Item 1A. Risk Factors
We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties. Certain factors may have a material adverse effect on our business, financial condition and results of operations, and you should carefully consider them. Accordingly, in evaluating our business, we encourage you to consider the following discussion of risk factors, in its entirety, in addition to other information contained in this Annual Report and our other public filings with the SEC. Other events that we do not currently anticipate or that we currently deem immaterial may also affect our results of operations and financial condition.
Risks Related to Our Business
We are highly dependent on the successful commercialization of neffy. To the extent neffy and EURneffy are not commercially successful, our business, financial condition and results of operations would be materially adversely affected, and the price of our common stock would likely decline.
neffy is our only product that has been approved for sale. Currently, neffy has been approved for the emergency treatment of allergic reactions (anaphylaxis) in the United States, EU, United Kingdom, Japan and Australia (in the case of neffy 2 mg and 1 mg) and China (in the case of neffy 2 mg). We are focusing a significant portion of our activities and resources on neffy , and we believe our near-term revenues are highly dependent on, and a meaningful portion of the value of our company relates to, our ability to successfully commercialize neffy in the United States and abroad through our collaboration partners. Successful commercialization of neffy is subject to many risks. Prior to neffy , we have not, as an organization, commercialized any product, and there is no guarantee that we will be able to do so successfully with neffy . There are numerous examples of unsuccessful product launches and failures to meet high expectations of market potential, including by pharmaceutical companies with more experience and resources than we have. The commercial success of neffy depends on the extent to which patients and physicians accept and adopt neffy as a treatment of Type I allergic reactions, including anaphylaxis, and we do not know whether our or others’ estimates in this regard will be accurate. For example, if the population of patients who may suffer a Type I allergic reaction is smaller than we estimate or if physicians are unwilling to prescribe or patients are unwilling to use neffy for any reason, the commercial potential of neffy will be limited. It is too soon to tell how physicians, patients and payors will respond to the pricing of neffy . Physicians may not prescribe neffy and patients may be unwilling to use neffy if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost. Additionally, any negative development for neffy in post-approval trials or potential additional indications, including urticaria, or in regulatory processes in other jurisdictions, may adversely impact the commercial results and potential of neffy . Thus, significant uncertainty remains regarding the commercial potential of neffy . If the commercialization of neffy is unsuccessful or perceived as disappointing, our stock price could decline significantly and the long-term success of the product and our company could be harmed.
If we are unable to fully develop and maintain our sales, marketing and distribution capabilities on our own or through collaborations with marketing partners, we may not be successful in commercializing neffy.
We have built a sales force and entered into the ALK Co-Promotion Agreement to commercialize neffy in the United States. In order to successfully commercialize neffy , we must, among other things, continue to build our sales, marketing, distribution, managerial and other non-technical capabilities. Factors that may hinder our ability to successfully market and commercially distribute our products include:
inability of sales personnel to obtain access to or educate adequate numbers of physicians on the benefits and safety of prescribing neffy ;
inability to recruit, retain and effectively manage adequate numbers of effective sales personnel, including ALK U.S. sales personnel;
lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies that have more extensive product lines; and
unforeseen delays, costs and expenses associated with maintaining our sales organization and receive the intended benefits to be provided by the ALK Co-Promotion Agreement.
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If we are unable to maintain an effective sales force, including through the ALK Co-Promotion Agreement, for neffy , we may not be able to generate significant product revenue in the United States. In addition, until the commencement of our commercial launch in September 2024, no one in our sales force had promoted neffy . We are required to expend significant time and resources to train our sales force, including through the ALK Co-Promotion Agreement, to be credible in educating physicians and pharmacists on the benefits of neffy . In addition, we must continually train our sales force, including through the ALK Co-Promotion Agreement, to ensure that a consistent and appropriate message about neffy is being delivered to our potential customers. We currently have limited resources compared to some of our competitors, and the continued development of our own commercial organization to market neffy and any additional products we may develop or acquire will be expensive and time-consuming. We also cannot be certain that we will be able to continue to successfully develop this capability.
We have entered into the ALK Co-Promotion Agreement with ALK U.S. for the co-promotion of neffy to up to 9,000 specified pediatricians and other prescribers in the U.S. The commercial success of neffy in the United States, will be influenced in part by the efforts and allocation of resources by ALK U.S. Currently, ALK U.S. has limited experience promoting neffy , and while we will continue to work with ALK U.S. to optimize their commercialization activities, we cannot guarantee that such efforts will be successful. We also depend on ALK U.S. to comply with all applicable laws relative to the promotion of neffy . Because we do not control the individual efforts of ALK U.S., they may take actions or fail to take actions in a manner that is inconsistent with our interests. As a result, we may not realize the full potential benefits from the ALK Co-Promotion Agreement, and such actions or inactions could result in more limited or reduced sales, reputational harm, or regulatory or other adverse legal implications, any of which could adversely affect our business and results of operations.
We entered into exclusive licensing and collaboration agreements for the development and commercialization of neffy with Alfresa Pharma Corporation in Japan; Pediatrix Therapeutics, Inc. in China, Macau, Hong Kong and Taiwan; Seqirus in Australia and New Zealand; and ALK in all other unpartnered geographies outside the United States. If these third parties do not effectively engage or maintain their sales force for neffy if approved in the applicable territories, our ability to recognize milestone payments and royalties from the sales in such territories will be adversely affected.
We will need to continue to expend significant time and resources to train our sales forces to be credible in discussing neffy with the specialists treating the patients indicated under the product’s label. In addition, if we are unable to effectively train our sales force and equip them with effective marketing materials our ability to successfully commercialize neffy could be diminished, which would have a material adverse effect on our business, results of operations and financial condition.
neffy and our current and future intranasal epinephrine technology product candidates may fail to achieve the degree of market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or profits.
We have never commercialized a product before our U.S. commercial launch of neffy in September 2024, and neffy may fail to gain sufficient market acceptance by allergists, pediatricians and other physicians, patients, caregivers, third-party payors and others in the medical community. Physicians may be reluctant to prescribe neffy or our current and future intranasal epinephrine technology product candidates in place of well-established epinephrine intra-muscular injectable devices or other available treatments. Further, patients and caregivers may be reluctant to switch unless their physicians recommend switching products or are required to switch due to lack of coverage and adequate reimbursement. In addition, even though neffy has been determined to be safe and effective by the FDA and the EMA, safety or efficacy concerns in the medical community may hinder market acceptance.
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The degree of market acceptance of neffy and any future intranasal epinephrine technology product will depend on a number of factors, including:
the ability to provide acceptable evidence of safety and efficacy;
the potential advantages of the product compared to competitive therapies and our ability to successfully publicize these advantages or highlight them in any marketing materials;
the scope of the approved indication(s) for the product;
the inclusion of any warnings or contraindications in the product label;
the relative convenience and ease of administration;
the willingness of the target patient population to try, and of physicians to prescribe, the product;
the prevalence and severity of any adverse side effects;
the availability of alternative treatments and products from our competitors;
pricing and cost effectiveness, which may be subject to regulatory control;
changes in the standard of care for the targeted indications for the product;
effectiveness of our or our collaborators’ sales and marketing strategy; and
our ability to obtain sufficient third-party insurance coverage or adequate reimbursement levels.
The market for neffy and our intranasal epinephrine technology may be smaller than we expect.
We have focused our development of our intranasal epinephrine technology initially for the emergency treatment of Type I allergic reactions. We base our market opportunity estimates on a variety of factors, including our estimates of the number of people who have experienced severe Type I allergic reactions and are at risk of anaphylaxis, the continued growth rate of our patient population, the number of those in our patient population who we expect will fill a prescription for neffy , including those that currently do not fill prescriptions for epinephrine intra-muscular injectable devices or whose prescriptions have lapsed, the estimated increase in per patient device acquisition of neffy as compared to epinephrine intra-muscular injectable devices and the net sales of epinephrine intra-muscular injectable devices. These estimates are based on many assumptions and may prove incorrect, and new studies or market research may reduce our estimated patient population and potential sales. If our market opportunities are smaller than we expect, our future product revenues may be smaller than anticipated, which would adversely affect our business, financial condition, results of operations and prospects.
If we are unable to achieve and maintain adequate levels of third-party payor coverage and reimbursement for neffy on reasonable pricing terms, its commercial success may be severely hindered.
Successful sales of any approved products, including neffy , depend on the availability of adequate coverage and reimbursement from third-party payors. Patients who are prescribed medicine for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available. Even with coverage for neffy , the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high. Patients may not use neffy if coverage is not provided or reimbursement is inadequate to cover a significant portion of the cost of those products.
Payors may require documented proof that patients meet certain eligibility criteria in order to be reimbursed for neffy . Payors may even require that pre-approval, or prior-authorization, be obtained from the payor for reimbursement of neffy . Patients are unlikely to use neffy unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of neffy .
In addition, the market for neffy may depend significantly on access to third-party payors’ medical policies, drug formularies, or lists of medications for which third-party payors provide coverage and reimbursement. The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies, and we will be required to offer discounted rates to state Medicaid programs to ensure Medicaid coverage of our drugs. Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access to a branded drug when a less costly generic equivalent or other alternative is available, even if not approved for the indication(s) for which neffy is approved.
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Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. For example, the U.S. Department of Health and Human Services (“HHS”) imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. In addition, HHS has been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize neffy and any product candidates for which we receive approval, which could have an adverse effect on our operating results and our overall financial condition. The current environment is putting pressure on companies to price products below what they may feel is appropriate. Selling neffy at less than an optimized price could impact our revenues and overall as a company. In addition, in the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for neffy may differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and process that will require us to provide scientific and clinical support for the use of neffy to each payor separately, with no assurance that coverage will be obtained, or that payment levels will be adequate for neffy or any other products we may market. Further, coverage policies and third-party payor reimbursement rates may change at any time. Therefore, even if coverage and reimbursement status is for neffy or more products for which we receive marketing approval, less coverage policies and reimbursement rates may be implemented in the future. In addition, physicians may limit how much or under what circumstances they will prescribe or administer neffy , or any other products we may market, and patients may to purchase them. This in turn could affect our ability to commercialize neffy , or any other products we may market, and thereby impact our , results of operations, financial condition and future .
neffy has only been studied in a limited number of patients. neffy is now available to a much larger number of patients, and we do not know whether the results of neffy’s use in such larger number of patients will be consistent with the results from our clinical studies.
Prior to commercialization, neffy had been administered only to a limited number of patients in clinical studies. While the FDA and European Commission granted approval of neffy based on the data included in the NDA and marketing authorization application (“MAA”), respectively, we do not know whether the results when a large number of patients are exposed to neffy , including results related to safety and efficacy, will be consistent with the results from earlier clinical studies of neffy that served as the basis for the approval of neffy . New data relating to neffy may result in changes to the product label and may adversely affect sales, or result in withdrawal of neffy from the market. The FDA and regulatory authorities in other jurisdictions may also consider the new data in reviewing neffy ’s marketing applications for additional indications and/or in other jurisdictions, or impose post-approval requirements. If any of these actions were to occur, it could result in significant expense and delay or limit our ability to generate sales revenues.
Competitive products may reduce or eliminate the commercial opportunity for neffy or our current and future intranasal epinephrine technology product candidates. If our competitors develop technologies or product candidates more rapidly than us, or their technologies or product candidates are more effective or safer than ours, our ability to develop and successfully commercialize neffy and our current and future intranasal epinephrine technology product candidates may be adversely affected.
The clinical and commercial landscape for the emergency treatment of Type I allergic reactions is highly competitive and subject to significant technological change. Existing products have name recognition, are marketed by companies with established commercial infrastructures, and are marketed with greater financial, technical and personnel resources than we have. We also face competition with respect to our current indications for our intranasal epinephrine technology, including neffy , and will face competition with respect to any future indications of our intranasal epinephrine technology or other product candidates that we may seek to develop or commercialize in the future from large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions. Based on the initially approved indications for neffy , we anticipate that neffy will compete primarily against epinephrine intra-muscular injectable products, for the emergency treatment of Type I allergic reactions including EpiPen and its generics, which is marketed by Viatris, Inc. and Teva Pharmaceuticals, Inc.; Adrenaclick, which is marketed by Amneal Pharmaceuticals, Inc.; Auvi-Q, which is marketed by Kaleo, Inc.; and Symjepi, which is marketed by Sandoz, Inc., a Novartis division. Several other companies are also clinically developing larger dose intranasal epinephrine product candidates that may compete with neffy , including Bryn Pharma, Nasus Pharma, Hikma Pharmaceuticals, Inc. (previously INSYS Therapeutics, Inc.), Orexo AB and Belhaven BioPharma. Aquestive Therapeutics is developing a sublingual candidate based on a prodrug of epinephrine (Anaphylm), but received a Complete Response Letter in January 2026 regarding its new drug application for Anaphylm due to with their application. If our current and future intranasal epinephrine technology product candidates are approved for other indications, they would also compete with a range of other therapeutic treatments that are well established such as antihistamines or in development.
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Many of our potential competitors have substantially greater financial, technical, commercial and human resources than we do and significantly more experience in the discovery, development and regulatory approval of product candidates and the commercialization of those products. Accordingly, our competitors may be more successful than we may be in obtaining regulatory approval for therapies and achieving widespread market acceptance. Our competitors’ products may be more effective, safer, or more effectively marketed and sold, than any product candidate we may commercialize and may render neffy or our current and future intranasal epinephrine technology product candidates obsolete or non-competitive before we can recover development and commercialization expenses. In addition, our competitors may succeed in developing, acquiring or licensing technologies and drug products that are more effective or less costly than neffy or our current and future intranasal epinephrine technology product candidates, which could render such products or product candidates obsolete and noncompetitive.
We face competition based on many different factors, including the efficacy, safety and tolerability of neffy and our current and future intranasal epinephrine technology product candidates, the ease with which neffy and our current and future intranasal epinephrine technology product candidates can be administered, the scope of regulatory approval for neffy and our current and future intranasal epinephrine technology product candidates, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Such competitors could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan.
In addition, our competitors may obtain patent protection, regulatory exclusivities or regulatory approval and commercialize products more rapidly than we do, which may impact future approvals or sales of any of our products that receive regulatory approval. We will also be competing with respect to marketing capabilities and manufacturing efficiency for neffy as an early commercial stage product. We expect competition among future products, if any, will be based on product efficacy and safety, the timing and scope of regulatory approvals, availability of supply, marketing and sales capabilities, product price, reimbursement coverage by government and private third-party payors, regulatory exclusivities and patent position. Our profitability and financial position will suffer if our product or future products cannot compete effectively in the marketplace.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early commercial stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites, as well as in acquiring technologies complementary to, or necessary for, our activities.
If the FDA, the European Commission or other comparable foreign regulatory authorities approve generic versions of neffy or our current or future intranasal epinephrine technology product candidates that receives regulatory approval, or such authorities do not grant our products appropriate periods of non-patent exclusivity before approving generic versions of such products, the sales of such products could be adversely affected.
In the United States, once an NDA is approved, the product covered thereby becomes a “reference listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” or the Orange Book. The FDA may not finally approve an ANDA for a generic product or a Section 505(b)(2) NDA of a competitor until any applicable period of non-patent exclusivity and patent exclusivity for the reference listed drug in the Orange Book has expired. We have not received U.S. non-patent marketing exclusivity for neffy , which was approved by the FDA under the 505(b)(2) regulatory pathway. We have 8 patents with claims covering neffy listed in the Orange Book. Any applicant who files an ANDA seeking approval of a generic equivalent version of neffy or an NDA submitted under the 505(b)(2) regulatory pathway referencing neffy must make one of the following certifications to the FDA concerning the patents listed in the Orange Book for neffy : (a) the patents that are listed have expired; (b) the date on which such patents will expire; or (c) such patents are invalid or will not be infringed upon by the manufacture, use or sale of the generic equivalent version of neffy or the drug product submitted under the 505(b)(2) regulatory pathway referencing neffy . This last certification is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to us for each patent to which the ANDA or 505(b)(2) application refers. Following receipt of a paragraph IV notice, we may bring a lawsuit for patent the paragraph IV filer, and we may be entitled to a statutory 30-month stay of approval of the proposed product of the paragraph IV filer. We received paragraph IV certification notice letters from Lupin in August 2025 and February 2026, providing notification to us that Lupin submitted an ANDA to the FDA seeking approval to manufacture, use, or sell a generic version of neffy 2 mg and 1 mg, respectively. In February 2026, we filed a lawsuit Lupin in the United States District Court for the District of New Jersey, of certain of our patents and seeking a permanent market entry of a generic product from Lupin prior to the expiry of such patents. See Note 10 – Commitments and Contingencies to the consolidated financial statements in this Form 10-K for additional discussion. There is no guarantee that we will be in our lawsuit Lupin. Patent is expensive and time consuming, requires significant resources, may absorb significant time of our management and has an outcome. If we are in the lawsuit or if a generic competitor is found not to our patents, the resulting generic competition will likely affect our business, financial condition and results of operations.
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In support of an ANDA, a generic manufacturer generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration, and adequate labeling as the reference listed drug and that the generic version is bioequivalent to the reference listed drug, meaning, in part, that it is absorbed in the body at the same rate and to the same extent. Generic products may be significantly less costly to bring to market than the reference listed drug and companies that produce generic products are generally able to offer them at lower prices. Moreover, third-party insurers require, and many states allow or require, substitution of therapeutically equivalent generic drugs at the pharmacy level even if the branded drug is prescribed. Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference listed drug may be lost to the generic product.
Upon receiving a marketing authorization in the EU from the European Commission, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity. Data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product, after which a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU. The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those 10 years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data . Comparable regimes to those in the U.S. and EU exist in some other major markets, including the United Kingdom.
Obtaining regulatory approval of neffy or our current or future intranasal epinephrine technology product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval in other jurisdictions.
Even though we have obtained regulatory approval of neffy in the United States, the EU, and other foreign jurisdictions, including but not limited to the United Kingdom, China, Japan, and Australia, there is no guarantee that we will be able to maintain these regulatory approvals or obtain or maintain regulatory approval in any other jurisdiction. A failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even though the FDA and European Commission have granted marketing approval of neffy , comparable regulatory authorities in other foreign jurisdictions must also approve the manufacturing, marketing and promotion of neffy before it can be marketed in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States or the EU including additional nonclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States including certain jurisdictions in the EU, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.
We have submitted and plan to submit additional or supplemental marketing applications in the United States and in the EU. Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions and such regulatory requirements can vary widely from country to country. Obtaining other regulatory approvals and compliance with other regulatory requirements could result in significant delays, difficulties and costs for us and could require additional nonclinical studies or clinical trials, which could be costly and time-consuming and could delay or prevent the introduction of our products in certain countries. The foreign regulatory approval process involves all of the risks associated with FDA approval. We have one product approved for sale. We have limited experience in obtaining regulatory approval in domestic and international markets. If we or our collaboration partners fail to comply with the regulatory requirements in international markets and/or obtain and maintain applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of neffy will be harmed.
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If we are unable to successfully develop our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, or experience significant delays in doing so, the commercial potential of our current or future intranasal epinephrine technology product candidates or neffy will be more limited.
Successful continued development and ultimate regulatory approval of our current or future intranasal epinephrine technology product candidates and neffy for additional indications is important to the future success of our business. The future regulatory and commercial success of our current or future intranasal epinephrine technology product candidates and neffy for additional indications is subject to a number of risks, including the following:
successful completion of nonclinical studies and clinical trials;
successful patient enrollment in clinical trials;
successful data from our nonclinical studies and clinical trials that support an acceptable risk-benefit profile of our intranasal epinephrine technology in the intended populations and indications;
satisfaction of applicable regulatory requirements, including to satisfy applicable rules governing combination products;
potential unforeseen safety issues or adverse side effects;
receipt and maintenance of marketing approvals from applicable regulatory authorities;
remaining in compliance with post-marketing regulatory requirements;
obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our intranasal epinephrine technology;
making arrangements or maintaining existing arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our intranasal epinephrine technology;
entry into collaborations to further the development of neffy and our current and future intranasal epinephrine technology product candidates in other jurisdictions or for additional indications;
continuing to grow our sales, marketing and distribution capabilities and commercializing any approved products, whether alone or in collaboration with others;
successfully commercializing neffy and our current and future intranasal epinephrine technology product candidates;
acceptance by patients, the medical community and third-party payors of neffy and our current and future intranasal epinephrine technology product candidates;
obtaining and maintaining third-party coverage and adequate reimbursement;
products, following approval, maintaining a continued acceptable safety profile;
effectively competing with other therapies;
ensuring that we promote and distribute our products consistent with all applicable healthcare laws; and
enforcing and defending intellectual property rights and claims.
Many of these risks are beyond our control, including the risks related to clinical development, the regulatory submission and review process, maintaining regulatory approval, potential threats to our intellectual property rights and the manufacturing, marketing and sales efforts of any current or future collaboration partner. If we or a collaboration partner are unable to develop, receive regulatory approval for our intranasal epinephrine technology for the additional indications we are developing it for, including urticaria, or if we experience delays as a result of any of these risks or otherwise, our ability to grow our business will be limited.
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If the FDA does not conclude that our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if the requirements for such product candidates or additional indications under Section 505(b)(2) are not as we expect, the approval pathway for those product candidates or additional indications will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.
The Hatch Waxman Act added Section 505(b)(2) to the FDCA. Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if available to us, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development program for any additional indications by potentially decreasing the amount of nonclinical and/or clinical data that we would need to generate in order to obtain FDA approval. This pathway does not, however, expedite the FDA review process timelines.
If the FDA does not allow us to proceed under the Section 505(b)(2) regulatory pathway for our current or future intranasal epinephrine technology product candidates, or neffy for additional indications, we may need to conduct additional nonclinical studies and/or clinical trials, provide additional data and information, and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for any such product candidates or additional indications, including for urticaria, and complications and risks associated with such product candidates, would likely substantially increase. Moreover, inability to pursue the Section 505(b)(2) regulatory pathway could result in new competitive products reaching the market more quickly than any product candidates we develop, which could adversely impact our competitive position and prospects. We cannot assure you that our current or future intranasal epinephrine technology product candidates or neffy for additional indications will receive the requisite approval for commercialization.
In addition, notwithstanding the approval of a number of products by the FDA under Section 505(b)(2), certain pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may change its Section 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to certain requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. These requirements may give rise to patent litigation and mandatory delays in approval of our NDAs for up to 30 months or longer depending on the outcome of any litigation. It is not uncommon for a manufacturer of an approved product to file a citizen petition with the FDA seeking to delay approval of, or impose additional approval requirements for, pending competing products. If successful, such petitions can significantly , or even prevent, the approval of a new product. Even if the FDA ultimately such a petition, the FDA may substantially approval while it considers and responds to the petition. Finally, a competitor might receive FDA approval and obtain non-patent market before we obtain approval of any such product candidates or additional indications, including urticaria, which could approval of potential additional indications, including urticaria, for our intranasal epinephrine technology.
We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, further development and the commercialization of our current and future intranasal epinephrine technology product candidates.
To obtain the requisite regulatory approvals to market and commercialize our current and future intranasal epinephrine technology product candidate, including for urticaria, we must demonstrate through extensive nonclinical studies and clinical trials that such product candidates are safe and effective for their intended use in humans. Nonclinical and clinical testing are expensive and can take many years to complete, and their outcome is inherently uncertain. Failure can occur at any time during the clinical trial process and our future clinical trial results may not be successful.
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We may experience delays in completing our clinical trials or nonclinical studies and initiating or completing additional studies or clinical trials. We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize for our current and future intranasal epinephrine technology product candidates, including for urticaria, including:
regulators, IRBs, ethics committees or other reviewing bodies may not authorize or issue positive opinions permitting us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;
we may not reach an agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
a delay in receiving study or clinical trial material from outside the United States;
the number of subjects or patients required for clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria, may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;
our third-party contractors, including those manufacturing neffy or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
we may have to amend clinical trial protocol(s) submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to resubmit to an IRB or ethics committee and regulatory authorities for re-examination;
unforeseen safety events may occur during the course of a clinical trial and these events may result in the temporary suspension or termination of a clinical trial, or require urgent safety measures or restrictions to protect human subjects during the conduct of a clinical trial;
regulators, IRBs, ethics committees or other reviewing bodies may fail to approve or issue positive opinions or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we have entered and may enter into agreement for clinical and commercial supplies, or the supply or quality of our current and future intranasal epinephrine technology product candidates or other materials necessary to conduct clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria, may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and
the potential for policies or regulations of the FDA, the EMA, the EU or any other applicable foreign regulatory authorities to significantly change in a manner rendering our clinical data insufficient for approval.
Regulators, IRBs and ethics committees of the institutions in which clinical trials are being conducted, or data monitoring committees may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to appear to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Negative or inconclusive impressions of the results from our earlier clinical trials of neffy for the emergency treatment of Type I allergic reactions or any other clinical trial or nonclinical studies in animals that we have conducted, could mandate repeated or additional nonclinical studies or clinical trials and could delay marketing approvals or result in changes to or delays in nonclinical studies or clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria. While data from our studies of our intranasal epinephrine technology product candidates demonstrated nasally delivered epinephrine reached blood levels comparable to those of already approved epinephrine injectable products, we do not know whether any future clinical trials or studies that we may conduct will demonstrate adequate efficacy and safety necessary to result in obtaining regulatory approval to market our current and future intranasal epinephrine technology product candidates, including for urticaria. If later stage clinical trials do not produce favorable results that meet regulatory authority criteria, our ability to obtain regulatory approval for our current and future intranasal epinephrine technology product candidate, including for urticaria, may be adversely impacted.
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Our failure to successfully initiate and complete clinical trials of our current and future intranasal epinephrine technology product candidates, including for urticaria, and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market our current and future intranasal epinephrine technology product candidates, including for urticaria, would significantly harm our business. Our product candidate development costs will also increase if we experience delays in testing or regulatory approvals and we may be required to obtain additional funds to complete clinical trials. We cannot assure you that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our trials after they have begun. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our current and future intranasal epinephrine technology product candidates, including for urticaria, or allow our competitors to bring products to market before we do and impair our ability to commercialize such product candidates, which may our business and results of operations. In addition, many of the factors that cause, or lead to, of clinical trials may ultimately lead to the of regulatory approval of our current and future intranasal epinephrine technology product candidates, including urticaria.
We may not be successful in our efforts to expand our pipeline by identifying additional indications for which to investigate intranasal epinephrine technology in the future or by developing or acquiring new products or product candidates. We may expend our limited resources to pursue a particular indication or formulation for our intranasal epinephrine technology and fail to capitalize on product candidates, indications or formulations that may be more profitable or for which there is a greater likelihood of success.
Although neffy is approved for the emergency treatment of allergic reactions (anaphylaxis) in the United States, EU, United Kingdom, Japan and Australia (in the case of neffy 2 mg and 1 mg) and China (in the case of neffy 2 mg), as part of our longer-term growth strategy, we are evaluating and plan to continue to evaluate our intranasal epinephrine technology, including neffy , for use in other potential indications. We may evaluate opportunities to in-license or acquire other development programs, product candidates, as well as commercial products, including for the treatment of other indications like Type I allergic reactions. Other than our intranasal epinephrine technology, we do not currently have any other programs in development. Our development of our intranasal epinephrine technology for other indications remains at an early clinical development stage and will require significant further investment and regulatory approvals prior to commercialization in such indications. Because we have limited financial and managerial resources, we are focused on specific indications for our intranasal epinephrine technology. As a result, we may fail to generate additional clinical development opportunities for our intranasal epinephrine technology for a number of reasons, including, that our intranasal epinephrine technology may in certain indications, on further study, be shown to have harmful side effects, limited to no efficacy or other characteristics that suggest it is unlikely to receive marketing approval and market acceptance in such additional indications. In addition, we may forgo or pursuit of with other indications that could have had commercial potential or likelihood of . We may not be to develop our intranasal epinephrine technology for any additional indications based on resource allocation decisions and other reasons. Our resource allocation decisions may cause us to to capitalize on viable commercial products or market . Our spending on current and future research and development activities for specific indications may not yield any commercially viable products.
Research activities to identify additional indications for our intranasal epinephrine technology require substantial technical, financial and human resources. Additionally, any future potential indications for our intranasal epinephrine technology will require the selection of suitable patients for our clinical trials and additional clinical development, management of clinical, preclinical and manufacturing activities, obtaining regulatory approval, obtaining manufacturing supply, continued build out of a commercial organization, substantial investment and significant marketing efforts before we generate any revenues from product sales in such additional indications, if approved. We are not permitted to market or promote any future indications before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval. By such time, if ever, as we may receive necessary regulatory approvals for any potential additional indications for our intranasal epinephrine technology, including urticaria, the standard of care for such treatments may have evolved such that it would be necessary to modify our plans for full approval and commercial acceptance of such products may be limited by a change in the standard of care. Additionally, if we receive the necessary approval for any additional indications for our intranasal epinephrine technology, we may not realize the full potential benefits from the sale of our intranasal epinephrine technology for such indications due to our existing collaboration and marketing arrangements.
Even if we develop, license, or otherwise acquire potential product candidates or development programs, and obtain the required financing or establish a collaboration to enable us to conduct pre-clinical and clinical development of such product candidates, we cannot be certain that such development would be successful, or that we will obtain regulatory approval or be able to successfully commercialize any other product candidates and generate revenue. Further, even if any product candidate we develop or acquire was to receive marketing approval, we would continue to bear the risks that the FDA or similar foreign regulatory authorities could revoke, vary or suspend approval of our product candidate or that safety, efficacy, manufacturing or supply issues could arise with such product candidate.
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The results of early-stage clinical trials and preclinical studies may not be predictive of future results. Initial data in our clinical trials may not be indicative of results obtained when these trials are completed or in later stage trials.
The results of preclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials. In addition, initial data in clinical trials may not be indicative of results obtained when such trials are completed. There can be no assurance that any of our ongoing, planned or future clinical trials will ultimately be successful or support further clinical development or regulatory approval of our current or future intranasal epinephrine technology product candidates. There is a high failure rate for drugs and biologics candidates proceeding through clinical trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could have a material adverse effect on our business and operating results.
Interim topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
From time to time, we may publish interim topline or preliminary data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Preliminary or topline results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could significantly harm our reputation and business prospects.
neffy or our current or future intranasal epinephrine technology product candidates may cause undesirable side effects, adverse events, or have other properties that could delay or prevent its regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.
Undesirable side effects or adverse events caused by neffy or our current or future intranasal epinephrine technology product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay, denial, or withdrawal of regulatory approval by the FDA, the European Commission or comparable foreign regulatory authorities. Although our clinical studies to date have demonstrated that neffy is well-tolerated by patients with no serious treatment-related adverse events, and reported adverse events generally no more severe than grade 1 and comparable with injection products, and with no meaningful pain or irritation based on formal scoring, results of our ongoing or future clinical trials for neffy or our current or future intranasal epinephrine technology product candidates could reveal a high and and prevalence of side effects, events, or characteristics. Many compounds that initially showed promise in clinical or earlier stage testing are later found to cause or side effects or events that prevented further development of the compound.
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If unacceptable side effects or adverse events are observed following the commercialization of neffy or our current or future intranasal epinephrine technology product candidates, including for urticaria, we, the FDA or comparable foreign regulatory authorities, the IRBs, or independent ethics committees at the institutions in which our trials are conducted, or the independent safety monitoring committee could suspend or terminate our clinical trials or regulatory authorities could order us to cease clinical trials, restrict us or neffy or our current or future intranasal epinephrine technology product candidates, including withdrawing the marketing approval of neffy or our current or future intranasal epinephrine technology product candidates or deny approval for or all targeted indications. Treatment-emergent side effects and adverse events that are deemed to be drug-related could also affect subject recruitment or the ability of enrolled subjects to complete the trial or result in potential product liability claims, an unwillingness of physicians to prescribe neffy or our current or future intranasal epinephrine technology product candidates for approved indications, patients’ to purchase neffy or our current or future intranasal epinephrine technology product candidates, or payors’ willingness to cover neffy or our current or future intranasal epinephrine technology product candidates. side effects or events resulting from the use of neffy or our current or future intranasal epinephrine technology product candidates (whether by patients in our clinical studies or through the commercialization of neffy or our current or future intranasal epinephrine technology product candidates) could affect enrollment in clinical trials, regulatory approval and commercialization of neffy or our current or future intranasal epinephrine technology product candidates. Additionally, there may be findings regarding components of neffy or our current or future intranasal epinephrine technology product candidates by other parties. Any findings by third parties may impact neffy for its initially approved indications and labeling, or the future approvability or labeling of our current or future intranasal epinephrine technology product candidates, including for urticaria. In addition, all side effects and events may not be appropriately recognized or managed by the treating medical staff. training in recognizing or managing the potential side effects and events of neffy or our current or future intranasal epinephrine technology product candidates could result in patient or death. Any of these occurrences may our business, financial condition, and prospects significantly.
In addition, clinical trials of our intranasal epinephrine technology product candidates are and have been conducted in carefully defined sets of patients who have agreed to enter into clinical trials. Consequently, it is possible that our clinical trials, or those of any future collaborator, may indicate an apparent positive effect of our intranasal epinephrine technology product candidates that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.
Finally, our intranasal epinephrine technology product candidates are comprised of epinephrine and Intravail that is delivered via an intranasal device. Intra-muscular injection of epinephrine has been approved by the FDA and other regulatory authorities for the emergency treatment of Type I allergic reactions. In addition, Intravail has previously been included in the formulations of FDA approved products such as VALTOCO and TOSYMRA nasal sprays. The intranasal apparatus we use to deliver our intranasal epinephrine technology product candidates has been used to deliver several drugs approved by the FDA and other regulatory authorities, including VALTOCO, TOSYMRA and NARCAN. Even though neffy has received marketing approval for its initial indication, we are subject to the risks that the FDA, European Commission or similar regulatory authorities could revoke approval of intra-muscular epinephrine injection products, other drug formulations containing Intravail or utilizing the same intranasal apparatus, or that efficacy, manufacturing or supply issues could arise with epinephrine API, Intravail or our intranasal apparatus. This could result in our own products being removed from the market or being less commercially successful.
We may seek priority review by the FDA for potential additional indications, including urticaria, for our current or future intranasal epinephrine technology product candidates, and we may be unsuccessful. If we are successful, the designation may not actually lead to a faster development or regulatory review or approval process.
A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. We may in the future request priority review designation for potential additional indications, including urticaria, for our current or future intranasal epinephrine technology product candidates, however, we cannot assume that any application for priority review will meet the criteria for that designation. A product is eligible for priority review if it is designed to treat a serious condition, and if approved, would provide a significant improvement in the treatment, diagnosis or prevention of a serious condition compared to marketed products. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily mean a faster development or regulatory review or approval process or necessarily confer any advantage with respect to approval compared to standard FDA review and approval. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.
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Product liability lawsuits against us or any of our current and future licensing and collaboration partners could divert our resources and attention, cause us to incur substantial liabilities and limit commercialization of neffy or our current or future intranasal epinephrine technology product candidates.
We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing, commercialization, and use of pharmaceutical products. Currently, we have one product, neffy , that has been approved for commercial sale. The sale of neffy and the use of neffy by us and any current and future licensing and collaboration partners in clinical trials may expose us to liability claims. Product liability claims may be brought against us or our partners by participants enrolled in our clinical trials, patients, health care providers, pharmaceutical companies, our current and future licensing and collaboration partners or others using, administering, or selling any of our future products, if approved. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities or be required to limit commercialization of neffy or our current or future intranasal epinephrine technology product candidates. Regardless of the merits or eventual outcome, liability may result in:
decreased demand for neffy or our current or future intranasal epinephrine technology product candidates;
injury to our reputation;
withdrawal of clinical trial participants;
termination of clinical trial sites or entire trial programs;
significant litigation costs, including with respect to potential class action lawsuits;
substantial monetary awards to, or costly settlements with, patients or other claimants;
product recalls or a change in the indications for which they may be used;
loss of revenue;
diversion of management and scientific resources from our business operations; and
the inability to successfully commercialize neffy or our current or future intranasal epinephrine technology product candidates.
We face an inherent risk of product liability as a result of the commercialization and clinical testing of neffy or our current or future intranasal epinephrine technology product candidates. Although the clinical trial process is designed to identify and assess potential side effects and adverse events, clinical development does not always fully characterize the safety and efficacy profile of a new drug, and it is always possible that a drug, even after regulatory approval, may exhibit unforeseen side effects. If neffy or our current or future intranasal epinephrine technology product candidates causes adverse events or side effects, we may be exposed to substantial liabilities. Physicians may not prescribe or patients may not use neffy or our current or future intranasal epinephrine technology product candidates for its approved indications or in accordance with neffy ’s our current or future intranasal epinephrine technology product candidates’ instructions or any warnings that identify known potential adverse effects, side effects, and patients who should not use neffy or our current or future intranasal epinephrine technology product candidates. We are highly dependent upon consumer perceptions of us regarding the safety and efficacy of neffy and our current or future intranasal epinephrine technology product candidates. We could be affected if we are subject to publicity associated with illness or other effects resulting from patients’ use or of our products or any similar products distributed by other companies.
Although we maintain product liability insurance coverage in the amount of up to $10.0 million in the aggregate, including commercial product liability and clinical trial liability, this insurance may not fully cover potential liabilities that we may incur. The cost of any product liability litigation or other proceeding, even if resolved in our favor, could be substantial. In addition, insurance coverage is becoming increasingly expensive. If we are unable to maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims, it could prevent or inhibit the development and commercial production and sale of neffy or our current or future intranasal epinephrine technology product candidates, which could harm our business, financial condition, results of operations and prospects.
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If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.
In the ordinary course of our business, we and the third parties with whom we work collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, sensitive third-party data, business plans, transactions, and financial information (collectively, “sensitive data”). As a result, we and such third parties face a variety of evolving threats, including but not limited to ransomware attacks, which could cause security incidents. Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” actors, “hacktivists,” organized actors, personnel (such as through theft or ), sophisticated nation states, and nation-state-supported actors.
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, which could materially disrupt our systems and operations, supply chain, and ability to conduct our business.
We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as a fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident. Our efforts to do so may not be successful. Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions of our business. Threat actors may also gain access to other networks and systems after a compromise of our networks and systems. For example, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment, or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.
Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
In addition, our reliance on third-party service providers could introduce new or heightened cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions. We also rely on our licensing and collaboration partners, our CROs, third-party logistics providers, distributors and other contractors and consultants to utilize information technology systems and networks to process, transmit and store electronic information in connection with our business activities, including in connection with our clinical trials.
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Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third-parties with whom we work experience a security incident or other interruption, we could, and in certain cases have, experienced adverse consequences. While we may be entitled to damages if the third-parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised.
Any of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that have in the past and may in the future result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties with whom we work. For example, we have been the target of unsuccessful phishing attempts in the past, as well as successful phishing attempts that did not have a material adverse effect, and expect such attempts will continue in the future. In addition, we have become aware of certain security incidents whereby vendor email accounts have been hacked and the bad actors impersonated our vendors in email communications with us. None of these have had a material effect on our business. A security or other could our ability (and that of third parties with whom we work) to operate our business.
We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents. Additionally, certain data privacy and security obligations have required us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We take steps designed to detect, mitigate and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We have not and may not in the future, however, detect and remediate all such vulnerabilities, including on a timely basis. Vulnerabilities could be exploited and result in a security incident. Any unremediated critical or high risk vulnerabilities could pose material risks to our business. Further, we have and may in the future experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences.
If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may negatively impact our ability to operate our business. For example, the of clinical trial data from completed, ongoing or future clinical trials for neffy could result in in our development and regulatory approval efforts and significantly increase our costs to recover or reproduce the data. In addition, we may reputational or face or regulatory action as a result of cyber-attacks or other data security and may incur significant additional expense to implement further data protection measures.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. Relatedly, our contracts with third parties with whom we work may limit the types and/or amounts of damages that we can recover from those third parties, even where the third party is responsible for a privacy or cybersecurity incident or violation. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
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In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Additionally, our sensitive data could be leaked, disclosed, or revealed as a result of or in connection with the use of generative AI technologies by our employees, personnel, or vendors, which may constitute a cybersecurity incident or data breach, and which may adversely affect our business, operations, reputation, or financial condition.
International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.
We operate in a global economy, and our business depends on a global supply chain for the development, manufacturing, and distribution of neffy , and for the advancement of our clinical development programs. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty.
We source raw materials, active pharmaceutical ingredient (“API”) and other important components related to the manufacture of neffy and our intranasal epinephrine technology product candidates, including Intravail and our nasal sprayer apparatus, from international suppliers located in the European Union. Although we anticipate that our current supply of materials for neffy and our product candidates will be sufficient for at least the next 18-24 months, tariff policies, particularly those affecting the Europe Union and pharmaceutical products could materially increase our costs and reduce our margins, including as a result of our inability to adjust pricing in formulary-based markets. Recent and potential future changes in international trade policies, particularly regarding pharmaceutical-specific tariffs, present material risks to our operations and financial performance.
Recent policy discussions have included potential targeted tariffs or other trade measures specifically aimed at pharmaceutical products and ingredients as part of broader healthcare cost control or national security initiatives. Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Should additional tariffs be imposed, including those specifically targeting pharmaceutical imports, our production costs could rise significantly, and it would be difficult and costly to qualify alternative sources within another country with a lower tariff rate or within the United States, as developing and qualifying alternative sources typically requires at least 18-24 months and substantial investment and regulatory approvals. Moreover, the dynamic and unpredictable tariff and trade landscape creates substantial uncertainty and significant planning challenges for our operations. Changes in tariff classifications, country-of-origin requirements, or customs procedures can occur with limited notice. This uncertainty complicates our long-term investment decisions regarding manufacturing facilities, supply chain optimization, and research and development locations.
Unlike many industries, our ability to pass increased costs to customers is limited by the structure of pharmaceutical pricing and reimbursement systems. neffy is included in formularies with pricing established through annual or multi-year contracts with commercial, third-party payors and pharmacy benefit managers, and reimbursement methodologies established by government programs, such as Medicare. These arrangements typically include fixed pricing terms that were negotiated prior to the implementation of the recently announced tariffs. As a result, and depending on the timing and scope of the implementation of these tariffs, cost increases due to tariffs may be difficult or impossible to pass through to customers until the next negotiation cycle, which could be up to 36 months away.
Current or future tariffs may also result in increased research and development expenses, including with respect to increased costs associated with raw materials, API, laboratory equipment and research materials and components. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence and negatively impact our business, results of operations, financial condition and growth prospects.
The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks. In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.
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Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this report.
A pandemic, epidemic, or outbreak of an infectious disease may materially and adversely affect our business, including our nonclinical studies, clinical trials, third parties on whom we rely, our supply chain, our ability to raise capital, our ability to conduct regular business and our financial results.
We are subject to risks related to public health crisis and any efforts to halt the spread of any public health crises. For example, COVID-19 and policies and regulations implemented by governments in response to its outbreak, such as directing businesses and governmental agencies to cease non-essential operations at physical locations, prohibiting certain nonessential gatherings and ceasing non-essential travel had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages occurred, supply chains were disrupted, facilities and production were suspended, and demand for certain goods and services, such as medical services and supplies, spiked, while demand for other goods and services fell. We experienced certain impacts of COVID-19, including inability to conduct clinical trial site monitoring for certain earlier phase clinical trials and delays in completing clinical trials, bioanalytical sample analysis and study reports. There can be no guarantee we will not experience other impacts from other pandemics, epidemics or infectious disease outbreaks, such as being to further or pause enrollment, experiencing potential to our supply chain, facing or additional costs in enrolling patients in future clinical trials or being to full enrollment of our studies within the timeframes we anticipate, or at all. Additionally, pandemics, epidemics or other infectious disease outbreaks could have extensive impacts in many aspects of society and could result in significant to the global economy, as well as businesses and capital markets around the world. Other global health could also result in social, economic, and labor in the countries in which we or the third parties with whom we engage operate.
While we have been working closely with our third-party manufacturers, distributors and other partners to manage our supply chain activities and mitigate potential disruptions to the production of neffy or our current or future intranasal epinephrine product candidates as a result of pandemics, epidemics or other infectious disease outbreaks, if such a public health crisis were to persist for an extended period of time, there could be significant and material disruptions to our supply chain and operations, and associated delays in the manufacturing and supply of neffy or our current or future intranasal epinephrine product candidates. Any such supply disruptions, including disruptions in procuring items that are essential for our development activities and securing manufacturing slots for the products needed for such activities, could adversely impact our ability to initiate and complete nonclinical studies or clinical trials and generate sales of and revenue from neffy or our current or future intranasal epinephrine product candidates, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
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COVID-19 affected and other public health crises may in the future affect employees of third-party CROs located in affected geographies that we rely upon to carry out our clinical trials. If any future public health crisis is not contained, we may experience disruptions that could severely impact our business and clinical trials, including:
delays or difficulties in our commercialization efforts;
delays or difficulties in enrolling patients in our clinical trials;
delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;
diversion of healthcare resources away from the conduct of clinical trials, including the diversion of sites or facilities serving as our clinical trial sites and staff supporting the conduct of our clinical trials, including our trained therapists, or absenteeism that reduces site resources;
interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal, state or national governments, employers and others or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data;
risk that participants enrolled in our clinical trials will acquire a virus or illness while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events or patient withdrawals from our trials;
limitations in employee resources that would otherwise be focused on conducting our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;
delays in receiving authorizations from regulatory authorities to initiate our future clinical trials;
delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials;
interruption in global shipping that may affect the transport of clinical trial materials, such as neffy used in our clinical trials;
changes in local regulations as part of a response to the public health crisis which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or the discontinuation of the clinical trials altogether;
interruptions or delays in nonclinical studies due to restricted or limited operations at research and development laboratory facilities;
delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and
refusal of the FDA, the EMA or the other regulatory bodies to accept data from clinical trials in affected geographies outside the United States, the EU or other relevant local geographies.
Any negative impact a public health crisis has on patient enrollment or treatment, or the commercialization of neffy and the development of any additional indications could cause costly delays to clinical trial activities, which could adversely affect our ability to obtain regulatory approval for potential additional indications, including urticaria, for our current or future intranasal epinephrine technology product candidates, increase our operating expenses, which could have a material adverse effect on our financial results. COVID-19 caused significant volatility in public equity markets and disruptions to the United States and global economies and any future pandemic, epidemic, infectious disease outbreak or similar public health crisis could lead to market dislocation. Any such volatility and economic dislocation may make it more difficult for us to raise capital on favorable terms, or at all. If we or any of the third parties with whom we engage were to experience or other business , our ability to conduct our business in the manner and on the timelines presently planned could be materially and affected, which could have a material impact on our business and our results of operations and financial conditions. To the extent a future pandemic, epidemic, infectious disease outbreak or other public health affects our business and financial results, it may also heighten many of the other risks described in this “Risk Factors” section, such as those relating to the timing and completion of our clinical trials and our ability to obtain future financing.
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The FDA and other regulatory agencies actively enforce the laws and regulations relating to the promotion of our products.
If we are found to have improperly promoted uses of our products in the U.S., we may become subject to significant liability. Such enforcement has become more common in the industry. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription drug and device products. In particular, a product may not be promoted in a manner that results in the company making false or misleading claims. If the FDA determines that our or our partners’ public disclosures, promotional materials or training constitutes promotion of false or misleading claims, it could request modifications to disclosure policies, training or promotional materials or subject us or our partners to regulatory or enforcement actions, including the issuance of an untitled letter, a Warning Letter, injunction, seizure, civil fine or criminal penalties and a requirement for corrective advertising, including “Dear Doctor” letters. On September 9, 2025 and January 23, 2026, we received untitled letters from the Department of Human & Health Services regarding our television (“TV”) advertisements. The letters raised from the FDA that our advertisements made or , including with respect to suggesting the avoidance of injectable treatments for emergency treatment of allergic reactions and reducing needle- . We have since withdrawn the cited TV advertisements and are working directly with the FDA to address its . It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our or our partners’ promotional or training materials to constitute promotion of or which could result in significant civil, and/or administrative , , , , individual , exclusion from government-funded healthcare programs, such as Medicare and Medicaid, contractual , reputational , increased and profits and the or of operations, any of which could affect our or our partners’ ability to operate and, thus, impact our business and our financial results. The FDA or other enforcement authorities could also request that we enter into a consent decree or a corporate agreement or seek a permanent us under which specified promotional conduct is monitored, changed, or . If we cannot manage the promotion of our product in the U.S., we could become subject to significant liability, which would materially affect our business and financial condition.
The increasing use of social media platforms presents new risks and challenges.
Social media is increasingly being used to communicate about our clinical development activities and the indications our intranasal epinephrine technology product candidates has been approved to treat and is being developed to treat, and we intend to utilize appropriate social media in connection with our commercialization efforts for neffy . Advertising and promotional materials must comply with FDA rules concerning the advertising and promotion of our intranasal epinephrine technology product candidates and are subject to FDA review, in addition to other potentially applicable federal and state laws. Failure to comply with these regulations can result in warning letters and further liability if off-label promotion is involved. The FDA’s Office of Prescription Drug Promotion has sent warning letters to sponsors for alleged violative labeling and promotional materials, including those disseminated through social media. Social media practices in the biotechnology and biopharmaceutical industries continue to evolve and regulations and regulatory guidance relating to such use are evolving and not always clear. This evolution creates uncertainty and risk of noncompliance with regulations applicable to our business, resulting in potential regulatory actions against us, along with the potential for related to off-label marketing or other prohibited activities and heightened by the FDA, the Federal Trade Commission, the SEC and other regulators. For example, patients may use social media channels to comment on their experience in an ongoing clinical trial or to report an side effect or event. If such disclosures occur, there is a risk that trial enrollment may be impacted, that we may to monitor and comply with applicable event reporting obligations or that we may not be to our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about any potential additional indications. There is also a risk of disclosure of sensitive or confidential information or or posts or comments about us on any social networking website. In addition, we may encounter attacks on social media regarding us, our management or our current or future intranasal epinephrine technology product candidates. Moreover, information communicated on social media must take into consideration applicable rules governing the advertising and promotion of medicinal products. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, and comparative advertising and commercial practices. General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law. However, the details are governed by regulations in individual EU Member States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”), which may require approval by the competent national authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU. If any of these events were to occur or we otherwise to comply with applicable regulations, we could incur liability, face regulatory actions or incur other to our business.
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Risks Related to Our Results of Operations and Financial Position
We expect that our timing of sales and our results of operations will fluctuate for the foreseeable future, which may make it difficult to predict our future performance from period to period.
Our operating results have fluctuated in the past and are likely to do so in future periods, especially in the near term as we continue our ongoing commercial launch of neffy . Some of the factors that could cause our operating results to fluctuate from period to period include the factors described elsewhere in the “Risk Factors” section of this report as well as in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this report.
We believe that comparisons from period to period of our financial results are not necessarily meaningful and should not be relied upon as indications of our future performance.
We have incurred significant losses since our inception.
Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have one product approved for commercial sale and remain in the early stages of our commercialization efforts, and we will continue to incur significant expenses related to our commercialization activities, clinical development and ongoing operations. As a result, we have incurred significant losses in most periods since our inception. Since our inception, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, performing research and development activities, pre-commercialization activities, the commercial launch of neffy and providing general and administrative support for these operations. Our financial condition and operating results, including net losses, may fluctuate significantly from quarter to quarter and year to year. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance. Additionally, net losses and negative cash flows have had, and will continue to have, an effect on our stockholders’ equity and working capital. Our net for the year ended December 31, 2025 was $171.3 million. As of December 31, 2025, we had an accumulated of $294.6 million. We expect to continue to incur significant for the foreseeable future.
We anticipate that our expenses will increase substantially if and as we:
maintain and expand our sales, marketing, distribution, manufacturing, supply chain and other commercial infrastructure to support the commercialization of neffy and any other product candidates for which we may obtain regulatory approval;
continue to develop and conduct nonclinical studies and clinical trials for our current or future intranasal epinephrine technology product candidates and for neffy on a post-approval basis;
seek regulatory approvals in the United States and in other geographic regions for our current or future intranasal epinephrine technology product candidates;
seek to identify future product candidates;
experience any delays or encounter any issues with any of the above, including but not limited to failed studies, negative or mixed clinical trial results, safety issues or other regulatory challenges, the risk of which in each case may be exacerbated by tariffs, trade wars, geopolitical conflicts and a health epidemic or pandemic;
add clinical, scientific, operational, sales, financial and management information systems and personnel, including personnel to support our product candidate development and commercialization efforts and help us comply with our obligations as a public company;
incur and pay the interest expense under the Credit Agreement;
maintain, expand and protect our intellectual property portfolio; and
acquire or in-license other product candidates and technologies.
Our expenses could increase beyond our expectations if we are required by the FDA, the EMA or other regulatory authorities to perform clinical trials or conduct nonclinical studies in addition to those that we currently expect, or if there are any delays in completing our clinical trials or the development of our current or future intranasal epinephrine technology product candidates, or if we choose to develop or acquire any future product candidates. Our expenses could also increase significantly as a result of tariffs, trade wars and geopolitical conflicts.
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We may need additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development activities or commercialization efforts.
Our operations have consumed significant amounts of cash since inception. Based upon our current operating plan, we believe that our cash and cash equivalents will fund our operating and capital expenses for at least three years. We expect to incur significant expenses related to commercialization, such as product sales, medical affairs, marketing, manufacturing and distribution of neffy . Further, we expect to incur additional costs associated with operating as a public company. We may require significant additional amounts of cash in order to commercialize neffy for its currently approved indications in the United States, or for our current or future intranasal epinephrine technology product candidates which receive regulatory approval. In addition, other unanticipated costs may arise in the course of our continued development and commercialization efforts. Because the outcome of our commercialization efforts and continued development of our current or future intranasal epinephrine technology product candidates is highly uncertain, we cannot reasonably estimate the actual amounts of cash necessary to commercialize neffy for its approved indications in the United States, or any other indications we are pursuing.
Our future capital requirements depend on many factors, including:
the costs of commercialization activities for neffy for its approved indications and our current or future intranasal epinephrine technology product candidates that receives regulatory approval, to the extent such costs are not the responsibility of any current or future licensing and collaboration partners, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;
revenue received from commercial sales of neffy or any current or future intranasal epinephrine technology product candidates that receives regulatory approval;
the scope, progress, results and costs of researching and developing our intranasal epinephrine technology for potential additional indications, including urticaria;
the timing of, and the costs involved in, obtaining regulatory approval for the marketing of our current or future intranasal epinephrine technology product candidates and neffy for additional indications;
the amount and timing of potential royalty and milestone payments to our current or future licensing and collaboration partners;
the receipt of licensing fees, royalties and potential milestone payments under our current or future out-licensing arrangements;
the extent to which we in-license or acquire rights to other products, product candidates or technologies;
our headcount growth and associated costs as we expand our personnel, including personnel to support our product development and commercialization efforts and help us comply with our obligations as a public company;
our ability to service our current credit facility under the Credit Agreement and access, if and when needed, additional amounts of principal provided for under the Credit Agreement;
the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and
the ongoing costs of operating as a public company.
We cannot be certain that additional funding will be available on acceptable terms, or at all. The global credit and financial markets have experienced extreme volatility and disruptions and have been adversely impacted, and may continue to be adversely impacted or further adversely impacted, by macroeconomic factors such as tariffs, trade wars, inflation, high interest rates, recessionary concerns, recessions, bank failures, geopolitical conflicts and general economic uncertainty. If the equity and credit markets do not improve or further deteriorate, it may make any necessary debt or equity financing more difficult, more costly or more dilutive.
We believe that our existing cash and cash equivalents will be sufficient to fund our planned operations for at least three years. This estimate may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.
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We have no committed source of additional capital other than potential milestone payments, potential draw-downs under the Credit Agreement, each subject to its own conditions, and royalties under our collaboration and licensing agreements. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development and commercialization of neffy . We may need to seek licensing and collaboration partners for neffy for commercialization in additional indications on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to neffy in markets where we otherwise would seek to pursue development or commercialization ourselves. Any of the above events could significantly harm our business, prospects, financial condition, and results of operations.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidate.
We expect our expenses to increase in connection with our planned operations. Based upon our current operating plan, we believe that our cash and cash equivalents will fund our operating and capital expenses for at least three years. However, unless and until we can generate a substantial amount of revenue from our current or future intranasal epinephrine technology product candidates, we may seek to finance our future cash needs through public or private equity offerings, royalty-based or debt financings, collaborations, licensing arrangements or other sources, or any combination of the foregoing. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. On January 31, 2025, we entered into a Controlled Equity Offering SM Sales Agreement (the “ATM Sales Agreement”) pursuant to which we may from time to time offer and sell our common stock to or through Cantor Fitzgerald & Co., acting as sales agent, in any manner deemed to be an “at-the market offering”. We have filed a sales agreement prospectus with the SEC pursuant to which we may offer and sell up to $200.0 million of our common stock pursuant to the ATM Sales Agreement.
To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, stockholders’ interests may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect our stockholders’ rights. In addition, new debt financing, if available, may result in fixed payment obligations and may involve agreements that include restrictive covenants that further limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, which could adversely impact our ability to conduct our business. On September 29, 2025, we entered into the Credit Agreement, which subjects us to a number of restrictive covenants, including among others (subject to certain qualifications and exceptions), limitations on our ability to incur additional debt; create liens and encumbrances; merge, dissolve, liquidate or consolidate; make acquisitions, investments, or advances, dispose of or transfer assets, pay dividends, and enter into transactions with affiliates. In addition, securing financing could require a substantial amount of time and attention from our management and may a amount of their attention away from day-to-day activities, which may affect their ability to oversee the commercialization of neffy and the development and potential future commercialization of neffy or our intranasal epinephrine technology product candidates for additional indications.
If we raise additional funds through collaborations or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us.
Our Credit Agreement contains conditions and restrictions that limit our flexibility in drawing on the additional funds thereunder and in operating our business. We may be required to repay our outstanding indebtedness under the Credit Agreement earlier than we expect and possibly at a time when we do not have sufficient capital to meet such obligations if an event of default occurs (including a material adverse change affecting our business), which could have a material adverse effect on our financial condition and results of operations.
As of December 31, 2025, we had an outstanding principal balance under our Credit Agreement of $100.0 million. We may also draw, at our election, up to an additional (i) $25.0 million under the Term B Loan during the period commencing on the six-month anniversary of the Closing Date and ending no later than the one-year anniversary of the Closing Date, (ii) $25.0 million under the Term C Loan will be made available at our election during the period commencing on and including the Closing Date and ending no later than the two-year anniversary of the Closing Date, subject to the satisfaction of a certain revenue requirement under the Credit Agreement, and (iii) $100.0 million under the Term D Loan, subject to the consent of the Lenders. If we are unable to achieve the revenue requirement by the applicable date, we would be unable to borrow additional funds under the Term C Loan under the Credit Agreement, which could negatively impact our ability to fund our operations.
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Furthermore, the Credit Agreement contains various covenants that limit or restrict our ability to engage in specified types of transactions. Subject to certain exceptions, these covenants limit our ability to, among other things, incur additional indebtedness; create liens and encumbrances; merge, dissolve, liquidate or consolidate; make acquisitions, investments, or advances, dispose of or transfer assets, pay dividends, and enter into transactions with affiliates. The Credit Agreement also contains a minimum liquidity covenant that requires us to maintain at all times at least $25.0 million of unrestricted cash and cash equivalents. These covenants may limit our flexibility in operating our business and our ability to take actions that might be advantageous to us and our shareholders. In the case of a continuing event of default under the Credit Agreement, including an event of default that arises due to our failure to comply with the covenants (subject to applicable notice and grace periods), the Lenders under the Credit Agreement could elect to declare all amounts outstanding to be immediately due and payable, proceed the collateral in which we granted to the Lenders a security interest, or otherwise exercise the rights of a secured creditor. We are currently in compliance with the Credit Agreement covenants.
We cannot assure you that we will maintain a level of cash reserves or cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our existing or future indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, or that these actions would permit us to meet our scheduled debt service obligations. We may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and the Lenders could seek to enforce security interests in the collateral securing such indebtedness, which would harm our business and financial condition. We cannot be certain that future working capital, borrowings or equity financings will be available to repay or refinance our debt to the Lenders or any other debt we may incur in the future. To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness instead of funding working capital, capital expenditures or other general corporate purposes, we will be less to plan for, or react to, changes in our business, industry and in the economy generally. This may place us at a competitive compared to our competitors that have less indebtedness.
Changes in tax law could adversely affect our business and financial condition.
The rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service, the U.S. Treasury Department, and state and local taxing authorities. Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our common stock. In recent years, many such changes have been made and changes are likely to continue to occur in the future. For example, legislation informally titled the One Big Beautiful Bill Act (“OBBBA”) and the Inflation Reduction Act of 2022 (“IRA”) enacted many significant changes to the U.S. tax laws. Future guidance from the Internal Revenue Service and other tax authorities with respect to new and existing legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation. Future changes in tax laws could have a material adverse effect on our business, cash flow, financial condition, realization of tax assets or results of operations.
Our ability to use net operating loss carryforwards and certain other tax attributes may be limited.
We have incurred substantial losses during our history. Unused federal net operating losses (“NOLs”) for the tax years beginning before January 1, 2018, will carry forward to offset future taxable income, if any, until such unused losses expire. Unused federal NOLs generated in tax years beginning after December 31, 2017, will not expire and may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards is limited to 80% of taxable income. In addition, both current and future unused losses and other tax attributes may be subject to limitation under Sections 382 and 383 of the Code if we undergo an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in our equity ownership by certain stockholders over a three-year period. The Merger resulted in an ownership change of our company. The NOL carryforwards of pre-Merger, privately-held ARS Pharma may also be subject to limitation as a result of prior shifts in equity ownership and/or the Merger. Additional ownership changes in the future could result in additional limitations on our NOL carryforwards. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. In addition, at the state level, there may be periods during which the use of NOLs is or otherwise limited, which could accelerate or permanently increase state taxes owed. For example, California recently imposed limits on the usability of California state NOL carryforwards and certain state tax credits in tax years beginning after 2023 and before 2027. Consequently, even if we in the future, we may not be to utilize a material portion of our NOL carryforwards and other tax attributes, which could affect our business, cash flow, financial condition or results of operations.
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Risks Related to our Legal and Regulatory Environment
neffy and our current or future intranasal epinephrine technology product candidates are subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. neffy and our current or future intranasal epinephrine technology product candidates could be subject to post-marketing restrictions or withdrawal from the market and we, or any current or future licensing and collaboration partners, may be subject to substantial penalties if we, or they, fail to comply with regulatory requirements or if we, or they, experience unanticipated problems with our products following approval.
neffy and our current or future intranasal epinephrine technology product candidates, as well as, among other things, the manufacturing processes, post-approval studies, labeling, post-approval pharmacovigilance monitoring, advertising and promotional activities for neffy , is subject to ongoing requirements of and review by the FDA, the EMA and other applicable regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping. For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA and comparable foreign regulatory authorities of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States or relevant territory. We and our contract manufacturers will also be subject to user fees and periodic inspection by regulatory authorities to monitor compliance with these requirements and the terms of any product approval we may obtain. Even if regulatory approval of a product candidate is granted, the approval may be subject to on the indications or uses for which the product may be marketed or to the conditions of approval, including the requirement in the United States to implement a Risk Evaluation and Mitigation Strategy or the inclusion of a Boxed , which highlights a specific life- safety risk, or comparable foreign strategies and requirements.
The FDA or other regulatory authorities may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. For example, the FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling. Regulatory authorities impose stringent restrictions on manufacturers’ communications regarding off-label use. However, companies generally may share truthful and not misleading information that is otherwise consistent with a product’s approved labeling. If we, or any current or future licensing and collaboration partners, do not market neffy or our current or future intranasal epinephrine technology product candidates, for only its approved indications, we, or they, may be subject to warnings or enforcement action for off-label marketing if it is alleged that we are doing so. Violation of laws and regulations relating to the promotion and advertising of prescription drugs may lead to investigations or of of federal and state health care and laws and state consumer protection laws, including the Act and any comparable foreign laws. In the EU, the direct-to-consumer advertising of prescription-only medicinal products is prohibited. of the rules governing the promotion of medicinal products in the EU could be by administrative measures, and . These laws may further limit or restrict the advertising and promotion of our products to the general public, and may also impose on our promotional activities with health care professionals.
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In addition, later discovery of previously unknown side effects, adverse events or other problems with our products or their manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:
restrictions on the manufacturing of such products;
restrictions on the labeling or marketing of such products;
restrictions on product distribution or use;
requirements to conduct post-marketing studies or clinical trials;
warning letters or untitled letters;
withdrawal of the products from the market;
refusal to approve pending applications or supplements to approved applications that we submit;
recall of products;
restrictions on coverage by third-party payors;
fines, restitution or disgorgement of profits or revenues;
exclusion from federal health care programs such as Medicare and Medicaid or comparable foreign programs;
suspension, variation or withdrawal of regulatory approvals;
refusal to permit the import or export of products;
product seizure; or
injunctions or the imposition of civil or criminal penalties.
The FDA and other regulatory agencies also closely regulate and monitor the post-approval marketing and promotional claims that may be made about drug products to ensure that the product is not promoted in a manner that results in the company making false or misleading claims. If the FDA or other agency determines that any of our advertising or promotional claims are misleading, not substantiated or not permissible, we may be subject to enforcement actions, including warning letters, and we may be required to revise our promotional claims and make other corrections or restitutions.
Recently enacted and future legislation may increase the difficulty and cost for us to commercialize neffy or our current or future intranasal epinephrine technology product candidates and affect the prices we may obtain.
In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system, including cost-containment measures, that could reduce or limit coverage and reimbursement for newly approved drugs, prevent or delay marketing approval of neffy or our current or future intranasal epinephrine technology product candidates for potential additional indications, including urticaria, restrict or regulate post-approval activities and affect our ability to profitably sell neffy or our current or future intranasal epinephrine technology product candidates for which we obtain marketing approval.
For example, in 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), was signed into law. The ACA was intended, among other things, to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. Since its enactment, there have been amendments and judicial, executive and Congressional challenges to certain aspects of the ACA. For example, on July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies. It is unclear how any such , and the healthcare reform measures of the current administration will impact the ACA and our business.
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In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, additional changes include aggregate reductions to Medicare payments to providers of up to two percent per fiscal year pursuant to the Budget Control Act of 2011, which went into effect on April 1, 2013, and due to subsequent legislative amendments, will remain in effect until 2032, unless additional Congressional action is taken.
