Rallybio (RLYB) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Need for Additional Capital

1. 01Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our intellectual property or product candidates
2. 02We have a limited operating history and no history of commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability
3. 03Our quarterly and annual financial results may fluctuate, which makes our results difficult to predict and may cause our results to fall short of expectations
4. 04Our ability to use our net operating loss and income tax credit carryforwards to offset future income tax liabilities may be subject to certain limitations

Risks Related to Discovery, Development, Clinical Testing, Manufacturing, Marketing Approval and Commercialization

1. 05We are heavily dependent on the success of RLYB212 and RLYB116, which are in early-stage clinical development. If we are not able to develop, obtain marketing approval for, or successfully commercialize our product candidates, or if we experience significant delays in doing so, our business will be materially harmed
2. 06Preclinical studies and clinical trials are expensive, time consuming and difficult to design and implement, and involve uncertain outcomes. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development of our product candidates
3. 07endpoints selected, which may require us to complete additional preclinical studies or clinical trials or (iii) impose stricter requirements for approval than we currently expect
4. 08the identification of safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions
5. 09Results of preclinical studies, clinical trials or analyses that we may announce or publish from time to time, may not be indicative of results obtained in later trials, and any interim results we may publish could be different than final results
6. 10Enrollment and retention of patients in rare disease clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control
7. 11result in increased costs or program delays, which could have a harmful effect on our ability to develop our product candidates or could render further development impossible
8. 12We have never obtained marketing approval for a product candidate. Any delay in obtaining, or an inability to obtain, marketing approvals would prevent us from commercializing our product candidates, generating revenues, and achieving and sustaining profitability
9. 13We face significant competition from biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
10. 14If we are not able to effectively compete for any of the foregoing reasons, our business will be materially harmed
11. 15Even if we obtain marketing approval for a product candidate in the United States, we or our current or future collaborators may never obtain approval for or commercialize the product candidate in any other jurisdiction, which would limit our ability to realize its full market potential
12. 16We may seek Fast Track designation, Breakthrough Therapy designation, or PRIME designation for our product candidates, but we might not receive any such designation, and even if we do, such designation may not actually lead to a faster development or regulatory review or approval process
13. 17Although RLYB212 has received FDA designation as a rare pediatric disease drug product, any marketing application we submit for RLYB212 may not qualify for issuance of a rare pediatric disease priority review voucher
14. 18Even if a product candidate we develop receives marketing approval, it may fail to achieve market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success
15. 19If approved, our product candidates that are regulated as biologics may face competition from biosimilars approved through an abbreviated regulatory pathway
16. 20If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing any product candidates we develop, if approved
17. 21Due to the recent change in presidential administration, we face uncertainty regarding potential regulatory developments that may adversely affect our business

Risks Related to Our Dependence on Third Parties

1. 22Our reliance on a central team consisting of a limited number of employees and third parties who provide various administrative, research and development, and other services across our organization presents operational challenges that may adversely affect our business
2. 23Our employees and independent contractors, including principal investigators, CROs, consultants and vendors, may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business
3. 24programs in other jurisdictions, individual imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations

Risks Related to Healthcare Laws and Other Legal Compliance Matters

1. 25Enacted and future healthcare legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates, if approved, and may affect the prices we may set
2. 26Our business operations and current and future relationships with contractors, investigators, healthcare professionals, consultants, third-party payors, patient organizations, customers, and others will be subject to applicable healthcare regulatory laws, which could expose us to penalties
3. 27Our business operations may subject us to data protection laws, including the GDPR, the UK GDPR, the CCPA and other similar laws
4. 28We are subject to environmental, health and safety laws and regulations, and we may become exposed to liability and substantial expenses in connection with environmental compliance or remediation activities

Risks Related to Our Intellectual Property

1. 29For these reasons, our patent portfolio might not provide us with sufficient rights to exclude others from using or commercializing technology and products similar or identical to our technology and product candidates
2. 30Obtaining and maintaining patent protection depends on compliance with various procedural requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
3. 31We may not be able to protect our intellectual property and proprietary rights throughout the world
4. 32Changes to patent laws in the United States and other jurisdictions could diminish the value of our patents, thereby impairing our ability to protect our products
5. 33If we are unable to obtain licenses from third parties on commercially reasonable terms, our business could be harmed
6. 34If we fail to comply with our obligations in our intellectual property licenses with third parties, or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business
7. 35Patent terms may not protect our competitive position for an adequate amount of time
8. 36If we do not obtain a patent term extension for any product candidates we might develop, our business might be materially harmed
9. 37If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
10. 38If 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
11. 39We may become involved in lawsuits to protect or enforce our patent or other intellectual property rights, which could be expensive, time-consuming and unsuccessful
12. 40We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
13. 41Third parties may allege that we are violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business
14. 42Intellectual property litigation or other legal proceedings relating to intellectual property could cost substantial resources
15. 43Intellectual property rights do not necessarily address all potential threats

Risks Related to Our Employees, Managing Our Growth and Our Operations

1. 44Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified personnel
2. 45We expect to expand our development, regulatory, and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations
3. 46Our business and operations would suffer in the event of system failures
4. 47Our proprietary or confidential information may be lost, or we may suffer security breaches

Risks Related to Our Common Stock

1. 48An active trading market for our common stock may not be sustained
2. 49Our common stock may be delisted from The Nasdaq Global Select Market, which could harm the trading price of our common stock, the liquidity of our common stock, and our ability to raise additional capital
3. 50common stock to a Nasdaq Hearings Panel. There can be no assurance that we will regain compliance with the minimum bid price requirement prior to the Compliance Date, that an additional 180-day period to regain compliance will be granted, or that an appeal would be successful
4. 51The market price of our common stock may be volatile, which could result in substantial losses for investors
5. 52If securities analysts stop publishing research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline
6. 53A significant portion of our total outstanding shares may be sold into the market, which could cause the market price of our common stock to decline significantly, even if our business is doing well
7. 54Insiders have substantial influence over us, which could limit your ability to affect the outcome of key transactions, including a change of control
8. 55We could be subject to securities class action litigation
9. 56Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain
10. 57We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors
11. 58These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock

General Risks

1. 59A variety of risks associated with operating internationally could materially adversely affect our business
2. 60U.S. federal income tax reform could adversely affect our business and financial condition
3. 61Potential clinical trial or product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we may develop
4. 62Unfavorable global economic conditions and geopolitical instability could adversely affect our business, financial condition or results of operations
5. 63We have incurred, and will incur increased costs as a result of operating as a public company, and our management will continue to be required to devote substantial time to new compliance initiatives and corporate governance practices