Annexon Inc

Previous wording

We have had significant operating losses since our inception. Our net loss for the years ended December 31, 2023 and 2022 was approximately $134.2 million and $141.9 million, respectively, and our net loss for the three months ended March 31, 2024 was approximately $25.2 million. As of March 31, 2024, we had an accumulated deficit of $597.7 million. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will continue as we develop our product candidates, conduct clinical trials and pursue research and development activities. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

Current wording

We have had significant operating losses since our inception. Our net loss for the years ended December 31, 2023 and 2022 was approximately $134.2 million and $141.9 million, respectively, and our net loss for the three and six months ended June 30, 2024 was approximately $29.6 million and $54.8 million, respectively. As of June 30, 2024, we had an accumulated deficit of $627.3 million. Substantially all of our losses have resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will continue as we develop our product candidates, conduct clinical trials and pursue research and development activities. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

Previous wording

As of March 31, 2024, we had capital resources consisting of cash and cash equivalents and short-term investments of approximately $264.9 million. We expect our existing capital resources to fund our planned operating expenses into mid-2026. However, our operating plans may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned through public or private equity offerings or debt financings or other sources, such as strategic collaborations. Such financing may result in dilution to our stockholders, imposition of burdensome debt covenants and repayment obligations, or other restrictions that may affect our business. 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.

Current wording

As of June 30, 2024, we had capital resources consisting of cash and cash equivalents and short-term investments of approximately $368.7 million. We expect our existing capital resources to fund our planned operating expenses into the second half of 2026. However, our operating plans may change as a result of many factors currently unknown to us, and we may need to seek additional funds sooner than planned through public or private equity offerings or debt financings or other sources, such as strategic collaborations. Such financing may result in dilution to our stockholders, imposition of burdensome debt covenants and repayment obligations, or other restrictions that may affect our business. 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.

Previous wording

We are currently focused on developing product candidates to address classical complement-mediated autoimmune and neurodegenerative diseases. We seek to maintain a process of prioritization and resource allocation among our programs to balance time, risk and cost, due to the significant resources required for the development of our product candidates. For example, in 2023, based on clinical data, regulatory feedback, and cash runway considerations, we prioritized our resources to advance ANX005 in GBS, ANX007 in GA and ANX1502 in autoimmune diseases. In addition, we have designed a two-part global registrational program for ANX007 in GA, including the Phase 3 ARCHER II global sham-controlled trial and a second injection-controlled head-to-head study, ARROW, against SYFOVRE®. Our current cash and cash equivalents are sufficient to fund our operations into mid-2026. However, we will need to raise additional capital in order to complete the ARROW trial. If sufficient funding is not available, we may not be able to complete our planned clinical trials, or on the timelines we currently anticipate, and we may need to redesign, reduce the scope of or terminate some of our programs.

Current wording

We are currently focused on developing product candidates to address classical complement-mediated autoimmune and neurodegenerative diseases. We seek to maintain a process of prioritization and resource allocation among our programs to balance time, risk and cost, due to the significant resources required for the development of our product candidates. For example, in 2023, based on clinical data, regulatory feedback, and cash runway considerations, we prioritized our resources to advance ANX005 in GBS, ANX007 in GA and ANX1502 in autoimmune diseases. If sufficient funding is not available, we may not be able to complete our planned clinical trials, or on the timelines we currently anticipate, and we may need to redesign, reduce the scope of or terminate some of our programs.

Previous wording

The ARCHER II Phase 3 trial is designed to be a global sham-controlled trial and the ARROW trial is expected to be an injection-controlled head-to-head trial against SYFOVRE®. The FDA has recommended the use of an injection comparator instead of a sham control in ophthalmic trials. As a result, the data from the ARCHER II study, even if positive, may be insufficient for regulatory approval in the United States. The Company is planning to conduct the ARROW study to demonstrate ANX007’s significant protection against vision loss over SYFOVRE®. However, the FDA may not agree that the data from the ARROW trial is sufficient to warrant approval of ANX007, even if the results are sufficiently positive. In such an event, we may be required to conduct one or more additional clinical trials before seeking FDA approval of ANX007, which would increase our expenses and could delay or prevent commercialization of ANX007 in GA. Moreover, there are no currently approved therapies for GA in Europe, and the results of the ARROW study may not be acceptable to the EMA or any other comparable foreign regulatory authorities.

Current wording

The ARCHER II Phase 3 trial is designed to be a global sham-controlled trial and the ARROW trial is expected to be an injection-controlled head-to-head trial against SYFOVRE®. The FDA has recommended the use of an injection comparator instead of a sham control in ophthalmic trials. As a result, the data from the ARCHER II study, even if positive, may be insufficient for regulatory approval in the United States. The Company is planning to conduct the ARROW study to demonstrate ANX007’s significant protection against vision loss over SYFOVRE®. However, the FDA may not agree that the data from the ARROW trial is sufficient to warrant approval of ANX007, even if the results are sufficiently positive. In such an event, we may be required to conduct one or more additional clinical trials before seeking FDA approval of ANX007, which would increase our expenses and could delay or prevent commercialization of ANX007 in GA.

Previous wording

Conducting two large Phase 3 trials in multiple jurisdictions is expensive and can take many years to complete, and we cannot guarantee that clinical trials will be conducted as planned or completed timely, if at all. In addition, there are two FDA-approved therapies for GA in the United States, which may adversely impact our ability to recruit patients into our clinical trials. We may need additional capital to complete both the ARCHER II and ARROW clinical trials and may not be able to raise sufficient capital in a timely manner. The occurrence of any such events could delay either trial, prevent us from completing one or more of our clinical trials, seeking FDA approval of ANX007 for GA, if ever, and could delay or prevent commercialization of ANX007.

Current wording

Conducting two large Phase 3 trials in multiple jurisdictions is expensive and can take many years to complete, and we cannot guarantee that clinical trials will be conducted as planned or completed timely, if at all. In addition, there are two FDA-approved therapies for GA in the United States, which may adversely impact our ability to recruit patients into our clinical trials. Our timelines and costs for the Phase 3 trials in GA could be substantially longer and larger than we initially planned. We may need additional capital to complete the Phase 3 clinical program for ANX007 and may not be able to raise sufficient capital in a timely manner. The occurrence of any such events could delay either trial, prevent us from completing one or more of our clinical trials, seeking FDA approval of ANX007 for GA, if ever, and could delay or prevent commercialization of ANX007.

Previous wording

For example, we believe that we will be able to seek FDA approval of ANX005 for the treatment of patients with GBS based on the results from a single pivotal trial. However, the FDA may not agree that the data from one pivotal trial are sufficient to warrant approval of ANX005, even if we believe the results are sufficiently positive. In such an event, we would be required to conduct one or more additional clinical trials before seeking FDA approval of ANX005 for patients with GBS, if ever, which would increase our expenses and could delay or prevent commercialization of ANX005 in GBS. In addition, our recently reported ARCHER data showed that ANX007 protected against vision loss as measured by changes from baseline in the widely accepted functional endpoint of best corrected visual acuity of ≥15 letter loss, or BCVA15. Based on this data, we expect to conduct a global clinical trial of ANX007 for the treatment of GA. To accomplish this objective, we must obtain and maintain regulatory approvals and comply with regulatory requirements in each jurisdiction. While we have attempted to design a global clinical development program that satisfies the regulators in all of our target markets, there is no assurance that our efforts will be successful or that the various regulators will be aligned or agree that the data from the global Phase 3 registrational program are sufficient to warrant approval of ANX007. Following discussions with the FDA and pending discussion with the EMA, we have designed a two-part global registrational program for ANX007 in GA. As a result, our timelines and costs for the Phase 3 trials of ANX007 in GA could be substantially longer and larger than we initially planned.

Current wording

For example, we believe that we will be able to seek FDA approval of ANX005 for the treatment of patients with GBS based on the results from a single pivotal trial. However, the FDA may not agree that the data from one pivotal trial are sufficient to warrant approval of ANX005, even if we believe the results are sufficiently positive. In such an event, we would be required to conduct one or more additional clinical trials before seeking FDA approval of ANX005 for patients with GBS, if ever, which would increase our expenses and could delay or prevent commercialization of ANX005 in GBS. In addition, our recently reported ARCHER data showed that ANX007 protected against vision loss as measured by changes from baseline in the widely accepted functional endpoint of best corrected visual acuity of ≥15 letter loss, or BCVA15. Based on this data, we expect to conduct a global clinical trial of ANX007 for the treatment of GA. To accomplish this objective, we must obtain and maintain regulatory approvals and comply with regulatory requirements in each jurisdiction. While we have attempted to design a global clinical development program that satisfies the regulators in all of our target markets, there is no assurance that our efforts will be successful or that the various regulators will be aligned or agree that the data from the global Phase 3 registrational program are sufficient to warrant approval of ANX007. Following discussions with the FDA and the EMA, we have designed a two-part global registrational program for ANX007 in GA. As a result, our timelines and costs for the Phase 3 trials of ANX007 in GA could be substantially longer and larger than we initially planned.

Previous wording

We conduct clinical trials of our product candidates outside the United States, and plan to continue to do so. For example, we conducted our Phase 1b GBS clinical trial of ANX005 in Bangladesh, and are conducting our Phase 3 clinical trial of ANX005 in patients with GBS exclusively at sites in Southeast Asia. We have also designed a global Phase 3 program for ANX007 in GA. The acceptance of study data from clinical trials conducted outside the United States or the applicable jurisdiction by the FDA and comparable foreign regulatory authorities may be subject to certain conditions, or may not be accepted at all.

Current wording

We conduct clinical trials of our product candidates outside the United States, and plan to continue to do so. For example, we conducted our Phase 1b GBS clinical trial of ANX005 in Bangladesh, and have completed our Phase 3 clinical trial of ANX005 in patients with GBS exclusively at sites in Southeast Asia. We have also designed a global Phase 3 program for ANX007 in GA. The acceptance of study data from clinical trials conducted outside the United States or the applicable jurisdiction by the FDA and comparable foreign regulatory authorities may be subject to certain conditions, or may not be accepted at all.

Previous wording

To support data from clinical trials conducted in foreign jurisdictions, applicants may submit clinical evidence, clinical trials, patient registries or other sources of real-world evidence (RWE), such as electronic health records or the collection of larger confirmatory data sets. In particular, provided that all of our studies to date for ANX005 in GBS have been conducted exclusively at sites outside the United States, we are conducting a RWE study to assess comparability of disease populations in the US and ex-US using a large natural history database from the International Guillain-Barré syndrome Outcome Study (IGOS). Published data from IGOS presents baseline characteristics of GBS patients in various jurisdictions and patient outcomes at certain timepoints over the course of their disease. We intend to use the RWE study as part of our registration package in support of the ANX005 BLA. Conducting this RWE study may be expensive, or may result in delays of our BLA and any regulatory approval of ANX005. Any such expenses or delays may adversely impact our business and operations and may negatively impact our stock price. In addition, the results of this RWE study may not provide sufficient support of the comparability between the disease populations in the US and ex-US and thus may not be acceptable to the FDA as part of our BLA, which could adversely affect regulatory approval of ANX005.

Current wording

To support data from clinical trials conducted in foreign jurisdictions, applicants may submit clinical evidence, clinical trials, patient registries or other sources of real-world evidence (RWE), such as electronic health records or the collection of larger confirmatory data sets. In particular, provided that all of our studies to date for ANX005 in GBS have been conducted exclusively at sites outside the United States, we have initiated a RWE study to assess comparability of disease populations in the US and ex-US using a large natural history database from the International Guillain-Barré syndrome Outcome Study (IGOS). Published data from IGOS presents baseline characteristics of GBS patients in various jurisdictions and patient outcomes at certain timepoints over the course of their disease. We intend to use the RWE study as part of our registration package in support of the ANX005 BLA. Conducting this RWE study may be expensive, or may result in delays of our BLA and any regulatory approval of ANX005. Any such expenses or delays may adversely impact our business and operations and may negatively impact our stock price.

Previous wording

As of March 31, 2024, we had 70 full-time employees. We will need to continue to expand our managerial, operational, finance and other resources in order to manage our operations and clinical trials, continue our development activities and commercialize our product candidates or any future product candidates. Our management and personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our growth strategy requires that we:

Current wording

As of June 30, 2024, we had 71 full-time employees. We will need to continue to expand our managerial, operational, finance and other resources in order to manage our operations and clinical trials, continue our development activities and commercialize our product candidates or any future product candidates. Our management and personnel, systems and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our growth strategy requires that we:

Previous wording

We may from time to time issue additional shares of common stock, and as a result, our stockholders would experience immediate dilution. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. For example, in August 2021, we entered into a sales agreement with Cowen and Company LLC, or TD Cowen, as sales agent, pursuant to which we may issue and sell shares of our common stock for an aggregate maximum offering price of $100.0 million under an at-the-market offering program under which we have sold approximately $51.1 million of shares of our common stock as of March, 31, 2024. In addition, in July 2022 and December 2023, we closed financings which included the sale of pre-funded warrants or common warrants to purchase shares of our common stock. Until exercised, the shares issuable upon the exercise of the pre-funded warrants or the common warrants are not included in the number of our outstanding shares of common stock. If we issue common stock or securities convertible into common stock in the future, our stockholders would experience additional dilution and such dilutive impact may be difficult to compute.

Current wording

We may from time to time issue additional shares of common stock, and as a result, our stockholders would experience immediate dilution. In addition, as opportunities present themselves, we may enter into financing or similar arrangements in the future, including the issuance of debt securities, preferred stock or common stock. For example, in August 2021, we entered into a sales agreement with Cowen and Company LLC, or TD Cowen, as sales agent, pursuant to which we may issue and sell shares of our common stock for an aggregate maximum offering price of $100.0 million under an at-the-market offering program under which we have sold approximately $57.7 million of shares of our common stock as of June, 30, 2024. In addition, in July 2022, December 2023 and June 2024, we closed financings which included the sale of pre-funded warrants or common warrants to purchase shares of our common stock. Until exercised, the shares issuable upon the exercise of the pre-funded warrants or the common warrants are not included in the number of our outstanding shares of common stock. If we issue common stock or securities convertible into common stock in the future, our stockholders would experience additional dilution and such dilutive impact may be difficult to compute.

Previous wording

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the stock price of our common stock could decline. As of March 31, 2024, the number of shares of our common stock outstanding was 90,482,068. This number does not include 35,248,479 shares of common stock issuable upon the exercise of pre-funded warrants or 8,427,508 shares of common stock issuable upon the exercise of common warrants. Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, may reduce the stock price of our common stock.

Current wording

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the stock price of our common stock could decline. As of June 30, 2024, the number of shares of our common stock outstanding was 105,539,683. This number does not include 41,283,052 shares of common stock issuable upon the exercise of pre-funded warrants or 8,104,615 shares of common stock issuable upon the exercise of common warrants. On August 12, 2024, we filed a resale registration statement on Form S-3, pursuant to which, entities and trusts affiliated with Muneer Satter, a member of our board of directors, can sell up to 3,000,000 shares of common stock. Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, may reduce the stock price of our common stock.

Previous wording

We rely upon third-party service providers and technologies to operate critical business systems and process sensitive data in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions. Our ability to monitor these third parties’ security practices is limited, and these third parties may not have adequate security measures in place. Our third-party service providers have experienced and may experience in the future a security incident or other interruption. For example, one of our third-party drug component suppliers experienced a cyber-attack, which did not materially impact our operations. In addition, in 2024, one of our vendors experienced a cyber-attack which resulted in our access to the third-party system being unavailable to us for a brief period of time before being restored. We continue to monitor the incident and have implemented mitigating procedures designed to limit any potential impacts on our operations. These types of incidents have and could lead to business interruption and additional costs. Any significant system failure, accident or security breach and resulting interruptions in our operations or our critical third parties’ operations could result in a material disruption of our product development programs, and ultimately, our financial results. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

Current wording

We rely upon third-party service providers and technologies to operate critical business systems and process sensitive data in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions. Our ability to monitor these third parties’ security practices is limited, and these third parties may not have adequate security measures in place. Our third-party service providers have experienced and may experience in the future a security incident or other interruption. For example, one of our third-party drug component suppliers experienced a cyber-attack, which did not materially impact our operations. In addition, in 2024, one of our vendors experienced a cyber-attack which resulted in our access to the third-party system being unavailable to us for a brief period of time before being restored. We concluded that there was no material impact to our operations and clinical data. These types of incidents have and could lead to business interruption and additional costs. Any significant system failure, accident or security breach and resulting interruptions in our operations or our critical third parties’ operations could result in a material disruption of our product development programs, and ultimately, our financial results. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

Previous wording

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States or other relevant countries. If there were no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activities groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations. Moreover, failure or perceived failure to comply with the EU GDPR and/or the UK GDPR, and other countries’ privacy or data security-related laws, rules or regulations could result in significant regulatory penalties and fines and affect our compliance with contracts entered into with our partners, collaborators and other third parties.

Current wording

Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States or other relevant countries. If there were no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activities groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations. Moreover, failure or perceived failure to comply with the EU GDPR and/or the UK GDPR, and other countries’ privacy or data security-related laws, rules or regulations could result in significant regulatory penalties and fines and affect our compliance with contracts entered into with our partners, collaborators and other third parties.