SELLAS Life Sciences Group (SLS) risk factors, FY2025 10-K

Risks Related to Our Financial Position and Capital Needs

1. 01We have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses for the foreseeable future
2. 02We currently have no source of revenues from product sales. We may never generate such revenues or achieve profitability
3. 03We will need additional financing to fund our operations and complete the development and, if approved, the commercialization of our product candidates. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts
4. 04Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us

Risks Related to the Development and Regulatory Approval of Our Product Candidates

1. 05Clinical-stage biopharmaceutical companies with product candidates in clinical development face a wide range of challenging activities which may entail substantial risk
2. 06Our lead product candidate, GPS, represents a new therapeutic approach that presents significant challenges
3. 07The limited number of patients who have the diseases for which our product candidates are being studied, has made it more difficult to enroll patients in our clinical trials, which could delay or prevent the start of clinical trials for our product candidates63% rewritten
4. 08sufficient number of patients in our clinical trials, if the pace of enrollment is slower than we expect, the development costs for our product candidates may increase and the completion of our trials may be delayed or our trials could become too expensive to completeNew
5. 09Interim, 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
6. 10We are developing and may continue to develop our programs in combination with other therapies, which exposes us to additional risks
7. 11Clinical drug development involves a lengthy and expensive process with an uncertain outcome
8. 12Risks associated with operating in foreign countries could materially adversely affect our product development
9. 13Global, market and economic conditions may negatively impact our business, financial condition and share price
10. 14Our partnerships in China subject us to risks and uncertainties relating to the laws and regulations of China and the changes in relations between the United States and China34% rewritten
11. 15Climate change or legal, regulatory or market measures to address climate change may negatively affect our business, results of operations, cash flows and prospects
12. 16Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved
13. 17Our future success is dependent on the regulatory approval of our product candidates
14. 18Our current and future product candidates could fail to receive regulatory approval from the FDA or comparable foreign regulatory authorities
15. 19We currently have orphan designation for GPS and SLS009 for certain indications, which might not provide the intended benefit thereof52% rewritten
16. 20in the marketplace, or that another product will not be approved for the same indication ahead of our product candidateNew
17. 21We currently have Fast Track designation for GPS and SLS009 and may seek Fast Track designation for additional product candidates, or indications, which might not be received or provide the intended benefits thereof
18. 22Failure to obtain regulatory approval in international jurisdictions would prevent our product candidates from being marketed abroad
19. 23Even if our current and future product candidates receive regulatory approval, they may still face future development and regulatory difficulties
20. 24Any government investigation of alleged violations of law would require us to expend significant time and resources in response and could generate adverse publicity. The occurrence of any event or penalty described above may inhibit our ability to successfully commercialize our products and generate revenues

Risks Related to Our Manufacturing

1. 25We have limited to no manufacturing or distribution capability and must rely upon third parties for such
2. 26We are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit supply of our product candidates
3. 27In our GPS clinical trials, GM-CSF and Montanide are also administered in addition to GPS and their availability is dependent upon third-party manufacturers, which may or may not reliably provide GM-CSF or Montanide, thus jeopardizing the completion of the trials
4. 28If any of the clinical manufacturing facilities of CMOs we rely on for clinical supply are damaged or destroyed or production at such facilities is otherwise interrupted, our business and prospects would be negatively affected

Risks Related to Our Dependence on Third Parties and Our License Agreements

1. 29If any of our relationships with our third-party CROs, third-party vendors or contractors terminate, we may not be able to enter into arrangements with alternative CROs, third-party vendors or contractors on a timely basis, on commercially reasonable terms or at all
2. 30We have in-licensed a significant portion of our intellectual property from MSK. If we breach our license agreement with MSK, we could lose the ability to continue the development and potential commercialization of GPS
3. 31We rely on a license agreement with GenFleet for the development of SLS009, and if this license is breached or otherwise terminated, we could lose the ability to continue the development and potential commercialization of SLS009
4. 32We may not realize the benefits of our strategic alliances that we may form in the future
5. 33Our business involves the use of hazardous materials and we and our third-party manufacturers and suppliers must comply with environmental, health and safety laws and regulations, which can be expensive and restrict how we do business
6. 34We may not be able to establish or maintain the third-party relationships that are necessary to develop or potentially commercialize some or all of our product candidates, including our relationship with 3D Medicines

Risks Related to Our Intellectual Property

1. 35We may not be able to obtain and enforce patent rights or other intellectual property rights that cover our product candidates and that are of sufficient breadth to prevent third parties from competing against u s
2. 36Changes in the patent laws, regulations, or interpretations thereof in the United States or abroad may diminish the value of our intellectual property85% rewritten
3. 37While we intend to take actions reasonably necessary to enforce our patent rights, we may not be able to detect infringement of our own or in-licensed patents, which may be especially difficult for methods of manufacturing or formulation products
4. 38SLS009 may face generic competition sooner than expected before the expiration of our composition of matter patent protection 33% rewritten
5. 39brand-name biologic may not be made effective, which means FDA may not approve the biosimilar application until 12 years after the date on which the reference product was first licensedNew
6. 40If we are sued for infringing the intellectual property rights of third parties, such litigation could be costly and time-consuming and could prevent or delay our development and commercialization efforts
7. 41We may not be able to protect our intellectual property rights throughout the world
8. 42We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful and have a material adverse effect on the success of our business and on our stock price
9. 43If we are unable to protect the confidentiality of our trade secrets and other proprietary information, the value of our technology could be materially adversely affected, and our business could be harmed
10. 44Some intellectual property that we have in-licensed, if created as a result of government funded programs, may be subject to certain federal regulations

Risks Related to Competition and Commercialization of Our Current and Future Product Candidates

1. 45We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do
2. 46If we obtain marketing approval, our commercial success depends on establishing or implementing our own sales, marketing, access and reimbursement, and distribution capabilities or entering into licensing or collaboration agreements for these purposes, and the timing of these
3. 47Our commercial success depends upon attaining significant market acceptance of our current and future product candidates, if approved, among health care providers, third-party payors and operators of major cancer clinics
4. 48Even if we are able to commercialize our current or future product candidates, the products may become subject to unfavorable pricing regulations, third-party reimbursement practices or health care reform initiatives, which could harm our business
5. 49Health care policy changes may have a material adverse effect on our business and results of operations74% rewritten
6. 50health plans to continue to require health care providers, including health care providers that may one day purchase our products, to contain costs and demonstrate the value of the therapies they provideNew
7. 51Price controls may be imposed in foreign markets, which may adversely affect our future profitability

Risks Related to Health Care Compliance Regulations

1. 52In addition to the CCPA, numerous other states have either enacted are considering enacting new comprehensive privacy laws
2. 53view any alternative approaches to compliance as being too costly, too burdensome, too legally uncertain, or otherwise objectionable and therefore decide not to do business with us. Any of the foregoing could materially harm our business, prospects, financial condition, and results of operationsNew
3. 54We also continue to see jurisdictions imposing data localization laws. These regulations may interfere with our intended business activities, inhibit our ability to expand into those markets or prohibit us from continuing to offer services in those markets without significant additional costs
4. 55Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation
5. 56Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop

Risks Related to our Business Operations

1. 57Significant disruptions of information technology systems, computer system failures or cybersecurity incidents could adversely affect our business
2. 58Artificial intelligence presents risks and challenges that can impact our business including by posing security risks to our confidential information, proprietary information, and personal data
3. 59A pandemic, epidemic, or outbreak of an infectious disease, such as the COVID-19 pandemic, could materially and adversely affect our business64% rewritten
4. 60We will need to grow the size of our organization in the future, and we may experience difficulties in managing this growth
5. 61The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members
6. 62Our future success depends on our ability to retain our executive officers and to attract, retain and motivate qualified personnel
7. 63Legislation or other changes in U.S. tax law could adversely affect our business and financial condition66% rewritten
8. 64recent years, many changes have been made to applicable tax laws and changes are likely to continue to occur in the futureNew
9. 65Our ability to use net operating losses to offset future taxable income may be subject to limitations

Risks Related to Ownership of Our Common Stock

1. 66We will likely need to secure additional capital which may cause dilution to you and our existing stockholders, provide subsequent investors with rights and preference that are senior to yours, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us
2. 67The market price and trading volume of shares of our common stock may be volatile22% rewritten
3. 68Factors beyond our control may also have an impact on the market price of shares of our common stock. For example, to the extent that other companies within our industry experience declines in their stock prices, the market price of shares of our common stock may decline as well52% rewritten
4. 69Future sales of substantial amounts of our common stock, or the possibility that such sales could occur, could adversely affect the market price of our common stock27% rewritten
5. 70We have issued and may issue additional preferred stock in the future, and the terms of the preferred stock may reduce the value of our common stock
6. 71We have settled in the past and may in the future settle legal claims through the issuance of freely tradable shares of our common stock, which results in dilution to holders of our common stock and may adversely affect the market price of our common stock
7. 72Anti-takeover provisions of our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws and provisions of Delaware law could delay or prevent a change of control
8. 73If our common stock becomes subject to the penny stock rules, it may be more difficult to sell our common stock
9. 74Our common stock may be delisted from the Nasdaq Capital Market which could negatively impact the price of our common stock, liquidity and our ability to access the capital markets
10. 75We have never declared or paid cash dividends on our common stock and we do not anticipate paying cash dividends on our common stock in the foreseeable future