Kodiak Sciences (KOD) risk factors, FY2024 10-K

Risks Related to the Discovery, Development and Commercialization of Our Product Candidates

1. 01We are in the clinical stage of drug development and have a very limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our current business and predict our future success and viability
2. 02Our prospects will be heavily dependent on our tarcocimab, KSI-501 and KSI-101 product candidates and the results of planned or pending clinical studies. We cannot be certain that our product candidates will be successful in any of the planned or pending clinical trials
3. 03For example, in our Phase 2b/3 DAZZLE clinical trial evaluating the efficacy, durability and safety of tarcocimab in treatment-naïve subjects with neovascular wet AMD and in our Phase 3 GLEAM and GLIMMER studies, tarcocimab did not meet the primary efficacy endpoint of showing non-inferior visual acuity gains
4. 04The failure of pivotal studies of tarcocimab to meet their primary efficacy endpoints may lead us to pause, change or discontinue development of other product candidates based on our ABC Platform
5. 05Our plan for the development of tarcocimab, KSI-501 or KSI-101 may be unsuccessful
6. 06Research and development of biopharmaceutical products is inherently risky. We cannot give any assurance that any of our product candidates will receive regulatory, including marketing, approval, which is necessary before they can be commercialized
7. 07a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable
8. 08We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all
9. 09delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials and for use in regulatory filings or the inability to do any of the foregoing
10. 10Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences
11. 11our reputation may suffer
12. 12We may encounter difficulties enrolling patients in our clinical trials, and our clinical development activities could thereby be delayed or otherwise adversely affected
13. 13the risk that patients enrolled in clinical trials will not complete such trials, for any reason
14. 14Our clinical trials may fail to demonstrate substantial evidence of the durability, efficacy and safety of our product candidates, which would prevent, delay or limit the scope of regulatory approval and commercialization
15. 15We may not be successful in our efforts to continue to create a pipeline of product candidates or to develop commercially successful products. If we fail to successfully identify and develop additional product candidates, our commercial opportunity may be limited
16. 16One of our strategies is to identify and pursue clinical development of product candidates based on our ABC Platform. Our ABC Platform may not produce a pipeline of viable product candidates, or our competitors may develop platform technologies that render our ABC Platform obsolete or less attractive
17. 17The manufacture of our product candidates is highly complex and requires substantial lead time to produce
18. 18Changes in methods of manufacturing or formulation of product candidates may result in additional costs or delay
19. 19The development program and timeline of tarcocimab may impact our ability to use the Ursus Facility as intended, which could result in an excess of capital expenditures
20. 20If, in the future, we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved
21. 21unforeseen costs and expenses associated with creating an independent commercialization organization
22. 22Even if any product candidates we develop receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors and others in the medical community necessary for commercial success
23. 23Even if we are able to commercialize any product candidates, such products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business
24. 24Our product candidates may face competition from biological products that are biosimilar to or interchangeable with our product candidates sooner than anticipated
25. 25If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates
26. 26a decline in our share price

Risks Related to Regulatory Approval and Other Legal Compliance Matters

1. 27the approval policies or regulations of the FDA, EMA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval
2. 28We have conducted clinical trials for our product candidates outside the United States (or the respective jurisdictions of other regulatory authorities), and the FDA (or EMA and applicable foreign regulatory authorities) may not accept data from such trials
3. 29Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions
4. 30Even if we obtain regulatory approval for a product candidate, our products will remain subject to extensive obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements
5. 31require a product recall
6. 32Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations
7. 33the availability of capital
8. 34Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements or insider trading violations, which could significantly harm our business
9. 35If we fail to comply with healthcare laws, we could face substantial penalties and our business, operations and financial conditions could be adversely affected
10. 36If we or any contract manufacturers and suppliers we engage 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 the success of our business
11. 37Our business activities may be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery and anti-corruption laws

