Affimed (A28A) Risk Analysis
Risk Overview Q4, 2023
Source: the company's latest filing for the period ended Dec 31, 2023, filed Mar 28, 2024
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1We believe it is likely that we were a "passive foreign investment company", or a PFIC, for U.S. federal income tax purposes in 2023, and we may be a PFIC in 2024 or one or more future taxable years. A U.S. investor may suffer adverse U.S. federal income tax consequences if we are a PFIC for any taxable year during which the U.S. investor holds common shares.
Under the Internal Revenue Code of 1986, as amended (the "Code"), we will be a passive foreign investment company ("PFIC") for any taxable year in which, after the application of certain "look-through" rules with respect to subsidiaries, either (i) 75% or more of our gross income consists of "passive income," or (ii) 50% or more of the average quarterly value of our assets consist of assets that produce, or are held for the production of, "passive income." Passive income generally includes interest, dividends, rents, certain non-active royalties and capital gains. Although we have not performed a definitive PFIC analysis using U.S. federal income tax principles, based on certain estimates as to the composition of our income and assets during 2023, including the implied value, based on our market capitalization, of our assets that produce non-passive income, including, for this purpose, certain elements of our net working capital, we believe it is likely that we were a PFIC for our 2023 taxable year. Whether we will be a PFIC in 2024 or any future taxable year is uncertain because, among other things, we currently own a substantial amount of passive assets, including cash, and because the valuation of our assets that generate non-passive income for PFIC purposes, including our intangible assets, is uncertain and may vary substantially over time. In addition, the composition of our assets and income may vary substantially over time. The average quarterly value of our assets for purposes of determining our PFIC status for any taxable year will generally be determined in part by reference to our market capitalization, which has fluctuated and may continue to fluctuate significantly over time. Accordingly, there can be no assurance that we will not be a PFIC in 2024 or for any future taxable year. In addition, we may, directly or indirectly, hold equity interests in other entities, including certain of our subsidiaries, that are PFICs, or "Lower-tier PFICs." If we are a PFIC for any taxable year during which a U.S. investor holds common shares, we generally will continue to be treated as a PFIC with respect to that U.S. investor for all succeeding years during which the U.S. investor holds common shares, even if we cease to meet the threshold requirements for PFIC status. Such a U.S. investor may be subject to adverse tax consequences, including (i) the treatment of all or a portion of any gain on disposition as ordinary income, (ii) the application of a deferred interest charge on such gain and the receipt of certain dividends and (iii) compliance with certain reporting requirements. To avoid the application of the foregoing rules, a U.S. investor can make an election to treat us and each Lower-tier PFIC as a qualified electing fund (a "QEF Election") in the first taxable year that we and each Lower-tier PFIC are treated as PFICs with respect to the U.S. investor. We currently intend to provide the information necessary for a U.S. investor to make a QEF Election with respect to us and each Lower-tier PFIC that we control for 2023 and for any future years with respect to which we determine that we or any Lower-tier PFIC that we control are or are likely to be a PFIC. A U.S. investor can also avoid certain of the adverse U.S. federal income tax consequences described above by making a mark-to-market election with respect to its common shares, provided that the common shares are "marketable." U.S. investors should consult their tax advisers regarding the availability and advisability of making a QEF Election or a mark-to-market election in their particular circumstances. See "Material U.S. Federal Income Tax Considerations" for further information regarding the consequences to a U.S. investor if we are a PFIC for any taxable year during which the U.S. investor holds common shares.
- Share Price & Shareholder Rights - Risk 2If we are unable to comply with Nasdaq's continued listing requirements, our common shares could be delisted from the Nasdaq Capital Market, which would seriously harm the liquidity of our common shares and our ability to raise capital.
