Autolus Therapeutics (AUTL) Financial Report Summaries

Risks

• We are an early commercial stage biopharmaceutical company and have incurred significant losses since our inception. We expect to continue to incur losses for the foreseeable future.
• We will need additional funding to successfully commercialize AUCATZYL and to complete the development of and commercialize our other product candidates, which may not be available on acceptable terms, if at all.
• We have incurred substantial obligations under license and collaboration agreements, which could impair our flexibility and access to other capital and adversely affect our financial position, and our business would be adversely affected if we were unable to meet our obligations under these and similar future agreements.
• AUCATZYL and any other product candidates, if approved, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, thereby limiting our potential to generate revenue.
• If we are unable to fully develop our sales, marketing and distribution capability on our own , or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing AUCATZYL, or our other product candidates, if and when approved.
• The incidence and prevalence for target patient populations for AUCATZYL and our other product candidates have not been established with precision. If the market opportunities for AUCATZYL and our other product candidates are smaller than we estimate, our revenue and ability to achieve profitability will be adversely affected, possibly materially.
• We operate in a rapidly changing industry and face significant competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
• Coverage and adequate reimbursement may not be available for AUCATZYL or our current or any future product candidates, which could make it difficult for us to sell profitably, if approved.
• Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of AUCATZYL or any other products that we may develop.
• Our product candidates are in clinical development or in preclinical development. If we are unable to advance our product candidates through clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.
• Our proprietary, next-generation T cell programming technologies, our modular approach for engineering T cells and our manufacturing platform for our programmed T cell product candidates, represent emerging therapeutic approaches that face significant challenges and hurdles.
• Our future success is highly dependent on the regulatory approval of our other clinical-stage programmed T cell product candidates and our preclinical programs. Our product candidates will require significant clinical or preclinical testing before we can seek regulatory approval for and launch a product commercially.
• We may not be successful in our efforts to build a pipeline of product candidates.
• Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or to commercialize these programs on a timely basis or at all, which would have an adverse effect on our business.
• Clinical trials are difficult to design and implement, involve uncertain outcomes and may not be successful.
• Success in preclinical studies or clinical trials may not be indicative of results in future clinical trials.
• We depend on enrollment of patients in our clinical trials for our product candidates. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
• The market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small, and our projections regarding the size of the addressable market may be incorrect.
• Adverse side effects or other safety risks associated with our product candidates could delay or preclude approval, cause us to suspend or discontinue clinical trials, cause us to abandon product candidates, limit the commercial profile of an approved label, or result in significant negative consequences following any potential marketing approval.
• If the clinical trials of any of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA and the European Commission 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 our product candidates.
• We may not be able to successfully create our own manufacturing infrastructure for supply of our, or our current or future collaborators', requirements of programmed T cell product candidates for use in clinical trials and for commercial sale.
• We may not be successful in achieving cost of goods at commercial scale that provide for an attractive margin.
• Our products and product candidates are biologics and the manufacture of such biologics is complex and we may encounter difficulties in production, particularly with respect to process development or scaling-out of our manufacturing capabilities. If we encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients could be delayed or stopped.
• Prior treatments can alter the patient's disease and negatively impact chances for achieving clinical activity with our programmed T cells.
• We may expend our resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or have a greater likelihood of success.
• As a company based outside of the United States, our business is subject to economic, political, regulatory and other risks associated with international operations.
• Exchange rate fluctuations may materially affect our results of operations and financial condition.
• We expect to continue to expand our development, commercial and regulatory capabilities and have recently developed sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
• Our future success depends on our ability to retain key members of senior management and to attract, retain and motivate qualified personnel.
• If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.
• Business disruptions, including those caused by the ongoing geopolitical conflicts, could seriously harm our future revenue and financial condition and increase our costs and expenses.
• As a public company with operations in the EU, we may be subject to the sustainability disclosure requirements set out in the EU Corporate Sustainability Reporting Directive.
• We are dependent on intellectual property obtained or licensed from third parties, and if we were to fail to comply with our obligations under our existing and any future intellectual property licenses with third parties, we could lose intellectual property rights that are important to our business and we may not be able to continue developing or commercializing our product candidates, if approved.
• We rely, and expect to continue to rely, on third parties to conduct the preclinical and clinical trials for our product candidates, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with applicable regulatory requirements.
• Cell-based therapies rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our products.
• We operate a manufacturing facility to manufacture materials for AUCATZYL and our product candidates, which requires significant resources. A failure to successfully operate our manufacturing facility could lead to substantial delays and adversely affect our research and development efforts, including clinical trials, and commercial success of AUCATZYL and our product candidates, if approved. We are also obligated to share some of the capabilities of the manufacturing facility with BioNTech under the BioNTech License Agreement.
• We, and the third parties on whom we rely in part for sales, marketing and distribution capabilities, may not be able to effectively market, sell and distribute AUCATZYL or our other product candidates, if approved.
• We collaborate with third parties in the research, development and commercialization of certain of our product and product candidates. If our collaborators do not perform as expected or if we are unable to maintain existing or establish additional collaborations, our ability to develop and commercialize our product candidates may be adversely affected.
• We do not and will not have access to all information regarding the product candidates we license to our collaborators. Consequently, our ability to inform our shareholders about the status of such product candidates, and to make informed operational and investment decisions about the product candidates to which we have retained development and commercialization rights, may be limited.
• We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.
• Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of our product candidates. As a result, we cannot predict when or if, and in which territories, we will obtain marketing approval to commercialize a product candidate.
• Obtaining and maintaining regulatory approval of AUCATZYL or our other product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
• Even though we have obtained marketing approval by the FDA for AUCATZYL, the terms of approvals and ongoing regulation of AUCATZYL may limit how we manufacture and market AUCATZYL and compliance with such requirements may involve substantial resources, which could materially impair our ability to generate revenue.
• AUCATZYL, and any other product candidate for which we obtain marketing approval, could be subject to post-marketing restrictions or recall or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.
• Our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
• Our business operations and current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to substantial penalties.
• Our products and product candidates are subject to government price controls in certain jurisdictions that may affect our revenue.
• Current and future legislation in the United States and other countries may affect the prices we may obtain for our products and future candidates and increase the difficulty and cost for us to commercialize our product candidates.
• We are subject to the U.K. Bribery Act, the FCPA, and other anti-corruption laws, as well as export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations.
• If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
• If we are unable to obtain and maintain patent protection for our T cell programming technologies and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and biologics similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.
• Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could significantly harm our business.
• We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.
• We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful.
• We may be subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
• We may be subject to claims challenging the inventorship or ownership of our owned or in-licensed patent rights and other intellectual property.
• Our existing trademarks and any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.
• If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
• We may not be able to protect our intellectual property rights throughout the world.
• Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
• The trading price of our ADSs has been and may continue to be highly volatile and may fluctuate due to factors beyond our control.
• Our ADSs are thinly traded and our shareholders may be unable to sell their ADSs quickly or at market price.
• Future sales of our ADSs in the public market could cause our share price to decline, even if our business is doing well.
• Our senior management, directors and principal shareholders, if they choose to act together, have the ability to control or significantly influence all matters submitted to our shareholders for approval.
• The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.
• Holders of our ADSs may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise their right to vote.
• Holders of our ADSs may not receive distributions on our ordinary shares represented by the ADSs or any value for them if it is illegal or impractical to make them available to holders of ADSs.
• Because we do not anticipate paying any cash dividends on our ADSs in the foreseeable future, capital appreciation, if any, will be our ADS holders’ and shareholders’ sole source of gains and they may never receive a return on their investment.
• If we are a PFIC, there could be adverse U.S. federal income tax consequences to U.S. Holders.
• If a United States person is treated as owning at least 10% of our ordinary shares, including ordinary shares represented by ADSs, such holder may be subject to adverse U.S. federal income tax consequences.
• Future changes to tax laws could materially adversely affect our company and reduce net returns to our shareholders.
• Tax authorities may disagree with our positions and conclusions regarding certain tax positions, or may apply existing rules in an unforeseen manner, resulting in unanticipated costs, taxes or non-realization of expected benefits.
• We may be unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments or benefits from favorable UK tax legislation.
• We have incurred, and will continue to incur, significant costs and demands upon management as a result of being a public company, and our management have devoted, and will continue to devote, substantial time to existing and new compliance initiatives.
• As a foreign private issuer, we are permitted to and follow certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards applicable to public companies organized in the United States. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
• We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
• Provisions in the U.K. City Code on Takeovers and Mergers that may have anti-takeover effects do not currently apply to us.
• You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited, because we are incorporated under the laws of England and Wales, conduct most of our operations outside the United States and most of our directors and senior management reside outside the United States.
• As an English public limited company, certain capital structure decisions will require shareholder approval, which may limit our flexibility to manage our capital structure.
• Our articles of association provide that the courts of England and Wales are the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act and the Exchange Act, and that the U.S. District Court for the Southern District of New York will be the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act or the Exchange Act.
• If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, the price and trading volume of our ADSs could decline.