The management's discussion and analysis of financial condition as ofJune 30, 2020 and results of operations for the three and six months endedJune 30, 2020 , should be read in conjunction with management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the year endedDecember 31, 2019 which was filed with theSecurities and Exchange Commission , orSEC , onFebruary 25, 2020 . Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the "Business" section of our Annual Report on Form 10-K and elsewhere in this and other reports we file with theSEC . We use words such as "anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect," "believe," "intend," "may," "will," "should," "could," and similar expressions to identify forward-looking statements. All forward-looking statements included in this report are based on information available to us on the date hereof and, except as required by law, we assume no obligation to update any such forward-looking statements. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to "Iovance," "we," "us" and "our" refer toIovance Biotherapeutics, Inc. and
our subsidiaries. Overview We are a clinical-stage biopharmaceutical company focused on the development and commercialization of cell therapies as novel cancer immunotherapy products designed to harness the power of a patient's own immune system to eradicate cancer cells. Tumor infiltrating lymphocyte, or TIL, therapy is an autologous cell therapy platform technology that was originally developed by theNational Cancer Institute , or NCI, which conducted initial clinical trials in diseases such as metastatic melanoma and cervical cancer. We have developed a new, shorter manufacturing process for TIL known as Generation 2, or Gen 2, which yields a cryopreserved TIL product. This proprietary and scalable manufacturing method is being further investigated in multiple indications. Our lead product candidates include lifileucel for metastatic melanoma and LN-145 for metastatic cervical cancer. In addition to metastatic melanoma and metastatic cervical cancer, we are investigating the effectiveness and safety of TIL for the treatment of squamous cell carcinoma of the head and neck, non-small cell lung cancer, and peripheral blood lymphocyte, or PBL, therapy for chronic lymphocytic leukemia through our sponsored trials, as well as in other oncology indications through collaborations. We are conducting a Phase 2 clinical trial, C-144-01, of our lead product candidate, lifileucel, for the treatment of metastatic melanoma. This multicenter pivotal trial enrolled patients with melanoma whose disease has progressed following treatment with at least one systemic therapy, including a PD-1 inhibitor and if BRAF mutated, a BRAF inhibitor, or a combination of BRAF and MEK inhibitors. Cohort 4 of the C-144-01 clinical trial is a single-arm cohort intended to support a biologics license application, or BLA, submission for lifileucel. The C-144-01 trial uses our proprietary Gen 2 manufacturing process. We completed and closed enrollment of patients into Cohort 2 of the C-144-01 trial in 2018. Results from Cohort 2 of the C-144-01 clinical trial were initially reported at theAmerican Society of Clinical Oncology , or ASCO, annual meeting onJune 1, 2019 and subsequently updated at the ASCO annual meeting onMay 29, 2020 , or ASCO 2020. In 66 patients with metastatic melanoma, treatment with lifileucel resulted in an objective response rate, or ORR, of 36%, as assessed by investigator, with 2 complete responses and 22 partial responses. The disease control rate, or DCR, was 80.3%. Patients were heavily pretreated and had a mean of 3.3 prior therapies. The data released at ASCO 2020 disclosed that after a median study follow up of 18.7 months for Cohort 2 patients, the median duration of response, or DOR, has not been reached per investigator assessment. Furthermore, durable responses have been observed across a wide age range of metastatic melanoma patients, and among thosewho have received prior anti-CTLA-4 and BRAF targeted treatments, regardless of BRAF mutation status, and equally in patients with PD-L1 high and low status. The adverse event profile was generally consistent with the underlying advanced disease and the profile of the lymphodepletion and IL-2 regimens. Cohort 4 of in the C-144-01 trial was enrolled to evaluate ORR as read out by an Independent Review Committee, or IRC, as the primary endpoint based on our interpretation of discussions with theU.S. Food and Drug Administration , or FDA, as part of an End of Phase 2, or EOP2, meeting held with the FDA in the third quarter of 2018. InOctober 2018 and based on the data provided to the FDA during the EOP2 meeting, we announced that lifileucel had received a Regenerative Medicine Advanced Therapy, or RMAT, designation from the FDA. Enrollment in pivotal Cohort 4 in the C-144-01 trial commenced inMarch 2019 and patient dosing was completed inJanuary 2020 . A total of 89 patients were dosed in Cohort 4. Initial results from the pivotal Cohort 4 are available for 68 patients with two radiological assessments, as determined by investigator. Lifileucel shows a 32.4% ORR, including 1 complete response and 21 partial responses, 2 of which are yet to be confirmed with follow up visits, and a DCR of 72.1% as of the data cut off ofMarch 16, 2020 , 30
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corresponding to 5.3 months of median study follow up. This data is highly consistent with the Cohort 2 data read out at a similar median duration of study follow up. The ORR of Cohort 2 at a median study follow up of 6 months was 33%.
We are also conducting a Phase 2 clinical trial, C-145-04, which is a multicenter pivotal trial that will assess the safety and efficacy of LN-145 for the treatment of patients with recurrent, metastatic or persistent cervical cancer. InFebruary 2019 , LN-145 received Fast Track designation from the FDA for development in the treatment of cervical cancer with disease progression on or after chemotherapy. InMarch 2019 , the protocol for this trial was amended to modify the primary endpoint of ORR to be determined by IRC. InMay 2019 , LN-145 received Breakthrough Therapy designation, or BTD, from the FDA for the development in the treatment of cervical cancer. Updated results from the C-145-04 clinical trial were reported at the ASCO annual meeting onJune 1, 2019 . In 27 patients with metastatic cervical cancer, treatment with LN-145 resulted in an ORR of 44%. At the time of study data cut, there were 3 complete responses and 9 partial responses. The DCR was 85%. Patients were heavily pretreated and had a mean of 2.4 prior therapies. The DOR had not been reached. The adverse event profile was generally consistent with the underlying advanced disease and the profile of the lymphodepletion and IL-2 regimens. Based on an EOP2 meeting held with the FDA inJune 2019 , we believe that results from the C-145-04 clinical trial may be sufficient to support registration of LN-145 for the treatment of patients with metastatic cervical cancer. In accordance with theFDA's recommendations, the protocol was amended to further define the patient population. InNovember 2019 , in order to position LN-145 for potential future use in broader lines of therapy in cervical cancer, we have further amended the C-145-04 trial to collect additional data on early-line patients as well as late-line patients by adding additional cohorts, in anticipation of a changing landscape in this indication, including Cohort 2 for patients that had previously received anti-PD-1 therapy. These additional cohorts also allow access to TIL therapy when the pivotal Cohort 1 is completed and we believe may support expanded access to LN-145. Cohort 2 of the C-145-04 trial continues and is expected to complete enrollment during the second half of 2020. We intend to initiate a dialog with the FDA subsequent to such completion to discuss BLA submission plans. C-145-03 is our ongoing Phase 2, multicenter trial that we are conducting to assess the safety and efficacy of LN-145 for the treatment of patients with recurrent metastatic squamous cell carcinoma of the head and neck. InOctober 2018 , we reported that, to date, preliminary data for 13 patients in the C-145-03 clinical trial yielded an ORR of 31% with a DOR ranging from 2.8 to 7.6 months. The adverse event profile remained consistent with previous reports. We continue to enroll patients in this study. We have redesigned our C-145-03 trial to include multiple cohorts, in order to allow for dosing of TIL therapies produced by multiple manufacturing methods, including our Gen 2 manufacturing process, our Generation 3, or Gen 3, manufacturing process, and our PD-1 selected TIL manufacturing process. Our PD-1 selected TIL manufacturing process is referred to as LN-145-S1. We are also investigating the potential of our TIL therapies in earlier lines of treatment and in combination with pembrolizumab, and are studying LN-145 as a monotherapy in relapsed refractory non-small cell lung cancer, or NSCLC, patients. IOV-COM-202 is a Phase 2, multicenter trial that is composed of five cohorts which can enroll up to a total of 75 patients. InMay 2019 , we reported that the first patient was dosed in the IOV-COM-202 trial. In Cohort 1A, we are enrolling unresectable or metastatic melanoma patientswho have not received prior immunotherapy, including checkpoint inhibitors such as anti-PD-1/anti-PD-L1 therapy. The patients receive lifileucel in combination with pembrolizumab. In Cohort 2A, we are enrolling advanced, recurrent, or metastatic head and neck squamous cell carcinoma patientswho are naïve to prior immunotherapy including anti-PD-1/anti-PD-L1 therapy. The patients will receive LN-145 in combination with pembrolizumab. Cohort 3A is enrolling advanced or metastatic NSCLC patientswho are naïve to prior immunotherapy including anti-PD-1/anti-PD-L1 therapy. The patients in Cohort 3A will receive LN-145 in combination with pembrolizumab. In Cohort 3B, we are enrolling NSCLC patientswho have previously received systemic therapy which could include checkpoint inhibitors. The patients are receiving LN-145. InFebruary 2020 , we announced the addition of Cohort 1B to the IOV-COM-202 trial, for patients with melanoma whose disease has progressed following treatment with at least one systemic therapy, including a PD-1 inhibitor and if BRAF mutated, a BRAF inhibitor, or a combination of BRAF and MEK inhibitors. The patients will receive LN-145-S1. In addition to its ongoing enrollment in theU.S. , the IOV-COM-202 trial has also received regulatory approval inCanada and in certain European countries. InNovember 2019 , we announced that our investigational new drug application, or IND, for our PBL therapy, IOV-2001, was authorized by the FDA and our sponsored clinical trial using this therapy, IOV-CLL-01, was cleared to proceed. IOV-2001 is a non-genetically modified, polyclonal T cell product that is manufactured using a nine-day process from 50 mL of patient's blood. IOV-CLL-01 is Phase 1/2 clinical trial evaluating the safety and efficacy of IOV-2001 in patients with relapsed or refractory chronic lymphocytic leukemia or small lymphocytic leukemia. The IOV-CLL-01 trial is expected to enroll up to approximately 70 patients. As part of our collaboration program with theMD Anderson Cancer Center , or MDACC, two Phase 2 trials were initiated in 2018. Both trials are sponsored by MDACC. The first trial, NCT03449108, is intended to allow for investigation
of LN-145 31 Table of Contents
manufactured by Iovance using our manufacturing processes to treat patients with soft tissue sarcoma, osteosarcoma and platinum resistant ovarian cancer. A second trial under the collaboration with MDACC, NCT03610490, is active as well. This trial is treating patients with platinum resistant ovarian cancer, pancreatic and colorectal cancer. This trial uses TIL manufactured by MDACC using urelumab, a 4-1BB agonistic antibody, as part of the manufacturing process. The data obtained using this manufacturing process may not be representative of our data using our Gen 2 manufacturing process. We are also collaborating with Centre hospitalier de l'Université deMontreal , or CHUM,Yale University , or Yale, and Moffitt on investigator-sponsored clinical trials of TIL therapies in other indications. The clinical trials sponsored by CHUM and Moffitt use, or will use, TIL manufactured by different manufacturing processes, which may not be representative of our data using our Gen 2 manufacturing process.
Our current product candidate pipeline and selected investigator-sponsored proof-of-concept studies are summarized in the graph below:
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Components of Operating Results
Revenue
We have not yet generated any revenues since our formation, and we currently do not anticipate that we will generate any significant revenues from the sale or licensing of our product candidates during the 12 months from the date these financial statements are issued. Our ability to generate revenues in the future will depend on our ability to complete the development of our product candidates and to obtain regulatory approval for them.
Research and Development Expenses
Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services. Research and development costs are expensed as incurred. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and amortized over the period that the goods are delivered, or the related services are performed, subject to an assessment of recoverability. Clinical development costs are a significant component of research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on our behalf in connection with the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. We accrue and expense costs for clinical trial activities performed by third parties based upon 32
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estimates of work completed to date of the individual trial in accordance with agreements established with contract research organizations and clinical trial sites. We determine our estimates through discussions with internal clinical personnel and outside service providers as to the progress or stage of completion of trials or services and the agreed upon fee to be paid for such services. We expect our research and development expenses to increase over the next couple of years as we prepare for commercial manufacturing of our products and continue to conduct our clinical trials for other indications. However, it is difficult to determine with certainty the duration and completion costs of our current or future preclinical programs and clinical trials of our product candidates.
General and Administrative Expenses
General and administrative expenses consist primarily of salaries, recruiting fees, sign on, retention and special bonuses and other related costs, including stock-based compensation, for personnel in executive, finance, accounting, legal, investor relations, facilities, business development, marketing, commercial, information technology and human resources functions. Other significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to corporate matters and intellectual property, insurance, public company expenses relating to maintaining compliance with Nasdaq listing rules andSEC requirements, investor relations costs, and fees for accounting and consulting services. General and administrative costs are expensed as incurred, and we accrue for services provided by third parties related to the above expenses by monitoring the status of services provided and receiving estimates from its service providers and adjusting its accruals as actual costs become known. We anticipate general and administrative expenses will increase in 2020 as we continue to prepare for commercialization and support an expected increase
in total headcount. Interest Income
Interest income results from our interest-bearing cash and short term investment balances.
Results of Operations
Comparison of the Three and Six Months Ended
Revenues
We did not generate any revenues during the three and six months ended
Research and Development expenses (in thousands)
Three Months Ended Increase Six Months Ended Increase June 30, (Decrease) June 30, (Decrease) 2020 2019 $ % 2020 2019 $ %
Research and development$ 49,274 $ 39,298 9,976 25 %$ 106,226 $ 70,203 36,023 51 % Stock-based compensation expense included in research and development expense 5,465 2,720 2,745 101 % 9,783 5,421 4,362 80 % Research and development expense for the three months endedJune 30, 2020 increased by$10.0 million , or 25%, compared to the same period in 2019. The increase was attributable to (i) a$6.9 million increase in clinical trial costs due primarily to higher costs for the purchase of drugs used in the clinical trials, specifically IL-2, (ii) a$4.6 million increase in payroll and related expenses driven by a higher number of full-time research and development employees, and (iii) a$2.7 million increase in stock-based compensation expenses. These increases were partially offset by a$3.1 million decrease in manufacturing costs due to decreased production runs during the three months endedJune 30, 2020 . Research and development expense for the six months endedJune 30, 2020 increased by$36.0 million , or 51%, compared to the same period in 2019. The increase was primarily attributable to (i) a$12.0 million increase in clinical trial costs due to an increase in enrollment across all the trials, (ii) a$10.0 million increase for the license to further develop IOV-3001 obtained from Novartis, (iii) a$9.9 million increase in payroll and related expenses driven by a higher number of full-time research and development employees, and (iv) a$4.4 million increase in stock-based compensation expenses. 33
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General and Administrative expenses (in thousands)
Three Months Ended Increase Six Months Ended Increase June 30, (Decrease) June 30, (Decrease) 2020 2019 $ % 2020 2019 $ %
General and administrative$ 14,353 $ 10,867 3,486 32 %$ 28,211 $ 19,948 8,263 41 % Stock-based compensation expense included in general and administrative 5,072 3,706 1,366 37 % 10,166 6,851 3,315 48 % General and administrative expenses for the three months endedJune 30, 2020 increased by$3.5 million , or 32%, compared to the same period in 2019. The increase was primarily attributable to a$2.1 million increase in payroll and related expenses and a$1.4 million increase in stock-based compensation expenses driven by a higher number of full-time general and administrative employees and a higher average stock price. General and administrative expenses for the six months endedJune 30, 2020 increased by$8.3 million , or 41%, compared to the same period in 2019. The increase was primarily attributable to (i) a$3.5 million increase in payroll and related expenses driven by a higher number of full-time general and administrative employees and a higher average stock price, (ii) a$3.3 million increase in stock-based compensation expenses, and (iii) a$1.2 million increase in director's and officer's insurance premiums.
Interest Income (in thousands)
Three Months Ended Increase Six Months Ended Increase June 30, (Decrease) June 30, (Decrease) 2020 2019 $ % 2020 2019 $ % Net interest income$ 609 $ 2,614 (2,005) (77) %$ 1,824 $ 5,650 (3,826) (68) % Net interest income for the three and six months endedJune 30, 2020 and 2019 decreased by$2.0 million or 77% and$3.8 million or 68% respectively, due to interest income earned on the lower cash balance, and a decrease in interest rates for the three and six months period endedJune 30, 2020 as compared to the same period in 2019. Interest income earned on the net proceeds received from the public offering inJune 2020 was minimal during the three months endedJune 30, 2020 due to the timing of investment. Net Loss (in thousands) Three Months Ended Increase Six Months Ended Increase June 30, (Decrease) June 30, (Decrease) 2020 2019 $ % 2020 2019 $ % Net loss$ (63,018) $ (47,551) (15,467) 33 %$ (132,613) $ (84,501) (48,112) 57 % Net loss for the three and six months endedJune 30, 2020 increased by$15.5 million or 33% and$48.1 million or 57% compared to the same periods in 2019. The increase in our net loss was due to the continued expansion of our research and development activities, increased clinical trials and manufacturing activities, and the overall growth of our corporate infrastructure. We anticipate that we will continue to incur net losses in the future as we further invest in our research and development activities and commercial preparation activities.
Liquidity and Capital Resources
We have incurred losses and generated negative cash flows from operations since inception. We expect to continue to incur significant losses in 2020 and may incur significant losses and negative cash flows from operations for the foreseeable future. Historically, we have funded our operations from various public and private offerings of our equity securities (both common stock and preferred stock), from option and warrant exercises, and from interest income. Since 2017, our primary source of funds has been from the public sale of our common stock. OnDecember 28, 2017 , we filed a shelf registration statement, or the 2017 Shelf Registration Statement, with theSEC , for the issuance of common stock, preferred stock, warrants, rights, debt securities and units, which we refer to collectively asShelf Securities , up to an aggregate amount of$250 million . The 2017 Shelf Registration Statement was declared effective onJanuary 19, 2018 . OnJanuary 29, 2018 , we sold 15,000,000 shares of our common stock at a public offering price of$11.50 per share pursuant to 34
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the 2017 Shelf Registration Statement. We received gross proceeds of approximately$172.5 million and net proceeds of approximately$162.0 million , after deducting underwriting discounts and offering expenses. The 2017 Shelf Registration Statement was terminated upon effectiveness of the 2018 Shelf Registration Statement (as discussed below). OnSeptember 7, 2018 , we filed a shelf registration statement with theSEC for the issuance of up to an aggregate amount of$250 million ofShelf Securities , which we refer to as the 2018 Shelf Registration Statement. The 2018 Shelf Registration Statement was declared effective onOctober 3, 2018 and the aggregate amount of securities we could issue thereunder was subsequently increased by$50 million through a post-effective amendment that we filed onOctober 11, 2018 , pursuant to Rule 462(b) under the Securities Act of 1933, as amended. OnOctober 17, 2018 , we sold 25,300,000 shares of our common stock at a public offering price of$9.97 per share pursuant to the 2018 Shelf Registration Statement. We received gross proceeds of approximately$252.2 million and net proceeds of$236.7 million , after deducting underwriting discounts and offering expenses. The 2018 Shelf Registration Statement is no longer available for future offerings. OnSeptember 17, 2019 , we filed a shelf registration statement with theSEC for the issuance of up to an aggregate amount of$400 million ofShelf Securities , which we refer to as the 2019 Shelf Registration Statement. The 2019 Shelf Registration Statement was declared effective onSeptember 24, 2019 . The 2019 Shelf Registration Statement was terminated upon effectiveness of the 2020 Automatic Shelf Registration Statement (as discussed below). No shares were sold under the 2019 Shelf Registration Statement prior to its termination. OnMay 27, 2020 , we filed an automatic shelf registration statement with theSEC for the issuance of an indeterminate amount ofShelf Securities , which we refer to as the 2020 Automatic Shelf Registration Statement. The 2020 Automatic Shelf Registration Statement was immediately effective upon filing with theSEC , and the 2019 Shelf Registration Statement was simultaneously terminated. OnJune 2, 2020 , we sold 19,475,806 shares of our common stock at a public offering price of$31.0 per share pursuant to the 2020 Automatic Shelf Registration Statement. We received gross proceeds of$603.7 million and net proceeds of approximately$567.0 million , after deducting underwriting discounts and offering expenses. Following the public offering, the 2020 Automatic Shelf Registration Statement remains available for the future issuance of an indeterminate amount ofShelf Securities . In the future, we may periodically offer one or more of theShelf Securities in amounts, prices and terms to be announced when and if the securities are offered. If any of theShelf Securities covered by the 2020 Automatic Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with theSEC containing specific information about the terms of such offering at that time. We are currently engaged in the development of therapeutics to fight cancer. We do not have any commercial products and have not yet generated any revenues from our biopharmaceutical business. We currently do not anticipate that we will generate any significant revenues from the sale or licensing of any products during the 12 months from the date these financial statements are issued. We have incurred a net loss of$132.6 million for the six months endedJune 30, 2020 and used$101.9 million of cash in our operating activities for the six months endedJune 30, 2020 . As ofJune 30, 2020 , we had$160.6 million of cash and cash equivalents,$611.3 million of short-term investments,$5.5 million of restricted cash,$758.3 million of stockholders' equity and had working capital of$727.7 million . We expect to continue our research and development activities, initiate pre-commercial activities and to begin construction on our tenant improvements to our new production facility, which will increase the amount of cash we will use during 2020 and beyond. Specifically, we expect continued spending on clinical trials, research and development activities, higher payroll expenses as we increase our professional, commercial and scientific staff and continue our expansion of manufacturing activities including building our own facility. Based on the funds we have available as of the date of filing of this Quarterly Report on Form 10-Q, and after consideration of the possible impacts of the COVID-19 Pandemic, we believe that we have sufficient capital to fund our anticipated operating expenses and capital expenditure for at least the next 12 months from the date of filing this report. 35
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The following table summarizes our cash flows for the periods presented from Operating, Investing and Financing Activities (in thousands):
Six Months Ended June 30, 2020 2019 Net cash (used in) provided by: Operating activities$ (101,927) $ (62,885) Investing activities (323,651) 59,716 Financing activities
572,298 3,379
Net increase in cash, cash equivalents and restricted cash
Operating Activities Net cash used in operating activities for the six months endedJune 30, 2020 was$101.9 million compared to$62.9 million for the same period in 2019. The increase of$38.8 million was primarily due to increased costs in research and development activities. Included in$38.8 million was the$10.0 million upfront payment we paid for IOV-3001. Investing Activities Net cash used in investing activities for the six months endedJune 30, 2020 was$323.7 million compared to net cash used provided by investing activities of$59.7 million for the same period in 2019. The increase in cash used in investing activities of$383.2 million was primarily due to the purchase of short-term investments to invest the net proceeds from ourJune 2020 public offering.
Financing Activities
Net cash provided by financing activities for the six months endedJune 30, 2020 was$572.3 million compared to$3.4 million for the same period in 2019. The increase of$568.5 million was primarily due to net proceeds of$567.4 million from ourJune 2020 public offering.
Impact of the CARES Act
The CARES Act, among other things, permits net operating losses, or NOLs, carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act provides other reliefs and stimulus measures. We are currently evaluating the impact of the CARES Act, however, at present we do not expect that any provision of the CARES Act would result in a material cash benefit to us or have a material impact on our financial statements or internal controls over financial reporting.
Impact of COVID-19 on our Business
InDecember 2019 , a novel coronavirus known as SARS-CoV-2 was first detected inWuhan ,Hubei Province ,People's Republic of China , causing outbreaks of the coronavirus disease, known as COVID-19, that has now spread globally. OnJanuary 30, 2020 , theWorld Health Organization (WHO ) declared COVID-19 a pandemic, which we refer to herein as the COVID-19 Pandemic. The Secretary ofHealth and Human Services declared a public health emergency onJanuary 31, 2020 , under section 319 of the Public Health Service Act (42 U.S.C. 247d), in response
to the COVID-19 Pandemic. Operations and Liquidity The full impact of the COVID-19 Pandemic is unknown and rapidly evolving. While the potential economic impact brought by and over the duration of the COVID-19 Pandemic may be difficult to assess or predict, the COVID-19 Pandemic has resulted in significant disruption of global financial markets, which could in the future negatively affect our liquidity. In addition, a recession or market volatility resulting from the COVID-19 Pandemic could affect our business. We have taken proactive, aggressive action throughout the COVID-19 Pandemic to protect the health and safety of our employees, and expect to continue to implement these measures until we determine that the COVID-19 Pandemic is adequately contained for purposes of our business. We may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees. To date, the COVID-19 Pandemic has not had significant effects on our clinical trial enrollment. Given the nature and
type of our short-term 36 Table of Contents
investments in
Outlook
Although there is uncertainty related to the anticipated impact of the recent COVID-19 Pandemic on our future results, we believe our current cash reserves leave us well-positioned to manage our business through this crisis as it continues to unfold. However, the impacts of the COVID-19 Pandemic are broad-reaching and continuing and the financial impacts associated with the COVID-19 Pandemic are still uncertain. The COVID-19 Pandemic is ongoing, and its dynamic nature, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the pandemic, and actions that would be taken by governmental authorities to contain the pandemic or to treat its impact, makes it difficult to forecast any effects on our results for the fiscal year endingDecember 31, 2020 . Despite the economic uncertainty resulting from the COVID-19 Pandemic, we intend to continue to focus on the development of our product candidates. We continue to monitor the rapidly evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations. In these circumstances, there may be developments outside our control requiring us to adjust our operating plan. As such, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows in the future.
Off-Balance Sheet Arrangements
At
Significant Accounting Policies and Recent Accounting Standards
See Note 2 of the financial statements for a discussion of our significant accounting policies, including the discussion of recently issued and adopted accounting standards.
Inflation
Inflation and changing prices have had no effect on our continuing operations over our two most recent fiscal years.
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