Veradermics (MANE) risk factors, FY2025 10-K

Risks Related to Our Financial Position and Need for Capital

1. 01We are a clinical-stage biopharmaceutical company with a limited operating history and no products approved for commercial sale. We have incurred substantial losses since our inception, and we anticipate incurring substantial and increasing losses for the foreseeable future
2. 02n incur additional costs associated with being a public company, including audit, legal, regulatory and tax-related services associated with maintaining compliance with an exchange listing and the SEC, requirements, director and officer insurance premiums and investor relations costs
3. 03We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed, or on acceptable terms, would cause us to delay, limit, reduce or terminate our product development or commercialization efforts
4. 04n the costs of operating as a public company
5. 05Raising additional capital may cause dilution to our stockholders which may impose restrictions on our operations or require us to relinquish rights to our product candidates

Risks Related to the Development of Our Product Candidates

1. 06n enforcing and defending intellectual property rights and claims
2. 07If we are unable to develop, receive regulatory approval for, or successfully commercialize VDPHL01 for the indications we are developing it for, or if we experience delays as a result of any of these risks or otherwise, our business and financial condition will be materially harmed
3. 08n future collaborators may conduct clinical trials in ways they view as advantageous to them but that are suboptimal for us
4. 09If VDPHL01, or any of our other current or future product candidates, generally prove to be ineffective, unsafe or commercially unviable, our entire pipeline may have little, if any, value, which would have a material and adverse effect on our business, financial condition, results of operations and prospects
5. 10n our reputation may suffer
6. 11We operate in highly competitive markets and face competition from large, well-established companies with significant resources as well as other entities, and, as a result, we may not be able to compete effectively
7. 12Delays or difficulties in the enrollment and dosing of patients in clinical trials may delay or prevent receipt of necessary regulatory approvals
8. 13As an organization, we have only recently initiated registration-directed clinical trials, and may be unable to complete such trials for any product candidates we may develop, including VDPHL01
9. 14Interim, initial, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time are subject to audit and verification procedures and may differ materially from final data as more patient data become available
10. 15We intend to expend our resources to pursue VDPHL01 and therefore may fail to capitalize on, or identify product candidates that may be more profitable or for which there is a greater likelihood of success
11. 16The increasing use of social media platforms presents new risks and challenges
12. 17We may not be successful in our efforts to build a pipeline of additional product candidates
13. 18If we do not achieve our projected development goals in the timeframes we announce and expect, the commercialization of our products may be delayed
14. 19Product liability lawsuits against us or any of our licensing and collaboration partners could divert our resources and attention, cause us to incur substantial liabilities and limit commercialization of VDPHL01 or any of our other current or future product candidates
15. 20n the inability to commercialize VDPHL01 or any of our other current or future product candidates

Risks Related to Commercialization of Our Product Candidates

1. 21We currently have limited marketing, sales or distribution infrastructure. If we are unable to fully develop our sales, marketing and distribution capability on our own or through collaborations with marketing partners, we may not be successful in commercializing our product candidates
2. 22n unforeseen costs and expenses associated with building out an independent sales and marketing organization
3. 23Even if we obtain regulatory approval for VDPHL01 or any other product candidates, such products may fail to achieve market acceptance which would adversely affect our efforts to commercialize any such product successfully
4. 24If we fail to generate sufficient market acceptance of our product candidates, if approved, our ability to obtain an appropriate return on investment on such products will be impacted
5. 25The commercial opportunity for VDPHL01 and any of our other current or future product candidates we may develop may be smaller than we expect
6. 26Our strategy of focusing on the cash-pay healthcare market for VDPHL01 may limit our ability to increase sales or achieve profitability
7. 27If we fail to effectively maintain, promote, and enhance our reputation and VDPHL01 brand recognition in a cost-effective manner, our business and competitive advantage may be harmed
8. 28Our products rely on consumer discretionary spending and the purchasing decisions of our customers, both of which are sensitive to difficult to predict global economic conditions, including the imposition of tariffs, or changes in consumer or customer sentiment

Risks Related to Our Business Operations, Employee Matters and Managing Growth

1. 29We are dependent on the services of our senior management and other key personnel, and if we are not able to retain these individuals or recruit additional management or key personnel, our business will suffer
2. 30We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business
3. 31Misconduct or other improper actions, including noncompliance with regulatory standards and requirements, by our employees, independent contractors, consultants, commercial partners and vendors exposes us to potential noncompliance with regulatory standards and requirements
4. 32Applicable data privacy and security obligations may require us to notify data subjects, customers, partners, regulators and the media relevant stakeholders of security incidents. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences

Risks Related to Our Intellectual Property

1. 33Our commercial success depends on our ability to obtain and maintain sufficient intellectual property protection for VDPHL01 and our other current and any future product candidates and other proprietary technologies
2. 34If 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 product candidates would be adversely affected
3. 35We may not be able to protect our intellectual property rights throughout the world
4. 36Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
5. 37Obtaining and maintaining 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 as a result of noncompliance with these requirements
6. 38Patent terms may be inadequate to protect our competitive position on products or product candidates for an adequate amount of time
7. 39Patent rights relating to inventions described and claimed in our pending patent applications may not issue and patents based on our patent applications may be challenged and rendered invalid and/or unenforceable
8. 40n whether we may experience patent office interruption or delays to our ability to timely secure patent coverage to our product candidates
9. 41Issued patents covering our product candidates, or the method of use of our product candidates, could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
10. 42We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent which might adversely affect our ability to develop and market VDPHL01 or any of our other current and any future product candidates
11. 43If we are sued for infringing intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing VDPHL01 or any of our other current and any future product candidates
12. 44We may be involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful
13. 45VDPHL01, or any of our other current or future product candidates, may face competition sooner than expected, and our patents may be challenged
14. 46We may become subject to claims challenging the inventorship or ownership of our or our licensors’ patents and other intellectual property
15. 47If 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
16. 48If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
17. 49We may be subject to claims asserting 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
18. 50If we fail to comply with our obligations under our intellectual property licenses with third parties, we could lose license rights that are important to our business
19. 51We may not be successful in obtaining or maintaining necessary rights to third party patents for our product candidates through acquisitions and in-licenses
20. 52Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to Government Regulation

1. 53If we fail to comply with broad and complex healthcare and other laws, we could face substantial penalties and our business, operations, and financial condition could be adversely affected
2. 54To the extent that we implement a telehealth platform, activities undertaken and arrangements implemented in connection with such a platform may implicate other laws such as state physician, pharmacy and telehealth licensure laws, corporate practice of medicine, and fee-splitting laws
3. 55Legislative, regulatory, and executive healthcare and other reform initiatives in the United States, including those aimed at containing or lowering the cost of healthcare, may adversely impact our business, operations, and financial condition
4. 56Healthcare reform efforts have been and may continue to be subject to scrutiny and legal challenge, which increases uncertainty. For example, the IRA drug price negotiation program has been challenged in litigation filed by various pharmaceutical manufacturers and industry groups
5. 57In addition to data privacy and security laws, we are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful

Risks Related to Our Dependence on Third Parties

1. 58n the possible inability of third-party suppliers to supply and/or transport materials, components and products to us in a timely manner as a result of disruptions to the global supply chain
2. 59If our third-party manufacturer of VDPHL01 is unable to increase the scale of its production or we are not able to qualify additional manufacturers, then commercialization may be delayed or interrupted
3. 60We depend on third-party suppliers for materials used in the manufacture of our product candidates, and the loss of these third-party suppliers or their inability to supply us with adequate materials could harm our business
4. 61The operations of our supplier for minoxidil API for VDPHL01 are located outside of the United States and are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects
5. 62n changes in local economic conditions in countries where our manufacturers or suppliers are located
6. 63Risks associated with the in-licensing or acquisition of product candidates could cause substantial delays in the preclinical and clinical development of our product candidates
7. 64We may seek to enter into collaborations, licenses and other similar arrangements for VDPHL01 or any of our other current or future product candidates and may not be successful in doing so, and even if we are, we may relinquish valuable rights and may not realize the benefits of such relationships
8. 65n a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings
9. 66Our reliance on third parties requires us to share our trade secrets, know-how and other proprietary information, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed
10. 67Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay

Risks Related to Ownership of Our Common Stock

1. 68An active and liquid trading market for our common stock may not be sustained
2. 69The market price of our common stock may be volatile, which could result in substantial losses for investors
3. 70n the other factors described in this “ Risk Factors ” section and elsewhere in this Annual Report on Form 10-K, including those which are outside of our control
4. 71Our quarterly and annual operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts or any guidance we may publicly provide, each of which may cause our stock price to fluctuate or decline
5. 72n changes in general market and economic conditions
6. 73Insiders have substantial influence over us, which could limit your ability to affect the outcome of key transactions, including a change of control
7. 74Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain
8. 75We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth and smaller reporting companies may make our common stock less attractive to investors
9. 76These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock
10. 77Our restated certificate of incorporation designates specific courts as the sole and exclusive forum for certain claims or causes of action that may be brought by our stockholders, which could discourage lawsuits against us and our directors and officers
11. 78If securities or industry analysts do not publish research or reports about our business, or if they publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
12. 79Unstable economic and market conditions may have serious adverse consequences on our business, financial condition and stock price
13. 80We have incurred, and will incur, increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices
14. 81Failure to establish and maintain effective internal control over financial reporting could adversely affect our business and if investors lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected
15. 82Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
16. 83Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities
17. 84We could be subject to securities class action litigation
18. 85Our operations or those of the third parties upon whom we depend might be affected by the occurrence of a natural disaster, pandemic or other catastrophic event
19. 86We could be subject to changes in tax rates or new tax legislation or could otherwise have exposure to additional tax liabilities, which could harm our business
20. 87Our ability to use certain net operating loss, or NOL, carryforwards and certain other tax attributes may be limited