ArriVent BioPharma (AVBP) risk factors, FY2024 10-K

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

1. 01We have a limited operating history and no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability
2. 02Operating our business requires substantial additional capital to finance 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 development programs, commercialization efforts or other operations
3. 03Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates

Risks Related to the Development and Regulatory Approval of Our Product Candidates

1. 04If we are unable to develop, receive marketing approval for and successfully commercialize firmonertinib, or if we experience delays as a result of any of the above factors or otherwise, our business would be significantly harmed
2. 05Any difficulties or delays in the commencement or completion, or the termination or suspension, of our current or planned clinical trials or nonclinical studies could result in increased costs to us, delay or limit our ability to generate revenue or adversely affect our commercial prospects
3. 06the termination or suspension, of our ongoing and planned clinical trials or nonclinical studies for firmonertinib, our other product candidates, and any future product candidates could significantly affect our product development timelines and product development costs and harm our financial position
4. 07In addition, disruptions caused by COVID-19 or future public health concerns may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing clinical trials
5. 08Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, which could adversely affect our business, operating results and prospects
6. 09Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects
7. 10We are currently developing and may in the future develop our product candidates in combination with other therapies, and safety or supply issues with combination-use products may delay or prevent development and approval of our product candidates
8. 11Interim, topline and preliminary data from our clinical trials and nonclinical studies that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
9. 12The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed
10. 13With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods and agreements with pricing authorities
11. 14Obtaining and maintaining marketing approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining marketing approval of our product candidates in other jurisdictions
12. 15We previously announced that, based on discussions with the FDA, there is potential to pursue an accelerated approval for firmonertinib for the treatment of NSCLC patients diagnosed with PACC mutations using ORR as the surrogate endpoint
13. 16If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of our product candidates may be delayed and our business will be harmed

Risks Related to Our Reliance on Third Parties

1. 17We heavily rely on our exclusive license with Allist to provide us with intellectual property rights to develop and commercialize firmonertinib. Any termination or loss of significant rights under our agreements with Allist would adversely affect our development or commercialization of firmonertinib
2. 18Reported data or other clinical development announcements by third parties, including Allist, may adversely affect our clinical development plan
3. 19Furthermore, we may not be able to maintain such collaborations if, for example, the development or approval of a product candidate is delayed, the safety of a product candidate is questioned or the sales of an approved product candidate are unsatisfactory

Risks Related to Commercialization of Firmonertinib, Our Other Product Candidates, and any Future Product Candidates

1. 20The occurrence of any event or penalty described above may inhibit our ability to commercialize firmonertinib or any other current or future product candidates and to generate revenue, could require us to expend significant time and resources in response and could generate negative publicity
2. 21The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses
3. 22If the market opportunities for firmonertinib and any other current or future product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer
4. 23Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties
5. 24We may not successfully identify, acquire, develop or commercialize new potential product candidates

Risks Related to Our Business Operations and Industry

1. 25Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or any guidance we may provide
2. 26We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer
3. 27We will need to develop and expand our organization, and we may encounter difficulties in managing our growth and expanding our operations successfully, which could disrupt our operations
4. 28Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize firmonertinib, our other product candidates, and any future product candidates and may affect the prices we may set
5. 29If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit, delay or cease commercialization of any products we may develop
6. 30administering or selling products that may be approved in the future. Claims could also be asserted under state consumer protection acts
7. 31Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities
8. 32In the ordinary course of our business, we, and the third parties upon which we rely, process sensitive data and as a result, we and the third parties upon which we rely face a variety of evolving threats which could cause cybersecurity incidents
9. 33Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations
10. 34Our business, operations and clinical development timelines and plans are subject to risks arising from epidemic or pandemic diseases
11. 35Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any
12. 36Our business could be affected by litigation, government investigations and enforcement actions
13. 37We may engage in strategic transactions that could increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, subject us to other risks, adversely affect our liquidity, increase our expenses and present significant distractions to our management
14. 38Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection our initial public offering completed in January 2024 or other ownership changes
15. 39New tax legislation may impact our results of operations and financial condition
16. 40Inflation could adversely affect our business and results of operations

Risks Related to Our Intellectual Property

1. 41We may not be able to protect our intellectual property and proprietary rights throughout the world
2. 42Obtaining 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
3. 43Changes in patent laws or their interpretations could diminish the value of patents in general, thereby impairing our ability to protect our products
4. 44Issued patents covering our current product candidates or our future product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
5. 45We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue or that our patents will not be challenged and rendered invalid and/or unenforceable
6. 46Patent terms may be inadequate to protect the competitive position of our product candidates for an adequate amount of time
7. 47If we do not obtain patent term extension in the United States and equivalent extensions outside of the United States for our product candidates, our business may be materially harmed
8. 48We may be subject to claims challenging the inventorship of our patents and other intellectual property
9. 49We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our products and product candidates
10. 50Third-party claims of intellectual property infringement, misappropriation or other violations against us or our collaborators could be expensive and time consuming and may prevent or delay the development and commercialization of our product candidates
11. 51We may become involved in lawsuits to protect or enforce our patent and other intellectual property rights, which could be expensive, time-consuming and unsuccessful
12. 52If 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
13. 53may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark
14. 54We may not be successful in obtaining or maintaining necessary rights to technology for our development pipeline through acquisitions and in-licenses
15. 55Our intellectual property licensed from third parties may be subject to retained rights
16. 56Intellectual property rights do not necessarily address all potential threats to our competitive advantage
17. 57We 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
18. 58Our reliance on third parties requires us to share potential trade secrets, which increases the possibility that a competitor or other third party will discover them or that potential trade secrets will be misappropriated or disclosed
19. 59If we are unable to protect the confidentiality of any potential trade secrets, our business and competitive position would be harmed

Risks Related to Our Common Stock

1. 60An active, liquid and orderly market for our common stock may not develop, or we may in the future fail to satisfy the continued listing requirements of Nasdaq and our stock may be delisted, and you may not be able to resell your common stock at your purchase price or at all
2. 61The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses
3. 62Our executive officers, directors and principal stockholders, if they choose to act together, have the ability to significantly influence all matters submitted to stockholders for approval and may prevent new investors from influencing significant corporate decisions
4. 63We 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, if any, in the price of our common stock
5. 64Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could significantly reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity or equity-linked securities
6. 65We are an emerging growth company and a smaller reporting company, and the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors
7. 66Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
8. 67Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
9. 68We incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
10. 69If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our stock
11. 70Our third-party manufacturers or suppliers may use potent chemical agents and hazardous materials, and any claims relating to improper handling, storage or disposal of these materials could be time-consuming or costly
12. 71Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
13. 72Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
14. 73Changes in tax law may materially adversely affect our financial condition, results of operations and cash flows, or adversely impact the value of an investment in our common stock
15. 74If securities or industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline
16. 75We could be subject to securities class action litigation