In April 2023, we received a letter from Nasdaq indicating that for the last thirty consecutive business days, the bid price for our common shares had closed below the minimum $1.00 per share requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial period of 180 calendar days, or until October 2, 2023, to regain compliance. As the common shares remained below the minimum bid price, we applied for a transfer of our common shares from the Nasdaq Global Select Market to the Nasdaq Capital Market. On October 4, 2023 we announced that we received approval from the Listing Qualifications Department of Nasdaq to transfer the listing of our common shares from the Nasdaq Global Market to the Nasdaq Capital Market. This transfer was effective as of the opening of business on October 4, 2023 and provided us with an additional 180 calendar days, or until April 1, 2024, to regain Nasdaq listing compliance. On March 25, 2024, we received a letter from Nasdaq stating that, for the last 10 consecutive business days, the closing bid price of our common shares was $1.00 per share or greater and, accordingly, we regained compliance with Listing Rule 5550(a)(2). Pursuant to the shareholder approval obtained at our annual general meeting of shareholders held in June 2023, our supervisory board and management board effectuated a 1-for-10 reverse stock split on March 8, 2024 (the "Reverse Stock Split"). On March 11, 2024, the common shares began trading on a post-split basis under the Company's existing trading symbol "AFMD." The Reverse Stock Split was undertaken with the objective of meeting the minimum $1.00 per share requirement for maintaining the listing of our common shares on the Nasdaq Capital Markets. All the share and per share information for all periods presented herein have been adjusted to reflect the 1-for-10 Reverse Stock Split. There is no guarantee that the post-split share price will be sufficient to continue to meet such standards. A continued decline in the closing price of our common shares on Nasdaq could result in suspension or delisting procedures in respect of our common shares. The commencement of suspension or delisting procedures by Nasdaq remains, at all times, at the discretion of Nasdaq and would be publicly announced by the exchange. If a suspension or delisting were to occur, there would be significantly less liquidity in the suspended or delisted securities. In addition, our ability to raise additional necessary capital through equity or debt financing would be greatly impaired. Furthermore, with respect to any suspended or delisted common shares, we would expect decreases in institutional and other investor demand, analyst coverage, market making activity and information available concerning trading prices and volume, and fewer broker-dealers would be willing to execute trades with respect to such common shares. If our common shares are removed from the Nasdaq Capital Market, an investor could find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, our common shares. Additionally, our common shares may then be subject to "penny stock" regulations.
- Debt & Financing - Risk 3We will require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not available, may require us to delay, scale back, or cease our product development programs or operations. If we are unable to raise capital when needed or on acceptable terms, we may need to delay, reduce or terminate our product development programs and may be unable to continue as a going concern and could ultimately go into insolvency.
We are advancing our product candidates through clinical development. Developing pharmaceutical products, including conducting preclinical studies and clinical studies, is expensive. In order to obtain such regulatory approval, we will be required to conduct clinical studies for each indication for each of our product candidates. We will require additional funding to complete the development and commercialization of our product candidates and to continue to advance the development of our other product candidates, and such funding may not be available or acceptable due to factors beyond our control, such as rising interest rates, uncertainty in financial markets, or economic instability, and our failure to raise capital when needed could harm our business. Although it is difficult to predict our liquidity requirements, based upon our current operating plan, assuming all of our programs advance as currently contemplated, we anticipate that our existing liquidity will enable us to fund our operating expenses and capital expenditure requirements into the second half of 2025. Because successful development of our product candidates is uncertain, we are unable to estimate the actual funds we will require to complete research and development and to commercialize our product candidates. In the event we are not able to generate sufficient funds from these measures, we may be unable to continue as a going concern, our business, financial condition and/or results of operations could be materially and adversely affected and we may ultimately go into insolvency. Our future funding requirements will depend on many factors, including but not limited to: - the number and characteristics of other product candidates that we pursue;- the scope, progress, timing, cost and results of research, preclinical development and clinical studies;- the costs, timing and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals;- the costs associated with manufacturing our product candidates and establishing sales, marketing and distribution capabilities;- our ability to maintain, expand, and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights;- the extent to which we acquire or in-license other products or technologies;- our need and ability to hire additional management, scientific and medical personnel;- the effect of competing products that may limit market penetration of our product candidates;- the amount and timing of revenues, if any, we receive from commercial sales of any product candidates for which we receive marketing approval in the future;- our need to implement additional internal systems and infrastructure, including financial and reporting systems; and - the economic and other terms, timing of and success of our existing collaborations, and any collaboration, licensing, or other arrangements into which we may enter in the future, including the timing of achievement of milestones and receipt of any milestone or royalty payments under these agreements. Until we can generate sufficient product revenues to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through a combination of public or private equity offerings, debt financings, strategic collaborations and grant funding. If sufficient funds on acceptable terms are not available when needed, or at all, we could be forced to significantly reduce operating expenses and delay, scale back or eliminate one or more of our development programs or our business operations or even go bankrupt.
