Immunic (IMUX) risk factors, FY2024 10-K

Macroeconomic Risks

1. 01Our business could be materially and adversely affected in the future by the effects of disease outbreaks, epidemics and pandemics
2. 02Continued inflation and uncertainty in global economic conditions could negatively affect our business, results of operations and financial condition
3. 03Our clinical trials have been delayed as a result of the ongoing military action by Russia in Ukraine and the continuation of this conflict could have further adverse effects on our business

Risks Related to Our Business and Financial Condition

1. 04We currently have no source of product sales revenue and may never earn product revenue or be profitable
2. 05We will require substantial additional funding, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, other operations or future commercialization efforts
3. 06Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
4. 07Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability continue as a “going concern

Risks Related to the Clinical Development and Marketing Approval of Our Product Candidates

1. 08The marketing approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product candidates, our business will be substantially harmed
2. 09Clinical drug development involves a lengthy and expensive process with an uncertain outcome
3. 10Use of patient-reported outcomes in our clinical trials may delay the development of our product candidates or increase development costs
4. 11Clinical failure can occur at any stage of clinical development. Because the results of earlier clinical trials are not necessarily predictive of future results, any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive marketing approval
5. 12Our product candidates may cause undesirable adverse effects or have other properties that could delay or prevent their marketing approval, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if obtained
6. 13Any of these events could prevent us from achieving or maintaining market acceptance of any approved product candidates, and could materially adversely affect our business, financial condition, results of operations and prospects
7. 14We may use our limited financial and operational resources to pursue a particular research program or product candidate and fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood of success
8. 15We may find it difficult to enroll patients in our clinical trials given the limited number of patients who have the diseases for which some of our product candidates are being studied. Difficulty in enrolling patients could delay or prevent clinical trials of our product candidates
9. 16If we fail to obtain regulatory approval in jurisdictions outside the United States, we will not be able to market our products in those jurisdictions
10. 17Agencies like the FDA and national competition regulators in European countries strictly regulate the marketing and promotion of drugs. If we are found to have improperly promoted any of our product candidates for uses beyond those that are approved, we may become subject to significant liability
11. 18products and these claims are approved for our product labeling, we will not be able to promote our product candidates as superior to competing products
12. 19The impact on us of recent and future healthcare reform legislation and other changes in the healthcare industry and healthcare spending is currently unknown, and may adversely affect our business model
13. 20If we 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 our business, financial condition or results of operations
14. 21Other Risks Related to Our Business
15. 22We may not be able to win contracts or grants from governments, academic institutions or non-profits
16. 23Our success as a biotechnology company depends on our continued ability to attract, retain and motivate highly qualified management and scientific and clinical personnel. The loss of the services of any such personnel could delay or prevent obtaining marketing approval or commercialization of our product candidates
17. 24If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of applicable insurance coverage, we could be forced to pay substantial damage awards
18. 25We could have liability if our employees, independent contractors, investigators, CROs, consultants, collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
19. 26We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations
20. 27Our internal computer systems, or those of our development collaborators, third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs

Risks Related to Commercialization of Our Product Candidates

1. 28Even if we obtain the required regulatory approvals in the United States and other territories, the commercial success of our product candidates will depend on market awareness and acceptance of our product candidates
2. 29We currently have no marketing and sales experience. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, if and when regulatory approval is received, we may be unable to generate any revenue
3. 30If we fail to enter into strategic relationships or collaborations, our business, financial condition, commercialization prospects and results of operations may be materially adversely affected
4. 31Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our products profitably
5. 32We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do
6. 33The size of the potential market for our product candidates is difficult to estimate and, if any of our assumptions are inaccurate, the actual markets for our product candidates may be substantially smaller than our estimates
7. 34Negative developments in the field of oral therapies for chronic inflammatory and autoimmune diseases could damage public perception of our product candidates and negatively affect our business
8. 35Price controls may be imposed in foreign markets, which may adversely affect our future profitability

Risks Related to Third Parties

1. 36We rely on third-party suppliers and other third parties for production of our product candidates, and our dependence on these third parties may impair the advancement of our research and development programs and the development of our product candidates
2. 37We may be unable to realize the potential benefits of any collaboration
3. 38We enter into various contracts in the normal course of our business in which we indemnify the other party to the contract. In the event we have to perform under these indemnification provisions, it could have a material adverse effect on our business, financial condition and results of operations
4. 39If our contract manufacturers fail to comply with continuing regulations, resulting enforcement action could adversely affect us

Risks Related to Our Intellectual Property

1. 40Our proprietary rights may not adequately protect our technologies and product candidates
2. 41We may not be able to protect our intellectual property rights throughout the world
3. 42If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, we may be unable to extend the term of marketing exclusivity for our product candidates and our business may be materially harmed
4. 43We may not identify relevant patents or may incorrectly interpret the relevance, scope or expiration of a patent issued to others, which could adversely affect our ability to develop and market our product candidates
5. 44Obtaining and maintaining patent protection depends on compliance with various procedural, documentary, 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
6. 45The patent protection for our product candidates may expire before we are able to maximize their commercial value, which may subject us to increased competition and reduce or eliminate our opportunity to generate product revenue
7. 46We may become involved in lawsuits or interference proceedings to protect patents held by us or our licensors or other intellectual property rights, which could be expensive, time-consuming and ultimately unsuccessful
8. 47Third-party claims of intellectual property infringement or misappropriation may adversely affect our business and could prevent us from developing or commercializing our product candidates
9. 48Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
10. 49Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
11. 50Intellectual property rights do not protect against all potential threats to our potential competitive advantage
12. 51Confidentiality agreements with employees, consultants and others may not adequately prevent disclosure of trade secrets and protect other proprietary information
13. 52We may need to license certain intellectual property from third parties, and such licenses may not be available on commercially reasonable terms, or at all
14. 53We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties
15. 54We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
16. 55Our reliance 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
17. 56If 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

Risks Related to Being a Public Company

1. 57We incur significant costs and demands upon management as a result of complying with the laws and regulations affecting public companies
2. 58We are required to report on internal control over financial reporting, which has increased our costs as a public company and increased the demands on management

Risks Related to Our Common Stock

1. 59Our failure to meet the $1.00 minimum bid price or other continued listing requirements of Nasdaq could result in a delisting of our common stock, which would negatively impact the market price and liquidity of our common stock and our ability to access the capital markets
2. 60The market price of our common stock has been and is expected to continue to be volatile
3. 61Moreover, stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations have had, and can be expected to continue to have, adverse effects on the trading price of our common stock
4. 62Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for the company that stockholders might consider favorable
5. 63Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall
6. 64For example, in connection with the second and third tranches under the January 2024 Financing, we may issue up to an additional $160 million of common stock, which could represent the issuance of up to approximately 93.2 million shares of common stock
7. 65We may experience adverse consequences because of required indemnification of officers and directors
8. 66We do not anticipate that we will pay any cash dividends in the foreseeable future
9. 67Our business and stock price could be negatively affected as a result of actions of activist stockholders, and such activism could negatively impact the trading value of our securities
10. 68An active trading market for our common stock may not be sustained and our stockholders may not be able to resell their shares of common stock for a profit, if at all
11. 69Future sales of shares by existing stockholders could cause our stock price to decline
12. 70If 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
13. 71If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired
14. 72If we become profitable, our ability to use our net operating loss carryforwards and other tax attributes to offset future taxable income or taxes may be subject to limitations