Aprea Therapeutics (APRE) risk factors, FY2024 10-K

Risks related to our financial position and need for additional capital

1. 01We have incurred significant losses in each year since inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability
2. 02We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern
3. 03Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability. We have never generated commercial revenues and may never be profitable
4. 04We will need substantial additional funding, which may not be available to us on acceptable terms or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce and/or eliminate our research and drug development programs or future commercialization efforts
5. 05Raising additional capital may cause dilution to our stockholders and restrict our operations or require us to relinquish rights to our product candidates
6. 06and the resulting political and economic uncertainty materially impact our operations and those of our third-party service providers and reduce our ability to access capital, which could negatively affect our liquidity and adversely affect our business and the value of our common stock

Risks related to the discovery, development and commercialization of our product candidates

1. 07We 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
2. 08We have limited experience as a company conducting clinical trials and may be unable to complete pivotal clinical trials for any product candidates we may develop
3. 09We may find it difficult to enroll patients in our clinical trials. If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented
4. 10If serious adverse or unacceptable side effects are identified during the development of our product candidates or we observe limited efficacy of our product candidates, we may need to abandon or limit the development of one or more of our product candidates
5. 11Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their drugs
6. 12We 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
7. 13If we are required to in the future and if we are unable to successfully develop companion diagnostic tests for our product candidates that require such tests, or experience significant delays in doing so, we may not realize the full commercial potential of these product candidates
8. 14We may not be successful in our efforts to identify or discover additional potential product candidates
9. 15Research programs to identify new product candidates require substantial technical, financial and human resources. If we are unable to identify suitable compounds for preclinical and clinical development, our business would be harmed
10. 16Even if any of our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success
11. 17We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do
12. 18Our business and operations would suffer in the event of IT system failures, cybersecurity attacks, data breaches, or vulnerabilities in our or our third-party vendors’ information security program or defenses
13. 19If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market our product candidates, we may not be successful in commercializing our product candidates if and when they are approved
14. 20Even if we are able to commercialize any product candidate, such product candidate may become subject to unfavorable pricing regulations, third-party coverage and reimbursement policies or healthcare reform initiatives, which could harm our business
15. 21Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any drugs that we may develop. Our insurance policies may be inadequate and may potentially expose us to unrecoverable risk
16. 22Governments outside of the United States tend to impose strict price controls, which may adversely affect our revenues from the sales of our products, if any
17. 23The reactivation of p53 is a novel and unproven therapeutic approach and our development of eprenetapopt may never lead to a marketable product

Risks related to our dependence on third parties

1. 24Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all
2. 25The API and drug product for our product candidates is currently manufactured by a single contract manufacturer. Although we may do so in the future, we do not currently have arrangements in place for redundant supply of the API and drug product for our product candidates
3. 26Any performance failure on the part of our existing or future manufacturers could delay clinical development or marketing approval

Risks related to our intellectual property

1. 27Our proprietary position for eprenetapopt depends upon patents that consist of method-of-use and formulation patent claims, which may not prevent a competitor or other third party from using the same product candidate for another use or in another formulation
2. 28Issued patents covering our product candidates and other technologies could be narrowed or found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
3. 29We may be subject to other claims challenging the inventorship of our patents and other intellectual property
4. 30If we do not obtain patent term extension or data exclusivity for any product candidates we may develop, our business may be materially harmed
5. 31We may not be successful in obtaining, through acquisitions, in-licenses or otherwise, rights that may be necessary to our product candidates or other technologies
6. 32Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates and technology
7. 33We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming and unsuccessful
8. 34If we are sued for infringing, misappropriating or otherwise violating patents or other intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business
9. 35condition and prospects. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, results of operations or growth prospects
10. 36We may not be able to protect our intellectual property rights with patents throughout the world
11. 37Obtaining and maintaining our patent protection depends upon 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
12. 38As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors
13. 39Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information
14. 40Intellectual property rights do not necessarily address all potential threats
15. 41If trademarks, brand names and trade names are not adequately protected or available, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected

Risks related to regulatory and marketing approval and other legal compliance matters

1. 42We have never obtained marketing approval for a product candidate and we may be unable to obtain, or may be delayed in obtaining, marketing approval for any of our product candidates
2. 43may be forced to abandon our development efforts for our product candidates, which could significantly harm our business
3. 44Failure to obtain marketing approval in foreign jurisdictions would prevent our product candidates from being marketed abroad. Any approval we are granted for our product candidates in the United States would not assure approval of our product candidates in foreign jurisdictions
4. 45We, or any future collaborators, may not be able to obtain or maintain orphan drug exclusivity for our product candidates and, even if we do, that exclusivity many not prevent the FDA or the European Commission from approving competing products
5. 46The FDA’s and other comparable regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates, which would impact our ability to generate revenue
6. 47Any of our product candidates for which we, or our future collaborators, obtain marketing approval in the future, will be subject to continual review by the FDA or comparable foreign regulatory authorities
7. 48Recently enacted and future legislation, and any change in existing government regulations and policies, may increase the difficulty and cost for us and our future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain
8. 49coverage criteria and additional downward pressure on the price that we, or our future collaborators, may receive for any approved drugs
9. 50We may seek a breakthrough therapy designation for ATRN-119 or one or more of our other product candidates, but we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process
10. 51A fast track designation by the FDA for ATRN-119 or any of our other product candidates may not actually lead to a faster development or regulatory review or approval process
11. 52We may seek priority review designation for one or more of our product candidates, but we might not receive such designation, and even if we do, such designation may not lead to a faster development or regulatory review or approval process
12. 53Our employees and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation
13. 54If 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 our business
14. 55Laws and regulations governing any international operations we may have in the future may preclude us from developing, manufacturing and selling certain product candidates outside of the United States and require us to develop and implement costly compliance programs
15. 56Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation

Risks related to employee matters and managing growth

1. 57Our future success depends on our ability to retain our President and Chief Executive Officer and our Senior Vice President and Chief Financial Officer, and to attract, retain and motivate qualified personnel
2. 58We expect to expand our development and regulatory capabilities and potentially our sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations
3. 59We will need to expand our organization, and may experience difficulties in managing this growth, which could disrupt operations

Risks related to tax matters

1. 60We have significant deferred tax assets, which may become devalued if we do not generate sufficient future taxable income, applicable corporate tax rates are reduced or if we experience an ownership change
2. 61Due to potential ownership changes under the Swedish Income Tax Act, we may be limited in our ability to realize a tax benefit on our deferred tax assets, whether or not we attain profitability in future years
3. 62We may have taxable income as a result of the purging election made following the Holdco Reorganization
4. 63We may be subject to current taxation on some of the income of our foreign subsidiaries even absent any cash distributions
5. 64Our foreign subsidiaries may directly become subject to U.S. federal income tax and be subject to a branch profits tax in the United States, which could reduce our after-tax returns and the value of our shares
6. 65The ongoing effects of the 2017 Tax Cuts and Jobs Act and GILTI could make our results difficult to predict
7. 66Changes in U.S. federal income tax law and other jurisdictions could materially adversely affect an investment in our common shares

Risks related to our common stock

1. 67Our executive officers, directors and principal stockholders may have substantial influence over matters submitted to stockholders for approval. This may prevent new investors from influencing significant corporate decisions
2. 68Provisions 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
3. 69If securities analysts do not or do not continue to publish research or reports about our business or if they publish negative evaluations of our business, the price of our stock could decline
4. 70The price of our common stock has been and may continue to be volatile and fluctuate substantially
5. 71We could be subject to securities class action litigation
6. 72We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors
7. 73We continue to incur increased costs as a result of operating as a public company as we become subject to additional laws, regulations and listing exchange standards, and our management will continue to be required to devote substantial time to new compliance initiatives
8. 74Because we do not anticipate paying any cash dividends on our common stock for the foreseeable future, capital appreciation, if any, of our common stock may be investors’ sole source of gain
9. 75Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall