ImmunityBio (IBRX) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Capital Requirements

1. 01Our payment obligations under the RIPA may adversely affect our financial position and results of operations and our ability to raise additional capital, which in turn may increase our vulnerability to adverse regulatory developments or economic or business downturns
2. 02The RIPA and our payment obligations to Oberland could have important negative consequences to holders of our securities. For example, a portion of our cash flow from operations will be needed to make required payments to Oberland and will not be available to fund future operations
3. 03Our debt and revenue interest liability could adversely affect our cash flows and limit our flexibility to raise additional capital
4. 04The occurrence of any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition
5. 05The accounting method for convertible debt securities could have a material effect on our reported financial results
6. 06We invest our cash on hand in various financial instruments which are subject to risks that could adversely affect our business, results of operations, liquidity and financial condition
7. 07Our ability to use NOLs and research and development credits to offset future taxable income may be subject to certain limitations
8. 08Our transfer pricing policies may be subject to challenge by the IRS or other taxing authorities
9. 09Unanticipated changes in effective tax rates or adverse outcomes resulting from new tax statutes or regulations, examination of our income or other tax returns could expose us to greater than anticipated tax liabilities
10. 10Risks Related to the Discovery, Development and Commercialization of our Approved Product and our Other Product Candidates
11. 11We have limited experience as a commercial company and the sales, marketing, and distribution of our approved product or any future approved products may be unsuccessful or less successful than anticipated
12. 12We have developed an approved product and are developing other product candidates in combination with other therapies, which expose us to additional risks
13. 13Our clinical trials may fail to adequately demonstrate the safety and efficacy of our product candidates, which would prevent or delay regulatory approval and commercialization of other product candidates
14. 14The ongoing shortage of TICE BCG in the U.S. may adversely impact market uptake of ANKTIVA and it may also delay our ability to execute our clinical trials or seek new approvals
15. 15We may choose to expend our limited resources on programs that do not yield successful product candidates or additional indications and may fail to capitalize on other indications and product candidates that may ultimately have been more profitable or had a greater likelihood of success
16. 16Our projections regarding the market opportunities for our approved product and our other product candidates may not be accurate, and the actual market for our approved product and other product candidates may be smaller than we estimate
17. 17There can be no assurance that we will complete a strategic partnership transaction on acceptable terms, or at all
18. 18Interim, initial, top-line and preliminary data from our clinical trials that we announce or publish 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
19. 19Even if more of our product candidates are approved and commercialized, we still may not become profitable
20. 20If we encounter delays or difficulties enrolling and/or maintaining patients in our clinical trials, our clinical development activities, and receipt of necessary marketing approvals, could be delayed or otherwise adversely affected
21. 21We also are required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so could result in enforcement actions and adverse publicity
22. 22We may not be successful in managing the buildout of our manufacturing facilities and associated costs or satisfying manufacturing-related regulatory requirements
23. 23We also may not successfully realize the anticipated benefits from capital expenditures at such facilities based on factors such as delays and uncertainties regarding development, regulatory approval, and commercialization of our product candidates, as well as the potential to lose access to the leased facilities
24. 24If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our approved product or other product candidates
25. 25We will face significant competition from other biotechnology and pharmaceutical companies and from non-profit institutions
26. 26As a condition of approval, the FDA may require that we implement various post-marketing requirements and conduct post-marketing studies, any of which would require a substantial investment of time, effort, and money, and which may limit our commercial prospects
27. 27If our approved product or any of our other product candidates do not achieve broad market acceptance, the revenues that we generate from their sales will be limited
28. 28Our approved product and our product candidates may face competition sooner than anticipated
29. 29We will need to obtain FDA approval of any proposed branded product names, and any failure or delay associated with such approval may adversely affect our business
30. 30A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, or the perception of its effects, may materially and adversely affect our business, operations and financial condition

Risks Related to Reliance on Third Parties

1. 31Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services
2. 32If conflicts arise between us and our collaborators or strategic partners, these parties may act in a manner adverse to us and could limit our ability to implement our strategies
3. 33Our use of joint ventures, strategic partnerships, supply agreements, collaborations, and/or alliances may expose us to risks associated with jointly owned investments
4. 34We are heavily dependent on our senior management, particularly Dr. Soon-Shiong, our Founder, Executive Chairman and Global Chief Scientific and Medical Officer, and a loss of a member of our senior management team in the future, even if only temporary, could harm our business
5. 35We will need to grow the size and capabilities of our organization, and we may experience difficulties in achieving and managing this growth
6. 36If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks
7. 37A variety of risks associated with marketing our approved product and other product candidates internationally could materially adversely affect our business
8. 38These and other risks associated with international operations may materially adversely affect our ability to attain or maintain profitable operations
9. 39We are party to a public-private partnership regarding our manufacturing facility in Dunkirk, New York, and our failure to meet the obligations of those agreements could materially impact our development, operations and prospects
10. 40Our counterparties in the public-private partnership for the Dunkirk Facility may fail to meet their obligations, which could materially impact our development, operations and prospects for the facility
11. 41Our contractors and subcontractors may place liens on our projects, and if they then successfully foreclose on such projects, we may not be able to use such assets for our business

Risks Related to Healthcare and Other Government Regulations

1. 42Obtaining and maintaining regulatory approval of our approved product or other product candidates in one jurisdiction does not mean that we will be successful in obtaining or maintaining regulatory approval in other jurisdictions
2. 43Failure to obtain regulatory approval in any targeted jurisdiction would prevent us from marketing our products to a larger patient population and reduce our commercial opportunities
3. 44If we are unable to establish sales, marketing and distribution capabilities, we may not be successful in commercializing our approved product or our other product candidates if and when they are approved
4. 45Problems related to large-scale commercial manufacturing could cause delays in product launches, an increase in product costs, product recalls or product shortages
5. 46If any of these events were to occur, it would have a material and adverse effect on our business, financial condition and results of operations
6. 47Inappropriate assumptions may be drawn based on results for patients who receive access to any of our non-approved product candidates through compassionate use, EAPs, or right to try access, which should not be viewed as representative of how the product candidate will perform in a well-controlled clinical trial
7. 48Our failure to comply with state, national and/or international privacy and security laws and regulations could lead to government enforcement actions and significant penalties against us and adversely impact our operating results
8. 49We and our third-party contractors must comply with environmental, health and safety laws and regulations. A failure to comply with these laws and regulations could expose us to significant costs or liabilities
9. 50Coverage and reimbursement may be limited or unavailable in certain market segments for our approved product or other product candidates, which could make it difficult for us to sell our approved product or other product candidates profitably
10. 51We may face difficulties from changes to current regulations and future legislation
11. 52Governments outside the U.S. tend to impose strict price controls, which may adversely affect our revenues, if any
12. 53Our employees, independent contractors, consultants, commercial partners, principal investigators, CROs, CMOs, suppliers and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements

Risks Related to Intellectual Property

1. 54If any of our owned or in-licensed patent applications do not issue as patents in any jurisdiction, we may not be able to compete effectively
2. 55Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our approved product and other product candidates
3. 56Obtaining 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
4. 57Our rights to develop and commercialize our product candidates and technologies are subject, in part, to the terms and conditions of licenses granted to us by others
5. 58If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we may be required to pay damages, and we could lose license rights that are important to our business
6. 59We have limited foreign intellectual property rights and may not be able to protect our intellectual property rights in various jurisdictions throughout the world
7. 60We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed trade secrets or other confidential information of third parties or claims asserting ownership of what we regard as our own intellectual property
8. 61We may not be able to license or acquire new or necessary intellectual property rights or technology from third parties
9. 62If we do not obtain patent term extension and data exclusivity for our approved product or any other product candidates we may develop, our business may be materially harmed
10. 63We may be subject to claims challenging rights in our patents and other intellectual property
11. 64If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
12. 65If 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
13. 66Intellectual property rights do not necessarily address all potential threats

Risks Related to Our Common Stock

1. 67Dr. Soon-Shiong, our Founder, Executive Chairman, Global Chief Scientific and Medical Officer and principal stockholder, has significant interests in other companies which may conflict with our interests
2. 68Dr. Soon-Shiong, through his voting control of the company, has the ability to control actions that require stockholder approval
3. 69The market price of our common stock has been and may continue to be volatile, and investors may have difficulty selling their shares
4. 70Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall
5. 71We have incurred and will continue to incur costs as a result of operating as a public company and our management has been and will be required to devote substantial time to compliance initiatives and corporate governance practices, including maintaining an effective system of internal control over financial reporting
6. 72If a restatement of our consolidated financial statements were to occur, our stockholders’ confidence in the company’s financial reporting in the future may be affected, which could in turn have a material adverse effect on our business and stock price
7. 73We have not paid cash dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock
8. 74Because we are relying on the exemptions from corporate governance requirements as a result of being a “controlled company” within the meaning of the Nasdaq listing standards, you do not have the same protections afforded to stockholders of companies that are subject to such requirements
9. 75If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline
10. 76Holders of our CVRs that are payable contingent upon us achieving certain milestones may not receive any further consideration
11. 77We are not subject to the provisions of Section 203 of the DGCL, which could negatively affect your investment
12. 78Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management
13. 79Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us
14. 80Our bylaws provide that the Delaware Court of Chancery is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees