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CytoMed Therapeutics Limited (GDTC)
NASDAQ:GDTC
RESEARCH TOOLSreports
Risk Overview Q4, 2023
Risk Distribution
35% Tech & Innovation
26% Finance & Corporate
20% Legal & Regulatory
11% Production
5% Ability to Sell
3% Macro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
CytoMed Therapeutics Limited Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q4, 2023
Main Risk Category
Tech & Innovation
With 37 Risks
Tech & Innovation
With 37 Risks
Number of Disclosed Risks
106
No changes from last report
S&P 500 Average: 31
106
No changes from last report
S&P 500 Average: 31
Recent Changes
0Risks added
0Risks removed
6Risks changed
Since Dec 2023
0Risks added
0Risks removed
6Risks changed
Since Dec 2023
Number of Risk Changed
6
+6
From last reportS&P 500 Average: 4
6
+6
From last reportS&P 500 Average: 4
See the risk highlights of CytoMed Therapeutics Limited in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 106
Tech & Innovation
Total Risks: 37/106 (35%)Above Sector Average
Innovation / R&D8 | 7.5%
Innovation / R&D - Risk 1
Our research on utilizing CTM-N2D, CTM-GDT and iPSC-gdNKT to treat cancer; and CTM-MSC to treat degenerative diseases is novel, and we must overcome significant challenges such as obtaining required regulatory approvals in order to develop, commercialize and manufacture our product candidates.Changed
Innovation / R&D - Risk 2
Our pre-clinical studies may experience delays or may not progress to clinical trials, which would adversely affect our ability to obtain regulatory approvals or commercialize these programs on a timely basis or at all.In order to obtain HSA and/or other relevant regulatory authority approval to market a new biological product we must demonstrate proof of safety, purity and potency or efficacy in humans. We will have to conduct adequate and well-controlled clinical trials in order to meet high safety standards and requirements. We cannot guarantee the timely completion or successful outcome of our pre-clinical testing and studies and cannot determine whether the regulatory authority will accept our proposed clinical programs or if the outcome of our pre-clinical testing and studies will ultimately support the further development of our programs. As a result, we cannot be certain that we can submit any clinical trial or similar applications for our pre-clinical programs on the timelines we expect, if at all, and we cannot be sure that submission of clinical trials or similar applications will result in the regulatory authority or other regulatory authorities allowing clinical trials to begin.
Conducting pre-clinical testing is a prolonged, time-consuming and costly process. The period of pre-clinical testing may vary substantially depending on the type, complexity and novelty of the program, and may often take several years or more for each program. Any delays in pre-clinical testing and studies conducted by us or potential future partners may cause us to incur additional operating expenses. The commencement and rate of completion of pre-clinical studies and clinical trials for a product candidate may be delayed by many factors, including, for example:
- inability to generate sufficient pre-clinical or other in vivo or in vitro data to support the commencement of clinical trials; - delays in reaching a consensus with regulatory agencies on clinical trial design; and - the relevant regulatory authorities not allowing us to rely on previous clinical trial findings of safety and efficacy for other similar but approved products and published scientific literature.
Moreover, as standards for pre-clinical assessment are constantly evolving and may change rapidly, even if an agreement with HSA and/or other relevant regulatory authorities on a pre-clinical trial proposal has been made, HSA and/or other relevant regulatory authorities may not accept the proposed clinical trial submission, in which case patient enrollment would be put on partial or complete hold and treatment of enrolled patients could be temporarily put on hold as the product candidate is re-assessed. Even if we commence clinical trials, we cannot guarantee the success of our clinical trials or development efforts.
Innovation / R&D - Risk 3
The results of pre-clinical studies and early-stage clinical trials may not be indicative of future results in future clinical trials. Initial success in any clinical trials may not be indicative of future results obtained at the completion of such trials in later stage trials.The results of our pre-clinical studies may not be indicative of future results of clinical trials, and the results of any early-stage clinical trials we commence may not be indicative of the results of the later-stage clinical trials. For example, pre-clinical models as applied to cell therapy in oncology are not sufficiently representative of the clinical setting, and thus cannot always accurately predict clinical activity nor identify all potential risks, and may not provide sufficient guidance as to appropriate dose or administration regimen of a given therapy. In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed. Interim data from clinical trials that we may conduct 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. Preliminary data are required to undergo audit and verification procedures that may result in the final data being materially different from the preliminary data we previously announced. Negative differences between preliminary or interim data and final data could materially adversely affect the prospects of any product candidate that is impacted by such data updates.
Innovation / R&D - Risk 4
Clinical trials involve a lengthy and costly process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control.Pre-clinical and clinical trials are costly, time consuming and subject to substantial uncertainty in respect of the outcome. Due to scientific feasibility, safety, efficacy, changing standards of medical care and other variables, our product candidates may fail at any time during the trial. The results from pre-clinical testing or early clinical trials of a product candidate may not accurately indicate or ensure the outcome of later phases of clinical trials of our product candidates. HSA and/or other relevant regulatory authorities may suspend or terminate our clinical trials of any of our product candidate(s) at any time for various reasons, including, but not limited to, a perception that humans participating in such trials are exposed to unacceptable health risks or adverse side effects, or other adverse initial experiences or clinical trial findings. HSA and/or other relevant regulatory authorities may also require us to conduct additional pre-clinical studies or clinical trials due to negative or inconclusive results, or may fail to approve the raw materials, manufacturing processes or facilities of third-party manufacturers upon which we rely, and/or change their approval policies or regulations or their prior guidance to us during clinical development in a manner rendering our clinical data insufficient or unsuitable for approval. In addition, data obtained from our pre-clinical and clinical trials may not be deemed adequate to support the submission of the relevant regulatory filings in our key markets. We cannot guarantee that any pre-clinical studies or clinical trials that we may plan or initiate will be conducted as planned or completed on schedule, if at all.
We may fail at any stage in one or more of our clinical trials. We may face circumstances which prevent successful initiation, timely completion, or the desired results of our pre-clinical studies and clinical trials including, but not limited to:
- delays and challenges in obtaining requisite regulatory approvals to commence pre-clinical studies and clinical trials on humans; - delays in reaching agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different trial sites; - our ability to recruit sufficient patients for our clinical trials in a timely manner or at all;- delays in sufficiently developing, characterizing or conducting a manufacturing process suitable for advanced clinical trials; - delays in reaching an agreement with HSA and/or other relevant regulatory authorities on the planning, design or implementation of our pre-clinical studies and clinical trials; - changes in regulatory requirements or guidance that may require us to amend or submit new clinical protocols, or the introduction of unanticipated requirements; - changes in the standard of care on which a clinical development plan was based, which consequently may require new or additional trials; - lack of quality of our product candidates or other materials necessary to conduct pre-clinical studies or clinical trials of our product candidates; - clinical trials of our product candidates may have negative or inconclusive results, and as such, we may, or HSA and/or other relevant regulatory authorities may require us, to conduct additional clinical trials or abandon product development programs; - inability of enrolled patients in foreign countries to adhere to our clinical protocol and process due to differences in healthcare services or cultural customs, or additional administrative burdens associated with foreign regulatory schemes; and - failure of ourselves or any third-party manufacturers, contractors or suppliers to comply with regulatory requirements, maintain adequate quality controls, or be able to provide sufficient product supply to conduct and complete pre-clinical studies or clinical trials of our product candidates.
In addition, the pandemics, epidemics, or outbreaks of infectious diseases, including future outbreaks of COVID-19 variants, Respiratory Syncytial Virus ("RSV"), or the flu, may increase the likelihood that we face such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing pre-clinical studies and clinical trials, as applicable. If the pandemics, epidemics, or outbreaks of infectious diseases, including future outbreaks of COVID-19 variants, Respiratory Syncytial Virus ("RSV"), or the flu, could continue to prevent or otherwise obstruct regulatory authorities' conduct of regular inspections, reviews or other regulatory activities, HSA's (or other relevant regulatory authorities) timely review and process our regulatory filings could be severely affected. If we experience delays in the initiation, enrollment or completion of any pre-clinical study or clinical trial of our product candidates, or if any pre-clinical studies or clinical trials of our product candidates are canceled, the commercial prospects of our product candidates may be materially and adversely affected, and our ability to generate product revenues from any of these product candidates will be delayed or not realized at all. In addition, any delays in completing our clinical trials may increase our costs and hold up our product candidate development and approval process.
Innovation / R&D - Risk 5
Our business is highly reliant on the success of our product candidates, in particular CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC, and we may fail to develop CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC successfully or to obtain regulatory approval for them.Changed
We cannot assure that CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC will be safe and effective or will obtain the requisite approvals and licenses for commercialization, on a timely basis or at all. Although some of our employees have prior exposure to clinical trials, regulatory compliance and cGMP manufacturing, we have not previously completed any clinical trials or submitted a marketing approval application to HSA, or similar regulatory approval filings to comparable foreign authorities, for any product candidate, and we cannot be certain that CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC will be successful in clinical trials or receive the requisite regulatory approvals for the development, commercialization and marketing of CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC. HSA (or other relevant regulatory authorities) can delay, limit or refuse to grant approval of any of our product candidates for many reasons. For further details about such reasons, please refer to the risk factor entitled "Clinical trials involve a lengthy and costly process with an uncertain outcome, and we may encounter substantial delays due to a variety of reasons outside our control". Any delay in obtaining, or inability to obtain, requisite regulatory approvals will delay or hinder our ability to successfully commercialize CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC. This may have a material and adverse impact on our business, financial condition, results of operations and growth prospects.
Furthermore, as CTM-N2D is our lead product candidate and CTM-GDT is based on the same core proprietary technology, if any of our clinical trials of CTM-N2D encounter safety, efficacy or manufacturing problems, development delays, regulatory issues or other problems, our development plans for CTM-N2D and all of our other product candidates in our pipeline could be significantly hindered, which could materially and adversely affect our business, financial condition, results of operations and growth prospects.
In the event we manage to obtain clinical proof-of-concept from our CTM-N2D Phase I trials for relapsed or refractory solid tumors of different types, we may develop CTM-N2D for additional indications. We may not be able to advance any of these clinical trial indications through the development process. Even if we receive regulatory approval to market CTM-N2D for the treatment of any of these additional clinical trial indications, any such additional clinical trial indications may not be successfully commercialized, widely accepted in the marketplace or found to be more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize CTM-N2D for these additional clinical trial indications, our commercial opportunities will be limited.
Innovation / R&D - Risk 6
Enrollment and retention of patients for clinical trials is costly and time-consuming and could be delayed, made more difficult or rendered impossible by multiple factors outside our control.Identifying and qualifying suitable patients to participate in our clinical trials is vital to our development of our product candidates. We need the enrollment of a sufficient number of patients suitable to undergo such clinical trials, including patients who are suffering from the disease that the product candidate is intended to treat and who meet other eligibility criteria for any clinical trial of a new product candidate. The rate of patient enrollment, which is a pivotal factor in determining the timing of clinical trials, is dependent on many factors beyond our control, including:
- our ability to locate and set up clinical trial sites; - the size and nature of the patient population; - the design and eligibility criteria of the clinical trial; - the physical proximity of patients to clinical sites; - the patient referral practices and protocols of medical practitioners; - changing medical practice patterns or guidelines related to the clinical trial indications we are investigating; - competing clinical trials or approved therapies which are seen as an attractive alternative to patients and their medical practitioners; - perceived risks and benefits of the product candidate under study, including as a result of adverse effects observed in similar or competing therapies; - our ability to obtain and maintain consent to our clinical trials from patients which may be affected as a result of various reasons, including but not limited to, patients' unwillingness to participate in our clinical trials due to the pandemics, epidemics, or outbreaks of infectious diseases, including future outbreaks of COVID-19 variants, Respiratory Syncytial Virus ("RSV"), or the flu; - the risk that enrolled patients will drop out of our clinical trial or die before completion of the clinical trial; - our patients failing to complete a clinical trial or returning for post-treatment follow-up; and - our ability to manufacture or obtain the requisite materials for a patient and clinical trial.
In addition, we will compete with many other ongoing clinical trials in sourcing for and recruiting patients for our expected clinical trials. Our clinical trials may also compete with other clinical trials for product candidates that are in a similar cellular immunotherapy area as our product candidates. This competition could reduce the number and profiles of available patients, as some patients may opt to enroll in a clinical trial conducted by one of our competitors instead of ours. Since the number of qualified clinical investigators is limited, we may conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial site. If we are unable to enroll a sufficient number of patients in our clinical trials in a timely manner, completion of our clinical trials may be delayed or may not be achieved, which would prevent us from commercializing our product candidates which in turn, could also cause us to fail to meet milestone deadlines required to maintain intellectual property licenses upon which we rely.
Innovation / R&D - Risk 7
If any of our product candidates, or any competing product candidates, cause severe adverse effects (such as the development of severe or fatal cytokine release syndrome, neurotoxicity or graft-versus-host disease) we may be required to delay or discontinue further clinical development.Our product candidates may have undesirable side effects that could result in us or HSA and/or other relevant regulatory authorities requiring us to interrupt, delay or discontinue clinical trials and could result in a more restrictive label than anticipated or the delay or denial of regulatory approvals. Our clinical trials may demonstrate a high and unacceptable level of severity and prevalence of side effects or unexpected characteristics.
As of the date of this annual report, our evaluation of our product candidates is limited to pre-clinical studies. As such, there can be no guarantee that any toxicity, and/or other adverse events, will not occur in human subjects during clinical trials.
While scientific data suggests that gamma delta T cell-based therapies may be better-tolerated as compared to alpha beta T cell-based therapies due to biologic differences between these cell types, there can be no assurance that patients will not experience cytokine release syndrome, neurotoxicity, GvHD or other serious adverse events. Severe adverse events associated with our product candidates, CTM-N2D, iPSC-gdNKT and CTM-GDT may also develop, since targeting NKG2DLs is not yet a well-characterized modality. NKG2D targets multiple ligands, and the landscape of ligand expression is currently not fully understood. For example, there are risks that NKG2DLs may be expressed on either known or an as-yet-underappreciated population of healthy cells. Therefore, such cells may also be targeted by CTM-N2D, iPSC-gdNKT and CTM-GDT and lead to adverse events of unknown frequency and severity. Such adverse events may cause delays in completion of our clinical programs. If unacceptable side effects arise in the development of our product candidates such that there is no longer a positive benefit risk, our clinical trials may be suspended or terminated, or the regulatory authorities may deny approval of our product candidates for any or all targeted clinical trial indications. Treatment-related side effects could also affect patient enrollment or the successful completion clinical trial by enrolled patients or result in potential product liability claims. In addition, these side effects may not be adequately identified or managed by the relevant medical personnel, and inadequate training in identifying or managing the potential side effects of our product candidates could result in patient injury or death.
Innovation / R&D - Risk 8
We may not identify or develop other product candidates and may fail to capitalize on programs or product candidates that may present a greater commercial opportunity or for which there is a greater likelihood of success.Our business is largely based on our ability to identify, develop and commercialize successful product candidates. A key element of our strategy is to discover and develop additional product candidates based upon our core proprietary technology platform through our internal research programs. We may also explore strategic collaborations for the discovery of new product candidates. Research programs to identify product candidates require substantial technical, financial and human resources, whether or not any product candidates are ultimately identified. In addition, targets for different cancers may require changes to our core proprietary technology platform, which may delay development or prevent the manufacture our product candidates. Our research programs may initially suggest positive results in identifying potential product candidates, but fail to produce successful product candidates for clinical development for many reasons, including without limitation the following:
- the research methodology(ies) and/or technology platform(s) we use may not be accurate in identifying potential product candidates; - competitors may develop alternatives that render our product candidates obsolete or less attractive; - we may choose to discontinue development if we determine that clinical results do not show promise; - product candidates we develop may nevertheless be covered by third parties' patents or other exclusive rights; - a product candidate may be shown to have harmful side effects or other characteristics that clinical trials indicate it is unlikely to be safe, effective or otherwise does not meet applicable regulatory criteria; and - a product candidate may not be accepted as safe and effective by patients and/or the medical professionals.
Due to our limited resources, we have to focus our time and resources on the development of specific types of treatment, or treatment for a specific type of cancer, and we may forego or delay pursuing opportunities with certain programs or product candidates or for clinical trial indications which may be shown in the future to have greater commercial potential. Our estimates regarding the potential market for our product candidates may not be accurate, and if we do not correctly identify and accurately assess the commercial potential for a particular product candidate, we may relinquish valuable rights to that product candidate through strategic collaboration, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. Alternatively, we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement.
If any of these events occur, we may be forced to delay or discontinue our development efforts with respect to a particular product candidate or we may fail to develop a potentially successful product candidate.
Trade Secrets27 | 25.5%
Trade Secrets - Risk 1
If we fail to prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be materially diminished.Trade Secrets - Risk 2
We may fail to obtain or enforce assignments of intellectual property rights from our employees and contractors.Although we generally require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning all such intellectual property to us, we may fail to obtain an enforceable agreement with each party who in fact conceives or develops intellectual property that we regard as our own. Furthermore, our assignment agreements may be breached, and we may be forced to bring or defend claims to determine the ownership of what we regard as our intellectual property, and we may not be successful in such claims. If we fail in any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights which could materially and adversely affect our business, financial condition, results of operations and growth prospects. Even if we are successful in defending against such claims, litigation could result in substantial costs and diversion of management's and other employees' attention from our business operations.
Trade Secrets - Risk 3
Developments in U.S. patent law or the patent law of other jurisdictions present uncertainties in our ability to obtain patents and diminish the value of patents in general, thereby affecting our ability to protect our current and any future product candidates.The U.S. Supreme Court and the Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. For example, in recent years, the U.S. Supreme Court has modified certain tests used by the USPTO in awarding patents, which may reduce our chances of obtaining the requisite patents and increase the likelihood of a challenge of any patents we obtain or license. Similarly, there have been international developments in how the patent laws in their respective jurisdictions are interpreted. Those changes, as well as any future changes, may materially and adversely affect our patent rights and our ability to obtain issued patents.
Developments in either the patent laws or interpretation of the patent laws in the United States could result in greater uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. Under the Leahy-Smith America Invents Act, or the America Invents Act, assuming that all other conditions for patentability are satisfied, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.
The America Invents Act also includes a number of significant changes that affect the prosecution of patent applications and patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO-administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. The implementation of the America Invents Act could result in greater uncertainties and expenses relating to the prosecution of our patent applications and the enforcement or defense of patents issued therefrom, all of which could materially and adversely affect our business, financial condition, results of operations and growth prospects.
Further, the U.S. Supreme Court has made judgments on several patent cases in recent years, with a trend towards either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. This results in greater uncertainty with respect to the value of patents, if and once obtained. Depending on actions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce patents. Similarly, developments in patent law and regulations in other countries or jurisdictions, changes in the enforcement authorities or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents, which in turn could materially adversely affect our business, financial condition, results of operations and growth prospects.
Trade Secrets - Risk 4
We may fail to identify unauthorized use of our intellectual property and enforce our intellectual property rights against infringement, and may incur substantial costs as a result of bringing litigation or other proceedings to protect our intellectual property rights.Identifying unauthorized use of our intellectual property is challenging and expensive. From time to time, we will review products from our competitors to determine potential infringement of our rights if any. We may not be able to identify unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Any failure by us to identify any unauthorized use of our intellectual property rights by third parties could result in competitors offering products that incorporate our product features, which could in turn reduce demand for our products.
We may also, from time to time, seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may result in an increase in the value of our intellectual property.
If we or our licensor choose to enforce our licensed patent rights against a party, we or our licensor may face a counterclaim that our patent is invalid and/or unenforceable. Our patents may be challenged in legal proceedings. Proceedings to challenge patents are also available internationally, including, for example, opposition proceedings and nullity actions. In general, grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion may include an allegation that someone connected with the prosecution of the patent withheld relevant information, or made a misleading statement, during prosecution. Third parties may also raise similar claims, even outside the context of litigation. We are unable to predict the outcome of litigation suits. With respect to the validity question, for example, we cannot guarantee that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we may lose at least part, and perhaps all, of the patent protection on our product candidates.
In addition, such lawsuits and proceedings are costly and would take up considerable time and resources and divert the attention of managerial and scientific personnel from our business operations even if we were successful in preventing the infringement of such patents. Litigation is inherently unpredictable, and there is a risk that the court will decide that such patents are not valid and that we do not have the right to stop the other party from using the technologies. Furthermore, some of our competitors have significantly greater resources and thus may be able to sustain the costs of complex patent litigation more effectively than us. There is also the risk that, even if the validity of such patents is upheld, the court will refuse to grant an injunction against the other party on the ground that there is no infringement of our intellectual property rights.
There could also be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results negatively on us, it could materially adversely affect the price of our ordinary shares. Additionally, any uncertainties resulting from the initiation and continuation of any litigation could materially and adversely affect our ability to raise the funds necessary to continue our operations.
Trade Secrets - Risk 5
We may face claims for infringing, misappropriating or otherwise violating intellectual property rights of third parties or engaging in unfair competition, which would be expensive and time-consuming, and could hinder the successful development and/or commercialization our product candidates.The success of our business is affected by our ability to develop, manufacture and market our technology and use our technology without infringing the proprietary rights of third parties. As the relevant pharmaceutical and biotechnology industries expand and more patents are issued, we face greater risks of patents being issued to third parties that relate to our product candidates and technology of which we are not aware or that we may need to circumvent or overcome to continue our business operations as currently contemplated. As a result, our technology and any future product candidates that we commercialize could be alleged to infringe patent rights and other proprietary rights of third parties, which may require costly litigation and, if we are not successful, could require us to pay substantial damages and/or limit our ability to commercialize our product candidates.
We may have to defend ourselves against litigation claims in which the scope, enforceability and validity of third-party proprietary rights are at issue, or to establish our proprietary rights. Regardless of whether any such claims that we are infringing patents or other intellectual property rights have merit, such claims can be time consuming, divert management attention and financial resources and are costly to evaluate and defend.
If a license is available from a third party who contends any product candidates for which we obtain approval infringe or misappropriate third party intellectual property rights, we may have to pay substantial license fees, annual minimum fees, royalties, upfront fees, or milestone fees, or grant cross-licenses to our intellectual property rights. We may also have to modify our product candidates so they do not infringe third-party intellectual property rights, which may not be possible or may require additional regulatory approvals, or substantial monetary expenditures and time, during which our product candidates may not be available for manufacture, use, or sale.
Trade Secrets - Risk 6
We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of third-party patents, which could materially and adversely affect our ability to develop, manufacture and market our product candidates.There are many patents issued or applied for in the biopharmaceutical industry, and we may not be aware of patents or patent applications held by others which are relevant to our business and our product candidates.
Furthermore, after issuance of a patent, the scope of patent claims depends on an interpretation of the law, the written disclosure in a patent and the patent's prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be inaccurate, and we may incorrectly determine that our product candidates are not covered by a third-party patent or may incorrectly predict whether a third party's pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in any relevant jurisdiction that we consider relevant may also be incorrect. If we fail to correctly identify or interpret the scope of third-party patents, we may be subject to infringement claims. We cannot guarantee that we will be able to successfully settle or otherwise resolve such infringement claims and/or lawsuits. If we fail in any such dispute, in addition to being forced to pay monetary damages, we may be temporarily or permanently prohibited from commercializing our product candidates. We may also be forced to attempt to redesign our product candidates in a manner that no longer infringes third-party intellectual property rights. Any of these events, even if we were ultimately to prevail, could require us to divert substantial financial and management resources that we would otherwise be able to devote to the development and commercialization of our product candidates.
Trade Secrets - Risk 7
If our patent protection is not sufficiently robust, our competitors could develop and commercialize products and technology similar or identical to ours.There is intense competition in the market for cell therapy, and the market is also subject to rapid technological change. Our business depends largely on our ability to maintain a competitive edge in the development and protection of technologies and products for use in these fields.
There have been several complex legal and factual questions relating to patents of biopharmaceutical companies which has, in recent years, been the subject of much litigation. As a result, there are considerable uncertainties relating to the issuance, scope, validity, enforceability and commercial value of our licensed patent rights. Our pending and future patent applications may not result in patents being issued that protect our technology or product candidates or effectively prevent others from commercializing similar or identical technologies and product candidates.
The process to seek and obtain patent protection is costly, time-consuming and complex, and we may not be able to file, prosecute, obtain, maintain, enforce or license all required or desirable patents or patent applications at a reasonable cost or in a timely manner. We may also fail to identify patentable aspects of our R&D output before it is too late to obtain patent protection.
There may be changes in the scope of patent claims before a patent is issued, and after issuance of the patent. Even if the patent applications we license issue as patents, the patents may not be in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us or otherwise provide us with any competitive advantage. Our competitors or other third parties may be able to circumvent our patents by developing similar or alternative products in a manner which does not infringe on our patents.
Trade Secrets - Risk 8
We may not be able to obtain and enforce our intellectual property rights throughout the world.Filing, prosecuting, enforcing and defending the patents rights relating to our product candidates which have been licensed to us in every country in the world would likely be prohibitively expensive. ATPL is responsible for patent prosecution and maintenance costs in a limited number of countries and territories, and if we want to pursue protection in countries other than those for which ATPL is obligated, we will be responsible for the prosecution and maintenance costs. The extent of patent protection can vary in different countries. In addition, we have entered into three addenda for our Patent License that extends the deadlines to meet the commercialization milestones. Failure to meet these extended milestone deadlines may result in termination of the Patent License. Additionally, in the second addendum CytoMed agreed to take over responsibility for all patent prosecution and maintenance costs beginning January 2022.
The requirements for patentability may also differ in certain countries, particularly in developing countries; thus, even in countries where we do pursue patent protection, there can be no assurance that any patents will be issued by the relevant authorities in relation to our product candidates. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by developments in international and foreign intellectual property legislation, regulations and policies.
Additionally, the laws of certain countries may not afford the same level of intellectual property protection as the laws of Singapore or other countries. Many companies have encountered significant problems in protecting and defending their intellectual property rights in certain foreign jurisdictions. It may be more difficult to enforce our patents license rights and other intellectual property rights in the legal systems of some countries, including India and China. This could make it difficult for us to obtain an injunction to stop third party infringement and/or misappropriation of our patents and/or our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from utilizing our technologies in certain countries outside Singapore or from selling or importing products made from our inventions in and into Singapore and/or other jurisdictions.
It is possible that competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop and market their own products and export such products to jurisdictions where we have patent protection, if our patent protection against infringement is not sufficiently robust. These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing with us. Further, our Patent License gives ATPL the right but not the obligation to prosecute and defend any and all infringements of any licensed patent that may issue. We are obligated to obtain ATPL's consent to pursue enforcement of our licensed patents or defend any claims asserting the invalidity of these patents (or control of such enforcement or defense) of such patent rights in all relevant jurisdictions. Proceedings to enforce our patent rights, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business.
Moreover, such proceedings could put any patents at issue in such proceedings at risk of being revoked, invalidated or interpreted narrowly and our licensed patent applications at risk of not being issued and could provoke third parties to assert claims against us. We may not be successful in any lawsuits or other patent office proceedings involving the licenses granted to us and the damages or other remedies awarded, if any, may not be sufficient to compensate us for our losses and expenses and/or otherwise be commercially meaningful. Furthermore, while we intend to seek to protect the patent rights under the license agreements granted to us and if necessary, enforce rights of any patents that issue, in major markets for our products, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our products, if approved. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.
Trade Secrets - Risk 9
Any patents that we have licensed from ATPL will expire, and when they expire, our business may be affected.Our development of our product candidates is reliant on some of the technologies licensed to us pursuant to the patent licenses from ATPL as described in the section entitled "Intellectual Property". When the patents licensed from ATPL, assuming they are issued from the pending patent applications reach the end of their lives, we may not be able to continue to preclude others from making, using or selling, any of our product candidates that are approved.
Trade Secrets - Risk 10
We may not be able to meet our commercialization milestones in our patent license agreements with ATPL, and if our license agreement is terminated as a result, our clinical trials and business will be significantly affected.Any breach or non-compliance of any term in any of our patent license agreements with ATPL (such as our failure to meet any of the commercialization milestones relating to different phases of clinical trials or otherwise) may result in termination. Failure by us to renew or otherwise maintain the required patent licenses, or cancellation, suspension or revocation of any of our patent licenses pursuant to our patent license agreements with ATPL may result in the interruption of our clinical trials and operations if we are not able to use the patent licenses and this could potentially affect our working relationship with ATPL and/or A*STAR, which would have a materially adverse effect on our business, operations and future prospects. We may not be able to identify another licensor able and willing to license such technology(ies) to us, and we may be required to recreate our product candidates altogether which would significantly increase our costs and expenses required to operate. This would also severely delay any potential commercialization of our products and we may not be able to create a new product candidate suitable for pre-clinical or clinical trials or even commercialization.
We have entered into three addenda for our Patent License that extends the deadlines to meet the commercialization milestones. Failure to meet these extended milestone deadlines may result in termination of the license. Additionally, in the second addendum CytoMed agreed to take over responsibility for all patent prosecution maintenance costs beginning January 2022.
Pursuant to the third addendum, the four milestones have been extended from the second addendum as follows: commencement of Phase 1 clinical trial for fifteen (15) months; commencement of Phase 2 clinical trial for forty-five (45) months; commencement of Phase 3 clinical trial for fifty-seven (57) months; and commercial sale of the Licensed Product for sixty-nine (69) months.
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Our development and commercialization rights to our current and future product candidates and technology are subject, in part, to the terms and conditions of patent licenses granted to us by others.We do not have the right to control the preparation, filing, prosecution, maintenance, enforcement and defense of patents and patent applications in respect of the technology(ies) that we license from ATPL. ATPL is responsible for patent prosecution and maintenance costs in a limited number of countries and territories. Therefore, we cannot guarantee that these patent applications and patents issued therefrom will be prepared, filed, prosecuted, maintained, enforced and defended in a manner consistent with our best interests. If ATPL fails to prosecute, maintain, enforce and defend any of such patent applications or patents, or lose rights to any of those patents or patent applications, the patent rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our products that are the subject of such licensed rights could be impaired. Additionally, we may be required to reimburse ATPL for their expenses related to the prosecution, maintenance, enforcement and defense of patents and patent applications that we license from them.
Trade Secrets - Risk 12
If any of our license agreements with ATPL is terminated, we could lose our rights to key components enabling our core proprietary CAR gamma delta T cell technology platform.We are highly reliant on three licenses granted to us pursuant to the Patent License, K562 Cell License for NK cell expansion, and Know-How License by ATPL, a wholly-owned subsidiary of A*STAR and the leading R&D agency in Singapore. A*STAR is the leading body for biomedical research initiatives among the research community in Singapore. Please refer to the section entitled "Intellectual Property" for further information on these licenses. Our lead product candidates, CTM-N2D, iPSC-gdNKT and CTM-GDT, are derived from the technology we licensed from ATPL. If any of these three license agreements is terminated for any reason, we would lose the rights to use the licensed intellectual property rights that may be material or necessary to the development and/or production of our product candidates, which could impede or prevent our successful commercialization of such product candidates and materially adversely affect our business, financial condition, results of operations and growth prospects.
Furthermore, our Patent License is field-specific and has been granted to us in the field of immunotherapy, including stem cell therapy and treatment and immunotherapy drugs using any licensed patents that issue from and claim priority with and from the two Patent Cooperation Treaty applications in the Patent License.
If the licenses granted to us by ATPL are affected in any manner, it could delay our development and commercialization of our product candidates, which in turn could materially adversely affect our business, financial condition, results of operations and growth prospects.
Trade Secrets - Risk 13
Intellectual property rights may be less extensive and enforcement may be more difficult in jurisdictions outside of the U.S. Therefore, we may not be able to protect our intellectual property and third parties may be able to market competitive products that may use some or all of our intellectual property.Changes to patent law, including the Leahy-Smith America Invests Act of 2011 and other future article of legislation, may substantially change the regulations and procedures surrounding patent applications, issuance of patents and prosecution of patents. We can give no assurances that the patents of ours or our licensor's can be defended or will protect us against future intellectual property challenges, particularly as they pertain to changes in patent law and future patent law interpretations.
Trade Secrets - Risk 14
Our intellectual property may not be sufficient to protect our product candidates from competition, which may negatively affect our business as well as limit our partnership or acquisition appeal.We may be subject to competition despite the existence of intellectual property we license or may in the future own. We can give no assurances that our intellectual property rights will be sufficient to prevent third parties from designing around patents we own or license and developing and commercializing competitive products. The existence of competitive products that avoid our intellectual property could materially adversely affect our operating results and financial condition. Furthermore, limitations, or perceived limitations, in our intellectual property may limit the interest of third parties to partner, collaborate or otherwise transact with us, if third parties perceive a higher than acceptable risk to commercialization of our product candidates or future product candidates.
We may elect to sue a third party, or otherwise make a claim, alleging infringement or other violation of patents, trademarks, trade dress, copyrights, trade secrets, domain names or other intellectual property rights that we either own or license from a third party. If we do not prevail in enforcing our intellectual property rights in this type of litigation, we may be subject to:
- paying monetary damages related to the legal expenses of the third party; - facing additional competition that may have a significant adverse effect on our product pricing, market share, business operations, financial condition, and the commercial viability of our product; and - restructuring our company or delaying or terminating select business opportunities, including, but not limited to, R&D, clinical trial, and commercialization activities, due to a potential deterioration of our financial condition or market competitiveness.
A third party may also challenge the validity, enforceability or scope of the intellectual property rights that we license or own and the result of these challenges may narrow the scope or claims of or invalidate patents that are integral to our product candidates in the future. There can be no assurance that we will be able to successfully defend patents we own or license in an action against third parties due to the unpredictability of litigation and the high costs associated with intellectual property litigation, amongst other factors.
Trade Secrets - Risk 15
We may be subject to claims that our employees or consultants have wrongfully used or disclosed alleged trade secrets.As is common in the biotechnology and pharmaceutical industries, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees or consultants have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we could lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
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If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and product could be significantly diminished.We also rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its transparency initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA's disclosure policies may change in the future, if at all. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
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If the breadth or strength of our patent or other intellectual property rights is compromised or threatened, it could allow third parties to exploit and, in particular, commercialize our technology or products or result in our inability to exploit and/or commercialize our technology and products without infringing third-party intellectual property rights. Further, third parties may be dissuaded from collaborating with us.Interference or derivation proceedings brought by the USPTO or its foreign counterparts may be necessary to determine the priority or inventorship of inventions with respect to our licensed patents or patent applications, and we may also become involved in other proceedings, such as re-examination proceedings, before the USPTO or its foreign counterparts. Due to the substantial competition in the pharmaceutical space, the number of such proceedings may increase. This could delay the prosecution of our pending patent applications or impact the validity and enforceability of any future patents that we may obtain. In addition, any such litigation, submission or proceeding may be resolved adversely to us and, even if successful, may result in substantial costs and distraction to our management.
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We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful.In addition to the possibility of litigation relating to infringement claims asserted against us, we may become a party to other patent litigation and other proceedings, including inter partes review proceedings, post grant review proceedings, derivation proceedings declared by the USPTO and similar proceedings in foreign countries, regarding intellectual property rights with respect to our current or future technologies or product candidates or products. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Patent litigation and other proceedings may also absorb significant management time. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace.
Competitors may infringe or otherwise violate our intellectual property, including patents that may issue to or be licensed by us. As a result, we may be required to file claims in an effort to stop third-party infringement or unauthorized use. Any such claims could provoke these parties to assert counterclaims against us, including claims alleging that we infringe their patents or other intellectual property rights, and/or that any of our intellectual property, including licensed intellectual property, is invalid and/or unenforceable. This can be prohibitively expensive, particularly for a company of our size, and time-consuming, and even if we are successful, any award of monetary damages or other remedy we may receive may not be commercially valuable. In addition, in an infringement proceeding, a court may decide that our asserted intellectual property is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our intellectual property does not cover the third party's technology. An adverse determination in any litigation or defense proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing as patents.
Trade Secrets - Risk 19
We may infringe the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our product candidates.Our success will depend in part on our ability to operate without infringing the proprietary rights of third parties. We are not aware of any third-party proprietary rights that our planned products will infringe or misappropriate, but we have not conducted any freedom to operate study as we are in the earliest stages of development. We thus cannot guarantee that our product candidates, or manufacture or use of our product candidates, will not infringe third-party patents. Furthermore, a third party may claim that we are using technologies covered by the third party's patent rights and may go to court to stop us from engaging in our normal operations and activities, including making or selling our product candidates. These lawsuits are costly and could affect our results of operations and divert the attention of managerial and scientific personnel. Some of these third parties may be better capitalized and have more resources than us. There is a risk that a court would decide that we are infringing the third party's patents and would order us to stop the activities covered by the patents. In that event, we may not have a viable way around the patent and may need to halt commercialization of our product candidates. In addition, there is a risk that a court will order us to pay the other party damages for having violated the other party's patents. In addition, we may be obligated to indemnify our licensors and collaborators against certain intellectual property infringement claims brought by third parties, which could require us to expend additional resources. The pharmaceutical and biotechnology industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform.
If we are sued for patent infringement, we would need to demonstrate that our product candidates or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do this. Proving invalidity is difficult. For example, in the U.S., proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Even if we are successful in these proceedings, we may incur substantial costs and diversion of management's time and attention in pursuing these proceedings, which could have a material adverse effect on us. If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.
Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than us or the third parties from whom we license intellectual property because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.
Trade Secrets - Risk 20
We may need to license intellectual property from third parties, and such licenses may not be available on commercially reasonable terms or may not be available at all.There may be intellectual property rights existing now, or in the future, relevant to our product candidates that we seek to commercialize or develop, if any, that may affect our ability to commercialize such product candidates. Although the Company is not aware of any such intellectual property rights, a third party may hold intellectual property rights, including patent rights, which are important or necessary to the development or manufacture of our product candidates. Even if all our main product candidates are covered by patents, it may be necessary for us to use the patented or proprietary technology of third parties to commercialize our product candidates, in which case we would be required to obtain licenses from these third parties. Such licenses may not be available on commercially reasonable terms, or at all, and we could be forced to accept unfavorable contractual terms. In that event, we may be required to expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, our business could be harmed.
The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license intellectual property rights to us. We also may be unable to license or acquire third party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. If we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant project or product candidate, which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Trade Secrets - Risk 21
The life of patent protection is limited, and third parties could develop and commercialize products and technologies similar or identical to ours and compete directly with us after a patent licensed to us expires, which could materially and adversely affect our ability to commercialize our products and technologies.The life of a patent and the protection it affords is limited. For example, in the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. In Europe, the expiration of an invention patent is 20 years from its filing date. Even if we successfully obtain patent protection for an approved product candidate, it may face competition from biosimilar medications. Manufacturers of other drugs may challenge the scope, validity or enforceability of the patents underlying our technology in court or before a patent office, and the patent holder may not be successful in enforcing or defending those intellectual property rights and, as a result, we may not be able to develop or market the relevant product candidate exclusively, which would materially adversely affect any potential sales of that product.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. As a result, the patent pending applications licensed to us may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Even if we believe that the patents involved are eligible for certain (and time-limited) patent term extensions, there can be no assurance that the applicable authorities, including the FDA and the USPTO, and any equivalent regulatory authority in other countries, will agree with our assessment of whether such extensions are available, and such authorities may refuse to grant extensions to such patents, or may grant more limited extensions than requested. For example, depending upon the timing, duration and specifics of any FDA marketing approval of any product candidates we may develop, one or more of the U.S. patents licensed to us may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984, or Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. However, we may not be granted an extension or may be granted a shorter extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patent, or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than requested. If we are unable to obtain patent term extension or term of any such extension is less than requested, our competitors may obtain approval of competing products following our patent expiration, and our business could be harmed. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.
The patent pending applications licensed to us for our product candidates are expected to expire on various dates. Upon the expiration, we or our licensor will not be able to assert such licensed patent rights against potential competitors, which would materially adversely affect our business, financial condition, results of operations and prospects.
Trade Secrets - Risk 22
Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and patent protection could be reduced or eliminated for noncompliance with these requirements.Periodic maintenance fees on any issued patent are due to be paid to the United States Patent and Trademark Office (USPTO) and foreign Intellectual Property Offices in several stages over the term of the patent. Maintenance fees are also due for pending patent applications in some countries. The USPTO and various foreign intellectual property offices require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to office actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.
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Even if patents are issued based on patent applications to which we have been granted a license, because the patent positions of pharmaceutical and biotechnology products are complex and uncertain, we cannot predict the scope and extent of patent protection for our product candidates.Any patents that may be issued based on patent applications that we have been granted licenses to will not ensure sufficient protection with respect to our activities for a number of reasons, including without limitation the following:
- any issued patents may not be broad or strong enough to prevent competition from other identical or similar products; - if patents are not issued or if issued patents expire, there would be no protections against competitors making generic equivalents; - there may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim; - there may be other patents existing, now or in the future, in the patent landscape for our product candidates that we seek to commercialize or develop, if any, that will affect our freedom to operate; - if patents that we have been granted licenses to are challenged, a court could determine that they are not valid or enforceable; - a court could determine that a competitor's technology or product does not infringe patents that we have been granted licenses to; - patents to which we have been granted licenses could irretrievably lapse due to failure to pay fees or otherwise comply with regulations, or could be subject to compulsory licensing; and - if we encounter delays in our development or clinical trials, the period of time during which we could market our products under patent protection would be reduced.
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Some of the intellectual property covered by our licenses concern patent applications. We cannot assure investors that any of the currently pending or future patent applications will result in granted patents, nor can we predict how long it will take for such patents to be granted.Some of the intellectual property covered by our current licenses from the licensor concern certain, specified patent rights (including patent applications and Patent Cooperation Treaty patent applications). While to some extent and for at least a certain period of time, the licensor has agreed to assume responsibility for the preparation, filing, prosecution and maintenance of patent applications covered by the licensed patent rights, we cannot be certain as to when or if final patents will be issued for those patent applications covered by the licensed patent rights. However, the licensor may not successfully prosecute certain patent applications, the prosecution of which the licensor controls, under which we are only a licensee and on which our business substantially depends. Even if patents issue from these applications, there is no assurance that the patents will be free from defects or survive validity or enforceability challenges, the licensors may fail to maintain these patents, may decide not to pursue litigation against third-party infringers, may fail to prove infringement or may fail to defend against counterclaims of patent invalidity or unenforceability.
Moreover, it is possible that the licensed pending patent applications will not result in granted patents, and even if such pending patent applications are granted as patents, they may not provide a basis for intellectual property protection of commercially viable products or may not provide us with any competitive advantages. Further, it is possible that, for any of the patents that may be granted in the future, others will design around the licensed patent rights or identify methods for preventing or treating diseases that do not concern the rights covered by our licenses. Further, we cannot assure investors that other parties will not challenge any patents granted to the licensor or that courts or regulatory agencies will hold licensor's patents to be valid or enforceable. We cannot guarantee investors that, if required to defend the covered patents, we will have the funds to or be successful in defending challenges made against the licensed patents. Any successful third-party challenge to the licensed patents could result in the unenforceability or invalidity of such patents, or to such patents being interpreted narrowly or otherwise in a manner adverse to our interests. Our ability to establish or maintain a technological or competitive advantage over our competitors may be diminished because of these uncertainties.
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We have entered into several licenses to support our various projects. Termination of any of these license agreements would have a material adverse impact on our ability to develop and commercialize derived products under each respective agreement.We have entered into several licenses to support our various projects. We may enter into additional licenses to third-party intellectual property that are necessary or useful to our business. Our current licenses and any future licenses that we may enter into impose various royalty payment, milestone, and other obligations on us. Under some license agreements, we may not control prosecution of the licensed intellectual property, or may not have the first right to enforce the intellectual property. In those cases, we may not be able to adequately influence patent prosecution or enforcement, or prevent inadvertent lapses of coverage due to failure to pay maintenance fees. If we fail to comply with any of our obligations under a current or future license agreement, the licensor may allege that we have breached our license agreement, and may accordingly seek to terminate our license. Termination of any of our current or future licenses could result in our loss of the right to use the licensed intellectual property, which could materially adversely affect our ability to develop and commercialize a product candidate or product, if approved, as well as harm our competitive business position and our business prospects. Under some license agreements, termination may also result in the transfer of or granting in rights under certain of our intellectual property and information related to the product candidate being developed under the license, such as regulatory information.
The agreements under which we have licensed intellectual property or technology or may license intellectual property or technology in the future to or from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Moreover, if disputes over intellectual property that we have licensed or may license prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.
In addition, if our licensor fails to abide by the terms of any of the licenses, if the licensor fails to prevent infringement by third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms, our business could suffer. Moreover, our licensor may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing, misappropriating or otherwise violating the licensor's rights.
Similarly, if we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to seek alternative options, such as developing new product candidates with design-around technologies, which may require more time and investment, or abandon development of the relevant research programs or product candidates and our business, financial condition, results of operations and prospects could suffer.
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We are dependent on licensed intellectual property. If we were to lose our rights to licensed intellectual property, we may not be able to continue developing or commercializing our product candidates, if approved. If we breach any of the agreements under which we license the use, development and commercialization rights to our product candidates or technology from third parties or, in certain cases, we fail to meet certain development deadlines, we could lose license rights that are important to our business.We do not currently own any patents, and we are heavily reliant upon a number of license agreements under which we are granted rights to intellectual property that are important to our business and we may need or choose to enter into additional license agreements in the future. Our existing license agreements impose, and we expect that future license agreements will impose on us, various development, regulatory and/or commercial diligence obligations, payment of milestones and/or royalties and other obligations. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, the licensor may have the right to terminate the licenses, in which event we would not be able to market products covered by the licenses. Our business could suffer, for example, if any current or future licenses terminate, if the licensors fail to abide by the terms of the licenses, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms.
Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues. Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including:
- the scope of rights granted under the license agreements and other interpretation-related issues; - whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; - our right to sublicense patent and other rights to third parties; - our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations; - the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; - our right to transfer or assign the license; and - the effects of termination.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.
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It is difficult and costly to protect our proprietary rights, and we may not be able to ensure full protection of our proprietary rights. If our patent position does not adequately protect our product candidates, others could compete against us more directly, which would harm our business, possibly materially.Our commercial success will depend in part on obtaining and maintaining proprietary rights including patent protection and trade secret protection of our current product candidates and future product candidates, the processes used to manufacture them and the methods for using them, as well as successfully asserting and defending these proprietary rights against third-party challenges. Our ability to stop third parties from making, using, selling, offering to sell or importing our product candidates is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.
The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in pharmaceutical patents has emerged to date in the U.S. or in foreign jurisdictions outside of the U.S., including Singapore. Changes in either the patent laws or interpretations of patent laws in the U.S. and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be enforced in the patents that may be issued from the applications we currently licensed or may in the future own or license from third parties. Further, if any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our product candidates or technology could be adversely affected.
Others may file patent applications covering products and technologies that are similar, identical, or competitive to ours or important to our business. We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed or in-licensed by us, or that we or our licensors will not be involved in patent office proceedings such as interference, derivation, opposition, reexamination, inter partes review, reissue, post grant review or invalidity proceedings before U.S. or non-U.S. patent offices. Such proceedings are also expensive and time consuming.
The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:
- others may be able to make products that are similar to our product candidates, but that are not covered by the claims of our patents or our licensed patents; - any patents that we obtain from licensing or otherwise may not provide us with any competitive advantages; - any granted patents that we rely upon may be held invalid or unenforceable as a result of legal challenges by third parties; and - the patents of others may have an adverse effect on our business.
Cyber Security1 | 0.9%
Cyber Security - Risk 1
We are exposed to information technology and cyber security risks and disruption of service.Technology1 | 0.9%
Technology - Risk 1
We believe we may require an updated and validated protocol for commercial-scale expansion and manufacturing of gamma delta T cells for conducting pivotal trials and for commercialization of our product candidates, if approved.Finance & Corporate
Total Risks: 28/106 (26%)Below Sector Average
Share Price & Shareholder Rights14 | 13.2%
Share Price & Shareholder Rights - Risk 1
It may be difficult for you to enforce any judgment obtained in the United States against us, our Directors and officers and/or our affiliates.Share Price & Shareholder Rights - Risk 2
Subject to the general authority to allot and issue new ordinary shares as may be approved by our shareholders pursuant to the Singapore Companies Act and our constitution, our Directors may allot and issue new ordinary shares from time to time on such terms and conditions and for such purposes as may be determined by our Board of Directors in its sole discretion. Any issuance of new shares would dilute the percentage ownership of existing shareholders and could adversely impact the market price of our ordinary shares.Under Singapore law, we may only allot and issue new ordinary shares with prior approval of our shareholders in a general meeting. Subject to the general authority to allot and issue new ordinary shares provided by our shareholders, the provisions of the Singapore Companies Act, and our constitution, we may allot and issue new ordinary shares on such terms and conditions as our Directors may think fit to impose. Such terms and conditions may be adverse to the rights of holders of our ordinary shares. Any additional issuances of new ordinary shares could dilute the percentage ownership of our existing shareholders and may adversely impact the market price of our ordinary shares.
Because new issuances of ordinary shares are subject to restrictions in respect of the percentage thereof under the Singapore Companies Act and the requisite shareholders' approval, if a sufficient number of shares have not been approved for issuance in respect of one or more transactions in any given year, we may be delayed in raising capital through equity offerings or delayed or prevented from consummating an acquisition using our ordinary shares. Assuming shareholders have approved the issuance of new shares, we may seek to raise capital in the future, including to fund acquisitions, future investments and other growth opportunities. We may, for these and other purposes, issue additional ordinary shares or securities convertible into ordinary shares. Any additional issuances of new ordinary shares could dilute the percentage ownership of our existing shareholders and may also adversely impact the market price of our ordinary shares.
Share Price & Shareholder Rights - Risk 3
Our shareholders may have more difficulty transferring their shares in the Company.The transfer of our shares is subject to restrictions under our constitution and by the laws governing companies incorporated in Singapore. Under Singapore law, a public company shall not register a transfer of shares unless a proper instrument of transfer has been delivered to the company. In addition, our constitution provides that our Directors may decline to lodge a notice of transfer of shares with ACRA if (a) the shares are not fully paid shares, (b) the Directors do not approve of the transferee or (c) the Company has a lien on the shares. As such, it may be difficult for you to transfer your shares in the Company.
Share Price & Shareholder Rights - Risk 4
We are incorporated in Singapore, and our shareholders may have more difficulty in protecting their interests than they would as shareholders of a corporation incorporated in the United States.Our corporate affairs are governed by, inter alia, our constitution and by the laws governing companies incorporated in Singapore. The rights of our shareholders and the responsibilities of the members of our Board under Singapore law may be different from those applicable to a corporation incorporated in the United States. Therefore, our public shareholders may have more difficulty protecting their interests in connection with actions taken by us, our management, members of our Board or our controlling shareholders than they would as shareholders of a corporation incorporated in the United States. For example, controlling shareholders in corporations incorporated in Delaware are subject to fiduciary duties while controlling shareholders in Singapore companies are not subject to such duties.
In addition, subject to the Singapore Companies Act and our constitution, only persons who are registered as shareholders in our register of members are recognized under Singapore law as our shareholders. Only registered shareholders have legal standing to institute shareholder actions against us or otherwise seek to enforce their rights as shareholders. Investors in our ordinary shares who are not specifically registered as shareholders in our register of members (for example, where such shareholders hold ordinary shares indirectly through the DTC) are required to be registered as shareholders in our register of members in order to institute or enforce any legal proceedings or claims against us, our Directors and/or our executive officers relating to shareholder rights. The administrative process of becoming a registered shareholder could result in delays prejudicial to any such legal proceeding or enforcement action. Please refer to the section entitled "Comparison of Shareholder Rights" for a discussion of certain differences between Singapore and Delaware corporation law.
Share Price & Shareholder Rights - Risk 5
We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act's domestic reporting regime and cause us to incur additional legal, accounting and other expenses.In order to maintain our current status as a foreign private issuer, either (1) a majority of our ordinary shares must be either directly or indirectly owned of record by non-residents of the United States or (2) (a) a majority of our executive officers or directors must not be U.S. citizens or residents, (b) more than 50 percent of our assets cannot be located in the United States and (c) our business must be administered principally outside the United States. If we lost this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC rules and Nasdaq listing standards. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance. These rules and regulations could also make it more difficult for us to attract and retain qualified Board members.
Share Price & Shareholder Rights - Risk 6
We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.We are an "emerging growth company" within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds $700 million as of any December 31 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
Share Price & Shareholder Rights - Risk 7
We are a "controlled company" defined under the Nasdaq Listing Rules. Although we do not intend to rely on the "controlled company" exemption under the Nasdaq Listing Rules, we could elect to rely on this exemption in the future and you will not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.Our principal shareholders, officers and directors beneficially hold a majority of our ordinary shares. Under the Nasdaq Listing Rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and is permitted to phase in its compliance with the independent committee requirements. For so long as we are a controlled company under that definition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules, including:
- an exemption from the rule that a majority of our Board must be independent directors; - an exemption from the rule that the compensation of our Chief Executive Officer must be determined or recommended solely by independent directors; and - an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.
As a result, you will not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.
Although we do not intend to rely on the "controlled company" exemption under the Nasdaq Listing Rules, we could elect to rely on this exemption in the future. If we elected to rely on the "controlled company" exemption, a majority of the members of our Board might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors upon closing of this offering. Our status as a controlled company could cause our ordinary shares to look less attractive to certain investors or otherwise harm our trading price. As a result, the investors will not have the same protection afforded to stockholders of companies that are subject to these corporate governance requirements.
Share Price & Shareholder Rights - Risk 8
Our principal shareholders, officers and directors beneficially own approximately 70.80% of our outstanding ordinary shares. They will therefore be able to exert significant control over matters submitted to our shareholders for approval, which could limit your ability to influence the outcome of key transactions, including a change of control, and which may result in conflicts with us or you in the future.Our principal shareholders, officers and directors beneficially own approximately 70.80% of our ordinary shares. This significant concentration of share ownership may adversely affect the trading price for our ordinary shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders. As a result, these shareholders, if they acted together, could significantly influence or even unilaterally approve matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of these shareholders may not always coincide with our interests or the interests of other shareholders, and which may result in conflicts with us or you in the future.
Share Price & Shareholder Rights - Risk 9
Sales of a substantial number of our ordinary shares in the public market by our existing shareholders could cause our share price to fall.Sales of a substantial number of our ordinary shares in the public market, or the perception that these sales might occur, could depress the market price of our ordinary shares and could impair our ability to raise capital through the sale of additional equity securities. Furthermore, while our directors, officers and certain shareholders are subject to lock-up agreements with the representative of the underwriters of our Offering that restrict their ability to transfer our ordinary shares until April 2024, approximately 32.82% of outstanding ordinary shares are not subject to such lock-up and may be sold at any time. We are unable to predict the effect that sales may have on the prevailing market price of our ordinary shares.
Share Price & Shareholder Rights - Risk 10
If securities analysts do not publish research or reports about our business or if they publish negative reports or downgrade our shares, the price of our ordinary shares could decline.The trading market for our ordinary shares relies in part on the research and reports that financial analysts publish about us, our business, our markets and our competitors. We have no control over the research and reports that these financial analysts publish. If we and our ordinary shares are not discussed by securities analysts, this may materially and adversely affect the market price of our ordinary shares. Furthermore, if any securities analyst chooses to downgrade our shares or issue unfavorable commentary on us or our business, our share price would likely decline. If one or more of these security analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the market and interest in our ordinary shares could decrease, which in turn could cause our share price or trading volume to decline and may also impair our ability to expand our business with existing customers and attract new customers.
Share Price & Shareholder Rights - Risk 11
We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempted from certain provisions applicable to U.S. domestic public companies.Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:
- the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; - the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; - the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and - the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
We are required to file an annual report on Form 20-F within four months of the end of each financial year. Press releases relating to financial results and material events must also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections and/or information that would be made available to you if you were investing in a U.S. domestic issuer.
Share Price & Shareholder Rights - Risk 12
Our ordinary share price may in the future be volatile and, as a result, you could lose a significant portion or all of your investment.Market prices for securities of newly-public companies have historically been particularly volatile in response to various factors, some of which are beyond our control. As a result of this volatility, you may not be able to sell your ordinary shares at or above the price you pay for your shares.
Factors affecting the trading price of our ordinary shares may include, but are not limited to:
- our decision on whether or not to initiate a clinical study or to terminate an existing clinical study; - adverse regulatory decisions, including failure to receive regulatory approval for our products; - success or failure of competitive products, immunotherapy or cellular therapies more generally; - adverse developments concerning our manufacturers or our strategic partnerships; - adverse safety or other clinical results, such as those that have occurred in the past or that may occur in the future, related to cellular therapies being developed by other companies that are or may be perceived to be similar to our cellular therapies; - operating and share price performance of other companies that investors deem comparable to us; - sales of substantial amounts of ordinary shares by our Directors, executive officers or significant shareholders or the perception that such sales could occur; - general economic and political conditions such as recessions, interest rates, fuel prices, elections, drug pricing policies, international currency fluctuations, acts of war or terrorism, and other public health crises, illnesses, epidemics or pandemics, such as the potential impact of the COVID-19 pandemic; and - other factors discussed in these risk factors.
Any of or a combination of the above factors could materially and adversely affect your investment in our ordinary shares, which could contribute to a loss of all or part of your investment. In such circumstances the trading price of our ordinary shares may not recover and may experience a further decline.
In addition, broad market and clinical trial industry factors could materially and adversely affect the market price of our ordinary shares, irrespective of our operating performance. The stock market in general, and Nasdaq Capital Market and the market for biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. We cannot predict the trading prices and valuations of these stocks, and of ours. For example, the trading prices for common stock of other biopharmaceutical and biotechnology companies have been highly volatile as a result of the COVID-19 pandemic. If any pandemics, epidemics, or outbreaks of infectious diseases, including future outbreaks of COVID-19 variants, Respiratory Syncytial Virus ("RSV"), or the flu, continue to rapidly evolve, the extent to which the outbreak may impact our business, pre-clinical studies and clinical trials is contingent on future developments, which are highly uncertain and cannot be accurately predicted. We may face a loss of investor confidence in the market for biopharmaceutical stocks or the stocks of other companies which investors perceive to be similar to us, the opportunities in the biopharmaceutical market or the stock market in general, which may decrease our share price regardless of our business, financial condition, results of operations or growth prospects.
Share Price & Shareholder Rights - Risk 13
An active trading market for our ordinary shares or our ordinary shares may not continue and the trading price for our ordinary shares may fluctuate significantly.Our ordinary shares are listed on the Nasdaq Capital Market. We cannot assure you that a liquid public market for our ordinary shares will continue. If an active public market for our ordinary shares does not continue, the market price and liquidity of our ordinary shares may be materially and adversely affected. As a result, investors in our securities may experience a significant decrease in the value of their ordinary shares.
Share Price & Shareholder Rights - Risk 14
We have incurred losses since our incorporation and we expect to incur significant losses for the foreseeable future, which raise substantial doubt on our ability to continue as a going concern. Our ability to continue as a going concern is dependent on being able to obtain sufficient additional funding to finance our operations.Since our incorporation in 2018, we have incurred losses. As of December 31, 2021, 2022 and 2023, we have accumulated losses of S$5.07 million, S$8.20 million and S$12.33 million, respectively. Given that we will continue to invest most of our resources in developing our product candidates, we expect to continue to incur increasing losses for the foreseeable future. In addition, we anticipate a substantial increase in our expenses if, and as, we seek to:
- initiate clinical development of our proprietary product candidates, CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC; - advance additional product candidates to clinical trials, including CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC; - discover and develop additional product candidates; - establish and validate our own clinical-scale and commercial-scale cGMP facilities; - initiate or develop a MAA, or equivalent in the relevant countries, for CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC and/or seek marketing approvals for any of our other product candidates that successfully complete clinical trials; - engage, on an as needed basis, third-party contractors including CROs and CMOs to conduct clinical trials; - maintain, expand and protect our intellectual property portfolio; - acquire or in-license other product candidates and technologies; - incur additional costs associated with operating as a public company; - Explore new partnerships locally, within the region and globally; and - increase our employee headcount and related expenses to support these activities.
We may not be successful in any or all of these activities and even if we are successful, we may not generate revenues that are significant enough to generate profit. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all. Further, if we are unable to continue as a going concern, we may have to discontinue operations and liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, which would cause our shareholders to lose all or a part of their investment.
Accounting & Financial Operations7 | 6.6%
Accounting & Financial Operations - Risk 1
Our disclosure controls and procedures are not risk-free and may not fully prevent and/or identify errors or acts of fraud.Accounting & Financial Operations - Risk 2
If our system of internal control over financial reporting is not effective and robust, our financial results may not be accurately reported and we may not be able to prevent fraud. As a result, shareholders could deem our financial and other public reporting unreliable, which would materially and adversely affect our business and the trading price of our ordinary shares.We need effective and robust internal controls over financial reporting in order to present reliable and accurate financial reports and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could result in us breaching our reporting obligations. When we lose our status both as an emerging growth company and a smaller reporting company, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting. There are complex rules governing the standards that must be met for management to assess our internal control over financial reporting which require significant documentation, testing and possible remediation. Any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed material weaknesses or that may require prospective or retroactive revisions to our financial statements or us to determine other areas for further attention or improvement. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could materially and adversely affect the trading price of our ordinary shares.
Accounting & Financial Operations - Risk 3
We currently report our financial results under IFRS, which differs in certain significant respects from U.S. GAAP.Currently, we report our financial statements under IFRS. There have been and there may in the future be certain significant differences between IFRS and U.S. GAAP, including differences related to revenue recognition, share-based compensation expense, income tax and earnings per share. As a result, our financial information and reported earnings for historical or future periods could be significantly different if they were prepared in accordance with U.S. GAAP. In addition, we do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. As a result, you may not be able to meaningfully compare our financial statements under IFRS with those companies that prepare financial statements under U.S. GAAP.
Accounting & Financial Operations - Risk 4
Because the likelihood of paying cash dividends on our ordinary shares is remote at this time, investors must look solely to appreciation of our ordinary shares in the market to realize a gain on their investments.We do not know when or if we will pay dividends to our shareholders, and the likelihood that we will be paying dividends on our ordinary is remote at this time. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon various factors, including our business, financial condition, results of operations, capital requirements and investment opportunities. Accordingly, investors must look solely to appreciation of our ordinary shares in the market to realize a gain on their investment. This appreciation may not occur.
Accounting & Financial Operations - Risk 5
Our results of operations may be affected by changes to, or interpretations of financial accounting standards may affect our results of operations, which may require us to change our business practices.Our financial statements are prepared in accordance with IFRS. These accounting principles are subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to interpret and create accounting rules and regulations. Changes in accounting rules can have a significant effect on our reported financial results and may affect our reporting of transactions which may be completed before the announcement of such a change. Changes to those rules or the questioning of current practices may materially adversely affect our financial results, including those contained in this filing, or the way we conduct our business.
Accounting & Financial Operations - Risk 6
If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence.The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. We are required, under Sarbanes-Oxley Act Section404, to perform system and process evaluations and testing of internal controls over financial reporting to allow management to report annually on the effectiveness of internal control over financial reporting. This assessment requires disclosure of any material weaknesses in our internal control over financial reporting identified by management. Sarbanes-Oxley Act Section404 also generally requires an attestation from our independent registered public accounting firm on the effectiveness of internal control over financial reporting. However, for as long as we remain an emerging growth company ("EGC"), we intend to take advantage of the exemption permitting it not to comply with the independent registered public accounting firm attestation requirement.
At the time when we are no longer an Emerging Growth Company, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which we control are documented, designed or operating. Remediation efforts may not enable us to avoid a material weakness in the future.
Compliance with Sarbanes-Oxley Act Section404 requires the incurrence of substantial accounting expense and consumes significant management efforts. We may not be able to complete evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit its ability to accurately report financial condition, results of operations or cash flows. If we are unable to conclude that internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in internal control over financial reporting, it could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our ordinary shares could decline, and we could be subject to sanctions or investigations by the Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict future access to the capital markets.
Accounting & Financial Operations - Risk 7
We do not have a long operating history and we do not currently have any product approved for commercial sale.We are a pre-clinical biopharmaceutical development stage company and we do not have any products approved for commercial sale as of the date of this annual report. We are focused on developing human cells as therapeutics and our technologies are new and unproven. Since our incorporation in 2018, we have invested most of our resources in developing our product candidates, building our intellectual property portfolio, developing our supply chain, conducting business planning, constructing our centralized cGMP Facility, hiring and training staff, raising capital and providing general and administrative support for these operations. Consequently, we do not have a meaningful operating history upon which our business and prospects may be evaluated, and predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing drug products. We have not yet demonstrated our ability to overcome many of the risks and uncertainties frequently encountered by companies in the rapidly evolving biopharmaceutical clinical trial industry. If we do not successfully address these risks, our business, financial condition, results of operations and growth prospects will be materially and adversely affected. At present time, we manufacture limited quantities of cells for researchers and institutions on a non-profit, cost recovery basis for the purpose of research.
Debt & Financing2 | 1.9%
Debt & Financing - Risk 1
In the future, our ability to raise additional capital to expand our operations and invest in our business may be limited, and our failure to raise additional capital, if required, could impair our business.Debt & Financing - Risk 2
We will require additional capital, which, if available, may cause dilution to our shareholders, restrict our operations and/or require us to relinquish rights to our product candidates.Prior to the Offering, we financed our operations primarily from private equity financing and issuance of convertible loans. As of December 31, 2021, 2022 and 2023, we had cash and cash equivalents of S$2.51 million, S$1.58 million and S$9.00 million, respectively. Our research expenses were S$1.09 million, S$1.52 million and S$1.59 million for the financial year ended December 31, 2021, 2022 and 2023, respectively. During the period from April to June 2021, the Company raised an aggregate of S$4.00 million gross proceeds from the sale of our equities. The Company raised capital in an aggregate of S$1.22 million between September and October 2022. On April 18, 2023, we consummated our Offering resulting in net proceeds of approximately S$10.31 million (U.S.$7.81 million) after deducting underwriting discounts, commissions and offering expenses. We intend to use the proceeds from our Offering to, among other uses, advance CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC through clinical development. Developing pharmaceutical products and conducting pre-clinical studies and clinical trials are expensive. In the future, we may require additional cash funding to continue to execute our strategic plan and fund operations from time to time.
Until and unless we can achieve substantial revenue from our products to offset our expenses, we expect to finance our operations through the proceeds of our Offering, a combination of equity offerings and debt financings, and potentially through additional license and development agreements or strategic partnerships with third parties. We may not be able to obtain sufficient financing or financing on terms which are reasonable to us. In addition, market volatility resulting from the COVID-19 pandemic or other factors could adversely impact our ability to obtain sufficient financing as and when needed. We have no commitments for any additional financing, and will likely be required to raise such financing through the sale of additional securities. If we sell equity or equity-led securities, our current shareholders, may be diluted, and the terms may include liquidation or other preferences that are senior to or otherwise adversely affect the rights of our shareholders. Moreover, if we obtain debt financing, we may need to allocate a significant percentage of our operating cash flow to paying principal and interest on such debt and we may need to comply with operating restrictions, such as limitations on incurring additional debt, which could hinder our future ability to acquire, sell or license intellectual property rights. This consequently could impede our business operations. Furthermore, the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our ordinary shares to decline.
If we obtain additional financing through licensing or collaboration arrangements with third parties, we may have to relinquish valuable rights to our product candidates, or grant licenses on terms that are not favorable to our business and operations. In addition, we may seek 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.
Our efforts to obtain additional financing for our business operations may also divert our time and attention from our day-to-day activities, which may impair or delay the development of our product candidates. In addition, our cash flow requirements may fluctuate as a result of factors currently unknown to us including, but not limited to, any unforeseen costs we may incur as a result of pre-clinical study or clinical trial delays due to the COVID-19 pandemic amongst other causes, and we may need to seek additional financing sooner than anticipated. If we are unable to obtain sufficient financing on a timely basis or at all, we may have to significantly curtail or stop one or more of our research or development programs.
Corporate Activity and Growth5 | 4.7%
Corporate Activity and Growth - Risk 1
Any acquisitions or strategic collaborations are capital intensive, may dilute our shareholders' equity interest, cause us to incur debt or assume contingent liabilities and/or subject us to other risks.Corporate Activity and Growth - Risk 2
We will need to increase the size of our organization, and we may experience difficulties in managing growth.As of the date of this annual report, we have thirty-four (34) full-time employees. We are required to continue expanding our managerial, operational, quality, manufacturing, finance, sales and other resources in order to manage our operations and clinical trials, continue our development activities and eventually commercialize our product candidates. Our existing management and personnel, systems and facilities may not be sufficient to manage and support our future growth. Our growth strategy requires that we:
- discover new product candidates, develop the process and analytical methods for clinical trials and submissions and applications to the relevant regulatory authorities, complete the required clinical trial studies for each, and receive approval from the regulatory authorities to initiate clinical trials for such product candidates; - manage our clinical trials effectively; - identify, recruit, retain, incentivize and integrate additional employees; - continue to maintain and renew qualification of our in-house clinical cGMP Facility; and - continue to improve our operational, financial and management controls, reports systems and procedures.
If we are unable to attract skilled employees, increase the size of our organization or manage our future growth effectively, it will impair our ability to execute our business strategy and our business, financial condition, results of operations and growth prospects will be materially and adversely affected.
Corporate Activity and Growth - Risk 3
We have entered into collaborations with third parties to develop or commercialize our product candidates, our prospects with respect to those product candidates will depend significantly on the success of those collaborations.Changed
The risks of our present and future collaboration with third parties to develop and/or commercialize our product candidates include without limitation:
- collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; - collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; - our agreements with collaborators include agreements that may not provide us with sole ownership of all intellectual property rights resulting from the collaborations and do not address all issues that may arise from joint ownership; - current and future collaboration agreements may not provide us with sufficient ownership or control of all intellectual property rights; - collaborators may not properly enforce, maintain or defend our intellectual property rights or may use our proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation, or other intellectual property proceedings; - disputes may arise between a collaborator and us that cause the delay or termination of the research, development or commercialization of the product candidates, or that result in costly litigation or arbitration that diverts management attention and resources; - if a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished or terminated; - collaboration agreements may restrict our right to pursue new product candidates; and - we may become involved in disputes over the terms of our collaboration agreements and intellectual property rights generated from our collaborations.
In the event of disagreements and/or conflicts between our collaborators and us, our collaborators may act in a hostile and/or vexatious manner which could hinder the implementation of our strategies. Future collaborators may develop, either alone or with others, products in related fields that are competitive with our products or potential products that are the subject of these collaborations. Competing products, either developed by the collaborators or to which the collaborators have rights, may result in the withdrawal of support for our product candidates. Non-competition clauses in our agreements with our collaborators may prevent us from entering into collaborations with their competitors and/or being able to obtain timely regulatory approvals. Our collaborators may also terminate their agreements with us prematurely and/or fail to devote sufficient resources to the development and commercialization of products. Any of these events could hinder and severely undermine our product development efforts.
As a result, if we enter into collaboration agreements and strategic partnerships or out-license our intellectual property, products or businesses, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations, which could delay our timelines or otherwise adversely affect our business. We also cannot be certain that, following a strategic transaction or license, we will be able to achieve a level of revenue or specific net income that justifies such transaction.
Corporate Activity and Growth - Risk 4
We incur significantly increased costs and devote substantial management time as a result of operating as a public company.As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company. For example, we are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, as well as rules and regulations subsequently implemented by the SEC and the Nasdaq Capital Market including the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Compliance with these requirements increases our legal and financial compliance costs and makes some activities more time consuming and costly.
The Exchange Act requires, among other things, that we file annual and current reports with respect to our business and results of operations. We incur significant expenses and devote substantial management effort toward ensuring compliance with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act, which will increase when we are no longer an "emerging growth company," as defined by the JOBS Act. We may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs. As a result, management's attention may be diverted from other business concerns, which could adversely affect our business and results of operations.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as regulatory and governing bodies provide new guidance. These factors could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We will continue to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business could be adversely affected.
As a result of disclosure of information as a public company, our business and financial condition have become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If the claims are successful, our business operations and financial results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business operations and financial results. These factors could also make it more difficult for us to attract and retain qualified colleagues, executive officers and Board members.
Operating as a public company makes it more difficult and more expensive for us to obtain director and officer liability insurance on the terms that we would like. As a result, it may be more difficult for us to attract and retain qualified people to serve on our Board, our Board committees or as executive officers.
Corporate Activity and Growth - Risk 5
If we fail to establish biopharmaceutical collaborations on commercially reasonable terms, or at all, we may have to change our development and commercialization plans.The advancement of our product candidates and development programs and the potential commercialization of our current and future product candidates will require substantial additional financing. For some of our programs, we may partner with pharmaceutical and biotechnology companies to develop and commercialize such product candidates. Any such collaborations may incur non-recurring and other charges, increase our near and long-term expenditures, require us to issue securities that dilute our existing shareholders, or disrupt our management and business.
We face intense competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Any definitive agreement for other partnerships is contingent, among other things, on our assessment of the collaborator's resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator's evaluation of a number of factors, including the design or results of clinical trials, the progress of our clinical trials, the likelihood of approval by the relevant regulatory authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge and clinical trial industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar clinical trial indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidates. Further, we may fail to enter into a strategic partnership or other alternative arrangements for future product candidates because they may be deemed to be premature for collaborations and third parties may not be satisfied with the level of safety and efficacy of our product candidates. Any delays in entering into new collaborations or strategic partnership agreements related to any product candidate we develop could hinder the development and commercialization of our product candidates, which would materially and adversely affect our business prospects, financial condition, and results of operations.
Legal & Regulatory
Total Risks: 21/106 (20%)Below Sector Average
Regulation15 | 14.2%
Regulation - Risk 1
Delays in obtaining renewal of regulatory approvals for our cGMP Facility and licenses could delay our development plans and thereby limit our ability to generate revenues.Regulation - Risk 2
Our business depends upon the success of our CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC product candidates in obtaining regulatory approval and being commercialized.Changed
The success of our business depends on our ability to utilize our proprietary technologies to manufacture our product candidates obtain regulatory approval for such product candidates, and commercialize the approved products. Our product candidates have not yet been evaluated in humans and may never become commercialized. All our product candidates developed from our proprietary technology platforms will require significant additional clinical and non-clinical development, review and approval by the relevant health and regulatory authorities in the various jurisdictions, substantial capital and time investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before they can be successfully commercialized. If any of our product candidates encounter safety or efficacy issues, developmental delays or regulatory issues or other roadblocks, it could impact the development plans for our other product candidates.
