Celcuity (CELC) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01We have a limited operating history and we may never generate revenue or profit
2. 02Our inability to raise additional capital on acceptable terms in the future may limit our ability to develop and commercialize our drug candidate, gedatolisib
3. 03Future financing activities could dilute the percentage ownership of our stockholders and could cause our stock price to fall or could result in operating or other restrictions
4. 04We are dependent on our ability to attract and retain key personnel
5. 05Product liability claims may damage our reputation and, if insurance proves inadequate, these claims may harm our business
6. 06We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations

Risks Related to Our Product Strategy

1. 07Our near-term revenue prospects depend on the success of our initial drug product, gedatolisib. If we are unable to successfully complete clinical development of, obtain regulatory approval for or commercialize gedatolisib, or if we experience delays in doing so, our business will be materially harmed
2. 08We were not involved in the early development of gedatolisib; therefore, we are dependent on third parties having accurately generated, collected, interpreted and reported data from certain preclinical and clinical trials of gedatolisib
3. 09We have not yet successfully completed any registrational clinical trials, and we may be unable to do so for any drug candidates we may develop
4. 10The successful development of our products is highly uncertain
5. 11If we encounter difficulties enrolling patients in any of our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
6. 12Interim, topline and preliminary data from our clinical studies that we announce or publish from time to time may change as more data becomes available and are subject to audit and verification procedures that could result in material changes in the final data
7. 13Clinical development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates
8. 14We face significant competition, and our operating results will suffer if we fail to compete effectively
9. 15If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could face clinical trial delays; regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; and other adverse consequences
10. 16The majority of our employees and contractors work remotely. Remote work involves risks to our information technology systems and data, as individuals utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations
11. 17Public health matters may materially and adversely impact our business, including ongoing clinical trials
12. 18Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information and personal data

Risks Related to Product Development and Product Regulation

1. 19Breakthrough Therapy Designation or Fast Track Designation from the FDA may not actually lead to a faster development or regulatory review or approval process
2. 20Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions
3. 21Our focus on the clinical development of gedatolisib has led us to minimize the Company’s activities to support development of CELsignia, which will significantly delay, or potentially forestall, further advancement of clinical development of CELsignia tests or finding appropriate pharmaceutical company partners

Risks Related to Intellectual Property

1. 22We depend on intellectual property licensed from third parties, including from Pfizer for our lead product candidate, and termination of this license could result in the loss of significant rights, which would harm our business
2. 23If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates
3. 24If we fail to comply with our obligations under our patent license with Pfizer, we could lose license rights that are important to our business
4. 25We may not be successful in obtaining or maintaining necessary rights to develop any future product candidates on acceptable terms
5. 26If we are not able to prevent disclosure of our trade secrets and other proprietary information, the value of our products could be significantly diminished
6. 27We may be subject to claims by employees claiming ownership of what we regard as our own intellectual property
7. 28Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business
8. 29Any lawsuits relating to infringement of intellectual property rights necessary to defend ourselves or enforce our rights will be costly and time consuming and could be unsuccessful

Risks Related to Our Reliance on Third Parties

1. 30Our reliance on third parties to formulate and manufacture our drug product will expose us to risks that may delay the development, regulatory approval and commercialization of our drug product or result in higher product costs
2. 31The pharmaceutical companies that we partner with for our CELsignia tests may not be successful in receiving regulatory approval for drug indications or may not commercialize their companion therapies for our expected companion diagnostic programs
3. 32Performance issues or price increases by our shipping carriers could adversely affect our business, results of operations and financial condition, and harm our reputation and ability to provide our products on a timely basis

Risks Related to Commercializing Our Products

1. 33Even if our products achieve positive clinical trial results and requisite approvals, they 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
2. 34If our products do not achieve an adequate level of acceptance, we may never generate significant product revenues and we may not become profitable
3. 35We may encounter difficulties in scaling production of, commercializing, marketing and distributing our products, including in hiring and retaining a qualified sales force
4. 36Our business, operational and financial goals may not be attainable if the market opportunities for our products are smaller than we expect. Our internal research and third party estimates may not accurately reflect the market opportunities for gedatolisib today or in the future
5. 37Failure to comply with the HIPAA security and privacy regulations may increase our operational costs
6. 38We will also need to expend a considerable amount of resources complying with other federal, state and foreign laws and regulations. If we are unable to comply or have not complied with such laws, we could face substantial penalties or other adverse actions

Risks Relating to Our Common Stock

1. 39Provisions in our corporate charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
2. 40The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock or could subject us to securities litigation
3. 41Future sales of shares of our common stock, including by us and significant stockholders, could negatively affect our stock price
4. 42Our Series A Preferred Stock has rights, preferences, and privileges that are not held by, and are preferential to, the rights of holders of our common stock
5. 43If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline
6. 44We incur increased costs as a result of operating as a public company, and our management devotes substantial time to new compliance initiatives and corporate governance practices
7. 45We do not currently intend to pay dividends on our common stock, and, consequently, our stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock