Hepion Pharmaceuticals (HEPA) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We have incurred losses since inception, anticipate that we will incur continued losses for the foreseeable future indicating the possibility that we may not be able to operate in the future
2. 02Our product candidates may exhibit undesirable side effects when used alone or in combination with other approved pharmaceutical products or investigational new drugs, which may delay or preclude further development or regulatory approval or limit their use if approved
3. 03We have limited capacity for recruiting and managing clinical trials, which could impair our timing to initiate or complete clinical trials of our product candidates and materially harm our business
4. 04We, and our collaborators, must comply with extensive government regulations in order to advance our product candidates through the development process and ultimately obtain and maintain marketing approval for our products in the U.S. and abroad
5. 05We will require substantial additional funding which may not be available to us on acceptable terms, or at all. If we fail to raise the necessary additional capital, we may be unable to complete the development and commercialization of our product candidates or continue our development programs
6. 06We will need to obtain FDA approval of any proposed product brand names, and any failure or delay associated with such approval may adversely impact our business
7. 07Clinical trials involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results
8. 08Delays in clinical testing could result in increased costs to us and delay our ability to generate revenue
9. 09The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidate, our business will be substantially harmed
10. 10This lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidate, which would significantly harm our business, results of operations and prospects
11. 11We may be required to suspend or discontinue clinical trials due to unexpected side effects or other safety risks that could preclude approval of our product candidates
12. 12If we fail to comply with healthcare regulations, we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial condition could be adversely affected
13. 13We need FDA approval prior to marketing our product candidates in the United States. If we fail to obtain FDA approval to market our product candidates, we will be unable to sell our product candidate in the United States and we will not generate any revenue
14. 14If our product candidates are unable to compete effectively with marketed drugs targeting similar indications as our product candidate, our commercial opportunity will be reduced or eliminated
15. 15We currently have no sales and marketing organization. If we are unable to establish a direct sales force in the United States to promote our products, the commercial opportunity for our products may be diminished
16. 16We may need others to market and commercialize our product candidate in international markets
17. 17If the manufacturers upon whom we intend to rely on fail to produce our product candidates, in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our product candidate
18. 18We may not be able to manufacture our product candidates in commercial quantities, which would prevent us from commercializing our product candidates
19. 19Materials necessary to manufacture our product candidates may not be available on commercially reasonable terms, or at all, which may delay the development and commercialization of our product candidates
20. 20Our product candidates, if approved for sale, may not gain acceptance among physicians, patients and the medical community, thereby limiting our potential to generate revenues
21. 21Guidelines and recommendations published by various organizations can impact the use of our product
22. 22In the event that we need to change our third-party contract manufacturers, our preclinical studies, clinical trials or the commercialization of our product candidate could be delayed, adversely affected or terminated, or such a change may result in significantly higher costs
23. 23Our industry is highly competitive and subject to rapid technological changes. As a result, we may be unable to compete successfully or develop innovative products, which could harm our business
24. 24We do not currently have any internal drug discovery capabilities, and therefore we are dependent on in-licensing or acquiring development programs from third parties in order to obtain additional product candidates
25. 25If a product liability claim is successfully brought against us for uninsured liabilities, or such claim exceeds our insurance coverage, we could be forced to pay substantial damage awards that could materially harm our business
26. 26If our use of hazardous materials results in contamination or injury, we could suffer significant financial loss
27. 27Our operations could be disrupted if our information systems fail, if we are unsuccessful in implementing necessary upgrades or if we are subject to cyber-attacks
28. 28Business disruptions could seriously harm future revenue and financial condition and increase our costs and expenses

Risks Relating to the Commercialization of our Product Candidate

1. 29We may delay or terminate the development of our product candidates at any time if we believe the perceived market or commercial opportunity does not justify further investment, which could materially harm our business
2. 30If we fail to enter into or maintain collaborations or other sales, marketing and distribution arrangements with third parties to commercialize our product candidates, or otherwise fail to establish marketing and sales capabilities, we may not be able to successfully commercialize our products
3. 31If government and third-party payers fail to provide adequate reimbursement or coverage for our products or those we develop through collaborations, our revenues and potential for profitability will be harmed
4. 32If any product candidate that we develop independently or through collaborations is approved but does not gain meaningful acceptance in its intended market, we are not likely to generate significant revenues or become profitable
5. 33We may be unable to successfully develop a product candidate that is the subject of collaboration if our collaborator does not perform, terminates our agreement, or delays the development of our product candidate

Risks Related to Our Intellectual Property

1. 34If we are unable to adequately protect or expand our intellectual property related to our future product candidates, our business prospects could be harmed
2. 35If a third party claims we are infringing on its intellectual property rights, we could incur significant expenses, or be prevented from further developing or commercializing our product candidates
3. 36Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information and may not adequately protect our intellectual property
4. 37Our failure to successfully discover, acquire, develop and market additional product candidates or approved products would impair our ability to grow

Risks Related to Government Regulation

1. 38Even if our product candidates receive regulatory approval, it may still face future development and regulatory difficulties
2. 39Even if our product candidates receive regulatory approval in the United States, we may never receive approval to commercialize it outside of the United States
3. 40We intend to rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to seek or obtain regulatory approval for or commercialize our product candidates
4. 41We will need to increase the size of our organization
5. 42Reimbursement may not be available for our product candidates, which would impede sales
6. 43Healthcare reform measures and other recent legislative initiatives could adversely affect our business
7. 44Our clinical activities involve the handling of hazardous materials, and we must comply with environmental laws and regulations, which can be expensive and restrict how we do business

Risks Related to Our Common Stock

1. 45Our common stock may be delisted if we fail to comply with continued listing standards
2. 46On March 18, 2025, we received written notice from Nasdaq indicating that the bid price for our common stock, for the last 10 consecutive business days, had closed below $0.10 per share and, as a result, we are subject to the provisions contemplated under Listing Rule 5810(c)(3)(A)(iii) (the “Low Priced Stocks Rule”)
3. 47The market price of our common stock may be volatile and adversely affected by several factors
4. 48In addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock
5. 49U.S. federal income tax reform could adversely affect us
6. 50Certain provisions in our certificate of incorporation and by-laws, and of Delaware law, may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock
7. 51Delaware law also imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock
8. 52Future sales and issuances of our common stock or rights to purchase common stock pursuant to our equity incentive plan could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall
9. 53We may be at risk of securities class action litigation
10. 54If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline
11. 55We presently do not intend to pay cash dividends on our common stock