Spruce Biosciences (SPRB) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We will need substantial additional financing to develop our product candidates and implement our operating plan. If we fail to obtain additional financing, we may be forced to delay, reduce or eliminate our product development programs or commercialization efforts
2. 02We will require additional capital for the further development and commercialization of tralesinidase alfa, tildacerfont and our other current and future product candidates and may need to raise additional funds sooner if we choose to expand more rapidly than we presently anticipate
3. 03We do not currently have sufficient working capital to fund our planned operations for the next twelve months and substantial doubt exists as to our ability to continue as a going concern
4. 04If we are unable to advance our product candidates in clinical development, obtain regulatory approval, and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed
5. 05and placebo. Cortibon stratifies the patient sample with a sensitivity and specificity above 80% and post-hoc analysis suggests treatment benefit of a CRF1receptor antagonist in the Cortibon-positive population
6. 06If we do not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or an inability to obtain regulatory approvals or commercialize our product candidates
7. 07Our clinical trials may fail to adequately demonstrate that our product candidates are well tolerated and provide sufficient clinical benefits for patients, which could prevent or delay regulatory approval and commercialization
8. 08We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively
9. 09intellectual property protection
10. 10If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
11. 11Any delays in the commencement or completion, or termination or suspension, of our clinical trials could result in increased costs to us, delay or limit our ability to generate revenue, and adversely affect our commercial prospects
12. 12the impacts of contagious disease outbreaks on our ongoing and planned clinical trials
13. 13foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of tildacerfont
14. 14the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval
15. 15Interim, 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
16. 16If the market opportunities for tralesinidase alfa, tildacerfont and our other current and future product candidates are smaller than we believe they are, our future revenue may be adversely affected, and our business may suffer
17. 17Obtaining and maintaining regulatory approval for a product candidate in one jurisdiction does not mean that we will be successful in obtaining regulatory approval for that product candidate in other jurisdictions
18. 18the EU, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our product candidates is also subject to approval
19. 19Unfavorable U.S. and global economic and geopolitical conditions could adversely affect our business, financial condition or results of operations
20. 20We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
21. 21Use of tralesinidase alfa, tildacerfont or our other current and future product candidates could be associated with side effects, adverse events or other properties that could delay or prevent regulatory approval or result in significant negative consequences following marketing approval, if any
22. 22Any of these events could prevent us from achieving or maintaining market acceptance of tralesinidase alfa, tildacerfont and our other current and future product candidates, if approved, and could significantly harm our business, results of operations, and prospects
23. 23The occurrence of any event or penalty described above may inhibit our ability to commercialize tralesinidase alfa, tildacerfont and our other current and future product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity
24. 24Even if we obtain regulatory approval for tralesinidase alfa, tildacerfont and our other current and future product candidates, they may not gain market acceptance among physicians, patients, healthcare payors and others in the medical community
25. 25the effectiveness of our sales and marketing efforts and those of any collaboration or distribution partner on whom we rely for sales in foreign jurisdictions
26. 26Coverage and reimbursement may be limited or unavailable in certain market segments for tralesinidase alfa, tildacerfont and our other current or future product candidates, which could make it difficult for us to sell tralesinidase alfa, tildacerfont and our other current or future product candidates profitably
27. 27neither experimental nor investigational
28. 28Current and future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize tralesinidase alfa, tildacerfont and any other current or future product candidates and may affect the prices we may set
29. 29Our failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our product candidates internationally
30. 30Even if we obtain the necessary regulatory approvals, a variety of risks associated with marketing tralesinidase alfa, tildacerfont and any other current or future product candidates internationally could materially adversely affect our business
31. 31If we fail to develop and commercialize additional product candidates, we may be unable to grow our business
32. 32We 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
33. 33We will need to grow the size of our organization, and we may experience difficulties in managing this growth
34. 34improving our operational, financial and management controls, reporting systems and procedures
35. 35Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our technologies or product candidates
36. 36Business disruptions could seriously harm our future revenues and financial condition and increase our costs and expenses
37. 37Our employees, independent contractors, principal investigators, CROs, consultants, strategic partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
38. 38Additionally, we may be subject to federal consumer protection and unfair competition laws, and equivalent foreign laws, which broadly regulate marketplace activities and activities that potentially harm consumers
39. 39or reproduce the data, and subsequently commercialize the product. Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy
40. 40global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests
41. 41If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of tralesinidase alfa, tildacerfont and any future product candidates
42. 42a decline in our share price
43. 43Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited
44. 44Changes in tax laws or regulations that are applied adversely to us may have a material adverse effect on our business, cash flow, financial condition or results of operations

Risks Related to Our Reliance on Third Parties

1. 45We depend on intellectual property licensed from others, the termination of which could result in the loss of significant rights, which would harm our business
2. 46We rely on third parties to conduct our 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 for or commercialize tralesinidase alfa, tildacerfont, and our other product candidates
3. 47commercial prospects for tralesinidase alfa, tildacerfont and any future product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed
4. 48If we or 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
5. 49Social media platforms and AI-based platforms present new risks and challenges to our business

Risks Related to Our Intellectual Property

1. 50countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop, and market competing product candidates in those countries
2. 51the patents of others may have an adverse effect on our business
3. 52Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
4. 53If we do not obtain patent term extension for our product candidates, our business may be materially harmed
5. 54or we are subject to a bankruptcy, the license agreements may be terminated, in which event we would not be able to develop, commercialize or market our product candidates
6. 55the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners
7. 56Obtaining 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
8. 57Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates
9. 58We may not be able to protect our intellectual property rights throughout the world
10. 59We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property
11. 60We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses
12. 61Third-party claims alleging intellectual property infringement may prevent or delay our drug discovery and development efforts
13. 62publications in the scientific literature often lag behind actual discoveries
14. 63require us to enter into royalty or license agreements, which may not be available on commercially reasonable terms, or at all
15. 64We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees or consultants have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers
16. 65Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad
17. 66have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations
18. 67Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
19. 68If 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
20. 69Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our products

Risks Related to Ownership of Our Common Stock

1. 70If we fail to meet all applicable requirements of the Nasdaq Capital Market (“Nasdaq") and Nasdaq determines to delist our common stock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease
2. 71prevent our common stock from dropping below the Nasdaq Minimum Bid Price Requirement or prevent future non-compliance with the listing requirements of Nasdaq Listing Qualifications
3. 72An active, liquid and orderly trading market for our common stock may not be sustained
4. 73The trading price of our common stock has been, and may continue to be volatile, and you could lose all or part of your investment
5. 74other events or factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, many of which are beyond our control
6. 75We could be subject to securities class action litigation
7. 76If 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
8. 77We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock
9. 78Our principal stockholders and management own a significant percentage of our stock and are able to exert significant control over matters subject to stockholder approval
10. 79We are an emerging growth company and a smaller reporting company, and the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors
11. 80As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock
12. 81We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
13. 82Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall
14. 83Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to the Shelf Registration, Sales Agreement and our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall
15. 84sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock
16. 85Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management
17. 86the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock