Whitehawk Therapeutics (WHWK) risk factors, FY2024 10-K

Risks Related to Our Business, Financial Condition and Capital Requirements

1. 01We are a preclinical-stage biopharmaceutical company, have a limited operating history and had a single product approved for commercial sale that we have divested, which may make it difficult for you to evaluate our current business and likelihood of success and viability
2. 02We have incurred significant net losses since our inception, and we expect to continue to incur significant net losses for the foreseeable future
3. 03Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery, development and commercialization of the ADC Therapies and other product candidates that we may develop in the future
4. 04We will require additional capital to finance our operations. If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts
5. 05Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned
6. 06seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans

Risks Related to the Discovery, Development and Commercialization of Our Product Candidates

1. 07Through the License Agreement, we are transitioning to a new preclinical pipeline and pursuing different targets and indications from those we have historically pursued, which has risks
2. 08The ADC Therapies have never been tested in humans. They are comprised of antibodies that have never been tested in humans and linker-payloads that are currently in clinical trials run by independent third parties for other indications
3. 09Our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success, which would limit the revenue that we generate from our sales
4. 10The market opportunities for the ADC Therapies and any other product candidates we may develop in the future, if approved, may be limited to certain smaller patient subsets
5. 11Any product candidates for which we may obtain regulatory approval, may become subject to unfavorable third-party coverage and reimbursement practices, as well as pricing regulations
6. 12We may not be able to obtain FDA approval of any future NDA for any other product candidates we may develop
7. 13Failure to obtain marketing approval in international jurisdictions would prevent any product candidates that we may develop, if approved, from being marketed abroad
8. 14A variety of risks associated with marketing any product candidates we may develop, if approved, internationally could affect our business
9. 15These and other risks associated with our international operations may compromise our ability to achieve or maintain profitability
10. 16Even if the side effects do not preclude the product candidate from obtaining or maintaining regulatory approval, undesirable side effects may inhibit market acceptance due to its tolerability versus other therapies. Any of these developments could materially harm our business, financial condition and prospects
11. 17We are subject to risks relating to open-label clinical trials
12. 18Adverse results of clinical trials conducted by third parties investigating the same product candidates as us in different territories could adversely affect our development of such product candidate
13. 19If we experience delays or difficulties in the enrollment and/or maintenance of patients in clinical trials, our regulatory submissions or receipt of necessary regulatory approvals could be delayed or prevented
14. 20We may develop product candidates in combination with other therapies, which exposes us to additional risks
15. 21compete with these new treatment options, physicians may not utilize our products and our future revenues and estimates may be negatively impacted
16. 22Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay
17. 23We may not be successful in growing our product pipeline through acquisitions and in-licenses
18. 24Our business entails a significant risk of product liability and if we are unable to obtain sufficient insurance coverage such inability could have a material adverse effect on our business and financial condition

Risks Related to Regulatory Approval and Other Legal Compliance Matters

1. 25We may be unable to obtain United States approval for product candidates that we may develop or foreign regulatory approval for product candidates that we may develop and, as a result, may be unable to commercialize any product candidates and in such event our business will be substantially harmed
2. 26The FDA, EMA and other comparable foreign regulatory authorities may not accept data from trials conducted in locations outside of their jurisdiction
3. 27We are subject to risks relating to regulatory uncertainty in foreign jurisdictions
4. 28Obtaining 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
5. 29standards. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production, and quality control
6. 30The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses
7. 31effectiveness of our current diagnostics and any future diagnostics we may develop, which we expect will require separate regulatory clearance or approval prior to commercialization
8. 32We may seek Fast Track designations from the FDA for our product candidates. Even if one or more of our product candidates receive Fast Track designation, we may not lead to a faster development or review process, or we may be unable to maintain or effectively utilize such a designation
9. 33We may not be able to obtain or maintain orphan drug designation or obtain or maintain orphan drug exclusivity for any product candidates and, even if we do, such exclusivity may not prevent the FDA, EMA or other comparable foreign regulatory authorities, from approving competing products
10. 34six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified
11. 35We may face difficulties from changes to current regulations and future legislation
12. 36Our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs, suppliers and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
13. 37If we, or any contract manufacturers and suppliers we engage, fails to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business
14. 38Our business activities may be subject to the FCPA and similar anti-bribery and anti-corruption laws of other countries. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to liability if we violate them
15. 39Our business activities may be subject to United States and certain foreign export controls, trade sanctions, and import laws and regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to liability if we violate them

Risks Related to Our Reliance on Third Parties

1. 40Our product candidates are complex and can be difficult to manufacture
2. 41We are currently dependent on single-source suppliers for our product candidates and their components, any issues with any such suppliers, including increases in costs or expenses or delays in supply, could harm our business
3. 42manufacturers or suppliers, or the loss of manufacturing ability by such parties could similarly require significant time, effort and expense and materially harm our business
4. 43We are dependent on third parties having accurately generated, collected, interpreted and reported data from certain preclinical studies that were previously conducted for our product candidates
5. 44We rely on third parties to conduct preclinical studies and clinical trials and for the manufacture, production, storage and distribution of our products and product candidates and certain commercialization activities for our products
6. 45We rely, and expect to continue to rely, on third parties to conduct our preclinical studies and clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research and studies
7. 46We may form or seek strategic alliances or collaborations in the future. Such alliances and collaborations may inhibit future opportunities, or we may not realize the benefits of such collaborations or alliances
8. 47If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks
9. 48If we decide to establish collaborations but are not able to establish those collaborations on commercially reasonable terms, we may have to alter our development and commercialization plans
10. 49We may enter into collaborations with third parties for the development and commercialization for any 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 Employee Matters, Managing Our Growth and Other Risks Related to our Business

1. 50Our success is highly dependent on our ability to attract and retain highly skilled executive officers, key scientific personnel and employees
2. 51In order to successfully implement our plans and strategies, from time to time we may need to grow the size of our organization, and we may experience difficulties in managing this growth
3. 52Our ability to utilize our net operating loss (“NOL”) carryforwards and certain other tax attributes to offset future taxable income may be limited
4. 53We expect that the portion of our consolidated NOLs and other tax attributes that are allocable to Aadi Subsidiary will generally remain with Aadi Subsidiary and will no longer constitute tax attributes of Whitehawk following the FYARRO Divestiture
5. 54Changes in tax laws could materially adversely affect our financial condition

Risks Related to Our Intellectual Property

1. 55Our success depends on our ability to protect and strengthen our intellectual property and our proprietary technologies, including our ability to obtain patent term extension for our product or any future product candidates
2. 56countries, nor can we be certain that the claims in our issued patent will not be found invalid or unenforceable if challenged
3. 57If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical products or product candidates would be adversely affected
4. 58Our competitors or other third parties may be able to circumvent our patents or the patents of our licensors by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects
5. 59Intellectual property rights do not necessarily address all potential threats to our competitive advantage
6. 60Our success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties. Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental and commercialization efforts
7. 61We may not be successful in obtaining or maintaining necessary rights to our product or product candidates that we may develop in the future through acquisitions and in-licenses
8. 62Intellectual property litigation may lead to unfavorable publicity that harms our reputation and causes the market price of our common shares to decline
9. 63Derivation proceedings may be necessary to determine priority of inventions, and an unfavorable outcome may require us to cease using the related technology or to attempt to license rights from the prevailing party
10. 64Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications or those of our licensors and the enforcement or defense of our issued patents or those of our licensors
11. 65Changes in United States patent law, or laws in other countries, could diminish the value of patents in general, thereby impairing our ability to protect our product or product candidates
12. 66We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
13. 67Patent terms may be inadequate to protect our competitive position on our product or product candidates that we may develop for an adequate amount of time
14. 68If we do not obtain patent term extension for our product or product candidates that we may develop in the future, our business may be materially harmed
15. 69We may not be able to protect our intellectual property rights throughout the world
16. 70Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by regulations and governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
17. 71If 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
18. 72If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed
19. 73We may be subject to claims that we or our employees, consultants or advisors have wrongfully used or disclosed alleged confidential information or trade secrets
20. 74We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers
21. 75Our rights to develop and commercialize our technology and product candidates that we may develop may be subject, in part, to the terms and conditions of licenses granted to us by others
22. 76If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business
23. 77and commercialize the affected product or product candidates, which could have a material adverse effect on our business, financial conditions, results of operations, and prospects
24. 78The patent protection and patent prosecution for our product candidates that we may develop in the future may be dependent on third parties

General Risks

1. 79Our business is subject to the risks associated with doing business in China
2. 80U.S.-China trade relations may adversely impact our supply chain operations and business
3. 81Litigation and legal proceedings may substantially increase our costs and harm our business
4. 82Our stock price is volatile
5. 83Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies or the biotechnology sector. These broad market fluctuations may also adversely affect the trading price of our common stock
6. 84We must maintain effective internal control over financial reporting, and if we are unable to do so, the accuracy and timeliness of our financial reporting may be adversely affected, which could have a material adverse effect on our business and stock price
7. 85There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq
8. 86Sales of a substantial number of shares of our common stock in the public market, including by our existing stockholders, could cause our stock price to fall
9. 87Our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially own a significant portion of our outstanding voting stock
10. 88We are a smaller reporting company. We cannot be certain whether the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors or otherwise limit our ability to raise additional funds
11. 89We do not anticipate that we will pay any cash dividends in the foreseeable future
12. 90If 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
13. 91Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts our stockholders to replace or remove our management
14. 92Our 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