therapeutic anti-Tau vaccines for the treatment of AD and potentially other Tauopathies. We also have a diagnostic partnership
with Life Molecular for a compound from our Morphomer chemical library that binds pathogenic Tau for use as a positron emission
tomography, or PET, tracer. Genentech has the right to terminate its agreements with us at any time and for any reason upon providing
us with a certain notice period. After a specified amount of time, Janssen and Life Molecular will also each have the right to
terminate their agreements with us for any reason upon providing us with a certain notice period. If Genentech, Lilly, Janssen,
Life Molecular or other of our current or future strategic partners terminates its agreement with us at any time, it could delay
or prevent development of our product candidates and materially harm our business, financial condition, commercialization prospects
and results of operations.
Good relationships with Genentech, Lilly,
Janssen, Life Molecular and other of our current or future strategic partners are important for our business prospects. If our
relationships with Genentech, Lilly, Janssen, Life Molecular or other of our current or future strategic partners were to deteriorate
substantially or Genentech, Lilly, Janssen, Life Molecular or other of our current or future strategic partners were to challenge
our use of their intellectual property or our calculations of the payments we are owed under our agreements, our business, financial
condition, commercialization prospects and results of operations could be materially adversely affected.
Lastly, our collaboration agreement with
Genentech for crenezumab provides Genentech with control over, and responsibility for, the clinical development process, including
obtaining regulatory and marketing approvals, manufacturing costs and sales and marketing costs. Our other existing collaboration
agreements provide our collaboration partners with similar control over the clinical development process and future collaboration
agreements may also relinquish development control to our partners. Genentech or our other current or future collaboration partners
may separately pursue competing products, therapeutic approaches or technologies to develop treatments for the diseases targeted
by us or our collaborative efforts. Even if our partners continue their contributions to the collaborative agreements to which
we are a party, they may nevertheless determine not to actively pursue the development or commercialization of any resulting products.
Our partners may also fail to perform their obligations under the collaboration agreements or may be slow in performing their obligations.
Any of these circumstances could result in a material adverse impact on our business, financial condition, commercialization prospects
or results of operations.
We may seek to form additional strategic alliances
in the future with respect to our product candidates, and if we do not realize the benefits of such alliances, our business, financial
condition, commercialization prospects and results of operations may be materially adversely affected.
Our product development programs and the
potential commercialization of our product candidates will require substantial additional liquidity to fund expenses and may require
expertise, such as sales and marketing expertise, which we do not currently possess. Therefore, in addition to our relationships
with Genentech, Lilly, Janssen and Life Molecular , we may decide to enter into strategic alliances, or create joint ventures or
collaborations with pharmaceutical or biopharmaceutical companies for the further development and potential commercialization of
those and other of our product candidates.
We face significant competition in seeking
appropriate collaborators. Collaborations are complex and time-consuming to negotiate, document and manage. Any delays in entering
into new strategic partnership agreements related to our product candidates could delay the development and commercialization of
our product candidates and reduce their competitiveness even if they reach the market. We may also be restricted under existing
and future collaboration agreements from entering into strategic partnerships or collaboration agreements on certain terms with
other potential collaborators. We may not be able to negotiate collaborations on acceptable terms, or at all, for any of our existing
or future product candidates and programs because the potential partner may consider that our research and development pipeline
is insufficiently developed to justify a collaborative effort, or that our product candidates and programs do not have the requisite
potential to demonstrate safety and efficacy in the target population. If we are unsuccessful in establishing and maintaining a
collaboration with respect to a particular product candidate, we may have to curtail the development of that product candidate,
reduce the scope of or delay its development program or one or more of our other development programs, delay its potential commercialization
or reduce the scope of our sales or marketing activities, or increase our expenditures and undertake development or commercialization
activities at our own expense for which we have not budgeted. If we elect to increase our expenditures to fund development or commercialization
activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all.
If we do not have sufficient funds, we will not be able to bring our product candidates to market and generate product revenue.
Even if we are successful in establishing a new strategic partnership or entering into a collaboration agreement, we cannot be
certain that, following such a strategic transaction or license, we will be able to progress the development and commercialization
of the applicable product candidates as envisaged, or that we will achieve the revenues that would justify such transaction, and
we could be subject to the following risks, each of which may materially harm our business, commercialization prospects and financial