Risk Highlights Q4, 2023
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 67
- Innovation / R&D - Risk 1CROs and independent clinical investigators that we engage to conduct our clinical studies may not devote sufficient time or attention to our clinical studies or be able to repeat their past success.
We expect to continue to depend on independent clinical investigators and CROs to conduct our clinical studies. CROs may also assist us in the collection and analysis of data. There is a limited number of third-party service providers that specialize or have the expertise required to achieve our business objectives. Identifying, qualifying and managing the performance of third-party service providers can be difficult, time consuming and cause delays in our development programs. These investigators and CROs will not be our employees and we will not be able to control, other than by contract, the amount of resources, including time, which they devote to our product candidates and clinical studies. In addition, certain clinical studies in which we are involved, and which are testing our product candidates are sponsored by ISTs. By definition, the financing, design and conduct of the clinical study are under the sole responsibility of the respective ISTs. Therefore, we have limited control over these clinical studies, and we do not have control over the timing and reporting of the data from these trials. In addition, we may have limited information about ISTs while they are being conducted, including the status of trial initiation and patient recruitment, changes to trial design and clinical study results. The acimtamig phase 2a study in HL and the phase 1b/2a study in CD30+ lymphoma with cutaneous manifestations were ISTs. An additional acimtamig phase 1/2 IST is currently conducted by the MDACC with CD30+ lymphoma patients. If independent investigators or CROs fail to devote sufficient resources to the development of our product candidates, or if their performance is substandard, it may delay or compromise the completion of trials of our product candidates as well as the prospects for approval and commercialization of any product candidates that we develop. In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated. Further, the FDA and other regulatory authorities require that we comply with standards, commonly referred to as current Good Clinical Practice ("GCP"), and other local legal requirements, e.g., data privacy, for conducting, recording and reporting clinical studies to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial subjects are protected. Failure of clinical investigators or CROs to meet their obligations to us or comply with GCP procedures or other applicable legal requirements could adversely affect the clinical development of our product candidates and harm our business.
- Innovation / R&D - Risk 2AddedWe may submit applications for our product candidates under the Accelerated Approval Program. If we are unable to obtain approval or licensure of our product candidates through the Accelerated Approval Program in the United States, we may be required to conduct additional nonclinical and clinical studies and trials beyond those that we currently contemplate. Even if we receive approval from the FDA, the FDA may seek to withdraw the approval.
We may submit applications for our product candidates under the Accelerated Approval Program. For example, we are currently conducting the LuminICE-203 study, which is investigating acimtamig in combination with AlloNK. We hope that a positive outcome in the LuminICE-203 study may support a future submission under the Accelerated Approval Program. If our product candidates, including acimtamig, are not accepted into the Accelerated Approval Program, we may be required to conduct additional nonclinical and clinical studies and trials beyond those that we currently contemplate, which could increase the expense of obtaining, reduce the likelihood of obtaining and/or delay the timing of obtaining, necessary marketing approval. Even if we receive approvals from the FDA through the Accelerated Approval Program, if any required confirmatory post-marketing trial does not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw the approval.
- Innovation / R&D - Risk 3ChangedIn the United States, we may seek fast track designation of our product candidates, with the intent to pursue an accelerated approval pathway and potentially, breakthrough designation of acimtamig and/or certain of our other product candidates. There is no assurance that the FDA will grant such designation; and, even if it does grant such designations to acimtamig and/or certain of our other product candidates, such designation may not actually lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval in the United States.
Based on clinical data, either from ongoing or new clinical studies, we may seek fast-track designation of certain of our product candidates. The fast track program, a provision of the FDA Modernization Act of 1997, is designed to facilitate interactions between a sponsoring company and the FDA before and during submission of a BLA for an investigational agent that, alone or in combination with one or more other drugs, is intended to treat a serious or life-threatening disease or condition, and which demonstrates the potential to address an unmet medical need for that disease or condition. Under the fast-track program, the FDA may consider reviewing portions of a marketing application before the sponsor submits the complete application if the FDA determines, after a preliminary evaluation of the clinical data, that a product that has been granted fast track designation may be effective. A fast-track designation provides the opportunity for more frequent interactions with the FDA, and a product that has been granted fast track designation could be eligible for priority review if supported by clinical data at the time of submission of the BLA. In September 2023, we announced that the FDA had granted us fast track designation for the development of the combination of acimtamig and AlloNK. The FDA is authorized to designate a product candidate as a breakthrough therapy if it finds that the product is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For products designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Products designated as breakthrough therapies by the FDA can also be eligible for accelerated approval if the relevant criteria are met. The FDA has broad discretion on whether or not to grant fast track or breakthrough designation. Accordingly, even if we believe our product candidates meet the criteria for fast track or breakthrough designation, the FDA may disagree and instead determine not to make such designation. In any event, the receipt of fast-track or breakthrough therapy designation for a product candidate may not result in a faster development process, review or approval compared to product candidates considered for approval under conventional FDA procedures and, in any event, does not assure ultimate approval by the FDA. In addition, even if one or more of our product candidates qualify as fast track or breakthrough therapies, the FDA may later decide that the product candidates no longer meet the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
- Innovation / R&D - Risk 4Our product candidates are in preclinical or clinical development. Drug development is expensive, time consuming and uncertain, and we may ultimately not be able to obtain regulatory approvals for the commercialization of some or all of our product candidates.
The research, testing, manufacturing, labeling, approval, selling, marketing and distribution of drug products are subject to extensive regulation by the FDA, the European Medicines Agency (the "EMA"), national competent authorities (the "NCAs") in Europe, including the Paul-Ehrlich-Institute (the "PEI") in Germany, and other non-U.S. regulatory authorities, which establish regulations that differ from country to country. We are not permitted to market our product candidates in the United States or in other countries until we receive approval of a Biologics License Application ("BLA") or Investigational New Drug application ("IND", together with BLAs, the "US Marketing Applications") from the FDA, or marketing authorization application approvals from applicable regulatory authorities outside the United States. Our product candidates are in various stages of development and subject to the risks of failure inherent in drug development. Although we have submitted an IND application for a clinical study evaluating the combination of acimtamig and AlloNK (such study herein referred to as "LuminICE-203"), we continue to have limited experience in conducting and managing the clinical studies necessary to obtain regulatory approval, including by the FDA or the European Commission. Obtaining approval of US Marketing Applications or other marketing authorization applications from regulatory authorities outside the United States can be a lengthy, expensive and uncertain process. In addition, failure to comply with the FDA, the EMA and other non-U.S. regulatory requirements may, either before or after product approval, if any, subject our company to administrative or judicially imposed sanctions, including: - restrictions on our ability to conduct clinical studies, including full or partial clinical holds, or other regulatory objections to ongoing or planned trials;- restrictions on the products, manufacturers, or manufacturing process;- warning letters;- civil and criminal penalties;- injunctions;- suspension or withdrawal of regulatory approvals;- product seizures, detentions or import bans;- voluntary or mandatory product recalls and publicity requirements;- total or partial suspension of production;- imposition of restrictions on operations, including costly new manufacturing requirements; and - refusal to approve pending US Marketing Applications, or supplements thereto, and refusal to approve other marketing authorization applications in other jurisdictions. The FDA, the EMA and other non-U.S. regulatory authorities also have substantial discretion in the drug approval process. The number of preclinical studies and clinical studies that will be required for regulatory approval varies depending on the product candidate, the disease, the medical need or condition that the product candidate is designed to address, and the regulations applicable to any particular drug candidate. Regulatory agencies can delay, limit or deny approval of a product candidate for many reasons, including: - a product candidate may not be deemed safe or effective;- the results may not confirm the positive results from earlier preclinical studies or clinical studies;- regulatory agencies may not find the data from preclinical studies and clinical studies sufficient;- regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; or - regulatory agencies may change their approval policies or adopt new regulations that may have an impact on specific clinical programs. For example, the FDA's Oncology Center of Excellence initiated Project Optimus to reform the dose optimization and dose selection paradigm in oncology drug development and Project FrontRunner to develop a framework for identifying candidate drugs that are appropriate to initially develop for the treatment of early metastatic disease, among other goals. It is unclear how the FDA plans to implement these goals and whether they will have an impact on specific clinical programs. Any delay in obtaining or failure to obtain required approvals could materially adversely affect our ability to generate revenue from the particular product candidate, which likely would result in significant harm to our financial position and adversely impact our share price. Furthermore, any regulatory approval to market a product may be subject to limitations on the indicated uses for which we may market the product. These limitations may limit the size of the market for the product. In addition, even if regulatory approval is granted, pricing and reimbursement may not occur due to a number of factors, including formulary restrictions and health service providers determining that the benefits of a new medicine are insufficient to support reimbursement, among others.
- Innovation / R&D - Risk 5Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes, and results of earlier trials may not be predictive of future trial results. If clinical studies of our product candidates are prolonged or delayed, we may be unable to obtain the required regulatory approvals, and therefore be unable to commercialize our product candidates on a timely basis or at all.
We have a limited history of conducting large-scale or pivotal clinical studies, and no history commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability. Our operations to date have been limited to financing and staffing our company, developing our technology and developing acimtamig, AFM24, AFM28 and, previously, our other product candidates. We have not yet demonstrated an ability to successfully complete a large-scale or pivotal clinical study, obtain marketing approval, manufacture a commercial scale product or conduct sales and marketing activities necessary for successful product commercialization. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products. If clinical studies for our product candidates are prolonged, delayed or stopped, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay or restrict our receipt of any product revenue. There have been significant developments in the highly dynamic field of immuno-oncology such as the earlier availability of product candidates, or earlier approval of drugs for the same indications as our product candidates, which led us to adapt our clinical programs accordingly. For example, in the past, the marketing authorization of anti-PD-1 antibodies in Hodgkin Lymphoma ("HL") resulted in delays in clinical study initiation and/or patient recruitment for our phase 2a investigator sponsored trial of acimtamig in HL. Certain clinical studies of our product candidates are sponsored by academic sites, which are known as investigator sponsored trials ("ISTs"). By definition, the financing, design, and conduct of such studies are under the responsibility of the academic site sponsor. Therefore, we have limited control over these studies, and we do not have control over the timing and reporting of the data from these trials. In addition, we may have limited information about ISTs while they are being conducted, including the timing of planned trial initiation, the status of patient recruitment, changes to trial design, and clinical study results. At this stage, we cannot assure you of the safety or tolerability of acimtamig, AFM24, AFM28 mono- and/or combination therapy or of their ability to demonstrate efficacy in humans. The commencement of planned clinical studies could be substantially delayed or prevented by several factors, including: - further discussions with the FDA, the EMA, or other regulatory agencies regarding the scope or design of our clinical studies;- the limited number of, and competition for, suitable sites to conduct our clinical studies, many of which may already be engaged in other clinical study programs, including some that may be for the same indication as our product candidates;- approval of drugs for the same indications as our product candidates;- any delay or failure to obtain regulatory approval or agreement to commence a clinical study in any of the countries where enrollment is planned;- inability to obtain sufficient funds required for a clinical study;- clinical holds on, or other regulatory objections to, a new or ongoing clinical study;- delay or failure in the testing, validation, manufacture and delivery of sufficient supplies of product candidate for our clinical studies;- delays related to the impact of a widespread outbreak of an illness or communicable disease or any other public health crisis, similar to the recent COVID-19 pandemic;- delay or failure to reach agreement on acceptable clinical study agreement terms with prospective sites or clinical research organizations ("CROs") the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; and - delay or failure to obtain institutional review board ("IRB") or ethics committee approval to conduct a clinical study at a prospective site. The completion of our clinical studies has been and could in the future be substantially delayed or prevented by several factors, including: - slower than expected rates of patient recruitment and enrollment, due to factors including, but not limited to, the availability of other drugs to treat potential patients, the unwillingness of patients to participate in low-dose groups of dose-ranging studies and lack of recruitment by clinical study sites;- delays relating to adding new clinical study sites;- failure of patients to complete the clinical study or return for post-treatment follow-up;- failure of our collaborators to provide us with products necessary for us to conduct our combination studies;- safety issues, including severe or unexpected drug-related adverse effects experienced by patients, including possible deaths;- the FDA or other regulatory authorities requiring us to suspend or terminate a clinical study, or requiring us to submit additional data or imposing other requirements before permitting us to continue a clinical study;- lack of efficacy during clinical studies;- errors in trial design or conduct;- termination of our clinical studies by one or more clinical study sites;- inability or unwillingness of patients or clinical investigators to follow our clinical study protocols, including clinical investigators' failure to comply with our clinical study protocols without our notice;- inability to monitor patients adequately during or after treatment by us and/or our CROs; and - the need to repeat or terminate clinical studies as a result of inconclusive or negative results or unforeseen complications in testing. For example, in our clinical studies for acimtamig and AFM24, infusion related reactions ("IRRs") have been a commonly observed treatment-related side effect, in some cases serious. In our phase 1b study evaluating the combination of acimtamig with pembrolizumab, IRRs related to acimtamig were observed in 27 of 30 patients, or 90%, and IRRs of grade 3 or greater were observed in four patients, or 13%. IRRs were also observed in our phase 2 REDIRECT study evaluating acimtamig for the treatment of relapsed / refractory ("R/R") positive peripheral T cell lymphoma ("PTCL"), our phase 1/2a study evaluating NK cells pre-complexed with acimatmig in patients with CD30+ lymphomas, and our phase 1/2a studies evaluating AFM24 in patients with epidermal growth factor receptor ("EGFR")-expressing tumors. While these IRRs have generally been well managed with pre-medication and interventional treatments, the incidence of IRRs has occasionally led to dose reductions and/or patients discontinuing their participation in our clinical trials. As we increase the number of clinical trials for our ICE molecules and study them against new tumor targets, there can be no assurance that IRRs or other side effects will not cause delays or termination of our future clinical studies or development plans. Changes in regulatory requirements and guidance may also occur and we may need to significantly amend clinical study protocols or submit new clinical study protocols to reflect these changes with the appropriate regulatory authorities. In addition, changes in the competitive environment have occurred and may continue to occur. Amendments may require us to renegotiate terms with CROs or resubmit clinical study protocols to IRBs or ethics committees for re-examination, which may impact the costs, timing or successful completion of a clinical study. Our clinical studies may be suspended or terminated at any time by the FDA, the PEI, other regulatory authorities, the IRBs or ethics committees overseeing the clinical study at issue, any of our clinical study sites, or us, due to a number of factors, including: - failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols;- safety issues or any determination that a clinical study presents unacceptable health risks;- lack of adequate funding to continue the clinical study due to unforeseen costs or other business decisions;- upon a breach or pursuant to the terms of any agreement with, or for any other reason by, current or future collaborators that have responsibility for the clinical development of any of our product candidates; and - availability of a new effective treatment for the respective disease or condition that would be considered to be standard of care by regulatory bodies. Our product development costs will increase if we experience delays in clinical studies or marketing approvals or if we are required to conduct additional clinical studies or other testing of our product candidates. We may be required to obtain additional funding to conduct and complete such clinical studies. We cannot assure you that our clinical studies will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our trials after they have begun. Significant clinical study delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which may harm our business and results of operations. Any failure or significant delay in completing clinical studies for our product candidates would adversely affect our ability to obtain regulatory approval and our commercial prospects and ability to generate product revenue will be diminished.
- Innovation / R&D - Risk 6The results of previous clinical studies may not be predictive of future results, our progress in trials for one product candidate may not be indicative of progress in trials for other product candidates and the results of our current and planned clinical studies may not satisfy the requirements of the FDA, the EMA or other non-U.S. regulatory authorities.
