CORVUS PHARMACEUTICALS : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes for the year ended December 31, 2019, included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March 9, 2020.

This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled "Risk Factors." Except as may be required by law, we assume no obligation to update these forward-looking statements or the reasons that results could differ from these forward-looking statements.

Overview

We are a clinical stage biopharmaceutical company focused on the development and commercialization of precisely targeted oncology therapies. Our strategy is to identify and utilize novel biomarkers to enhance selection of patients we believe will be most likely to benefit from treatment with our product candidates. We have utilized adaptive clinical protocol designs that enable us to evaluate our agents in multiple dosing regimens and for a range of cancer types.

Since we began operations in November 2014, we have built a pipeline of five oncology programs. Three of these product candidates are now in international multicenter trials directed against a broad number of cancer indications. To date, we have evaluated our product candidates in over 350 patients. We are developing small molecules that are designed to selectively inhibit the binding of immunosuppressive adenosine to either A2A receptors or to A2B receptors. Another small molecule inhibitor is designed to block the function of ITK, a kinase protein inside T cells that is crucial to T-cell activation and differentiation. We also are developing injectable monoclonal antibodies. One of these antibodies is designed to block the production of adenosine by tumors by inhibiting the cell surface enzyme CD73. This antibody is designed to have dual properties; in addition to blocking production of immunosuppressive adenosine, the antibody is designed to stimulate various immune cells. Another antibody that is designed to bind to the chemokine receptor CXCR2 on myeloid cells to block the activity of immunosuppressive myeloid cells that infiltrate tumors is in preclinical development. Our product candidates' designed specificity has the potential to provide greater safety and facilitate their development either as monotherapies or in combination with other cancer therapies such as immune checkpoint inhibitors or chemotherapy.

Ciforadenant (formerly CPI-444), is an oral, small molecule antagonist of the A2A receptor for adenosine and is currently being studied under a Phase 2 expansion protocol in combination with Genentech, Inc.'s cancer immunotherapy, Tecentriq® (atezolizumab) for patients with either advanced, refractory renal cell cancer ("RCC") or patients with refractory metastatic castration resistant prostate cancer ("mCRPC"). Our second clinical product candidate, CPI-006, is an anti­CD73 monoclonal antibody that is designed to both inhibit the production of adenosine and stimulate various immune cells. CPI-006 is currently being studied in a Phase 1/1b clinical trial as a monotherapy and in combination with ciforadenant, in combination with pembrolizumab and in triplet combination with both ciforadenant and pembrolizumab. Our third clinical product candidate, CPI-818, is a selective, covalent inhibitor of ITK and is in a multi-center Phase 1/1b clinical trial in patients with various malignant T-cell lymphomas. CPI-818 is designed to be directly cytotoxic to certain malignant T-cells and we believe has the potential to regulate immune responses to tumors. We believe the breadth and status of our pipeline demonstrates our management team's expertise in understanding and developing oncology assets as well as in identifying product candidates that can be in­licensed and further developed internally to treat many types of cancer. We hold worldwide rights to all of our product candidates.

To date, the majority of our efforts have been focused on the research, development and advancement of ciforadenant, CPI-006 and CPI-818, and we have not generated any revenue from product sales and, as a result, we have incurred significant losses. We expect to continue to incur significant research and development and general and

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administrative expenses related to our operations. Our net loss for the three months ended March 31, 2020 was $12.9 million. As of March 31, 2020, we had an accumulated deficit of $230.1 million. We expect to continue to incur losses for the foreseeable future, and we anticipate these losses will increase as we continue our development of, seek regulatory approval for and begin to commercialize ciforadenant, CPI-006 and CPI-818, and as we develop other product candidates. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.

Since our inception and through March 31, 2020, we have funded our operations primarily through the sale and issuance of stock. On March 22, 2016, our registration statement on Form S­1 (File No. 333­208850) relating to our initial public offering ("IPO") of our common stock was declared effective by the SEC. Shares of our common stock began trading on the Nasdaq Global Market on March 23, 2016. The IPO closed on March 29, 2016, pursuant to which we sold 4,700,000 shares of our common stock at a public offering price of $15.00 per share. In April 2016, we sold an additional 502,618 shares of our common stock to the underwriters upon partial exercise of their over­allotment option, at the initial offering price of $15.00 per share. We received aggregate net proceeds of approximately $70.6 million, after underwriting discounts, commissions and offering expenses. Immediately prior to the consummation of the IPO, all of our outstanding shares of convertible preferred stock were converted into 14.3 million shares of our common stock. In March 2018, in a follow-on offering, we sold 8,117,647 shares of our common stock at a price of $8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters' exercise of their option to purchase additional shares of common stock. We received aggregate net proceeds of approximately $64.9 million, after underwriting discounts, commissions and offering expenses.

In March 2020, we entered into an open market sale agreement (the "Sales Agreement") with Jefferies LLC ("Jefferies") to sell shares of the Company's common stock, from time to time, with aggregate gross sales proceeds of up to $50,000,000, through an at­the­market equity offering program under which Jefferies will act as our sales agent. Jefferies is entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreement. As of March 31, 2020, we had not sold any shares of our common stock pursuant to the Sales Agreement.

As of March 31, 2020, we had capital resources consisting of cash, cash equivalents and marketable securities of approximately $68.7 million. We do not expect our existing capital resources to be sufficient to enable us to fund the completion of our clinical trials and remaining development program of any of ciforadenant, CPI-006 or CPI-818 through commercialization. In addition, our operating plan may change as a result of many factors, including those described in the section of this report entitled "Risk Factors" and others currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity, debt financings or other sources, such as strategic collaborations. Such financing would result in dilution to stockholders, imposition of debt covenants and repayment obligations or other restrictions that may affect our business. If we raise additional capital through strategic collaboration agreements, we may have to relinquish valuable rights to our product candidates, including possible future revenue streams. In addition, additional funding may not be available to us on acceptable terms or at all and any additional fundraising efforts may divert our management from its day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations.

We currently have no manufacturing capabilities and do not intend to establish any such capabilities. We have no commercial manufacturing facilities for our product candidates. As such, we are dependent on third parties to supply our product candidates according to our specifications, in sufficient quantities, on time, in compliance with appropriate regulatory standards and at competitive prices.

COVID-19 Update

A novel strain of coronavirus ("COVID-19") was first identified in Wuhan, China in December 2019, and subsequently declared a pandemic by the World Health Organization. COVID-19 has placed strains on the providers of healthcare services, including the healthcare institutions where we conduct our clinical trials. These strains have resulted in institutions prohibiting the initiation of new clinical trials, enrollment in existing trials and restricting the on-site

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monitoring of clinical trials. As our clinical trial enrollment goals for 2020 are largely completed, we have not been significantly affected by any clinical trial enrollment restrictions. Patients in our ongoing clinical trials have generally completed their scheduled visits and we have been able to collect the essential data from those visits. We also follow FDA guidance on clinical trial conduct during the COVID-19 pandemic, including the remote monitoring of clinical data.

We have not experienced any disruption in our supply chain of drug necessary to conduct our clinical trials and given our drug inventories, believe we will be able to supply the drug needs of our clinical trials in 2020. We are supporting our employees by utilizing remote work, leveraging virtual meeting technology and encouraging employees to follow local guidance.

Product Pipeline

Our oncology product candidate pipeline includes the following:

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Ciforadenant Adenosine A2A Receptor Antagonist. Our initial product candidate, ciforadenant, is an oral, small molecule antagonist of the A2A receptor for adenosine that we in-licensed from Vernalis (R&D) Limited ("Vernalis") in February 2015. In January 2016, we began enrolling patients in a large expansion cohort trial for ciforadenant. This Phase 1/1b clinical trial is designed to examine safety, tolerability, biomarkers and preliminary efficacy of ciforadenant in several solid tumor types, both as a single agent and in combination with Genentech, Inc.'s cancer immunotherapy, Tecentriq, a fully humanized monoclonal antibody targeting PD­L1. In November 2016, we completed enrollment of 48 patients in the first step of the Phase 1/1b clinical trial, which was designed to determine the optimal dose of ciforadenant as both a single agent therapy and in combination with Tecentriq for use in the cohort expansion stage of the trial. The expansion cohort portion of the trial enrolled patients with non­small cell lung cancer ("NSCLC"), RCC, melanoma ("MEL"), triple negative breast cancer ("TNBC") and other cancers including colorectal cancer, prostate cancer, head and neck cancer and bladder cancer at leading medical centers in the U.S., Australia and Canada. We have enrolled over 300 patients in this clinical trial to date. In 2017, both the single agent and combination arms of the NSCLC and RCC cohorts met the protocol­defined criteria for expansion from 14 to 26 patients, and both arms of the RCC cohort further met the protocol­defined criteria for expansion to 48 patients. In December 2017, Genentech began enrolling patients in a Phase 1b/2 clinical trial that is evaluating ciforadenant in combination with Tecentriq in patients with NSCLC under an umbrella protocol known as Morpheus. In 2018, we amended our Phase 1/1b protocol to enroll patients in a Phase 1b/2 clinical trial with RCC who have failed therapies with both anti-PD-(L)1 antibodies and tyrosine kinase inhibitors ("TKI"). Based on data observed in the Phase 1b/2 trial in 2019, we began enrolling patients with metastatic castration-resistant prostate cancer ("mCRPC") in a Phase 2 expansion arm of our

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ongoing Phase 1/1b clinical trial with mCRPC who will receive the combination of ciforadenant with Tecentriq based on data from the Phase 1b/2 trial that showed activity in this disease.

As of November 2019, the key findings from these clinical trials included:

· Ciforadenant has been well-tolerated at doses that achieved substantial

receptor blockade;

· Ciforadenant has shown evidence of anti-tumor activity as a monotherapy and in

combination with atezolizumab;

· Of cancers studied, RCC, mCRPC and NSCLC have appeared most responsive to

therapy; and

· Identification of a gene expression signature, known as the adenosine gene

signature, that enhances selection of patients we believe are most likely to

benefit from therapy and may be a useful biomarker for selection of patients in

future clinical trials.

We expect to present initial clinical data from a 25-patient RCC cohort in a presentation at the 2020 American Society of Clinical Oncology (ASCO) Virtual Annual Meeting in May 2020.

The issued U.S. patents that we in­licensed from Vernalis for ciforadenant are directed to the composition of matter of ciforadenant and its method of use for treating disorders treatable by purine receptor blocking. The composition of matter patent covering ciforadenant is expected to expire in the United States in July 2029, excluding any patent term extension that may be available. We hold an exclusive, worldwide license under these patent rights and related know­how, including a limited right to grant sublicenses, for all fields of use, to develop, manufacture and commercialize products containing certain adenosine receptor antagonists, including ciforadenant. We have also filed patent applications covering the use of ciforadenant in combination with other checkpoint inhibitors, and the use of various biomarkers to select and monitor patients receiving therapy.

CPI-006, Immunomodulatory Anti­CD73 Antibody. Our second clinical product candidate, CPI-006, is an anti­CD73 monoclonal antibody that is designed to inhibit the production of adenosine, which we in­licensed from The Scripps Research Institute ("Scripps") in December 2014. CPI-006 was developed into a humanized anti­CD73 monoclonal antibody from a mouse hybridoma clone expressing an anti­human CD73 antibody. We have further modified CPI­006 to improve binding to CD73 and maximize its inhibition of catalytic activity. CD73 is an ectonucleotidase often found on lymphocytes, tumors and other tissues and is believed to play an important role in tumor immune suppression by catalyzing the production of extracellular adenosine. In preclinical in vitro studies, our humanized monoclonal anti­CD73 antibody has been shown to inhibit the catalytic activity of CD73, resulting in the blocking of extracellular adenosine production by tumor cells, which we believe could stimulate or enhance immune response to tumors. In addition to its role in the production of adenosine, CD73 also functions as an immunomodulatory receptor present on B-cells, T-cells and certain myeloid cells. In February 2018, we initiated a Phase 1/1b clinical trial with CPI-006 administered alone and in combination with ciforadenant and in combination with pembrolizumab. In addition, we recently added a treatment arm to the study to evaluate the triplet combination of CPI-006, ciforadenant and pembrolizumab. As of February 2020, the key findings from this clinical trial included the observation that CPI-006 has been well-tolerated and has resulted in changes in lymphocyte migration and activation in peripheral blood.

We plan to present updated clinical data from the phase 1/1b clinical trial is targeted to be presented at the Society for Immunotherapy of Cancer (SITC) annual meeting in November 2020. We also expect to meet with the FDA to discuss the study design and plans for a cifordenant pivotal study in advanced refractory RCC using the Adenosine Gene Signature as a biomarker.

We hold a non­exclusive, world­wide license for all fields of use under Scripps' rights in a hybridoma clone expressing an anti­CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma. In 2016, we filed a patent application covering the composition of matter of CPI­006. In 2019, we filed patent applications covering the use of this CPI-006 for immunomodulation and enhancement of anti-tumor immunity.

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CPI-818, ITK Inhibitor. Our third clinical product candidate, CPI-818, is a selective, covalent inhibitor of ITK. ITK, an enzyme that functions in T­cell signaling and differentiation, is expressed predominantly in T­cells, which are lymphocytes that play a vital role in immune responses. One of the key survival mechanisms of tumors is believed to be the reprogramming of T­cells to create an inflammatory environment that inhibits anti­tumor immune response and favors tumor growth. We believe highly selective inhibitors of this enzyme will facilitate induction of T­cell anti­tumor immunity and also may be useful in the treatment of T­cell lymphomas. CPI-818 is orally bioavailable and has been shown to achieve cellular occupancy of the target in vivo in various animal models. Pre-clinical studies have demonstrated that CPI-818 was well-tolerated in vivo and resulted in inhibition of T-cell activation. In March of 2019, we initiated a phase 1/1b study of CPI-818 in patients with advanced refractory T-cell lymphomas. Early interim results from the dose-escalation portion of the study were presented in December 2019 at the American Society of Hematology (ASH) meeting and in February 2020 at the 12th Annual T-cell Lymphoma Forum, showing that, CPI-818 was well tolerated and achieved substantial ITK target occupancy, one of the goals of the study.

We plan to present updated clinical data from the CPI-818 phase 1/1b clinical trial at the American Society of Hematology (ASH) annual meeting in December 2020.

We have filed patent applications covering composition of matter and uses of our ITK inhibitors and hold exclusive worldwide rights for all indications.

CPI-182, Anti-CXCR2 Antibody designed to block Myeloid Suppression. In 2017, we in-licensed this monoclonal antibody designed to block CXCR2, a novel target expressed on myeloid derived suppressor cells ("MDSC"). Preclinical studies have demonstrated that this antibody blocked MDSCs and also may have reacted with CXCR2 present on certain cancers such as acute myeloid leukemia cells and other cancers. We had begun Investigational New Drug ("IND")-enabling studies and scale-up manufacturing for this product candidate but paused this work in mid-March 2020 as a result of COVID-19 pandemic.

CPI-935, Adenosine A2B Receptor Antagonist. Adenosine A2B receptors have been found to play an important role in the immune response to tumors as well as in inflammation and fibrosis. Similar to adenosine A2A receptors, adenosine binds to adenosine A2B receptors, which leads to immunosuppression. Preclinical models have shown that inhibition of A2B receptors prevents fibrosis. In 2018, we selected a development candidate for this program, a small molecule antagonist of the A2B receptor.

Significant Accounting Policies

Our significant accounting policies are described in Note 2 to our financial statements for the year ended December 31, 2019 included in our Annual Report on Form 10-K. There have been no material changes to our significant accounting policies during the three months ended March 31, 2020.

Components of Results of Operations

Revenue

To date, we have not generated any revenues. We do not expect to receive any revenues from any product candidates that we develop unless and until we obtain regulatory approval and commercialize our products or enter into revenue-generating collaboration agreements with third parties.

