Financial Performance - The company incurred net losses of $44.2 million and $31.3 million for the years ended December 31, 2022, and 2021, respectively, with an accumulated deficit of $158.3 million as of December 31, 2022[272]. - The company expects to continue incurring significant operating losses for the foreseeable future as it develops and seeks regulatory approval for its product candidates[272]. - The company faces substantial doubt about its ability to continue as a going concern, based on expected operating losses and negative cash flows[282]. - The company may need to seek additional capital sooner than planned due to changing operating plans and demands on cash resources[277]. - The company’s future capital requirements will depend on various factors, including the progress and costs of clinical trials and regulatory reviews[278]. Clinical Development - The company is in clinical development for zilovertamab and ONCT-808, with zilovertamab being evaluated in a Phase 3 study for relapsed or refractory MCL and a Phase 1/2 study for CLL, MCL, and MZL[287]. - The company is developing ONCT-808 as a CAR T therapy candidate targeting ROR1 for hematologic cancers and solid tumors, alongside ONCT-534, an investigational dual-action androgen receptor inhibitor[287]. - The company is conducting two clinical trials of zilovertamab: a Phase 3 global registrational study for relapsed or refractory MCL and a Phase 1/2 trial for B-cell lymphoid malignancies[302]. - The ongoing COVID-19 pandemic continues to impact the timeline for clinical trials, including the global Phase 3 study of zilovertamab[298]. - The company has sufficient quantities of zilovertamab clinical trial materials to treat patients through at least the end of 2024[300]. Regulatory Environment - The company has not yet demonstrated the ability to successfully obtain marketing authorization approvals or commercialize its product candidates, which may affect future revenue generation[271]. - Regulatory changes in the EU regarding clinical trials may impact the company's development plans, with a new centralized process effective from January 31, 2022[294]. - The regulatory approval process for gene therapy products is lengthy, rigorous, and expensive, with significant oversight from the FDA and EMA[325]. - The FDA may require additional clinical trials or studies post-approval, which can delay commercialization and increase costs[334]. - The company may seek Breakthrough Therapy designation for product candidates, including zilovertamab, but this does not guarantee faster development or approval processes[350]. Risks and Challenges - The historical failure rate for product candidates in the pharmaceutical industry is high, and many candidates fail despite promising early results[290]. - The company faces risks from potential delays in clinical trials due to various factors, including regulatory disagreements and difficulties in patient recruitment[303]. - The company may encounter additional risks and delays if conducting clinical trials in foreign countries due to differing healthcare practices and regulatory schemes[305]. - The company may face delays in clinical trials due to difficulties in patient enrollment, particularly for rare diseases with limited patient pools[310]. - The company faces significant liability risks if found to have promoted off-label uses of its products, which are strictly regulated by the FDA[386]. Market and Commercialization - The commercial success of product candidates will depend on market acceptance by physicians, patients, and healthcare payors, which may not be guaranteed even with regulatory approval[379]. - Coverage and adequate reimbursement from third-party payors are essential for the successful commercialization of products, and failure to secure this could limit revenue generation[387]. - The potential market for product candidates may be limited to patients who have failed prior treatments, affecting overall market opportunity[381]. - International operations are subject to extensive price controls and regulations, which may pressure pricing and reimbursement levels compared to the U.S.[393]. - The company currently lacks marketing and sales capabilities and must invest significantly to develop these functions or collaborate with third parties[404]. Compliance and Legal Issues - The company is subject to various healthcare laws and regulations, which could significantly impact its operations and financial condition[417]. - Non-compliance with the federal Anti-Kickback Statute could lead to civil, criminal, and administrative penalties, including exclusion from government-funded healthcare programs[418]. - The company may face substantial costs to ensure compliance with healthcare laws, which could affect profitability and operational efficiency[420]. - Legislative changes, such as the Affordable Care Act, may impose additional fees and rebates, impacting the company's pricing strategies and reimbursement rates[422]. - Compliance with evolving data protection laws, such as HIPAA, is critical, as violations could lead to significant penalties and reputational damage[432]. Intellectual Property - The company's success relies on protecting intellectual property; failure to do so could harm its competitive position and financial results[456]. - The patent application process is uncertain, and there is no guarantee that patents will be issued or provide adequate protection against competitors[459]. - The company may need to obtain licenses from third parties to advance research or commercialization, and failure to do so could materially harm its business[464]. - Legal challenges could lead to reduced scope or invalidation of patent rights, allowing competitors to commercialize similar products[468]. - The breadth and strength of patent protection are critical for attracting collaboration and licensing opportunities[469]. Operational Risks - The company relies on CROs and clinical trial sites for timely conduct of clinical trials, but has limited influence over their performance[311]. - The company has no control over third-party manufacturers, which poses risks related to compliance with cGMP regulations and could impact the ability to develop or market product candidates[357]. - The company entered into Clinical Trial and Supply Agreements with Pharmacyclics, LLC for supplying ibrutinib at no upfront cost, but termination of these agreements could incur substantial additional costs[366]. - The company faces risks related to fluctuating operating results, which can be influenced by various external factors, making future predictions challenging[407]. - Cybersecurity threats are increasing, with potential disruptions to product development programs and significant costs associated with breaches[446].
Oncternal Therapeutics(ONCT) - 2022 Q4 - Annual Report