Forte Biosciences (FBRX) risk factors, FY2024 10-K

Other

1. 01Forte’s ability to successfully develop any product candidate is highly uncertain
2. 02Positive results from early preclinical studies and current clinical trials are not necessarily predictive of the results of any future clinical trials of product candidates. Forte may be unable to successfully develop, obtain regulatory approval for and commercialize any product candidates
3. 03The market opportunities for FB102 may be limited and Forte’s estimates of the incidence and prevalence of its target patient populations may be inaccurate
4. 04Forte was previously non-compliant with Nasdaq’s minimum bid price requirement and should Forte not be compliant in the future, that could result in the delisting of our common stock and limit investor’s ability to trade in our common stock
5. 05If Forte experiences material weaknesses or otherwise fails to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock

Risks related to Forte’s business, technology and industry

1. 06Forte will require additional capital to fund its operations and if Forte fails to obtain necessary financing, Forte will not be able to complete the development and commercialization of its current lead product candidate, FB102, or any future product candidates
2. 07Through 2021, Forte invested substantially all of its efforts and financial resources into the research and development of FB-401, which was its only product candidate to enter clinical trials. In September 2021, Forte announced that it would not be continuing the advancement of FB-401
3. 08Results from early-preclinical and clinical studies may not be predictive of results from later-stage studies or clinical trials
4. 09Forte’s prospects are highly dependent on a single product candidate, FB102. If we are unable to complete further development of, obtain approval for and commercialize FB102 for one or more indications in a timely manner, our business will be harmed
5. 10We are very early in our development efforts of FB102 and, prior to discontinuing the advancement of FB-401, were early in our clinical development efforts of FB-401
6. 11Forte has incurred net losses in every year since its inception and anticipates that it will continue to incur net losses in the future
7. 12adds operational, compliance, financial and management information systems and personnel to support being a public company
8. 13The length of time necessary to complete clinical trials and to submit an application for marketing approval of a drug product candidate for a final decision by a regulatory authority may be difficult to predict for FB102 or any future product candidate, in large part because of its limited regulatory history
9. 14Successful completion of clinical trials is a prerequisite to submitting a BLA to the FDA, and similar marketing applications to comparable foreign regulatory authorities, for each product candidate, and, consequently, the ultimate approval and commercial marketing of any product candidate
10. 15changes in governmental regulations or administrative action
11. 16Forte’s planned additional preclinical studies or current and future clinical trials or those of its future collaborators may reveal significant adverse events and may result in a safety profile that could inhibit regulatory approval or market acceptance of any of its product candidates
12. 17Positive results from early preclinical studies are not necessarily predictive of the results of any current or future clinical trials of product candidates. Forte may be unable to successfully develop, obtain regulatory approval for and commercialize any product candidates
13. 18Interim top-line and preliminary data from current and future clinical trials that Forte announces or publishes 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
14. 19If Forte fails to comply with environmental, health and safety laws and regulations, Forte could become subject to significant fines or penalties or incur costs that could have a material adverse effect on the success of its business
15. 20Forte faces significant competition from other healthcare companies, and its operating results will suffer if Forte fails to compete effectively
16. 21Even if FB102 or any other product candidate that Forte develops receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, consumers and others in the medical or healthcare community necessary for commercial success
17. 22Forte’s operations and financial results could be adversely impacted by the public health emergencies or other disruptions to the industry
18. 23Forte will need to grow the size of its organization, and may experience difficulties in managing this growth
19. 24improving its operational, financial and management controls, reporting systems and procedures
20. 25If Forte loses key management personnel, or if Forte fails to recruit additional highly skilled personnel, its ability to identify and develop new or next generation product candidate will be impaired, could result in loss of markets or market share and could make Forte less competitive
21. 26Forte’s internal computer systems, or those used by its Clinical Research Organizations ("CROs"), Contract Manufacturing Organizations ("CMOs") or other contractors or consultants, may fail or suffer security breaches
22. 27Forte’s employees, independent contractors, consultants, commercial partners and vendors acting on its behalf may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
23. 28A variety of risks associated with testing and developing a product candidate internationally could materially adversely affect Forte’s business
24. 29business interruptions resulting from geo-political actions, including war, terrorism and public health crises, such as COVID-19 and its variants
25. 30Forte currently has no marketing and sales organization and has no experience in marketing products. If Forte is unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell its product candidate, Forte may not be able to generate product revenue
26. 31Comprehensive tax reform legislation could adversely affect Forte’s business and financial condition
27. 32Forte’s ability to use net operating losses and research and development credits to offset future taxable income or tax liability may be subject to certain limitations

Risks related to government regulation

1. 33maintaining a continued acceptable safety profile of FB102 following approval or commercialization
2. 34Changes in the legal and regulatory environment could limit Forte’s future business activities, increase its operating or regulatory costs, reduce demand for product candidates or result in litigation
3. 35New laws, regulations or governmental policy and their related interpretations, or changes in any of the foregoing, may alter the environment in which Forte does business and, therefore, may impact its operating results or increase its costs or liabilities
4. 36impact the ability of the FDA to timely review and process its regulatory submissions, which could have a material adverse effect on its business, including its ability to access the public markets and obtain necessary capital in order to properly capitalize and continue its operations
5. 37The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products
6. 38Obtaining and maintaining regulatory approval of any of its product candidates in one jurisdiction does not mean that Forte will be successful in obtaining regulatory approval for its product candidate in other jurisdictions
7. 39If Forte is not able to obtain, or if there are delays in obtaining, required regulatory approvals for any product candidates it may develop, Forte will not be able to commercialize, or will be delayed in commercializing, such product candidates, and its ability to generate revenue will be materially impaired
8. 40the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering its clinical data insufficient for approval
9. 41If Forte experiences delays in obtaining approval or if Forte fails to obtain approval of any product candidate it seeks to develop, the commercial prospects for such product candidate may be harmed, and its ability to generate revenues will be materially impaired
10. 42Forte’s reputation may suffer
11. 43injunctions or the imposition of civil or criminal penalties
12. 44Non-compliance by Forte or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance requirements, can also result in significant financial penalties

Risks related to Forte’s intellectual property

1. 45If the scope of any patent protection Forte obtains is not sufficiently broad, or if Forte loses any future patent protection, its ability to prevent its competitors from commercializing similar or identical technology and product candidates would be adversely affected
2. 46Forte’s rights to develop and commercialize any future product candidates may be subject, in part, to the terms and conditions of future licenses granted to it by others
3. 47the priority of invention of patented technology
4. 48Forte may not be able to protect its intellectual property and proprietary rights throughout the world
5. 49Obtaining and maintaining Forte’s patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and its patent protection could be reduced or eliminated for non-compliance with these requirements
6. 50Changes in U.S. patent law could diminish the value of patents in general, thereby impairing Forte’s ability to protect any products it develops
7. 51Forte's future issued patents covering product candidates Forte develops could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
8. 52Patent terms may be inadequate to protect our competitive position on our products and services for an adequate amount of time
9. 53If Forte does not obtain patent term extension and/or data exclusivity for any product candidate that Forte may develop, its business may be materially harmed
10. 54Forte may be subject to claims challenging the inventorship of its patents and other intellectual property
11. 55If Forte is unable to protect the confidentiality of its trade secrets, its business and competitive position would be harmed
12. 56Forte may be subject to claims that its employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what Forte regards as its own intellectual property
13. 57Third-party claims of intellectual property infringement, misappropriation or other violation against Forte or its collaborators may prevent or delay the development and commercialization of any product candidates Forte develops and other technologies
14. 58Forte may become involved in lawsuits to protect or enforce its patents and other intellectual property rights, which could be expensive, time-consuming, and unsuccessful
15. 59Intellectual property rights do not necessarily address all potential threats

Risks related to Forte’s reliance on third parties

1. 60We rely on third parties to conduct our preclinical studies, and plan to rely on third parties to conduct clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research and studies
2. 61the misappropriation of our proprietary information, including our trade secrets and know-how
3. 62Third-party relationships are important to Forte’s business. If Forte is unable to maintain its collaborations, enter into new relationships or if these relationships are not successful, its business could be adversely affected
4. 63current and future relationships may be terminated by the collaborator, and, if terminated, Forte could be required to raise additional capital to pursue further development or commercialization of the applicable product candidate
5. 64Additionally, if any of Forte’s current or future third parties terminate their agreement with Forte, Forte may find it more difficult to attract new collaborators and its perception in the business and financial communities could be adversely affected

General Risks

1. 65The market price of Forte’s common stock is expected to be volatile. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies
2. 66Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock
3. 67Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
4. 68Forte has previously been and may in the future be noncompliant with Nasdaq’s minimum bid price requirement, which could result in the delisting of our common stock, negatively affect the price of our common stock and limit investors’ ability to trade in our common stock
5. 69Forte incurs additional costs and demands upon management as a result of complying with the laws and regulations affecting public companies
6. 70Anti-takeover provisions in Forte’s charter documents and under Delaware law could make an acquisition of Forte more difficult and may prevent attempts by Forte’s stockholders to replace or remove the company management
7. 71Forte’s bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between Forte and its stockholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with Forte or its directors, officers or other employees
8. 72Forte does not anticipate paying any cash dividends in the foreseeable future
9. 73Future sales of shares by existing stockholders could cause Forte’s stock price to decline
10. 74If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about Forte, its business or its market, its stock price and trading volume could decline
11. 75Forte is able to take advantage of reduced disclosure and governance requirements applicable to smaller reporting companies, which could result in its common stock being less attractive to investors
12. 76Forte’s 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