Vaxcyte (PCVX) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Capital Needs

1. 01We are in the clinical or preclinical stages of vaccine development and have a limited operating history and no products approved for commercial sale, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability
2. 02We will require substantial additional funding to finance our operations, which may not be available to us on acceptable terms, or at all. If we are unable to raise additional capital when needed, we could be forced to delay, reduce or terminate certain of our development programs or other operations
3. 03additional funds to cover the gap created by the new funding gap, we may need to change or terminate our vaccine development program for VAX-GI, which is currently funded in part by grants obtained from the NIH and administered by the University of Maryland, Baltimore

Risks Related to Our Business and Industry

1. 04require inspection and approval of the new manufacturing site and submission of a Biologics License Application (“BLA”) supplement, which may further impede or delay commercialization
2. 05Our inability to complete development of or commercialize our vaccine candidates, or significant delays in doing so due to one or more of these factors, could have a material and adverse effect on our business, financial condition, results of operations and prospects
3. 06Our business is highly dependent on the success of our PCV candidates, VAX-31 and VAX-24, both of which are in clinical development. If we are unable to successfully develop, obtain approval for and effectively commercialize VAX-31 or VAX-24, our business would be significantly harmed
4. 07Our primary competitors have significantly greater resources and experience than we do, which may make it difficult for us to successfully develop and commercialize our vaccine candidates, or may result in others discovering, developing or commercializing products before or more successfully than us
5. 08We and our contract manufacturers may face difficulty satisfying CMC requirements imposed by the FDA and comparable foreign regulatory authorities. To date, no product developed using a cell-free manufacturing platform has received approval from the FDA or been commercialized
6. 09Even if we obtain regulatory approval of our vaccine candidates, the products may not gain market acceptance among regulators, advisory boards, physicians, patients, third-party payors and others in the medical community necessary for commercial success
7. 10We may not be successful in our efforts to use our cell-free protein synthesis platform to expand our pipeline of vaccine candidates and develop marketable products
8. 11affected by these and numerous other factors, including earthquakes and other natural or man-made disasters, equipment failures, labor shortages, health epidemics, power failures and tariffs
9. 12Our vaccine candidates may cause undesirable side effects or have other properties, including interactions with existing vaccine regimens, that could halt their clinical development, prevent their regulatory approval, limit their commercial potential or result in significant negative consequences
10. 13Negative developments and negative public opinion of vaccines or new technologies on which we rely may damage public perception of our vaccine candidates or adversely affect our ability to conduct our business or obtain regulatory approvals for our vaccine candidates
11. 14We may not be able to file IND applications to commence clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed
12. 15We may encounter substantial delays in our clinical trials or may not be able to conduct our trials on the timelines we expect
13. 16If we encounter difficulties enrolling subjects in any clinical trials we may conduct, including any field efficacy trials that may be required, our clinical development activities could be delayed or otherwise adversely affected
14. 17Interim topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
15. 18We currently have no marketing and sales organization, and as an organization have no experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our vaccine candidates, we may not be able to generate product revenue
16. 19A variety of risks associated with potentially conducting research and clinical trials abroad and marketing our vaccine candidates internationally could materially adversely affect our business
17. 20We are highly dependent on our key personnel, and if we are not able to retain these members of our management team or recruit and retain highly qualified personnel, we may not be able to successfully implement our business strategy
18. 21We have grown rapidly and will need to continue to grow the size of our organization, and we may experience difficulties in managing this growth
19. 22Obtaining and maintaining regulatory approval of our vaccine candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our vaccine candidates in other jurisdictions
20. 23We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements
21. 24Revenue from any “catch up” opportunity may decline over time as more of the patient population is vaccinated
22. 25severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised
23. 26Use of artificial intelligence in our operations could result in reputational or competitive harm and legal or regulatory liability
24. 27Natural or man-made disasters or business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses
25. 28The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses
26. 29If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our vaccine candidates
27. 30Our employees, principal investigators, consultants and commercial partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
28. 31Changes in tax laws or tax rulings could affect our financial position
29. 32The Infrastructure Investment and Jobs Act was signed on November 15, 2021, and it contained several tax provisions, including changes to the Employee Retention Tax Credit and changes to excise taxes. These provisions do not have a material impact to our current tax provision
30. 33The IRA of 2022 specifically introduces the topic of corporate alternative minimum tax on adjusted financial statement income on applicable corporations for taxable years beginning after December 31, 2022. There is no impact to our current tax provision
31. 34Our ability to utilize our NOL carryforwards and certain other tax attributes may be limited
32. 35Our insurance policies may be inadequate and potentially expose us to unrecoverable risks

Risks Related to Our Reliance on Third Parties

1. 36We rely and will continue to rely on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our vaccine candidates
2. 37commercial prospects for our vaccine candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed
3. 38We have not yet caused our vaccine candidates to be manufactured on a commercial scale and may not be able to achieve commercial scale manufacturing and may be unable to create an inventory of mass-produced product to satisfy demands for any of our vaccine candidates
4. 39If we or our third-party suppliers use hazardous, non-hazardous, biological or other materials in a manner that causes injury or violates applicable law, we may be liable for damages

Risks Related to Government Regulation

1. 40The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our vaccine candidates
2. 41The FDA may disagree with our regulatory plan, and we may fail to obtain regulatory approval of our vaccine candidates
3. 42We expect the vaccine candidates we develop will be regulated as biological products, or biologics, and therefore they may be subject to competition sooner than anticipated
4. 43Coverage and reimbursement may be limited or unavailable in certain market segments for our vaccine candidates, which could make it difficult for us to sell our vaccine candidates, if approved, profitably
5. 44Patients who receive vaccines generally rely on third-party payors to reimburse all or part of the associated costs. Obtaining coverage and adequate reimbursement from third-party payors is critical to new product acceptance
6. 45Healthcare legislative reform measures may have a negative impact on our business, financial condition, results of operations and prospects
7. 46Center for Medicare & Medicaid Innovation (“CMMI”) at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drugs
8. 47Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business

Risks Related to Our Intellectual Property

1. 48If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets
2. 49If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our vaccine candidates
3. 50Obtaining 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 noncompliance with these requirements
4. 51Third-party claims or litigation alleging infringement of patents or other proprietary rights, or seeking to invalidate our patents or other proprietary rights, may delay or prevent the development, manufacturing and commercialization of VAX-31 or VAX-24 and any future vaccine candidate
5. 52We may become involved in lawsuits to protect or enforce our patents, the patents of our licensors or our other intellectual property rights, which could be expensive, time consuming and unsuccessful
6. 53litigation the prevailing party does not offer us a license on commercially reasonable terms. Any litigation or other proceedings to enforce our intellectual property rights may fail, and even if successful, may result in substantial costs and distract our management and other employees
7. 54Changes in U.S. patent law or the patent law of other countries or jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products
8. 55Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business
9. 56We may not be able to protect our intellectual property rights throughout the world, which could impair our business
10. 57Our reliance 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
11. 58We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of their former employers or other third parties

Risks Related to Ownership of Our Common Stock

1. 59The price of our stock may be volatile, and the value of our common stock may decline
2. 60We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
3. 61Expectations relating to environmental, social and governance programs may impose additional costs and expose us to new risks
4. 62Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
5. 63Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us
6. 64Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission
7. 65While we maintain directors’ and officers’ liability insurance, such insurance may not be adequate to cover all liabilities that we may incur, which may reduce our available funds to satisfy third-party claims and may adversely impact our cash position
8. 66Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or vaccine candidates
9. 67Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price
10. 68If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely consolidated financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline
11. 69Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States
12. 70Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
13. 71If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline