Instil Bio (TIL) risk factors, FY2024 10-K

Other

1. 01Risks Associated with Our Business
2. 02regulatory approval for and commercialize AXN-2510/IMM2510, or successfully develop any other product candidates, or experience significant delays in doing so, our business will be harmed

Risks Related to our Financial Position and Capital Needs

1. 03We have incurred significant losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability
2. 04public offering and private placements of convertible preferred stock to date. We have no products approved for commercialization and have never generated any revenue from product sales
3. 05We have a limited operating history and no history of completing any clinical trial or commercializing any product, which may make it difficult for an investor to evaluate the success of our business to date and to assess our future viability
4. 06Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to technologies or product candidates
5. 07To date, we have recorded significant impairment losses on long-lived assets. Most recently, in the year ended December 31, 2024, we recorded aggregate impairment charges of approximately $7.5 million related to our restructuring plans

Risks Related to the Development of our Product Candidates

1. 08Preclinical studies and clinical trials are expensive, time-consuming, difficult to design and implement and involve an uncertain outcome. Further, we may encounter substantial delays in completing the development of our product candidates
2. 09our clinical trials are completed as planned, we cannot be certain that their results will support the safety and effectiveness of our product candidates for their targeted indications or support continued clinical development of such product candidates. Our clinical trials may not be successful
3. 10We may seek Fast Track designation for our product candidates, and we may be unsuccessful. Even if received, Fast Track designation may not actually lead to a faster review or approval process and does not increase the likelihood that our product candidates will receive marketing approval
4. 11The regulatory approval processes of the FDA, MHRA, EMA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable. If we are not able to obtain required regulatory approval for our product candidates, our business will be substantially harmed
5. 12Success in preclinical studies or earlier clinical trials may not be indicative of results in future clinical trials. Our product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval
6. 13Interim, “top-line” and preliminary results from our clinical trials that we or our collaborators announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data
7. 14We may fail to demonstrate with substantial evidence from adequate and well-controlled trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that our product candidates are safe and potent for their intended uses
8. 15As an organization, we do not have experience completing clinical trials, and may be unable to complete clinical trials for any product candidates we may develop, including AXN-2510/IMM2510
9. 16We may experience delays or difficulties in the enrollment and/or retention of patients in clinical trials, which could delay or prevent our receipt of necessary regulatory approvals
10. 17indications as one or more of our product candidates, or approved products for the conditions for which we are developing our product candidates
11. 18We may seek orphan drug designation for some of our product candidates, and we may be unsuccessful, or may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity, for product candidates for which we obtain orphan drug designation
12. 19Breakthrough therapy designation by the FDA for any product candidate may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that the product candidate will receive marketing approval
13. 20We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success
14. 21We plan to work with our collaborator, ImmuneOnco, to conduct clinical trials for AXN-2510/IMM2510 and AXN-27M/IMM27M outside the United States, including China, and the FDA and similar foreign regulatory authorities may not accept data from such trials conducted in locations outside of their jurisdiction
15. 22We have, and we may in the future, engage in strategic transactions to acquire or in-license additional new product candidates or technologies, and we may not be successful in developing and commercializing any product candidates we acquire or in-license, including AXN-2510/IMM2510
16. 23If we do not achieve our plans and projected development goals in the timeframes we announce and expect, the commercialization of our products may be delayed
17. 24The market opportunities for any current or future product candidate we develop, if approved, may be limited to those patients who are ineligible for established therapies or for whom prior therapies have failed, and may be small
18. 25We may develop AXN-2510/IMM2510, AXN-27M/IMM27M and future product candidates for use in combination with other therapies or third-party product candidates, which exposes us to additional regulatory risks

Risks Related to the Manufacturing of our Product Candidates

1. 26manufacture any of our product candidates on any scale, including clinical or commercial scale. We currently plan to rely on third parties for supply of our product candidates and for commercial supply if any of our product candidates are approved for sale
2. 27Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay

Risks Related to the Commercialization of our Product Candidates

1. 28Even if any of our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success
2. 29If we are unable to establish sales, marketing and distribution capabilities for any product candidate that may receive regulatory approval, we may not be successful in commercializing those product candidates if and when they are approved
3. 30The treatable populations for our product candidates may be smaller than we or third parties currently project, which may affect the addressable markets for our product candidates
4. 31Off-label use or misuse of our products may harm our reputation in the marketplace, result in injuries that lead to costly product liability suits, and/or subject us to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with any product
5. 32We face significant competition from other biotechnology and pharmaceutical companies, and from non-profit institutions, which may result in others discovering, developing or commercializing products before or more successfully than we do
6. 33Any product candidates for which we intend to seek approval as biologic products may face competition sooner than anticipated
7. 34The success of our product candidates will depend significantly on coverage and adequate reimbursement or the willingness of patients to pay for these therapies
8. 35Foreign governments also have their own healthcare reimbursement systems, which vary significantly by country and region, and we cannot be sure that coverage and adequate reimbursement will be made available with respect to the treatments in which our products are used under any foreign reimbursement system
9. 36Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop
10. 37Our business and operations would suffer in the event we, or the third parties with whom we work, suffer computer system failures, cyberattacks or a deficiency in our or such third parties’ cybersecurity
11. 38If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could seriously harm our business

Risks Related to Our Dependence on Third Parties

1. 39We 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 sanctions
2. 40We are currently party to a collaboration with ImmuneOnco and may seek additional collaborations with third parties for the development or commercialization of our product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates

Risks Related to our Intellectual Property

1. 41We depend on our relationship with, and the comprehensiveness of the intellectual property licensed from, ImmuneOnco, and termination of the IO Collaboration Agreement, or issues related to intellectual property could have a material adverse effect on our business
2. 42relevant agreement, or increase our costs to develop, manufacture and commercialize products under the IO Collaboration Agreement
3. 43Our success depends in large part on our ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our product candidates
4. 44violates the terms of such agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a result
5. 45If we fail to comply with our obligations imposed by any intellectual property licenses with third parties that we may need in the future, we could lose rights that are important to our business
6. 46Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our future patents
7. 47We may be involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming and unsuccessful
8. 48We may not identify relevant third party patents or may incorrectly interpret the relevance, scope or expiration of a third party patent which might adversely affect our ability to develop and market our products
9. 49We may be unsuccessful in licensing or acquiring intellectual property from third parties that may be required to develop and commercialize our product candidates
10. 50Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain
11. 51threatened or brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the drug or product candidate that is the subject of the actual or threatened suit
12. 52We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties
13. 53We may be subject to claims challenging the inventorship or ownership of our future patents and other intellectual property
14. 54Reliance 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
15. 55We may enjoy only limited geographical protection with respect to certain patents and we may not be able to protect our intellectual property rights throughout the world
16. 56Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
17. 57Any trademarks we have obtained or may obtain may be infringed or otherwise violated, or successfully challenged, resulting in harm to our business
18. 58Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to Legal and Regulatory Compliance Matters

1. 59Our collaboration with ImmuneOnco subjects us to risks and uncertainties relating to challenged and changing relations between the United States and China
2. 60Even if we obtain regulatory approval for any product candidates, they will remain subject to ongoing regulatory oversight, which may result in significant additional expense
3. 61In 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
4. 62Healthcare legislative or regulatory reform measures may have a negative impact on our business and results of operations
5. 63U.S.-China trade relations may adversely impact our supply chain operations and business

Risks Related to Employee Matters and Managing our Growth

1. 64Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
2. 65Our resources may not be sufficient to manage our future growth; failure to properly manage our potential growth could disrupt our operations and adversely affect our business, financial condition, results of operations and prospects
3. 66Our employees, independent contractors, consultants, collaborators, principal investigators, CROs, suppliers and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements

Risks Related to Ownership of our Common Stock and our Status as a Public Company

1. 67An active trading market for our common stock may not continue to be developed or sustained
2. 68The trading price of the shares of our common stock may be volatile, and purchasers of our common stock could incur substantial losses
3. 69If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline
4. 70A significant portion of our total outstanding shares are available for immediate resale. This could cause the market price of our common stock to drop significantly, even if our business is doing well
5. 71Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management and hinder efforts to acquire a controlling interest in us, and the market price of our common stock may be lower as a result
6. 72Concentration of ownership of our common stock among our existing executive officers, directors and principal stockholders may prevent new investors from influencing significant corporate decisions
7. 73We 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 stock may be less attractive to investors
8. 74We will have broad discretion in the use of our cash and cash equivalents
9. 75Because 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 gains and you may never receive a return on your investment
10. 76We have incurred and will continue to incur increased costs and demands upon management as a result of being a public company
11. 77If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired
12. 78Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of accrued amounts
13. 79We might not be able to utilize a significant portion of our net operating loss carryforwards
14. 80Our business activities will be subject to the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery and anti-corruption laws
15. 81Unfavorable global economic and political conditions could adversely affect our business, financial condition or results of operations