Third parties may assert infringement claims
against us based on existing patents or patents that may be granted in the future, regardless of merit. Even if we believe such
claims are without merit, a court of competent jurisdiction could hold that these third party patents are valid, enforceable and
infringed, which could materially and adversely affect our or our collaboration partners’ ability to commercialize our product
candidates or technologies covered by the asserted third party patents. If we are found to infringe a third party’s valid
and enforceable intellectual property rights, we could be required to obtain a license from such third party to continue developing,
manufacturing and marketing our product candidates and technology. However, we may not be able to obtain any required license on
commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive; thereby giving our
competitors and other third parties access to the same technologies licensed to us and it could require us to make substantial
payments to the licensor.
Parties making claims against us may also
obtain injunctive or other equitable relief, which could effectively block our or our collaboration partners’ ability to
further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would
involve substantial litigation expense and would be a substantial diversion of management and employee resources from our business.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages
and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses
from third parties, which may be impossible or require substantial time and monetary expenditure. Any of the foregoing could have
a material and adverse effect on our business, financial conditions, results of operations and prospects.
In addition, claims that we have misappropriated
the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial
condition, results of operations and prospects.
There could also be public announcements
of the results of hearings, motions, decisions, or other interim proceedings or developments. If securities analysts or investors
perceive these results to be negative, it could have a material adverse effect on the price of our common shares.
Some of our competitors may have substantially
greater resources and more mature and developed intellectual property portfolios than we do and may be able to sustain the costs
of complex intellectual property litigation to a greater degree and for longer periods of time than we could. In addition, patent
holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us. As the biotechnology
and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject
to claims of infringement of the patent rights of third parties. The uncertainties resulting from the initiation and continuation
of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.
We may be subject to claims that our employees,
consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our
employees have wrongfully used or disclosed alleged trade secrets of their former employers.
We employ and utilize the services of individuals
who were previously employed or provided services to universities or other biotechnology or pharmaceutical companies, including
our competitors or potential competitors. Although we try to ensure that our employees, consultants, and independent contractors
do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees,
consultants, or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade
secrets or other proprietary information, of any of our employee’s, consultant’s or independent contractor’s
former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any
such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could
adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial
costs and be a distraction to management and other employees.
In addition, while it is our policy to
require our employees, consultants and independent contractors who may be involved in the conception or development of intellectual
property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement
with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual
property rights may not be self-executing or the assignment agreements may be breached, and we may be forced to bring claims against
third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual