CRXM Taxus Cardium Pharmaceuticals Group Inc (CE)

You should carefully review and consider the risks described below, as well as the other information in this report and in other reports and documents we file with the SEC when evaluating our business and future prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties, not presently known to us, or that we currently perceive as immaterial or remote, may also occur. If any of the following risks or any additional risks and uncertainties actually occur, our business could be materially harmed, and our financial condition, results of operations and future growth prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline, and you could lose all or a portion of the value of your investment in our stock. You should not draw any inference as to the magnitude of any particular risk from its position in the following discussion.

Risks Related to the Development of Product Candidates

The regulatory approval processes of the FDA are inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, we may never generate revenue or achieve profitability.

To generate revenues, we must successfully complete clinical trials of our product candidates and obtain marketing approval from the FDA. We may never succeed in securing FDA approval for Generx or any new product candidate, and, even if we do, we may never generate sufficient revenue to achieve profitability. Our product candidates could fail to receive regulatory approval for many reasons, including the following:

Generally, there is a high rate of failure for drug candidates proceeding through clinical trials. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. It is not uncommon for companies in the biopharmaceutical industry to suffer significant setbacks in advanced clinical trials due to nonclinical findings made while clinical studies were underway and safety or efficacy observations made in clinical studies, including previously unreported adverse events.

We cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. If we do not receive regulatory approvals for our product candidates, we may not be able to continue our operations.

In addition, even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate or may restrict its distribution. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

There are uncertainties with respect to the impact of Coronavirus Outbreak on the conduct and operation of our clinical studies for Generx

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity.

Clinical trials are expensive, time-consuming, and difficult to design and implement, and involve an uncertain outcome.

Before obtaining marketing approval from the FDA or other comparable foreign regulatory authorities for the sale of our product candidates, we must complete pre-clinical development and extensive clinical trials to demonstrate the safety and efficacy of our product candidates. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical trial process. Although we are planning for certain clinical trials relating to Generx and our other product candidates, there can be no assurance that the FDA will accept our proposed trial designs.

We may experience delays in our clinical trials, and we do not know whether planned clinical trials will begin on time, need to be redesigned, enroll patients on time or be completed on schedule, if at all. Clinical trials can be delayed for a variety of reasons, including delays related to:

If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences would harm our business, financial condition, and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

If the third parties that we rely on for pre-clinical and clinical trial support do not successfully perform their contractual legal and regulatory duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates.

We have relied upon and plan to continue to rely upon third-party medical institutions, clinical investigators, contract laboratories and other third party CROs to monitor and manage data for our ongoing preclinical and clinical programs. We rely on these parties for execution of our preclinical and clinical trials, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory, and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities. We and our CROs are required to comply with Good Clinical Practices (“GCPs”), which are regulations and guidelines enforced by the FDA, the Competent Authorities of the member states of the European Economic Area (EEA), and comparable foreign regulatory authorities for all our products in clinical development.

Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators, and trial sites. If we or any of our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, the European Medicines Agency (“EMA”) or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under cGMP regulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.

In addition, our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our on-going clinical, non-clinical and preclinical programs. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data, they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed, or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed.

If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms. Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new CRO commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

If we are unable to enroll patients in our clinical trials, our research and development efforts could be adversely affected.

The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. Patient enrollment is affected by many factors including:

Many pharmaceutical companies are conducting clinical trials in patients with the disease indications that our potential drug products target. As a result, we must compete with them for clinical sites, physicians and the limited number of patients who fulfill the stringent requirements for participation in clinical trials. Also, due to the confidential nature of clinical trials, we do not know how many of the eligible patients may be enrolled in competing studies and who are consequently not available to us for our clinical trials. Our clinical trials may be delayed or terminated due to the inability to enroll enough patients. The delay or inability to meet planned patient enrollment may result in increased costs and delay or termination of our trials, which could have a harmful effect on our ability to develop products.

We may be unable to maintain sufficient clinical trial liability insurance to fully insure against liabilities arising out of clinical trial activities.

We will require all patients enrolled in our clinical trials to sign consents, which explain various risks involved with participating in the trial. However, patient consents provide only a limited level of protection, and it may be alleged that the consent did not address or did not adequately address a risk that the patient suffered from. Additionally, we will generally be required to indemnify the clinical product manufacturers, clinical trial centers, medical professionals and other parties conducting related activities in connection with losses they may incur through their involvement in the clinical trials. We may not be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities.

Our inability to retain sufficient clinical trial liability insurance at an acceptable cost to protect against potential liability claims could prevent or inhibit our ability to conduct clinical trials for product candidates we develop. We may be unable to obtain appropriate levels of such insurance. Even if we do secure clinical trial liability insurance for our programs, we may not be able to achieve sufficient levels of such insurance. Any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is more than the limits of our insurance coverage. We expect we will supplement our clinical trial coverage with product liability coverage in connection with the commercial launch of Generx or other product candidates we develop in the future; however, we may be unable to obtain such increased coverage on acceptable terms or at all. If we are found liable in a clinical trial lawsuit or a product liability lawsuit in the future, we will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

We currently have only one significant product candidate—our Generx product candidate—and our business is substantially dependent on its success.

