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| PART I. |
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| Item 1. | Business | 1 |
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| Item 1A. | Risk Factors | 46 |
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| Item 1B. | Unresolved Staff Comments | 94 |
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| Item 1C. | Cybersecurity | 94 |
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| Item 2. | Properties | 94 |
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| Item 3. | Legal Proceedings | 95 |
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| Item 4. | Mine Safety Disclosures | 95 |
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| PART II. |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 95 |
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| Item 6. | [Reserved] | 96 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 96 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 108 |
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| Item 8. | Financial Statements and Supplementary Data | F-1 |
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| Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 113 |
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| Item 9A. | Controls and Procedures | 113 |
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| Item 9B. | Other Information | 114 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 114 |
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| PART III. |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 114 |
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| Item 11. | Executive Compensation | 114 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 114 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 115 |
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| Item 14. | Principal Accountant Fees and Services | 115 |
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| PART IV. |
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| Item 15. | Exhibits and Financial Statement Schedules | 115 |
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| Item 16. | Form 10–K Summary | 116 |
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this Annual Report) contains forward-looking statements. All statements other than statements of historical facts contained in this Annual Report, including statements regarding our future results of operations and financial position, future revenue, business strategy, prospects, products, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, regulatory approvals, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that are in some cases beyond our control and may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these terms or other similar expressions are intended to identify forward looking statements. Forward-looking statements contained in this report include, but are not limited to, statements about:
| • | the likelihood of our clinical trials demonstrating the safety and efficacy of our drug candidates; |
| • | the timing and progress of our current clinical trials, the expected results of these clinical trials and the timing of initiation of our planned and future clinical trials; |
| • | our plans relating to the clinical development of our current and future drug candidates, including the size, number and disease indications to be evaluated; |
| • | Janssen Pharmaceutica NV, a Johnson & Johnson company’s (“J&J”), plans related to the clinical development of PIPE-307; |
| • | our clinical translational approach, and our ability to identify and develop drug candidates that can potentially treat neuroscience, inflammation and immunology (“NI&I”) diseases by targeting biological pathways associated with specific clinical impairment to alter the course of disease; |
| • | the size of the market opportunities for our drug candidates; |
| • | the rate and degree of market acceptance and clinical utility of our drug candidates; |
| • | our plans relating to commercializing our drug candidates, if approved; |
| • | the success of competing therapies and technologies that are or may become available; |
| • | the beneficial characteristics, safety, efficacy, therapeutic effects and potential advantages of our drug candidates; |
| • | the timing or likelihood of regulatory filings and approval for our drug candidates; |
| • | our ability to obtain and maintain regulatory approval of our drug candidates and our drug candidates to meet existing or future regulatory standards; |
| • | our plans relating to the further development and manufacturing of our drug candidates, including additional indications for which we may pursue; |
| • | our ability to successfully identify and complete transactions to in-license or otherwise acquire additional drug candidates, technologies, products or businesses; |
| • | our ability to attract and to enter into commercial arrangements with third parties who have development, regulatory, manufacturing and commercialization expertise; |
| • | our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available, as well as our ability to secure and maintain intellectual property regulatory rights and regulatory protections; |
| • | our ability to retain our senior management; |
| • | the need to hire additional personnel and our ability to attract and retain such personnel; |
| • | the accuracy of our estimates regarding expenses, capital requirements and needs for additional financing; |
| • | the sufficiency of our existing capital resources to fund our future operating expenses and capital expenditure requirements; |
| • | the period during which we expect we will qualify as an emerging growth company under the JOBS Act or a smaller reporting company; and |
| • | our anticipated use of our existing cash, cash equivalents and short-term investments. |
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled “Risk Factors” elsewhere in this report. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, advancements, discoveries, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, except as required by law, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business, and the markets for our product candidates, including data regarding the estimated size of markets for therapeutics and the incidence of certain medical conditions, statements that certain drugs, classes of drugs, or dosages are widely prescribed in the United States or other markets, statements regarding the perceptions and preferences of patients and physicians regarding certain therapies and other prescription, prescriber and patient data, as well as data regarding market research, estimates and forecasts prepared by our management. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.
You should read the following together with the more detailed information regarding our company, our common stock and our financial statements and notes to those statements appearing elsewhere in this report or incorporated by reference. The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this report.
Unless the context otherwise requires, the terms “Contineum Therapeutics,” “Contineum,” “we,” “us,” “our,” the “Company,” and similar references in this Annual Report on Form 10-K refer to Contineum Therapeutics, Inc. and references to our “common stock” refer to our voting Class A common stock.
SUMMARY OF RISKS ASSOCIATED WITH OUR BUSINESS
We face risks and uncertainties associated with our business, many of which are beyond our control. Some of the more significant risks associated with our business include the following:
| • | We are heavily dependent on the success of PIPE-791, our lead drug candidate, and PIPE-307, both of which are in the early stages of clinical development. If these drug candidates do not progress through clinical development, eventually receive regulatory approval or, even if approved, are not successfully commercialized, our business will be materially adversely harmed. |
| • | Clinical drug development is a lengthy, expensive and risky process with uncertain timelines and uncertain outcomes. The results of earlier preclinical studies and clinical trials, including those conducted by third parties, may not be predictive of future results. If clinical trials for the drug candidates we develop do not meet safety or efficacy endpoints or are prolonged or delayed, these drug candidates may not receive the required regulatory approvals, and therefore could not be commercialized on a timely basis or at all. Further, the results of our preclinical studies, clinical trials, or analyses may not be indicative of results that may be obtained in later trials. |
| • | The regulatory approval processes of the U.S. Food and Drug Administration (“FDA”) and comparable foreign regulatory authorities are unpredictable, lengthy, and time-consuming, and if we are ultimately unable to obtain regulatory approval for PIPE-791 or any other drug candidates that we develop J&J is unable to obtain regulatory approval for PIPE-307, our business will be substantially harmed. |
| • | We may not be successful in our efforts to identify and develop additional drug candidates or identify additional indications. Due to our limited resources and access to capital, we must prioritize development of a limited number of drug candidates, the choice of which may prove to be wrong and adversely affect our business. |
| • | We have and may continue to conduct future clinical trials outside of the United States. The FDA and other regulatory authorities or ethics committees may not accept data from such trials, in which case our development plans will be delayed, which could materially harm our business and financial condition. |
| • | We have incurred significant operating expenses since inception and anticipate that our operating expenses will continue to significantly increase for the foreseeable future. As a result, we may be unable to sustain profitability, and if we are unable to achieve sustained profitability, the market value of our common stock will likely decline. |
| • | We have a limited operating history and the drug candidates we have developed are in the early stages of clinical development, which may make it difficult to evaluate the prospects for our future viability. |
| • | We will require significant additional capital to complete the development and commercialization of PIPE-791 and the other drug candidates we select for development. |
| • | If the J&J License Agreement does not result in the successful development of PIPE-307, our business, financial condition and results of operations will be harmed. |
| • | We may seek to grow our business through in-licensing transactions or otherwise by acquiring drug candidates or complementary products, technologies or businesses. The failure to properly identify these drug candidates, products, technologies or businesses, as well as the failure to successfully complete transactions or to integrate any such drug candidates, products, technologies or businesses that we do in-license or acquire with our existing business, could harm our business, financial condition and operating results. |
| • | If we are unable to obtain, maintain and enforce intellectual property protection for our technology and drug candidates or if the scope of the intellectual property protection we obtain is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize and generate revenues from our drug candidates may be adversely affected. |
| • | We currently rely on third-party contract manufacturing organizations (“CMOs”) for the production of clinical supplies of PIPE-791 and PIPE-307 and we intend to rely on CMOs for our future drug candidates, as well as to supply the raw materials necessary to produce our drug candidates. We may elect to continue to rely on CMOs for the production of commercial supplies of PIPE-791, if approved. Our dependence on CMOs may impair our development of drug candidates and may impair their commercialization, which would adversely impact our business and financial position. |
| • | We rely on third parties to conduct our ongoing clinical trials of PIPE-791 and PIPE-307 and expect to rely on third parties to conduct future clinical trials of PIPE-791 and any other drug candidates that we develop. If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize the drug candidates we develop and our business could be substantially harmed. |
| • | Our future success depends on our ability to retain our key personnel and to attract, retain and motivate qualified personnel. |
| • | We face significant competition from biotechnology, pharmaceutical, and medical device companies, and our operating results will suffer if we fail to compete effectively and in a timely manner. |
| • | Even if PIPE-791 or PIPE-307 receives marketing approval in an indication, it may fail to achieve market acceptance by physicians, patients, third-party payors, or others in the medical community necessary for commercial success. |
| • | We have no sales, marketing or distribution capabilities or experience. If we are unable to establish sales and marketing capabilities either on our own or in collaboration with third parties, we may not be successful in commercializing PIPE-791, even if approved. |
| • | Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the U.S. federal district courts are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. |
PART I