Regulation - Risk 3
Our business involves the use of biohazardous materials and we and any third-party manufacturers and suppliers we may engage are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these biohazardous materials.Our R&D activities and those of any third-party manufacturers and suppliers we may engage involve the controlled storage, use and disposal of biohazardous materials. We and our manufacturers and suppliers may thus be subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these biohazardous materials. In some cases, these biohazardous materials and various wastes resulting from their use are stored at our manufacturers' facilities pending their use and disposal.
We cannot completely prevent the risk of contamination despite our best efforts, and any contamination could result in an obstruction of our R&D efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. Although we believe that the safety procedures utilized by our third-party manufacturers and suppliers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot be absolutely certain that this is always the case and/or fully eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other relevant authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, subject to frequent developments and are increasingly stringent over time. We cannot anticipate the impact of such changes and cannot be certain of our future compliance with such developments. We have not obtained any biological or hazardous waste insurance coverage as of the date of this annual report. Any contamination by biohazardous materials resulting from our operations could require us to suspend and/or cease our operations and therefore materially and adversely affect our business, financial condition, results of operations and growth prospects.
Regulation - Risk 4
We have no experience as a company in obtaining regulatory approval for a drug.As a company, we have not yet obtained regulatory approval for, or commercialized, any drug as of the date of this annual report. It is possible that the HSA and/or other relevant health and regulatory authorities may refuse to accept any or all of our planned NDAs for substantive review or may conclude after review of our data that our application is insufficient to obtain regulatory approval for any current or future product candidates. If the HSA and/or other relevant health and regulatory authorities does not approve any of our planned NDAs, we may need to conduct additional costly clinical, non-clinical or manufacturing validation studies before the HSA will reconsider our application(s). Depending on the extent of these or any other HSA and/or other relevant health and regulatory authorities-required studies, approval of any NDA or other application that we submit may be significantly delayed, possibly for several years, or may require us to expend more resources than we have available. Any failure or delay in obtaining regulatory approvals would prevent us from commercializing any of our product candidate, generating revenues and achieving and sustaining profitability. It is also possible that additional studies, if performed and completed, may not be considered sufficient by the HSA and/or other relevant health and regulatory authorities to approve any NDA or other application that we submit. If any of these outcomes occur, we may be forced to abandon the development of our product candidates, which would materially adversely affect our business and could potentially cause us to cease operations. We may face similar risks for our applications in foreign jurisdictions.
Regulation - Risk 5
Mechanism for enforcement of foreign judgments in Malaysia is limited to certain jurisdictionsIn Malaysia, foreign judgments may be enforced without the need to commence a fresh action, provided that the foreign judgment in question is granted by a "reciprocating country". The REJA provides for the mechanism to enforce foreign judgments, which is by way of ex-parte registration with the High Court of Malaya. To be eligible for registration, the foreign judgment must, amongst others, be final between parties, must provide for a sum of money to be payable (monetary judgment), the judgment must not be contrary to the public policy of Malaysia, the judgment was not obtained fraudulently or in a manner contrary to the rules of natural justice, and was pronounced by a specific court from one of the reciprocating countries set out in REJA. At the time of registration, the applicant must show that the foreign judgment was issued or pronounced within 6 years prior, has not been satisfied in full by the judgment debtor and is capable of being enforced or executed in the court of original jurisdiction. Upon registration, the judgment given by the High Court of Malaya will be treated as if it is a judgment given by the court of original jurisdiction.
The reciprocating countries under REJA are United Kingdom, Hong Kong, Singapore, New Zealand, Republic of Sri Lanka, India (excluding State of Jammu and Kashmir, State of Manipur, Tribal areas of State of Assam, Scheduled areas of the States of Madras and Andhra) and Brunei Darussalam. As mentioned, the foreign judgment eligible for registration under REJA must be one given by the specific court as prescribed. For example, in the case of Singapore, only the judgment made by the High Court of Singapore can be enforced in Malaysia through REJA.
As the mechanism provided under REJA is limited to monetary judgments in certain jurisdictions, enforcement of foreign judgments which do not fall within the ambit of REJA requires the initiation of a fresh suit and action in court.
Regulation - Risk 6
Our product candidates could be subject to more stringent limitations and procedures imposed by third-party users, including hospitals, than those imposed by regulatory authorities.Even if we manage to obtain the necessary licenses, permits and approvals for our products, we may also be required to comply with policies, limitations and other procedures imposed by third-party users, including hospitals, of our products. Such policies, limitations and other procedures may change from time to time, depending on factors including but not limited to perceived risks and benefits of our products, public sentiment towards the biopharmaceutical industries and relevant government legislation, regulations and policies. This may restrict the distribution of our products and/or increase our compliance costs, which may materially and adversely affect our financial performance and financial condition.
Regulation - Risk 7
Our product candidates could be subject to regulatory limitations following approval, if such approval is granted.Subsequent to obtaining approval of a product candidate, if any, we must adhere to all applicable government legislation and regulations regarding the manufacture, labeling, marketing, distribution and promotion of biologic products, which are subject to change from time to time. We must adhere to labeling protocols of HSA and/or other relevant regulatory authorities, which prohibit promoting "off-label uses". We may not be able to obtain the labeling claims necessary or desirable to successfully commercialize our products, including CTM-N2D, iPSC-gdNKT, CTM-GDT or other product candidates in development from time to time.
The HSA and/or other relevant regulatory authorities could impose substantial restrictions on the use of an approved product including restricting its use to limited clinical centers as well as through the product label, as well as on advertising, promotional and distribution activities associated with such approved product. The HSA and/or other relevant regulatory authorities could also condition their approval on the performance of post-approval clinical trials, patient monitoring or testing, which could be time-consuming and expensive. If the results of such post-marketing trials are not satisfactory, the HSA and/or other relevant regulatory authorities could withdraw marketing authorization or may impose conditions on continued marketing and/or impose or require further commitments from us or our partners that may be expensive and/or time-consuming to fulfill.
In addition, if side effects are identified after any of our products are on the market, if manufacturing problems occur subsequent to regulatory approval, or if we, our manufacturers or our partners fail to comply with regulatory requirements, including those mentioned above, we or our partners could be subject to the following:
- restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned clinical trials; - restrictions on such products' manufacturing processes; - changes to the product label; - restrictions on the marketing of a product; - restrictions on product distribution; - requirements to conduct post-marketing clinical trials; - warnings from the regulatory authority; - withdrawal of the product from the market; - refusal to approve pending applications or supplements to approved applications that we submit; - recall of products; - fines, restitution or disgorgement of profits or revenue; - suspension or withdrawal of regulatory approvals; - refusal to permit the import or export of our products; - product seizure; - injunctions; and/or - imposition of civil or criminal penalties.
Any one or a combination of the above could obstruct market acceptance of the affected product, or could substantially increase the costs and expenses of commercializing such product, which in turn could delay or prevent us from generating any revenue or profit from the sale of such product and could materially and adversely affect our business, financial condition, results of operations and growth prospects.
A summary of the material regulations in Singapore and Malaysia applicable to our operations to our knowledge are set out in the section titled "Regulation". However, as the biopharmaceutical industries in Singapore and Malaysia are only being regulated in recent times, there is a possibility that the biopharmaceutical industries may become more heavily regulated and we may be subject to further legislative, regulatory and compliance requirements.
Regulation - Risk 8
Singapore take-over laws contain provisions that may vary from those in other jurisdictions.The Singapore Take-over Code applies to, among others, corporations with a primary listing of their equity securities in Singapore. While the Singapore Take-over Code is drafted with, among others, listed public companies in mind, unlisted public companies with more than fifty (50) shareholders and net tangible assets of S$5.0 million or more, must also observe the letter and spirit of the general principles and rules of the Singapore Take-over Code, wherever this is possible and appropriate. Public companies with a primary listing overseas may apply to the SIC to waive the application of the Singapore Take-over Code. As of the date of this annual report, no application has been made to SIC to waive the application of the Singapore Take-over Code in relation to us.
In this regard, the Singapore Take-over Code contains certain provisions that may possibly delay, deter or prevent a future take-over or change in control of us. Under the Singapore Take-over Code, except with the consent of SIC, any person acquiring an interest, whether by a series of transactions over a period of time or not, either on his own or together with parties acting in concert with him, in 30% or more of our voting shares is required to extend a take-over offer for all remaining voting shares in accordance with the procedural and other requirements under the Singapore Take-over Code.
Except with the consent of SIC, such a take-over offer is also required to be made if a person holding between 30% and 50% (both inclusive) of our voting shares, either on his own or together with parties acting in concert with him, acquires additional voting shares representing more than 1% of our voting shares in any six (6) month period. While the Singapore Take-over Code seeks to ensure an equality of treatment among shareholders in take-over or merger situations, its provisions could substantially impede the ability of the shareholders to benefit from a change of control and, as a result, may adversely affect the market price of the ordinary shares and the ability to realize any benefit from a potential change of control.
Regulation - Risk 9
Our operations are affected by the changes in existing Malaysian laws and regulations, and the adoption of new Malaysian laws and regulations and/or the changes in interpretation of the Malaysian laws and regulations as well as possible inconsistencies between the various Malaysian laws and regulations and/or the corresponding interpretationOur operations in Malaysia are regulated by the laws and regulations of Malaysia, including those relating to the corporate, investment, marketing, labor, environmental protection, occupational health and safety, and taxation matters. The legal and regulatory regimes in Malaysia may be uncertain and subject to unforeseen changes. At times, the interpretation or application of laws and regulations in Malaysia may be unclear. Government policies, regulations and guidelines issued and imposed by the relevant authorities may change from time to time. We may have to incur significant capital and maintenance expenditures to comply with laws and regulations. The failure to discharge our obligations could result in the imposition of fines and penalties, damage to our reputation, delays in production or the temporary or permanent closure of our operations. In addition, existing laws, regulations or policies may become stricter or more strictly enforced. Our operations and business may face investigation, scrutiny or evaluation. The adoption of new laws and regulations or any modification to the existing laws and regulations may result in additional expenses to comply with the new laws.
While we have compliance procedures in place to ensure compliance with new legislation and every effect is taken to ensure the requirements of any new legislation are met, there is no certainty on the approach which will be taken by the relevant regulators, and we may incur additional compliance costs with the introduction of new or amended regulations. We have no control over such conditions and developments and there can be no assurance that such conditions and developments will not have a material adverse effect on our business. As a result, we may face new liabilities, reduced operating hours, additional investment requirements, or delays in the opening or expansion of operations. We may also be compelled to conduct preventive or remedial actions. These may result in increased costs. Such costs, liabilities, or disruptions in operations may materially and adversely affect our business.
Regulation - Risk 10
We are subject to the laws of Singapore, which differ in certain material respects from the laws of the United States.As a company incorporated in Singapore, we are required to comply with the laws of Singapore, some of which are capable of extra-territorial application, as well as our constitution. In particular, we are required to comply with certain provisions of the Securities and Futures Act 2001 of Singapore, which prohibit certain forms of market conduct and information disclosures, and impose criminal and civil penalties on corporations, directors and officers in respect of any breach of such provisions. In addition, the Singapore Take-over Code specifies, among other things, the circumstances wherein a general offer shall be taken upon a change in control of a Singapore-incorporated public company and the manner and price at which voluntary and mandatory general offers are to be made.
The laws of Singapore and of the United States differ in certain significant respects. The rights of our shareholders and the obligations of our Directors and officers under Singapore law may be different from those applicable to U.S. corporations, including corporations incorporated in Delaware, in material respects, and our shareholders may have more difficulty and less clarity in protecting their interests in connection with actions taken by us, our management, members of our Board and/or our controlling shareholders than would otherwise apply to U.S. corporations, including those incorporated in Delaware. Please refer to the section titled "Comparison of Shareholder Rights" for a discussion of certain differences between Singapore and Delaware corporation law.
In addition, the application of Singapore law, in particular, the Singapore Companies Act may, in certain circumstances, impose more restrictions on us, our shareholders, Directors and officers than would otherwise be applicable to U.S. corporations, including those incorporated in Delaware. For example, the Singapore Companies Act requires a director to act with reasonable degree of diligence in the discharge of the duties of his office and, in certain circumstances, imposes criminal liability for specified contraventions of particular statutory requirements or prohibitions. In addition, pursuant to the provisions of the Singapore Companies Act, two or more shareholders holding 10% or more of the total number of issued shares as at the date of the deposit of the relevant requisition, carrying the right of voting at general meetings (disregarding paid-up shares held as treasury shares) may require our Directors to convene an extraordinary general meeting.
Regulation - Risk 11
We are subject to the foreign exchange legislation and regulations in the jurisdiction of MalaysiaLocal and foreign investors are subject to the FX Notices in Malaysia. The FSA and the IFSA govern the foreign exchange control framework in Malaysia. Under the FSA and the IFSA, the BNM has issued FX Notices. These FX Notices embody the BNM's general permissions and directions. They set out the circumstances in which residents and non-residents must seek the specific approval of BNM to remit funds to and from Malaysia.
The FX Notices are reviewed regularly according to changing circumstances. As of the date of this annual report, foreign investors are allowed to repatriate from Malaysia, funds including any income earned or proceeds from divestments of Ringgit Asset (including any property in Malaysia), provided that the repatriation is made in foreign currency and the conversion of Malaysian Ringgit into foreign currency is undertaken in accordance with the FX Notices. Should the repatriation of funds be restricted in the future, this will limit our ability to extract the profits from our Malaysian business operations. In addition, our Malaysian subsidiaries may be subject to restrictions on the borrowing of foreign currency or from non-residents, which may affect our ability to raise funds in the future should the need arise. "Ringgit Asset" is defined in the FX Notices as:
- Ringgit-denominated securities or Islamic securities issued in Malaysia by a resident; - Ringgit-denominated securities or Islamic securities issued by a non-resident as approved in writing by the Bank; - Ringgit-denominated Financial Instrument or Islamic Financial Instrument as approved in writing by the Bank; - Ringgit deposit with a Financial Institution in Malaysia including deposit-like instrument with only Ringgit delivery at the inception and maturity; or - any property in Malaysia.
The relevant rules and regulations on foreign exchange control in Malaysia may also be subject to change from time to time. If there is any adverse change in the foreign exchange rules and regulations relating to the borrowing or repatriation of foreign currency, our business may be materially and adversely affected.
Regulation - Risk 12
The JOBS Act will allow us to postpone the date by which we must comply with some of the laws and regulations intended to protect investors and to reduce the amount of information we provide in our reports filed with the SEC, which could undermine investor confidence in our company and adversely affect the market price of our ordinary shares.For so long as we remain an "emerging growth company" within the meaning of the Securities Act, as modified by the JOBS Act, we intend to take advantage of certain exemptions from various requirements that are applicable to public companies that are not "emerging growth companies" including:
- the provisions of the Sarbanes-Oxley Act requiring that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting; - any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor's report on the financial statements; and, - Section 107 of the JOBS Act, which provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. This means that an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards. As a result of this adoption, our financial statements may not be comparable to companies that comply with the public company effective date.
We intend to take advantage of these exemptions until we are no longer an "emerging growth company." We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement under the Securities Act, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior December 31, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares, and our market prices may be more volatile and may decline.
Regulation - Risk 13
Obtaining and maintaining marketing approval or commercialization of our product candidates in one jurisdiction does not mean that we will be successful in obtaining marketing approval of our product candidates in other jurisdictions.Approval procedures are different among different jurisdictions and can involve requirements and administrative review periods significantly different from, and more extensive than, those in Singapore, Malaysia and/or other relevant jurisdictions including additional pre-clinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside Singapore, Malaysia and/or other relevant jurisdictions, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, we may have to obtain approval for the prices that we intend to charge for our products.
If we market products approved in jurisdictions outside Singapore, Malaysia and/or other relevant jurisdictions, we expect that we will be subject to additional risks in commercialization, including without limitation:
- variations in regulatory requirements for approval of therapies in different jurisdictions; - decreased scope of protection of intellectual property rights; - unanticipated changes in tariffs, trade barriers and other regulatory requirements; - economic weakness, including inflation, or political instability in particular foreign economies and markets; - compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; - foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; - foreign reimbursement, pricing and insurance regimes; - workforce uncertainty in countries where labor unrest is more common; - production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and - business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters including earthquakes, typhoons, floods and fires, and other public health crises, illnesses, epidemics or pandemics, such as the potential impact of the COVID-19 pandemic.
We do not have any prior experience in these areas. Any of the foregoing difficulties, if encountered, could materially and adversely affect our business, financial condition, results of operations and growth prospects.
Regulation - Risk 14
Healthcare reform initiatives and other administrative and legislative proposals may affect our business.We cannot anticipate the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in Singapore, Malaysia and/or any other relevant jurisdiction. If we or any third parties we may engage are late or fail to adapt to developments in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been previously obtained and we may not achieve or sustain profitability. Furthermore, future price controls or other changes in pricing regulation or negative publicity related to the pricing of cell therapy products could restrict the amount that we are able to charge for our cell therapy products, which could render our product candidates, if approved, commercially unviable and materially and adversely affect our ability to raise additional capital on acceptable terms.
Regulation - Risk 15
As a foreign private issuer, we are subject to different U.S. securities laws and Nasdaq Capital Market governance standards than domestic U.S. issuers. This may afford less protection to holders of our ordinary shares, and you may not receive corporate and company information and disclosure that you are accustomed to receiving or in a manner in which you are accustomed to receiving it.As a "foreign private issuer" for U.S. securities laws purposes, the rules governing the information that we will be required to disclose differ materially from those governing U.S. corporations pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The periodic disclosure required of foreign private issuers is more limited than that required of domestic U.S. issuers and there may therefore be less publicly available information about us than is regularly published by or about U.S. public companies. For example, we are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within four days of their occurrence and our quarterly (should we provide them) or current reports may contain less or different information than required under U.S. filings. In addition, as a foreign private issuer, we are exempt from the proxy rules under Section 14 of the Exchange Act, and proxy statements that we distribute are not subject to review by the SEC. Our exemption from Section 16 rules under the Exchange Act regarding sales of ordinary shares by our insiders means that you will have less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. As a result, you may not have all the data that you are accustomed to having when making investment decisions. Also, our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules thereunder with respect to their purchases and sales of our ordinary shares.
Moreover, as a foreign private issuer, we are exempt from complying with certain corporate governance requirements of the Nasdaq Capital Market applicable to a U.S. issuer, including the requirement that a majority of our board of directors consist of independent directors. For example, we follow Singapore law with respect to the requirements for meetings of our shareholders, which are different from the requirements of the Nasdaq Capital Market. Additionally, per our Singapore legal counsel's letter dated October 21, 2022 provided in connection with our Offering, we formally adopted home country practice and thereby opted out of the Nasdaq Capital Market rule that would otherwise require a majority of our Board of Directors to be comprised of independent directors as defined in Rule 5605(a)(2) of the Nasdaq Listing Rules, and that we must provide for a quorum of not less than 33.33% of the outstanding shares of its voting stock in relation to any meeting of its holders of its common voting stock. As the corporate governance standards applicable to us are different than those applicable to domestic U.S. issuers, you may not have the same protections afforded under U.S. securities regulation and the Nasdaq Capital Market rules as shareholders of companies that do not have such exemptions.
Litigation & Legal Liabilities2 | 1.9%
Litigation & Legal Liabilities - Risk 1
We may face securities class action litigation.Litigation & Legal Liabilities - Risk 2
We may incur substantial liabilities as a result of product liability lawsuits, if any, against us and this could limit commercialization of any product candidate that we may develop.We face an inherent risk of product liability exposure related to the testing of our product candidates in clinical trials and may face an even greater risk if we commercialize any product candidate that we may develop. If we cannot successfully defend ourselves against claims that any such product candidates caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:
- decreased demand for any product candidate that we may develop; - loss of revenue; - substantial monetary awards to trial participants or patients; - significant time and costs to defend the related litigation; - withdrawal of clinical trial participants; - increased insurance costs; - the inability to commercialize any product candidate that we may develop; and - loss of reputation and significant negative publicity and media attention.
Any such outcomes could materially and adversely affect our business, financial condition, results of operations and growth prospects.
Taxation & Government Incentives2 | 1.9%
Taxation & Government Incentives - Risk 1
Singapore tax laws may differ from the tax laws of other jurisdictions.Taxation & Government Incentives - Risk 2
Our ability to use our loss carryovers and certain other tax attributes may be limited.As described above under the heading "We have incurred losses since our incorporation and we expect to incur significant losses for the foreseeable future", we have incurred losses since our incorporation and anticipate that we will continue to incur significant losses for the foreseeable future. Under the Income Tax Act and subject to the agreement with the Comptroller, a company is generally allowed a deduction for trade losses, carried forward indefinitely from a prior taxable year. Under that provision, we can carry forward our trade losses to offset our future taxable income, if any, until such trade losses are fully utilized, subject to the fulfilment of certain conditions.
Furthermore, if a company undertakes substantial change in the shareholders (which is generally defined as changes of the owner of 50% or more of the company's (or its ultimate parent company's) total number of issued shares) as at the relevant dates (i.e. the last day of the year in which the loss was incurred and the first day of the year of assessment in which such loss is to be claimed), Section 37(12) of the Income Tax Act limits the corporation's ability to use/carry forward the unutilized trade losses and donations to reduce its tax liability for periods after the substantial shareholder change. Our issuance of ordinary shares pursuant to our Offering may result in a limitation under Section 37(12) of the Income Tax Act, either separately or in combination with certain prior or subsequent shifts in the ownership of our ordinary shares. As a result, our ability to carry forward of our trade losses to reduce our future income tax liability may be subject to limitations. This could result in increased income tax liability for us if we generate taxable income in a future period.
The use of our tax attributes will also be limited to the extent that we do not generate positive taxable income in future tax periods. To the extent our ability to utilize our trade losses and other tax assets going forward is limited, in part or altogether, our tax liability for future periods may be greater than expected, and our business, financial condition, results of operations and growth prospects may be materially adversely affected.
Environmental / Social2 | 1.9%
Environmental / Social - Risk 1
Regulatory risks in relation to environmental hazards, production safety and the occurrence of accidents in MalaysiaEnvironmental / Social - Risk 2
We may be subject to costs and risks associated with the monitoring, rehabilitation and compliance with environmental laws and regulationsWe are subject to environmental laws and regulations, under which we are required to take steps and/or omit certain steps for the protection and preservation of the environment, including control of pollution and the conservation and management of land. Compliance with environmental laws and regulations will increase our costs and may also hinder, delay or prevent our activities, depending on what is permitted and how these requirements are interpreted and implemented by the relevant regulatory authorities. In addition, economic development and improvements in living standards may increase public awareness of environmental protection. Thus, environmental laws and regulations may become more stringent and/or more stringently enforced. If so, we may not be able to comply with these environmental laws and regulations, and thus may be subject to penalties and liabilities under environmental laws and regulations.
Production
Total Risks: 12/106 (11%)Above Sector Average
Manufacturing4 | 3.8%
Manufacturing - Risk 1
Our current cGMP Facility may not be sufficient to handle the large-scale commercial manufacture and production of product candidatesManufacturing - Risk 2
Our manufacturing process is complex, and we may encounter challenges in production of our product candidates, which would delay or hinder our ability to provide a sufficient supply of our product candidates for clinical trials or our products for patients, if approved.Our product candidates are human cells, and the process of manufacturing such product candidates, as well as engineered K562 cells, is complex, highly regulated and involves numerous risks. Manufacturing our product candidates involves harvesting blood cells from a donor, isolating the gamma delta T cells, activating and expanding the gamma delta T cells, introducing a mRNA to be expressed on the gamma delta T cells, fill and finish and eventually shipping and infusing the cell product into the patient's body. As a result of these complexities, the cost of manufacturing our cellular product candidates is generally higher than traditional small-molecule chemical compounds or biologics, and such manufacturing process is less reliable and harder to reproduce.
Our manufacturing process is subject to product loss or failure, or product variation that may negatively impact patient outcomes, due to logistical issues associated with supply chain disruptions, the collection of starting material from the donor, shipping such material to the manufacturing site, shipping the final product back to the clinical trial recipient, preparing the product for administration, infusing the patient with the product, manufacturing issues or different product characteristics resulting from the differences in donor starting materials, variations between reagent lots, interruptions in the manufacturing process, contamination, equipment or reagent failure, improper installation or operation of equipment, vendor or operator error, inconsistency in cell growth and variability in product characteristics.
Apart from the transport of material from the donor, we may also face disruptions in the supply of other materials, especially those which have to be imported from other countries, which are essential parts of the manufacturing process. For example, we have to use a special cell culture vessel for storage of the CTM-N2D product candidate, for which we have currently only been able to identify one supplier who sends it from the United States. We also use a special cell culture medium in the manufacturing process of the CTM-N2D product candidate which has to be kept in a special freezer and therefore special arrangements have to be made for its courier. In this regard, medical courier is a lot more expensive than other third-party service providers. Therefore, in the event that there are any delays in these deliveries, or increased prices for the material and/or delivery, the manufacturing processes may be affected as the delay and/or increased costs may be prohibitive.
Slight deviations from our normal manufacturing processes could result in a decrease in production yields, product defects and other supply disruptions. If, for any reason in our CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC clinical studies, we damage and/or lose the starting material for a manufactured product for any of our patients at any point in the process, the manufacturing process for that patient would need to be repeated from the beginning and the resulting delay could require restarting the manufacturing process, or could result in such patient withdrawing from our clinical trial. If microbial, viral and/or other contaminations are discovered in any of our product candidates or in any of the manufacturing facilities in which our products or other materials are manufactured, such manufacturing facilities may need to be closed for an extended period of time to investigate and salvage the contamination. We may have to maintain a chain of identity in which materials are pegged to a specific donor as they move from the donor to the manufacturing facility, through the manufacturing process and back to the clinical trial recipient. Maintaining a chain of identity is challenging and complex and requires a high degree of accuracy and precision, and failure to do so could result in adverse patient outcomes, loss of product or regulatory action, including withdrawal of our products from the market, if licensed. Any failure in the foregoing processes could render a batch of product unusable, affect the regulatory approvals of such product candidate, cause us to incur fines or penalties or prejudice our reputation and that of our product candidates.
We may revise our manufacturing process for various reasons, such as to control costs, achieve scale, decrease processing time, and increase manufacturing success rate. As a result of changes made to our manufacturing process during the course of clinical development, we may need to demonstrate the comparability of the product used in earlier clinical phases or at earlier portions of a trial to the product used in later clinical phases or later portions of the trial. Changes to our manufacturing process made before or after commercialization could require us to show the comparability of the resulting product to the product candidate used in the clinical trials using earlier processes. We may need to collect additional non-clinical or clinical data from any modified process prior to obtaining marketing approval for the relevant product candidate produced with such modified process. If such data are not ultimately comparable to the data obtained in earlier trials or an earlier stage of the same trial in terms of safety and/or efficacy, we may be required to make further changes to our manufacturing process and/or undertake additional clinical testing, either of which could significantly delay the clinical development or commercialization of the associated product candidate, which would materially and adversely affect our business, financial condition, results of operations and growth prospects.
Manufacturing - Risk 3
We rely on the storage of our cell bank for the engineered K562 cells and peripheral blood mononuclear cells, and any damage or loss to them would cause delays in our clinical trials and may materially and adversely affect our business.The cell bank of the engineered K562 cells we license and our peripheral blood mononuclear cells are stored in liquid nitrogen tanks at our cGMP Facility. If these materials are damaged or lost at our cGMP Facility, including by the loss or malfunction of these liquid nitrogen tanks, or by damage from fire, power loss or other natural disasters, we would need to establish replacement master and working cell banks of the engineered K562 cells and peripheral blood mononuclear cells, which would impact clinical supply and delay our clinical trials or treatment of patients. If we are unable to find replacement storage facilities and/or re-manufacture the engineered K562 cells timeously, we may incur significant additional expenses and liability to patients whose treatment is delayed, which would materially and adversely affect our business. If we are unable to source for peripheral blood mononuclear cells which are suitable for manufacturing from healthy donors on a timely basis, we may incur significant additional expenses and liability to patients whose treatment is delayed, which would materially and adversely affect our business. Our K562 Cell License for NK cell expansion also requires us to broadly indemnify our licensor against any loss, damages, costs, expenses, or other claim for compensation in connection with the license or our licensed products under the license.
Manufacturing - Risk 4
We have not yet developed a validated methodology of freezing and thawing large quantities of CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC product candidates, which may be required for the storage and overseas distribution of our product candidates.Changed
We have not yet developed a validated method of freezing and thawing CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC, which can be frozen and thawed in smaller quantities, in large quantities without damage, in a cost-efficient manner and without degradation over time. We may encounter difficulties not only in developing freezing and thawing methodologies for large scale use, but also in obtaining the necessary regulatory approvals for using such methodologies in treatment. If we cannot adequately demonstrate that our frozen product candidates are similar to our product candidates in unfrozen form to the satisfaction of the HSA and/or other regulatory authorities, we could face substantial delays in obtaining regulatory approvals from the HSA and/or other regulatory authorities. If we are unable to develop a validated method of freezing CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC for shipping purposes, our ability to promote adoption and standardization of our products candidates, as well as achieve economies of scale by centralizing our production facility, will be limited. Even if we are able to successfully freeze and CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC in large quantities, we will also need to develop a cost-effective and reliable distribution and logistics network, which we may be unable to accomplish.
Furthermore, we have not yet demonstrated long-term stability of cryopreserved CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC and therefore are not certain if we will be able to store the cryopreserved cells for extended periods of time. If we are unable to demonstrate such long-term stability, we will need to reduce the manufacturing batch size to ensure that the material we produce will be used before it expires. In that case, the scaling of our production processes will not deliver the efficiencies we expect, and the cost per dose of our product candidates will be substantially higher.
Due to various reasons (including the foregoing), we have not yet established the long-term stability of our cryopreserved CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC and we may not be able to commercialize CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC on a large scale or in a cost-effective manner. If any of our product candidates is found to be unstable, we will have to conduct more frequent manufacturing runs, which could cause us to incur significant additional expenses. Currently, we have identified a potential collaboration partner to develop cryopreservation method for our product candidates.
Employment / Personnel2 | 1.9%
Employment / Personnel - Risk 1
If we fail to attract and retain senior management, clinical, and key scientific personnel, we may be unable to successfully develop our product candidates, conduct our clinical trials and commercialize our product candidates.Employment / Personnel - Risk 2
We are subject to regulations governing foreign workers in the event of employment of such foreign workersIn the event our operations in Malaysia require foreign workers, such foreign workers are regulated by the Malaysian government authorities which set a limit on the number of foreign workers which we may hire and also impose levies on each foreign worker hired by our Malaysian companies. Hence, any changes in governmental policies with respect to foreign workers in Malaysia, such as to decrease the number of foreign workers permissible to be employed by the Malaysian companies or to increase the levy payable by Malaysian companies for foreign works may materially and adversely affect our business. Any increase in demand and thus competition for foreign workers may also increase our labor costs.
Supply Chain4 | 3.8%
Supply Chain - Risk 1
Although we intend to design the clinical trials for our product candidates, we plan to rely on third parties to assist us in conducting our clinical trials.Supply Chain - Risk 2
If third parties that we may rely on for our clinical trials do not successfully satisfy their contractual obligations, comply with regulatory requirements or meet targeted timelines, we may not be able to obtain requisite marketing approval for or commercialize our product candidates.We are unable to independently conduct clinical trials though we intend to design our clinical trials for our product candidates and manufacture our product candidates in our cGMP Facility instead of engaging and relying on an external CMO. We remain dependent on medical institutions, clinical investigators, contract laboratories, and other third parties, such as CROs and CMOs to conduct or otherwise support other aspects of our clinical trials for our product candidates. In particular, in clinical trials, we are largely dependent on these parties for execution of clinical trials for our product candidates and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that our clinical trials are conducted in compliance with the applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on third parties will not relieve us of our regulatory responsibilities. For any violations of laws and regulations during the conduct of our clinical trials, we could be subject to untitled letters, warning letters or enforcement action that may include civil penalties up to and including criminal prosecution.
We and such third parties will be required to comply with the applicable legislations, regulations and other requirements in the relevant jurisdictions in conducting, monitoring, recording and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate, and that the trial patients are adequately informed of the potential risks of participating in clinical trials and their rights are protected. These regulations are enforced by the relevant governmental and regulatory authorities through regular inspections of clinical trial sponsors, principal investigators and trial sites. If we and/or these third parties fail to comply with applicable Good Clinical Practice and other regulations of the relevant jurisdictions, the clinical data generated in our clinical trials may be perceived as unreliable and the governmental and regulatory authorities may require us to conduct additional clinical trials before approving our marketing application filings. We cannot guarantee that, upon inspection or review, the governmental or regulatory authorities will determine that any of our future clinical trials are in compliance with applicable legislations, regulations and other requirements. In addition, our clinical trials must be conducted with product candidates produced under cGMP regulations. Our failure or the failure of these third parties to comply with these regulations may require us to conduct clinical trials again, which would delay the marketing approval process and could also subject us to enforcement action. The COVID-19 pandemic and government measures taken in response have also had a significant impact on our third-party contractors, and we expect that they will face further disruption, which may affect our commencement and execution of our pre-clinical studies and clinical trials.
As a result, we do not have direct control over several crucial aspects of our clinical development, including their conduct and timing. Our reliance on third parties to conduct future clinical trials will also result in limited direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Working with external parties can also be challenging, which may potentially lead to mistakes as well as difficulties in coordinating activities. External parties may:
- have staffing difficulties; - fail to comply with contractual obligations; - experience legal and/or regulatory compliance issues; - undergo changes in priorities or become financially distressed; and/or - form relationships with other entities, some of which may be our competitors, which may undermine our clinical development.
If third parties do not satisfactorily conduct our clinical trials, breach their contractual obligations to us and/or violate regulatory requirements, we cannot rely on clinical data collected by these third parties and may have to repeat, extend the duration of, or increase the size of any clinical trials we conduct, which could significantly delay commercialization and involve significantly greater expenditures.
If any of our relationships with these third parties deteriorate or terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms, or at all. If third parties do not successfully carry out their contractual obligations or meet targeted timelines, if they have to be replaced with alternative third parties or if the quality or accuracy of the clinical data they obtain are compromised due to any breach of our clinical protocols, regulatory requirements or for other reasons, any clinical trials such third parties are associated with may be extended, delayed or terminated, and we may not be able to obtain the requisite marketing approval for or successfully commercialize our product candidates. As a result, we believe that our financial results and the commercial prospects for our product candidates in the clinical trials would be adversely affected, and our costs will be increased thereby affecting our ability to commercialize our products and to generate revenues.
Supply Chain - Risk 3
We are highly reliant on certain key suppliers for certain steps of our manufacturing processes.Our manufacturing processes for CTM-N2D, iPSC-gdNKT, CTM-GDT and CTM-MSC depend on the use of cell culture vessel, and other reagents, some of which might only be available from certain key suppliers. In addition, some of these reagents, at the time of procurement, typically expire after approximately four to six months. Due to the short expiration period, we are unable to store the reagents in large quantities for future needs to mitigate against the risk of shortage due to disruption of the supply chain.
Further, although many of the reagents and consumables we require for our manufacturing process are available from more than one commercial supplier, we have not yet confirmed the suitability of the use of all such reagents and consumables in our manufacturing process. Even if we are able to replace any raw materials or consumables with alternatives, such alternatives may be more expensive, result in lower yields or not be as suitable for our purposes. In addition, some of the raw materials that we use are complex materials, which is likely to be harder to obtain substitutes for. Therefore, supply disruptions could result in significant delays and additional regulatory submissions and prevent us from being able to manufacture our product candidates due to the unsuitability of the substituted reagent or consumable that we are able to obtain.
In addition, some of the reagents that we use may be restricted by limited use label licenses and may be for research use and not for commercial application of any kind. We may need to replace certain reagents in order for us to commercialize our products in the future. While there are alternatives available, such alternatives may be more expensive, may result in lower yields or may not be as suitable for our purpose. These alternative reagents may also face regulatory challenges and review and potentially result in significant delays in our clinical trials and future developments.
Any disruption in supply of these reagents could result in significant delays in our clinical trials, which would materially and adversely affect our business, financial condition, results of operations and growth prospects.
Supply Chain - Risk 4
The optimal donor and manufacturing parameters for our product candidates may have not been definitively established, which may hinder our ability to optimize our product candidates or to address any safety or efficacy issues that may arise.If any of our clinical trials reveal issues with the safety or efficacy of any of our product candidates, modification of the donor selection criteria or the manufacturing process may be necessary to address such issues. However, we have not fully characterized or identified how donor characteristics and manufacturing process parameters affect the optimal cancer cell killing ability for our CTM-N2D and CTM-GDT product candidates for in vitro and animal efficacy studies or how such potency differences may translate into efficacy to be seen in human clinical trials, including both the proportion of patients who achieve a meaningful clinical response, and the duration of any such clinical responses. As a result, our ability to improve our manufacturing process or product potency, safety, or efficacy according to such parameters is limited and may require significant trial and error, which may cause us to incur significant costs or could result in significant delays to the clinical development and eventual commercialization of our product candidates.
Costs2 | 1.9%
Costs - Risk 1
Currently, we have limited insurance coverage, and even if we obtain additional insurance policies, they may be inadequate, may not cover all of our potential liabilities and may potentially expose us to unrecoverable risks.Costs - Risk 2
There are several uncertainties relating to the insurance coverage and reimbursement status of newly approved products on the market. Failure to obtain or maintain adequate coverage and reimbursement for our product candidates, if approved, could hinder our ability to market such products and to generate product revenue.The expenses incurred as a result of the administration of any of our cell therapy product candidates is anticipated to be significant, when and if regulatory approval is obtained. We expect that coverage and reimbursement by government and private payors will be essential for most patients to be able to afford these treatments. Accordingly, sales of our products, if approved, will depend substantially, both domestically and internationally, on the extent to which the costs of our product candidates will be reimbursed by government authorities, private health coverage insurers and/or other third-party payors. Coverage and reimbursement by a third-party payor could depend upon several factors, including the third-party payor's determination that use of our product is (i) a covered benefit under its health plan, (ii) safe, effective and medically necessary, (iii) appropriate for the specific patient, (iv) cost-effective and (v) neither experimental nor investigational.
Obtaining coverage and reimbursement for a product from third-party payors is a time-consuming and expensive process that could require us to provide supporting scientific, clinical and cost-effectiveness data. We may not be able to provide adequate data to obtain acceptance with respect to coverage and reimbursement. If coverage and reimbursement are not available, or are available only at limited levels, we may fail to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursement amount may not be sufficient to generate a sufficient return on our investment.
There is significant uncertainty relating to third-party coverage and reimbursement of newly approved drug products and/or treatments.
Outside of Singapore, international operations may vary significantly by country and our products may be subject to extensive government price controls and other market regulations. Increasing focus on cost-containment initiatives in the European Union, Canada and other countries could result in pricing pressure. In many countries, the prices of medical products are governed by several price control mechanisms as part of national health systems. The post-approval process to secure pricing and reimbursement for a product may be time-consuming depending on the country. In general, the prices of medical and therapeutic products under such systems may be substantially lower than in Singapore. Other countries allow companies to fix their own prices for such products, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside Singapore, the reimbursement for our products may be lower than that of Singapore and may be insufficient to generate commercially viable and sustainable product revenues and profits.
Moreover, any efforts by government and third-party payors in Singapore and abroad to limit and/or reduce healthcare costs could limit coverage and the level of reimbursement for our product candidates.
There is no certainty that the medical costs of our treatment for suitable patients will be covered by insurance. As our product candidates are novel, the treatment and medical costs may not be covered by medical and/or hospitalization insurances obtained by these patients. If so, the costs of treatment with our product candidates may be prohibitively high, and deter suitable patients from seeking help resulting in a low take-up rate for our product candidates. This will materially and adversely affect our business, growth and future prospects of our Group.
Ability to Sell
Total Risks: 5/106 (5%)Below Sector Average
Competition1 | 0.9%
Competition - Risk 1
If we fail to successfully compete with academic institutions and other biopharmaceutical companies that are developing similar product candidates or alternatives to cellular immunotherapy product candidates, our business will be materially and adversely affected.Demand1 | 0.9%
Demand - Risk 1
There may be limited market opportunities for our product candidates, if approved, and if such market opportunities are smaller than we anticipated, our revenues and business could be materially and adversely affected.Sales & Marketing2 | 1.9%
Sales & Marketing - Risk 1
If any of our product candidates are approved for marketing and commercialization and we have not developed or secured third-party marketing, sales and distribution capabilities, we will be unable to successfully commercialize such products and may not be able to generate product revenue.Sales & Marketing - Risk 2
The commercial success of any of our product candidates will depend upon such product candidate's level of market acceptance by physicians, patients, third-party payors and others in the medical community.Even if requisite approvals are obtained from HSA and/or other regulatory authorities, the commercial success of our product candidates will depend, in part, on the acceptance by physicians, patients and healthcare payors of cell therapy products in general, and our product candidates in particular, as medically necessary, cost-effective and safe. Physicians, patients, healthcare payors, professionals and others in the medical community may not approve of any product candidates that we commercialize. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. The degree of market acceptance of cell therapy products and, in particular, our product candidates, if approved for commercial sale, will depend on several factors, including without limitation:
- the efficacy and safety of such product candidates as demonstrated in clinical trials; - the potential and perceived advantages of product candidates over alternative treatments;- the cost of treatment relative to alternative treatments; - the clinical trial indications for which the product candidate is approved by the HSA and/or other relevant regulatory authorities; - the willingness of physicians to prescribe new therapies; - the willingness of the target patient population to try new therapies; - the prevalence and severity of any side effects; - product labeling or product insert requirements imposed by HSA and/or other relevant regulatory authorities, including any limitations or warnings contained in a product's approved labeling; - relative convenience and ease of administration; - the timing of market introduction of competitive products; - adverse publicity concerning our product candidates or favorable publicity about competing products and treatments; - sufficient third-party payor coverage, any limitations in terms of center or personnel training requirement imposed by third parties and adequate reimbursement; - limitations or warnings contained in the regulatory authority-approved labeling for our product candidates; - any regulatory authority requirement to undertake a risk evaluation and mitigation strategy; - the effectiveness of our sales, marketing and distribution efforts; and - potential product liability claims.
Even if a product candidate displays a favorable efficacy and safety profile in pre-clinical studies and clinical trials, market acceptance of the product will not be fully known until after such product is launched. Our product candidates may not achieve broad market acceptance.
Furthermore, the policies of HSA and/or other relevant regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of a product. We cannot determine the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in Singapore or abroad. If we are late or fail to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we fail to maintain regulatory compliance, we may lose any marketing approval that we may have previously obtained and as a result, we may not be able to achieve or sustain profitability.
Brand / Reputation1 | 0.9%
Brand / Reputation - Risk 1
Public perception of cell-based immuno-oncology therapies for treating cancer may impact public perception of our company and product candidates, or our business and operations.Macro & Political
Total Risks: 3/106 (3%)Below Sector Average
Economy & Political Environment1 | 0.9%
Economy & Political Environment - Risk 1
We are subject to the political, economic and social conditions in the jurisdiction of MalaysiaNatural and Human Disruptions2 | 1.9%
Natural and Human Disruptions - Risk 1
Our business and the business and operations of our research partners and/or other third parties with whom we conduct business are subject to the effects of pandemics, health epidemics, and outbreaks of infectious diseases , in regions where we or third parties on which we rely have business operations.Changed
Natural and Human Disruptions - Risk 2
Our cGMP Facility may be affected by circumstances beyond our control, such as natural disasters, and we may be required to cease operations and manufacturing of our product candidatesWe rely on the continued operations and maintenance of our cGMP Facility for the manufacture of our product candidates. The manufacturing of our product candidates in our cGMP Facility may be frustrated, disrupted, delayed or prevented by circumstances beyond our control, including without limitation earthquakes, fires, floods, explosion, accidents, disruptions to the electrical supply (including increased prices that may be prohibitive) leading to its shutdown, or other natural disasters. If any such event occurs, this could cause our equipment to malfunction and/or break down, and we may be forced to cease operations at our cGMP Facility notwithstanding that we have installed our own standby generator to try to mitigate such risks, until we manage to fully restore it in proper working order and condition. This will impede and delay our pre-clinical testing and progress of our proposed clinical trials and increase our costs and expenses, which will materially and adversely affect our business and operations.
In addition, as our cGMP Facility is subject to rigorous testing and standards in Malaysia, we may be subject to unannounced audit checks (or routine testing) from time to time by the relevant authorities in Malaysia, including the NPRA and others. If we fail to comply with any of the standards required of us, or if we do not comply with any of the Malaysian authorities' directions to us within a specified time period, we may be required to suspend or cease our operations at our cGMP Facility. If this happens, we may be subject to warnings or penalties imposed by the Malaysian authorities or we may lose our license to operate the cGMP Facility. This would similarly impede and delay our pre-clinical testing and progress of our proposed clinical trials and increase our costs and expenses, which would materially and adversely affect our business, operations and prospects. As of the date of this annual statement, our Group has not been subject to any penalties issued by the Malaysian authorities for any non-compliance with the standards required for the operation and maintenance of a cGMP Facility in Malaysia.
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.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.