Immunic (IMUX) risk factors, FY2025 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 candidates21% rewritten

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

1. 07The 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. 08Our most advanced product candidate requires successful completion of Phase 3 clinical trials and additional development activities before regulatory approval may be obtained, and any delays or failures could materially adversely affect our businessNew
3. 09Clinical drug development involves a lengthy and expensive process with an uncertain outcome95% rewritten
4. 10It is impossible to predict the extent to which the clinical trial process may be affected by existing or prospective legislative and regulatory developments or changes in regulatory priorities, guidance or review practicesNew
5. 11Use of patient-reported outcomes in our clinical trials may delay the development of our product candidates or increase development costs
6. 12Clinical 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 approval24% rewritten
7. 13analysis and the current sample size of approximately 1,050 adult patients with active RMS in each trial may not be sufficiently large to demonstrate efficacyNew
8. 14Notwithstanding any of the foregoing, many companies in the pharmaceutical industry, including those with greater resources and experience than we, have suffered significant setbacks in Phase 2 and Phase 3 clinical trials, even after seeing promising results in earlier clinical trialsNew
9. 15Our 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
10. 16Any 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
11. 17We 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
12. 18We 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 candidates84% rewritten
13. 19planned clinical trials. If patients are unwilling to participate in our clinical trials for any reason, the timeline for conducting trials and obtaining regulatory approval of our product candidates may be delayedNew
14. 20If we fail to obtain regulatory approval in jurisdictions outside the United States, we will not be able to market our products in those jurisdictions
15. 21Agencies 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 liability80% rewritten
16. 22The 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
17. 23If 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
18. 24Other Risks Related to Our Business
19. 25We may not be able to win contracts or grants from governments, academic institutions or non-profits
20. 26Our 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
21. 27If 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
22. 28We 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
23. 29We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations
24. 30Our 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 programs49% rewritten

Risks Related to Commercialization of Our Product Candidates

1. 31Even 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. 32We 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. 33If 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. 34Coverage 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 profitably46% rewritten
5. 35necessary or cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basisNew
6. 36We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do
7. 37The 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
8. 38Negative 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
9. 39Price controls may be imposed in foreign markets, which may adversely affect our future profitability

Risks Related to Third Parties

1. 40We 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. 41We may be unable to realize the potential benefits of any collaboration
3. 42We 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. 43If our contract manufacturers fail to comply with continuing regulations, resulting enforcement action could adversely affect us
5. 44A prolonged U.S. federal government shutdown could materially and adversely affect our business, operations, and legal proceedingsNew

Risks Related to Our Intellectual Property

1. 45Our proprietary rights may not adequately protect our technologies and product candidates
2. 46We may not be able to protect our intellectual property rights throughout the world
3. 47If 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. 48We 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. 49Obtaining 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. 50The 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. 51We 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. 52Third-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. 53Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
10. 54Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
11. 55Intellectual property rights do not protect against all potential threats to our potential competitive advantage
12. 56Confidentiality agreements with employees, consultants and others may not adequately prevent disclosure of trade secrets and protect other proprietary information
13. 57We 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. 58We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties
15. 59We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
16. 60Our 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. 61If 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. 62We incur significant costs and demands upon management as a result of complying with the laws and regulations affecting public companies
2. 63We 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. 64If we fail to regain compliance by June 22, 2026 with the $1.00 minimum bid price requirement of Nasdaq, our common stock will be delisted from the Nasdaq Capital Market (subject to appeal), which would negatively impact the market price and liquidity of our common stock and our ability to access the capital marketsNew
2. 65If our stockholders fail to approve a reverse stock split of our common stock, our business and operations will be materially negatively impacted, because we will be unable to issue additional shares of common stock and our common stock may be delisted from The Nasdaq Capital MarketNew
3. 66split is not approved or implemented, our ability to raise capital, satisfy obligations that require the issuance or reservation of shares, or pursue strategic opportunities could be limitedNew
4. 67The market price of our common stock has been and is expected to continue to be volatile
5. 68Moreover, 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
6. 69Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for the Company that stockholders might consider favorable
7. 70Future 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 fall25% rewritten
8. 71We may experience adverse consequences because of required indemnification of officers and directors
9. 72We do not anticipate that we will pay any cash dividends in the foreseeable future
10. 73Our 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
11. 74An 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
12. 75Future sales of shares by existing stockholders could cause our stock price to decline
13. 76If 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
14. 77If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired
15. 78If 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