Minerva Neurosciences (NERV) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Capital Requirements

1. 01We have incurred significant losses since our inception. We expect to continue to incur losses over the next several years and may never achieve or maintain profitability
2. 02We will require additional capital to finance our operations, which may not be available to us on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations
3. 03the cost of establishing sales, marketing and distribution capabilities for our product candidates for which we may receive regulatory approval and that we determine to commercialize ourselves or in collaboration with our partners
4. 04Raising additional funds by issuing equity securities will cause dilution to existing stockholders. Raising additional funds through debt financings may involve restrictive covenants and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights
5. 05Changes in estimates regarding fair value of intangible assets may result in an adverse impact on our results of operations
6. 06In addition, any significant change in market conditions, estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give rise to impairment in the period that the change becomes known
7. 07Our ability to use net operating losses (“NOL”) carryforwards may be limited
8. 08Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows

Risks Related to Our Business and Industry

1. 09We cannot give any assurance that any of our product candidates will receive regulatory approval in a timely manner or at all, which is necessary before they can be commercialized
2. 10The EMA, FDA or other regulatory authorities may disagree with the design or implementation of our clinical trials
3. 11The data collected from clinical trials of our product candidates may not be sufficient to support an NDA or other submission or to obtain regulatory approval in the United States or elsewhere
4. 12The approval policies or regulations of the European Commission, FDA or other regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval
5. 13Results of earlier clinical trials may not be predictive of the results of later-stage clinical trials
6. 14The results of clinical trials conducted at sites outside the United States may not be accepted by the FDA and the results of clinical trials conducted at sites in the United States may not be accepted by comparable foreign regulatory authorities
7. 15If we experience delays in clinical testing, we will be delayed in commercializing our product candidates, our costs may increase and our business may be harmed
8. 16clinical holds or termination imposed by competent authorities, including national regulatory authorities of EU Member States, the FDA or IRBs or Ethics Committees
9. 17lack of adequate funding to continue the clinical trial
10. 18Disruptions at the FDA and other government agencies or foreign regulatory authorities caused by funding shortages or global health concerns could negatively impact our business
11. 19We have no experience in advancing product candidates beyond Phase 3, which makes it difficult to assess our ability to develop and commercialize our product candidates
12. 20If we are unable to enroll subjects in clinical trials, we will be unable to complete these trials on a timely basis or at all
13. 21clinicians’ and subjects’ perceptions as to the potential advantages or disadvantages of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating
14. 22Our clinical trials may fail to demonstrate adequately the safety and efficacy of our product candidates, which could prevent or delay regulatory approval and commercialization, and also increase costs
15. 23We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success
16. 24Even if we complete the necessary clinical trials, we cannot predict when or if we will obtain regulatory approval to commercialize a product candidate or the approval may be for a narrower indication than we expect
17. 25as continued compliance with cGMP, regulations and GCPs, for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products
18. 26our reputation may suffer
19. 27The occurrence of any event or penalty described above may inhibit our ability to commercialize our products and generate revenue
20. 28The regulatory pathway for our product candidate, MIN-301, has not yet been determined in the US. Depending on the pathway, we may be subject to different regulatory requirements
21. 29If the market opportunities for any product that we or our collaborators develop are smaller than we believe, our revenue may be adversely affected and our business may suffer
22. 30Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay
23. 31Our failure to obtain regulatory approval in additional international jurisdictions would prevent us from marketing our product candidates outside the European Union and the United States
24. 32We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than us
25. 33Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and subject registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs
26. 34Even if any of our drug candidates receives regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success
27. 35any restrictions on the use of our drugs together with other medications
28. 36Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products
29. 37Even if we commercialize any of our product candidates, these products may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which could harm our business
30. 38If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed
31. 39Recently enacted and future legislation may increase the difficulty and cost for us to commercialize our product candidates and affect the prices we may obtain
32. 40Our international operations are subject to foreign currency and exchange rate risks
33. 41A variety of risks associated with international operations could materially adversely affect our business
34. 42The United Kingdom’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our business, which could reduce the price of our common stock
35. 43If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
36. 44We will need to grow the size of our organization, and we may experience difficulties in managing this growth
37. 45developing our compliance infrastructure and processes to ensure compliance with complex regulations and industry standards regarding us and our product candidates
38. 46Future acquisitions, mergers or joint ventures could disrupt our business and otherwise harm our business
39. 47possible write-offs or impairment charges relating to acquired businesses
40. 48If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates
41. 49the inability to commercialize our product candidates
42. 50Our business and operations would suffer in the event of system failures
43. 51If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock
44. 52Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
45. 53Our employees, independent contractors, principal investigators, CROs, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements
46. 54The federal criminal False Claims Act, which imposes criminal fines or imprisonment against individuals or entities who make or present a claim to the government knowing such claim to be false, fictitious or fraudulent
47. 55Federal consumer protection and unfair competition laws, which broadly regulate marketplace and other activities that potentially harm consumers
48. 56We are subject to the Foreign Corrupt Practices Act
49. 57In addition, data privacy and security laws have been proposed at the federal, state, and local levels in recent years, which could further complicate compliance efforts, and we expect more states to pass similar laws in the future
50. 58In the ordinary course of our business, we and the third parties with whom we work process proprietary, confidential, and sensitive data, including personal data (such as health-related data and data related to clinical trials), intellectual property, and trade secrets (collectively, sensitive information)

Risks Related to Our Dependence on Third Parties

1. 59the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us
2. 60If our third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages
3. 61We may engage third party collaborators to market and commercialize our product candidates, who may fail to effectively commercialize our product candidates
4. 62Substantial potential future milestone payments from Royalty Pharma depend on the development and commercialization of seltorexant. We may be obligated to make payments to Royalty Pharma even if Janssen breaches its obligations to pay us
5. 63Therefore, we will only realize future payments if Janssen achieves certain milestones over which we have no control. Some or all of the milestones may never be achieved, and we may never receive any such future payments
6. 64We may not be successful in establishing new collaborations which could adversely affect our ability to develop future product candidates and commercialize future products

Risks Related to Intellectual Property

1. 65If we are unable to obtain or protect intellectual property rights, we may not be able to compete effectively in our market
2. 66One or more of our owned or licensed patents directed to our proprietary products or technologies may expire or have limited commercial life before the proprietary product or technology is approved for marketing in a relevant jurisdiction
3. 67We have in-licensed or acquired a portion of our intellectual property necessary to develop our product candidates, and if we fail to comply with our obligations under any of these arrangements, we could lose such intellectual property rights
4. 68We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful
5. 69We may need to license or acquire additional patents and intellectual property rights
6. 70Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business
7. 71Restrictions on our patent rights relating to our product candidates may limit our ability to prevent third parties from competing against us
8. 72Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
9. 73Depending on decisions by the United States Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our and our licensors’ or collaborators’ ability to obtain new patents or to enforce existing and future patents
10. 74We may not be able to protect our intellectual property rights throughout the world
11. 75Obtaining 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
12. 76Intellectual property rights do not necessarily address all potential threats to our competitive advantage
13. 77Issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors
14. 78Should any of these events occur, they could significantly harm our business, results of operations and prospects
15. 79If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed

Risks Related to Ownership of Our Common Stock

1. 80We cannot predict what the market price of our common stock will be and, as a result, it may be difficult for you to sell your shares of our common stock
2. 81The market price of our stock may be volatile, and you could lose all or part of your investment
3. 82the other factors described in this “Risk Factors” section
4. 83Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval
5. 84Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall
6. 85Our management will continue to have broad discretion over the use of the proceeds we received in our public offerings, private placements, warrant exercises and loans and might not apply the proceeds in ways that increase the value of your investment
7. 86Future sales and issuances of equity and debt securities could result in additional dilution to our stockholders and could place restrictions on our operations and assets, and such securities could have rights, preferences and privileges senior to those of our common stock
8. 87We incur increased costs and demands upon management as a result of being a public company
9. 88We are a “smaller reporting company” under the SEC’s disclosure rules, meaning that we have either: (i) a public float of less than $250 million; or (ii) annual revenues of less than $100 million during the most recently completed fiscal year; and no public float; or a public float of less than $700 million
10. 89Securities litigation could result in substantial damages and may divert management’s time and attention from our business
11. 90Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management and hinder efforts to acquire a controlling interest in us, and the market price of our common stock may be lower as a result
12. 91requiring the approval of the holders of at least 66 2/3% of the votes that all of our stockholders would be entitled to cast to amend or repeal our bylaws
13. 92If securities or industry analysts cease publishing research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
14. 93We have never paid dividends on our capital stock, and because we do not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, of our common stock will be your sole source of gain on an investment in our common stock
15. 94Our common stock may be delisted from The Nasdaq Capital Market which could negatively impact the price of our common stock, liquidity and our ability to access the capital markets
16. 95a decreased ability to issue additional securities or obtain additional financing in the future