In addition to the risks and uncertainties discussed elsewhere in this Annual Report, the results of our previous clinical studies may not be predictive of future results, our progress in trials for one product candidate may not be indicative of progress in trials for other product candidates and the results of our current and planned clinical studies may not satisfy the requirements of the FDA, the EMA or other non-U.S. regulatory authorities. We currently have no products approved for sale and we cannot guarantee that we will ever have marketable products. Clinical failure can occur at any stage of clinical development. Clinical studies may produce negative or inconclusive results, and we or any of our current and future collaborators may decide, or regulators may require us, to conduct additional clinical or preclinical testing. We will be required to demonstrate with substantial evidence through well-controlled clinical studies that our product candidates are safe and effective for use in a diverse population before we can seek regulatory approvals for their commercial sale. Success in early clinical trials does not mean that future larger registration clinical studies will be successful, because product candidates in later-stage clinical studies may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and non-U.S. regulatory authorities despite having progressed through initial clinical studies. Product candidates that have shown promising results in early clinical studies may still suffer significant setbacks in subsequent registration clinical studies. Similarly, the outcome of preclinical testing and early clinical studies may not be predictive of the success of later clinical studies, and interim results of a clinical study do not necessarily predict final results. Progress in trials of one product candidate does not indicate that we will make similar progress in additional trials for that product candidate or in trials for our other product candidates. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in advanced clinical studies, even after obtaining promising results in earlier clinical studies. In addition, the design of a clinical study can determine whether its results will support approval of a product and flaws in the design of a clinical study may not become apparent until the clinical study is well advanced. We may be unable to design and execute a clinical study to support regulatory approval. In some instances, there can be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical study participants. We do not know whether any phase 2, phase 3 or other clinical studies we or any of our collaborators may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our product candidates. Furthermore, changes in combination therapies that we utilize in our clinical trials may create variability between results of early-stage clinical trials and later clinical trials. For example, to date we have generated data for acimtamig combined with allogeneic NK cells in CD30+ lymphomas utilizing a NK cell product from MD Anderson Cancer Center. The NK cell used in the phase 1/2 trial is a freshly prepared, cbNK cell (cord-blood derived) that is precomplexed with acimtamig. However, in November 2022, we announced a collaboration with Artiva to advance a separate development of the combination of acimtamig and AlloNK into a potential registration enabling study, LuminICE-203. While AlloNK is also an allogeneic, cord blood-derived NK cell, there are differences as compared to the NK cell used in our phase 1/2 study, including the fact that AlloNK is cryopreserved and is manufactured and activated in different ways than the MDACC cbNK cell used in the phase 1/2 trial. Further, rather than precomplexing acimatmig with AlloNK, we co-administer acimtamig with AlloNK. In January 2023, we announced that the FDA issued a written response to our pre-IND meeting request for the LuminICE-203 study. In May 2023, we announced the FDA clearance of our IND application for the clinical study evaluating the combination of acimtamig and AlloNK in patients with R/R classical HL ("cHL") and CD30+ PTCL. We initiated enrollment into the study in October 2023. Further, our product candidates may not be approved even if they achieve their primary endpoints in phase 3 clinical studies or registration trials. The FDA, the EMA or other non-U.S. regulatory authorities may disagree with our trial design and our interpretation of data from preclinical and clinical studies. In addition, any of these regulatory authorities may change requirements for the approval of a product candidate even after reviewing and providing comments or advice on a protocol for a clinical study. In addition, any of these regulatory authorities may also approve a product candidate for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical studies. The FDA, the EMA or other non-U.S. regulatory authorities may not accept the labeling claims that we believe would be necessary or desirable for the successful commercialization of our product candidates.
- Innovation / R&D - Risk 7We use new technologies in the development of our product candidates and the FDA and other regulatory authorities have not approved products that utilize these technologies.
