ProMIS Neurosciences (PMN) risk factors, FY2025 10-K

Risks Related to the Development of Our Product Candidates

1. 01Our product candidates are still in the early stages of development and there is significant uncertainty that any such products will ever be approved
2. 02Our business is heavily dependent on the successful development, regulatory approval and commercialization of PMN310 and any future product candidates that we may develop or acquire, including PMN442 and PMN267
3. 03Our approach to the potential treatment of AD is based on a novel therapeutic approach, which exposes us to unforeseen risks
4. 04We may not successfully expand our pipeline of product candidates, including by pursuing additional indications for PMN310 or by in-licensing or acquiring additional product candidates for other diseases
5. 05Clinical failure can occur at any stage of clinical development and our Company has not completed any pivotal clinical trial or submitted a BLA
6. 06We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates
7. 07We may experience delays or difficulties in the enrollment and retention of patients in clinical trials, which could delay or prevent our receipt of regulatory approvals
8. 08Interim, top-line and preliminary results from our planned clinical trials that we may announce or publish from time to time may change as more data become available and is subject to audit and verification procedures that could result in material changes in the final data
9. 09We currently have no product candidates approved for sale and we cannot guarantee that we will ever have marketable product candidates. Our ability to generate revenue related to sales of PMN310, PMN267 and PMN442, if ever, will depend on the successful development and regulatory approval of such product candidates
10. 10Our lead product candidate, PMN310, is being developed for the treatment of AD, a disease that has seen limited success in drug development
11. 11We may in the future conduct clinical trials for our product candidates outside the U.S., and the FDA, EMA and other foreign regulatory authorities may not accept data from such trials
12. 12If we do not achieve our projected development goals in the time frames we announce and expect, the commercialization of our products may be delayed
13. 13We may develop PMN310, PMN442, PMN267 and future product candidates for use in combination with other therapies, which could expose us to additional regulatory risks
14. 14Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay

Risks Related to Our Financial Position and Capital Needs

1. 15We have no product candidates approved for commercial sale, we have never generated any revenue from sales and we may never be profitable

Risks Related to the Commercialization of Our Product Candidates

1. 16Successful commercialization of our product candidates, if approved, will depend on a number of factors and we cannot guarantee that we will be able to successfully commercialize our products
2. 17The market opportunities for PMN310, PMN267, PMN442 and future product candidates, if approved, may be smaller than we anticipate
3. 18Even if our current or future product candidates obtain regulatory approval, they may fail to achieve the broad degree of adoption and use by physicians, patients, hospitals, healthcare payors and others in the medical community necessary for commercial success
4. 19Our product candidates have never been manufactured on a commercial scale, and there are risks associated with scaling up manufacturing to commercial scale. In particular, we will need to develop a larger scale manufacturing process to commercialize our potential products, which may not be successful

Risks Related to Our Dependence on Third Parties

1. 20We also are required to register certain ongoing clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within specified timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions79% rewritten
2. 21closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely harm our businessNew
3. 22combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaboratorsNew

Risks Related to Our Intellectual Property

1. 23The patent position of biotechnology and pharmaceutical companies is highly uncertain and involves complex legal, scientific, and factual questions and has been the subject of frequent litigation in recent years
2. 24U.S. courts, allowing foreign competitors a better opportunity to create, develop, and market competing product candidates in those countries
3. 25Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
4. 26If we do not obtain patent term extension for our product candidates our business may be materially harmed
5. 27If we fail to comply with our obligations in the agreements under which we 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. 28Obtaining 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
7. 29Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
8. 30We may not be able to protect our intellectual property rights throughout the world78% rewritten
9. 31We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property
10. 32We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through in-licenses
11. 33Third-party claims alleging intellectual property infringement may prevent or delay our drug discovery and development efforts27% rewritten
12. 34We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers87% rewritten
13. 35business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management team and other employeesNew
14. 36Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
15. 37If 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

Risks Related to Legal and Regulatory Compliance Matters

1. 38Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidatesNew
2. 39Even if we obtain regulatory approval for PMN310, PMN442, PMN267 or any future product candidates, they will remain subject to ongoing regulatory oversight, which may result in significant additional expense
3. 40Failure to comply with health and data protection laws and regulations could lead to government enforcement actions and civil or criminal penalties, private litigation or adverse publicity and could negatively affect our operating results and business49% rewritten
4. 41could result in government investigations and/or enforcement actions, fines, civil or criminal penalties, private litigation or adverse publicity and could negatively affect our operating results and businessNew
5. 42Artificial intelligence presents risks and challenges that can impact our business including by posing cybersecurity risks to our confidential information, proprietary information, and personal dataNew
6. 43In order to market any products in any particular jurisdiction, we must establish and comply with numerous and varying regulatory requirements on a country-by-country basis regarding safety and efficacy
7. 44Healthcare legislative or regulatory reform measures may have a negative impact on our business and results of operations
8. 45Our business activities may be subject to the Foreign Corrupt Practices Act of 1977 (FCPA) and similar anti-bribery and anti-corruption laws
9. 46Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities

Risks Related to Our Business and Industry

1. 47We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer or more effective than ours
2. 48Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization
3. 49If we fail to attract and retain senior management and key scientific personnel, our business may be materially and adversely affected
4. 50If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our current or future product candidates
5. 51We may explore strategic collaborations that may never materialize or may fail

Risks Related to Ownership of Our Common Shares and Our Status as a U.S. Public Company

1. 52Our Common Shares are currently listed on Nasdaq. We cannot assure you that we will be able to maintain a listing of our Common Shares on any such trading venueNew
2. 53Investment in the Company’s Common Shares is speculative, involves risk, and there is no guarantee of a return
3. 54If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our share price and trading volume could decline
4. 55Concentration of ownership of our Common Shares among our existing executive officers, directors and principal shareholders may prevent new investors from influencing significant corporate decisions
5. 56Our constating documents permit us to issue an unlimited amount of additional Common Shares or Preferred Shares, which may prevent a third-party takeover or cause our shareholders to experience dilution in the future
6. 57Anti-takeover provisions in our governing documents and under Canadian Law could prevent or delay transactions that shareholders may favor
7. 58The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation and these differences may make our Common Shares less attractive to investors
8. 59We are an “emerging growth company” and a “smaller reporting company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies and smaller reporting companies, our Common Shares may be less attractive to investors
9. 60We have never paid dividends on our capital shares and we do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our Common Shares will likely depend on whether the price of our Common Shares increases
10. 61We incur increased costs and demands upon management as a result of being a public company in the United States
11. 62Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial condition and results of operations84% rewritten
12. 63There may be difficulty in enforcing judgments and effecting service of process on directors and officers that are not citizens of the U.S
13. 64Comprehensive tax reform legislation could adversely affect our business and financial condition
14. 651 NTD: Please confirm that Company has not performed PFIC analysis for FY 2025, i.e., ensure that this sentence should not instead read “we were not a PFIC for the 2025 taxable year and do not expect to be a PFIC for the 2026 taxable year.” If not, fine to leave as-isNew
15. 66Our business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity posture or a natural disaster54% rewritten
16. 67government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictableNew
17. 68Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations
18. 69Rising inflation rates may result in increased operating costs and reduced liquidity, and affect our ability to access credit