or contractors acting with malicious intent. Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware,
a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality,
integrity and availability of our technology systems and data. Our key business partners face similar risks and any security breach
of their systems could adversely affect our security posture. While we continue to build and improve our systems and infrastructure
and believe we have taken appropriate security measures to reduce these risks to our data and information technology systems,
there can be no assurance that our efforts will prevent breakdowns or breaches in our systems that could adversely affect our
business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal,
business or reputational harm to us. In addition, our liability insurance may not be sufficient in type or amount to cover us
against claims related to security breaches, cyber-attacks and other related breaches.
Business disruptions could seriously
harm our future revenue and financial condition and increase our costs and expenses.
Our operations, and those of our third-party
research institution collaborators, CROs, CMOs, suppliers, and other contractors and consultants, could be subject to earthquakes,
power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions,
medical epidemics, and other natural or man-made disasters or business interruptions, for which we are partly uninsured. In addition,
we rely on our third-party research institution collaborators for conducting research and development of our product candidates,
and they may be affected by government shutdowns or withdrawn funding. The occurrence of any of these business disruptions could
seriously harm our operations and financial condition and increase our costs and expenses. We rely on third party manufacturers
to produce and process our product candidates. Our ability to obtain clinical supplies of our product candidates could be disrupted
if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.
All of our operations including our corporate
headquarters are located in Ecublens, near Lausanne, Canton of Vaud, Switzerland. Damage or extended periods of interruption to
our corporate, development or research facilities due to fire, natural disaster, power loss, communications failure, unauthorized
entry or other events could cause us to cease or delay development of some or all of our product candidates. Although we maintain
property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses under
such circumstances and our business may be seriously harmed by such delays and interruption.
We have never commercialized a product candidate
before and may lack the necessary expertise, personnel and resources to successfully commercialize our products on our own or together
with suitable partners.
We have never commercialized a product
candidate, and we currently have no sales force, marketing or distribution capabilities. To achieve commercial success for our
product candidates, we will have to develop our own sales, marketing and supply organization or outsource these activities to a
Factors that may affect our ability to
commercialize our product candidates on our own include recruiting and retaining adequate numbers of effective sales and marketing
personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our drug candidates and other unforeseen
costs associated with creating an independent sales and marketing organization. Developing a sales and marketing organization requires
significant investment, is time-consuming and could delay the launch of our product candidates. We may not be able to build an
effective sales and marketing organization. If we are unable to build our own distribution and marketing capabilities or to find
suitable partners for the commercialization of our product candidates, we may not generate revenues from them or be able to reach
or sustain profitability.
Risks Related to Our Relationships with Third Parties
If we fail to maintain our current strategic
relationships with Genentech, Eli Lilly and Company (“Lilly”), Janssen Pharmaceuticals, Inc. (“Janssen”),
Life Molecular Imaging SA (“Life Molecular”) (formerly Piramal Imaging SA) and other of our current or future strategic
partners, our business, commercialization prospects and financial condition may be materially adversely affected.
We have two partnerships with Genentech.
In 2006, we granted Genentech an exclusive, worldwide license for crenezumab. In 2012, we entered into a second partnership to
commercialize anti-Tau antibodies for use as immunotherapies. In December 2018, we signed a license agreement with Lilly
to research and develop Morphomer Tau small molecules for the treatment of Alzheimer’s disease and other neurodegenerative
diseases. The collaboration commenced in the first quarter of 2019. We partner with Janssen to develop and