Tempest Therapeutics (TPST) risk factors, FY2024 10-K

Other

1. 01Summary of Selected Risks Associated with Our Business
2. 02terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or our operations
3. 03Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish proprietary rights
4. 04If we are unable to develop, obtain regulatory approval for and commercialize amezalpat, TPST-1495, or any of our future product candidates, or if we experience significant delays in doing so, our business will be materially harmed
5. 05We may not be successful in our efforts to expand our pipeline of product candidates and develop marketable products
6. 06We may rely on third parties to manufacture our clinical product supplies, and we may have to rely on third parties to produce and process our product candidates, if approved
7. 07If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenues
8. 08The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our product candidates

Risks Related to Our Financial Position and Capital Needs

1. 09We will require significant additional funding to finance our operations, which may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or our operations
2. 10the extent to which we acquire or in-license other product candidates and technologies
3. 11In addition, if we raise additional capital through future collaborations, strategic alliances or third-party licensing arrangements, we may have to relinquish future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us
4. 12Our ability to raise capital may be limited by applicable laws and regulations
5. 13The terms of the Loan Agreement with Oxford provide Oxford with a lien against all of our assets, including our intellectual property, and contains financial covenants and other restrictions on our actions that may limit our operational flexibility or otherwise adversely affect our results of operations
6. 14Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability

Risks Related to Our Business and Strategy

1. 15We expect to expand our development and regulatory capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations
2. 16We must attract and retain highly skilled employees to succeed
3. 17Future acquisitions or strategic alliances could disrupt our business and harm our financial condition and results of operations
4. 18litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties
5. 19Our ability to utilize our net operating loss carryforwards and tax credit carryforwards may be subject to limitations

Risks Related to Our Product Development and Regulatory Approval

1. 20If we are unable to develop, obtain regulatory approval for and commercialize TPST-1495, amezalpat, or any of our future product candidates, or if we experience significant delays in doing so, our business will be materially harmed
2. 21business interruptions resulting from geopolitical actions, including war and terrorism such as the Russia-Ukraine war and the war in Israel, natural disasters including earthquakes, typhoons, floods and fires, and public health crises
3. 22Success in preclinical studies and earlier clinical trials for our product candidates may not be indicative of the results that may be obtained in later clinical trials, which may delay or prevent obtaining regulatory approval
4. 23If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected
5. 24the risk that patients enrolled in our clinical trials will drop out of the trials before the infusion of our product candidates or trial completion
6. 25From time to time, we may publish interim or preliminary data from our clinical studies. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available
7. 26We currently are investigating amezalpat and TPST-1495 in combination with other approved therapies, and we may in the future investigate product candidates in combination with other approved and unapproved therapies, which exposes us to additional risks
8. 27Even if we complete the necessary preclinical studies and clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize a product candidate and the approval may be for a narrower indication than we seek
9. 28the 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
10. 29TPST-1495, amezalpat and any future product candidates may cause undesirable and/or unforeseen side effects or be perceived by the public as unsafe, which could delay or prevent their advancement into clinical trials or regulatory approval, limit the commercial potential or result in significant negative consequences
11. 30injunctions or the imposition of civil or criminal penalties
12. 31Our failure to obtain regulatory approval in international jurisdictions would prevent us from marketing our product candidates outside the United States

Risks Related to Commercialization and Manufacturing

1. 32The commercial success of our product candidates, including TPST-1495 and amezalpat, will depend upon their degree of market acceptance by providers, patients, patient advocacy groups, third-party payors and the general medical community
2. 33The pricing, insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate product revenue
3. 34Our future contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products
4. 35Our third-party manufacturers could breach or terminate their agreement(s) with us
5. 36We may not be successful in finding strategic collaborators for continuing development of certain of our future product candidates or successfully commercializing or competing in the market for certain indications

Risks Related to Government Regulation

1. 37The FDA regulatory approval process is lengthy and time consuming, and we may experience significant delays in the clinical development and regulatory approval of our product candidates
2. 38Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may ultimately lead to the denial of regulatory approval of our product candidates
3. 39Enacted and future legislation may increase the difficulty and cost for us to commercialize and obtain marketing approval of our product candidates and may affect the prices we may set
4. 40The FDA’s ability to review and approve new products may be hindered by a variety of factors, including budget and funding levels, ability to hire and retain key personnel, statutory, regulatory and policy changes and global health concerns
5. 41If our information technology systems or those of third parties with whom we work, or our data, are or were compromised, we could experience adverse consequences, including disclosure of sensitive information, damage to our reputation, and significant financial and legal exposure
6. 42have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised
7. 43Our employees, principal investigators, CROs, CMOs and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading
8. 44Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions
9. 45If we fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business
10. 46Although we maintain workers’ compensation insurance to cover for costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities
11. 47Changes in tax laws or regulations could materially adversely affect us

Risks Related to Our Intellectual Property

1. 48Our success depends in part on our ability to obtain, maintain and protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection
2. 49the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us
3. 50Our owned and in-licensed patents and patent applications may not provide sufficient protection of our product candidates or result in any competitive advantage
4. 51Our strategy of obtaining rights to key technologies through in-licenses may not be successful
5. 52If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
6. 53Third-party claims of intellectual property infringement may prevent, delay or otherwise interfere with our product discovery and development efforts
7. 54there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock
8. 55We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful and could result in a finding that such patents are unenforceable or invalid
9. 56We may not be able to protect our intellectual property rights throughout the world
10. 57Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
11. 58Obtaining 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
12. 59As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain
13. 60Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
14. 61If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed

Risks Related to Ownership of Our Common Stock and Other General Matters

1. 62The trading price of the shares of our common stock has been and is likely to continue to be volatile, and purchasers of our common stock could incur substantial losses
2. 63period-to-period fluctuations in our financial results
3. 64Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price
4. 65Our common stock is thinly traded and our stockholders may be unable to sell their shares quickly or at market price
5. 66We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our common stock less attractive to investors

Risks Related to Our Status as a Public Company and Other General Matters

1. 67We expect to continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
2. 68If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired
3. 69If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, in a timely manner, or if we are unable to maintain proper and effective internal controls, we may not be able to accurately report our financial condition, results of operations or cash flows
4. 70We or the third parties upon whom we depend may be adversely affected by natural disasters and other calamities, including public health crises, and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster
5. 71Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could have a material and adverse effect on our business, financial condition, results of operations and prospects
6. 72the inability to commercialize any product candidates that we may develop
7. 73Provisions in our certificate of incorporation and by-laws and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
8. 74require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our certificate of incorporation or by-laws
9. 75Our bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees
10. 76We do not anticipate that we will pay any cash dividends in the foreseeable future
11. 77If 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