Research and Development Expense

Our research and development expenses consist primarily of costs incurred to conduct research and development of our product candidates. We record research and development expenses as incurred. Research and development expenses include:

· employee-related expenses, including salaries, benefits, travel and non-cash

stock-based compensation expense;

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· external research and development expenses incurred under arrangements with

    third parties, such as contract research organizations, preclinical testing
    organizations, contract manufacturing organizations, academic and non-profit
    institutions and consultants;

· costs to acquire technologies to be used in research and development that have

    not reached technological feasibility and have no alternative future use;




 ·  license fees; and

· other expenses, which include direct and allocated expenses for laboratory,

facilities and other costs.

We plan to increase our research and development expenses substantially as we continue the development and potential commercialization of our product candidates. Our current planned research and development activities include the following:

· enrollment and completion of our Phase 1/1b clinical trial and amended Phase

    1b/2 clinical trial of ciforadenant;

· enrollment of our ongoing Phase 1/1b clinical trial of CPI-006;

· enrollment of our ongoing Phase 1/1b clinical trial of CPI-818;

· process development and manufacturing of drug supply of ciforadenant, CPI-006

    and CPI-818; and

· preclinical studies under our other programs in order to select development

    product candidates.

In addition to our product candidates that are in clinical development, we believe it is important to continue substantial investment in potential new product candidates to build the value of our product candidate pipeline and our business.

Our expenditures on current and future preclinical and clinical development programs are subject to numerous uncertainties related to timing and cost to completion. The duration, costs and timing of clinical trials and development of product candidates will depend on a variety of factors, including many of which are beyond our control. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming, and the successful development of our product candidates is uncertain. The risks and uncertainties associated with our research and development projects are discussed more fully in "Part II, Item 1A-Risk Factors." As a result of these risks and uncertainties, we are unable to determine with any degree of certainty the duration and completion costs of our research and development projects or if, when or to what extent we will generate revenues from the commercialization and sale of any of our product candidates that obtain regulatory approval. We may never succeed in achieving regulatory approval for any of our product candidates.

General and Administrative Expenses

General and administrative expenses include personnel costs, expenses for outside professional services and allocated expenses. Personnel costs consist of salaries, benefits and stock­based compensation. Outside professional services consist of legal, accounting and audit services and other consulting fees. Allocated expenses consist of rent expense related to our office and research and development facility.

We expect that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of one or more of our product candidates.

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Results of Operations

Comparison of the periods below as indicated (in thousands):

                                                  Three Months Ended
                                                      March 31,
                                                   2020         2019        Change
   Operating expenses:
   Research and development                     $   10,163   $    9,419    $     744
   General and administrative                        3,106        2,886          220
   Total operating expenses                         13,269       12,305          964
   Loss from operations                           (13,269)     (12,305)        (964)
   Interest income and other expense, net              334          662        (328)
   Net loss                                     $ (12,935)   $ (11,643)    $ (1,292)

Research and Development Expense

Research and development expenses for the three months ended March 31, 2020 and
2019 consisted of the following costs by program (specific program costs consist
solely of external costs):




                                                  Three Months Ended
                                                      March 31,
                                                   2020         2019      Change
     Ciforadenant (formerly CPI-444)            $     1,232    $ 1,362    $ (130)
     CPI­006                                          2,664      1,069      1,595
     CPI-818                                          1,132      1,990      (858)
     Other programs                                     597        316        281
     Unallocated employee and overhead costs          4,538      4,682      (144)
                                                $    10,163    $ 9,419    $   744

For the three months ended March 31, 2020, the decrease in ciforadenant costs of $0.1 million as compared to the three months ended March 31, 2019, primarily consisted of a decrease in drug manufacturing costs.

For the three months ended March 31, 2020, the increase in CPI-006 costs of $1.6 million as compared to the three months ended March 31, 2019, primarily consisted of an increase of $1.3 million in clinical trial expenses, an increase of $0.2 million in drug manufacturing costs and an increase of $0.1 million in other outside services.

For the three months ended March 31, 2020, the decrease in CPI-818 costs of $0.9 million as compared to the three months ended March 31, 2019, primarily consisted of a decrease of $0.9 million in drug manufacturing costs and a decrease of $0.2 million in other outside services, partially offset by an increase of $0.2 million in clinical trial expenses.

For the three months ended March 31, 2020, the increase in other program costs of $0.3 million as compared to the three months ended March 31, 2019, primarily consisted of an increase of $0.5 million in drug manufacturing costs, partially offset by a decrease of $0.3 million in outside services.

For the three months ended March 31, 2020, the decrease in unallocated costs of $0.1 million as compared to the three months ended March 31, 2019, primarily consisted of a decrease of $0.3 million in outside services, partially offset by an increase of $0.2 million in personnel and related costs.

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General and Administrative Expense

For the three months ended March 31, 2020, the increase in general and administrative expenses of $0.2 million as compared to the three months ended March 31, 2019, primarily consisted of an increase of $0.3 million in professional service costs, partially offset by a decrease of $0.1 million in personnel and related costs.

Interest Income and Other Expense, net

For the three months ended March 31, 2020, the decrease in interest income and other expense, net of $0.3 million as compared to the three months ended March 31, 2019, primarily consisted of a decrease in interest income earned due to a decrease in cash equivalents and marketable securities.

Liquidity and Capital Resources

As of March 31, 2020, we had cash, cash equivalents and marketable securities of $68.7 million, and an accumulated deficit of $230.1 million, compared to cash and cash equivalents and marketable securities of $78.0 million and an accumulated deficit of $217.1 million as of December 31, 2019. We have financed our operations primarily through private placements of convertible preferred stock and the sale of common stock.

In March 2016, we consummated our IPO and sold 4,700,000 shares of our common stock at a price of $15.00 per share, and in April 2016, sold 502,618 shares at a price of $15.00 per share pursuant to the partial exercise of the underwriters' option to purchase additional shares of common stock. We received net proceeds of approximately $70.6 million, after deducting underwriting discounts, commissions and offering expenses. Immediately prior to the consummation of our IPO, all outstanding shares of the convertible preferred stock were converted into common stock on a one-for-one basis.

In March 2018, in a follow-on offering, we sold 8,117,647 shares of our common stock at a price of $8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters' exercise of their option to purchase additional shares of common stock. We received aggregate net proceeds of approximately $64.9 million, after underwriting discounts, commissions and offering expenses.

In March 2020, we entered into the Sales Agreement with Jefferies to sell shares of our common stock, from time to time, with aggregate gross sales proceeds of up to $50,000,000, through an at-the-market equity offering program under which Jefferies will act as its sales agent. As of March 31, 2020, we had received no proceeds from the sale of shares of common stock pursuant to the Sales Agreement.

We believe our current cash, cash equivalents and marketable securities will be sufficient to fund our planned expenditures and meet our obligations through at least the next twelve months from the issuance of our financial statements as of and for the three months ended March 31, 2020. The amounts and timing of our actual expenditures depend on numerous factors, including:

· the progress, timing, costs and results of clinical trials for ciforadenant,

    CPI-006 and CPI-818;

· the extent to which the COVID-19 coronavirus may impact our business, including

    our clinical trials and financial condition;

· the timing, progress, costs and results of preclinical and clinical development

    activities for our other product candidates;

· the number and scope of preclinical and clinical programs we decide to pursue;

· the costs involved in prosecuting, maintaining and enforcing patent and other

intellectual property rights;

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· the cost and timing of regulatory approvals;

· our efforts to enhance operational systems and hire additional personnel,

    including personnel to support development of our product candidates and
    satisfy our obligations as a public company; and

· other factors described in the section of this report entitled "Risk Factors."

We expect to increase our spending in connection with the development and commercialization of our product candidates. Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financings. We may also enter into additional collaboration arrangements or selectively partner for clinical development and commercialization. The sale of additional equity would result in dilution to our stockholders. The incurrence of debt financing would result in debt service obligations and the governing documents would likely include operating and financing covenants that would restrict our operations. In addition, sufficient additional funding may not be available on acceptable terms, or at all. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned programs. Any of these actions could have a material effect on our business, financial condition and results of operations.

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