OS Therapies (OSTX) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Need for Additional Capital

1. 01We are a clinical stage biopharmaceutical company and have not generated any revenue to date from drug sales, and may never become profitable
2. 02We have incurred significant operating losses in recent periods and anticipate that we will incur continued losses for the foreseeable future
3. 03At two closings occurring on December 31, 2024 and January 14, 2025, we issued an aggregate of (i) 1,775,750 shares of Series A Preferred Stock and (ii) Series A Warrants initially exercisable into 1,775,750 shares of common stock pursuant to the Private Placement
4. 04In consideration of our purchase of the HER2 Assets, we agreed to pay to Ayala $7.5 million shares of our common stock, based on the volume-weighted average price of our common stock over the 30 trading days immediately preceding the closing date of the HER2 Purchase Agreement
5. 05If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, scale back or discontinue some of our product candidate development programs or commercialization efforts
6. 06Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
7. 07Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern
8. 08Our ability to utilize our net operating loss carryforwards and certain other tax attributes in the future may be limited

Risks Related to Drug Development and Regulatory Approval

1. 09We depend heavily on the success of our lead product candidates, OST-HER2 and OST-tADC. We may not be able to obtain regulatory approval for, or successfully commercialize, any of our current or future product candidates
2. 10If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented
3. 11Rare Osteosarcoma has relatively low prevalence and it may be difficult to identify patients with driver genes of the disease, which may lead to delays in enrollment for our trials
4. 12Our current or future product candidates may cause adverse or other undesirable side effects that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if any
5. 13A breakthrough therapy designation by the FDA for our current or future product candidate does not convey any advantage in, or shorten the duration of, the regulatory review or approval process, and it does not increase the likelihood that our current or future product candidates will receive marketing approval
6. 14A fast track designation by the FDA does not convey any advantage in, or shorten the duration of, the regulatory review regulatory review or approval process
7. 15We may not be able to obtain or maintain orphan drug designation or exclusivity for any product candidates and, even if we do, that exclusivity may not prevent the FDA or EMA from approving other competing products
8. 16Although we have obtained rare pediatric disease designation for OST-HER2 for Osteosarcoma patients, we may not be eligible to receive a priority review voucher in the event that FDA approval does not occur prior to September 30, 2026
9. 17Manufacturing our current or future product candidates is complex and we may encounter difficulties in production. If we encounter such difficulties, our ability to provide our current or future product candidates for preclinical studies and clinical trials or for commercial purposes could be delayed or stopped
10. 18Our future growth may depend, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties that could materially adversely affect our business
11. 19We may in the future conduct clinical trials for current or future product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials

Risks Related to Commercialization

1. 20Even if we receive marketing approval for our current or future product candidates, our current or future product candidates may not achieve broad market acceptance, which would limit the revenue that we generate from their sales
2. 21We face substantial competition, which may result in others discovering, developing or commercializing drugs before or more successfully than we do
3. 22Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of any current or future product candidates that we may develop
4. 23Even if we are able to commercialize any current or future product candidates, such drugs may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business
5. 24Healthcare reform measures may have a material adverse effect on our business and results of operations
6. 25We may face potential liability if we obtain identifiable patient health information from clinical trials sponsored by us
7. 26If we 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

Risks Related to Our Dependence on Third Parties

1. 27The third parties upon whom we rely for the supply of the active pharmaceutical ingredient, or API, drug product and drug substance used in our core product candidates are limited in number, and the loss of any of these suppliers could significantly harm our business
2. 28Our manufacturing process needs to comply with FDA regulations relating to the quality and reliability of such processes. Any failure to comply with relevant regulations could result in delays in or termination of our clinical programs and suspension or withdrawal of any regulatory approvals
3. 29If 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

Risks Related to Intellectual Property

1. 30If we are unable to adequately protect and enforce our trade secrets, our business and competitive position would be harmed
2. 31We may initiate, become a defendant in, or otherwise become party to lawsuits to protect or enforce our intellectual property rights, which could be expensive, time-consuming and unsuccessful
3. 32Intellectual property litigation and administrative patent office patent validity challenges in one or more countries could cause us to spend substantial resources and distract our personnel from their normal responsibilities
4. 33We may not obtain or grant licenses or sublicenses to intellectual property rights in all markets on equally or sufficiently favorable terms with third parties
5. 34If we fail to comply with our obligations in any agreements under which we may license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business
6. 35Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our current or future product candidates
7. 36Intellectual property rights do not guarantee commercial success of current or future product candidates or other business activities. Numerous factors may limit any potential competitive advantage provided by our intellectual property rights

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

1. 37Our current operations are located in Maryland; and we or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
2. 38Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
3. 39We will need to develop and expand our company, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations
4. 40Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
5. 41Our internal computer systems, or those of our third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our current or future product candidates’ development programs
6. 42We may be unable to adequately protect our information systems from cyberattacks, which could result in the disclosure of confidential or proprietary information, including personal data, damage our reputation, and subject us to significant financial and legal exposure
7. 43Our employees, principal investigators, CROs and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading

Risks Related to Our Common Stock

1. 44The issuance of shares in connection with the Private Placement and the HER2 Purchase Agreement could adversely affect the prevailing market price of our shares
2. 45It is not possible to predict the actual number of ELOC Shares, if any, we will sell under the ELOC Purchase Agreement to Square Gate, or the actual gross proceeds resulting from those sales
3. 46Investors who buy ELOC Shares from Square Gate at different times will likely pay different prices
4. 47Paul A. Romness, MPH, and our other executive officers, directors and their affiliates exercise significant influence over our company, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control
5. 48We are incurring increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives
6. 49We have not paid, and do not intend to pay, dividends on our shares of common stock and, therefore, unless our common stock appreciates in value, our investors may not benefit from holding our shares