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Item 1A. Risk Factors
The information presented below supplements the
risk factors set forth in Item 1A of Part I of our 2021 Form 10-K. Except as set forth below, for additional risk factors that
could cause actual results to differ materially from those anticipated, please refer to Item 1A of Part I of our 2021 Form 10-K.
Innoviva, its subsidiaries and any investments held directly or indirectly by Innoviva, at the time of this filing, shall be referred
to as "Innoviva," "we", "us", or "our" for purposes of this Item 1A.
Our success in preclinical studies or clinical trials may not
be indicative of results in current or future clinical trials.
Our success in preclinical testing and early clinical
trials does not ensure that later clinical trials will generate the same results or otherwise provide adequate data to demonstrate the
efficacy and safety of a product candidate. Certain product candidates may fail to show the necessary safety and efficacy in clinical
development despite positive results in preclinical studies or having successfully advanced through initial clinical trials.
addition, the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design
of a clinical trial may not become apparent until the clinical trial is well advanced. We have limited experience designing clinical
trials and may be unable to design and execute a clinical trial to support regulatory approval. There is a high failure rate for drugs
and biologic products proceeding through clinical trials. Many companies in the pharmaceutical and biotechnology industries have suffered
significant setbacks in late-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical
trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent
regulatory approval. In addition, we may experience regulatory delays or rejections because of many factors, including changes in regulatory
policy during the period of our product candidate development. Any such delays could negatively impact our business, financial condition,
results of operations and prospects.
If clinical trials of our product candidates fail to demonstrate
safety and efficacy to the satisfaction of the FDA, the EMA or other comparable regulatory authorities, or do not otherwise produce favorable
results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization
of that product candidate.
or our potential collaborators, may not commercialize, market, promote, or sell any product candidate without obtaining marketing approval
from the FDA, the EMA or other comparable regulatory authority, and we may never receive such approvals. Even if our product candidates
appear sufficiently effective and/or safe in patients in well-controlled clinical trials, it is impossible to predict if or when these
product candidates will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the sale of any
product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy
of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete
and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. Moreover, preclinical and
clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates
performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
may experience numerous unforeseen events prior to, during, or because of, clinical trials that could delay or prevent our ability to
receive marketing approval or commercialize our product candidates, including:
| the FDA, the EMA or other comparable regulatory authority may change from the views they have expressed to us as to the design, implementation, and/or interpretation of our clinical trials; | ||
| the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program; | ||
| regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; | ||
| we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; | ||
| clinical trials of product candidates may produce negative or inconclusive results; | ||
| we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; | ||
| we may not be able to complete our clinical trials in a timely manner, if at all, for example because the number of patients required for clinical trials of our product candidates may be larger than we anticipate; | ||
| enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate, or we may fail to recruit suitable patients to participate in a trial; | ||
| we may fail to comply with regulatory requirements applicable to them, to the FDA's or other comparable regulatory authority's, satisfaction; | ||
| third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; | ||
| regulators may issue a clinical hold, or regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; | ||
| the cost of clinical trials of our product candidates may be greater than we anticipate; | ||
| the FDA, the EMA or other comparable regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with whom we enter into agreements for clinical and commercial supplies; | ||
| the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; | ||
| our product candidates, once exposed to greater numbers of patients, may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the clinical trials or cause regulatory authorities to refuse to approve our product candidates or approve them only with significant restrictions on distribution or use; | ||
| even if our clinical trials are successful, the FDA, the EMA or other comparable regulatory authorities may determine that the overall risk-benefit profiles of our product candidates are insufficient to support marketing authorization; and |
we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently
contemplate, if we are unable to successfully complete clinical trials or other testing of those product candidates, or if the results
of these trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
| be delayed in obtaining marketing approval for our product candidates; | ||
| not obtain marketing approval at all; | ||
| obtain approval for indications or patient populations that are not as broad as intended or desired; | ||
| obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, such as black box warnings or a REMS program; | ||
| be subject to additional post-marketing testing requirements; or | ||
| be required to remove the product from the market after obtaining marketing approval. |
product development costs may also increase if we experience delays in testing and we may be required to obtain additional funds
to complete clinical trials. We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need
to be restructured or will be completed on schedule, or at all. Significant preclinical study or clinical trial delays also could shorten
any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products
to market before we do and impair our ability to successfully commercialize our product candidates. In addition, many of the factors that
cause, or lead to, delays of clinical trials may ultimately lead to the denial of regulatory approval of a product candidate.
we are not successful in discovering, developing, and commercializing additional product candidates, our ability
to expand and achieve our strategic objectives would be impaired.
Although a substantial amount of our effort will
focus on the continued clinical testing and potential regulatory approval of our product candidates, an element of our strategy is to
develop and commercialize, either by ourselves or with a collaborator, our product candidates and discover and develop novel product candidates
in other therapeutic areas. We are seeking to do so by utilizing our discovery research experience and capabilities to design active new
compounds that target causative mechanisms of disease. Research efforts to identify and develop product candidates require substantial
technical, financial and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially
show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons,
including the following:
| the research methodology used may not be successful in identifying potential product candidates; | ||
| competitors may develop alternatives that render our product candidates obsolete or less attractive; | ||
| product candidates we develop may nevertheless be covered by third parties' patents or other exclusive rights; | ||
| a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; | ||
| a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; |
| a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable; and | ||
| the FDA, the EMA or other regulatory authorities may not approve or agree with the intended use of a new product candidate. |
we fail to develop and successfully generate revenue from other current and future product candidates, our future prospects may
be harmed, and we will be more vulnerable to any problems that we or potential collaborators may encounter in developing and commercializing
our current product candidates.
we or our collaborators experience delays or difficulties in the enrollment of patients in clinical trials, our receipt
of necessary regulatory approvals could be delayed or prevented.
may not be able to initiate, continue or complete clinical trials of our product candidates that we develop if we and our collaborators
are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA, the EMA
or other comparable regulatory authority. We have limited experience enrolling patients in our clinical trials and cannot predict how
successful we will be in enrolling patients in future clinical trials.
instance, patients involved in our clinical trials are often in the hospital setting and the decision to participate can be
made by the caregiver or doctor. Accordingly, seeking consent for patient participation may become difficult when the family and/or
the patient may not be available to consider participation in a clinical trial and the providers/investigators seeking the consent
often have no established relationship with the family or patient. The challenges of obtaining consent for patient participation
have increased during the COVID-19 pandemic as hospitals have imposed restrictions on visitation by friends or family members who
may be able to provide consent on behalf of patients. The COVID-19 pandemic may make patients less willing to seek medical attention
or return for follow-up visits post-treatment. In addition, some of our competitors have ongoing clinical trials to treat the same
indications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in
clinical trials of our competitors. If we are not successful at enrolling patients in one clinical trial, it may affect when we are
able to initiate the next clinical trial, which could result in significant delays in our efforts to pursue regulatory approval of
and commercialize our product candidates. Patient enrollment is affected by other factors including:
| the size and nature of the patient population; | ||
| the severity of the disease under investigation; | ||
| the proximity and availability of clinical trial sites for prospective patients; | ||
| the eligibility criteria for participation in the clinical trial; | ||
| the design of the clinical trial; | ||
| the perceived risks and benefits of the product candidate under study; | ||
| our ability to recruit clinical trial investigators with appropriate experience; | ||
| the availability of drugs approved to treat the diseases under study; | ||
| the patient referral practices of physicians; | ||
| our ability to obtain and maintain patient consents; |
| the ability to monitor patients adequately during and after treatment; | ||
| the risk that patients enrolled in clinical trials will drop out of the trials before completion; and | ||
| the impact of public health epidemics, such as the COVID-19 pandemic. |
inability to enroll a sufficient number of patients for clinical trials would result in significant delays and could require us
to abandon one or more clinical trials altogether. Enrollment delays in these clinical trials may result in increased development costs
for our product candidates, which would reduce the capital we have available to support current and future product candidates and may
result in the need to raise additional capital earlier than planned and could cause the value of our common stock to decline and limit
our ability to obtain additional financing.
product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval,
limit the commercial potential or result in significant negative consequences following any potential marketing approval.
the conduct of clinical trials, patients report changes in their health, including illnesses, injuries and discomforts (generally referred
to as adverse events), to their doctor. We are required to report adverse events to the FDA and other regulatory authorities. Often, it
is not possible to determine whether the product candidate being studied caused these conditions. Regulatory authorities may draw different
conclusions or require additional testing to confirm or refute these observations, if they occur. In addition, it is possible that as
we test our product candidates in larger, longer and more extensive clinical programs, or as use of these product candidates becomes
more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were observed in earlier
trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects. Many times, side
effects are only detectable after investigational drugs are tested in large-scale, Phase 3 clinical trials or, in some cases, after
they are made available to patients on a commercial scale after approval. If additional clinical experience indicates that any of our
current product candidates or any future product candidates, have side effects or causes serious or life-threatening side effects, the
development of the product candidate may fail or be delayed, or, if the product candidate has received regulatory approval, such approval
may be revoked, which could harm our business, prospects, operating results and financial condition.