REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol |
Name of Each Exchange On Which Registered | ||
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(The Nasdaq Global Market) (The Nasdaq Global Market) |
Large accelerated filer ☐ |
Accelerated filer ☐ | ☒ |
Emerging growth company |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
Other ☐ |
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• | “ADRs” refer to the American depositary receipts that evidence our ADSs; |
• | “ADSs” refer to our American depositary shares, each ten (10) ADSs represent twenty-three (23) ordinary shares; |
• | “China” or “the PRC” refers to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan, and “Greater China” does not exclude Hong Kong, Macau and Taiwan; |
• | “China Portfolio” refers to our investigational drugs of which we in-license Greater China rights from reputable global biopharmaceutical companies and rely on our own research and development capabilities to advance into pivotal clinical trials and commercialize in Greater China with an aim for near-term product launch; |
• | “Global Portfolio” refers to our own proprietary novel or differentiated drug candidates that we are advancing towards clinical validation in the United States; |
• | “I-Mab,” “we,” “us,” “our company” and “our” refer to I-Mab, a Cayman Islands exempted company, and its subsidiaries; |
• | “RMB” refers to the legal currency of China; |
• | “shares” or “ordinary shares” refer to our ordinary shares, par value US$0.0001 per share; and |
• | “US$,” “U.S. dollars,” “$,” and “dollars” refer to the legal currency of the United States. |
• | the timing of initiation and completion, and the progress of our drug discovery and research programs; |
• | the timing and likelihood of regulatory filings and approvals; |
• | our ability to advance our drug candidates into drugs, and the successful completion of clinical trials; |
• | the approval, pricing and reimbursement of our drug candidates; |
• | the commercialization of our drug candidates; |
• | the market opportunities and competitive landscape of our drug candidates; |
• | the payment, receipt and timing of any milestone payments in relation to the licensing agreements; |
• | estimates of our costs, expenses, future revenues, capital expenditures and our needs for additional financing; |
• | our ability to attract and retain senior management and key employees; |
• | our future business development, financial condition and results of operations; |
• | future developments, trends, conditions and competitive landscape in the industry and markets in which we operate; |
• | our strategies, plans, objectives and goals and our ability to successfully implement these strategies, plans, objectives and goals; |
• | our ability to continue to maintain our market position in China’s biopharmaceutical and biotechnology industries; |
• | our ability to identify and integrate suitable acquisition targets; |
• | changes to regulatory and operating conditions in our industry and markets; and |
• | potential impact of COVID-19 pandemic on our current and future business development, financial condition and results of operations. |
A. |
Selected Financial Data |
For the Year Ended December 31, |
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2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
US$ |
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(in thousands, except for share and per share data) | ||||||||||||||||||||
Selected Consolidated Statements of Comprehensive Income (Loss) Data: |
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Revenues |
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Licensing and collaboration revenue |
11,556 | 53,781 | 30,000 | 1,542,668 | 236,424 | |||||||||||||||
Expenses |
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Research and development expenses (1) |
(267,075 | ) | (426,028 | ) | (840,415 | ) | (984,689 | ) | (150,910 | ) | ||||||||||
Administrative expenses (1) |
(25,436 | ) | (66,391 | ) | (654,553 | ) | (402,409 | ) | (61,672 | ) | ||||||||||
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Income (loss) from operations |
(280,955 | ) | (438,638 | ) | (1,464,968 | ) | 155,570 | 23,842 | ||||||||||||
Interest income |
858 | 4,597 | 30,570 | 24,228 | 3,713 | |||||||||||||||
Interest expense |
(5,643 | ) | (11,695 | ) | (2,991 | ) | (957 | ) | (147 | ) | ||||||||||
Other income (expenses), net |
1,527 | (16,780 | ) | (20,205 | ) | 412,892 | 63,278 | |||||||||||||
Equity in loss of an affiliate (1) |
— | — | — | (108,587 | ) | (16,642 | ) | |||||||||||||
Fair value change of warrants |
(14,027 | ) | 61,405 | 5,644 | — | — | ||||||||||||||
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Income (loss) before income tax expense |
(298,240 | ) | (401,111 | ) | (1,451,950 | ) | 483,146 | 74,044 | ||||||||||||
Income tax expense |
— | (1,722 | ) | — | (12,231 | ) | (1,874 | ) | ||||||||||||
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Net income (loss) attributable to I-Mab |
(298,240 | ) | (402,833 | ) | (1,451,950 | ) | 470,915 | 72,170 | ||||||||||||
Deemed dividend to Series C-1 preferred shareholders at extinguishment of Series C-1 Preferred Shares |
— | — | (5,283 | ) | — | — | ||||||||||||||
Deemed dividend to Series B-1, B-2 and C preferred shareholders at modification of Series B-1, B-2 and C Preferred Shares |
— | — | (27,768 | ) | — | — | ||||||||||||||
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Net income (loss) attributable to ordinary shareholders |
(298,240 | ) | (402,833 | ) | (1,485,001 | ) | 470,915 | 72,170 | ||||||||||||
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Other comprehensive income (loss) |
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Foreign currency translation adjustments, net of nil tax |
5,918 | 53,689 | 10,747 | (120,920 | ) | (18,531 | ) | |||||||||||||
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Total comprehensive income (loss) attributable to I-Mab |
(292,322 | ) | (349,144 | ) | (1,441,203 | ) | 349,995 | 53,639 | ||||||||||||
Net income (loss) attributable to ordinary share-holders |
(298,240 |
) |
(402,833 |
) |
(1,485,001 |
) |
470,915 |
72,170 |
Weighted-average number of ordinary shares used in calculating net income (loss) per share |
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Basic |
5,742,669 | 6,529,092 | 7,381,230 | 134,158,824 | 134,158,824 | |||||||||||||||
Diluted |
5,742,669 | 6,529,092 | 7,381,230 | 157,231,652 | 157,231,652 | |||||||||||||||
Net income (loss) per share attributable to ordinary shareholders |
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Basic |
(51.93 | ) | (61.70 | ) | (201.19 | ) | 3.51 | 0.54 | ||||||||||||
Diluted |
(51.93 | ) | (61.70 | ) | (201.19 | ) | 3.00 | 0.46 | ||||||||||||
Net income (loss) per ADS attributable to ordinary shareholders |
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Basic |
(119.44 | ) | (141.91 | ) | (462.74 | ) | 8.07 | 1.24 | ||||||||||||
Diluted |
(119.44 | ) | (141.91 | ) | (462.74 | ) | 6.90 | 1.06 |
(1) | Share-based compensation expenses were allocated as follows: |
For the Year Ended December 31, |
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2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
US$ |
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(in thousands) | ||||||||||||||||||||
Research and development expenses |
2,112 | 1,056 | 470 | 284,431 | 43,591 | |||||||||||||||
Administrative expenses |
4,927 | 2,464 | 514,733 | 209,033 | 32,036 | |||||||||||||||
Equity in loss of an affiliate |
— | — | — | 32,707 | 5,013 | |||||||||||||||
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Total |
7,039 |
3,520 |
515,203 |
526,171 |
80,640 |
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As of December 31, |
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2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
RMB |
US$ |
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(in thousands) | ||||||||||||||||||||
Selected Consolidated Statements of Balance Sheet Data: |
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Current assets: |
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Cash and cash equivalents |
307,930 | 1,588,278 | 1,137,473 | 4,758,778 | 729,315 | |||||||||||||||
Restricted cash |
104,783 | 92,653 | 55,810 | — | — | |||||||||||||||
Accounts receivable |
— | — | — | 130,498 | 20,000 | |||||||||||||||
Contract assets |
— | 11,000 | — | 227,391 | 34,849 | |||||||||||||||
Short-term investments |
— | — | 32,000 | 31,530 | 4,832 | |||||||||||||||
Prepayments and other receivables |
12,633 | 88,972 | 136,036 | 195,467 | 29,957 | |||||||||||||||
Other financial assets |
266,245 | 255,958 | — | — | — | |||||||||||||||
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Total current assets |
691,591 | 2,036,861 | 1,361,319 | 5,343,664 | 818,953 | |||||||||||||||
Property, equipment and software |
22,336 | 27,659 | 30,069 | 25,272 | 3,873 | |||||||||||||||
Operating lease right-of-use |
— | — | 16,435 | 14,997 | 2,298 | |||||||||||||||
Intangible assets |
148,844 | 148,844 | 148,844 | 120,444 | 18,459 | |||||||||||||||
Goodwill |
162,574 | 162,574 | 162,574 | 162,574 | 24,916 | |||||||||||||||
Investment accounted for using the equity method |
— | — | — | 664,832 | 101,890 | |||||||||||||||
Other non-current assets |
— | — | 18,331 | 2,010 | 308 | |||||||||||||||
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Total assets |
1,025,345 |
2,375,938 |
1,737,572 |
6,333,793 |
970,697 |
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Total liabilities |
309,151 |
415,684 |
668,090 |
706,648 |
108,298 |
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Total mezzanine equity |
1,015,989 |
2,915,358 |
3,104,177 |
— |
— |
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Shareholders’ deficit |
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Ordinary shares (US$0.0001 par value, 500,000,000 shares authorized as of December 31, 2019 and 800,000,000 shares authorized as of December 31, 2020, respectively; 8,363,719 shares issued and outstanding as of December 31, 2019 and 164,888,519 shares issued and outstanding as of December 31, 2020, respectively) |
6 | 6 | 6 | 114 | 17 | |||||||||||||||
Treasury stock |
(1 | ) | (1 | ) | — | — | — | |||||||||||||
Additional paid-in capital |
52,369 | — | 389,379 | 7,701,116 | 1,180,249 | |||||||||||||||
Accumulated other comprehensive income (loss) |
5,691 | 59,380 | 70,127 | (50,793 | ) | (7,784 | ) | |||||||||||||
Accumulated deficit |
(357,860 | ) | (1,014,489 | ) | (2,494,207 | ) | (2,023,292 | ) | (310,083 | ) | ||||||||||
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Total shareholders’ equity/(deficit) |
(299,795 |
) |
(955,104 |
) |
(2,034,695 |
) |
5,627,145 |
862,399 |
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Total liabilities, mezzanine equity and shareholders’ equity/(deficit) |
1,025,345 |
2,375,938 |
1,737,572 |
6,333,793 |
970,697 |
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|
For the Year Ended December 31, |
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2017 |
2018 |
2019 |
2020 |
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RMB |
RMB |
RMB |
US$ |
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(in thousands) |
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Selected Consolidated Statements of Cash Flow Data: |
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Net cash (used in) generated from operating activities |
(252,157 | ) | (280,705 | ) | (867,982 | ) | 433,558 | 66,446 | ||||||||||||
Net cash (used in) generated from investing activities |
(157,665 | ) | 9,500 | 212,462 | (201,901 | ) | (30,943 | ) | ||||||||||||
Net cash generated from financing activities |
758,585 | 1,479,669 | 152,709 | 3,440,481 | 527,277 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
(132 | ) | 59,754 | 15,163 | (106,643 | ) | (16,344 | ) | ||||||||||||
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Net increase (decrease) in cash, cash equivalents and restricted cash |
348,631 | 1,268,218 | (487,648 | ) | 3,565,495 | 546,436 | ||||||||||||||
Cash, cash equivalents and restricted cash, beginning of the year |
64,082 | 412,713 | 1,680,931 | 1,193,283 | 182,879 | |||||||||||||||
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Cash, cash equivalents and restricted cash, end of the year |
412,713 | 1,680,931 | 1,193,283 | 4,758,778 | 729,315 | |||||||||||||||
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B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• | conducting clinical trials of our drug candidates; |
• | manufacturing clinical trial materials through contract manufacturing organizations, or CMOs, in and out of China; |
• | seeking regulatory approvals for our drug candidates; |
• | commercializing our drug candidates for which we have obtained marketing approval; |
• | completing the construction of and maintaining our manufacturing facilities; |
• | hiring additional clinical, operational, financial, quality control and scientific personnel; |
• | establishing a sales, marketing and commercialization team for any future products that have obtained regulatory approval; |
• | seeking to identify additional drug candidates; |
• | obtaining, maintaining, expanding and protecting our intellectual property portfolio; |
• | enforcing and defending any intellectual property-related claims; and |
• | acquiring or in-licensing other drug candidates, intellectual property and technologies. |
• | our research or business development methodology or search criteria and process may be unsuccessful in identifying potential drug candidates; |
• | our potential drug candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; and |
• | it may take greater human and financial resources to identify additional therapeutic opportunities for our drug candidates or to develop suitable potential drug candidates through internal research programs than we possess, thereby limiting our ability to diversify and expand our drug portfolio. |
• | severity of the disease under investigation; |
• | total size and nature of the relevant patient population; |
• | design and eligibility criteria for the clinical trial in question; |
• | perceived risks and benefits of the drug candidate under study; |
• | our resources to facilitate timely enrollment in clinical trials; |
• | patient referral practices of physicians; |
• | availability of competing therapies also undergoing clinical trials; |
• | our investigators’ or clinical trial sites’ efforts to screen and recruit eligible patients; and |
• | proximity and availability of clinical trial sites for prospective patients. |
• | regulators, institutional review boards, or IRBs, or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | our inability to reach agreements on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; |
• | manufacturing issues, including problems with manufacturing, supply quality, compliance with good manufacturing practice, or GMP, or obtaining sufficient quantities of a drug candidate from third parties for use in a clinical trial; |
• | clinical trials of our drug candidates may produce negative or inconclusive results, and we may decide to conduct additional clinical trials or abandon drug development programs, or regulators may require us to do so; |
• | the number of patients required for clinical trials of our drug candidates may be larger than we anticipate, enrollment may be insufficient or slower than we anticipate or patients may drop out at a higher rate than we anticipate; |
• | our third-party contractors, including clinical investigators, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; |
• | we might have to suspend or terminate clinical trials of our drug candidates for various reasons, including a finding of a lack of clinical response or other unexpected characteristics or a finding that participants are being exposed to unacceptable health risks; |
• | regulators, IRBs or ethics committees may require that we or our investigators suspend or terminate clinical research or not rely on the results of clinical research for various reasons, including non-compliance with regulatory requirements; |
• | the cost of clinical trials of our drug candidates may be greater than we anticipate; and |
• | the supply or quality of our drug candidates, companion diagnostics or other materials necessary to conduct clinical trials of our drug candidates may be insufficient or inadequate. |
• | disagreement with the design or implementation of our clinical trials; |
• | failure to demonstrate that a drug candidate is safe and effective and potent for its proposed indication; |
• | failure of our clinical trial results to meet the level of statistical significance required for approval; |
• | failure of our clinical trial process to pass relevant good clinical practice (“GCP”) inspections; |
• | failure to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks; |
• | disagreement with our interpretation of data from pre-clinical studies or clinical trials; |
• | insufficient data collected from the clinical trials of our drug candidates to support the submission and filing of a new drug application, or NDA, or other submissions or to obtain regulatory approval; |
• | failure of our drug candidates to pass current Good Manufacturing Practice (“cGMP”), inspections during the regulatory review process or across the production cycle of our drug; |
• | failure of our clinical sites to pass audits carried out by the NMPA, the FDA or comparable regulatory authorities, resulting in a potential invalidation of our research data; |
• | findings by the NMPA, the FDA or comparable regulatory authorities of deficiencies related to our manufacturing processes or the facilities of third-party manufacturers with whom we contract for clinical and commercial supplies; |
• | changes in approval policies or regulations that render our pre-clinical and clinical data insufficient for approval; and |
• | failure of our clinical trial process to keep up with any scientific or technological advancements required by approval policies or regulations. |
• | we may suspend marketing of the drug candidate; |
• | regulatory authorities may withdraw their approvals of or revoke the licenses for the drug candidate; |
• | regulatory authorities may require additional warnings on the label; |
• | the FDA may require the establishment of a Risk Evaluation and Mitigation Strategy, or REMS, or the NMPA or a comparable regulatory authority may require the establishment of a similar strategy that may, for instance, restrict distribution of our drugs and impose burdensome implementation requirements on us; |
• | we may be required to conduct specific post-marketing studies; |
• | we could be subjected to litigation proceedings and held liable for harm caused to subjects or patients; and |
• | our reputation may suffer. |
• | restrictions on the marketing or manufacturing of the drug, withdrawal of the drug from the market, or voluntary or mandatory drug recalls; |
• | fines, warning letters or holds on our clinical trials; |
• | refusal by the NMPA, the FDA or comparable regulatory authorities to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of drug license approvals; |
• | refusal by the NMPA, the FDA or comparable regulatory authorities to accept any of our other IND approvals, NDAs or BLAs; |
• | drug seizure or detention, or refusal to permit the import or export of drugs; and |
• | injunctions or the imposition of civil, administrative or criminal penalties. |
• | the clinical indications for which our drug candidates are approved; |
• | physicians, hospitals and patients considering our drug candidates as a safe and effective treatment; |
• | whether our drug candidates have achieved the perceived advantages of our drug candidates over alternative treatments; |
• | the prevalence and severity of any side effects; |
• | product labeling or package insert requirements of the NMPA, the FDA or other comparable regulatory authorities; |
• | limitations or warnings contained in the labeling approved by the NMPA, the FDA or other comparable regulatory authorities; |
• | timing of market introduction of our drug candidates as well as competitive drugs; |
• | cost of treatment in relation to alternative treatments; |
• | availability of adequate coverage and reimbursement under the national and provincial reimbursement drug lists in the PRC, or from third-party payors and government authorities in the United States or any other jurisdictions; |
• | willingness of patients to pay any out-of-pocket |
• | relative convenience and ease of administration, including as compared with alternative treatments and competitive therapies; and |
• | the effectiveness of our sales and marketing efforts. |
• | an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products; |
• | an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; |
• | expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; |
• | a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale |
• | extension of manufacturers’ Medicaid rebate liability; |
• | expansion of eligibility criteria for Medicaid programs; |
• | expansion of the entities eligible for discounts under the Public Health Service Act’s pharmaceutical pricing program; |
• | new requirements to report to CMS financial arrangements with physicians and teaching hospitals; |
• | a new requirement to annually report to the FDA drug samples that manufacturers and distributors provide to physicians; and |
• | a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research. |
• | efforts to enter into collaboration or licensing arrangements with third parties in connection with our international sales, marketing and distribution efforts may increase our expenses or divert our management’s attention from the acquisition or development of drug candidates; |
• | changes in a specific country’s or region’s political and cultural climate or economic condition; |
• | differing regulatory requirements for drug approvals and marketing internationally; |
• | difficulty of effective enforcement of contractual provisions in local jurisdictions; |
• | potentially reduced protection for intellectual property rights; |
• | potential third-party patent rights; |
• | unexpected changes in tariffs, trade barriers and regulatory requirements; |
• | economic weakness, including inflation or political instability; |
• | compliance with tax, employment, immigration and labor laws for employees traveling abroad; |
• | the effects of applicable non-PRC tax structures and potentially adverse tax consequences; |
• | currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incidental to doing business in another country; |
• | workforce uncertainty and labor unrest; |
• | the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from an international market with low or lower prices rather than buying them locally; |
• | failure of our employees and contracted third parties to comply with Office of Foreign Assets Control rules and regulations and the Foreign Corrupt Practices Act of the United States, and other applicable rules and regulations; |
• | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and |
• | business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters, including earthquakes, volcanoes, typhoons, floods, hurricanes and fires. |
• | we may be unable to identify manufacturers on acceptable terms or at all because the number of potential manufacturers is limited and the NMPA, the FDA or other comparable regulatory authorities must approve any manufacturers as part of their regulatory oversight of our drug candidates. This approval would require new testing and cGMP-compliance inspections by the NMPA, the FDA or other comparable regulatory authorities. In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our drugs; |
• | our contract manufacturers may have little or no experience with manufacturing our drug candidates, and therefore may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to manufacture our drug candidates; |
• | our contract manufacturers may have limited capacity or limited manufacturing slots, which may affect the timeline for the production of our drugs; |
• | our contract manufacturers might be unable to timely manufacture our drug candidates or produce the quantity and quality required to meet our clinical and commercial needs, if any; |
• | contract manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately; |
• | our future contract manufacturers may not perform as agreed, may not devote sufficient resources to our drugs, or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our drugs; |
• | our contract manufacturers are subject to ongoing periodic unannounced inspections by the NMPA and the FDA to ensure strict compliance with cGMP and other government regulations in the PRC and the United States, respectively, and by other comparable regulatory authorities for corresponding regulatory requirements. We do not have control over third-party manufacturers’ compliance with these regulations and requirements; |
• | we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our drugs; |
• | our contract manufacturers could breach or terminate their agreements with us; |
• | our contract manufacturers may be unable to sustain their business and become bankrupt as a result; |
• | raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to material or component defects; |
• | products and components from our third-party manufacturers may be subject to additional customs and import charges, which may cause us to incur delays or additional costs as a result; |
• | our contract manufacturers and critical reagent suppliers may be subject to inclement weather, as well as natural or man-made disasters; and |
• | our contract manufacturers may have unacceptable or inconsistent product quality success rates and yields. |
• | collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration; |
• | collaborators may not pursue the development and commercialization of our drug candidates or may elect not to continue or renew the development or commercialization programs based on clinical trial results, change in their strategic focus due to the acquisition of competitive drugs, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; |
• | collaborators may delay clinical trials, provide insufficient funding for a clinical trial, discontinue a clinical trial, repeat or conduct new clinical trials, or require a new formulation of a drug candidate for clinical testing; |
• | collaborators could independently develop, or develop with third parties, drugs that compete directly or indirectly with our drug candidates or future drugs; |
• | collaborators with marketing and distribution rights to one or more of our drug candidates or future drugs may not commit sufficient resources to their marketing and distribution; |
• | collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; |
• | collaborators may not always be cooperative or responsive in providing their services in a clinical trial; |
• | disputes may arise between us and a collaborator that cause a delay or termination of the research, development or commercialization of our drug candidates, or that result in costly litigation or arbitration that diverts management attention and resources; |
• | collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable drug candidates; and |
• | collaborators may own or co-own intellectual property covering our drug candidates or future drugs that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property. |
• | the scope of rights granted under the license agreement and other interpretation-related issues; |
• | the extent to which our technology and processes infringe, misappropriate or violate intellectual property of the licensor that is not subject to the license agreement; |
• | the sublicensing of patent and other rights under our collaborative development relationships; |
• | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and |
• | the priority of invention of patented technology. |
• | others may be able to make compounds that are similar to our drug candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; |
• | we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or may in the future exclusively license, which could result in the patents applied for not being issued or being invalidated after issuing; |
• | we might not have been the first to file patent applications covering certain of our inventions, which could result in the patents applied for not being issued or being invalidated after issuing; |
• | 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 own or have exclusively licensed may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors or other third parties; |
• | we may obtain patents for certain compounds many years before we receive regulatory approval for drugs containing such compounds, and because patents have a limited life, which may begin to run prior to the commercial sale of the related drugs, the commercial value of our patents may be limited; |
• | 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 drugs for commercialization in our major markets; |
• | we may fail to develop additional proprietary technologies that are patentable; |
• | we may fail to apply for or obtain adequate intellectual property protection in all the jurisdictions in which we operate; |
• | third parties may gain unauthorized access to our intellectual property due to potential lapses in our information systems; and |
• | the patents of others may have an adverse effect on our business, for example by preventing us from commercializing one or more of our drug candidates for one or more indications. |
• | decreased demand for our drug candidates or any resulting products; |
• | injury to our reputation; |
• | withdrawal of other clinical trial participants; |
• | costs to defend the related litigation; |
• | a diversion of our management’s time and resources; |
• | substantial monetary awards to trial participants or patients; |
• | inability to commercialize our drug candidates; and |
• | a decline in the market price of our ADSs. |
• | comply with the laws of the NMPA, the FDA and other comparable regulatory authorities; |
• | provide true, complete and accurate information to the NMPA, the FDA and other comparable regulatory authorities; |
• | comply with manufacturing standards we have established; |
• | comply with healthcare fraud and abuse laws in the PRC, the United States and similar fraudulent misconduct laws in other applicable jurisdictions; or |
• | report financial information or data accurately or to disclose unauthorized activities to us. |
• | increased operating expenses and cash requirements; |
• | the assumption of additional indebtedness or contingent liabilities; |
• | the issuance of our equity securities; |
• | assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; |
• | the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition; |
• | retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; |
• | risks and uncertainties associated with the assimilation of operations, corporate culture and personnel of the acquired business; |
• | risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and its existing drugs or drug candidates and regulatory approvals; |
• | our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs; and |
• | changes in accounting principles relating to recognition and measurement of our investments that may have a significant impact on our financial results. |