Context Therapeutics (CNTX) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We have never been profitable and may never achieve or maintain profitability
2. 02We will need to raise additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations
3. 03If we are unable to raise substantial additional capital on acceptable terms, or at all, we may be forced to delay, reduce or eliminate some or all of our research programs, product development activities and commercialization efforts
4. 04If we are not able to successfully integrate recent and future acquisitions, our management’s attention could be diverted, and efforts to integrate future acquisitions could consume significant resources
5. 05We are a biopharmaceutical company with a limited operating history. We were founded in 2015 and spent the first three years of our company’s history developing and refining our therapeutic approach, and only since then have we focused our efforts on advancing the development of product candidates
6. 06We may expend our limited resources pursuing particular research programs or product candidates that may be less successful or profitable than other programs or product candidates
7. 07Fluctuating foreign exchange rates could increase our operating expenses and adversely affect our results of operations
8. 08Inflation could adversely affect our business and results of operations

Risks Related to our Product Candidates

1. 09Our business is dependent on the successful development, regulatory approval and commercialization of our therapeutic product candidates, CTIM-76, CT-95 and CT-202, which are in the early stages of development
2. 10We have no products approved for sale. The success of our business, including our ability to finance our Company and generate any revenue in the future, will primarily depend on the successful development, regulatory approval and commercialization of CTIM-76, CT-95 and CT-202, which may never occur
3. 11Our innovative therapy approach is based on novel ideas and technologies that are unproven and may not result in marketable products, which exposes us to unforeseen risks and makes it difficult for us to predict the time and cost of product development and potential for regulatory approval
4. 12Results of preclinical studies, early clinical trials or analyses may not be indicative of results obtained in later trials
5. 13Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data
6. 14Any product candidate may cause serious adverse events or undesirable side effects, which may delay or prevent marketing approval, or, if approved, require it to be taken off the market, require it to include safety warnings or otherwise limit its sales
7. 15We 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
8. 16our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether
9. 17The success of our business depends primarily upon our ability to identify, develop and commercialize products using our proprietary technologies
10. 18If a product candidate does not achieve projected development milestones or commercialization in the announced or expected timeframes, the further development or commercialization of such product candidate may be delayed, and our business will be harmed
11. 19We face an inherent risk of product liability and professional indemnity exposure related to the testing in clinical trials of our product candidates. We will face an even greater liability risk if we commercially sell any products that we or our collaborators may develop for human use

Risks Related to Our Organization, Structure and Operations

1. 20Our reliance on a central team consisting of a limited number of employees and consultants who provide various administrative, research and development, and other services across our organization presents operational challenges that may adversely affect our business
2. 21Our future success depends on our ability to retain our Chief Executive Officer, Chief Medical Officer, Chief Financial Officer, Chief Legal Officer, and other key executives and to attract, retain and motivate qualified personnel
3. 22Although we have formal employment agreements with all of our executive officers, these agreements do not prevent them from terminating their employment with us at any time. The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives
4. 23We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations
5. 24Our insurance policies are expensive and protect us only from some business risks, which leaves us exposed to significant uninsured liabilities
6. 25Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions, could adversely affect our current and projected business operations, financial condition and results of operations

Risks Related to Our Reliance on Third Parties

1. 26We expect to, and do, depend on collaborations with third parties for certain research, development and commercialization activities, and if any such collaborations are not successful, it may harm our business and prospects
2. 27We may become involved in disagreements or disputes with our licensees, licensors and other counterparties relating to the development and/or commercialization of our current or past product candidates, which may be time consuming, costly and could harm our efforts to develop our current or future product candidates
3. 28If we are unable to obtain sufficient quantities of raw materials and supplies, at acceptable prices and on a timely basis, it could harm our business
4. 29We do, and may further, rely on third parties for the manufacturing process of our current and any future product candidates, and failure by those parties to adequately perform their obligations could harm our business
5. 30requirements of the FDA or other regulatory authorities, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel
6. 31If we are not able to establish collaborations on commercially reasonable terms, we may have to alter our research, development and commercialization plans

Risks Related to Government Regulation

1. 32The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our current and any future product candidates
2. 33We expect that CTIM-76, CT-95 and CT-202 will be regulated as biological products, or biologics, and therefore they may be subject to competition from biosimilar applicants
3. 34Regulatory decisions implementing the Biologics Price Competition and Innovation Act may have a material adverse effect on the future commercial prospects for our biological products
4. 35The FDA may disagree with our regulatory plan and we may fail to obtain regulatory approval of any product candidate
5. 36Obtaining and maintaining regulatory approval of a product candidate in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of such product candidate in other jurisdictions
6. 37We will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with a product candidate
7. 38Even if we obtain regulatory approval of a product candidate, the product may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community
8. 39Coverage and reimbursement may be limited or unavailable in certain market segments for a product candidate, which could make it difficult for us to sell such product candidate, if approved, profitably
9. 40Patients 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
10. 41The advancement of healthcare reform may negatively impact our ability to sell our current and any future product candidates, if approved, profitably
11. 42In addition, other legislative changes have been proposed and adopted in the United States since PPACA was enacted which, among other things, have reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers

Risks Related to Intellectual Property

1. 43Patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to us, could negatively impact our business position
2. 44As a result of any patent infringement claims, or in order to avoid any potential infringement claims, we may choose to seek, or be required to seek, a license from a third party, which may require payment of substantial royalties or fees, or require us to grant a cross-license under our intellectual property rights
3. 45Our ability to compete effectively in our markets may decline if we do not adequately protect our proprietary rights, and our proprietary rights do not necessarily address all potential threats to our competitive advantages
4. 46In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various extensions may be available; however, the life of a patent, and the protection it affords, is limited
5. 47If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business
6. 48If 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
7. 49which permits a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process
8. 50We may not be able to protect our intellectual property rights throughout the world
9. 51Changes in U.S. patent law, and the laws of other countries, could diminish the value of patents in general, thereby impairing our ability to protect our products

Risks Related to the Market for Our Common Stock

1. 52Our common stock may be volatile or may decline regardless of our operating performance
2. 53We may not be able to regain and maintain compliance with the continued listing requirements of The Nasdaq Stock Market
3. 54If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the shares and trading volume could decline
4. 55We do not expect to pay dividends in the foreseeable future, and you must rely on price appreciation of your shares for return on your investment
5. 56We may issue debt and equity securities, which are senior to our common stock as to distributions and in liquidation, which could materially adversely affect the market price of our common stock
6. 57FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our common stock
7. 58We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies and our stockholders could receive less information than they might expect to receive from more mature public companies
8. 59If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to accurately report our financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in our company
9. 60Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
10. 61issuance of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect your rights as a common stockholder
11. 62We incur increased costs as a result of being a public company and in the administration of our organizational structure
12. 63We are subject to complex tax rules relating to our business, and any audits, investigations or tax proceedings could have a material adverse effect on our business, results of operations and financial condition
13. 64Our business and operations would suffer in the event of system failures or security breaches
14. 65We or third parties with whom we have relationships may be adversely affected by natural or manmade disasters, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
15. 66We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
16. 67We could be subject to securities class action litigation