Annexon (ANNX) risk factors, FY2025 10-K

Risks Related to Our Limited Operating History, Financial Condition and Capital Requirements

1. 01We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations
2. 02the timing, receipt and amount of sales of any future approved products
3. 03delay, limit, reduce or terminate our efforts to establish manufacturing and sales and marketing capabilities or other activities that may be necessary to commercialize our product candidates or any future product candidate or reduce our flexibility in developing or maintaining our sales and marketing strategy41% rewritten
4. 04Our results of operations may fluctuate significantly, which makes our future results of operations difficult to predict and could cause our results of operations to fall below expectations
5. 05the level of demand for our product candidates, if approved, which may vary significantly over time

Risks Related to Our Business

1. 06Our business is heavily dependent on the successful development, regulatory approval and commercialization of our product candidates, some of which are in early stages of clinical development
2. 07our ability to avoid third-party patent interference, intellectual property challenges or intellectual property infringement claims
3. 08Public health crises such as pandemics or similar outbreaks have, and could in the future, materially and adversely affect our preclinical and clinical trials, business, financial condition and results of operations
4. 09refusal of the FDA to accept data from clinical trials in affected geographies outside the United States
5. 10Research and development of biopharmaceutical products is inherently risky. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized
6. 11a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors
7. 12The FDA or other regulatory agencies may not agree with our clinical development plan and require that we conduct additional clinical trials to support our regulatory submissions. Regulatory agencies, including the FDA may require that we conduct more than one pivotal trial in order to gain approval
8. 13We may encounter substantial delays in our clinical trials or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all
9. 14obtaining sufficient product supply of product candidates for use in preclinical studies or clinical trials from third-party suppliers
10. 15any future collaborators may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us
11. 16have the product removed from the market after obtaining marketing approval72% rewritten
12. 17customs and managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks
13. 18If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
14. 19our ability to obtain and maintain patient consents
15. 20Adverse events or undesirable side effects caused by, or other unexpected properties of, any of our product candidates could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences
16. 21our reputation may suffer
17. 22Interim, “top-line” and preliminary data from studies or trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data
18. 23Even if our current or future product candidates obtain regulatory approval, they may fail to achieve the broad degree of physician and patient adoption and use necessary for commercial success
19. 24We cannot assure you that our current or future product candidates, if approved, will achieve broad market acceptance among physicians and patients. Any failure by our product candidates that obtain regulatory approval to achieve market acceptance or commercial success would adversely affect our results of operations
20. 25A Breakthrough Therapy designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval
21. 26A Fast Track designation by the FDA or PRIME designation by the EMA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval
22. 27We conduct, and in the future plan to conduct, clinical trials for product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials46% rewritten
23. 28If the product candidates that we develop receive regulatory approval in the United States or another jurisdiction, they may never receive approval in other jurisdictions, which would limit market opportunities for our product candidates and adversely affect our business
24. 29Any product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated
25. 30If we are not successful in identifying, developing and commercializing additional product candidates, our ability to expand our business and achieve our strategic objectives would be impaired
26. 31a product candidate may not be accepted as safe and effective by physicians and patients27% rewritten
27. 32identify, acquire, develop and commercialize additional product candidates, our commercial opportunities may be limited54% rewritten
28. 33We 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 our product candidates, if approved, effectively in the United States and foreign jurisdictions or generate product revenue
29. 34We will need to increase the size of our organization, and we may experience difficulties in managing growth28% rewritten
30. 35continue to improve our operational, financial and management controls, reports systems and procedures
31. 36If we fail to attract and retain senior management and key scientific personnel, our business may be materially and adversely affected
32. 37We cannot guarantee that we will not face turnover in the future. Our ability to execute our business strategies may be adversely affected by the uncertainty associated with any transition and the time and management attention needed to fill any vacant role could disrupt our business
33. 38If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our current or future product candidates
34. 39the inability to commercialize our current or any future product candidates
35. 40Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our product candidates
36. 41Unfavorable global and macroeconomic or political conditions could adversely affect our business, financial condition or results of operations
37. 42International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and growth prospectsNew
38. 43We or the third parties upon whom we depend on 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
39. 44Furthermore, integral parties in our supply chain are similarly vulnerable to natural disasters or other sudden, unforeseen and severe adverse events. If such an event were to affect our supply chain, it could have a material adverse effect on our business94% rewritten
40. 45including noncompliance with regulatory standards and requirements, which could have an adverse effect on our results of operationsNew
41. 46Our business involves the use of hazardous materials, and we and our third-party manufacturers and suppliers must comply with environmental laws and regulations, which can be expensive and restrict how we do business

Risks Related to Intellectual Property

1. 47Our current and any future product candidates or products could be alleged to infringe patent rights and other proprietary rights of third parties, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and/or limit our ability to commercialize our products
2. 48If we are unable to obtain, maintain and enforce intellectual property protection directed to our current and any future technologies that we develop, others may be able to make, use or sell products substantially the same as ours, which could adversely affect our ability to compete in the market
3. 49If we are unable to prevent disclosure of our trade secrets or other confidential information to third parties, our competitive position may be impaired
4. 50We license patent rights from third-party owners. Such licenses may be subject to early termination if we fail to comply with our obligations in our licenses with third parties, which could result in the loss of rights or technology that are material to our business
5. 51Our intellectual property agreements with third parties may be subject to disagreements over contract interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology or increase our financial or other obligations to our licensors82% rewritten
6. 52intellectual property or technology, or affect financial or other obligations under the relevant agreement, any of which could have a material adverse effect on our business, financial condition, results of operations and prospectsNew
7. 53We may wish to form collaborations in the future with respect to our product candidates, but may not be able to do so or to realize the potential benefits of such transactions, which may cause us to alter or delay our development and commercialization plans
8. 54We jointly own certain patent rights with third parties. Our ability to out-license these patent rights, or to prevent the third party from out-licensing these patent rights, may be limited in certain countries
9. 55We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
10. 56If 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
11. 57We may not be able to protect our intellectual property rights throughout the world

Risks Related to Government Regulation

1. 58Even if we obtain regulatory approval for a product candidate, our products will remain subject to regulatory scrutiny
2. 59seize or detain products, or require a product recall
3. 60Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and may affect the prices we may set83% rewritten
4. 61pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. This could reduce the ultimate demand for our product candidates or put pressure on our product pricingNew
5. 62If we develop a small molecule product candidate that obtains regulatory approval, additional competitors could enter the market with generic versions of such drugs, which may result in a material decline in sales of affected products
6. 63Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties

Risks Related to Our Common Stock

1. 64Our stock price has been volatile, and could in the future be volatile, and you may not be able to resell shares of our common stock at or above the price you paid
2. 65the issuance of shares of our common stock pursuant to the exercise of outstanding warrants
3. 66We are a “smaller reporting company,” and as a result of the reduced disclosure and governance requirements applicable to smaller reporting companies, our common stock may be less attractive to investors48% rewritten
4. 67as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable termsNew
5. 68the possibility that any enhancements to controls and procedures may still not be adequate to assure timely and accurate financial control
6. 69Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval26% rewritten
7. 70Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall31% rewritten
8. 71Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited48% rewritten
9. 72Federal NOLs of $556.1 million and state and local NOLs of $191.4 million are not expected to expire unutilized as a result of ownership changes identified through December 31, 2025New
10. 73Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
11. 74Our 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
12. 75While we maintain a directors’ and officers’ insurance policy, such insurance may not be adequate to cover all liabilities that we may incur, which may reduce our available funds to satisfy third-party claims and may adversely impact our cash position
13. 76We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock78% rewritten
14. 77Changes in tax laws and regulations may have a material adverse effect on our business, financial condition and results of operations
15. 78material interruption to our operations, including clinical trials, damage to our reputation and/or subject us to costs, fines and penalties or lawsuitsNew
16. 79In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position21% rewritten
17. 80If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline
18. 81We may be subject to securities litigation, which is expensive and could divert our management’s attention