Aquestive Therapeutics (AQST) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Need for Additional Capital

1. 01We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability
2. 02We will need substantial additional capital to fund our operations, which may not be available on acceptable terms, if at all
3. 03We may sell additional equity, incur debt or raise funds through licensing arrangements to fund our operations, which may result in dilution to our stockholders, impose restrictions on our business or require us to relinquish proprietary rights
4. 04In November 2020, we began utilizing the ATM facility. For the year ended December 31, 2024, we sold 4,557,220 shares which provided net proceeds of approximately $11.8 million, after deducting commissions and other transaction costs of $0.6 million
5. 05Even if we can generate revenues from our operations in the future, our revenues and operating income are likely to fluctuate significantly from year-to-year or quarter-to-quarter and create volatility in our stock price
6. 06Our level of indebtedness and significant debt service obligations could constrain our ability to invest in our business and make it more difficult for us to fund our operations
7. 07We are dependent upon the commercial success of our licensed and proprietary products and other licensing activities to generate revenue for the near future
8. 08A substantial portion of our revenues is derived from a single customer and license and any loss or material reduction in revenues from such significant customer would adversely affect our business
9. 09Although Suboxone has continued to retain meaningful market share, we expect erosion of this sunsetting branded product over time, which will further affect our total revenues and our results from operations

Risks Related to Development and Commercialization of Our Products and Product Candidates

1. 10Our business could be adversely affected if Libervant market access for ARS patients between two and five years of age is blocked
2. 11We cannot be certain that we will be able to successfully develop our product candidates or obtain regulatory approval for our product candidates
3. 12If we do not obtain market exclusivity for certain of our products, including orphan drug exclusivity, our business may be harmed
4. 13Clinical trials may be delayed, suspended or terminated for many reasons, which will increase our expenses and delay the time it takes to develop our product candidates
5. 14We have limited commercialization experience and may lack the necessary expertise, personnel and resources to successfully commercialize our other product candidates that must first receive regulatory approval, either on our own or together with collaborators
6. 15Our success depends upon attaining significant market acceptance of our licensed products and proprietary products and product candidates, if approved, among patients, physicians, pharmacists and the medical community
7. 16We could incur substantial costs and disruption to our business and delays in the launch of our product candidates if our competitors and/or collaborators bring legal actions against us, which could harm our business and operating results
8. 17Guidelines and recommendations published by government agencies can reduce the use of our products or product candidates
9. 18We face significant competition from other pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
10. 19If we are unable to achieve and maintain coverage and adequate reimbursement from third-party payors for our licensed products or product candidates, if approved, their commercial success may be severely hindered
11. 20Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws
12. 21physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The introduction of the Medicare quality payment program has shifted the focus of physician reimbursement from volume to value, encouraging higher quality and more cost-effective care

Risks Related to Our Reliance on Third Parties

1. 22We rely on limited sources of supply for our thin film foil, and any disruption in the chain of supply may impact production and sales and cause delay in developing and commercializing our proprietary PharmFilm Technology product candidates
2. 23We currently rely, and expect to continue to rely, on third parties to manufacture API for our licensed products and our product candidates, and control only certain aspects of their activities
3. 24The design, development, manufacture, supply, and distribution of our licensed products and our product candidates is highly regulated and technically complex
4. 25We may not be successful in establishing development and commercialization collaborations, which could adversely affect, and potentially prohibit, our ability to develop our product candidates
5. 26product candidate to patients, competing products, and industry and market conditions generally. Collaborations are complex and time-consuming to negotiate and document

Risks Related to Our Business Operations and Industry

1. 27We may experience difficulties in managing growth if our business expands to meet future needs, which could disrupt our operations
2. 28Our licensed products and, if approved, product candidates, may give rise to potential product liability claims or false marketing claims, and, if successful claims are brought against us, we may incur substantial liability
3. 29We may not be able to maintain insurance coverage, and our existing or any future insurance policies or our own resources may not sufficiently cover claims for damages that we may receive in the future
4. 30We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively
5. 31Business interruptions at our manufacturing facilities could delay us in the process of developing our product candidates
6. 32Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing
7. 33Our operations involve hazardous materials and we and third parties with whom we contract must comply with environmental laws and regulations, which can be expensive and restrict how we do business

Risks Related to Government Regulation

1. 34restrictive label or the delay, denial or withdrawal of regulatory approval, which may harm our business, financial condition and prospects significantly
2. 35Our business is subject to extensive regulatory requirements and our approved products and product candidates that obtain regulatory approval will be subject to ongoing and continued regulatory review, which may result in significant expense and limit our ability to commercialize such products
3. 36Regulatory approval is required for each of our products in each jurisdiction in which we intend to market or license such products, and the inability to obtain such approvals would limit our ability to realize their full market potential
4. 37If we fail to develop, acquire or in-license other product candidates or products, our business and prospects will be limited
5. 38Public concern regarding the safety of any of our drug products could result in the inclusion of unfavorable information in our labeling or require us to undertake other activities that may entail additional costs
6. 39Uncertainty about presidential administration initiatives could negatively impact our business, financial condition and results of operations

Risks Related to Our Intellectual Property

1. 40If we are unable to obtain or protect intellectual property rights of any of our products and product candidates, we may not be able to compete effectively in our market
2. 41We may enjoy only limited geographical protection with respect to certain patents and we may not be able to protect our intellectual property rights throughout the world
3. 42Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents
4. 43We have in the past and are likely in the future to be, involved in lawsuits to protect or enforce our patents. These lawsuits are expensive and require us to expend substantial financial resources, are time consuming, may continue for many years for one or more claims and may be unsuccessful
5. 44Third parties may commence 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
6. 45further practice our technologies or develop and commercialize any of our product candidates at issue, which could significantly harm our business
7. 46Obtaining 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
8. 47in which non-compliance can result in abandonment or lapse of the patents or patent applications, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market which could harm our business
9. 48Our success will depend in part on our ability to operate without infringing the intellectual property and proprietary rights of third parties. We cannot assure you that our business, products, product candidates and methods do not or will not infringe the patents or other intellectual property rights of third parties
10. 49We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
11. 50Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to Ownership of Our Common Stock

1. 51Our quarterly operating results may fluctuate significantly, and these fluctuations could cause our stock price to decline
2. 52Our largest stockholder and management own a significant percentage of our stock and may have the ability to effectively influence matters subject to stockholder approval
3. 53Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
4. 54We do not intend to pay dividends on our Common Stock so any returns will be limited to the value of our stock
5. 55Public health threats such as a global pandemic, or widespread outbreak of infectious disease, similar to the COVID-19 pandemic, may create uncertainties about our future operating results and financial conditions
6. 56Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
7. 57Under applicable employment laws, we may not be able to enforce covenants not to compete
8. 58standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI
9. 59Our colleagues, principal investigators, consultants and agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
10. 60We may be subject to claims that our colleagues, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties
11. 61The market price of our Common Stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock
12. 62If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our Company, the price of our Common Stock could decline
13. 63We are a “smaller reporting company”, and we cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make our Common Stock less attractive to investors
14. 64Sales of a substantial number of shares of our Common Stock in the public market by our existing stockholders would cause our stock price to fall
15. 65Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial conditions and results of operation