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Our business is subject to
various risks and uncertainties that may have a material adverse effect on our
business, financial condition or results of operations. You should carefully
consider the risks and uncertainties described below, together with all of the
other information included in this Form 8-K, our most recent Quarterly Report on
Form 10-Q for the quarter ended September 30, 2014 and our most recent Annual
Report on Form 10-K for the year ended December 31, 2013. Our business faces
significant risks and uncertainties, and those described below may not be the
only risks and uncertainties we face. Additional risks and uncertainties not
presently known to us or that we currently believe are immaterial may also
significantly impair our business, financial condition or results of operations.
If any of these risks or uncertainties occur, our business, financial condition
or results of operations could suffer, the market price of our common stock
could decline and you could lose all or part of your investment in our common
RISKS RELATED TO OUR
Our recently-announced
collaboration agreement with Janssen Biotech, Inc., or Janssen, has not yet
become effective. Our failure to cause the collaboration agreement to become
effective would have a material adverse effect on our financial condition,
business prospects and the price of our common stock.
In November 2014, we entered
into an exclusive collaboration and license agreement, or the Collaboration
Agreement, with Janssen to develop and commercialize imetelstat worldwide for
oncology, including hematologic myeloid malignancies, and other human
therapeutic uses. Under the terms of the Collaboration Agreement, we have
granted to Janssen exclusive worldwide rights to develop and commercialize
imetelstat for all indications, and Janssen is responsible for the development
of, seeking regulatory approval for, and commercializing imetelstat worldwide.
However, the Collaboration Agreement is not yet effective and may never become
effective. In this regard, effectiveness of the Collaboration Agreement is
conditioned on the expiration or termination of all applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. If
the Collaboration Agreement does not become effective, then we will not receive
any of the anticipated benefits of the Collaboration Agreement, including
financial payments, which would materially and adversely affect our imetelstat
development plans, and we would need to undertake development, manufacturing,
regulatory and commercialization activities for imetelstat solely at our own
expense. This, in turn, would have a material adverse effect on our financial
condition, business prospects and the price of our common stock.
elect to continue the development of imetelstat through a Continuation Decision,
our business and business prospects would be significantly
Under the terms of the
Collaboration Agreement, Janssen is not obligated to make any additional
payments to us (apart from the initial upfront payment should the Collaboration
Agreement become effective) until such time as it affirmatively elects to
continue to advance the development of imetelstat, or the Continuation Decision,
following the protocol-specified primary analysis of a Phase 2 clinical trial in
myelofibrosis, or the Phase 2 MF Results, or, if the Phase 2 clinical trial in
myelofibrosis, or the Initial Phase 2 MF Study, is terminated early or suspended
for an extended period of time, within a certain time period thereafter. The
timing of Janssen s Continuation Decision and whether Janssen elects to continue
further clinical development of imetelstat also affects the timing and
availability of our opt-in decision to share further U.S. development and
promotion costs and be eligible for higher tiered royalty rates and potential
future milestone payments, or the U.S. Opt-In Rights, as well as our election to
co-promote in the U.S., or the U.S. Co-Promotion Option. If the Initial Phase 2
MF Study is terminated early, suspended for
an extended period of time, or is otherwise unsuccessful, Janssen may determine
not to elect to continue further clinical development of imetelstat, in which
case, the Collaboration Agreement would terminate, we would not be eligible for
any further payments from Janssen under that agreement and our business and
business prospects would be severely and adversely harmed.
We are dependent upon
our collaborative relationship with Janssen to further develop, manufacture and
commercialize imetelstat, our sole product candidate. If Janssen fails to
perform as expected, the potential for us to generate future revenues from
milestone payments and royalties from imetelstat would be significantly reduced,
the development and/or commercialization of imetelstat may be terminated or
substantially delayed, and our business would be severely harmed.
Under the terms of the
Collaboration Agreement, we and Janssen will create a joint governance
structure, including joint development and steering committees and working
groups, to oversee and manage worldwide regulatory, development, manufacturing
and commercialization activities for imetelstat; however, Janssen will be solely
responsible for the operational implementation for those activities.
Accordingly, the timely and successful completion by Janssen of those activities
will significantly affect the timing and amount of any revenues from milestone
payments and royalties we may receive under the Collaboration Agreement, and
these activities will be influenced by, among other things, the efforts and
allocation of resources by Janssen, none of which we control. If Janssen does
not perform in the manner we expect or fulfill its responsibilities in a timely
manner, or at all, the clinical development, manufacturing, regulatory approval
and commercialization efforts related to imetelstat could be delayed or
terminated, and it could become necessary for us to assume the responsibilities
for the clinical development, manufacturing, regulatory approval or
commercialization of imetelstat at our own expense. Accordingly, there can be no
assurance that any of the development, regulatory or sales milestones will be
achieved or that we will receive any future milestone or royalty payments under
the Collaboration Agreement.
In addition, our collaboration
with Janssen may be unsuccessful due to other factors, including the
Janssen may choose to terminate the
Collaboration Agreement for convenience;
Janssen may choose not to
affirmatively elect to continue to advance the development of
imetelstat through a Continuation
the Phase 2 MF Results and/or the Phase 2 clinical trial in myelodysplastic
syndrome, or the Initial Phase 2 MDS Study, may be negative or inconclusive, or Janssen
may observe safety issues in either of these studies, which may result in Janssen electing not
to continue further clinical development of imetelstat in which case, we would receive no further