Evommune (EVMN) risk factors, FY2025 10-K

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

1. 01acquire or in-license other technologies; and
2. 02experience any delays or encounter any issues with any of the above, including but not limited to failed studies or trials, complex results, manufacturing challenges, safety issues or other regulatory challenges
3. 03market acceptance of any approved product candidates
4. 04Raising additional capital may cause dilution to our stockholders and may restrict our operations or require us to relinquish rights to our product candidates

Risks Related to Discovery, Development and Regulatory Approval of Product Candidates

1. 05the proprietary rights of others and their competing products and technologies that may prevent our product candidates from being commercialized
2. 06Our clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates or any future product candidates, which would prevent or delay or limit the scope of regulatory approval and commercialization
3. 07our reputation may suffer
4. 08Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, which could adversely affect our business, operating results and prospects
5. 09If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of our therapeutics may be delayed and, as a result, our stock price may decline
6. 10securing product reimbursement
7. 11Obtaining and maintaining marketing approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining marketing approval of our product candidates in other jurisdictions
8. 12In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval
9. 13Our product candidates are subject to extensive regulatory and compliance obligations, compliance with which is costly and time-consuming and which may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates
10. 14the approval policies or regulations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval
11. 15We may develop our current or future product candidates in combination with other therapies, which would expose us to additional risks
12. 16The FDA and any comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction

Risks Related to Commercialization, Marketing and Competition of Our Product Candidates

1. 17If the market opportunities for any of our product candidates, if approved, are smaller than we estimate, our revenue may be adversely affected, and our business may suffer
2. 18We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
3. 19the presence or perceived risk of potential product liability claims
4. 20or any products that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future
5. 21particularly prescription drugs, medical devices and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products
6. 22refuse to allow us to enter into supply contracts, including government contracts
7. 23Our future growth may depend, in part, on our ability to commercialize products in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties

Risks Related to Our Business and Operations, Employee Matters and Managing Growth

1. 24times of war and other major conflicts, we, the third parties with whom we work, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain and ability to produce, sell and distribute our goods and services
2. 25Remote work has increased risks to our information technology systems and data, as our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations
3. 26In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised
4. 27information technology systems or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our services
5. 28We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations
6. 29We are highly dependent on the services of our senior management team and if we are not able to retain members of our management team and recruit and retain additional management, clinical and scientific personnel, our business will be harmed
7. 30Failure to comply with health and data protection laws and regulations could lead to government enforcement actions, including civil or criminal penalties, private litigation and adverse publicity and could negatively affect our operating results and business
8. 31Legislation or other changes in U.S. tax law may have a material adverse effect on our business, cash flow, financial condition or results of operations
9. 32We or the third parties upon whom we depend may be adversely affected by earthquakes, fires or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
10. 33Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any product candidate that we may develop
11. 34a decline in our stock price
12. 35We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations
13. 36improve our operational, financial and management controls, reporting systems and procedures
14. 37Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
15. 38If we or any CDMOs and suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business
16. 39Failure to comply with these laws, regulations and permitting requirements also may result in substantial fines, penalties or other sanctions or business disruption, which could have a material adverse effect on our business, financial condition, results of operations and prospects
17. 40International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects

Risks Related to Government Regulatory and Legal Requirements

1. 41Because of the breadth of these laws and the limited statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws
2. 42Healthcare legislative reform measures may have a negative impact on our business and results of operations
3. 43the availability of capital
4. 44discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, designed to encourage importation from other countries and bulk purchasing

Risks Related to Third Party Relationships

1. 45in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our therapeutics
2. 46regulatory approval for or commercialize our product candidates and our business could be substantially harmed
3. 47Our existing collaborations are, and our future collaborations may be, important to our business. If we are unable to enter into new collaborations, or if our collaborations are not successful, our business could be adversely affected
4. 48collaborations may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates
5. 49Reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed

Risks Related to Intellectual Property

1. 50We have licensed intellectual property rights from third parties and may do so in the future. Such licenses may be subject to early termination if we fail to comply with our obligations in our licenses with third parties, which could result in the loss of rights or technology that are material to our business
2. 51Our success depends in part on our ability to protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection
3. 52the patents of others may have an adverse effect on our business
4. 53We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue or that patents based on our patent applications will not be challenged and rendered invalid or unenforceable
5. 54whether we may experience patent office interruption or delays to our ability to timely secure patent rights covering our product candidates
6. 55We may rely on trade secret and proprietary know-how which can be difficult to trace and enforce and, if we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
7. 56Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our current and any future product candidates
8. 57These and future changes in patent law could increase the uncertainties and costs surrounding the prosecution of our and our licensors’ patent applications and the enforcement or defense of our and our licensors’ issued patents, all of which could have a negative effect on our business
9. 58We may be involved in lawsuits or proceedings to protect or enforce our patents or other intellectual property or the patents of our licensors, which could be expensive, time-consuming and unsuccessful
10. 59Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
11. 60We may be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed trade secrets or other confidential information of their current or former employers or claims asserting inventorship or ownership of what we regard as our own intellectual property
12. 61Rights to improvements to our product candidates may be held by third parties
13. 62We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration date of a third-party patent, which might adversely affect our ability to develop and market our products
14. 63We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses
15. 64the priority of invention of patented technology
16. 65Third-party claims of intellectual property infringement may prevent or delay our product discovery, development and commercialization efforts
17. 66redesigning our product candidates or processes so they do not infringe, which may not be possible or may require substantial monetary expenditures and time
18. 67Our intellectual property licensed from third parties may be subject to retained rights
19. 68Obtaining 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
20. 69Intellectual property rights do not necessarily address all potential threats to our business
21. 70we may not develop additional proprietary technologies that are patentable; and
22. 71We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business
23. 72If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our business may be adversely affected
24. 73as well as the potential loss of or limitations on our ability to develop and commercialize products and technologies covered by these license agreements

Risks Related to Ownership of Our Common Stock

1. 74We do not know whether an active, liquid and orderly trading market will be sustained for our common stock or what the market price of our common stock will be, and, as a result, it may be difficult for you to sell your shares of our common stock
2. 75The market price of our common stock may be volatile, which could result in substantial losses for investors
3. 76the other factors described in this “Risk Factors” section
4. 77Our executive officers, directors and principal stockholders have the ability to control or significantly influence all matters submitted to our stockholders for approval
5. 78We do not expect to pay any dividends for the foreseeable future. Investors may never obtain a return on their investment
6. 79If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline
7. 80These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock
8. 81Our amended and restated certificate of incorporation contains exclusive forum provisions, which may limit a stockholder’s ability to bring a claim in a judicial forum it finds favorable and may discourage lawsuits with respect to such claims
9. 82We will incur significantly increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
10. 83We are an EGC and a smaller reporting company, and the reduced reporting requirements applicable to EGCs and smaller reporting companies may make our common stock less attractive to investors
11. 84Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected
12. 85Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
13. 86We may not be able to satisfy listing requirements of NYSE or obtain or maintain a listing of our common stock on the NYSE
14. 87Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities
15. 88We may become involved in litigation that could divert management’s attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages