Celularity (CELU) risk factors, FY2024 10-K

Risks Related to Business and Industry

1. 01We have incurred net losses in every period since our inception, have no cellular therapeutics approved for commercial sale and anticipate that we will incur substantial net losses in the future
2. 02Our historical operating results indicate substantial doubt exists related to our ability to continue as a going concern
3. 03We will need substantial additional financing to develop our therapeutics and implement our operating plans. Further, if approved, we will require significant additional amounts in order to launch and commercialize our therapeutic candidates
4. 04We may expend our limited resources to pursue product candidates that do not yield a successful product and fail to capitalize on development opportunities or therapeutic candidates that may be more profitable or for which there is a greater likelihood of success
5. 05Our placental-derived cellular therapy candidates represent a novel approach to cancer, infectious and degenerative disease treatments that creates significant challenges
6. 06The gene-editing technology we use is relatively new, and if we are unable to use this technology in our intended therapeutic candidates, our revenue opportunities will be materially limited
7. 07We are dependent on patents, know-how and proprietary technology, both our own and licensed from others
8. 08If disputes over intellectual property that we have licensed, or may license in the future, prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected therapeutic candidates
9. 09Our therapeutic candidates are based on novel technologies, which makes it difficult to predict the time and cost of therapeutic candidate development and obtaining regulatory approval
10. 10Our therapeutic candidates may cause undesirable side effects or have other properties that could halt our clinical development, prevent our regulatory approval, limit our commercial potential or result in significant negative consequences
11. 11Planned future clinical trials for our product candidates may fail to demonstrate the safety and efficacy of any of our therapeutic candidates, which would prevent or delay regulatory approval and commercialization
12. 12Initial, interim and preliminary data from any clinical trials 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
13. 13We may not be able to submit INDs to commence clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit such trials to proceed
14. 14Our HCT/P products are subject to extensive government regulation and our failure to comply with these requirements could cause our business to suffer
15. 15We may encounter substantial delays in our planned clinical trials or may not be able to conduct our trials on the timelines we expect
16. 16Our business could be materially adversely affected by the effects of health pandemics or epidemics in regions where we or third parties on which we rely have concentrations of clinical trial sites or other business operations
17. 17Monitoring and managing toxicities in patients receiving therapeutic candidates is challenging, which could adversely affect our ability to obtain regulatory approval and commercialize our therapeutic candidates
18. 18Clinical trials are expensive, time-consuming and difficult to design and implement
19. 19If we fail to develop additional therapeutic candidates, our commercial opportunity will be limited
20. 20Our organizational changes and cost cutting measures may not be successful
21. 21If we are unable to maintain the necessary operational and administrative infrastructure, we may face delays or difficulties in resuming suspended development activities, pursuing new initiatives, or fulfilling our ongoing obligations
22. 22We operate our own manufacturing and storage facility, which requires significant resources; manufacturing or other failures could adversely affect our clinical trials and the commercial viability of our therapeutic candidates and our biobanking and degenerative diseases businesses
23. 23We currently have no cellular therapeutics marketing sales force. If we are unable to establish future marketing and sales capabilities or enter into agreements with third parties to market and sell our therapeutic candidates once approved, we may not be able to generate cell therapy product revenue
24. 24A variety of risks associated with conducting research and clinical trials abroad and marketing our therapeutic candidates internationally could materially adversely affect our business
25. 25We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
26. 26We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
27. 27We may experience difficulties in managing the growth of our business
28. 28We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements
29. 29We may not realize the benefits of acquired assets or other strategic transactions
30. 30Our internal computer systems, or those used by our CROs, collaborators or other contractors or consultants, may fail or suffer security breaches
31. 31Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
32. 32If we do not obtain and maintain federal and state licenses and registrations required for our current and future operations, our ability to generate revenue will be limited
33. 33Our relationships with customers, physicians, and third-party payors are subject to numerous laws and regulations. If we or our employees, independent contractors, consultants, commercial partners and vendors violate these laws, we could face substantial penalties
34. 34Our collection, use, processing, and cross-border transfer of personal information, including individually identifiable health information, is governed by restrictive regulations
35. 35If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our therapeutic candidates
36. 36Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited
37. 37Changes in tax law could adversely affect our business and financial condition
38. 38Fluctuations in the cost and availability of raw materials, equipment, labor, and transportation could cause manufacturing delays or increase our costs
39. 39Failure to maintain effective internal controls could cause our investors to lose confidence in us and adversely affect the market price of our Class A common stock. If our internal controls are not effective, we may not be able to accurately report our financial results or prevent fraud

