Risks Relating to our Business and our Industry
Our business operations are dependent upon our senior management team and the ability of our other employees to execute on our business strategy. If we
fail to attract, integrate, and keep senior management and key scientific personnel, we may be unable to successfully develop PF708, Px563L, RPA563 or any other product candidates, conduct our clinical trials and commercialize PF708, Px563L, RPA563
or any other product candidates we develop.
Our success depends in part on our continued ability to attract, integrate, retain,
and motivate highly qualified management, clinical and scientific personnel, including our ability to develop an effective working relationship among senior management. Our senior management has substantially changed since the beginning of the last
two fiscal years, including, for example, the departures of our former chief executive officer, Bertrand Liang, former chief financial officer, Paul Wagner, former chief manufacturing officer, Steven Sandoval in 2017 and former chief medical and
scientific officer, Hubert Chen, in 2018. Dr. Chen continues to support the Company as an advisor. We have a new president and chief executive officer, Eef Schimmelpennink, who started in August 2017, a new chief financial officer, Susan
Knudson, who started in February 2018, and a new chief operating officer, Dr. Shawn Scranton who started in October 2018.
As new
employees gain experience in their roles, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of new employees with business processes, operating requirements, policies
and procedures, and we may experience additional costs as new employees gain necessary experience. It is important to our success that these key employees quickly adapt to and excel in their new roles. If they are unable to do so, our business and
financial results could be materially adversely affected. In addition, the loss of the services of any member of our senior management or our scientific or technical support staff might significantly delay or prevent the development of our products
or achievement of other business objectives by diverting managements attention to transition matters and identification of suitable replacements, if any, and could have a material adverse effect on our business.
We believe that our future success is highly dependent upon the contributions of our senior management, particularly our Chief Executive
Officer, Chief Financial Officer, Chief Business Officer, and Chief Operating Officer, as well as our senior scientists and other members of our senior management team. Employment agreements with our Chief Executive Officer, Chief Financial Officer,
Chief Business Officer, and Chief Operating Officer, as well as our offer letters with our senior scientists, all provide for
at-will
employment. The loss of services of any of these individuals
could delay or prevent the successful development of our product pipeline, completion of our planned clinical trials or the commercialization of PF708, Px563L, RPA563, or any other products we develop.
Competition for qualified personnel in the biotechnology and pharmaceuticals industry is intense due to the limited number of individuals who
possess the skills and experience required. To help attract, retain, and motivate qualified employees, we use share-based incentive awards such as employee stock options. Other companies may provide more generous compensation and benefits, more
diverse opportunities and better chances for career advancement than we do. Some of these advantages may be more appealing to high-quality candidates and employees than those we have to offer. In addition, the decline in our stock price has created
additional challenges related to our ability to compete effectively with respect to equity compensation. We may need to hire additional personnel as we expand our clinical development and commercial activities. We may not be able to attract and
retain quality personnel on acceptable terms, or at all, which may cause our business and operating results to suffer.
If an improved version of a
reference product or reference listed drug, such as Forteo, is developed, or if the market for a reference product or reference listed drug significantly declines, sales or potential sales of our therapeutic equivalent product candidates may suffer.
Reference product or reference listed drug (originator) sponsor companies may develop improved versions as part of a
life cycle extension strategy and may obtain regulatory approval of the improved version
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