Inhibrx Biosciences (INBX) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Need for Additional Capital

1. 01Biotechnology product development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never generated any revenue from product sales and may never be profitable
2. 02Raising additional capital by issuing equity or debt securities may cause dilution to existing stockholders, and raising funds through lending and licensing or collaboration agreements may restrict our operations or require us to relinquish proprietary rights
3. 03We may be adversely affected by the effects of inflation
4. 04We maintain our cash and cash equivalents at financial institutions. The failure of financial institutions could adversely affect our ability to pay our operational expenses or make other payments

Risks Related to the Development, Clinical Testing and Commercialization of Our Therapeutic Candidates

1. 05The therapeutic candidates we pursue may not demonstrate the necessary safety or efficacy requirements for marketing approval
2. 06If any of these challenges, events or circumstances occur, we may be forced to abandon our development efforts for a program or programs, which would harm our business, financial condition, results of operation and prospects
3. 07Our therapeutic candidates may cause undesirable side effects 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 any
4. 08or halt clinical trials or the delay or denial of marketing approval by regulatory authorities, or, if such therapeutic candidates are approved, result in a more restrictive label and other post-approval requirements
5. 09We expect to develop certain of our therapeutic candidates in combination with other therapies, and safety or supply issues with combination use products may delay or prevent development and approval of our therapeutic candidates
6. 10If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary marketing approvals could be delayed or prevented
7. 11If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the commercialization of any of our therapeutic candidates may be delayed, and our business may be harmed
8. 12Initial, interim, topline and preliminary data from our clinical trials that we may announce, observe 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
9. 13The market opportunities for any current or future therapeutic candidate we develop, if and when approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small or smaller than we may expect
10. 14We do not track our research and development expenses on a program-by-program basis, which may impact our ability to efficiently allocate resources and could adversely affect our financial condition and results of operation
11. 15We may expend our limited resources to pursue a particular therapeutic candidate and fail to capitalize on therapeutic candidates or indications that may be more profitable or for which there is a greater likelihood of success
12. 16We may in the future enter into collaborations with third parties to develop our therapeutic candidates. If these collaborations are not successful, our business could be harmed
13. 17Our third-party manufacturers may be unable to successfully scale up manufacturing of our therapeutic candidates in sufficient quality and quantity, which would delay or prevent us from developing our therapeutic candidates and commercializing any approved therapeutic candidates
14. 18Failure to successfully identify, develop and commercialize additional therapeutics or therapeutic candidates could impair our ability to grow
15. 19Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could have a material and adverse effect on our business, financial condition, results of operations and prospects
16. 20liability claims that could have a material and adverse effect on our business, financial condition, results of operations and prospects
17. 21The future commercial success of our therapeutic candidates will depend on the degree of market acceptance of our therapeutic candidates among physicians, patients, healthcare payors and the medical community

Risks Related to Our Organization and Operations

1. 22We face significant competition and if our competitors develop and market products that are more effective, safer or less expensive than the therapeutic candidates we develop, our commercial opportunities will be negatively impacted
2. 23Our competitors also include other large pharmaceutical and biotechnology companies who may be developing therapeutic candidates with mechanisms similar to or targeting the same indications as our therapeutic candidates
3. 24Any inability to attract and retain qualified key management and technical personnel would impair our ability to implement our business plan
4. 25We have a significant amount of debt which may affect our ability to operate our business and secure additional financing in the future. If we fail to comply with the terms of our loan agreement with Oxford, our business, prospects and results of operations could be materially and adversely affected
5. 26We are subject to continuing contingent liabilities of the Former Parent following the Separation and Distribution
6. 27We are required to pay Former Parent for certain tax savings we may realize as a result of the Code Section 336(e) election made in connection with the Distribution
7. 28Use of any net operating loss carryforwards and other tax attributes may be limited
8. 29Our employees, independent contractors, principal investigators, contract research organizations, consultants or vendors may engage in misconduct or other improper activities, including non-compliance with governmental and regulatory bodies
9. 30Our insurance may not provide adequate levels of coverage against claims which may adversely affect our financial condition
10. 31As we expand our development and regulatory capabilities, we may encounter difficulties in managing our growth, which could disrupt our operations
11. 32We may not be able to integrate efficiently or achieve the expected benefits of any acquisitions of complementary businesses, therapeutic candidates or technologies
12. 33Our business may be adversely affected as a result of major computer system failures
13. 34Cybersecurity breaches could expose us to material liability, damage our reputation, compromise our confidential information or otherwise adversely affect our business
14. 35Our current operations are concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by earthquakes, medical epidemics or pandemics, or other natural disasters

Risks Related to Intellectual Property

1. 36If we are not able to obtain and enforce intellectual property protection for our technologies or therapeutic candidates, the development and commercialization of our therapeutic candidates may be adversely affected
2. 37We may not be able to protect our intellectual property rights throughout the world
3. 38Changes in patent laws could diminish the value of patents in general, thereby impairing our ability to protect our products
4. 39Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, 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
5. 40We may be required to reduce the scope of our intellectual property due to intellectual property claims included in the patents or patent applications of others
6. 41If we fail to comply with our obligations under the agreements pursuant to which we license intellectual property rights from third parties, or otherwise experience disruptions to our business relationships with our licensors, we could lose the rights to intellectual property licensed to us
7. 42If disputes over intellectual property that we have licensed prevent or impair our ability to maintain any licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected therapeutic candidates
8. 43Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their normal responsibilities
9. 44If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
10. 45If 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
11. 46If our patent terms expire before or soon after our therapeutic candidates are approved, or if manufacturers of biosimilar drugs successfully challenge our patents, our business may be materially harmed
12. 47Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to Government Regulation

1. 48We may be unable to obtain marketing approval for any product that we may develop and the marketing approval processes of the FDA and other comparable regulatory authorities outside the United States are lengthy, time-consuming and inherently unpredictable
2. 49If we fail to obtain the appropriate marketing approvals necessary for us to sell our therapeutic candidates, or if the approvals are more limited than those that we intend to seek, our business, financial condition and results of operations would be materially harmed
3. 50from continued marketing of ineffective drugs previously granted accelerated approval. Under these provisions, the FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted
4. 51Any of these occurrences may cause our operations or potential for success to suffer, harm our competitive standing and result in further losses that adversely affect our financial condition
5. 52The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses
6. 53regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction, including any trials conducted in China
7. 54Our partnerships in China subject us to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China
8. 55Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to commercialize our product candidates, may adversely affect the prices we may obtain and may have a material and adverse effect on our business, financial condition, results of operations, and prospects
9. 56As another example, the American Rescue Plan Act of 2021 included a provision that eliminated the statutory cap on manufacturer Medicaid rebates. Beginning in January 2024, Medicaid rebates are no longer capped at 100 percent of the drug’s average manufacturer price
10. 57If we or our partners, manufacturers or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions, which could affect our ability to develop, market and sell our products and may harm our reputation
11. 58Our therapeutic candidates for which we intend to seek approval may face competition sooner than anticipated
12. 59Actual or perceived failures to comply with applicable privacy, data protection and information security laws, regulations and standards and other requirements could adversely affect our business, results of operations, and financial performance
13. 60If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected
14. 61Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties

Risks Related to Ownership of Our Common Stock

1. 62We do not know whether an active, liquid and orderly trading market will continue to develop or be sustained for our common stock and as a result it may be difficult for you to sell your shares of our common stock
2. 63We expect that our stock price may fluctuate significantly
3. 64Our executive officers, directors and holders of more than 5% of our capital stock own a significant percentage of our stock and are able to exercise significant control over matters subject to stockholder approval
4. 65Future sales of our common stock in the public market could cause our stock price to fall
5. 66We have reserved approximately 4,000,000 shares for future grants under our Omnibus Incentive Plan. Any common stock that we issue, including under our Omnibus Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by our existing stockholders
6. 67Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or therapeutic candidates
7. 68If securities or industry analysts do not publish research reports about our business, or if they issue an adverse opinion about our business, our stock price and trading volume could decline
8. 69The Nasdaq Stock Market may delist our securities from its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
9. 70We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
10. 71We will continue to incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives
11. 72Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt
12. 73These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
13. 74may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees
14. 75We may be subject to securities litigation that materially diverts the attention of our management or pursuant to which we incur substantial costs
15. 76We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to “emerging growth companies” will make our Common Sock less attractive to investors
16. 77We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our common stock less attractive to investors