Risks Related to Our Reliance on Third Parties

1. 40We rely and will continue to rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of, or commercialize, our therapeutic candidates
2. 41We rely on donors of healthy human full-term placentas to manufacture our therapeutic candidates, and if we do not obtain an adequate supply of such placentas from qualified donors, development of our placental-derived allogeneic cells may be adversely impacted
3. 42Cell-based therapies rely on the availability of specialty raw materials, which may not be available to us on acceptable terms or at all
4. 43We also face competition for supplies from other cell therapy companies. Such competition may make it difficult for us to secure raw materials or the testing of such materials on commercially reasonable terms or in a timely manner
5. 44If we or third party suppliers acting on our behalf use hazardous, non-hazardous, biological or other materials in a manner that causes injury or violates applicable law, we may be liable for damages

Risks Related to Government Regulation

1. 45The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our future therapeutic candidates
2. 46We expect the cell therapy therapeutic candidates we may develop will be regulated as biological products, or biologics, and they may be subject to competition sooner than anticipated
3. 47The FDA may disagree with our future regulatory plans and we may fail to obtain regulatory approval of our cell therapeutic candidates
4. 48We plan to seek orphan drug designation for some or all of our therapeutic candidates across various indications, but we may be unable to obtain such designations or to maintain the benefits associated with orphan drug designation, including market exclusivity, which may cause our revenue, if any, to be reduced
5. 49We may not elect or be able to take advantage of any expedited development or regulatory review and approval processes available to therapeutic candidates granted breakthrough therapy or fast track designation by the FDA
6. 50Although we have previously received fast track designation for certain of our cell therapy candidates, we may elect not to pursue either of breakthrough therapy or fast track designation for our other therapeutic candidates, and the FDA has broad discretion whether or not to grant these designations
7. 51Obtaining and maintaining regulatory approval of our therapeutic candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our therapeutic candidates in other jurisdictions
8. 52Negative public opinion and increased regulatory scrutiny of genetic research and therapies involving gene editing or modified cells may damage public perception of our therapeutic candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our therapeutic candidates
9. 53Even if we obtain regulatory approval of our therapeutic candidates, the cell therapies may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community
10. 54Coverage and reimbursement may be limited or unavailable in certain market segments for our therapeutic candidates, which could make it difficult for us to sell our cell therapies, if approved, profitably
11. 55Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Obtaining coverage and adequate reimbursement from third-party payors is critical to new product acceptance
12. 56The advancement of healthcare reform may negatively impact our ability to sell our therapeutic candidates, if approved, profitably

Risks Related to Our Intellectual Property

1. 57If our efforts to protect the proprietary nature of the intellectual property related to our technologies is not adequate, we may not be able to compete effectively in our market
2. 58Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information
3. 59We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties
4. 60Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts and our ability to commercialize our therapeutic candidates
5. 61We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses
6. 62We may be involved in lawsuits or other legal proceedings to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful
7. 63Obtaining and maintaining our patent protection depends on 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
8. 64The lives of our patents may not be sufficient to effectively protect our products and business
9. 65We or our licensors may be subject to claims challenging the inventorship of our patents and other intellectual property
10. 66We may not be able to protect our intellectual property rights throughout the world
11. 67Changes in patent law, including recent patent reform legislation, could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents
12. 68Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to Ownership of Our Securities

1. 69There may not be an active trading market for our securities, which may make it difficult to sell shares of Class A common stock
2. 70The market price of our securities may be volatile, which could cause the value of an investment to decline
3. 71We do not intend to pay cash dividends for the foreseeable future
4. 72Future sales and issuances of our Class A common stock or rights to purchase common stock, including pursuant to our equity plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall
5. 73Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our Class A common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management
6. 74This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction
7. 75Sales of a substantial number of our shares of Class A common stock in the public market could cause our stock price to fall
8. 76The exercise of our outstanding options and warrants and the vesting of outstanding restricted stock units will dilute stockholders and could decrease our stock price
9. 77Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
10. 78If 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 may decline
11. 79We could be subject to securities class action litigation
12. 80Financial reporting obligations of being a public company in the U.S. are expensive and time-consuming, and our management will be required to devote substantial time to compliance matters
13. 81We have material weaknesses in our internal control over financial reporting, which could adversely affect our business, financial condition and operating results