We do not currently have any viable product candidates other than Generx. Accordingly, our success is substantially dependent on our ability to successfully secure marketing approval and to commercialize Generx. If we fail to secure marketing approval for Generx, we could be forced to try to secure an alternative product candidate. Our internal research and development capabilities are limited and will initially be focused on the Phase 3 Generx clinical trial. We may evaluate, acquire, license, develop and/or market additional product candidates and technologies. We do not currently have substantial resources to procure additional technologies. The success of this strategy depends partly upon our ability to identify, select, and acquire promising pharmaceutical product candidates and products. The process of proposing, negotiating, and implementing a license or acquisition of a product candidate or approved product is lengthy and complex. Other companies, including some with substantially greater financial, marketing and sales resources, may compete with us for the license or acquisition of product candidates and approved products. We have limited resources to identify and execute the acquisition or in-licensing of third-party products, businesses and technologies and integrate them into our current infrastructure. Moreover, we may devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts. We may not be able to acquire the rights to additional product candidates on terms that we find acceptable, or at all. If we are unable to receive marketing approval and successfully commercialize Generx we may not be able to secure rights to another viable product candidate and may be forced to cease operations.

Interim “top-line” and preliminary data from our clinical trials may change as more patient data become available and are subject to verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose interim top-line or preliminary data from our clinical trials, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to evaluate all data fully and carefully. As a result, the top-line, or preliminary results that we report may differ from future results of the same studies, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated. Top-line or preliminary data also remain subject to verification procedures that may result in the final data being materially different from the top-line or preliminary data we previously published. As a result, top-line and preliminary data should be viewed with caution until the final data are available.

Regulatory agencies may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.

If the interim, top-line or preliminary data that we report differs from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.

We have obtained Fast Track Designation for Generx, but that designation may not lead to a faster development, regulatory review, or approval.

If a product is intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition, a product sponsor may apply for FDA Fast Track designation. We have obtained Fast Track designation for Generx for investigation into the treatment of refractory angina, providing opportunity for expedited clinical development and regulatory review. Fast Track Designation does not ensure that we will receive marketing approval or that approval will be granted within any particular timeframe. We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.

If the FDA does not conclude that our product candidates satisfy the requirements for the 505(b)(2) regulatory approval pathway, or if the requirements for approval of any of our product candidates under Section 505(b)(2) are not as we expect, the approval pathway for our product candidates will likely take significantly longer, cost significantly more, and encounter significantly greater complications and risks than anticipated, and in any case may not be successful.

We intend to seek FDA approval through the 505(b)(2) regulatory pathways for Generx. Section 505(b)(2) of the Food Drug and Cosmetics Act permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant. If the FDA does not allow us to pursue the 505(b)(2) regulatory pathways for our product candidates as anticipated, we may need to conduct additional clinical trials, provide additional data and information, and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for our product candidates would likely substantially increase. Moreover, the inability to pursue the 505(b)(2) regulatory pathways could result in new competitive products reaching the market faster than our product candidates, which could materially adversely impact our competitive position and prospects. Even if we can pursue the 505(b)(2) regulatory pathways for a product candidate, we cannot assure you that we will receive the requisite or timely approvals for commercialization of such product candidate. In addition, we expect that our competitors will file citizens’ petitions with the FDA in an effort to persuade the FDA that our product candidates, or the clinical studies that support their approval, contain deficiencies. Such actions by our competitors could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2).

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in other significant negative consequences.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities. The clinical evaluation of Generx and our other product candidates in patients is still in the early stages and it is possible that there may be side effects associated with their use. Results of our trials could reveal a high and unacceptable severity and prevalence of side effects. In such an event, we, the FDA, the IRBs at the institutions in which our studies are conducted, or the Data Safety Monitoring Board could suspend or terminate our clinical trials, or the FDA or comparable foreign regulatory authorities could order us to cease clinical trials or deny approval of our product candidates for any or all targeted indications.

While we are not presently aware of any side effects from the use of Generx, possible serious side effects of gene transfer include viral or gene product toxicity resulting in inflammation or other injury to the heart or other parts of the body. The development or worsening of cancer in a patient could potentially be a perceived or actual side effect of gene therapy technologies. Furthermore, there is a possibility of side effects or decreased effectiveness associated with an immune response toward any viral vector or gene used in gene therapy. The possibility of such response may increase if there is a need to deliver the viral vector more than once.

Treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the clinical trial or result in potential product liability claims. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff. We expect to have to train medical personnel using our product candidates to understand the side effect profiles for our clinical trials and upon any commercialization of any of our product candidates. Inadequate training in recognizing or managing the potential side effects of our product candidates could result in patient injury or death. Any of these occurrences may harm our business, financial condition, and prospects significantly.

If we elect or are forced to suspend or terminate any planned clinical trial of Generx or any other of our product candidates, the commercial prospects for that product will be harmed and our ability to generate product revenue from that product may be delayed or eliminated. Furthermore, any of these events could prevent us or our partners from achieving or maintaining market acceptance of the affected product and could substantially increase the costs of commercializing our product candidates and impair our ability to generate revenue from the commercialization of these products.

Risks Related to Product Commercialization

Even if we obtain regulatory approvals to commercialize Generx or other product candidates, our product candidates may not be accepted by physicians or the medical community in general.

Our ongoing business depends on the success of our technologies and product candidates. Gene-based therapy, like our Generx product candidate, is a relatively new and rapidly evolving medical approach. Biotechnology and pharmaceutical companies have successfully developed and commercialized only a limited number of biologic-based products and to date only a limited number of cellular and gene therapy products have been approved by the U.S. FDA. Our product candidates, and the technology underlying them, are new and unproven and there is no guarantee that health care providers or patients will be interested in our products even if they are approved for use.

We cannot be certain that Generx or any other product candidate we successfully develop will be accepted by physicians, hospitals, and other health care facilities. The degree of market acceptance of any drugs we develop depends on a number of factors, including:

If the market does not accept our products or product candidates, when and if we are able to commercialize them, then we may never become profitable. It is difficult to predict the future growth of our business, if any, and the size of the market for our product candidates because the market and technology are continually evolving. There can be no assurance that our technologies and product candidates will prove superior to technologies and products that may currently be available or may become available in the future or that our technologies or research and development activities will result in any commercially profitable products. If our products do not gain market acceptance, we may not be able to fund future operations either through operating or financing activities.

Even if we obtain marketing approval for Generx or another product candidate, we will still face extensive and ongoing regulatory requirements which could significantly impact our operations.

Any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising, and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with cGMP requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and GCP requirements for any clinical trials that we conduct post-approval.

Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product candidate may be marketed or to the conditions of approval, including a requirement to implement a REMS. If any of our product candidates receives marketing approval, the accompanying label may limit the approved indicated use of the product candidate, which could limit sales of the product candidate. The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of a product. Violations of the Federal Food, Drug, and Cosmetic Act, or FDCA, relating to the promotion of prescription drugs may lead to FDA enforcement actions and investigations alleging violations of federal and state healthcare fraud and abuse laws, as well as state consumer protection laws.

Later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes or failure to comply with regulatory requirements, could result in:

Further, the FDA’s policies may change, and additional government regulations may be enacted that could impose extensive and ongoing regulatory requirements and obligations on any product candidate for which we obtain marketing approval. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects, and ability to achieve or sustain profitability.

Healthcare reform measures could hinder or prevent our product candidates’ commercial success.

New laws, regulations and judicial decisions, or new interpretations of existing laws, regulations, and decisions, that relate to healthcare availability, methods of delivery or payment for products and services, or sales, marketing, or pricing, may limit our potential revenue, and we may need to revise our research and development programs. The continuing efforts of the U.S. and foreign governments, insurance companies, managed care organizations and other payors of health care services to contain or reduce health care costs may adversely affect our ability to set prices for our products which we believe are fair, and our ability to generate revenues and achieve and maintain profitability. We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified.

Further federal and state proposals and health care reforms are likely which could limit the prices that can be charged for the product candidates that we develop and may further limit our commercial opportunities. Our proposed products may not be considered cost-effective, and coverage and reimbursement may not be available or sufficient to allow us to sell our proposed products on a profitable basis. Our results of operations could be materially adversely affected by proposed healthcare reforms, by the Medicare prescription drug coverage legislation, by the possible effect of such current or future legislation on amounts that private insurers will pay and by other health care reforms that may be enacted or adopted in the future.

We intend to rely on third parties to produce commercial supplies of any approved product candidate, and our commercialization of any future product could be stopped or delayed or made less profitable if third party manufacturers fail to obtain approval of the FDA or comparable regulatory authorities or fail to provide us with drug product in sufficient quantities or at acceptable prices.

The manufacture of biotechnology and pharmaceutical products is complex and requires significant expertise, capital investment, process controls and know-how. Common difficulties in biotechnology and pharmaceutical manufacturing may include:

We do not currently have, nor do we plan to acquire, the infrastructure or capability internally to produce an adequate supply of compounds to meet future requirements for clinical trials and commercialization of our products or to produce our products in accordance with cGMP prescribed by the FDA. Drug manufacturing facilities are subject to inspection before the FDA will issue an approval to market a new drug product, and all of the manufacturers that we intend to use must adhere to the cGMP regulations prescribed by the FDA.

We expect to rely on third-party manufacturers for clinical supplies of our product candidates that we may develop. These third-party manufacturers will be required to comply with cGMPs, and other applicable laws and regulations. We will have no control over the ability of these third parties to comply with these requirements, or to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or any other applicable regulatory authorities do not approve the facilities of these third parties for the manufacture of our other product candidates or any products that we may successfully develop, or if it withdraws any such approval, or if our suppliers or contract manufacturers decide they no longer want to supply or manufacture for us, we may need to find alternative manufacturing facilities, in which case we might not be able to identify manufacturers for clinical or commercial supply on acceptable terms, or at all. Any of these factors would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates and adversely affect our business.

Manufacturing biologic products is subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit supply of our products.

We and/or our third-party manufacturers may be adversely affected by developments outside of our control, and these developments may delay or prevent further manufacturing of our products. Adverse developments may include:

If we or our third-party manufacturers were to encounter any of the above difficulties, or otherwise fail to comply with contractual obligations, our ability to provide any product for commercial purposes would be jeopardized. This may increase the costs associated with completing our commercial production. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications or pass safety inspections. Inability to meet the demand for our product candidate could damage our reputation and the reputation of our product among physicians, healthcare payors, patients, or the medical community, which could adversely affect our ability to operate our business and our results of operations. If production difficulties cannot be solved with acceptable costs, expenses, and timeframes, we may be forced to abandon our commercialization plans, which could have a material adverse effect on our business, prospects, financial condition, and the value of our securities.

If we are unable to develop satisfactory sales and marketing capabilities, we may not succeed in commercializing Generx or any other product candidate.

We have limited experience in marketing and selling drug products. Typically, pharmaceutical companies would employ groups of sales representatives and associated sales and marketing staff numbering in the hundreds to thousands of individuals to call on many physicians and hospitals. If we seek to market and sell our drugs directly, we will need to hire additional personnel skilled in marketing and sales. The establishment of a direct sales force or a contract sales force or a combination direct and contract sales force to market our products will be expensive and time-consuming and could delay any product launch. Further, we can give no assurances that we may be able to maintain a direct and/or contract sales force for any period or that our sales efforts will be sufficient to grow our revenues or that our sales efforts will ever lead to profits.

We may seek to collaborate with a third party to market our products. If we seek to collaborate with a third party, we cannot be sure that a collaborative agreement can be reached on terms acceptable to us. We cannot be sure that we will be able to acquire, or establish third party relationships to provide, any or all these marketing and sales capabilities.

We operate in a highly competitive industry and the emergence of an alternative product or technology could significantly impact the market opportunity for our products.

Biopharmaceutical product development is highly competitive and subject to rapid and significant technological advancements. We face and will continue to face intense competition from a variety of businesses, including large, fully integrated, well-established pharmaceutical companies who already possess a large share of the market, specialty pharmaceutical and biopharmaceutical companies, academic institutions, government agencies and other private and public research institutions in the United States, the European Union, and other jurisdictions. These companies have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved drugs than we do. This may make it easier for them to respond more quickly than us to new or changing opportunities, technologies, or market needs.

For our Generx product candidate, we will have to demonstrate that it provides advantages over existing standards of care including stents, enhanced external counter-pulsation, and Ranexa® (ranolazine). In addition, a number of competitors are developing alternative treatments for refractory angina, including product candidates being developed by Neovasc, BioCardia, Caladrius, and others.

Our competitors may develop more effective or more affordable products or achieve earlier patent protection or product commercialization and market penetration than us. As these competitors develop their technologies, they may develop proprietary positions that prevent us from successfully commercializing our future products. If we are unable to adapt, products and technologies developed by our competitors may render our products and product candidates uneconomical or obsolete, and we may not be successful in marketing our products and product candidates against competitors. We may never be able to capture and maintain the market share necessary for growth and profitability and there is no guarantee we will be able to compete successfully against current or future competitors.

If we successfully commercialize Generx or another product candidate, we will face the risk of product liability claims, which could adversely affect our business and financial condition.

Our sales and marketing will expose us to product liability risks that are inherent in the testing, manufacturing, and marketing of biotechnology products. Product liability may result from harm to patients using our products, such as a complication that was either not communicated as a potential side effect or was more extreme than communicated. Failure to obtain or maintain sufficient product liability insurance or otherwise protect against product liability claims could prevent or delay the commercialization or marketing of our products or product candidates or expose us to substantial liabilities and diversions of resources, all of which can negatively impact our business. Regardless of the merit or eventual outcome, product liability claims may result in withdrawal of product candidates from clinical trials, costs of litigation, damage to our reputation, substantial monetary awards to plaintiffs and decreased demand for products.

Risks Related to Intellectual Property Rights

Our intellectual property may not be sufficient to protect our products from competition, which may negatively affect our business as well as limit our partnership or acquisition appeal.

The patents relating to the fundamental processes for our Generx product candidate have expired. We do not currently have any patent protection related to Generx. For Generx, and other product candidates we may develop, we rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our competitive position.

We may be subject to competition despite the existence of intellectual property we license or own. We can give no assurances that our intellectual property claims will be sufficient to prevent third parties from designing around patents we own or license and developing and commercializing competitive products. The existence of competitive products that avoid our intellectual property could materially adversely affect our operating results and financial condition. Furthermore, limitations, or perceived limitations, in our intellectual property may limit the interest of third parties to partner, collaborate or otherwise transact with us, if third parties perceive a higher than acceptable risk to commercialization of our products or future products.

It is difficult and costly to protect our proprietary rights, and we may not be able to ensure their protection. If we fail to adequately protect our product candidates, others could compete against us more directly.

Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection of our current and future product candidates, the processes used to manufacture them and the methods for using them, as well as successfully defending these patents against third-party challenges.

The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. No consistent policy regarding the breadth of claims allowed in pharmaceutical patents has emerged to date in the United States or in foreign jurisdictions outside of the United States. Changes in either the patent laws or interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property. Accordingly, we cannot predict the breadth of claims that may be enforced in the patents that may be issued from the applications we currently or may in the future own or license from third parties. Further, if any patents we obtain or license are deemed invalid and unenforceable, our ability to commercialize or license our technology could be adversely affected.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

We cannot be certain that any future patents will be issued with claims that cover our product candidates. Our ability to stop third parties from making, using, selling, offering to sell, or importing our product candidates is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these activities.

If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished.

We also rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.

Furthermore, any license agreements we enter in the future may require us to notify, and in some cases license back to the licensor, certain additional proprietary information, or intellectual property that we developed using the rights licensed to us under these agreements. Any such licenses back to the licensor could allow our licensors to use that proprietary information or intellectual property in a manner that could harm our business. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA, as part of its transparency initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

We may incur substantial costs because of litigation or other proceedings relating to patents and other intellectual property rights.

If we choose to commence a proceeding or litigation to prevent another party from infringing our patents, that party will have the right to ask the examiner or court to rule that our patents are invalid or should not be enforced against them. There is a risk that the examiner or court will decide that our patents are not valid and that we do not have the right to stop the other party from using the related inventions. There is also the risk that, even if the validity of our patents is upheld, the examiner or court will refuse to stop the other party on the ground that such other party’s activities do not infringe our rights to such patents. In addition, the U.S. Supreme Court has recently modified some tests used by the U.S. Patent and Trademark Office, or USPTO, in granting patents over the past 20 years, which may decrease the likelihood that we will be able to obtain patents and increase the likelihood of challenge to any patents we obtain or license.

Any proceedings or litigation to enforce our intellectual property rights or defend ourselves against claims of infringement of third-party intellectual property rights could be costly and divert the attention of managerial and scientific personnel, regardless of whether such litigation is ultimately resolved in our favor. We may not have sufficient resources to bring these actions to a successful conclusion. Some of our competitors who may assert infringement may be able to sustain the costs of complex patent litigation more effectively than we can because they are better capitalized and have more resources than us. Moreover, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

If we are unable to successfully defend against claims that we have infringed the intellectual property rights of others, we may be prevented from using certain intellectual property and may be liable for damages, which in turn could materially adversely affect our business, financial condition, or results of operations. Alternatively, we could be compelled to seek licenses from one or more third parties who could be direct or indirect competitors and who might not make licenses available on terms that we find commercially reasonable or at all.

Risks Related to International Operations

We may be subject to extensive regulations outside the United States and may not obtain marketing approvals for products in Europe and other jurisdictions.

In addition to regulations in the United States, should we or our collaborators pursue marketing approvals for Generx and our other product candidates internationally, we and our collaborators will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products. Whether or not we, or our collaborators, obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

We expect to pursue marketing approvals for Generx and our other product candidates in Europe and other jurisdictions outside the United States with collaborative partners. The time and process required to obtain regulatory approvals and reimbursement in Europe and other jurisdictions may be different from those in the United States, and regulatory approval in one jurisdiction does not ensure approvals in any other jurisdiction; however, negative regulatory decisions in any jurisdiction may have a negative impact on the regulatory process in other jurisdictions.

Following a national referendum and enactment of legislation by the government of the United Kingdom, the United Kingdom withdrew from the European Union, or Brexit, on January 31, 2020, and entered into a transition period during which it will continue its ongoing and complex negotiations with the European Union relating to the future trading relationship between the parties. Significant political and economic uncertainty remains about whether the terms of the relationship will differ materially from the terms before withdrawal, as well as about the possibility that a so-called “no deal” separation will occur if negotiations are not completed by the end of the transition period. Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the United Kingdom and/or the European Union and restrict our ability to generate revenue and achieve and sustain profitability. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the United Kingdom and/or European Union for our product candidates, which could significantly and materially harm our business.

We have entered into agreements with third parties to market our Generx product candidate in certain territories if approved by relevant regulatory authorities, but there can be no assurance that the efforts of such third parties will meet our expectations or result in any significant product sales.

We have entered into license agreements with Pineworld Capital Ltd, and Shanxi for the right to manufacture and sell Generx in greater China and the CIS. The licenses are effective upon FDA approval to market Generx in the United States. Our licenses to Pineworld Capital Ltd, and Shanxi are exclusive, and we do not have a right to separately manufacture, use or sell our Generx product candidate into those territories. Consequently, we are dependent on the resources, efforts, and success of our licensees to successfully develop a market for Generx in those territories. We do not control the operations of our licensees and have limited rights to terminate the licenses under the terms of our agreements. We cannot be certain that our licensees will successfully generate any significant product sales, or that the royalties that we ultimately receive from these arrangements will meet our expectations.

Collaborations with Third Parties outside the United States presents additional risks.

Conducting clinical trials in foreign countries, as we may do for our current and future product candidates, presents additional risks that may delay completion of our clinical trials. These risks include the failure of enrolled patients in foreign countries to adhere to the clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

To the extent we agree to work exclusively with one collaborator in each area, our opportunities to collaborate with other entities could be curtailed. Lengthy negotiations with potential new collaborators may lead to delays in the research, development, or commercialization of product candidates. The decision by our collaborators to pursue alternative technologies or the failure of our collaborators to develop or successfully commercialize any product candidate to which they have obtained rights from us could materially harm our business, financial condition, and results of operations.

To the extent that we enter markets outside the United States, our business will be subject to political, economic, legal, and social risks in those markets, which could adversely affect our business.

There are significant regulatory and legal barriers in markets outside the United States that we must overcome to the extent we enter or attempt to enter markets in countries other than the United States. We will be subject to the burden of complying with a wide variety of national and local laws, including multiple and possibly overlapping and conflicting laws. We also may experience difficulties adapting to new cultures, business customs and legal systems. Any sales and operations outside the United States would be subject to political, economic, and social uncertainties including, among others:

Any changes related to these and other factors could adversely affect any business operations that we conduct outside the United States.

Risks Related to Financial Position, Need for Additional Capital, and Worldwide Environment

We have incurred losses since inception and anticipate that we will continue to incur significant net losses for the foreseeable future and may never achieve or maintain profitability.

We have sustained operating losses since our inception and will likely continue to sustain losses as we seek to develop our products and product candidates. We expect these losses to be substantial because of the significant amounts we expect to spend on development activities and clinical trials for our product candidates. We expect our net losses from operations to continue for at least the next few years.

Whether we will generate additional revenues and become profitable will depend on our ability, alone or with potential collaborators, to efficiently and successfully complete the development of our product candidates, successfully complete pre-clinical and clinical tests, obtain necessary regulatory approvals, and manufacture and market our products. There can be no assurance that any such events will occur or that we will ever become profitable. Even if we do achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time, we may be unable to continue our business.

We will need substantial additional funding to develop our Generx product candidate, and if we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts.

Our expenses will increase over the next several years as we continue to develop and conduct clinical trials with respect to our Generx or other product candidates, seek regulatory approvals, and initiate commercialization efforts. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. We do not have any arrangements for future financing in place currently. If we are unable to obtain such funds when needed, we may have to delay, scale back or terminate our product development or our business.

To the extent we raise additional capital through the sale of equity securities, the ownership position of existing stockholders could be substantially diluted. Anti-dilution adjustments to our Series A Convertible Preferred Stock and Series B Convertible Preferred Stock could cause further dilution. If additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock and may involve significant fees, interest expense, restrictive covenants, and the granting of security interests in our assets.

Future sales of securities could result in additional dilution of the percentage ownership of our stockholders and could cause the share price for our Common Stock to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations, including conducting clinical trials, hiring new personnel, commercializing our products, and continuing activities as an operating public company. We expect to raise additional capital through the sale of debt or equity securities, but we do not have any firm arrangements for capital in place currently. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, preferred stock or other convertible securities or other equity securities in one or more transactions at prices and in a manner, we determine from time to time. If we sell common stock, convertible securities, or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

We need a significant amount of additional capital investment which will be necessary to finance our continued operations, which creates additional risk that financing may not be available to us when needed, or that the terms may not be favorable or may result in additional dilution to our current stockholders.

Our estimate as to how long we expect our existing cash to be able to continue to fund our operations and the costs required to move our Generx product candidate to commercialization are based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. Our future funding requirements, both short-term and long-term, will depend on many factors, including:

Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will obtain marketing approval to commercialize any of our product candidates. If we are required by the U.S. Food and Drug Administration, or FDA, or other regulatory authorities such as the EMA, to perform studies and trials in addition to those currently expected, or if there are any delays in the development, or in the completion of any planned or future preclinical studies or clinical trials of our current or future product candidates, our expenses could increase, and profitability could be further delayed.

As a result, although we can estimate the amount of future capital requirements, we cannot predict with exact certainty the amount of capital that we will need to raise to finance our continued operations. If we encounter unexpected delays or expenses or setback in our product development efforts, we may be compelled to seek additional financing, which may not be available on terms that are favorable to our investors at that time.

Our recurring losses from operations raise substantial doubt regarding our ability to continue as a going concern.

Our consolidated financial statements for the years ending December 31, 2020, and 2019 were prepared under the assumption that we will continue as a going concern for the next twelve months from the issuance date of these financial statements. Due to our recurring losses from operations from our inception and our limited cash resources, there is a substantial risk that we may not be able to continue as a going concern within one year after the financial statements are issued without additional capital becoming available. Our independent registered public accounting firm has issued an audit opinion that included an explanatory paragraph referring to our projected future losses along with recurring losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies, reduce expenditures, and, ultimately, to generate revenue. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We are currently dependent on the services of a few key employees and need to increase the size of our organization.

As of December 31, 2020, we employed a total of three full-and part-time employees. We will need to expand our managerial, operational, technical, scientific, financial, and other resources to manage our operations and clinical trials, continue our research and development activities, and commercialize our product candidate. Our management and scientific personnel, systems, and facilities currently in place may not be adequate to support our future growth, and the loss of one or more of our executive officers or key employees or an inability to attract and retain highly skilled employees could adversely affect our business. We will need to attract and retain enough talented employees to:

Competition for qualified personnel is intense among companies, academic institutions, and other organizations. The pool of qualified personnel with experience working with the pharma market is limited overall. In addition, many of the companies with which we compete for experienced personnel have greater resources than we have. If we are unable to attract and retain key personnel, it may negatively affect our ability to successfully develop, test, commercialize and market our products and product candidates. If we fail to secure sufficient qualified and talented personnel our development efforts may be delayed, become more costly or more susceptible to failure.

We may have material weaknesses in our internal control over financial reporting which may result in misstatements in our financial statements or erode investor confidence.

We have had limited financial resources and have historically had material weaknesses in our internal control over financial reporting, as described elsewhere in this report. We have applied a portion of the funds secured from the Nostrum financing to enhance and strengthen our internal controls and financial reporting. If we fail to completely mitigate those material weaknesses or significant deficiencies in our internal controls continue or occur in the future, we may fail to meet our future reporting obligations on a timely basis, or our financial statements could contain errors or misstatements. If such errors were sufficiently material, we would be required to restate prior period financial results, which may subject us to class action litigation.

Any failure to address the ineffectiveness of our internal controls could also adversely affect the periodic management evaluations of the effectiveness of our internal controls over financial reporting and our disclosure controls and procedures that are required to be included in our annual report on Form 10-K. Continued reporting of internal control deficiencies could also cause investors to lose confidence in our reported financial information, which could adversely impact demand for stock and stock price.

We plan to file our quarterly reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021, September 30, 2021, and our 10-K for 2021 and file any other submission that may be required to become current with our Section 13(a) filing obligations under the Securities Exchange Act of 1934. If remedial measures become required or if material weaknesses or significant deficiencies in our internal controls continue or occur in the future, any of the following may occur:

Any failure to address the ineffectiveness of our disclosure controls and procedures could also adversely affect the periodic management evaluations of the effectiveness of our internal controls over financial reporting and our disclosure controls and procedures that are required to be included in our annual report on Form 10-K. Internal control deficiencies and ineffective disclosure controls and procedures could also cause investors to lose confidence in our reported financial information. The future measures we plan to take may not remediate the ineffectiveness of our disclosure controls and procedures, and material weaknesses and restatements of financial results may arise in the future due to a failure to implement and maintain adequate internal control over financial reporting and adequate disclosure controls and procedures. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls, and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements.

We are not current with our reporting requirements under Section 13(a) of the Securities Exchange Act of 1934.

Due to financial hardship, we were unable to secure auditor review or audit of our financial statements and suspended regular reporting of our financial results of operations following our quarterly report for the period ended March 31, 2017. On May 22, 2020, during the period covered by this report, we secured a $1.7 million financing arrangement and have used a portion of those proceeds to complete the financial statements and disclosures in this report. On April 23, 2021, we filed a comprehensive Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 Annual Report”), with expanded disclosures for the fiscal years ended December 31, 2018, and 2017, and the quarterly periods ended March 31, June 30, and September 30 during 2019, 2018 and 2017. We have subsequently filed quarterly reports for the periods ended March 31, June 30, and September 30, 2020, and the 2020 annual report. The filing of this report will not result in us becoming “current” in our reporting requirements under the Securities Exchange Act of 1934. It is our intention to become current, and we are planning to file reports for the periods beyond December 31, 2020. Once we do become current, we will continue to be precluded from the use of certain abbreviated registration statements and forms, which are predicated on timely filing of all required reports over the prior 12-month period.

Once we become current with our SEC filings, we plan to apply for an up listing of our stock trading from the OTC-PINK to the OTC-QB marketplace and apply to effect a change the Company’s trading symbol to be more reflective of our current company “Gene Biotherapeutics.”

As we have previously reported, it is our intention to become “current” with respect to our SEC financial reporting obligations, and we continue to move forward with our plan.

If one or more of the foregoing risks or challenges persist, our business, operations and financial condition are likely to be materially and adversely affected.

Impact of Coronavirus Outbreak

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally and since then authorities throughout the world have implemented measures to contain or mitigate the spread of the virus, including physical distancing, travel bans and restrictions, closure of non-essential businesses, quarantines, work-from-home directives, and shelter-in-place orders. These measures have caused, and are continuing to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide, which have impacted our business and results of operations.

The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020 and 2021.

Risks Related to Our Capital Structure and Owning our Common Stock

Our outstanding shares of Preferred Stock and warrants to purchase Common Stock far exceed the number of shares of our Common Stock outstanding and their conversion or exercise will result in substantial dilution to holders of our Common Stock.

As of March 15, 2022, we had 64,932,888 shares of Common Stock issued and outstanding. In addition, we had 220 shares of Series A Convertible Preferred Stock and 1,700,000 shares of Series B Convertible Preferred Stock outstanding. The Series A Convertible Preferred Stock is currently convertible into an aggregate of 19,469,026 shares of our Common Stock, and each share of Series B Convertible Preferred Stock is convertible into aggregate of 150,442,478 shares of Common Stock. Both our Series A Convertible Preferred Stock and our Series B Convertible Preferred Stock have anti-dilution protection in the event that we issue shares of Common Stock or equivalents at a price less than the current $0.0113 conversion price.

Subsequently, during the 2021 calendar year, Nostrum made additional capital contributions to the Company totaling $371,080, which are convertible into 32,838,938 shares of Common Stock. After giving effect for issuance of these of the issuance these shares into Common Stock and the conversion of the Series A and Series B Convertible Preferred Stocks, Nostrum would beneficially own 202,750,442 shares of the Common Stock, representing 75.7% of the Company, and other shares of issued and outstanding Common Stock totals 64,931,888, representing 24.3% of the total outstanding shares of Common Stock, as of March 15, 2022.

In addition, as of December 31, 2021, we had warrants outstanding to purchase 14,799,333 shares of our Common Stock at prices from $0.19 to $0.80 per share. The warrants expire at various times from 2024 to 2027. The conversion of outstanding Series A Convertible Preferred Stock and Series B Convertible Preferred Stock and the exercise of outstanding warrants would substantially reduce the percentage ownership of holders of our Common Stock. The addition of substantial additional shares of Common Stock in the market could result in excess supply and adversely affect prevailing market prices of our Common Stock.

We may consider affecting a reverse stock split or other share recapitalization transaction, which could impact the value of our Common Stock.

The total number of shares of our Common Stock, on a fully diluted basis, nearly exceeds our authorized capital. In addition, we would like to increase the per share price of our outstanding Common Stock to a range that would meet initial listing standards for a national exchange, should we otherwise qualify for a listing. We have not fixed the terms of any such share recapitalization. Often when companies affect a reverses stock split, their post-split trading price does not reflect the full multiple, resulting in an effective decrease in value.

Nostrum’s control of approximately 75.7% of our voting securities gives them control over any action requiring stockholder approval and may discourage some investors from investing.

Nostrum through its ownership of our Series A Convertible Preferred Stock and Series B Convertible Preferred Stock controls approximately 75.7% of the voting interests of our company. Nostrum will control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all our assets. In addition, Nostrum will exercise significant control over the management and affairs of our company. This concentration of ownership might harm the market price of our Common Stock if:

Our Common Stock is not listed on a national exchange which may diminish the market interest, liquidity, and price for our Common Stock.

Our common stock currently is listed only on the OTC Pink Sheets. We hope to have our Common Stock re-established on the OTC QB once our SEC filing delinquencies are rectified. OTC QB is a reporting service and not a securities exchange. It is our intent to secure a listing on the Nasdaq Capital Market or another National Exchange, but we do not currently meet the listing criteria and we may never qualify for trading on a national exchange.

Many institutional investors are prohibited from investing in stock unless they are listed on a national exchange. Also index funds are generally restricted to exchange listed securities. Accordingly, stock listed on the over-the counter market is less likely to secure general market interest, including analyst and research coverage. Stocks that trade on the over-the-counter market may experience lower trading volumes, higher spreads between bid and ask pricing, increased volatility, and lower prices generally that those traded on a national exchange. The inability to list our Common Stock on a national exchange may negatively impact the volume of trading and market price for our common stock.

We are subject to SEC rules concerning the regulation of “penny stocks” which may reduce investor demand and market prices for our Common Stock.

Our Common Stock is currently a “penny stock” under applicable SEC rules. While we have that designation, broker-dealers trading in our common stock must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. This requirement may impair the ability of broker-dealers to sell our Common Stock and the ability of interested purchasers to acquire shares. In addition to additional SEC regulation, penny stocks are generally perceived as more susceptible to trading manipulation schemes such as (a) control of the market by one or a few broker dealers, (b) manipulation of pricing through wash sale transactions, (c) so-called “boiler room” practices involving high pressure sales tactics, (d) excessive and undisclosed bid-ask differentials and mark-ups by selling broker-dealers. Consequently, many institutional investors will not invest in stock that are classified as penny stocks. These circumstances may reduce the demand for our Common Stock and could result in reduced liquidity or lower market prices for our Common Stock.

To raise capital to fund the development of our Generx product candidate, we have sold shares in our Angionetics subsidiary.

In 2016 we sold a 15% non-dilutive interest in our Angionetics, Inc. subsidiary to Pineworld Capital Limited. Our management did this because it believed that it could raise capital at a better valuation, and with less dilution to existing stockholders, than if it were to sell shares of Gene Biotherapeutics. Angionetics holds the intellectual property rights for our Generx product candidate. Consequently, Gene Biotherapeutics is only entitled to 85% of the economic return from the commercialization of Generx or any sale of Angionetics. While it is not currently contemplated, if Angionetics were to issue additional equity securities to third party investors, it will dilute the interest of Gene Biotherapeutics, and consequently our stockholders in Angionetics and the Generx product candidate.

The price of our Common Stock may fluctuate substantially and an investment in our Common Stock could decline substantially in value.

The market price for our Common Stock may be subject to greater volatility than other stock as a result of:

We have never paid cash dividends on our capital stock and do not intend to pay cash dividends on our shares of common stock in the foreseeable future.

We do not anticipate generating cash from operations for several years while we continue development and qualification of our product candidates. For the foreseeable future, we intend to retain any future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends. Any return to stockholders will therefore be limited to the increase, if any, of our share price.

We are a “smaller reporting company” and can avail ourselves of reduced disclosure requirements applicable to small reporting companies, which could make our common stock less attractive to investors.

We are a smaller reporting company, and we will remain a smaller reporting company until the fiscal year following the determination that the market capitalization our voting and non-voting common stock held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenues are more than $100 million during the most recently completed fiscal year and the market capitalization of our voting and non-voting common stock held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter. Smaller reporting companies can provide simplified executive compensation disclosure, are exempt from the auditor attestation requirements of Section 404, and have certain other reduced disclosure obligations, including, among other things, being required to provide only two years of audited financial statements and not being required to provide selected financial data, supplemental financial information, or risk factors. We have elected to take advantage of certain of the reduced reporting obligations, which may render our common stock less attractive to some investors.

Our charter and Delaware law have anti-takeover effects that could discourage, delay, or prevent a change in control, which may discourage third party offers to acquire our Company.

Our company could be difficult to acquire due to anti-takeover provisions in our charter and Delaware law. Our bylaws provide for advance shareholder notice for actions to be taken at meetings of stockholders. In addition, our certificate of incorporation includes a provision for “blank check” preferred stock, which could be used to implement a stockholder rights plan. These provisions may make it more difficult for stockholders to take corporate actions and may have the effect of delaying or preventing a change in control. These provisions also could deter or prevent transactions that stockholders deem to be in their interests.

In addition, we are subject to the anti- takeover provisions of Section 203 of the Delaware General Corporation Law. Subject to specified exceptions, this section provides that a corporation may not engage in any business combination with any interested stockholder during the three-year period following the time that such stockholder becomes an interested stockholder. This provision could have the effect of delaying or preventing a change of control of our company. The foregoing factors could reduce the price that investors or an acquirer might be willing to pay in the future for shares of our common stock.