CytomX Therapeutics (CTMX) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01the cost and timing of regulatory approvals; and
2. 02our efforts to enhance operational systems and hire additional personnel, including personnel to support development and commercialization of our product candidates and satisfy our obligations as a public company
3. 03collaborators electing to not pursue development and commercialization of our product candidates
4. 04varying interpretations of data by the FDA and similar foreign regulatory agencies
5. 05our reputation may suffer
6. 06If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented
7. 07the proximity and availability of clinical trial sites for prospective patients
8. 08We will continue to conduct clinical trials and contract with third-party manufacturers in foreign countries, including China, which could expose us to risks that could have a material adverse effect on the success of our business
9. 09biotechnology companies “of concern”, including a third-party manufacturer we use for certain product candidates, without losing the ability to contract with, or otherwise receive funding from, the U.S. government
10. 10Because we have no long-term contracts with and rely on third-party manufacturing and supply partners, most of which are sole source suppliers, our supply of research and development, preclinical and clinical development materials may become limited or interrupted or may not be of satisfactory quantity or quality
11. 11in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products
12. 12We, or third-party manufacturers, may be unable to successfully scale-up manufacturing of our product candidates in sufficient quality and quantity, which would delay or prevent us from developing our product candidates and commercializing approved products, if any
13. 13Our approach to the discovery and development of our therapeutic treatments is based on novel technologies that are unproven and may not result in marketable products
14. 14Additionally, we entered into a collaboration with Moderna for the development of mRNA based product candidates. We do not know whether our PROBODY platform will be able to successfully develop product candidates utilizing this mRNA technology
15. 15The market may not be receptive to our product candidates based on a novel therapeutic modality, and we may not generate any future revenue from the sale or licensing of product candidates
16. 16If any product candidate we commercialize fails to achieve market acceptance, it could have a material and adverse effect on our business, financial condition, results of operations and prospects
17. 17collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates
18. 18If our collaborators cease development efforts under our collaboration agreements, or if any of those agreements are terminated, these collaborations may fail to lead to commercial products and we may never receive milestone payments or future royalties under these agreements
19. 19If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect the commercialization of any of our product candidates may be delayed, or never attained, and our business will be harmed
20. 20We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability to develop and commercialize product candidates, impact our cash position, increase our expense and present significant distractions to our management
21. 21If we are unable to successfully develop companion diagnostic tests for certain of our product candidates, or experience significant delays in doing so, we may not realize the full commercial potential of our product candidates
22. 22We may expend our limited resources to pursue a particular product candidate and fail to capitalize on product candidates that may be more profitable or for which there is a greater likelihood of success
23. 23We may experience difficulties in managing our growth and expanding when needed
24. 24Any inability to attract and retain qualified key management and technical personnel would impair our ability to implement our business plan
25. 25Price controls imposed in foreign markets may adversely affect our future profitability
26. 26Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could have a material and adverse effect on our business, financial condition, results of operations and prospects
27. 27Our employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
28. 28Our current operations are concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
29. 29Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S
30. 30Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Intellectual Property

1. 31If we are not able to obtain and enforce patent protection for our technologies or product candidates, development and commercialization of our product candidates may be adversely affected
2. 32We or our licensors, or our collaborators are the first to file patent applications covering certain aspects of our inventions
3. 33The patents of others will not have a material or adverse effect on our business, financial condition, results of operations and prospects
4. 34Other companies or organizations may challenge our or our licensors’ patent rights or may assert patent rights that prevent us from developing and commercializing our products
5. 35We may not be able to protect our intellectual property rights throughout the world
6. 36Russia, we may be unable in the future to pay for the prosecution of patent applications or the maintenance of existing patents in Russia. As a result of these actions, we may not be able to protect our technology from unlicensed use in Russia
7. 37Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities
8. 38If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose our rights to intellectual property rights that are necessary for developing and protecting our product candidates or we could lose certain rights to grant sublicenses
9. 39If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
10. 40If 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

Risks Related to Government Regulation

1. 41We may be unable to obtain or be delayed in obtaining U.S. or foreign regulatory approval and, as a result, be unable or delayed in being able to commercialize our product candidates
2. 42such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission
3. 43physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools
4. 44injunctions or the imposition of civil or criminal penalties
5. 45Our product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated
6. 46Healthcare legislative reform measures may have a material and adverse effect on our business and results of operations
7. 47If we or our collaborators, manufacturers or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions, which could affect our ability to develop, market and sell our products and may harm our reputation
8. 48federal government in addition to requiring drug and therapeutic biologics manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures and pricing information
9. 49Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition
10. 50Even if we are able to commercialize any product candidate, such product candidate may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business
11. 51We may seek and fail to obtain fast track or breakthrough therapy designations for our current or future product candidates. If we are successful, these programs may not lead to a faster development or regulatory review process, and they do not guarantee we will receive approval for any product candidate
12. 52accelerated approval from the FDA, if our confirmatory trials do not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw any accelerated approval we have obtained
13. 53We may seek Orphan Drug Designation for some of our product candidates, and we may be unsuccessful or may be unable to maintain the benefits associated with Orphan Drug Designation, including the potential for market exclusivity
14. 54therapeutic biologic nor gives the drug or therapeutic biologic any advantage in the regulatory review or approval process. In addition, while we may seek Orphan Drug Designation for our product candidates, we may never receive such designations

Risks Related to Ownership of Our Common Stock

1. 55Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline
2. 56revenue to be recognized in 2025 and future years may be significantly lower than 2024 as collaboration research terms come to an end
3. 57If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner or with adequate compliance, we may be subject to a loss of stockholder confidence and sanctions or investigations by regulatory authorities or litigation
4. 58Our stock price may be volatile and purchasers of our common stock could incur substantial losses
5. 59general economic, industry and market conditions
6. 60The future issuance of equity or of debt securities that are convertible into equity will dilute our share capital
7. 61The employment agreements with our executive officers may require us to pay severance benefits to officers in connection with termination of employment or upon a change of control of us, which could harm our financial condition
8. 62An active market for our common stock may not be maintained
9. 63Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval
10. 64Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
11. 65the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine
12. 66We incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices
13. 67Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain
14. 68Our failure to meet the continued listing requirements of the Nasdaq Global Select Market, including minimum stock price requirements, could result in a delisting of our common stock
15. 69We may incur significant costs from class action litigation due to our expected stock volatility
16. 70Any future pandemic could adversely impact our business, including our research, development, including clinical trials, manufacturing and financial condition
17. 71We cannot be certain of the impact of any future pandemic on our business or make any assurance that research, development or manufacturing of our product candidates will not be delayed, discontinued or otherwise impacted
18. 72Adverse U.S. and multi-national financial market conditions may adversely affect our business and financial position
19. 73We may acquire assets or form strategic alliances in the future, and we may not realize the benefits of such acquisitions
20. 74any unanticipated liabilities for activities of or related to the acquired business or its operations, products or product candidates
21. 75Our 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
22. 76Our information technology systems, or those of our CROs or other contractors or consultants we may utilize, may fail, suffer disruptions or suffer security breaches, which could result in a material disruption of our product development programs
23. 77The ongoing armed conflict between Russia and Ukraine or other international conflicts could adversely affect our business, financial condition, and results of operations
24. 78blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets, and bans on various Russian imports
25. 79If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected
26. 80Changes in U.S. or foreign tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, cash flow, financial condition or results of operations
27. 81If securities or industry analysts do not publish research or reports about our business, or if they issue adverse or misleading opinions regarding our stock, our stock price and trading volume could decline