The following discussion and analysis and the unaudited interim condensed consolidated financial statements included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto for the year endedDecember 31, 2021 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with theSecurities and Exchange Commission , orSEC , onMarch 3, 2022 .
Forward-Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Section 27A of the Securities Act of 1933, as amended, or the Securities Act. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our future results of operations and financial position, business strategies and plans, research and development plans, the anticipated timing, costs, design and conduct of our ongoing and planned preclinical studies and planned clinical trials for our product candidates, the timing and likelihood of regulatory filings and approvals for our product candidates, the impact of COVID-19 on our business, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements in this quarterly report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, "Risk Factors" of this report and Part I, Item 1A, "Risk Factors" in our most recent Annual Report on Form 10-K filed with theSEC onMarch 3, 2022 . The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Overview
We are a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutics in the disease areas of immunology, inflammation and oncology. We are developing seralutinib for the treatment of pulmonary arterial hypertension, or PAH. In the second quarter of 2022, we completed patient enrollment in our ongoing Phase 2 TORREY Study of seralutinib in PAH. We expect topline results from this clinical trial in the fourth quarter of 2022. Pending the outcomes of the topline results from the ongoing Phase 2 TORREY Study, we expect to initiate a registrational Phase 3 program in PAH in the third quarter of 2023. We are developing GB5121 for the treatment of relapsed / refractory primary CNS lymphoma, or PCNSL, and we commenced enrolling healthy volunteers in a Phase 1 clinical trial inNovember 2021 . We commenced the Phase 1b/2 STAR CNS Study in relapsed / refractory PCNSL and other rare CNS malignancies in the second quarter of 2022. We expect to release results from these open-label GB5121 clinical trials at relevant medical conferences as data become available. We are developing GB7208 for the treatment of multiple sclerosis. GB7208 is currently undergoing preclinical testing. Pending the outcomes of our ongoing GB7208 preclinical work and the seralutinib TORREY Phase 2 topline results, we expect to initiate a Phase 1 clinical trial in healthy volunteers in the first half of 2023. We also have multiple preclinical programs at various stages of development in the therapeutic areas of immunology, inflammation and oncology. We have assembled a deeply experienced and highly skilled group of industry veterans, scientists, clinicians and key opinion leaders from leading biotechnology and pharmaceutical companies, as well as leading academic centers from around the world. Our employees are a team of highly dedicated, passionate individuals who pride themselves on a culture of respect, humility, transparency, inclusion, dedication, collaboration and fun. Our ultimate goal is to enhance and extend the lives of patients. 21
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We were incorporated inOctober 2015 and commenced operations in 2017. To date, we have focused primarily on organizing and staffing our company, business planning, raising capital, identifying, acquiring and in-licensing our product candidates and conducting preclinical studies and early clinical trials. We have funded our operations primarily through equity and debt financings. We raised$942.0 million fromOctober 2017 throughJune 30, 2022 through Series A and B convertible preferred stock financings, a convertible note financing, our IPO completed inFebruary 2019 , proceeds from our Credit Facility, proceeds from our concurrent underwritten public offerings of 5.00% convertible Notes due 2027, and our common stock inMay 2020 . As ofJune 30, 2022 , we had$222.2 million in cash, cash equivalents and marketable securities. OnJuly 15, 2022 , we completed a private placement of 16,649,365 shares of our common stock at a purchase price of$7.21 per share. The aggregate gross proceeds for the private placement was approximately$120.0 million , before deducting offering expenses. We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future. For the three months endedJune 30, 2022 and 2021, our net loss was$56.5 million and$59.8 million , respectively. For the six months endedJune 30, 2022 and 2021, our net loss was$114.3 million and$117.5 million , respectively. As ofJune 30, 2022 , we had an accumulated deficit of$917.1 million . We expect our expenses and operating losses will increase substantially as we conduct our ongoing and planned clinical trials, continue our research and development activities and conduct preclinical studies, and seek regulatory approvals for our product candidates, as well as hire additional personnel, protect our intellectual property and incur additional costs associated with being a public company. In addition, as our product candidates progress through development and toward commercialization, we will need to make milestone payments to the licensors and other third parties from whom we have in-licensed or acquired our product candidates, including seralutinib. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending in particular on the timing of our clinical trials and preclinical studies and our expenditures on other research and development activities. We do not expect to generate any revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which we expect will take a number of years. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, until such time as we can generate substantial product revenues to support our cost structure, if ever, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise additional capital when needed, we could be forced to delay, limit, reduce or terminate our product candidate development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
COVID-19 Pandemic
As we continue to actively advance our programs, we are in close contact with our principal investigators and clinical sites and continue to assess any impacts of the ongoing COVID-19 global pandemic on our drug manufacturing, nonclinical activities, clinical trials, expected timelines and costs on an ongoing basis. In addition, while we are continuing the clinical trials we have underway in sites across the globe, COVID-19 precautions and related staffing shortages at sites and key vendors have delayed, such as the temporary closure of enrollment in 2020 at certain sites in our ongoing Phase 2 trial for seralutinib in PAH, and may continue to delay completion of our current and future trials and may directly or indirectly impact the timeline for data readouts, initiation of, as well as monitoring, data collection and analysis and other related activities for some of our current and future clinical trials. In light of recent developments relating to the COVID-19 pandemic, and consistent with theFDA's updated industry guidance for conducting clinical trials, clinical trials may be deprioritized in favor of treating patients who have contracted the virus or to prevent the spread of the virus. The direct and indirect impacts of COVID-19 on our business could alter our forecasted timelines, which could have a material adverse effect on our business, results of operations and financial condition. We will continue to evaluate the impact of the COVID-19 pandemic on our business.
