PTC THERAPEUTICS, INC. The following discussion and analysis is meant to provide material information
relevant to an assessment of the financial condition and results of operations
of our company, including an evaluation of the amounts and certainty of cash
flows from operations and from outside resources, so as to allow investors to
better view our company from management's perspective. The following discussion
of our financial condition and results of operations should be read in
conjunction with our financial statements and the notes to those financial
statements appearing elsewhere in this Quarterly Report on Form 10-Q and the
audited consolidated financial statements and notes thereto and management's
discussion and analysis of financial condition and results of operations for
the year ended
Our Company
We are a science-driven global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines. Our mission is to provide access to best-in-class treatments for patients who have few or no treatment options. Our strategy is to leverage our strong scientific and clinical expertise and global commercial infrastructure to bring therapies to patients. We believe that this allows us to maximize value for all of our stakeholders.
We have a portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases.
Corporate Updates
COVID-19 Impact
The global pandemic caused by a strain of novel coronavirus, COVID-19, has
impacted and is continuing to impact the timing of certain of our clinical
trials and regulatory submissions as well as other aspects of our business
operations. In addition to our previous disclosures regarding the impact of the
COVID-19 pandemic, such as those set forth in our Annual Report on Form 10-K for
the year ended
As of the date of this Report on Form 10-Q, except as otherwise previously
disclosed with respect to Translarna product revenue in
generate revenue has not been significantly affected by the COVID-19 pandemic.
However, due to travel restrictions, social distancing and the continued global
? uncertainty resulting from the COVID-19 pandemic, we may have difficulty
identifying and accessing new patients, supporting existing patients and
meeting with regulatory authorities or other governmental entities, which may
negatively affect our future revenue. We continue to support our existing
patient base and remotely connect with them, as necessary. We have not
encountered any material issues in supplying those patients.
As previously disclosed, in response to the global uncertainty caused by the
? COVID-19 pandemic, we are continuing to prioritize our expenses where we deem
appropriate and strategically positioning our capital allocation.
The COVID-19 pandemic and responsive measures thereto may result in further negative impacts, including additional delays in our clinical and regulatory activities and further fluctuations in our revenue. We cannot be certain what the overall impact of the COVID-19 pandemic will be on our business and it has the potential to materially adversely affect our business, financial condition, results of operations, and prospects. For additional information, see "Item 1A. Risk
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Factors - We face risks related to health epidemics and other widespread
outbreaks of contagious disease, which are, and may continue to, delay our
ability to complete our ongoing clinical trials and initiate future clinical
trials, disrupt regulatory activities and have other adverse effects on our
business and operations, including the novel coronavirus (COVID-19) pandemic,
which has disrupted, and may continue to disrupt, our operations and may
significantly impact our operating results. In addition, the COVID-19 pandemic
has caused substantial disruption in the financial markets and economies, which
could result in adverse effects on our business and operations." in our Annual
Report on Form 10-K for the year ended
Global Commercial Footprint
Global DMD Franchise
We have two products, Translarna™ (ataluren) and Emflaza® (deflazacort), for the
treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening
disorder. Translarna has marketing authorization in the European Economic Area,
or EEA, for the treatment of nonsense mutation Duchenne muscular dystrophy, or
nmDMD, in ambulatory patients aged two years and older and in
Our marketing authorization for Translarna in the EEA is subject to annual
review and renewal by the
Each country, including each member state of the EEA, has its own pricing and reimbursement regulations. In order to commence commercial sale of product pursuant to our Translarna marketing authorization in any particular country in the EEA, we must finalize pricing and reimbursement negotiations with the applicable government body in such country. As a result, our commercial launch will continue to be on a country-by-country basis. We also have made, and expect to continue to make, product available under early access programs, or EAP programs, both in countries in the EEA and other territories. Our ability to negotiate, secure and maintain reimbursement for product under commercial and EAP programs can be subject to challenge in any particular country and can also be affected by political, economic and regulatory developments in such country.
There is substantial risk that if we are unable to renew our EEA marketing authorization during any annual renewal cycle, or if our product label is materially restricted, or if Study 041 does not provide the data necessary to maintain our marketing authorization, we would lose all, or a significant portion of, our ability to generate revenue from sales of Translarna in the EEA and other territories.
Translarna is an investigational new drug in
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resolution request with the
Tegsedi® (inotersen) and Waylivra™ (volanesorsen)
We hold the rights for the commercialization of Tegsedi and Waylivra for the
treatment of rare diseases in countries in
Evrysdi
We also have an SMA collaboration with Roche and the
Diversified Development Pipeline
Splicing Platform
In addition to our SMA program, our splicing platform also includes PTC518,
which is being developed for the treatment of Huntington's disease, or HD. We
announced the results from our Phase 1 study of PTC518 in healthy volunteers in
Gene Therapy Platform
We have a pipeline of gene therapy product candidates for rare monogenic diseases that affect the central nervous system, or CNS, including PTC-AADC for the treatment of Aromatic L-Amino Acid Decarboxylase, or AADC, deficiency, a rare
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CNS disorder arising from reductions in the enzyme AADC that result from
mutations in the dopa decarboxylase gene. In
Bio-e Platform
Our Bio-e platform consists of small molecule compounds that target oxidoreductase enzymes that regulate oxidative stress and inflammatory pathways central to the pathology of a number of CNS diseases. The two most advanced molecules in our Bio-e platform are vatiquinone and PTC857. We initiated a registration-directed Phase 2/3 placebo-controlled trial of vatiquinone in children with mitochondrial disease associated seizures in the third quarter of 2020. We previously experienced delays in enrolling this trial due to the COVID-19 pandemic and anticipate results from this trial to be available in the fourth quarter of 2022. We also initiated a registration-directed Phase 3 trial of vatiquinone in children and young adults with Friedreich ataxia in the fourth quarter of 2020 and anticipate results from this trial to be available in the second quarter of 2023. In the third quarter of 2021, we completed a Phase 1 trial in healthy volunteers to evaluate the safety and pharmacology of PTC857. PTC857 was found to be well-tolerated with no reported serious adverse events while demonstrating predictable pharmacology. We initiated a Phase 2 trial of PTC857 for amyotrophic lateral sclerosis in the first quarter of 2022.
Metabolic Platform
The most advanced molecule in our metabolic platform is PTC923, an oral formulation of synthetic sepiapterin, a precursor to intracellular tetrahydrobiopterin, which is a critical enzymatic cofactor involved in metabolism and synthesis of numerous metabolic products, for orphan diseases. We initiated a registration-directed Phase 3 trial for PTC923 for phenylketonuria, or PKU, in the third quarter of 2021 and expect results from this trial to be available by the end of 2022.
Oncology Platform
We also two oncology agents in that are in clinical development, unesbulin and emvododstat. We completed our Phase 1 trials evaluating unesbulin in leiomyosarcoma, or LMS, and diffuse intrinsic pontine glioma, or DIPG, in the fourth quarter of 2021. We initiated a registration-directed Phase 2/3 trial of unesbulin for the treatment of LMS in the first quarter of 2022 and we expect to initiate a registration-directed Phase 2 trial of unesbulin for the treatment of DIPG in the third quarter of 2022. We completed our Phase 1 trial evaluating emvododstat in acute myelogenous leukemia, or AML, in the fourth quarter of 2021. We expect to provide further updates regarding our emvododstat program at a later date.
Emvododstat for COVID-19
In
Multi-Platform Discovery
In addition, we have a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas, including rare diseases and oncology.
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Funding
The success of our products and any other product candidates we may develop,
depends largely on obtaining and maintaining reimbursement from governments and
third-party insurers. Our revenues are primarily generated from sales of
Translarna for the treatment of nmDMD in countries where we were able to obtain
acceptable commercial pricing and reimbursement terms and in select countries
where we are permitted to distribute Translarna under our EAP programs and from
sales of Emflaza for the treatment of DMD in
To date, we have financed our operations primarily through our offering of 3.00%
convertible senior notes due
The 2022 Convertible Notes consist of
In
The 2026 Convertible Notes consist of
As of
We anticipate that our expenses will continue to increase in connection with our
commercialization efforts in
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and marketing, legal and regulatory, distribution and manufacturing, including
expanding our direct manufacturing capabilities at our leased biologics
manufacturing facility and administrative and employee-based expenses. In
addition to the foregoing, we expect to continue to incur ongoing research and
development expenses for our products and product candidates, including our
splicing, gene therapy, Bio-e, metabolic and oncology programs, our studies of
emvododstat for COVID-19 as well as studies in our products for maintaining
authorizations, including Study 041, label extensions and additional
indications. In addition, we may incur substantial costs in connection with our
efforts to advance our regulatory submissions. We continue to seek marketing
authorization for Translarna for the treatment of nmDMD in territories that we
do not currently have marketing authorization in and we may also seek marketing
authorization for Translarna for other indications. We submitted an MAA to the
EMA for the treatment of AADC deficiency with PTC-AADC in the EEA and we expect
an opinion from the CHMP in
We may seek to expand and diversify our product pipeline through opportunistically in-licensing or acquiring the rights to products, product candidates or technologies and we may incur expenses, including with respect to transaction costs, subsequent development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction, which would increase our future capital requirements.
With respect to our outstanding 2022 Convertible Notes, cash interest payments
are payable on a semi-annual basis in arrears, which require total funding of
In addition, in the first quarter of 2022, we paid
We also have certain significant contractual obligations and commercial
commitments that require funding and we have disclosed these items under the
heading "Management's Discussion and Analysis of Financial Condition and Results
of Operations-Funding Obligations" in our 2021 Annual Report on Form 10-K. There
were no material changes to these obligations and commitments during the period
ended
We have never been profitable and we will need to generate significant revenues to achieve and sustain profitability, and we may never do so. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or our commercialization efforts.
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Financial operations overview
Revenues
Net product revenues. To date, our net product revenues have consisted primarily
of sales of Translarna for the treatment of nmDMD in territories outside of
We record product sales net of any variable consideration, which includes
discounts, allowances, rebates related to Medicaid and other government pricing
programs, and distribution fees. We use the expected value or most likely amount
method when estimating variable consideration, unless discount or rebate terms
are specified within contracts. The identified variable consideration is
recorded as a reduction of revenue at the time revenues from product sales are
recognized. These estimates for variable consideration are adjusted to reflect
known changes in factors and may impact such estimates in the quarter those
changes are known. Revenue recognized does not include amounts of variable
consideration that are constrained. For the three months ended
In relation to customer contracts, we incur costs to fulfill a contract but do not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. We consider any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise. Shipping and handling costs associated with finished goods delivered to customers are recorded as a selling expense.
Roche and the SMA Foundation Collaboration. In
For the three months ended
For the three months ended
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Pursuant to the Royalty Purchase Agreement, we sold to RPI 42.933%, or the
Assigned Royalty Payment, of our right to receive sales-based royalty payments,
or the Royalty, on worldwide net sales of Evrysdi and any other product
developed pursuant to the SMA License Agreement in consideration for
Research and development expense
Research and development expenses consist of the costs associated with our research activities, as well as the costs associated with our drug discovery efforts, conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings. Our research and development expenses consist of:
?external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants;
?employee-related expenses, which include salaries and benefits, including share-based compensation, for the personnel involved in our drug discovery and development activities; and
?facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, IT, human resources and other support functions, depreciation of leasehold improvements and equipment, and laboratory and other supplies.
We use our employee and infrastructure resources across multiple research projects, including our drug development programs. We track expenses related to our clinical programs and certain preclinical programs on a per project basis.
We expect our research and development expenses to fluctuate in connection with our ongoing activities, particularly in connection with Study 041 and other studies for Translarna for the treatment of nmDMD, our activities under our splicing, gene therapy, Bio-e, metabolic and oncology programs and our studies of emvododstat for COVID-19 and performance of our post-marketing requirements imposed by regulatory agencies with respect to our products. The timing and amount of these expenses will depend upon the outcome of our ongoing clinical trials and the costs associated with our planned clinical trials. The timing and amount of these expenses will also depend on the costs associated with potential future clinical trials of our products or product candidates and the related expansion of our research and development organization, regulatory requirements, advancement of our preclinical programs, and product and product candidate manufacturing costs.
The following tables provide research and development expense for our most
advanced principal product development programs, for the three months ended
Three Months Ended March 31,
2022 2021
(in thousands)
Global DMD Franchise $ 17,694 $ 15,457
Metabolic 15,756 11,579
Gene Therapy 42,570 54,633
Bio-e 14,864 13,601
Oncology 6,255 3,151
Splicing 14,397 9,624
Emvododstat for COVID-19 2,348 10,874
Discovery 26,194 15,594
Total research and development
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The successful development of our products and product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:
? the scope, rate of progress and expense of our clinical trials and other
research and development activities;
? the potential benefits of our products and product candidates over other
therapies;
our ability to market, commercialize and achieve market acceptance for any of
? our products or product candidates that we are developing or may develop in the
future, including our ability to negotiate pricing and reimbursement terms
acceptable to us; ? clinical trial results;
? the terms and timing of regulatory approvals; and
? the expense of filing, prosecuting, defending and enforcing patent claims and
other intellectual property rights.
A change in the outcome of any of these variables with respect to the development of our products or product candidates could mean a significant change in the costs and timing associated with the development of that product or product candidate. For example, if the EMA or FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of any of our products or product candidates or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development. In addition, the uncertainty with respect to the duration, nature and extent of negative impacts of the COVID-19 pandemic and responsive measures relating thereto on our ability to successfully enroll our current and future clinical trials, has caused us to experience delays, and may cause us to experience further delays, in our clinical trials and regulatory submissions.
Selling, general and administrative expense
Selling, general and administrative expenses consist primarily of salaries and other related costs for personnel, including share-based compensation expenses, in our executive, legal, business development, commercial, finance, accounting, information technology and human resource functions. Other selling, general and administrative expenses include facility-related costs not otherwise included in research and development expense; advertising and promotional expenses; costs associated with industry and trade shows; and professional fees for legal services, including patent-related expenses, accounting services and miscellaneous selling costs.
We expect that selling, general and administrative expenses will increase in future periods in connection with our continued efforts to commercialize our products, including increased payroll, expanded infrastructure, commercial operations, increased consulting, legal, accounting and investor relations expenses.
Interest expense, net
Interest expense, net consists of interest expense from the liability for the sale of future royalties related to the Royalty Purchase Agreement, and from the Convertible Notes outstanding.
Critical accounting policies and significant judgments and estimates
Our management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which we have prepared in
accordance with generally accepted accounting principles in
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of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions.
During the three months ended
Results of operations
Three months ended
The following table summarizes revenues and selected expense and other income
data for the three months ended
Three Months Ended
March 31, Change
(in thousands) 2022 2021 2022 vs. 2021
Net product revenue $ 129,832 $ 91,280 $ 38,552
Collaboration revenue 7 20,007 (20,000)
Royalty revenue 18,896 6,655 12,241
Cost of product sales, excluding amortization
of acquired intangible asset 10,135 9,104 1,031
Amortization of acquired intangible asset 23,473 11,278 12,195
Research and development expense 140,078 134,513 5,565
Selling, general and administrative expense 73,271 61,095 12,176
Change in the fair value of deferred and
contingent consideration (11,700) 100 (11,800)
Interest expense, net (23,514) (19,159) (4,355)
Other expense, net (11,855) (10,884) (971)
Income tax expense (4,835) (451) (4,384)
Net product revenues. Net product revenues were
Collaboration revenues. Collaboration revenues were
Royalty revenue. Royalty revenue was
Cost of product sales, excluding amortization of acquired intangible asset. Cost
of product sales, excluding amortization of acquired intangible asset, were
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or 11%, from
Amortization of acquired intangible asset. Amortization of our intangible assets
was
Research and development expense. Research and development expense was
Selling, general and administrative expense. Selling, general and administrative
expense was
Change in the fair value of deferred and contingent consideration. The change in
the fair value of deferred and contingent consideration was a gain of
Interest expense, net. Interest expense, net was
Other expense, net. Other expense, net was
Income tax expense. Income tax expense was
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foreign jurisdictions, and our foreign tax liabilities are largely dependent upon the distribution of pre-tax earnings among these different jurisdictions.
Liquidity and capital resources
Sources of liquidity
Since inception, we have incurred significant operating losses.
As a growing commercial-stage biopharmaceutical company, we are engaging in
significant commercialization efforts for our products while also devoting a
substantial portion of our efforts on research and development related to our
products, product candidates and other programs. To date, almost all of our
product revenue has been attributable to sales of Translarna for the treatment
of nmDMD in territories outside of
We have historically financed our operations primarily through the issuance and sale of our common stock in public offerings, our "at the market offering" of our common stock, proceeds from the Royalty Purchase Agreement, the private placements of our preferred stock, collaborations, bank and institutional lender debt, convertible debt financings and grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates. We expect to continue to incur significant expenses and operating losses for at least the next fiscal year. The net losses we incur may fluctuate significantly from quarter to quarter.
In
In
In
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In
Cash flows
As of
The following table provides information regarding our cash flows and our capital expenditures for the periods indicated.
Three Months Ended
March 31,
(in thousands) 2022 2021
Cash (used in) provided by:
Operating activities (97,404) (100,157)
Investing activities 49,043 30,147
Financing activities 1,168 9,531
Net cash used in operating activities was
Net cash provided by investing activities was
Net cash provided by financing activities was
Funding requirements
We anticipate that our expenses will continue to increase in connection with our
commercialization efforts in
In addition, our expenses will increase if and as we:
? seek to satisfy contractual and regulatory obligations we assumed in connection
with the Agilis Merger;
? seek to satisfy contractual and regulatory obligations in conjunction with the
Tegsedi-Waylivra Agreement;
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? satisfy contractual and regulatory obligations that we assumed through our
other acquisitions and collaborations;
? execute our commercialization strategy for our products and product candidates
that may receive marketing authorization;
are required to complete any additional clinical trials, non-clinical studies
? or Chemistry, Manufacturing and Controls, or CMC, assessments or analyses in
order to advance Translarna for the treatment of nmDMD in
elsewhere;
? utilize the Hopewell Facility to manufacture program materials for certain of
our gene therapy product candidates;
initiate or continue the research and development of our splicing, gene
? therapy, Bio-e, metabolic and oncology programs and our studies of emvododstat
for COVID-19 as well as studies in our products for maintaining authorizations,
including Study 041, label extensions and additional indications;
? seek to discover and develop additional product candidates;
? seek to expand and diversify our product pipeline through strategic
transactions;
? maintain, expand and protect our intellectual property portfolio; and
add operational, financial and management information systems and personnel,
? including personnel to support our product development and commercialization
efforts.
We believe that our cash flows from product sales, together with existing cash and cash equivalents, including our offerings of the Convertible Notes, public offerings of common stock, our "at the market offering" of our common stock, proceeds from the Royalty Purchase Agreement and marketable securities, will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
Our future capital requirements will depend on many factors, including:
? our ability to commercialize and market our products and product candidates
that may receive marketing authorization;
our ability to negotiate, secure and maintain adequate pricing, coverage and
? reimbursement terms, on a timely basis, with third-party payors for our
products and products candidates;
our ability to maintain the marketing authorization for our products, including
in the EEA for Translarna for the treatment of nmDMD and whether the EMA
? determines on an annual basis that the benefit-risk balance of Translarna
supports renewal of our marketing authorization in the EEA, on the current
approved label;
? the costs, timing and outcome of Study 041;
the costs, timing and outcome of our efforts to advance Translarna for the
treatment of nmDMD in
? to perform additional clinical trials, non-clinical studies or CMC assessments
or analyses at significant cost which, if successful, may enable FDA review of
an NDA re-submission by us and, ultimately, may support approval of Translarna
for nmDMD in
? unexpected decreases in revenue or increases in expenses resulting from the
COVID-19 pandemic;
? our ability to maintain orphan exclusivity in
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? our ability to successfully complete all post-marketing requirements imposed by
regulatory agencies with respect to our products;
the progress and results of activities under our splicing, gene therapy, Bio-e,
? metabolic and oncology programs and our studies of emvododstat for COVID-19 as
well as studies in our products for maintaining authorizations, label
extensions and additional indications;
the scope, costs and timing of our commercialization activities, including
product sales, marketing, legal, regulatory, distribution and manufacturing,
? for any of our products and for any of our other product candidates that may
receive marketing authorization or any additional territories in which we
receive authorization to market Translarna;
the costs, timing and outcome of regulatory review of our splicing, gene
? therapy, Bio-e, metabolic and oncology programs and our studies of emvododstat
for COVID-19 and Translarna in other territories;
? our ability to utilize the Hopewell Facility to manufacture program materials
for certain of our gene therapy product candidates;
? our ability to satisfy our obligations under the indentures governing the
Convertible Notes;
? the timing and scope of growth in our employee base;
the scope, progress, results and costs of preclinical development, laboratory
? testing and clinical trials for our other product candidates, including those
in our splicing, gene therapy, Bio-e, metabolic and oncology programs;
? revenue received from commercial sales of our products or any of our product
candidates;
our ability to obtain additional and maintain existing reimbursed named patient
? and cohort EAP programs for Translarna for the treatment of nmDMD on adequate
terms, or at all;
the ability and willingness of patients and healthcare professionals to access
? Translarna through alternative means if pricing and reimbursement negotiations
in the applicable territory do not have a positive outcome;
the costs of preparing, filing and prosecuting patent applications,
? maintaining, and protecting our intellectual property rights and defending
against intellectual property-related claims;
the extent to which we acquire or invest in other businesses, products, product
candidates, and technologies, including the success of any acquisition,
? in-licensing or other strategic transaction we may pursue, and the costs of
subsequent development requirements and commercialization efforts, including
with respect to our acquisitions of Emflaza,
Censa and our licensing of Tegsedi and Waylivra; and
our ability to establish and maintain collaborations, including our
? collaborations with Roche and the
research funding and achieve milestones under these agreements.
With respect to our outstanding 2022 Convertible Notes, cash interest payments
are payable on a semi-annual basis in arrears, which require total funding of
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In addition, in the first quarter of 2022, we paid
We also have certain significant contractual obligations and commercial
commitments that require funding and we have disclosed these items under the
heading "Management's Discussion and Analysis of Financial Condition and Results
of Operations-Funding Obligations" in our 2021 Annual Report on Form 10-K. There
were no material changes to these obligations and commitments during the period
ended
We will need to generate significant revenues to achieve and sustain profitability, and we may never do so. We may need to obtain substantial additional funding in connection with our continuing operations. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs primarily through a combination of equity offerings, debt financings, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product and product candidates and marketing, distribution or licensing arrangements. Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
If we are unable to raise additional funds through equity, debt or other financings when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
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