Our innate cell engager product candidates in development are based on our fit-for-purpose ROCK platform and are capable of recruiting NK cells and / or macrophages. Regulatory approval of our product candidates is less certain than the approval of drugs that do not employ such novel technologies or methods of action. We intend to work closely with the FDA, the EMA and other regulatory authorities to perform the requisite scientific analyses and evaluation of our methods to obtain regulatory approval for our product candidates. For example, final assays and specifications of our product candidates have yet to be developed, and the FDA, EMA or other regulatory authorities may require additional analyses to evaluate different aspects of our product quality. It is possible that the validation process may take time and resources, may require independent third-party analyses, or may not be accepted by the FDA, the EMA or other regulatory authorities. Delays or failure to obtain regulatory approval of any of the product candidates that we are developing would adversely affect our business.
- Innovation / R&D - Risk 8Our product candidates may result in serious adverse, undesirable or unacceptable side effects which may delay or prevent marketing approval. If such side effects are identified during the development of our product candidates or following approval, if any, we may need to abandon our development of such product candidates, the commercial profile of any approved label may be limited, or we may be subject to other significant negative consequences following marketing approval, if any.
Although all of our product candidates have undergone or will undergo safety testing to the extent possible and agreed with health authorities, not all adverse effects of drugs can be predicted or anticipated. Immunotherapy and its mode of action of harnessing the body's immune system, especially with respect to immune cell engagers, is powerful and could lead to serious side effects that we only discover in clinical studies. Unforeseen side effects from any of our product candidates could arise either during clinical development or, if such side effects are rarer, after our product candidates have been approved by regulatory authorities and the approved product has been marketed, resulting in the exposure of additional patients. All of our product candidates are still in clinical or preclinical development. While our phase 1 clinical studies for acimtamig demonstrated a favorable safety profile, the results from ongoing and future trials of acimtamig or other NK cell-engaging bispecific antibodies may not confirm these results. The most frequently observed adverse event for acimtamig is IRRs, in some cases serious. In our phase 1b study evaluating the combination of acimtamig with pembrolizumab, IRRs related to acimtamig were observed in 27 of 30 patients, or 90%, and IRRs of grade 3 or greater were observed in four patients. IRRs were also observed in our phase 2 study evaluating acimtamig for the treatment of R/R PTCL, our phase 1/2a study evaluating NK cells pre-complexed with acimtamig in patients with CD30+ lymphomas, and our phase 1/2a studies evaluating AFM24 in patients with EGFR-expressing tumors. While these IRRs have generally been well managed with pre-medication and interventional treatments, the incidence of IRRs has occasionally led to dose reductions and/or patients discontinuing their participation in our clinical trials. If we increase the number of clinical trials for our ICE molecules and study them against new tumor targets, there can be no assurance that IRRs or other side effects will not cause delays or termination of our future clinical studies or development plans. We are developing our acimtamig candidate for patients with R/R HL and other CD30+ lymphomas, and AFM24 for patients with EGFR+ solid tumor indications, for which other therapies have limited benefit and survival times may be short. Therefore, we expect that certain patients may die during the clinical studies of our product candidates, and it may be difficult to ascertain whether such deaths are attributable to the underlying disease, complications from the disease, our product candidate, or a combination thereof. The results of ongoing and future clinical studies may show that our product candidates cause undesirable or unacceptable side effects, which could interrupt, delay or halt clinical studies, and result in the delay of, or failure to obtain, marketing approval from the FDA, the European Commission and other regulatory authorities, or result in marketing approval from the FDA, the European Commission and other regulatory authorities with restrictive label warnings or potential product liability claims. Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the study or make the product candidate less attractive for partnering. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, particularly outside of our existing or future collaborators as toxicities resulting from cancer immunotherapies are not normally encountered in the general patient population and by medical personnel. The inability to recognize and manage the potential side effects of our product candidates could result in patient deaths. Any of these occurrences may prevent us from achieving or maintaining market acceptance of the affected product candidate and may harm our business, financial condition and prospects significantly. Additionally, if any of our product candidates receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by such products: - regulatory authorities may require us to take our approved product off the market;- regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies;- we may be required to change the way the product is administered, conduct additional clinical studies or change the labeling of the product;- we may be subject to limitations on how we may promote the product;- sales of the product may decrease significantly;- we may be subject to litigation or product liability claims; and - our reputation may suffer. Any of these events could prevent us, our collaborators or our potential future partners from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenue from the sale of our products.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.