Components of Results of Operations
Revenue
We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products for the foreseeable future.
Operating expenses
Research and development
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Research and development expenses relate primarily to preclinical and clinical development of our product candidates and discovery efforts, as well as our discontinued clinical product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.
Research and development expenses include or could include:
•salaries, payroll taxes, employee benefits, and stock-based compensation charges for those individuals involved in research and development efforts;
•external research and development expenses incurred under agreements with contract research organizations, or CROs, investigative sites and consultants to conduct our clinical trials and preclinical and non-clinical studies;
•laboratory supplies;
•costs related to manufacturing our product candidates for clinical trials and preclinical studies, including fees paid to third-party manufacturers;
•costs related to compliance with regulatory requirements; and
•facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance, equipment and other supplies. Our direct research and development expenses consist principally of external costs, such as fees paid to CROs, investigative sites and consultants in connection with our clinical trials, preclinical and non-clinical studies, and costs related to manufacturing clinical trial materials. We deploy our personnel and facility related resources across all of our research and development activities. We track external costs and personnel expense on a program-by-program basis and allocate common expenses, such as facility related resources, to each program based on the personnel resources allocated to such program. Stock-based compensation and personnel and common expenses not attributable to a specific program are considered unallocated research and development expenses. We plan to substantially increase our research and development expenses for the foreseeable future as we continue the development of our product candidates and conduct discovery and research activities for our preclinical programs. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate's commercial potential. We will need to raise substantial additional capital in the future.
Our clinical development costs may vary significantly based on factors such as:
•the costs incurred as a result of the COVID-19 pandemic, including clinical trial delays;
•per patient trial costs;
•the number of trials required for approval;
•the number of sites included in the trials;
•the countries in which the trials are conducted;
•the length of time required to enroll eligible patients;
•the number of patients that participate in the trials;
•the number of doses that patients receive;
•the drop-out or discontinuation rates of patients;
•potential additional safety monitoring requested by regulatory agencies;
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•the duration of patient participation in the trials and follow-up;
•the cost and timing of manufacturing our product candidates;
•the phase of development of our product candidates; and
•the efficacy and safety profile of our product candidates.
In process research and development
In process research and development, or IPR&D, expenses include IPR&D acquired as part of an asset acquisition or in-license for which there is no alternative future use, are expensed as incurred.
General and administrative
General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation, for personnel in executive, finance and other administrative functions. Other significant costs include facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs. We expect our general and administrative expenses will increase for the foreseeable future to support our expanded infrastructure and increased costs of operating as a public company. These increases will likely include increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing andSEC requirements, director and officer insurance premiums, and investor relations costs associated with operating as a public company.
Other income (expense), net
Other income (expense), net consists of (1) interest income on our cash, cash equivalents and marketable securities, (2) sublease income, (3) interest expense related to our Credit Facility and our 2027 Notes, and (4) other miscellaneous income (expense).
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles inthe United States , or GAAP. The preparation of these financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. During the six months endedJune 30, 2022 , there have been no significant changes in our critical accounting policies and estimates as discussed in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K filed with theSEC onMarch 3, 2022 .
Results of Operations - Comparison of the Three and Six Months Ended
The following table sets forth our selected statements of operations data for
the three months ended
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Table of Contents Three months ended June 30, 2022 vs 2021 2022 2021 Change (in thousands) Operating expenses: Research and development$ 42,580 $ 44,318 $ (1,738) In process research and development 15 15 - General and administrative 11,277 11,263 14 Total operating expenses 53,872 55,596 (1,724) Loss from operations (53,872) (55,596) 1,724 Other income (expense) Interest income 300 141 159 Interest expense (3,481) (4,834) 1,353 Other income 587 457 130 Total other expense, net (2,594) (4,236) 1,642 Net loss$ (56,466) $ (59,832) $ 3,366
The following table sets forth our selected statements of operations data for
the six months ended
Six months ended June 30, 2022 vs 2021 2022 2021 Change (in thousands) Operating expenses: Research and development$ 84,902 $ 86,145 $ (1,243) In process research and development 35 45 (10) General and administrative 23,278 22,609 669 Total operating expenses 108,215 108,799 (584) Loss from operations (108,215) (108,799) 584 Other income (expense) Interest income 524 334 190 Interest expense (6,948) (9,614) 2,666 Other income 388 606 (218) Total other expense, net (6,036) (8,674) 2,638 Net loss$ (114,251) $ (117,473) $ 3,222 Operating Expenses Research and development Research and development expenses were$42.6 million for the three months endedJune 30, 2022 , compared to$44.3 million for the three months endedJune 30, 2021 , for a decrease of$1.7 million , which was primarily attributable to a decrease of$4.6 million of costs associated with preclinical studies and clinical trials for GB004, a decrease of$1.9 million of costs associated with preclinical studies for other discontinued programs, and a decrease of$4.2 million of costs associated with preclinical studies and clinical trials for other programs, offset by an increase of$1.7 million of costs associated with preclinical studies and clinical trials for seralutinib, and an increase of$7.3 million of costs associated with preclinical studies and clinical trials for GB5121. Research and development expenses were$84.9 million for the six months endedJune 30, 2022 , compared to$86.1 million for the six months endedJune 30, 2021 , for a decrease of$1.2 million , which was primarily attributable to a decrease of$2.4 million of costs associated with preclinical studies and clinical trials for GB004, a decrease of$5.2 million of costs associated with preclinical studies for other discontinued programs, and a decrease of$9.5 million of costs associated with 25
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preclinical studies and clinical trials for other programs, offset by an
increase of
The following table shows our research and development expenses by program for
the three and six months ended
Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 (in thousands) Seralutinib$ 13,317 $ 11,646 $ 25,471 $ 22,313 GB5121 14,024 6,703 23,536 10,791 GB004 5,771 10,386 16,777 19,244 Other terminated programs 1,062 2,970 1,900 7,070 Other programs 8,406 12,613 17,218 26,727 Total research and development$ 42,580 $
44,318
In process research and development
There were no significant IPR&D expenses for the three and six months ended
General and administrative
General and administrative expenses were
General and administrative expenses were$23.3 million for the six months endedJune 30, 2022 , compared to$22.6 million for the six months endedJune 30, 2021 , for an increase of$0.7 million , which was primarily attributable to a$1.4 million increase in costs related to personnel, offset by a decrease of$0.7 million in general legal costs.
Other expense, net
Other expense, net was$2.6 million for the three months endedJune 30, 2022 , compared to other expense, net of$4.2 million for the three months endedJune 30, 2021 , for a decrease of$1.6 million , which was primarily attributable to a decrease in interest expense due to the adoption of ASU 2020-06.
Other expense, net was
Liquidity and Capital Resources
We have incurred substantial operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. As ofJune 30, 2022 , we had an accumulated deficit of$917.1 million . Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Under our license agreement withPulmokine , as well as our other license and acquisition agreements, we have payment obligations that are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sale of products developed under those agreements. As ofJune 30, 2022 , we were unable to estimate the timing or likelihood of achieving the milestones or making future product sales. Other contractual obligations include future payments under our Credit Facility, 2027 Notes and existing operating leases. 26
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From our inception throughJune 30, 2022 , our operations have been financed primarily by gross proceeds of$942.0 million from the sale of our convertible preferred stock, convertible promissory note, proceeds from our IPO, proceeds from our Credit Facility, and proceeds from our concurrent underwritten public offerings of 2027 Notes and common stock. As ofJune 30, 2022 we had cash, cash equivalents and marketable securities of$222.2 million . Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to capital preservation and liquidity. OnFebruary 12, 2019 , we closed our IPO and the underwriters in the IPO purchased 19,837,500 shares of our common stock, including the full exercise of their option to purchase additional shares of common stock. The net proceeds from the IPO were$291.3 million , after deducting underwriting discounts and commissions and estimated offering costs. In connection with the closing of the IPO, the outstanding shares of our convertible preferred stock were converted into shares of common stock at a ratio of 4.5-to-one. OnMay 2, 2019 , we entered into a credit, guaranty and security agreement, as amended onSeptember 18, 2019 andJuly 2, 2020 , pursuant to which the lenders party thereto agreed to make term loans available to us for working capital and general business purposes, in a principal amount of up to$150.0 million in term loan commitments, including a$30.0 million term loan which was funded at the closing date, with the ability to access the remaining$120.0 million in two additional tranches (each$60.0 million ), subject to specified availability periods, the achievement of certain clinical development milestones, minimum cash requirements and other customary conditions, or the Credit Facility. As ofJune 30, 2022 , no tranches under the Credit Facility were available to be drawn. OnApril 10, 2020 , we filed a registration statement on Form S-3, or the 2020 Shelf Registration Statement, covering the offering from time to time of common stock, preferred stock, debt securities, warrants and units, which registration statement became automatically effective onApril 10, 2020 . OnMay 21, 2020 , we issued$200.0 million aggregate principal amount 5.00% convertible senior notes due 2027 in a registered public offering. The interest rate on the 2027 Notes is fixed at 5.00% per annum. Interest is payable semi-annually in arrears onJune 1 andDecember 1 of each year commencing onDecember 1, 2020 . The total net proceeds from the 2027 Notes, after deducting the underwriting discounts and commissions and other offering costs, were approximately$193.6 million . Concurrent with the registered underwritten public offering of the 2027 Notes, we completed an underwritten public offering of 9,433,963 shares of our common stock. We received net proceeds of$117.1 million , after deducting underwriting discounts and commissions and other offering costs. Our concurrent offerings of 2027 Notes and common stock were registered pursuant to the 2020 Shelf Registration Statement. OnMarch 3, 2022 , we filed a registration statement on Form S-3 covering the offering from time to time of common stock, preferred stock, debt securities, warrants and units, which registration statement became automatically effective onMarch 3, 2022 . OnJuly 15, 2022 , we executed a stock purchase agreement for the private placement of 16,649,365 shares of our common stock. The aggregate gross proceeds for the private placement were approximately$120.0 million , before deducting offering expenses. Additional information about our long-term borrowings is presented in Note 5 "Indebtedness" to the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1, of this Form 10-Q, which is incorporated herein by this reference.
The following table shows a summary of our cash flows for each of the six months
ended
Six months ended
2022 2021 (in thousands) Net cash used in operating activities$ (102,305) $ (106,346) Net cash provided by (used in) investing activities 13,099 (38,108) Net cash provided by financing activities 742 1,045
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(687) (192)
Net decrease in cash, cash equivalents and restricted cash
$ (143,601) 27
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Operating activities
During the six months endedJune 30, 2022 , operating activities used approximately$102.3 million of cash, primarily resulting from a net loss of$114.3 million and change in accrued compensation and benefits of$3.2 million , prepaid expenses and other current assets of$4.0 million and accrued research and development expenses of$1.9 million , reduced by stock-based compensation expense of$21.0 million . During the six months endedJune 30, 2021 , operating activities used approximately$106.3 million of cash, primarily resulting from a net loss of$117.5 million and changes in operating assets and liabilities of$11.7 million , reduced by stock-based compensation expense of$16.8 million and amortization of debt discount and issuance costs of$3.3 million . Net cash used in changes in operating assets and liabilities consisted primarily of changes in accounts payable and accrued compensation and benefits.
Investing activities
During the six months endedJune 30, 2022 , investing activities provided approximately$13.1 million of cash, primarily resulting from the purchases of marketable securities of$72.6 million , offset by the maturities of marketable securities of$86.0 million . During the six months endedJune 30, 2021 , investing activities used approximately$38.1 million of cash, primarily resulting from the purchases of marketable securities of$49.9 million , offset by the maturities of marketable securities of$12.8 million . Financing activities During the six months endedJune 30, 2022 , financing activities provided$0.7 million of cash, primarily resulting from the purchase of shares pursuant to the ESPP and proceeds from the exercise of stock options. During the six months endedJune 30, 2021 , financing activities provided$1.0 million of cash, primarily resulting from the purchase of shares pursuant to the ESPP and proceeds from the exercise of stock options.
Funding requirements
Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities, and access to our Credit Facility, will be sufficient to fund our operations into the second quarter of 2024. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
Our future capital requirements will depend on many factors, including:
•the type, number, scope, progress, expansions, results, costs and timing of, our preclinical studies and clinical trials of our product candidates which we are pursuing or may choose to pursue in the future;
•the costs and timing of manufacturing for our product candidates;
•the costs, timing and outcome of regulatory review of our product candidates;
•the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;
•our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;
•the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase;
•the timing and amount of the milestone or other payments we must make to the licensors and other third parties from whom we have in-licensed our acquired our product candidates; 28
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•the costs and timing of establishing or securing sales and marketing capabilities if any product candidate is approved;
•our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;
•the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;
•costs associated with any products or technologies that we may in-license or acquire; and
•any delays and cost increases that result from the COVID-19 pandemic.
Until such time as we can generate substantial product revenues to support our cost structure, if ever, we expect to finance our cash needs through equity offerings, our Credit Facility, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could 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 and preferred equity 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 funds through collaborations, licenses and other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to raise additional capital when needed, we could be forced to delay, limit, reduce or terminate our product candidate development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
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