We may not be able to protect
our intellectual property rights throughout the world.
Filing, prosecuting and defending patents
on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights
in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some
foreign countries do not protect intellectual property rights to the same extent as the laws in the United States. Consequently,
we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from
selling or importing products made using our inventions in and into the United States or other jurisdictions. In the ordinary course
of prosecution and maintenance activities, we determine whether to seek patent protection outside the U.S. and in which countries.
This also applies to patents we have acquired or in-licensed from third parties. In some cases, we, or our predecessors in interest
or licensors of patents within our portfolio, have sought patent protection in a limited number of countries for patents covering
our product candidates. Competitors may use our technologies in jurisdictions where we have not obtained or are unable to adequately
enforce patent protection to develop their own products and further, may export otherwise infringing products to territories where
we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products
and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing, which
would have a material adverse effect on our business and financial positions.
Many companies have encountered significant
problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries,
particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property
protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement,
misappropriation or other violations of our intellectual property and proprietary rights. Proceedings to enforce our patent rights
in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from
other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications
at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we
initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce
our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual
property that we develop or license.
Risks Related to Our Financial Condition and Capital Requirements
We are a clinical-stage company and have a
history of operating losses. We anticipate that we will continue to incur losses for the foreseeable future.
We are a clinical-stage biopharmaceutical
company. Since 2003, while we have received upfront and milestone payments from our collaboration partners and certain other contract
revenue, we have also incurred significant operating losses. For example, we incurred net losses (defined as net loss attributable
to owners of the company) of CHF 50.9 million for the year ended December 31, 2018. In addition, we had accumulated losses
of CHF 121.9 million as of December 31, 2018.
Our losses have resulted principally from
research and development expenses and from general business and administrative expenses. We expect to continue to incur significant
operating losses in the future as we continue our research and development efforts for our current and future product candidates
and seek to obtain regulatory approval and commercialization of such product candidates.
To date, the Company has financed its liquidity
requirements primarily from revenues from collaboration agreements, share issuances, the proceeds of its initial public offering
and the proceeds from three offerings of its common shares in July 2018. We have no products approved for commercialization and
have never generated any revenues from product sales. Biopharmaceutical product development is a highly speculative undertaking
and involves a substantial degree of risk. It may be several years, if ever, before we or our collaboration partners complete pivotal
clinical studies and have a product candidate approved for commercialization and we begin to generate revenue or royalties from
While we have generated revenues from upfront
and milestone payments related to our collaboration agreements, we have never generated any revenue from product sales and may
never be profitable.
While we have generated revenue from upfront
and milestone payments related to our collaboration agreements, we have no products approved for commercialization and have never
generated any revenue from product sales. Our ability to generate revenue and achieve profitability depends on our ability to successfully