Filana Therapeutics (FLNA) risk factors, FY2025 10-K

Risks Related to the Discovery, Development, and Commercialization of Our Product Candidates

1. 01Our product candidates are based on new scientific approaches and novel technology, which makes it difficult to predict the time and cost of product candidate development and likelihood of success100% rewritten
2. 02We have a limited operating history in our business targeting TSC- related epilepsy and no history of product approvals for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability68% rewritten
3. 03We may encounter substantial delays in clinical studies that we conduct or may not be able to conduct or complete clinical studies on the timelines we expect, if at allNew
4. 04If physicians and patients do not accept and use our drugs, we will not achieve sufficient product revenues and our business will suffer
5. 08The FDA has placed a full clinical hold on our planned clinical studies, which may cause our business to suffer100% rewritten
6. 09A clinical hold is an order issued by FDA or another regulatory agency to suspend an ongoing or planned clinical trial, typically due to newly identified deficiencies with, or the need for additional information regarding, the subject study or drug candidateNew
7. 10The drug development process, the clinical trial process and the enrollment and retention of patients in clinical trials could be challenging, expensive and time-consuming for the indications that we are targeting
8. 11We are heavily dependent on the success of simufilam, our lead product candidate, which is under development. If this product candidate is unsuccessful in clinical development or does not receive regulatory approval, we will be unable to generate product revenue and our business will be harmed64% rewritten
9. 12The results of clinical studies are subject to a variety of factors, and there can be no assurance for any indication that simufilam will achieve clinical success, advance to regulatory approval, be approved by applicable regulatory agencies, or be successfully commercialized84% rewritten
10. 13We have a limited operating history in our business targeting TSC-related epilepsy and no history of product approvals for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viabilityNew
11. 14We may not be able to obtain orphan drug exclusivity for our product candidates in the United States or the European UnionNew
12. 15Our inability to develop formulations of simufilam appropriate for pediatric patients under the age of 12 could delay or prevent clinical trials of simufilam in that populationNew
13. 16We cannot give any assurance that we will file for regulatory approval for any of our product candidates or that, if we file for approval, our product candidates will receive regulatory approval, which is necessary before they can be commercialized
14. 17If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which would have a material adverse effect on our business and could potentially cause us to cease operations
15. 18There can be no assurance that promising results of preclinical studies or Phase 1 or Phase 2 clinical trials with simufilam will be reproduced in later stage studies, including Phase 3 studies
16. 19Results observed in preclinical studies and early stage clinical trials for simufilam are not sufficient evidence of drug safety or efficacy for purposes of regulatory approval 42% rewritten
17. 20We may encounter substantial delays in the clinical studies that we conduct or may not be able to conduct or complete our clinical studies on the timelines we expect, if at all
18. 21delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing
19. 22Governmental actions with respect to U.S. drug prices could negatively impact our businessNew
20. 23effectiveness of marketing and distribution efforts by us and other licensees and distributors
21. 24We may not be successful in developing our product candidates in neurodegeneration or other forms of central nervous system disorders
22. 25Interim, “ top-line ” and preliminary data from our clinical trials that we announce or publish from time to time are likely to change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final dataset
23. 26generate sufficient product revenues
24. 27We rely on third parties to conduct our studies and some aspects of our research, and such third parties may not perform satisfactorily, which could delay or harm our studies, research, and testing
25. 28We may not be successful in our efforts to expand our technology or product candidates in other indications58% rewritten
26. 29If we fail to successfully identify and develop additional product candidates, our commercial opportunity will be limited
27. 30Our clinical studies may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates and may suffer from improper or inadequate study design or enrollment criteria, which would prevent, delay, or limit the scope of regulatory approval and commercialization
28. 31The market opportunities for simufilam, if approved, may be smaller than we anticipate
29. 32We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that additional competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced, or more effective than ours, any of which may harm our business operations

Risks Related to Government Regulation and Other Legal Compliance Matters

1. 05Our ability to market and promote our product candidates will be determined and limited by FDA-approved labeling
2. 06If we fail to comply or stay in compliance with the complex set of federal, state, local and foreign laws and regulations that apply to our business, we could suffer severe consequences that could materially and adversely affect our operating results and financial condition
3. 33We are, and may in the future be, subject to various investigations and legal proceedings82% rewritten
4. 34In response to such legal proceedings, we have established a comprehensive document retention policy that strictly governs how we handle, store and protect our documents and data. Failure to comply with our document retention policy would expose us to risk of enforcement actions and penalties under applicable lawsNew
5. 35Additional future litigation involving us could be costly and time-consuming to defend
6. 36If we are ultimately unable to file for and obtain regulatory approval for our product candidates, we will be unable to generate product revenue, and our business will be substantially harmed
7. 37the approval policies or regulations of FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval85% rewritten
8. 38Our application to register our new corporate name as a trademark may be denied, which could adversely affect our businessNew
9. 39The FDA may change the statutory requirements for drug approval46% rewritten
10. 40Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements23% rewritten
11. 41otherwise comply with applicable criminal, civil or regulatory laws governing their conduct
12. 42Government agencies may establish and promulgate usage guidelines that could limit the use of our product candidates
13. 43Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences
14. 44We may be subject to legal liability associated with clinical trials
15. 45Our insurance policies may be inadequate and potentially expose us to unrecoverable risks
16. 46Legislative and regulatory changes and future changes regarding the healthcare system could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities or affect our ability to profitably sell any product candidates for which we obtain marketing approval

Risks Related to Our Business and Operations

1. 07Our ability to operate without any significant disruptions will, in part, depend on our ability to source materials and clinical supplies via our product supply chains67% rewritten
2. 63We have been and may in the future be subject to lawsuits and governmental investigations and inquiries52% rewritten
3. 64Our current dependence on single source suppliers for our drug substance and drug product could materially adversely affect our ability to manufacture our product candidates and materially increase our costs
4. 65In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid, unpredictable and entirely beyond our control61% rewritten
5. 66the inability to produce required volume in a timely manner and to quality standards
6. 67Any product candidates that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us
7. 68Our employees, principal investigators, consultants and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading28% rewritten
8. 69Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
9. 70Failure to comply with laws regarding data privacy could expose us to risk of enforcement actions and penalties under such laws
10. 71Ownership of our corporate headquarters and property leasing are subject to numerous risks and uncertainties
11. 72Our reliance on third parties requires us to share our proprietary information, which increases the possibility that a competitor will discover this information or that our proprietary information will be misappropriated or inadvertently disclosed
12. 73Our business involves environmental risks that may result in liability for us
13. 74Business disruptions and lack of appropriate levels of commercial insurance could seriously harm our future revenue and financial condition and increase our costs and expenses
14. 75Social media platforms have significantly altered the dynamics of corporate communications and present risks and challenges, some of which are and may continue to be unknown to us
15. 76We are a small company with a limited number of employees. We are highly dependent on our key personnel, and if we are not successful in attracting, motivating, and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
16. 77We may need to cease our operations if we are unable to attract and retain key personnel
17. 78If our current research collaborators or scientific advisors terminate their relationships with us or develop relationships with a competitor, our ability to continue our business operations could be adversely affected
18. 79Our business may be impacted by political events, war, terrorism, business interruptions and other geopolitical events and uncertainties beyond our control

Risks Related to Our Intellectual Property

1. 47If we are unable to obtain and maintain sufficient patent protection for any product candidates, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize any product candidates we may develop may be adversely affected
2. 48Issued patents covering our product candidates and other technologies could be found invalid or unenforceable if challenged in court or before administrative bodies in the U.S. or abroad
3. 49If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed
4. 50If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
5. 51If any of our patent applications do not issue as patents in any jurisdiction, we may not be able to compete effectively
6. 52If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected
7. 53Filing, prosecuting, and defending patents on our product candidates and other technologies in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S
8. 54Obtaining 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
9. 55Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products
10. 56We may be subject to claims challenging the inventorship of our patents and other intellectual property
11. 57We may not be successful in obtaining necessary rights to our product candidates or other technologies
12. 58We may leverage our scientific insights in neurodegeneration and neuroinflammation and advanced tools in molecular biology, biochemistry, and imaging to expand our science to other diseases, initially focusing on central nervous system disordersNew
13. 59We are currently subject to a full clinical hold. If we are successful in our efforts to have the clinical hold lifted, we intend to conduct a proof-of-concept clinical study to better understand simufilam’s potential as a treatment for TSC-related epilepsyNew
14. 60We 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 which may prevent or delay the development of our product candidates
15. 61We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming, and unsuccessful
16. 62Intellectual property rights do not necessarily address all potential threats

Risks Related to Financial Condition and Capital Requirements

1. 80We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur net losses for the foreseeable future
2. 81We have incurred net losses in each reporting period since our inception, including a net loss of $91.0 million for the year ended December 31, 2025. As of December 31, 2025, we had an accumulated deficit of $496.1 million
3. 82defend against litigation, claims or other uncertainties that may arise from allegations made against us or our collaborators
4. 83We have broad discretion in the use of our capital resources, including the net proceeds from any of our financing transactions, and we may not use them effectively
5. 84We have no product revenues and may never achieve revenues or profitability based on product revenues
6. 85attracting, hiring, and retaining qualified personnel
7. 86We may require additional capital to fund our operations and to complete the development of our product candidates. A failure to obtain this necessary capital on acceptable terms, or at all, could force us to delay, limit, reduce, or terminate our commercialization efforts, product development, or other operations
8. 87Global credit and financial market conditions could negatively impact the value of our portfolio of cash equivalents and our ability to meet our financing objectives

Risks Related to the Ownership of Our Common Stock

1. 88We do not know whether a sufficient market will continue to develop for our securities or what the market price of our securities will be, and, as a result, it may be difficult for investors to sell shares of our common stock
2. 89The market price of our common stock has historically been highly volatile, and we expect it to continue to be volatile, which could result in substantial losses for investors who purchase our shares
3. 90securities litigation, regardless of merit
4. 91If securities analysts do not publish research or reports about our business, or we are the subject of negative publicity, the price of our stock could decline
5. 92If we are unable to maintain effective internal controls, our business, financial position, and results of operations could be adversely affected
6. 93Anti-takeover provisions of our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may have the effect of deterring or delaying attempts by our stockholders to remove or replace management, engage in proxy contests and effect changes in control
7. 94the ability of the Board to issue up to 10,000,000 shares of preferred stock without stockholder approval upon the terms and conditions and with the rights, privileges and preferences as the Board may determine
8. 95These provisions, alone or together, could have the effect of deterring or delaying changes in incumbent management, proxy contests or changes in control
9. 96Our amended and restated bylaws provide that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933
10. 97Changes in our ownership could limit our ability to utilize net operating loss carryforwards
11. 98In order to raise additional capital to support our operations, we may sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock which could result in dilution our stockholders42% rewritten
12. 99The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements could prove inaccurate