CG Oncology (CGON) risk factors, FY2024 10-K

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

1. 01acceptance of our products, if approved, by patients, the medical community and third-party payors
2. 02Cretostimogene is based on a novel approach to the treatment of cancer, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval, if at all
3. 03Any difficulties or delays in the commencement or completion, or the termination or suspension, of our current or planned clinical trials or preclinical studies could result in increased costs to us, delay or limit our ability to generate revenue or adversely affect our commercial prospects
4. 04third parties being unwilling or unable to satisfy their contractual obligations to us in a timely manner
5. 05We may find it difficult to enroll patients in our clinical trials. If we encounter difficulties or delays enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
6. 06Any of these events could prevent us from achieving or maintaining market acceptance and/or physician adoption of the particular product candidate, if approved, and could significantly harm our business, financial condition, results of operations and prospects
7. 07We intend to develop cretostimogene and future product candidates in combination with other therapies, which exposes us to additional risks
8. 08Negative developments in the field of immuno-oncology and, in particular, viral immunotherapy, could damage public perception of any cretostimogene or any future oncolytic product candidates and negatively affect our business
9. 09Interim, topline and preliminary data from our clinical trials and preclinical 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
10. 10Changes in methods of the manufacturing or formulation of cretostimogene or any future product candidates may result in additional costs or delay
11. 11A Breakthrough Therapy designation from the FDA may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that cretostimogene or any future product candidates will receive FDA approval
12. 12Fast track designation by the FDA for cretostimogene may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that cretostimogene or any future product candidate which may receive fast track designation will receive regulatory approval

Risks Related to Our Reliance on Third Parties

1. 13in the event of approval to market and commercialize cretostimogene or any future product candidates, an inability to meet commercial demands for cretostimogene or any future product candidates
2. 14termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us
3. 15Further, cretostimogene and any future product candidates that we may develop may compete with other product candidates and products for access to manufacturing facilities
4. 16Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor or other third party will discover them or that our trade secrets will be misappropriated or disclosed

Risks Related to Commercialization of Cretostimogene and any Future Product Candidates

1. 17Even if we receive regulatory approval for cretostimogene or any future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense
2. 18The occurrence of any event or penalty described above may inhibit our ability to commercialize cretostimogene or any future product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity
3. 19The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses
4. 20Any product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated
5. 21The commercial success of cretostimogene or any future product candidates will depend upon the degree of market acceptance of such product candidates by physicians, patients, healthcare payors, and others in the medical community
6. 22unfavorable publicity relating to the product
7. 23If the market opportunities for cretostimogene or any future product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer
8. 24Our 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

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

1. 25We have a relatively limited operating history, have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future. We may never generate any revenue or become profitable or, if we achieve profitability, we may not be able to sustain it
2. 26We will require substantial additional capital to finance our operations, 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. 27costs associated with any products or technologies that we may in-license or acquire
4. 28Raising 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 Our Business Operations and Industry

1. 29Our 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. 30the timing and amount of any milestone, royalty or other payments payable by us or due to us under any collaboration, licensing or other similar agreement
3. 31Our success is dependent on our ability to attract and retain highly qualified management and other clinical and scientific personnel
4. 32We may encounter difficulties in managing our growth and expanding our operations successfully, which could disrupt our operations
5. 33We are subject to various U.S. federal, state and foreign healthcare laws and regulations, which could increase compliance costs, and our failure to comply with these laws and regulations could harm our reputation, subject us to significant fines and liability or otherwise adversely affect our business
6. 34Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to obtain coverage for and commercialize cretostimogene or any future product candidates and may adversely affect the prices we may set
7. 35Since its enactment, there have been executive, judicial and Congressional challenges and amendments to certain aspects of the ACA
8. 36If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit, delay or cease commercialization of our products
9. 37a decline in our stock price
10. 38Our insurance policies are expensive and protect us from only some business risks, which will leave us exposed to significant uninsured liabilities
11. 39We and any of our current or potential future collaborators will be required to report to regulatory authorities if any of our approved products cause or contribute to adverse medical events, and any failure to do so would result in sanctions that would materially harm our business
12. 40Our business is subject to risks arising from pandemics and epidemic diseases
13. 41Our business could be affected by litigation, government investigations and enforcement actions
14. 42Our employees and independent contractors, including collaborators, principal investigators, CROs, consultants and vendors, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
15. 43We may engage in strategic transactions that could impact our liquidity, increase our expenses, and present significant distractions to our management
16. 44Our ability to use net operating loss carryforwards and other tax attributes may be limited

Risks Related to Our Intellectual Property

1. 45We may not be able to protect our intellectual property and proprietary rights throughout the world
2. 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
3. 47Changes in patent laws or their interpretations could diminish the value of patents in general, thereby impairing our ability to protect our products
4. 48Issued patents covering cretostimogene or any future product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
5. 49Patent terms may be inadequate to protect the competitive position of cretostimogene or any future product candidates for an adequate amount of time
6. 50If we do not obtain patent term extension and equivalent extensions outside of the United States for cretostimogene or any future product candidates, our business may be materially harmed
7. 51We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
8. 52If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
9. 53We may be subject to claims 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
10. 54We 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 cretostimogene or any future product candidates
11. 55Third-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 cretostimogene or any future product candidates
12. 56We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time-consuming, and unsuccessful
13. 57If 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
14. 58Intellectual property rights do not necessarily address all potential threats
15. 59the patents or other intellectual property rights of others may harm our business; and
16. 60We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses

Risks Related to Ownership of Our Common Stock

1. 61Prior to our initial public offering, there was no public market for our common stock. An active, liquid and orderly market for our common stock may not be sustained, or we may in the future fail to satisfy the continued listing requirements of Nasdaq
2. 62The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses
3. 63changes in accounting standards, policies, guidelines, interpretations or principles
4. 64Our 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
5. 65We do not currently intend to pay dividends on our common stock, so any returns on your investment will be limited to the value of our common stock
6. 66Sales 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
7. 67We are an emerging growth company, and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors
8. 68exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved
9. 69Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
10. 70We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives
11. 71Any violations of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences
12. 72We and any of our 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
13. 73Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
14. 74Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business, financial condition and stock price
15. 75Changes 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
16. 76If 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
17. 77If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline
18. 78We could be subject to securities class action litigation