Risks Related to Our Reliance on Third Parties

1. 38We expect to rely on third parties to conduct many aspects of our clinical trials and some aspects of our research and preclinical testing, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research or testing
2. 39We currently rely on a third-party manufacturer, Lonza AG, for the manufacture of our materials for preclinical studies and clinical trials and expect to continue to do so for preclinical studies, clinical trials and for commercial supply of any product candidates that we may develop
3. 40the inability to produce required volume in a timely manner and to quality standards
4. 41Any medicines that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us
5. 42We rely on third-party suppliers for key raw materials used in our manufacturing processes, and the loss of these third-party suppliers or their inability to supply us with adequate raw materials could harm our business
6. 43We may depend on collaborations with third parties for the research, development and commercialization of certain of the product candidates we may develop. If any such collaborations are not successful, we may not be able to realize the market potential of those product candidates
7. 44collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all
8. 45Reliance 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

Risks Related to Our Intellectual Property

1. 46If any of our patent applications does not issue as a patent in any jurisdiction, we may not be able to compete effectively
2. 47If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical technology and product candidates would be adversely affected
3. 48We may not be able to protect our intellectual property and proprietary rights throughout the world
4. 49Obtaining 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
5. 50If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed
6. 51We may be subject to claims challenging the inventorship of our patents and other intellectual property
7. 52If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
8. 53We may be subject to claims that our employees, consultants, or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property
9. 54Third-party claims of intellectual property infringement, misappropriation or other violation against us or our collaborators may prevent or delay the development and commercialization of our product candidates, the ABC Platform and other technologies
10. 55We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming and unsuccessful
11. 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
12. 57Intellectual property rights do not necessarily address all potential threats

Risks Related to Our Operations

1. 58We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
2. 59Developing and commercializing new medicines is a challenging exercise and requires diverse expertise in a variety of scientific, clinical, manufacturing, commercial, financial, people and legal functions. Failure to adequately develop these functions will hurt our ability to compete effectively
3. 60We will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth
4. 61managing increasing operational and managerial complexity
5. 62Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
6. 63Our business is subject to economic, political, regulatory and other risks associated with international operations
7. 64business interruptions resulting from geo-political actions, including war and terrorism or natural disasters
8. 65Our business could be materially and adversely affected by health epidemics in regions where we have concentrations of clinical trial sites or other business operations and could cause significant disruption in the operations of third parties upon whom we rely

Risks Related to Our Business, Financial Condition and Capital Requirements

1. 66We have incurred significant net losses in each period since our inception and anticipate that we will continue to incur significant and increasing net losses for the foreseeable future
2. 67We have incurred net losses in each reporting period since our inception, including net losses of $176.2 million, $260.5 million and $333.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of $1,328.7 million
3. 68defend against any product liability claims or other lawsuits related to our products
4. 69We have no products approved for commercial sale and have not generated any revenue from product sales. We do not anticipate generating any revenue from product sales until after we have successfully completed clinical development and received regulatory approval for the commercial sale of a product candidate, if ever
5. 70attracting, hiring and retaining qualified personnel
6. 71Our financial condition raises substantial doubt about our ability to continue as a going concern
7. 72If we fail to obtain additional financing, we may be unable to complete the development and, if approved, commercialization of our product candidates
8. 73If we engage in acquisitions, in-licensing 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
9. 74Unfavorable U.S. and global economic conditions could adversely affect our business, financial condition or results of operations
10. 75Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
11. 76Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations
12. 77Foreign currency exchange rate risk may impact our financial position and results
13. 78As a public company, we are subject to reporting and other obligations under the Exchange Act, including the requirements of the Sarbanes-Oxley Act of 2002, or SOX, Section 404, which require annual management assessments of the effectiveness of our internal control over financial reporting

Risks Related to Ownership of Our Common Stock

1. 79The market price of our common stock may be volatile, which could result in substantial losses for investors purchasing shares
2. 80the other factors described in this “Risk Factors” section
3. 81Future sales of our common stock in the public market could cause our share price to decline, even if our business is doing well
4. 82If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline
5. 83Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
6. 84Our principal stockholders own a significant percentage of our common stock, which could limit your ability to affect the outcome of key transactions, including a change of control
7. 85Delaware law and provisions in our certificate of incorporation and bylaws might discourage, delay, or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock
8. 86require the affirmative vote of at least 66 2/3% or more of the outstanding shares of common stock to amend many of the provisions described above
9. 87Our bylaws further provide that the U.S. federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended