Pelthos Therapeutics Inc.
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 27, 2025
PTHS$9.36+0.6%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-16.
0001753926-24-000740
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001753926-25-000503
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 210 previous paragraphs and 221 current paragraphs.
127 unchanged; 62 reworded; 32 added; 21 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 149 previous and 122 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
We are early in our efforts to develop CT3000 and have not moved into clinical trials. If we are unable to advance CT3000 through clinical trials, obtain regulatory approval and ultimately commercialize CT3000, or if we experience significant delays in doing so, our business will be materially harmed.
Current report
We are early in our development of CT3000. The development and commercialization of CT3000 (or any other compound that we may advance towards clinical development in the future) is subject to many uncertainties, including the following:
Current report
If we fail in one or more of these factors, we could experience significant delays or an inability to successfully commercialize CT3000, which would materially harm our business. If we do not receive regulatory approvals for CT3000, our business, financial condition, results of operations and prospects could be materially and adversely affected. Advancing a different compound than CT3000 towards clinical development would take substantial time and resources and be subject to the same risks as described here for CT3000.
Current report
The FDA’s policies, and those of equivalent foreign regulatory agencies, may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of CC8464, CT2000 and CT3000. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would materially and adversely affect our business, financial condition, results of operations and prospects.
Current report
We have pending patent applications for both of CT2000 and CT3000 and there is no guarantee that any of these applications become patents in the United States or any other jurisdiction.
Current report
We could issue “blank check” preferred stock without stockholder approval with the effect of diluting then current stockholder interests and impairing their voting rights; and provisions in our charter documents could discourage a takeover that stockholders may consider favorable.
Current report
Our articles of incorporation authorizes the issuance of up to 20,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board. Our Board is empowered, without stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common stockholders. The issuance of a series of preferred stock could be used as a method of discouraging, delaying, or preventing a change in control of the Company. For example, it would be possible for our Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of the Company.
Current report
Our Series C Convertible Redeemable Preferred Stock, par value of $0.0001 per share (“Series C Preferred Stock”)currently ranks (i) senior to the Common Stock and any class or series of capital stock of the Company created specifically ranking by its terms junior to the Series C Preferred Stock; and (ii) junior to any class or series of capital stock of the Company created after the creation of the Series C Preferred Stock specifically ranking by its terms senior to any Series C Preferred Stock, in each case, with respect to payment of dividends and distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily. For further information regarding our shares of Series C Preferred Stock, please refer to the Certificate of Designations of Series C Convertible Redeemable Preferred Stock, filed with the Secretary of State of the State of Nevada on November 8, 2024 filed as an exhibit to, and the disclosure contained in, our Post-Effective Amendment No. 1 on Form S-1 filed with the SEC on November 22, 2024.
Current report
Our articles of incorporation require that, to the fullest extent permitted by law, and unless we otherwise consent in writing to the selection of an alternative forum, the Second Judicial District Court, in and for the State of Nevada, located in Washoe County, Nevada, (or if the Second Judicial District Court does not have jurisdiction, any other state district court located in the State of Nevada, and if no state district court in the State of Nevada has jurisdiction, any federal court located in the State of Nevada), will be the exclusive forum for each of the following:
Current report
The exclusive forum provision provides federal courts located in the State of Nevada as the forum for suits brought to enforce any duty or liability for which Section 27 of the Exchange Act establishes exclusive jurisdiction with the federal courts, or any other claim for which the federal courts have exclusive jurisdiction. In addition, Section 22 of the Securities Act provides that federal and state courts have concurrent jurisdiction over lawsuits brought under the Securities Act or the rules and regulations thereunder. To the extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Although we believe this provision will benefit the Company by providing increased consistency in the application of Nevada law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.
Current report
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and other applicable securities rules and regulations. The Exchange Act requires, among other things, that we file annual and current reports with the SEC with respect to our business and operating results. Compliance with these rules and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming, or costly, and increases demand on our systems and resources.
Current report
As a result of disclosure of information in this Annual Report on Form 10-K and in filings required of a public company, our business and financial condition is more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and operating results could be harmed, 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 resources of our management and harm our business and operating results.
Current report
On July 26, 2024, we entered into the CEF Purchase Agreement (the “CEF Purchase Agreement”) with Tikkun Capital LLC (“Tikkun”), pursuant to which Tikkun committed to purchase up to $30.0 million in shares of our Common Stock, subject to certain limitations and conditions set forth in the CEF Purchase Agreement.
Current report
The shares of Common Stock that may be issued under the CEF Purchase Agreement (the “Purchase Shares”) may be sold by us to Tikkun at our discretion from time to time until July 26, 2026, commencing after the satisfaction of certain conditions set forth in the CEF Purchase Agreement, including a registration statement covering the resale of shares of Common Stock that may be issued under the CEF Purchase Agreement is declared effective by the SEC, a final prospectus in connection therewith is filed, and the other conditions set forth in the CEF Purchase Agreement are satisfied. We generally have the right to control the timing and amount of any sales of Purchase Shares to Tikkun under the CEF Purchase Agreement. Sales of Purchase Shares to Tikkun under the CEF Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Tikkun all or a portion of the Purchase Shares that may be available pursuant to the CEF Purchase Agreement.
Current report
Because the purchase price per share to be paid by Tikkun for the Purchase Shares that we may elect to sell to Tikkun under the CEF Purchase Agreement will fluctuate based on the market prices of our Common Stock during the applicable volume weighted average price purchase valuation period for each purchase, it is not possible for us to predict the total number of Purchase Shares that we will sell to Tikkun under the CEF Purchase Agreement, the purchase price per share that Tikkun will pay for shares purchased from us under the CEF Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by Tikkun under the CEF Purchase Agreement.
Current report
Although the CEF Purchase Agreement provides that we may sell up to an aggregate of $30.0 million of Purchase Shares to Tikkun, only 2,000,000 Purchase Shares are being registered for resale by Tikkun under the registration statement on Form S-1 filed with the SEC on July 29, 2024, which we may elect to sell to Tikkun, in our sole discretion, from time to time from and after the Commencement Date under the CEF Purchase Agreement.
Current report
If after the Commencement Date, we elect to sell to Tikkun all of the 2,000,000 Purchase Shares being registered for resale under the prospectus in the registration statement on Form S-1 filed with the SEC on July 29, 2024, that are available for sale by us to Tikkun in purchases under the CEF Purchase Agreement, depending on the market prices of our Common Stock during the applicable volume weighted average price purchase valuation period for each purchase made pursuant to the CEF Purchase Agreement, the actual gross proceeds from the sale of all such shares may be substantially less than the $30.0 million (the “Total Commitment”) available to us under the CEF Purchase Agreement, which could materially adversely affect our liquidity.
Current report
If it becomes necessary for us to issue and sell to Tikkun under the CEF Purchase Agreement more than 2,000,000 Purchase Shares being registered for resale under the registration statement on Form S-1 filed with the SEC on July 29, 2024 in order to receive aggregate gross proceeds equal to the Total Commitment of an aggregate of $30.0 million under the CEF Purchase Agreement, we must file with the SEC one or more additional registration statements to register under the Securities Act the resale by Tikkun of any such additional Purchase Shares we wish to sell from time to time under the CEF Purchase Agreement, which the SEC must declare effective. Tikkun will not be required to purchase any Purchase Shares if such sale would result in Tikkun and its affiliates’ beneficial ownership exceeding than 4.99% of the outstanding shares of the Common Stock (the “Beneficial Ownership Limit”).
Current report
Any issuance and sale by us under the CEF Purchase Agreement of a substantial amount of Purchase Shares could cause additional substantial dilution to our stockholders. The number of Purchase Shares ultimately offered for resale by Tikkun is dependent upon the number of Purchase Shares we ultimately sell to Tikkun under the CEF Purchase Agreement.
Current report
Our inability to access a portion or the full amount available under the CEF Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on our business.
Current report
Sales of a substantial number of our Common Stock in the public market by our existing stockholders could cause the price of our shares of our Common Stock to fall.
Current report
Tikkun may resell up to 2,000,000 Purchase Shares, from time to time during the term of the CEF Purchase Agreement. If all of the 2,000,000 Purchase Shares were issued and outstanding as of the date hereof (without taking into account the Exchange Cap limitation), such shares would represent approximately 24.7% of the total number of outstanding shares of our Common Stock and approximately 26.9% of the total number of outstanding shares of our Common Stock held by non-affiliates of our Company, in each case as of March 7, 2025.
Current report
Sales of a substantial number of our shares of our Common Stock in the public market by Tikkun and/or by our other existing stockholders, or the perception that those sales might occur, could depress the market price of shares of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities*.*
Current report
Investors who buy shares of our Common Stock at different times will likely pay different prices.
Current report
Pursuant to the CEF Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of Purchase Shares sold to Tikkun. If and when we do elect to sell Purchase Shares to Tikkun under the CEF Purchase Agreement, after Tikkun has acquired such shares, Tikkun may resell all or a portion of such shares at any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares of our Common Stock from Tikkun at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from Tikkun as a result of future sales made by us to Tikkun at prices lower than the prices such investors paid for their shares.
Current report
On July 24, 2024, we entered into a securities purchase agreement with an accredited investor (the “July Holder”), pursuant to which the Company issued to the July Holder a senior unsecured convertible note (the “July Note”) in the aggregate principal amount of $750,000, which is convertible into shares of the Company’s common stock. If we were to default on the July Note and such default is not waived, the July Note shall bear interest at a rate of 12% per annum, and the Holder may require us to redeem all or any portion of the July Note. The July Note also imposes certain restrictions on us and our subsidiaries. These restrictions limit us and our subsidiaries’ ability, among other things, to incur or guarantee certain additional indebtedness, engage in transactions with affiliates, sell certain assets, and create liens, and they place restrictions on the ability of us to make dividends and our subsidiaries to pay dividends. If we fail to maintain compliance with the restrictions and covenants under the Securities Purchase Agreement and the July Note, we would be subject to events of default which in turn would materially and adversely affect our business, financial condition, and results of operations and our liquidity.
Current report
The terms of the CEF Purchase Agreement limit the amount of shares of Common Stock we may issue to Tikkun, which may have an adverse effect on our liquidity.
Current report
The CEF Purchase Agreement includes restrictions on our ability to sell shares of our Common Stock to Tikkun, including, subject to specified limitations, if a sale would cause Tikkun and its affiliates to beneficially own more than the Beneficial Ownership Limit. Accordingly, we cannot guarantee that we will be able to sell all $30.0 million of shares of Common Stock under the CEF Purchase Agreement. If we cannot sell the full amount of the shares that Tikkun has committed to purchase because of these limitations, we may be required to utilize more costly and time-consuming means of accessing the capital markets, which could materially adversely affect our liquidity and cash position.
Current report
In order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock. Investors purchasing shares or other securities in the future could have rights superior to existing shareholders. The price per share at which we sell additional shares of our Common Stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors in previous offerings by us.
Current report
Management will have broad discretion as to the use of the proceeds from our sale of Purchase Shares to Tikkun under the CEF Purchase Agreement, and such uses may not improve our financial condition or market value.
Current report
Because we have not designated the amount of net proceeds from our sale to Tikkun of Purchase Shares to be used for any particular purpose, our management will have broad discretion as to the application of such net proceeds. Our management may use the net proceeds for corporate purposes that may not improve our financial condition or advance our business objectives.
Removed paragraphs (21)
Previous report
A pandemic, epidemic, or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business and our financial results and could cause a disruption to the development of our compounds.
Previous report
Public health crises such as pandemics or similar outbreaks could adversely impact our business. In December 2019, COVID-19 surfaced in Wuhan, China and has since spread worldwide, including to New Jersey where our primary office and laboratory space is located. In response to the COVID-19 pandemic, we reduced staff and slowed down development activities as capital and testing options available to us were more limited. The extent to which COVID-19 will impact our future operations or those of our third-party partners, including our clinical trial operations, will also depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, adverse impacts of the Omicron COVID-19 variant or other COVID-19 variants, new information that will emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
Previous report
The continued spread of COVID-19 globally could adversely impact our preclinical or clinical trial operations, including our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19. COVID-19 may also affect employees of third-party CROs and CMOs located in affected geographies that we rely upon to carry out our clinical trials.
Previous report
In addition, the patient populations that we target may be particularly susceptible to COVID-19, which may make it more difficult for us to identify patients able to enroll in our future clinical trials and may impact the ability of enrolled patients to complete any such trials. Any negative impact COVID-19 has to patient enrollment or treatment, or the execution of our compounds could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and to commercialize our compounds, increase our operating expenses, and have a material adverse effect on our financial results.
Previous report
On May 11, 2023, the United States government declared an end to the COVID-19 pandemic, but the negative effects from COVID-19 described above may still be present for the foreseeable future.
Previous report
Our certificate of incorporation and our bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. Notwithstanding the foregoing, the exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive or concurrent jurisdiction. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act of the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, and notwithstanding the provisions of our certificate of incorporation and our bylaws, compliance with the federal securities laws and the rules and regulations thereunder may not be waived by our investors. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation and our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition, and results of operation.
Previous report
In connection with our proposed ELOC, we intend to file a registration statement, providing for the resale of the shares of Common Stock issuable pursuant to the proposed ELOC, if issued. An agreement with respect to our proposed ELOC has not been, and may never be, finalized and executed and there is no assurance that we will enter into an ELOC or, if we do enter into such an ELOC, that the terms thereof will be consistent with or as favorable as those described in this Report.
Previous report
We will incur increased costs as a result of operating as a smaller reporting public company, and our management will be required to devote substantial time to new compliance initiatives.
Previous report
As a smaller reporting public company, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act and rules subsequently implemented by the SEC and NYSE American have imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.
Previous report
There is no assurance that we will enter into our proposed ELOC or that the terms thereof will be consistent with or as favorable as those described in this Report.
Previous report
We anticipate that we will enter into a purchase agreement to issue the shares of Common Stock issuable pursuant to the ELOC; however, as of the date hereof, an agreement with respect to our proposed ELOC has not been, and may never be, finalized and executed and there is no assurance that we will enter into an ELOC or, if we do enter into such an ELOC, that the terms thereof will be consistent with or as favorable as those described in this Report.
Previous report
Issuances of our Common Stock to the Holder of the Investor Note under our proposed ELOC may have a significant dilutive effect.
Previous report
We are negotiating an arrangement with the Holder of the Investor Note to enter into a proposed ELOC, pursuant to which we will have the right, but not the obligation, to sell to the Holder of the Investor Note up to $20,000,000 in newly issued shares of our Common Stock, subject to certain limitations. Depending on the number of shares of Common Stock we issue to the Holder of the Investor Note pursuant to the proposed ELOC, it could have a significant dilutive effect upon our existing stockholders. Although the number of shares of Common Stock that we may issue pursuant to the proposed ELOC will vary based on our stock price (the higher our stock price, the fewer shares of our Common Stock we have to issue), there may be a potential dilutive effect to our stockholders, based on different potential future stock prices, if the full amount of the proposed ELOC is realized. Dilution is based upon shares of Common Stock “put” to the Holder of the Investor Note and the stock price discounted to the Holder of the Investor’s purchase price of 95% of the lowest volume-weighted average price during the three (3) consecutive trading days immediately following our notice to the Holder of the Investor Note of our exercise of our “put” right, with the lesser of (i) one hundred percent (100%) of the average daily trading volume over the five days before our notice to the Holder of the Investor Note, (ii) forty percent (40%) of the daily trading volume on the date of our notice to the Holder of the Investor Note or (iii) $2,000,000, delivered in shares of our Common Stock for each particular “put”.
Previous report
Our existing stockholders may experience significant dilution from the sale of our shares of Common Stock pursuant to our proposed ELOC.
Previous report
The sale of our Common Stock to the Holder of the Investor Note in accordance with the proposed ELOC may have a dilutive impact on our stockholders. As a result, the market price of our Common Stock could decline. In addition, the lower our stock price is at the time we exercise our put options, the more shares of our Common Stock we will have to issue to the Holder of the Investor Note in order to exercise a put under the proposed ELOC. If our stock price decreases, then our existing stockholders would experience greater dilution for any given dollar amount raised through the proposed ELOC.
Previous report
The perceived risk of dilution may cause our stockholders to sell their shares, which may cause a decline in the price of our Common Stock. Moreover, the perceived risk of dilution and the resulting downward pressure on our stock price could encourage investors to engage in short sales of our Common Stock. By increasing the number of shares offered for sale, material amounts of short selling could further contribute to progressive price declines in our Common Stock.
Previous report
Under our proposed ELOC, we will have the right to direct the Holder of the Investor Note to purchase shares of our Common Stock from time to time by presenting the Holder of the Investor Note with a purchase notice directing it to purchase shares according to the terms of the related purchase agreement.
Previous report
Although, pursuant to our proposed ELOC, we may sell up to $20,000,000 in shares of our Common Stock to the Holder of the Investor Note, depending on the market prices of our Common Stock, we may not be able to nor desire to sell all of the shares of Common Stock contemplated by our proposed ELOC. In addition, we will be required to file one or more additional registration statements to register any shares issued under our proposed ELOC.
Previous report
The Holder of the Investor Note will pay less than the then-prevailing market price for shares of our Common Stock, which could cause the price of our Common Stock to decline.
Previous report
The purchase price of Common Stock sold to the Holder of the Investor Note under our proposed ELOC will be 95% of the lowest volume-weighted average price during the three (3) consecutive trading days immediately following our notice to the Holder of the Investor Note of our exercise of our “put” right. Therefore, shares of Common Stock to be sold to the Holder of the Investor Note pursuant to our proposed ELOC will be purchased at a discounted price as described above. As a result of this pricing structure, the Holder of the Investor Note has a financial incentive to sell our shares of Common Stock immediately upon receiving them to realize the profit between the discounted price and the market price, subject to certain limitations. If the Holder of the Investor Note sells our shares of Common Stock, the price of our Common Stock may decrease. If our Common Stock price decreases, the Holder of the Investor Note may have further incentive to sell such shares. Accordingly, the discounted sales price in our proposed ELOC may cause the price of our Common Stock to decline.
Reworded paragraphs (62)
Previous wording
The report of the independent registered public accounting firm covering our financial statements for the years ended December 31, 2023 and 2022 stated that certain factors, including that we have suffered recurring losses from operations and have an accumulated deficit at December 31, 2023, raised substantial doubt as to our ability to continue as a going concern. Because we are not yet producing sufficient revenue to sustain our operating costs, we are dependent upon raising capital to continue our business. If we are unable to raise capital, we may be unable to continue as a going concern.
Current wording
The report of the independent registered public accounting firm covering our consolidated financial statements for the years ended December 31, 2024 and 2023 stated that certain factors, including that we have suffered recurring losses from operations and have an accumulated deficit at December 31, 2024, raised substantial doubt as to our ability to continue as a going concern. Because we are not yet producing sufficient revenue to sustain our operating costs, we are dependent upon raising capital to continue our business. If we are unable to raise capital, we may be unable to continue as a going concern.
Previous wording
The operations of our company, contributed to us by Chromocell Holdings, to date have been limited to financing and staffing our Company, developing and licensing compounds, conducting preclinical and clinical studies of CC8464 for EM and iSFN, CT2000 for eye pain and other pain indications. We have not yet demonstrated the ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products.
Current wording
The operations of our company, contributed to us by Chromocell Holdings, to date have been limited to financing and staffing our Company, developing and licensing compounds, conducting preclinical and clinical studies of CC8464 for EM and iSFN, CT2000 for eye pain, CT3000 for post-surgical pain and other pain indications. We have not yet demonstrated the ability to successfully complete a large-scale, pivotal clinical trial, obtain marketing approval, manufacture a commercial scale product, arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products.
Previous wording
We have had net losses since inception, and we had an accumulated deficit of approximately $13.5 million and $6.1 million as of December 31, 2023 and December 31, 2022, respectively, which includes a net loss of approximately $7.4 million for year ended December 31, 2023, and approximately $2.5 million the year ended December 31, 2022, respectively. Overall, these conditions have raised substantial doubt regarding our ability to continue as a going concern beyond one year of the filing of our financial statements. Our ability to continue as a going concern is dependent upon the ability to complete clinical studies and implement our business plan, raise capital, generate sufficient revenues and to control operating expenses.
Current wording
We have had net losses since inception, and we had an accumulated deficit of approximately $21.5 million and $13.5 million as of December 31, 2024 and December 31, 2023, respectively, which includes a net loss of approximately $8.0 million for year ended December 31, 2024, and approximately $7.4 million the year ended December 31, 2023, respectively. Overall, these conditions have raised substantial doubt regarding our ability to continue as a going concern beyond one year of the filing of our consolidated financial statements. Our ability to continue as a going concern is dependent upon the ability to complete clinical studies and implement our business plan, raise capital, generate sufficient revenues and to control operating expenses.
Previous wording
We have primarily financed our operations through a combination of a series of cash advances, equity raises, bridge and promissory note issuances, licensing arrangements, government grants and the IPO (from which we raised net proceeds of approximately $5.7 million, after deducting underwriting discounts, commissions and other offering expenses). Our ability to achieve significant profitability depends on our ability to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, CC8464, CT2000 and/or additional compounds. We expect that it will take several years, if ever, before we have a commercialized compound. The net losses we incur may fluctuate significantly from quarter to quarter.
Current wording
We have primarily financed our operations through a combination of a series of cash advances, equity raises, bridge and promissory note issuances, licensing arrangements, government grants and the IPO (from which we raised net proceeds of approximately $5.7 million, after deducting underwriting discounts, commissions and other offering expenses). Our ability to achieve significant profitability depends on our ability to successfully complete the development of, and obtain the regulatory approvals necessary to commercialize, CC8464, CT2000, CT3000 and/or additional compounds. We expect that it will take several years, if ever, before we have a commercialized compound. The net losses we incur may fluctuate significantly from quarter to quarter.
Previous wording
If we are required by the FDA, the EMA, or other international regulatory authorities to which we may be subject, to perform studies in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of CC8464, CT2000 and/or other future compounds, our expenses could increase and revenue could be further delayed. We anticipate that our expenses will increase substantially if, and as, we:
Current wording
If we are required by the FDA, the EMA, or other international regulatory authorities to which we may be subject, to perform studies in addition to those currently expected, or if there are any delays in completing our clinical trials or the development of CC8464, CT2000, CT3000 and/or other future compounds, our expenses could increase and revenue could be further delayed. We anticipate that our expenses will increase substantially if, and as, we:
Previous wording
To become and remain profitable, we must develop and eventually commercialize one or more compounds with significant market potential. This will require us to be successful in a range of challenging activities, including completing the clinical trials, developing and validating commercial scale manufacturing processes, obtaining marketing approval for our compounds, manufacturing, and marketing. Licensing and selling any future compounds for which we may obtain marketing approval and satisfying any post-marketing requirements. If we were required to discontinue development of CC8464 or CT2000, if CC8464 or CT2000 does not receive regulatory approval, if we do not obtain our targeted indication(s) for CC8464 or CT2000, or if CC8464 or CT2000 fails to achieve sufficient market acceptance for any indication, we could be delayed by many years in our ability to achieve profitability. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company also could cause you to lose all or part of your investment.
Current wording
To become and remain profitable, we must develop and eventually commercialize one or more compounds with significant market potential. This will require us to be successful in a range of challenging activities, including completing the clinical trials, developing and validating commercial scale manufacturing processes, obtaining marketing approval for our compounds, manufacturing, and marketing. Licensing and selling any future compounds for which we may obtain marketing approval and satisfying any post-marketing requirements. If we were required to discontinue development of CC8464, CT2000 or CT3000, if CC8464, CT2000 or CT3000 does not receive regulatory approval, if we do not obtain our targeted indication(s) for CC8464, CT2000 or CT3000, or if CC8464, CT2000 pr CT3000 fails to achieve sufficient market acceptance for any indication, we could be delayed by many years in our ability to achieve profitability. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research and development efforts, expand our business or continue our operations. A decline in the value of our company also could cause you to lose all or part of your investment.
Previous wording
The design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. There can be no guarantee that our disclosure controls and procedures and internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weaknesses, in our disclosure controls and procedures or internal control over financial reporting could result in misstatements of our results of operations or our financial statements or could otherwise materially and adversely affect our business, reputation, results of operations, financial condition or liquidity.
Current wording
The design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. There can be no guarantee that our disclosure controls and procedures and internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weaknesses, in our disclosure controls and procedures or internal control over financial reporting could result in misstatements of our results of operations or our consolidated financial statements or could otherwise materially and adversely affect our business, reputation, results of operations, financial condition or liquidity.
Previous wording
Prior to our IPO, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. In connection with the audit and review, as applicable, of our financial statements for the years ended December 31, 2023 and 2022, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in our case arose from inadequate segregation of duties, ineffective information technology controls and lack of certain financial reporting and transaction processing controls. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls appropriate for a public company, we may be unable to produce timely and accurate financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.
Current wording
Prior to our IPO, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures. In connection with the audit and review, as applicable, of our consolidated financial statements for the years ended December 31, 2024 and 2023, we identified material weaknesses in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The material weaknesses in our case arose from inadequate segregation of duties, ineffective information technology controls and lack of certain financial reporting and transaction processing controls. If we are unable to remedy our material weaknesses, or if we generally fail to establish and maintain effective internal controls appropriate for a public company, we may be unable to produce timely and accurate consolidated financial statements, and we may conclude that our internal control over financial reporting is not effective, which could adversely impact our investors’ confidence and our stock price.
Previous wording
We will need to raise additional funding to receive approval for CC8464, CT2000 or any other future compound. Such funding may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit, sell or terminate certain of our product development efforts or other operations.
Current wording
We will need to raise additional funding to receive approval for CC8464, CT2000, CT3000 or any other future compound. Such funding may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed may force us to delay, limit, sell or terminate certain of our product development efforts or other operations.
Previous wording
To complete the process of obtaining regulatory approval for CC8464 and CT2000 and to build the sales, marketing, licensing and distribution infrastructure that we believe will be necessary to commercialize CC8464 and CT2000, if approved, we will require substantial additional funding. In addition, if we obtain marketing approval for CC8464 and CT2000, we expect to incur significant expenses related to product sales, medical affairs, marketing, manufacturing and distribution.
Current wording
To complete the process of obtaining regulatory approval for CC8464, CT2000 and CT3000 and to build the sales, marketing, licensing and distribution infrastructure that we believe will be necessary to commercialize CC8464, CT2000 and CT3000, if approved, we will require substantial additional funding. In addition, if we obtain marketing approval for CC8464, CT2000 and CT3000, we expect to incur significant expenses related to product sales, medical affairs, marketing, manufacturing and distribution.
Previous wording
We are early in our efforts to develop CT2000, and have not moved into pre-clinical or clinical trials. If we are unable to advance CT2000 through pre-clinical and clinical trials, obtain regulatory approval and ultimately commercialize CT2000, or if we experience significant delays in doing so, our business will be materially harmed.
Current wording
We are early in our efforts to develop CT2000 and have not moved into clinical trials. If we are unable to advance CT2000 through clinical trials, obtain regulatory approval and ultimately commercialize CT2000, or if we experience significant delays in doing so, our business will be materially harmed.
Previous wording
Before obtaining marketing approval from regulatory authorities for the sale of our drug candidates, CC8464 and CT2000 included, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the drug candidate for its intended indications. Clinical trials are expensive, time consuming and uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:
Current wording
Before obtaining marketing approval from regulatory authorities for the sale of our drug candidates, CC8464, CT2000 and CT3000 included, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the drug candidate for its intended indications. Clinical trials are expensive, time consuming and uncertain as to outcome. We cannot guarantee that any clinical trials will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing. Events that may prevent successful or timely completion of clinical development include:
Previous wording
In addition, if we have to make manufacturing or formulation changes to CC8464, we would need to conduct additional studies to bridge our modified compound to earlier versions. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize CC8464 or allow our competitors to bring products to market before we do, which could limit our potential revenue or impair our ability to successfully commercialize CC8464 and may harm our business, financial condition, results of operations and prospects. Any delays, setbacks or failures in our clinical trials could materially and adversely affect our business, financial condition, results of operations and prospects.
Current wording
In addition, if we have to make manufacturing or formulation changes to CC8464, CT2000 and CT3000, we would need to conduct additional studies to bridge our modified compound to earlier versions. Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize CC8464, CT2000, and CT3000, or allow our competitors to bring products to market before we do, which could limit our potential revenue or impair our ability to successfully commercialize CC8464, CT2000 and CT3000 and may harm our business, financial condition, results of operations and prospects. Any delays, setbacks or failures in our clinical trials could materially and adversely affect our business, financial condition, results of operations and prospects.
Previous wording
Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize CC8464 and CT2000 and the approval may be for a narrower indication than we seek.
Current wording
Even if we complete the necessary clinical trials, we cannot predict when, or if, we will obtain regulatory approval to commercialize CC8464, CT2000 and CT3000 and the approval may be for a narrower indication than we seek.
Previous wording
We cannot commercialize a compound until the appropriate regulatory authorities have reviewed and approved the compound. Even if CC8464 and CT2000 meet their respective safety and efficacy endpoints in clinical trials, the regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy during the period of product development, clinical trials and the review process.
Current wording
We cannot commercialize a compound until the appropriate regulatory authorities have reviewed and approved the compound. Even if CC8464, CT2000 and CT3000 meet their respective safety and efficacy endpoints in clinical trials, the regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval. Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval. In addition, we may experience delays or rejections based upon additional government regulation from future legislation or administrative action, or changes in regulatory authority policy during the period of product development, clinical trials and the review process.
Previous wording
Regulatory authorities also may approve a compound for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or a post-approval safety monitoring program. These regulatory authorities may require precautions or contra-indications with respect to conditions of use or they may grant approval subject to the performance of costly post-marketing clinical trials. In addition, regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of CC8464 and CT2000. Any of the foregoing scenarios could materially harm the commercial prospects for CC8464 and CT2000 and materially and adversely affect our business, financial condition, results of operations and prospects as CC8464 is our only compound in clinical development and CT2000 has not yet entered pre-clinical trials.
Current wording
Regulatory authorities also may approve a compound for more limited indications than requested or they may impose significant limitations in the form of narrow indications, warnings or a post-approval safety monitoring program. These regulatory authorities may require precautions or contra-indications with respect to conditions of use or they may grant approval subject to the performance of costly post-marketing clinical trials. In addition, regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of CC8464, CT2000 and CT3000. Any of the foregoing scenarios could materially harm the commercial prospects for CC8464, CT2000 and CT3000 and materially and adversely affect our business, financial condition, results of operations and prospects as CC8464 is our only compound in clinical development and CT2000 and CT3000 have not yet entered pre-clinical trials.
Previous wording
CC8464 and CT2000 may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval.
Current wording
CC8464, CT2000 and CT3000 may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval, limit the commercial potential or result in significant negative consequences following any potential marketing approval.
Previous wording
We have yet to begin evaluating CT2000 to determine if it has any side effects, but could face similar or other issues, including but not limited to the disclosures set forth above for CC8464 with respect to FDA approval, ongoing monitoring programs and label requirements.
Current wording
We have yet to begin evaluating CT2000 and CT3000 in humans to determine if it has any side effects, but could face similar or other issues, including but not limited to the disclosures set forth above for CC8464 with respect to FDA approval, ongoing monitoring programs and label requirements.
Previous wording
CC8464 and CT2000 are based on specific modes of administration (dose escalation regime and eye drops, respectively), which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval.
Current wording
CC8464, CT2000 and CT3000 are based on specific modes of administration (dose escalation regime, eye drops and injection, respectively), which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval.
Previous wording
These regulatory review committees and advisory groups and the new guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of CC8464 or future compounds or lead to significant post-approval limitations or restrictions. As we advance CC8464, we will be required to consult with these regulatory and advisory groups and comply with applicable guidelines. If we fail to do so, we may be required to delay or discontinue development of CC8464. These additional processes may result in a review and approval process that is longer than we otherwise would have expected. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be materially and adversely affected.
Current wording
These regulatory review committees and advisory groups and the new guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of CC8464, CT2000 and CT3000 or future compounds or lead to significant post-approval limitations or restrictions. As we advance CC8464, CT2000 and CT3000, we will be required to consult with these regulatory and advisory groups and comply with applicable guidelines. If we fail to do so, we may be required to delay or discontinue development of CC8464, CT2000 and CT3000. These additional processes may result in a review and approval process that is longer than we otherwise would have expected. Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be materially and adversely affected.
Previous wording
Even if we obtain regulatory approval for CC8464 and CT2000, our compounds will remain subject to regulatory oversight.
Current wording
Even if we obtain regulatory approval for CC8464, CT2000 and CT3000, our compounds will remain subject to regulatory oversight.
Previous wording
Even if we obtain any regulatory approval for CC8464 and CT2000, our lead compounds, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for CC8464 and CT2000 may also be subject to a post-approval safety monitoring program, limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the product. For example, the holder of an approved NDA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the NDA. The holder of an approved NDA also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.
Current wording
Even if we obtain any regulatory approval for CC8464, CT2000 and CT3000, our lead compounds, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for CC8464, CT2000 and CT3000 may also be subject to a post-approval safety monitoring program, limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the product. For example, the holder of an approved NDA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the NDA. The holder of an approved NDA also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process. Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.
Previous wording
If we fail to comply with applicable regulatory requirements following approval of CC8464, CT2000 or any future compound, a regulatory authority may:
Current wording
If we fail to comply with applicable regulatory requirements following approval of CC8464, CT2000, CT3000 or any future compound, a regulatory authority may:
Previous wording
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize CC8464 and CT2000 and adversely affect our business, financial condition, results of operations and prospects.
Current wording
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize CC8464, CT2000 and CT3000 and adversely affect our business, financial condition, results of operations and prospects.
Previous wording
Even if we obtain and maintain approval for CC8464 and CT2000 from the FDA, we may never obtain approval for them outside of the United States, which would limit our market opportunities and adversely affect our business.
Current wording
Even if we obtain and maintain approval for CC8464, CT2000 and CT3000 from the FDA, we may never obtain approval for them outside of the United States, which would limit our market opportunities and adversely affect our business.
Previous wording
Approval of a compound in the United States by the FDA does not ensure approval of such compound by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Sales of CC8464 and CT2000 or other future compounds outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a compound, comparable regulatory authorities of foreign countries also must approve the manufacturing and marketing of the compound in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, including additional preclinical studies or clinical trials. In many countries outside the United States, a compound must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for our compounds, if approved, is also subject to approval. We intend to submit a marketing authorization application to the EMA for approval of CC8464 and CT2000 in the European Union, but obtaining such approval from the European Commission following the opinion of the EMA is a lengthy and expensive process. Even if a compound is approved, the FDA or the European Commission, as the case may be, may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Regulatory authorities in countries outside of the United States and the European Union also have requirements for approval of compounds with which we must comply prior to marketing in those countries. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our compounds in certain countries.
Current wording
Approval of a compound in the United States by the FDA does not ensure approval of such compound by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Sales of CC8464, CT2000 and CT3000 or other future compounds outside of the United States will be subject to foreign regulatory requirements governing clinical trials and marketing approval. Even if the FDA grants marketing approval for a compound, comparable regulatory authorities of foreign countries also must approve the manufacturing and marketing of the compound in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and more onerous than, those in the United States, including additional preclinical studies or clinical trials. In many countries outside the United States, a compound must be approved for reimbursement before it can be approved for sale in that country. In some cases, the price that we intend to charge for our compounds, if approved, is also subject to approval. We intend to submit a marketing authorization application to the EMA for approval of CC8464, CT2000 and CT3000 in the European Union, but obtaining such approval from the European Commission following the opinion of the EMA is a lengthy and expensive process. Even if a compound is approved, the FDA or the European Commission, as the case may be, may limit the indications for which the product may be marketed, require extensive warnings on the product labeling or require expensive and time-consuming additional clinical trials or reporting as conditions of approval. Regulatory authorities in countries outside of the United States and the European Union also have requirements for approval of compounds with which we must comply prior to marketing in those countries. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our compounds in certain countries.
Previous wording
Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for any of our compounds may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced and our ability to realize the full market potential of CC8464, CT2000 or our future compounds will be harmed and our business, financial condition, results of operations and prospects will be adversely affected.
Current wording
Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Also, regulatory approval for any of our compounds may be withdrawn. If we fail to comply with the regulatory requirements, our target market will be reduced and our ability to realize the full market potential of CC8464, CT2000, CT3000 or our future compounds will be harmed and our business, financial condition, results of operations and prospects will be adversely affected.
Previous wording
Although a substantial amount of our effort initially focuses on developing CC8464 and CT2000 towards approval in the U.S. and other countries, an additional component of our strategy is to discover, develop and potentially commercialize a portfolio of compounds to treat orphan diseases and potentially, non-orphan diseases. Identifying new compounds requires substantial technical, financial and human resources, whether any other compounds are ultimately identified. We may not be able to identify new molecules with the potential for clinical development and ultimate approval. Even if we identify new compounds that initially show promise, we may fail to successfully develop and commercialize such new compounds for many reasons, including the following:
Current wording
Although a substantial amount of our effort initially focuses on developing CC8464, CT2000 and CT3000 towards approval in the U.S. and other countries, an additional component of our strategy is to discover, develop and potentially commercialize a portfolio of compounds to treat orphan diseases and potentially, non-orphan diseases. Identifying new compounds requires substantial technical, financial and human resources, whether any other compounds are ultimately identified. We may not be able to identify new molecules with the potential for clinical development and ultimate approval. Even if we identify new compounds that initially show promise, we may fail to successfully develop and commercialize such new compounds for many reasons, including the following:
Previous wording
We face significant competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully market or commercialize CC8464 and CT2000.
Current wording
We face significant competition in an environment of rapid technological change and the possibility that our competitors may achieve regulatory approval before us or develop therapies that are more advanced or effective than ours, which may adversely affect our financial condition and our ability to successfully market or commercialize CC8464, CT2000 and CT3000.
Previous wording
Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any compound that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly or earlier than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, technologies developed by our competitors may render CC8464 and CT2000 uneconomical or obsolete, and we may not be successful in marketing CC8464 and CT2000 against competitors.
Current wording
Many of our potential competitors, alone or with their strategic partners, have substantially greater financial, technical and other resources, such as larger research and development, clinical, marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of competitors. Our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any compound that we may develop. Competitors also may obtain FDA or other regulatory approval for their products more rapidly or earlier than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Additionally, technologies developed by our competitors may render CC8464, CT2000 and CT3000 uneconomical or obsolete, and we may not be successful in marketing CC8464, CT2000 and CT3000 against competitors.
Previous wording
Delays in obtaining regulatory approvals of the process and facilities needed to manufacture CC8464, CT2000 or any of our other compounds or disruptions in our manufacturing process may delay or disrupt our product development and commercialization efforts.
Current wording
Delays in obtaining regulatory approvals of the process and facilities needed to manufacture CC8464, CT2000, CT3000 or any of our other compounds or disruptions in our manufacturing process may delay or disrupt our product development and commercialization efforts.
Previous wording
Before we can begin to commercially manufacture CC8464, CT2000 or any of our other compounds, whether in a third-party facility or in our own facility, if established, we must pass a pre-approval inspection of our manufacturing facility by the FDA. A manufacturing authorization must also be obtained from the appropriate regulatory authorities. The timeframe required for us to obtain such approvals is uncertain. To obtain approval, we will need to ensure that all our processes, methods and equipment are compliant with cGMP, and perform extensive audits of vendors, contract laboratories and suppliers. If any of our vendors, contract laboratories or suppliers is found to be out of compliance with cGMP, we may experience delays or disruptions in manufacturing while we work with these third parties to remedy the violation or while we work to identify suitable replacement vendors. The cGMP requirements govern quality control of the manufacturing process and documentation policies and procedures. In complying with cGMP, we will be obligated to expend time, money and effort in production, record keeping and quality control to assure that the product meets applicable specifications and other requirements. If we fail to comply with these requirements, we would be subject to possible regulatory action and may not be permitted to sell any compound that we may develop.
Current wording
Before we can begin to commercially manufacture CC8464, CT2000, CT3000 or any of our other compounds, whether in a third-party facility or in our own facility, if established, we must pass a pre-approval inspection of our manufacturing facility by the FDA. A manufacturing authorization must also be obtained from the appropriate regulatory authorities. The timeframe required for us to obtain such approvals is uncertain. To obtain approval, we will need to ensure that all our processes, methods and equipment are compliant with cGMP, and perform extensive audits of vendors, contract laboratories and suppliers. If any of our vendors, contract laboratories or suppliers is found to be out of compliance with cGMP, we may experience delays or disruptions in manufacturing while we work with these third parties to remedy the violation or while we work to identify suitable replacement vendors. The cGMP requirements govern quality control of the manufacturing process and documentation policies and procedures. In complying with cGMP, we will be obligated to expend time, money and effort in production, record keeping and quality control to assure that the product meets applicable specifications and other requirements. If we fail to comply with these requirements, we would be subject to possible regulatory action and may not be permitted to sell any compound that we may develop.
Previous wording
In addition, the manufacturing process used to produce our existing compounds is complex, novel and has not been validated for commercial use. To produce enough quantities of our existing compounds for future clinical trials and initial U.S. commercial demand, we will need to increase the scale of our manufacturing process. We employ multiple steps to control our manufacturing process to assure that the process works and that CC8464 and CT2000 are made strictly and consistently in compliance with the process. Problems with, or deviations from, the manufacturing process, even if minor, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet FDA, EMA or other applicable standards or specifications with consistent and acceptable production yields and costs.
Current wording
In addition, the manufacturing process used to produce our existing compounds is complex, novel and has not been validated for commercial use. To produce enough quantities of our existing compounds for future clinical trials and initial U.S. commercial demand, we will need to increase the scale of our manufacturing process. We employ multiple steps to control our manufacturing process to assure that the process works and that CC8464, CT2000 and CT3000 are made strictly and consistently in compliance with the process. Problems with, or deviations from, the manufacturing process, even if minor, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet FDA, EMA or other applicable standards or specifications with consistent and acceptable production yields and costs.
Previous wording
Given the nature of sterile product manufacturing, there is a risk of contamination. Any contamination could materially adversely affect our ability to produce CC8464 and CT2000 on schedule and could, therefore, harm our results of operations and cause reputational damage.
Current wording
Given the nature of sterile product manufacturing, there is a risk of contamination. Any contamination could materially adversely affect our ability to produce CC8464, CT2000 and CT3000 on schedule and could, therefore, harm our results of operations and cause reputational damage.
Previous wording
Some of the raw materials required in our manufacturing process may be derived from biologic sources. Such raw materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of CC8464 and CT2000 could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could materially and adversely affect our development timelines and our business, financial condition, results of operations and prospects.
Current wording
Some of the raw materials required in our manufacturing process may be derived from biologic sources. Such raw materials are difficult to procure and may be subject to contamination or recall. A material shortage, contamination, recall or restriction on the use of biologically derived substances in the manufacture of CC8464, CT2000 and CT3000 could adversely impact or disrupt the commercial manufacturing or the production of clinical material, which could materially and adversely affect our development timelines and our business, financial condition, results of operations and prospects.
Previous wording
We currently do not have a market development organization. To successfully commercialize CC8464 and CT2000, if approved, we will need to expand our capabilities to promote market access and build awareness. To successfully commercialize any other products that may result from our development programs, we will need to further expand our market development organization, either on our own or with a third party. The development of our own market development team will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability. We may enter into collaboration agreements regarding any of our compounds with third parties to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If any future collaborators do not commit sufficient resources to commercialize our products, or we are unable to develop the necessary capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We compete with many companies that currently have extensive, experienced and well-funded medical affairs, marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our compounds. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.
Current wording
We currently do not have a market development organization. To successfully commercialize CC8464, CT2000 and CT3000, if approved, we will need to expand our capabilities to promote market access and build awareness. To successfully commercialize any other products that may result from our development programs, we will need to further expand our market development organization, either on our own or with a third party. The development of our own market development team will be expensive and time-consuming and could delay any product launch. Moreover, we cannot be certain that we will be able to successfully develop this capability. We may enter into collaboration agreements regarding any of our compounds with third parties to utilize their established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If any future collaborators do not commit sufficient resources to commercialize our products, or we are unable to develop the necessary capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We compete with many companies that currently have extensive, experienced and well-funded medical affairs, marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our compounds. Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to compete successfully against these more established companies.
Previous wording
If the market opportunities for CC8464, CT2000 or our future compounds are smaller than we believe they are, our revenues may be adversely impacted, and our business may suffer.
Current wording
If the market opportunities for CC8464, CT2000, CT3000 or our future compounds are smaller than we believe they are, our revenues may be adversely impacted, and our business may suffer.
Previous wording
We are currently focusing our research and product development efforts on CC8464 for the management of EM and iSFN and CT2000 for acute and chronic eye pain and, potentially, other fields of neuropathic pain. Our understanding of both the number of people who have EM or iSFN, as well as the subset of people with either disease who have the potential to benefit from treatment with CC8464, are based on estimates in published literature. Similarly, our understanding of the number of people who could benefit from treatment with CT2000, are based on estimates in published literature. These estimates may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of this disease. The number of patients in the United States, the European Union and elsewhere may turn out to be lower than expected or these patients may not be otherwise amenable to treatment with CC8464 and CT2000 or may become increasingly difficult to identify and access, all of which would adversely affect our business, financial condition, results of operations and prospects.
Current wording
We are currently focusing our research and product development efforts on CC8464 for the management of EM and iSFN, CT2000 for acute and chronic eye pain, CT3000 for post-surgical pain and, potentially, other fields of neuropathic pain. Our understanding of both the number of people who have EM or iSFN, as well as the subset of people with either disease who have the potential to benefit from treatment with CC8464, are based on estimates in published literature. Similarly, our understanding of the number of people who could benefit from treatment with CT2000 and CT3000, are based on estimates in published literature. These estimates may prove to be incorrect and new studies may reduce the estimated incidence or prevalence of this disease. The number of patients in the United States, the European Union and elsewhere may turn out to be lower than expected or these patients may not be otherwise amenable to treatment with CC8464, CT2000 and CT3000 or may become increasingly difficult to identify and access, all of which would adversely affect our business, financial condition, results of operations and prospects.
Previous wording
Further, there are several factors that could contribute to making the actual number of patients who receive CC8464 and CT2000 less than the potentially addressable market. These include the increased use of currently available medication for mild cases as physicians gain a better understanding diagnosis and treatment of EM and iSFN, the discovery of novel medications for EM and iSFN and the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets.
Current wording
Further, there are several factors that could contribute to making the actual number of patients who receive CC8464, CT2000 and CT3000 less than the potentially addressable market. These include the increased use of currently available medication for mild cases as physicians gain a better understanding diagnosis and treatment of EM and iSFN, the discovery of novel medications for EM and iSFN and the lack of widespread availability of, and limited reimbursement for, new therapies in many underdeveloped markets.
Previous wording
Government price controls or other changes in pricing regulation could restrict the amount that we are able to charge for CC8464 and CT2000, if approved, or any of our other future compounds that may be approved in the future, which would adversely affect our revenue and results of operations.
Current wording
Government price controls or other changes in pricing regulation could restrict the amount that we are able to charge for CC8464, CT2000 and CT3000, if approved, or any of our other future compounds that may be approved in the future, which would adversely affect our revenue and results of operations.
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