Recently there has also been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Presidential executive orders, congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
The current administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, the Centers for Medicare & Medicaid Services (“CMS”) and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, the current administration has announced agreements with pharmaceutical companies that require the drug manufacturers to offer, through a direct-to-consumer platform, U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions include, for example: (1) directing agencies to reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing “Most-Favored-Nation” pricing for pharmaceutical products; (3) imposing tariffs on imported pharmaceutical product; and (4) as part of the Make America Healthy Again Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress to enact “The Healthcare Plan,” to codify and expand Most- Nation pricing, lower government subsidies to private insurance companies, increase healthcare price , expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy manager payment methodologies, among other things. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and , while increasing their operational costs and compliance risks. If implemented, a “Most--Nation” pricing policy that is determined to apply to us and neffy based on a reference to the lowest ex-U.S. list price for our intranasal epinephrine product could significantly reduce the U.S. list price for neffy and likewise reduce our annual market for neffy in the United States. In June 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court reduced judicial deference to regulatory agencies, which could increase legal to federal regulations affecting our operations. Congress may introduce and ultimately pass healthcare related legislation that could, among others, impact the drug approval process, modify the Medicare Drug Price Negotiation Program, expand orphan drug exclusions, and reduce Medicaid enrollment and funding.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. As an example, the regulatory landscape related to clinical trials in the EU has evolved. The EU Clinical Trials Regulation (“CTR”), which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. The CTR allows sponsors to make a single submission to both the competent authority and an ethics committee in each EU Member State, leading to a single decision for each EU Member State. The assessment procedure for the authorization of clinical trials has been harmonized as well, including a joint assessment by all EU Member States concerned, and a separate assessment by each EU Member State with respect to specific requirements related to its own territory, including ethics rules. Each EU Member State’s decision is communicated to the sponsor via the centralized EU portal. Once the clinical trial is approved, clinical study development may proceed. The CTR foresaw a three-year transition period which ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR Compliance with the CTR requirements by us and our third-party service providers, such as CROs, may impact our developments plans.
In addition, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation. On April 10, 2024, the Parliament adopted its related position and on June 4, 2025, the European Council agreed on its position. The Council, the Parliament and the European Commission have begun trilogue negotiations with a view to reaching an agreement on the package. A decrease in data and market exclusivity opportunities for our current or future intranasal epinephrine technology product candidates in the EU could make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status.
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Following Brexit, the UK and the EU signed an EU-UK Trade and Cooperation Agreement (“TCA”) which became provisionally applicable on January 1, 2021 and entered into force on May 1, 2021. This agreement sets out some aspects of the UK and EU’s relationship post-Brexit. The TCA primarily focuses on ensuring free trade between the EU and the UK in relation to goods, including medicinal products. Among the changes that have occurred are that the UK is treated as a “third country”, a country that is not a member of the EU and whose citizens do not enjoy the EU right to free movement (Northern Ireland continues to follow certain limited EU regulatory rules, including in relation to medical devices, but not in relation to medicinal products). As part of the TCA, the EU and the UK recognize GMP inspections carried out by the other party and the acceptance of official GMP documents issued by the other party. The TCA also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures. Among the areas of absence of mutual recognition are batch testing and batch release. The UK has unilaterally agreed to accept EU batch testing and batch release. However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory. This means that medicinal products that are tested and released in the UK must be retested and re-released when entering the EU market for commercial use.
On February 27, 2023, the UK Government and the European Commission reached a political agreement on the so-called “Windsor Framework”. The Windsor Framework is intended to revise the Northern Ireland Protocol to address some of the perceived shortcomings in its operation. The agreement was adopted at the Withdrawal Agreement Joint Committee on March 24, 2023, and the arrangements under the Windsor Framework relating to medicinal products took effect on January 1, 2025. As it relates to marketing authorizations, the United Kingdom has a separate regulatory submission process, approval process and a separate national marketing authorization. Northern Ireland continued, until January 1, 2025, to be covered by the marketing authorizations granted by the European Commission but the Windsor Framework provides that the UK MHRA is the sole regulatory body responsible for granting marketing authorizations for Northern Ireland as of January 1, 2025.
A significant proportion of the regulatory framework in the UK applicable to medicinal products is currently derived from EU Directives and Regulations. The potential for UK legislation to diverge from EU legislation following Brexit could materially impact the regulatory regime with respect to the development, manufacture, import, approval, and commercialization of our product candidates in the UK or the EU.
All of these changes could increase our costs and otherwise adversely affect our business. Any delay in obtaining, or an inability to obtain, any regulatory approvals, as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the UK and restrict our ability to generate revenue and achieve and sustain profitability in the future. Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us. These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the impacted nations and the UK.
These laws and the regulations and policies implementing them, as well as other healthcare reform measures that may be adopted in the future, may have a material adverse effect on our industry generally and on our ability to successfully develop and commercialize neffy or our current or future intranasal epinephrine technology product candidates.
Disruptions at the FDA, including due to a reduction in the FDA’s workforce and/or inadequate funding for the FDA, could prevent the FDA from performing normal functions on which our business relies.
The ability of the FDA to review and approve new products or review other regulatory submissions can be affected by a variety of factors, including statutory, regulatory and policy changes, inadequate government budget and funding levels, a reduction in the FDA’s workforce and its ability to hire and retain key personnel. Disruptions at the FDA and other agencies may also increase the time to meet with and receive agency feedback, review and/or approve our submissions, conduct inspections, issue regulatory guidance, or take other actions that facilitate the development, approval and marketing of regulated products, which would adversely affect our business. In addition, government proposals to reduce or eliminate budgetary deficits may include reduced allocations to the FDA and other related government agencies. For example, government shutdowns and reductions in the FDA’s workforce and budgetary pressures could significantly impact the ability of the FDA to timely review and process our regulatory submissions or take other actions critical to the marketing of our products which could have a material adverse effect on our business.
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Governments outside the United States may impose strict price controls, which may adversely affect our revenues, if any.
In some countries, including certain Member States of the EU, the pricing of prescription drugs is, in part, subject to governmental control. Additional countries may adopt similar approaches to the pricing of prescription drugs. In such countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product. The EU provides options for the EU Member States to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU Member States may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU Member States allow companies to fix their own prices for drug products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after coverage and reimbursement have been obtained. Reference pricing used by various countries and parallel distribution, or arbitrage between low-priced and high-priced countries, can further reduce prices. In some countries, we may be required to conduct a clinical study or other studies that compare the cost-effectiveness of our current or future intranasal epinephrine technology product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval, which is time-consuming and . This Health Technology Assessment (“HTA”) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country. The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States. In December 2021, Regulation No 2021/2282 on HTA amending Directive 2011/24/EU, was adopted in the EU. This Regulation, which entered into in January 2022 and began to apply on January 12, 2025 through a phased implementation, is intended to cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the basis for cooperation at EU level for joint clinical assessments in these areas. The Regulation permits EU Member States to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas. Individual EU Member States continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement.
We cannot be sure that such prices and reimbursement will be acceptable to us. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If pricing is set at unsatisfactory levels or if reimbursement of our products is unavailable or limited in scope or amount, our revenues from sales by us or our strategic partners and the potential profitability of our current or future intranasal epinephrine technology product candidates in those countries would be negatively affected.
Our business activities may be subject to the FCPA and similar anti-bribery and anti-corruption laws of other countries in which we may operate, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to liability if we violate them.
If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate. Our business activities may be subject to the Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate. The FCPA generally prohibits companies and their employees and third-party intermediaries from offering, promising, giving or authorizing the provision of anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, hospitals owned and operated by the government, and doctors and other hospital employees would be considered foreign officials under the FCPA. Recently the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our employees, agents or contractors, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. of these laws and regulations could result in , sanctions us, our officers or employees, , and other sanctions and remedial measures, and prohibitions on the conduct of our business. Any such could include prohibitions on our ability to offer neffy in one or more countries and could materially our reputation, brand, international activities, ability to attract and retain employees, and business, prospects, operating results and financial condition.
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In addition, neffy or our current or future intranasal epinephrine technology product candidates may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations. Governmental regulation of the import or export of neffy or our current or future intranasal epinephrine technology product candidates, or our failure to obtain any required import or export authorization for neffy or our current or future intranasal epinephrine technology product candidates, when applicable, could harm our international sales and adversely affect our revenue. Compliance with applicable regulatory requirements regarding the export of neffy or our current or future intranasal epinephrine technology product candidates may create delays in the introduction of any additional indications in international markets or, in some cases, prevent the export of neffy or our current or future intranasal epinephrine technology product candidates to some countries altogether. Furthermore, U.S. export control laws and economic sanctions prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or of certain export privileges. Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons, or products targeted by such regulations, could result in decreased use of neffy or our current or future intranasal epinephrine technology product candidates by, or in our decreased ability to export neffy or our current or future intranasal epinephrine technology product candidates to existing or potential customers with international operations. Any decreased use of neffy or our current or future intranasal epinephrine technology product candidates or on our ability to export or sell neffy or our current or future intranasal epinephrine technology product candidates would likely affect our business.
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Our relationships with customers, health care professionals and third-party payors may be subject to applicable healthcare laws, which could expose us to penalties, including administrative, civil or criminal penalties, damages, fines, imprisonment, exclusion from participation in federal healthcare programs such as Medicare and Medicaid, reputational harm, the curtailment or restructuring of our operations and diminished future profits and earnings.
Healthcare professionals and third-party payors will play a primary role in the recommendation and prescription of neffy or our current or future intranasal epinephrine technology product candidates for which we obtain marketing approval. Our current and future arrangements with customers, healthcare professionals and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we conduct research, market, sell and distribute neffy or our current or future intranasal epinephrine technology product candidates for which we obtain marketing approval. Restrictions under applicable federal and state healthcare laws and regulations include the following, among others:
the federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Further a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
federal civil and criminal false claims laws, including the False Claims Act, prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a false claim paid. Over the past few years, several pharmaceutical and other healthcare companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, including: allegedly providing free items and services, sham consulting fees and grants and other monetary benefits to prescribers; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion that caused to be submitted to government healthcare programs for non-covered, off-label uses; and submitting inflated price information to the Medicaid Drug Rebate Program to reduce liability for Medicaid rebates. In addition, the government may assert that a claim including items or services resulting from a of the federal Anti- Statute constitutes a or claim for purposes of the federal Act;
federal civil monetary penalties laws impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies;
HIPAA which prohibits, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, of any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless or the payor (e.g., public or private), willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, or statement in connection with the delivery of or payment for healthcare benefits, items or services; like the federal Anti- Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to it in order to have committed a ;
the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the government information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;
the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” and their covered subcontractors that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
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federal price reporting laws require manufactures to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products;
federal and state consumer protection and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers; and
analogous state and foreign laws and regulations of each of the laws described above, such as anti-kickback and false claims laws, that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; laws that require biotechnology companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; laws that require biotechnology companies to report information on the pricing of certain drug products; and laws require the registration or pharmaceutical sales representatives. For example, in the EU, interactions between pharmaceutical companies and healthcare professionals and healthcare organizations are also governed by strict laws, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct both at EU level and in the individual EU Member States.
Because of the breadth of these laws and the narrowness of available statutory exceptions and regulatory safe harbors, it is possible that some of our business activities, particularly any sales and marketing activities from neffy or our current or future intranasal epinephrine technology product candidates that have been approved for marketing in the United States or elsewhere, could be subject to legal challenge and enforcement actions. If our operations, or those of our partners and collaborators, are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, exclusion from governmental health care programs, a corporate integrity agreement or other agreement to resolve allegations of non-compliance, , and the or of our operations, any of which could affect our ability to operate our business and our financial results.
We and the third parties with whom we work are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
In the ordinary course of business, we process sensitive data. Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM”) and the Telephone Consumer Protection Act of 1991 (“TCPA”) impose specific requirements on communications with customers. The TCPA, for example, imposes various consumer consent requirements and other restrictions on certain telemarketing activity and other communications with consumers by phone, fax or text message. TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities.
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Numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide any product that receives regulatory approval. Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the California Consumer Privacy Act of 2018 (“CCPA”) applies to personal information of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages. Although the CCPA and other comprehensive U.S. state privacy laws exempt some data processed in the context of clinical trials, these developments may further compliance efforts and increase compliance costs and potential liability for us and the third parties with whom we work. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
Additionally, we are subject to new laws governing the privacy of consumer health data, including reproductive, sexual orientation, and gender identity privacy rights. For example, Washington’s My Health My Data Act (“MHMD”) broadly defines consumer health data, places restrictions on processing consumer health data (including imposing stringent requirements for consents), provides consumers certain rights with respect to their health data, and creates a private right of action to allow individuals to sue for violations of the law. Other states are considering and may adopt similar laws.
Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the EU’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (collectively, “GDPR”) and Australia’s Privacy Act, impose strict requirements for processing personal data.
For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR. 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
Furthermore, we also conduct clinical trials in Asia and have operations in Japan and are subject to new and emerging data privacy regimes in Asia, including China’s Personal Information Protection Law, Japan’s Act on the Protection of Personal Information, and Singapore’s Personal Data Protection Act. China’s PIPL imposes a set of specific obligations on covered businesses in connection with their processing and transfer of personal data and imposes fines of up to RMB 50 million or 5% of the prior year’s total annual revenue of the violator.
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In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries. However, evolving privacy and security laws and regulations may impact our ability to transfer personal data from Europe and other jurisdictions to the United States or other countries, or may require us to take additional actions in order to continue or resume such cross-border data flows (such as implementing new processes or additional safeguards). Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, the EEA and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it believes are inadequate. Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers for relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can or rely on these measures to lawfully transfer personal data to the United States. If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too , we could face significant consequences, including the or of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial and , the to transfer data and work with partners, vendors and other third parties, and our processing or transferring of personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased from regulators, individual , and activities groups. Some European regulators have ordered certain companies to or permanently certain transfers of personal data out of Europe for the GDPR’s cross-border data transfer . Additionally, the U.S. Department of Justice issued a rule entitled the Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of or Covered Persons, which places additional restriction on certain data transactions involving countries of (e.g., China, Russia, Iran) and covered individuals(i.e., individuals and entities who are designated as such by the U.S. Attorney General or considered “foreign persons” and are majority owned by, organized under the laws of, a primary resident in, or a contractor of, a covered person or country of , as applicable) that may impact certain business activities such as vendor engagements, sale or sharing of data, employment of certain individuals, and investor agreements. of the rule could lead to significant civil and and . The rule applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted, which presents particular for companies like ours and may impact our ability to engage in transactions or agreements. with certain third parties in the future.
Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data, including clinical trials. Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.
We publish privacy policies, marketing materials, and other statements, such as statements related to compliance with certain certifications or self-regulatory principles, concerning data privacy, and security. Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
In addition, we are contractually subject to industry standards adopted by industry groups and, we are and may become in the future, directly subject to such obligations. We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
Further, our employees and personnel, and those of any third parties involved in our operations, including vendors, service providers, collaborators, contractors, and consultants, develop and/or use artificial intelligence or machine learning technologies, including generative artificial intelligence or automated decision-making tools (collectively, “AI technologies”) in the course of performing work for us. The disclosure and use of personal data in AI technologies is subject to various privacy laws and other privacy obligations and the disclosure and use of sensitive data in AI technologies may subject us to various legal, contractual, and reputational risks and liabilities. Governments have passed and are likely to pass additional laws and regulations regulating AI technologies. Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are unable to use or limited in our use of AI technologies, it could make our business less efficient and result in competitive disadvantages.
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However, use of AI technologies in connection with our confidential, proprietary, or otherwise sensitive information, including personal data, may result in leaks, disclosure, or otherwise unauthorized or unintended access to or use or other processing of such information, including incorporation of such information into the applicable AI technology system or use of such information to further refine and train the AI technology models. Any such access or use, or any improper or inappropriate use, of AI technologies could, for example, reveal trade secrets or other confidential information that may enable third parties to replicate or improve upon our technologies and programs, advance their technologies or programs more rapidly than we do, or otherwise negatively impact the value of, or our ability to obtain or maintain, intellectual property rights. Access to and use and other processing of personal data may subject us to risks and potential liability and obligations under applicable data privacy laws. Further, we may use the output of AI technologies in our technologies, programs, and other aspects of our business, and such output could incorporate third-party intellectual property, or we may otherwise be to own, protect, further develop, or ultimately use such output, which could significantly our business to the extent such technologies, programs, or other aspects of our business rely upon such output. Such output may also be , non-sensical, biased, or otherwise to our operations and business if incorporated therein. Further, our ability to use AI technologies or further develop or use its output may depend on access to specific third-party software and infrastructure, such as processing hardware or third-party artificial intelligence models, and we cannot control the availability or pricing of such software and infrastructure, especially in a highly competitive environment. We may also face novel and cybersecurity risks and emerging ethical risks relating to the use of AI technologies, which could affect our operations, assets, including intellectual property and data, and reputation, as well as those of any third parties involved in our operations. Use of AI technologies in general, and generative AI in particular, in our business could subject us to additional costs and expenses, , regulatory actions and , and other consequences. There is significant uncertainty with respect to the nature of the laws and regulations that have been and may in the future be adopted, including how such laws and regulations will be interpreted and applied, both within and outside of the U.S., with respect to the use of AI technologies in general, and generative AI in particular, including the ownership of or right to use the output of generative AI. We may need to expend significant resources to modify and maintain our business practices to comply with such laws and regulations and to otherwise ensure appropriate and lawful use of artificial intelligence technologies, including generative AI and its output, in our technologies, programs, and other aspects of our business.
Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources, which may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal or sensitive data on our behalf. In addition, these obligations may require us to change elements of our business model. We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations. If we or the third parties with whom we work fail, or are perceived to have , to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., , , , audits, inspections, and similar); (including class-action ) and mass arbitration demands; additional reporting requirements and/or oversight; or restrictions on processing personal data; orders to or not use personal data; and of company officials. In particular, have become increasingly more active in bringing privacy-related companies, including class and mass arbitration demands. Some of these allow for the recovery of statutory on a per basis, and, if viable, carry the potential for monumental statutory , depending on the volume of data and the number of .
Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: loss of customers; interruptions or stoppages in our business operations (including clinical trials); inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.
We will incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies.
We will continue to incur significant legal, accounting and other expenses associated with being a public company, including public company reporting requirements, costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act, as well as new requirements implemented by the SEC and Nasdaq. These rules and regulations are expected to continue to result in meaningful legal and financial compliance costs and to make some activities more time consuming and costly. These rules and regulations also may make it expensive for us to obtain directors’ and officers’ liability insurance.
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If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.
We maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage against potential liabilities. However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Environmental laws and regulations may impair our research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.
Risks Related to Our Dependence on Third Parties
We rely completely on third parties to manufacture and warehouse both our domestic and international supply of neffy and our current and future intranasal epinephrine technology product candidates.
We do not currently have, nor do we plan to acquire, the infrastructure or capability to manufacture or warehouse commercial quantities of neffy or our current or future intranasal epinephrine technology product candidates. Our ability to commercially supply neffy and our current or future intranasal epinephrine technology product candidates depends, in part, on the ability of third-party manufacturers to supply, manufacture and warehouse the raw materials, API and other important components related to the manufacture of our intranasal epinephrine technology product candidates, including Intravail and our nasal sprayer apparatus. We also rely on third parties to label and package the finished product. These third-party manufacturers currently have limited experience manufacturing our intranasal epinephrine technology product candidates, the raw materials and API for our intranasal epinephrine technology product candidates to be supplied to patients. While we will continue to work with our third-party suppliers and manufacturers to optimize the manufacturing process for neffy and our current or future intranasal epinephrine technology product candidates, we cannot guarantee that such efforts will be successful. If we fail to develop and maintain supply relationships with these third parties, we may be unable to successfully commercialize neffy and our current or future intranasal epinephrine technology product candidates.
In particular, we rely on third parties for the supply of our intranasal epinephrine technology product candidates unit dose nasal spray devices and glass microvials. We have entered into a manufacturing agreement with Renaissance Lakewood, LLC (“Renaissance”), which has been actively involved in supporting the manufacture of our intranasal epinephrine technology product candidates in our clinical development, and we will continue to rely on Renaissance as the primary source for drug product manufacturing and final packaging. Unless and until we can secure alternative sources, drug product manufacturing and final packaging, our dependence on Renaissance will subject us to the possible risks of shortages, interruptions, and price fluctuations.
If we experience supply interruptions or delays, or if a supplier discontinues the sale of certain products, we may have to obtain substitute materials or products, which in turn would require us to obtain amended or additional regulatory approvals, subjecting us to additional expenditures of significant time and resources. In addition, changes in our raw material suppliers could result in significant delays in production, higher raw material costs and loss of sales and customers, because regulatory authorities must generally approve raw material sources for pharmaceutical products, which may be time consuming. Any significant supply interruption effect on our business, condition (financial and otherwise). For example, drug application processes require specification of raw material suppliers, if raw materials from a specified supplier were to become unavailable, FDA or comparable foreign regulatory authority approval of a new supplier would be required. The amount of time required for the FDA or a comparable foreign regulatory authority to qualify a new supplier and confirm that our manufacturing processes meet the necessary standards could cause in the manufacturing and marketing of neffy and our current or future intranasal epinephrine technology product candidates and could, depending on the particular product, have a material effect on our results of operations and financial condition.
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We may be unable to maintain or establish required agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
the failure of the third party to manufacture neffy or our current or future intranasal epinephrine technology product candidates according to our schedule, or at all, including if our third-party contractors give greater priority to the supply of other products over our intranasal epinephrine technology product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them;
the delay or interruption of the production of neffy or our current or future intranasal epinephrine technology product candidates due to a third-party contractor or supplier discontinuing the sale of certain products, requiring us to obtain substitute materials or products;
the reduction or termination of production, raw materials, or deliveries by suppliers, or the raising of prices or renegotiation of terms;
the termination or nonrenewal of arrangements or agreements by our third-party contractors at a time that is costly or inconvenient for us;
the breach by the third-party contractors of our agreements with them;
the failure of third-party contractors to comply with applicable regulatory requirements, whether related to our intranasal epinephrine technology product candidates or another product;
the failure of the third party to manufacture our intranasal epinephrine technology product candidates, or the raw materials associated therewith, according to our specifications;
the mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or study drug or placebo not being properly identified;
clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and
the misappropriation of our proprietary information, including our trade secrets and know-how.
We do not have complete control over all aspects of the manufacturing process of, and are dependent on, our contract manufacturing partners for compliance with cGMP regulations for manufacturing both active drug substances and finished drug products. Third-party manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside of the United States. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications, including without limitation due to a change in raw materials supply, and the strict regulatory requirements of the FDA and other foreign regulatory authorities, this could affect the sales of neffy and our current or future intranasal epinephrine technology product candidates. In addition, other than to conduct audits, we have limited control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our current or future intranasal epinephrine technology product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, and/or raw material suppliers, which would significantly impact our ability to develop, obtain or maintain marketing approvals for and commercialize neffy or our current or future intranasal epinephrine technology product candidates. Our failure, or the of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including , , civil , application review , , variation or withdrawal of approvals, license , import alerts, seizures or of product candidates or drugs, operating restrictions and , any of which could significantly and affect supplies of neffy or our current or future intranasal epinephrine technology product candidates and our business and results of operations. Our current and anticipated future dependence upon others for the raw materials associated with, and the manufacture of neffy and our current or future intranasal epinephrine technology product candidates may affect our profit margins and our ability to commercialize neffy or our current or future intranasal epinephrine technology product candidates on a competitive basis.
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We are dependent on international third-party licensees and assignees for the development and commercialization of neffy and our current and future intranasal epinephrine technology product candidates outside the United States. If these third parties are not successful in their development and commercialization efforts or if these third parties fail to meet their contractual, regulatory or other obligations, our business and results of operations could be adversely affected.
We have entered into exclusive licensing and collaboration agreements with third-party partners for the development and commercialization of neffy and our current or future intranasal epinephrine technology product candidates worldwide, excluding the United States. As a result, we are dependent on these parties to, at times, achieve regulatory approval of neffy and our current or future intranasal epinephrine technology product candidates for marketing and, if approval is obtained, commercialize neffy and our current or future intranasal epinephrine technology product candidates outside the United States. The timing and amount of any milestone and royalty payments we may receive under these agreements, as well as the commercial success of neffy and our current or future intranasal epinephrine technology product candidates in those regions outside of the United States, will depend on, among other things, the efforts, allocation of resources and successful commercialization of neffy and our current or future intranasal epinephrine technology product candidates by our licensing and collaboration partners. We also depend on such licensing and collaboration partners to comply with all applicable laws relative to the development and commercialization of neffy and our current or future intranasal epinephrine technology product candidates in those countries. They may take actions or to take actions that result in safety issues with neffy and our current or future intranasal epinephrine technology product candidates in their licensed territory, and such safety issues could impact neffy and our current or future intranasal epinephrine technology product candidates in countries outside of the licensed territory. We do not control the individual efforts of our licensing and partners and have limited ability to these agreements or have assigned assets returned to us if such licensing and partners do not perform as anticipated.
The failure of our licensing and collaboration partners to devote sufficient time and effort to the development and commercialization of neffy and our current or future intranasal epinephrine technology product candidates; to meet their obligations to us, including for future royalty and milestone payments; to adequately deploy business continuity plans in the event of a crisis; to adequately respond to the adverse impact of military action, sanctions and market disruptions; and/or to satisfactorily resolve significant disagreements with us or address other factors could have an adverse impact on our financial results and operations. In addition, if these third parties violate, or are alleged to have violated, any laws or regulations during the performance of their obligations for us, including with respect to safety, patient and data privacy, , and and , it is possible that we could financial and reputational or other outcomes, including possible legal consequences and liabilities. We may not be in enforcing the terms and conditions of our licensing and agreements in court or via agreed upon resolution mechanisms, and even if we were to prevail in any such , the remedies may not be adequate to compensate us for the . Any , or expiration of some of these licensing or agreements could have a material effect on our financial position by reducing or eliminating the potential for us to receive license fees, milestones and royalties. In such an event, we may be required to devote additional efforts and to incur additional costs associated with pursuing regulatory approval and commercialization of neffy and our current or future intranasal epinephrine technology product candidates. Alternatively, we may attempt to identify and transact with a new assignee or licensee, but there can be no assurance that we would be to identify a suitable partner or transact on terms that are to us.
neffy and our current or future intranasal epinephrine technology product candidates are developed and produced at a few locations, and a business interruption at one or more of these locations or within our supply chain could have a material adverse effect on our business, financial position, and results of operations.
neffy and our current or future intranasal epinephrine technology product candidates are developed and produced at our third-party’s manufacturing facilities in Lakewood, New Jersey. Disruptions of these facilities or within our supply chain can occur for many reasons, including events unrelated to us or beyond our control, such as fires and other industrial accidents, floods and other severe weather events, natural disasters, environmental incidents or other catastrophes, utility and transportation infrastructure disruptions, shortages of raw materials, pandemic diseases or viral contagions, and acts of war or terrorism. Natural disasters and adverse weather conditions can be caused or exacerbated by climate change, and the spate of extreme weather events experienced during 2021 presents an alarming trend. During 2021, for example, Tropical Storm Ida brought extreme rainfall and flash flooding to New Jersey that caused damage to local businesses. Such events could compromise our inventory, resulting in significant costs. Furthermore, work , whether union-organized or not, can also operations. Business could also be caused by compliance . A significant at any of these facilities or otherwise within our supply chain, even on a short-term basis, could our ability to produce and ship products to the market on a timely basis or at all, which could have a material effect on our business, financial position, and results of operations.
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We rely on third parties to conduct our nonclinical studies and clinical trials. If these third parties do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, our development programs and our ability to commercialize neffy and our current or future intranasal epinephrine technology product candidates may be delayed.
We are dependent on third parties to conduct our nonclinical studies and any clinical trials. Specifically, we have used and relied on, and intend to continue to use and rely on, medical institutions, clinical investigators, CROs and consultants to conduct our nonclinical studies and past clinical trials in accordance with our clinical protocols and regulatory requirements. These CROs, investigators and other third parties play a significant role in the conduct and timing of these studies and trials. While we have and will have agreements governing the activities of our third-party contractors, we have limited influence over their actual performance. Nevertheless, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on our CROs and other third parties does not relieve us of our regulatory responsibilities. We and our CROs are required to comply with GCP requirements, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for any products or potential products in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our CROs or trial sites fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. In addition, our clinical trials must be conducted with products produced under cGMP regulations. Our to comply with these regulations may require us to repeat clinical trials, which would the regulatory approval process.
There is no guarantee that any of our CROs, investigators or other third parties will devote adequate time and resources to such trials or studies or perform as contractually required. If any of these third parties fail to meet expected deadlines, adhere to our clinical protocols or meet regulatory requirements, or otherwise perform in a substandard manner, our clinical trials may be extended, delayed or terminated. In addition, many of the third parties with whom we contract may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other development activities that could harm our competitive position. In addition, principal investigators for our clinical trials are expected to serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA or a comparable regulatory authority concludes that the financial relationship may have affected the interpretation of the study, the integrity of the data generated at the applicable clinical trial site may be and the utility of the clinical trial itself may be , which could result in the or by the FDA of any NDA we submit or of comparable applicable submitted to foreign regulatory authorities. Any such or could prevent us from commercializing neffy and our current or future intranasal epinephrine technology product candidates for potential additional indications, including urticaria.
Our CROs have the right to terminate their agreements with us in the event of an uncured material breach. In addition, some of our CROs have an ability to terminate their respective agreements with us if it can be reasonably demonstrated that the safety of the subjects participating in our clinical trials warrants such termination, if we make a general assignment for the benefit of our creditors or if we are liquidated. If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms or at all. Switching or adding additional CROs, investigators and other third parties involves additional cost and requires our management’s time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Though we carefully manage our relationships with our CROs, investigators and other third parties, there can be no assurance that we will not encounter or in the future or that these or will not have a material impact on our business, financial condition and prospects.
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Our reliance on third parties requires us to share our trade secrets, know-how and other proprietary information, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Because we currently rely on third parties to manufacture neffy and our intranasal epinephrine technology product candidates and to perform quality testing, we must, at times, share our proprietary information, including trade secrets and know-how, with them. We seek to protect our proprietary information, in part, by entering into confidentiality agreements, and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our current and future licensing and collaboration partners, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our proprietary information. Despite the contractual provisions employed when working with third parties, the need to share trade secrets, know-how and other proprietary information increases the risk that such proprietary information become known by our competitors, are intentionally or inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. We rely, in part, on trade secrets, know-how and other proprietary information to develop and maintain our competitive position and a competitor’s discovery of our proprietary information or other use or disclosure would our competitive position and may have a material effect on our business, financial condition, results of operations and prospects.
Risks Related to Our Intellectual Property
Our commercial success depends on our ability to obtain and maintain sufficient intellectual property protection for neffy, our current and future intranasal epinephrine technology product candidates and other proprietary technologies.
Our commercial success will depend, in part, on our ability to obtain and maintain patent protection in the United States and other countries with respect to neffy and our current or future intranasal epinephrine technology product candidates. If we are unable to obtain or maintain patent protection with respect to neffy and our current or future intranasal epinephrine technology product candidates, and its uses, our business, financial condition, results of operations and prospects could be materially harmed.
We generally seek to protect our proprietary position by filing or in-licensing patents or patent applications in the United States and abroad related to neffy and our current or future intranasal epinephrine technology product candidates that are important to our business, as appropriate. Our pending and future patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, patents issue from such applications, and then only to the extent the issued claims cover the technology. There can be no assurance that our patent applications will result in patents being issued or that issued patents will afford sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties. Even issued patents may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to or keep any competitive . This to obtain the intellectual property rights relating to our product could have a material effect on our financial condition and results of operations.
The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our potential future collaborators will be successful in protecting our intellectual property by obtaining and defending patents. Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications, or maintain and/or enforce patents that may issue based on our patent applications, at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development results before it is too late to obtain patent protection. Recent reforms and changes at government agencies of the United States and those of non-U.S. jurisdictions could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications, and the maintenance, enforcement, or defense of our issued patents. For example, the ability of the USPTO and other applicable patent authorities to properly administer their functions is highly dependent on the levels of funding available to the agency and their ability to retain key personnel and fill key appointments, among various factors. of employees or in replacing or hiring for key positions could significantly impact the ability of the USPTO and other applicable patent authorities to fulfill their functions and could impact our ability to timely and or maintain our patent applications, and our ability to timely and maintain, enforce, or our issued patents.
Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, independent contractors, advisors and other third parties, any of these parties may breach these agreements and disclose such results before a patent application is filed, thereby jeopardizing our ability to seek adequate patent protection.
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If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection, our ability to prevent our competitors from commercializing similar or identical product candidates would be adversely affected.
The patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation, resulting in court decisions, including United States Supreme Court decisions, which have increased uncertainties as to the ability to enforce patent rights in the future. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa.
Further, we may not be aware of all third-party intellectual property rights potentially relating to our research programs and product candidates, or their intended uses, and as a result the potential impact of such third-party intellectual property rights upon the patentability of our own patents and patent applications, as well as the potential impact of such third-party intellectual property upon our freedom to operate, is highly uncertain. Because patent applications are maintained as confidential for a certain period of time, until the relevant application is published, we may be unaware of third-party patents that may be infringed by commercialization of any future product candidates, and we cannot be certain that we were the first to file a patent application related to a product candidate or technology. Moreover, because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that any future product candidates may infringe. In addition, identification of third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent . There is also no assurance that there is not prior art of which we are aware, but which we do not believe is relevant to our business, which may, nonetheless, ultimately be found to limit our ability to make, use, sell, offer for sale or import our products that may be approved in the future, or our competitive position. In addition, third parties may obtain patents in the future and claim that use of our technologies upon these patents. As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain.
Our patents or pending patent applications, or the patents or pending patent applications that we license, may be challenged in the courts or patent offices in the United States and other foreign jurisdictions. We may, in the future, be subject to third-party pre-issuance submission of prior art to the U.S. Patent and Trademark Office (“USPTO”) or become involved in post-grant review procedures, derivations, reexaminations, or inter partes review proceedings, in the United States or oppositions or similar proceedings in foreign jurisdictions, challenging our patent rights. The legal threshold for initiating such proceedings may be low, so that even proceedings with a low probability of success might be initiated. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.
Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
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We may not be able to protect our intellectual property rights throughout the world, which could negatively impact our business.
Patents are of national or regional effect. Although as of December 31, 2025 we own, co-own or exclusively license eight issued U.S. patents, granted patents in each of Australia, Canada, China, Hong Kong, Israel, Japan, Mexico, Singapore, South Korea, and over thirty member states of the European Patent Organization, including the United Kingdom, directed to neffy and its uses, among other things, three pending U.S. patent applications, one pending international patent application and sixteen pending foreign patent applications directed to neffy and its uses, among other things, and a pending U.S. provisional patent application directed to intranasal epinephrine formulations and methods of their use, among other things, filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. Increased patent-related fees from the USPTO and patent offices in foreign countries may significantly increase our operating costs and limit our ability to protect our intellectual property. These increased costs may require us to be more selective in the inventions we choose to patent or the jurisdictions in which we seek protection. If we are unable to adequately fund our patent and maintenance, or if the costs of our patents third-party become prohibitive, our competitive position could be . Furthermore, these fee structures may incentivize our competitors to adopt more aggressive strategies, potentially increasing our legal expenses and the risk of being to exclude others from using our proprietary technology. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be to prevent third parties from practicing our in all countries outside the United States or from selling or importing products made using our in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise products to territories where we have patent protection, but enforcement is not as as that in the United States. These competitor products may compete with our product, and our patents or other intellectual property rights may not be or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be to obtain a significant commercial from the intellectual property that we develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our product. Accordingly, our efforts to protect our intellectual property rights in such countries may be , which may have an effect on our ability to commercialize neffy and our current or future intranasal epinephrine technology product candidates in all of our expected significant foreign markets.
Various countries outside the United States have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. As a result, a patent owner may have limited remedies in certain circumstances, which could materially diminish the value of such patent. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected. Accordingly, our efforts to protect or enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Furthermore, while we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our product. Accordingly, our efforts to protect our intellectual property rights in such countries may be , which may have an effect on our ability to commercialize neffy and our current or future intranasal epinephrine technology product candidates in all of our expected significant foreign markets.
Further, the standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably. As such, we do not know the degree of future protection that we will have on our technologies, products and product candidates. While we will endeavor to try to protect our technologies, products and product candidates with intellectual property rights such as patents, as appropriate, the process of obtaining patents is time-consuming, expensive and unpredictable.
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Further, geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors. Many foreign countries could impose retaliatory measures that may adversely impact our intellectual property rights in those countries. For example, Brazil enacted Law No. 15.122/2025 (known as the “Economic Reciprocity Law”), which provides a framework that allows for the suspension of obligations related to foreign entity’s intellectual property rights. Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.
Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
On September 16, 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) was signed into law in the United States. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first inventor to file” system in which, assuming that other requirements of patentability are met, the first inventor to file a patent application will be entitled to the patent regardless of whether a third party was first to invent the claimed invention. A third party that files a patent application in the USPTO after March 2013 but before we could therefore be awarded a patent covering any of our inventions even if we had made the invention before it was made by such third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. Furthermore, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our technology, or the technologies we license for our product, and the prior art allow the technology we use for neffy and our current or future intranasal epinephrine technology product candidates to be patentable over the prior art. Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we were the first to either file any patent application related to neffy and our current or future intranasal epinephrine technology product candidates or any of the claimed in our patents or patent applications.
The Leahy-Smith Act also included a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including Post Grant Review, Inter Partes Review, and derivation proceedings. An adverse determination in any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to our patent that would not have been if first by the third party as a in a district court action. Thus, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the of our patent applications and the enforcement or defense of our issued patents, all of which could have a material effect on our business, financial condition, results of operations and prospects.
Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect neffy and our current or future intranasal epinephrine technology product candidates.
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents relating to neffy and our current or future intranasal epinephrine technology product candidates. Obtaining and enforcing patents in the pharmaceutical industry involves both technological and legal complexity and is therefore costly, time consuming and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws, rules and regulations in the United States and other countries could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. We cannot predict the breadth of claims that may be allowed or enforced in the patents we own, co-own or license from third parties. In addition, U.S. Congress or other foreign legislative bodies may pass patent reform legislation that is unfavorable to us.
Depending on decisions by the U.S. Congress, the U.S. federal courts, the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce the existing patents we own, co-own or license and patents we or our licensors might obtain in the future. For example, the U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
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Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO, or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce the existing patents we own, co-own or license and patents that we or our licensors might obtain in the future.
As an example, beginning June 1, 2023, European patent applications and patents may be subjected to the jurisdiction of the Unified Patent Court (the “UPC”). Also, European patent applications will have the option, upon grant of a patent, of becoming a Unitary Patent, which will be subject to the jurisdiction of the UPC. The UPC and Unitary Patent are significant changes in European patent practice. As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation in the UPC.
In 2012, the European Union Patent Package (the “EU Patent Package”) regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European UPC for litigation involving European patents. The EU Patent Package was implemented on June 1, 2023. As a result, all European patents, including those issued prior to ratification of the EU Patent Package, now by default automatically fall under the jurisdiction of the UPC. It is uncertain how the UPC will impact granted European patents in the biotechnology and pharmaceutical industries. During the first seven years of the UPC’s existence, the UPC legislation allows a patent owner to opt its European patents out of the jurisdiction of the UPC. We may decide to opt out our future European patents from the UPC, but doing so may preclude us from realizing the benefits of the UPC. Moreover, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patents could remain under the jurisdiction of the UPC. The UPC will provide our competitors with a new forum to centrally revoke our European patents and allow for the possibility of a competitor to obtain pan-European injunction. Such a loss of patent protection could have a material impact on our business and our ability to commercialize our technology and product candidates due to increased competition and, resultantly, on our business, financial condition, prospects and results of operations.
Obtaining and maintaining patent protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or patent applications will be due to be paid to the USPTO and various foreign patent agencies at various stages over the lifetime of our patents and/or patent applications. We have systems in place to remind us to pay these fees, and we rely on our outside patent annuity service to pay these fees when due. In addition, the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply with these provisions. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If such an event were to occur, it could have a material adverse effect on our business. If we or our licensors to maintain the patents and patent applications covering our product, our competitors might be to enter the market, which would have a material effect on our business, financial conditions, results of operations and growth prospects.
Patent terms may be inadequate to protect our competitive position for neffy and our current or future intranasal epinephrine technology product candidates for an adequate amount of time and may adversely affect our anticipated future revenues and operating earnings.
We rely on patent, trademark, trade secret and other intellectual property protection in the discovery, development, manufacturing and sale of neffy and our current or future intranasal epinephrine technology product candidates. In particular, patent protection is important in the development and commercialization of our approved product candidates. Patents covering neffy and our current or future intranasal epinephrine technology product candidates normally provide market exclusivity, which is important in order for neffy and our current or future intranasal epinephrine technology product candidates to generate profits.
Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Given the amount of time required for the development, testing and regulatory review, patents protecting any future indications or any product candidates might expire before or shortly after commercialization. Even if patents covering any future indications or any future product candidates are obtained, once the patent life has expired, we may be open to competition from generic products. As a result, our patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
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The patents we currently own, co-own or exclusively license for neffy and our intranasal epinephrine technology product candidates are expected to expire as early as 2038, absent any patent term adjustments. The API in neffy and our intranasal epinephrine technology product candidates is epinephrine, a generic API that is used in FDA-approved intra-muscular injectables. Since neffy was approved by the FDA under the 505(b)(2) regulatory pathway, our U.S. patents for neffy are not eligible for patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984. While we are planning to seek additional patent coverage for neffy , there can be no assurances that such additional patent protection will be granted, or if granted, that these patents will not be infringed upon or otherwise held enforceable. Even if we are successful in obtaining a patent, patents have a limited lifespan. Without patent protection, we may be open to competition from generic versions of neffy .
We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue or that patents based on our patent applications will not be challenged and rendered invalid and/or unenforceable.
We own, co-own or exclusively license patent applications in our portfolio relating to neffy and our current or future intranasal epinephrine technology product candidates that are pending at the patent offices in the United States, Europe, Japan, and other foreign jurisdictions, however, we cannot predict:
if and when patents may issue based on the patent applications we own, co-own or exclusively license;
the scope of protection of any patent issuing based on the patent applications we own, co-own or exclusively license;
whether the claims of any patent issuing based on the patent applications we own, co-own or exclusively license will provide protection against competitors,
whether or not third parties will find ways to invalidate or circumvent our patent rights;
whether or not others will obtain patents claiming aspects similar to those covered by the patent applications we own, co-own or exclusively license;
whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose;
whether the patent applications that we own, co-own or exclusively license will result in issued patents with claims that cover neffy and our intranasal epinephrine technology product candidates or uses thereof; and/or
whether we may experience patent office interruption or delays to our ability to timely secure patent coverage to any potential additional indications or any future product candidates.
We cannot be certain that the claims in our pending patent applications directed to neffy and our current or future intranasal epinephrine technology product candidates will be considered patentable by the USPTO or by patent offices in foreign countries. One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention. There may be prior art of which we are not aware that may affect the patentability of our patent claims or, if issued, affect the validity or enforceability of a patent claim relevant to our business. There is no assurance that there is not prior art of which we are aware, but which we do not believe is relevant to our business, which may, nonetheless, ultimately be found to limit our ability to make, use, sell, offer for sale or import our products that may be approved in the future, or impair our competitive position. Even if the patents do issue based on the patent applications we own, co-own or exclusively license, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, or held unenforceable. Furthermore, even if they are unchallenged, patents in our portfolio may not exclude third parties from practicing relevant technology or prevent others from designing around our . If the breadth or of our intellectual property position with respect to any potential additional indications or any future product candidates is , it could dissuade companies from with us to develop, and our ability to commercialize, any additional potential indications or any future product candidates. In the event of or administrative proceedings, we cannot be certain that the in any of our issued patents will be considered valid by courts in the United States or foreign countries.
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We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent which might adversely affect our ability to develop and market neffy and our current or future intranasal epinephrine technology product candidates.
As the pharmaceutical industry expands and more patents are issued, the risk increases that neffy and our current or future intranasal epinephrine technology product candidates may be subject to claims of infringement of the patent rights of third parties. There can be no assurance that our operations do not, or will not in the future, infringe existing or future third-party patents. Identification of third-party patent rights that may be relevant to our operations is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to our operations or necessary for the commercialization of neffy and our current or future intranasal epinephrine technology product candidates in any jurisdiction.
Numerous U.S. and foreign patents and pending patent applications exist in our market that are owned by third parties. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products. We do not always conduct independent reviews of pending patent applications and patents issued to third parties. Patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Certain U.S. patent applications that will not be filed outside the U.S. can remain confidential until patents issue. In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived. Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, our products or the use of our products. As such, there may be applications of others now pending or recently revived patents of which we are . These patent applications may later result in issued patents, or the revival of previously patents that will prevent, limit or otherwise with our ability to make, use or sell neffy or our current or future intranasal epinephrine technology product candidates.
The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market neffy or our current or future intranasal epinephrine technology product candidates. We may incorrectly determine that our products are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market neffy or our current or future intranasal epinephrine technology product candidates. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market neffy or our current or future intranasal epinephrine technology product candidates.
We cannot provide any assurances that third-party patents do not exist which might be enforced against our current technology, including our research programs, product candidates, their respective methods of use, and manufacture thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant.
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If we are sued for infringing on the intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from developing or commercializing neffy or our current or future intranasal epinephrine technology product candidates.
Our commercial success depends, in part, on our ability to develop, manufacture, market and sell neffy and our current or future intranasal epinephrine technology product candidates without infringing the intellectual property and other proprietary rights of third parties. Third parties may allege that we have infringed or misappropriated their intellectual property. For example, on March 25, 2025, AptarGroup, Inc. and Aptar France SAS (collectively, “Aptar”) filed a suit against us in the United States District Court for the Southern District of New York, alleging that we violated the Defend Trade Secrets Act (18 USC § 1836), misappropriated trade secrets under New York state law, and committed various breaches of contract (the “Aptar Litigation”). We dispute these allegations and intend to vigorously ourselves in the Aptar . or other legal proceedings relating to intellectual property , with or without merit, is and generally expensive and time consuming and, even if resolved in our favor, is likely to significant resources from our core business, including our technical and management personnel from their normal responsibilities. Such or proceedings could substantially increase our operating and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such or proceedings. Some of our competitors may be to sustain the costs of such or proceedings more effectively than we can because of their financial resources and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent or other proceedings could have a material effect on our ability to compete in the marketplace. Additionally, caused by the federal agencies may increase the time period that we are subject to such .
There is a substantial amount of intellectual property litigation in the pharmaceutical industry, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to neffy or our current or future intranasal epinephrine technology product candidates. Third parties may assert infringement claims against us based on existing or future intellectual property rights. The pharmaceutical industry has produced a significant number of patents, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we were sued for patent infringement, we would need to demonstrate that neffy or our current or future intranasal epinephrine technology product candidates, or of use either do not infringe the patent claims of the relevant patent or that the patent are or unenforceable, and we may not be to do this. Proving of third-party patents may be and uncertain. Stricter procedural rules and increased discretionary at the USPTO may limit our ability to use inter partes review to third-party patents, potentially increasing our costs and risk of liability. These changes may result in our to patents asserted us by third parties, our increased legal expenses, the need to pay significant licensing fees by us, or us being from selling certain products. Furthermore, our to third-party patents through the Patent Trial and Appeal Board could affect our product development timelines and market share. Even if we are in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be in our rights in these proceedings, which could have a material effect on our business and operations. In addition, we may not have sufficient resources to bring these actions to a conclusion.
If we are found to infringe a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product. Alternatively, we may be required to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of could prevent us from commercializing neffy or our current or future intranasal epinephrine technology product candidates or us to some of our business operations, which could materially our business. that we have the confidential information or trade secrets of third parties could have a similar impact on our business.
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We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful and could result in a court or administrative body finding our patents to be invalid or unenforceable.
Even if the patent applications we own, co-own or license are issued, third parties may challenge or infringe upon our patents. To counter infringement, we may be required to file infringement claims, which can be expensive and time-consuming. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including novelty, non-obviousness (or inventive step), written description or enablement. In addition, patent validity challenges may, under certain circumstances, be based upon non-statutory obviousness-type double patenting, which, if , could result in a finding that the are for obviousness-type double patenting or the of patent term if a terminal is filed to obviate a finding of obviousness-type double patenting. Grounds for an unenforceability assertion could be an that someone connected with of the patent withheld information material to patentability from the USPTO, or made a statement, during .
Third parties may raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in the revocation or cancellation of or amendment to our patents in such a way that they no longer cover our current or future products or provide any competitive advantage. The outcome following legal assertions of invalidity and unenforceability is unpredictable. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we could lose part or all of the patent protection on one or more of our current or future products, which could result in our competitors and other third parties using our technology to compete with us. Such a of patent protection could have a material impact on our business, financial condition, results of operations, cash flows and prospects. Additionally, we may be subject to of patent during those proceedings, and caused by the federal agencies may increase the time period that we are subject to such . For example, administrative changes, including reduced staff and budgets experienced by the USPTO Patent and Trial Appeal Board, could further our ability to timely any such patents.
We may, in the future, be a party to other intellectual property litigation or administrative proceedings that are very costly and time-consuming and could interfere with our ability to sell and market our products. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations. In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us, especially as we gain greater visibility and market exposure as a public company.
In an infringement proceeding, even one initiated by us, there is a risk that a court will decide that our patents are not valid and that we do not have the right to stop the other party from using the inventions they describe. There is also the risk that, even if the validity of such patents is upheld, the court will refuse to stop the other party on the ground that such other party’s activities do not infringe our rights to these patents.
An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against competitors, affect our ability to receive royalties or other licensing consideration from our licensees, and may curtail or preclude our ability to exclude third parties from making, using and selling similar or competitive products. Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations, cash flows and prospects.
Competitors may infringe our patents, trademarks, copyrights or other intellectual property that relate to our research programs and product candidates, their respective methods of use, manufacture and formulations thereof. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both. In any patent proceeding, there is a risk that a court will decide that a patent that we own, co-own or have licensed is or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the at issue. There is also a risk that, even if the validity of our patents is upheld, the court will construe the of our patents narrowly or decide that we do not have the right to stop the other party from using the at issue on the grounds that our patent do not cover the at issue. An outcome in a or proceeding involving our patents could limit our ability to assert our patents those parties or other competitors, and may or our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could affect our competitive business position, business prospects and financial condition. Similarly, if we assert trademark , a court may determine that the marks we have asserted are unenforceable, or that the party whom we have asserted trademark has rights to the marks in . In this case, we could ultimately be to use of such trademarks and pay for .
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Even if we establish infringement by competitors, a court may decide not to grant an injunction against further infringing activity by competitors and instead award only monetary damages, which may or may not be an adequate remedy. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. Moreover, we cannot assure you that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such infringement claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any we receive as a result of the proceedings.
neffy or our current or future intranasal epinephrine technology product candidates may face competition from generic intranasal epinephrine products sooner than expected, and our patents may be challenged.
Our success will depend in part on our ability to obtain and/or maintain patent protection for neffy and our current or future intranasal epinephrine technology product candidates and related technologies and to prevent third parties from infringing upon our proprietary rights. We must also operate without infringing upon patents and proprietary rights of others, including by obtaining appropriate licenses to patents or other proprietary rights held by third parties, if necessary. Moreover, the patent applications we have filed or may file in the future may never yield patents that protect our inventions and intellectual property assets. Failure to obtain additional patent coverage and/or maintain existing patent protection for our formulations, methods of treatment, and/or technologies would limit our protection against generic drug manufacturers, pharmaceutical companies and other parties who may seek to copy our products, produce substantially similar products or use technologies substantially similar to those we own, co-own, or exclusively license.
We have not received U.S. non-patent marketing exclusivity for neffy , which was approved by the FDA under the 505(b)(2) regulatory pathway. Without non-patent marketing exclusivity for neffy , we may face competition by third parties seeking to market generic versions of neffy . Upon approval of neffy by the FDA, we listed 7 patents with claims covering neffy in the Orange Book. An eighth patent with claims covering neffy was subsequently listed in the Orange Book. Any applicant who files an ANDA seeking approval of a generic equivalent version of neffy or an NDA submitted under the 505(b)(2) regulatory pathway referencing neffy must make one of the following certifications to the FDA concerning the patents listed in the Orange Book for neffy : (a) the patents that are listed have expired; (b) the date on which such patents will expire; or (c) such patents are invalid or will not be infringed upon by the manufacture, use or sale of the generic equivalent version of neffy or the drug product submitted under the 505(b)(2) regulatory pathway referencing neffy . This last certification is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to us for each patent to which the ANDA or 505(b)(2) application refers. Following receipt of a paragraph IV notice, we may bring a lawsuit for patent the paragraph IV filer, and we may be entitled to a statutory 30-month stay of approval of the proposed product of the paragraph IV filer. We received paragraph IV certification notice letters from Lupin in August 2025 and February 2026, providing notification to us that Lupin submitted an ANDA to the FDA seeking approval to manufacture, use, or sell a generic version of neffy 2 mg and 1 mg, respectively. In February 2026, we filed a lawsuit Lupin in the United States District Court for the District of New Jersey, of certain of our patents and seeking a permanent market entry of a generic product from Lupin prior to the expiry of such patents. See Note 10 – Commitments and Contingencies to the consolidated financial statements in this Form 10-K for additional discussion. There is no guarantee that we will be in our lawsuit Lupin. Patent is expensive and time consuming, requires significant resources, may absorb significant time of our management and has an outcome. If we are in the lawsuit or if a generic competitor is found not to our patents, the resulting generic competition will likely affect our business, financial condition and results of operations. In general, although we expect to vigorously our patents from by third parties, there can be no assurances that we will be with respect to such defense or any other legal proceedings which may arise in the ordinary course of our business. Such a may have a material impact on our business, our results of operations, and our financial condition in the future.
In the EU, we received non-patent marketing exclusivity for EURneffy , which received marketing authorization grounded on Article 8(3) of Directive 2001/83/EC by the European Commission. EURneffy received an eight-year period of data protection whereby another applicant cannot rely the data submitted as part of the EURneffy marketing authorization application, and a ten-year period of marketing protection during which a generic, hybrid or biosimilar cannot be placed on the market in the EU.
Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.
Because of the expense and uncertainty of litigation, we may conclude that even if a third party is infringing any one of our issued patents or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such an infringement claim or action may be too high or not in the best interest of our company or our stockholders. In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution.
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Intellectual property litigation may lead to unfavorable publicity that harms our reputation.
During the course of any intellectual property litigation, there could be public announcements of the initiation of the litigation as well as results of hearings, rulings on motions, and other interim proceedings in the litigation. Such announcements could harm our reputation, the perceived value of our intellectual property or the market for our existing or future products, which could have a material adverse effect on our business.
We may become subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
We may be subject to claims that former employees, consultants, independent contractors, collaborators or other third parties have an interest in our patents or other intellectual property as an owner, co-owner, inventor or co-inventor. The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable. Inventorship disputes may arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing neffy or our current or future intranasal epinephrine technology product candidates or as a result of questions regarding co-ownership of potential joint inventions. Litigation may be necessary to these and other inventorship and/or ownership. Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property. If we in any such , in addition to paying monetary , we may intellectual property rights, such as ownership of, or right to use, intellectual property. Such an outcome could have a material effect on our business. Even if we are in such , could result in substantial costs and be a to management and other employees.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
We have registered and pending trademarks in the United States, as well as in several foreign jurisdictions, including but not limited to the United Kingdom, EU, and Japan. We may not be able to obtain applicable corresponding health regulatory approval to use these trademarks for our product. Our trademarks or trade names may be refused, challenged, infringed, circumvented, declared generic or descriptive, or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. We may not be able to register or use our trademarks in all relevant jurisdictions. During trademark registration proceedings, we may receive rejections. Although we would be given an opportunity to respond to or appeal those , we may be to such . In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an to pending trademark applications and to seek to registered trademarks. or proceedings may be filed our trademarks, and our trademarks may not survive such proceedings. If we are to register or use, or obtain corresponding health regulatory approval for, a particular trademark in a given jurisdiction, we may need to adopt a different trademark in that territory, which could entail additional costs and our brand equity. If we are to establish name recognition based on our trademarks and trade names, we may not be to compete effectively and our business may be affected. We may license our trademarks and trade names to third parties, such as distributors. Though these license agreements may provide guidelines for how our trademarks and trade names may be used, a of these agreements or of our trademarks and trade names by our licensees may our rights in or the goodwill associated with our trademarks and trade names.
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Intellectual property rights do not necessarily address all potential threats to our competitive advantage.
Once granted, patents may remain open to opposition, interference, re-examination, post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against such grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed or granted claims altogether. In addition, the degree of future protection afforded by our intellectual property rights is uncertain because even granted intellectual property rights have limitations, and may not adequately protect our business. The following examples are illustrative:
others may be able to make formulations that are similar to neffy or our current or future intranasal epinephrine technology product candidates but that are not covered by the claims of our patent rights;
the patents of third parties may have an adverse effect on our business;
we or our licensors or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patents or pending patent applications that we own, co-own or exclusively license;
we or our licensors or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
it is possible that our pending patent applications will not lead to issued patents;
issued patents that we may own or co-own or that we exclusively license in the future may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors;
our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
third parties performing manufacturing or testing for us using neffy or our current or future intranasal epinephrine technology product candidates or technologies could use the intellectual property of others without obtaining a proper license;
we may not develop additional proprietary technologies that are patentable; and
the patents of others may have an adverse effect on our business.
Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition to seeking patent protection for some of our technology and product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. Elements of neffy or our current or future intranasal epinephrine technology product candidates, including processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property. Any disclosure, either intentional or unintentional, by our employees, the employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
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Trade secrets and unpatented know-how can be difficult to protect. We require our employees to enter into written employment agreements containing provisions of confidentiality and obligations to assign to us any inventions generated in the course of their employment. We and any third parties with whom we share facilities enter into written agreements that include confidentiality and intellectual property obligations to protect each party’s property, potential trade secrets, proprietary know-how and information. We further seek to protect our potential trade secrets, proprietary know-how and information in part, by entering into non-disclosure and confidentiality agreements with parties who are given access to them, such as our corporate collaborators, outside scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors and other third parties. With our consultants, contractors and outside scientific collaborators, these agreements typically include invention assignment obligations. Although we have taken steps to protect our trade secrets and unpatented know-how, we cannot provide any assurances that all such agreements have been duly executed, and any of these parties may breach the agreements and our proprietary information, including our trade secrets, and we may not be to obtain adequate remedies for such . Monitoring uses and disclosures is , and we do not know whether the steps we have taken to protect our proprietary technologies will be . parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. Enforcing a claim that a party or a trade secret is , expensive and time-consuming, and the outcome is . In addition, some courts inside and outside the United States are less willing or to protect trade secrets.
Trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles and the movement of skilled personnel from company to company or academic to industry scientific positions. Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights. Because from time-to-time we expect to rely on third parties, we must, at times, share trade secrets with them. Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be to or independently developed by a competitor or other third party, our competitive position would be .
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
We employ individuals who previously worked with other companies, including our competitors or potential competitors. We are and could in the future be subject to claims that we or our employees, consultants, or independent contractors have inadvertently or otherwise used or disclosed alleged trade secrets or other confidential information of current or former employers or competitors, including, for example, the Aptar Litigation. Although we try to ensure that our employees, consultants and independent contractors do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we are, and may in the future, become subject to claims that we caused an individual to breach the terms of his or her non-competition or non-solicitation agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged intellectual property, proprietary information, know-how or trade secrets of a current or former employer or competitor.
While we are, and may in the future, litigate to defend against these claims, even if we are successful, litigation could result in substantial costs and could be a distraction to management and other employees. If our defenses to these claims fail, in addition to requiring us to pay monetary damages, a court could prohibit us from using technologies that are essential to neffy and our current or future intranasal epinephrine technology product candidates, if such technologies are found to incorporate or be derived from the trade secrets or other proprietary information of the current or former employers. Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to , engage with scientific advisors or hire employees or consultants, each of which would have an effect on our business, results of operations and financial condition.
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In the future, we may need to obtain additional licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.
From time to time, we may be required to license technologies relating to our therapeutic programs from additional third parties to further develop or commercialize neffy and our current or future intranasal epinephrine technology product candidates. Should we be required to obtain licenses to any third-party technology, including any such patents required to manufacture, use or sell neffy , such licenses may not be available to us on commercially reasonable terms, or at all. The inability to obtain any third-party license required to develop or commercialize any of neffy or our current or future intranasal epinephrine technology product candidates could cause us to abandon any related efforts, which could seriously harm our business and operations.
Risks Related to Employee Matters and Managing Growth
Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees.
Our success depends, and will likely continue to depend, upon our ability to hire and retain the services of our current executive officers and our other highly qualified personnel. We have entered into employment agreements with each of our executive officers but they may terminate their employment or engagement with us at any time. The loss of their services might impede the achievement of our research, development and commercialization objectives.
Our ability to compete in the biotechnology and pharmaceuticals industries depends upon our ability to attract and retain highly qualified managerial, scientific, medical, sales and marketing personnel. Our industry has experienced a high rate of turnover of management personnel in recent years. Replacing executive officers or other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully.
Our industry has experienced a high rate of turnover in recent years. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these additional key employees on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
We rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors, which includes entities owned by our executive officers and directors, may be employed by other entities and may have commitments under consulting or advisory contracts with those entities that may limit their availability to us. If we are unable to continue to attract and retain highly qualified personnel, our ability to develop and commercialize neffy and our current or future intranasal epinephrine technology product candidates will be limited.
Our employees, independent contractors, consultants, current and future licensing and collaboration partners and CROs may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.
We are exposed to the risk that our employees, independent contractors, consultants, current and future licensing and collaboration partners and CROs may engage in fraudulent conduct or other illegal activity. Misconduct by those parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates:
FDA regulations or similar regulations of comparable non-U.S. regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities;
manufacturing standards;
federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable non-U.S. regulatory authorities; and
laws that require the reporting of financial information or data accurately.
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Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, creating fraudulent data in our nonclinical studies or clinical trials or illegal misappropriation of product materials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations. Additionally, we are subject to the risk that a person or government could such or other , even if none occurred. If any such actions are instituted us, and we are not in ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of civil, and administrative , , monetary , , oversight and reporting obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs or comparable foreign programs, contractual , reputational , profits and future earnings, and of our operations, any of which could have a material effect on our ability to operate our business and our results of operations.
We may encounter difficulties in managing our growth, which could disrupt our operations.
We expanded our organization following FDA approval of neffy in August 2024. Specifically, we increased our sales force and made additional hires in the areas of general and administrative, medical, commercial, sales and marketing, and operations. As a result, our headcount has increased from 23 full-time employees and 5 part-time employees as of July 31, 2024 to 158 full-time employees and 5 part-time employees as of December 31, 2025. We may need to further expand our headcount in the future to support our growth strategy. To manage these growth activities, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Our management may need to devote a significant amount of our attention to managing these growth activities. Due to our limited financial resources and the limited experience of our management team in managing a company with such recent and anticipated growth, we may not be able to effectively manage the expansion of our operations, retain key employees, or identify, recruit and train additional qualified personnel. Our inability to manage the expansion of our operations effectively may result in weaknesses in our infrastructure, give rise to operational mistakes, of business , of employees and reduced productivity among remaining employees. If we are to effectively manage our recent and expected growth, our ability to generate revenues or future could be reduced and we may not be to implement our business strategy, including the commercialization of neffy .
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Risks Related to the Securities Markets and Ownership of Our Common Stock
The market price of our common stock could be volatile.
The market price of our common stock could be subject to significant fluctuations. Market prices for securities of pharmaceutical, biotechnology and other life sciences companies have historically been particularly volatile. Some of the factors that may cause the market price of our common stock to fluctuate include:
failure to meet or exceed financial and development projections we may provide to the public;
failure to meet or exceed the financial and development projections of the investment community;
our ability to maintain regulatory approval for neffy , or obtain regulatory approvals for additional indications;
failure of neffy or our current or future intranasal epinephrine technology product candidates, to achieve commercial success;
failure by us to maintain our existing third-party license and supply agreements;
failure by us or our licensors to prosecute, maintain, or enforce our intellectual property rights;
changes in laws or regulations applicable to neffy or our current or future intranasal epinephrine technology product candidates;
any inability to obtain adequate supply of neffy or our current or future intranasal epinephrine technology product candidates or any of its components, or the inability to do so at acceptable prices;
adverse regulatory authority decisions;
introduction of new products, services or technologies by our competitors;
the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community;
announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors;
disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for neffy or our current or future intranasal epinephrine technology product candidates;
additions or departures of key personnel;
significant lawsuits, including patent or stockholder litigation;
if securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our business and stock;
changes in the market valuations of similar companies;
general market or macroeconomic conditions, including as a result of actual or threatened tariffs and trade wars;
sales of our common stock by us or our stockholders in the future;
trading volume of our common stock;
perceived and actual risks associated with our Credit Agreement;
announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments;
adverse publicity generally, including with respect to other products and potential products in such markets;
the introduction of technological innovations or new therapies that compete with potential products of ours;
changes in the structure of health care payment systems; and
period-to-period fluctuations in our financial results.
Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock.
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In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against those companies.
Additionally, a decrease in the stock price of our common stock may cause our common stock to no longer satisfy the continued listing standards of Nasdaq. If we are not able to maintain the requirements for listing on Nasdaq, we could be delisted, which could have a materially adverse effect on our ability to raise additional funds as well as the price and liquidity of our common stock.
Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law (“DGCL”) may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our stockholders. In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of us more difficult, including the following:
a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;
the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
the requirement that a special meeting of stockholders may be called only by a majority vote of our entire board of directors, the chair of our board of directors or our chief executive officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
the requirement for the affirmative vote of holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of our voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation relating to the management of our business or our amended and restated bylaws, which may inhibit the ability of an acquirer to affect such amendments to facilitate an unsolicited takeover attempt; and
advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
In addition, as a Delaware corporation, we will be subject to Section 203 of the DGCL. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time. A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.
These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including delay or impede a merger, tender offer or proxy contest involving us. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for our stockholders to realize value in a corporate transaction.
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Our amended and restated certificate of incorporation designates the state courts of the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, and the federal district courts of the United States of America to be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers and employees.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if and only if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom shall will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on behalf of us; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees or our stockholders; (iii) any action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and bylaws; (iv) any action or proceeding to interpret, apply, enforce or determine the validity of our amended and certificate of incorporation or our amended and bylaws; (v) any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (vi) any action asserting a claim us or any of our directors, officers or other employees, governed by the internal affairs doctrine.
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the forum provisions of our amended and certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions. If a court were to find either forum provision in our amended and certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with Securities Act in state court, or both state and federal court, which could our business, financial condition, results of operations, and prospects.
These exclusive forum provisions may make it more expensive for stockholders to bring a claim than if the stockholders were permitted to select another jurisdiction and limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.
We do not anticipate paying any cash dividends in the foreseeable future.
We plan to retain our future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain, if any, for the foreseeable future.
Future sales of shares by existing stockholders could cause our stock price to decline.
If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after any applicable legal restrictions on resale lapse, the trading price of our common stock could decline. We are not able to predict the effect that sales may have on the prevailing market price of our common stock.
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General Risk Factors
Geo-political conditions may have serious adverse consequences on our business, financial condition and stock price.
International and geo-political events could also have a serious adverse impact on our business. While we cannot predict the broader consequences, the conflict and retaliatory and counter-retaliatory actions associated with geopolitical conflicts could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.
If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.
The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. Equity research analysts may elect not to provide research coverage of our common stock, and such lack of research coverage may adversely affect the market price of our common stock. In the event we do have equity research analyst coverage, we will not have any control over the analysts, or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which in turn could cause our stock price or trading volume to decline.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.
We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.
