Neumora Therapeutics (NMRA) risk factors, FY2024 10-K

Other

1. 01We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale and may never achieve or maintain profitability
2. 02We were founded with a mission to redefine neuroscience drug development, a field that has seen very limited success. The ability to successfully develop drugs in this field is extremely difficult and is subject to a number of unique challenges
3. 03We operate in highly competitive and rapidly changing industries, which may result in others discovering, developing or commercializing competing products before or more successfully than we do

Risks Related to Our Limited Operating History, Financial Condition and Need for Additional Capital

1. 04We are a clinical‑stage biopharmaceutical company and have incurred significant losses since our inception, and we expect to incur losses for the foreseeable future. We have no products approved for commercial sale and may never achieve or maintain profitability
2. 05incur additional legal, accounting or other expenses in operating our business, including the additional costs associated with operating as a public company
3. 06Our substantial contingent consideration and related obligations from our acquisitions of assets and license and collaboration agreements may result in dilution to our stockholders, may be a drain on our cash resources, or may cause us to incur debt obligations to satisfy the payment obligations
4. 07the extent to which we acquire or invest in business, products and technologies
5. 08Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates

Risks Related to Our Business

1. 09If we are unable to successfully identify, develop and commercialize any product candidates, or experience significant delays in doing so, our business, financial condition and results of operations will be materially adversely affected
2. 10Additionally, clinical or regulatory setbacks to other companies developing similar products or within adjacent fields may impact the clinical development of and regulatory pathway for our current or future product candidates, or may negatively impact the perceptions of value or risk of our technologies
3. 11Moreover, given the history of clinical failures in this field, future clinical or regulatory failures by us or others may result in further negative perception of the likelihood of success in this field, which may significantly and adversely affect the market price of our common stock
4. 12We have experienced rapid growth since our inception in November 2019. If we fail to effectively manage our growth, we may not be able to execute on our business objectives
5. 13Our ability to develop product candidates, leverage our precision neuroscience approach and our future growth depends on attracting, hiring and retaining our key personnel and recruiting additional qualified personnel
6. 14In addition, our clinical operations and research and development programs depend on our ability to attract and retain highly skilled scientists, data scientists, and engineers, particularly in Massachusetts and California
7. 15We may not realize the benefits of assets that we have acquired, or will acquire in the future, or other strategic transactions that we have consummated or will consummate
8. 16possible write‑offs or impairment charges relating to acquired businesses or joint ventures
9. 17In addition, any collaborators may decide to market and sell products that compete with the product candidates that we have agreed to license to them, and any competition by our collaborators could also have a material adverse effect on our future business, financial condition, and results of operations
10. 18We 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
11. 19We rely upon third‑party providers of cloud‑based infrastructure to host our platforms. Any disruption in the operations of these third‑party providers, limitations on capacity, or interference with our use could adversely affect our business, financial condition, and results of operations
12. 20If our security measures are breached or unauthorized access to our other data is otherwise obtained, our data may be perceived as not being secure and we may incur significant liabilities
13. 21Our precision neuroscience tools utilize third‑party open source software, and any failure to comply with the terms of one or more of these open source software licenses could adversely affect our business, subject us to litigation, or create potential liability

Risks Related to the Development and Clinical Testing of Our Product Candidates

1. 22third parties being unwilling or unable to satisfy their contractual obligations to us
2. 23It is currently unclear to what extent the UK will seek to align its regulations with the EU. The UK regulatory framework in relation to clinical trials is derived from existing EU legislation (as implemented into UK law, through secondary legislation)
3. 24Results of preclinical studies or clinical trials of any product candidates may not be predictive of the results of future preclinical studies or clinical trials
4. 25If we fail to receive positive results in preclinical studies or clinical trials of any product candidate, the development timeline and regulatory approval and commercialization prospects for that product candidate, and, correspondingly, our business and financial prospects, would be negatively impacted
5. 26Any of these events could prevent us or our potential future partners from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenue from the sale of any products
6. 27clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies
7. 28The estimates of market opportunity and forecasts of market growth included in our public disclosures may prove to be smaller than we believe, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, or at all
8. 29Even if approved, our products may not gain market acceptance, in which case we may not be able to generate product revenues, which will materially adversely affect our business, financial condition, and results of operations
9. 30other potential advantages over alternative treatment methods
10. 31We currently have no marketing, sales, or distribution infrastructure and we intend to either establish a sales and marketing infrastructure or outsource this function to a third party. Either of these commercialization strategies carries substantial risks to us
11. 32We may become exposed to costly and damaging liability claims, either when testing our product candidates in the clinic or at the commercial stage, and our product liability insurance may not cover all damages from such claims

Risks Related to Our Regulatory Environment

1. 33the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval
2. 34seize or detain products, refuse to permit the import or export of products, or require us to conduct a product recall
3. 35The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off‑label uses. If we are found or alleged to have improperly promoted off‑label uses, we may become subject to significant liability
4. 36Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing
5. 37similar healthcare laws and regulations in foreign jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers
6. 38Our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
7. 39Current and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain
8. 40establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending
9. 41Even if we are able to commercialize any product candidate, coverage and adequate reimbursement may not be available or such product candidate may become subject to unfavorable pricing regulations or third‑party coverage and reimbursement policies, which would harm our business
10. 42We face potential liability related to the privacy of health information we utilize in the development of product candidates, as well as information we obtain from clinical trials sponsored by us from research institutions and directly from individuals

Risks Related to Our Dependence on Third Parties

1. 43the misappropriation of our proprietary information, including our trade secrets and know‑how
2. 44Our current and anticipated future dependence upon others for the manufacture of our product candidates or drugs may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis
3. 45Supply sources could be interrupted from time to time and, if interrupted, there is no guarantee that supplies could be resumed within a reasonable time frame and at an acceptable cost or at all

Risks Related to Intellectual Property

1. 46Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues and is complicated by the rapid pace of scientific discovery in our industry
2. 47the allocation of ownership of inventions and know‑how resulting from the joint creation or use of intellectual property by our licensors or collaborators and by us and our partners
3. 48We depend, in part, on our licensors to file, prosecute, maintain, defend, and enforce certain patents and patent applications that are material to our business
4. 49collaborators may own or co‑own intellectual property covering our products that results from our collaborating with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property
5. 50We may not be successful in obtaining or maintaining necessary rights for our product pipeline which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated
6. 51There can be no assurance that we will be able to successfully complete such negotiations and ultimately acquire the rights to the intellectual property surrounding the additional product candidates that we may seek to acquire
7. 52whether the patent applications that we own or in‑license will result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries
8. 53We 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 our products
9. 54Intellectual property rights do not necessarily address all potential threats to our competitive advantage
10. 55we may fail to adequately protect and police our trademarks and trade secrets; and
11. 56Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
12. 57Third‑party claims of intellectual property infringement against us or our collaborators may prevent or delay our product discovery and development efforts
13. 58We may not be able to protect our intellectual property rights throughout the world
14. 59We may be involved in lawsuits to protect or enforce our patents or other intellectual property or the intellectual property of our licensors, which could be expensive, time‑consuming, and unsuccessful
15. 60Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or before the USPTO or comparable foreign authority
16. 61Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products
17. 62Obtaining 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
18. 63The lives of our patents may not be sufficient to effectively protect our products and business
19. 64We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
20. 65If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our business may be adversely affected

Risks Related to Ownership of Our Common Stock

1. 66Our stock price has experienced volatility and declines and may continue to be volatile or decline, regardless of our operating performance, resulting in substantial losses for investors
2. 67other events or factors, many of which are beyond our control
3. 68Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline
4. 69impact from the COVID‑19 pandemic, or any future pandemic, on us or third parties with which we engage
5. 70Our 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
6. 71Sales of a substantial number of shares of our common stock in the public market could cause our common stock price to fall
7. 72We do not currently intend to pay dividends on our common stock and, consequently, our stockholders’ ability to achieve a return on their investment will depend on appreciation of the value of our common stock
8. 73Provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our common stock
9. 74limit the forums in which certain stockholder litigation may be brought
10. 75Our ability to use our net operating loss carryforwards and other tax attributes may be limited
11. 76If securities or industry analysts either do not publish research about us or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the trading price or trading volume of our common stock could decline
12. 77Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
13. 78An active trading market for our common stock may not develop or be sustained
14. 79The requirements of being a public company may strain our resources, result in more litigation, and divert management’s attention
15. 80Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
16. 81If we fail to maintain proper and effective internal controls over financial reporting our ability to produce accurate and timely financial statements could be impaired
17. 82Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
18. 83If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected
19. 84Our information technology systems, or those used by our third‑party research institution collaborators, CROs, CMOs, or other contractors or consultants, may fail or suffer cyberattacks or security breaches
20. 85We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties
21. 86We are currently subject to and may be subject to additional future securities class action litigation