Ensysce Biosciences, Inc 10-K for FY2022

Ensysce Biosciences, Inc. (ENSC)

10-K 2023-03-30 For: 2022-12-31

Added on April 12, 2026

About this 10-K

Ensysce Biosciences, Inc filed this 10-K on March 30, 2023, covering the fiscal year ended December 31, 2022 (FY2022).

Headline figures

Fiscal year ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.52M; down 28.5% from $3.53M a year earlier
Net loss: $24.21M; compared with a net loss of $29.15M a year earlier

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Delaware		82-2755287
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7946 Ivanhoe Avenue, Suite 201 La Jolla, California		92037
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	ENSC	The Nasdaq Stock Market
Warrants, to purchase one share of Common Stock	ENSCW	OTC Pink Open Market

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

Risk Factor Summary	3
Glossary	5
Cautionary Note Regarding Forward-Looking Statements	8
PART I	10
Item 1. Business	10
Item 1A. Risk Factors	34
Item 1B. Unresolved Staff Comments	68
Item 2. Properties	68
Item 3. Legal Proceedings	68
Item 4. Mine Safety Disclosures	68
PART II	69
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	69
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	70
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	84
Item 8. Financial Statements and Supplementary Data	85
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	85
Item 9A. Controls and Procedures	85
Item 9B. Other Information	86
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	86
PART III	86
Item 10. Directors, Executive Officers and Corporate Governance	86
Item 11. Executive Compensation	86
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	86
Item 13. Certain Relationships and Related Transactions, and Director Independence	86
Item 14. Principal Accounting Fees and Services	86
PART IV	87
Item 15. Exhibits and Financial Statement Schedules	87
Item 16. Form 10-K Summary	90
SIGNATURES	91

	●	We are a clinical-stage pharmaceutical company with a limited operating history. We have incurred significant financial losses since our inception and anticipate that we will continue to incur significant financial losses for the foreseeable future.

	●	We must obtain regulatory approval and fulfill numerous other requirements to be successful.

	●	We require substantial additional funding.

	●	We may incur additional dilution from repayment of the Investor Notes in common stock or re-setting the conversion price of the Investor Notes or reduced proceeds to Ensysce from a reduction in the exercise price of the Prior Warrants;

	●	The price of our common stock on Nasdaq and Public Warrants on the OTC Pink Open Market may be volatile.

	●	There may be no proceeds under the GEM Agreement or proceeds may be less than anticipated.

	●	We depend heavily on the success of PF614 and PF614-MPAR™ product candidates, which are currently in clinical trials, and which may not be successful.

	●	Due to the significant resources required for the development of our product pipeline, and depending on our ability to access capital, we must prioritize the development of certain product candidates over others.

	●	If we fail to discover, develop and commercialize other product candidates, we may be unable to grow our business.

	●	If we do not achieve our projected development and commercialization goals within the timeframes we expect, the development and commercialization of our product candidates may be delayed.

	●	Competitive products may reduce or eliminate potential commercial opportunity for our product candidates.

	●	Our business could be harmed if we lose the services of our key personnel or if we are unable to hire additional highly qualified employees.

	●	Our employees or others on which our business depends may engage in misconduct or other improper activities.

	●	Government grant awards may not be available to us in the future.

	●	We currently rely on, and expect to rely on in the future, third parties to conduct our clinical trials.

	●	We expect to be completely dependent on third parties to manufacture our product candidates.

	●	We must develop our sales, marketing and distribution capability on our own or through collaborations.

	●	The regulatory approval processes are lengthy, time-consuming and inherently unpredictable.

	●	Regulatory authorities may disagree with our regulatory plan for our product candidates.

	●	Interim topline and preliminary data from our clinical trials may change.

	●	We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the preclinical and clinical studies necessary.

	●	Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming and uncertain.

	●	We may encounter difficulties enrolling patients in our clinical trials.

	●	Fast track designation by the FDA for PF614, for management of moderate to severe chronic pain when a continuous, around-the-clock analgesic is needed for an extended period of time, may not lead to a faster development or regulatory review or approval process and does not assure FDA approval.

	●	If the FDA does not conclude that certain of our product candidates satisfy the requirements for the Section 505(b)(2) regulatory approval pathway, or if such requirements are not as we expect, the approval pathway will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated, and in either case may not be successful.

	●	Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.

	●	Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained.

	●	Even if any of our product candidates receives regulatory approval, we may fail to achieve the degree of market acceptance necessary for commercial success.

	●	We are subject to potential product liability lawsuits against us or any of our future collaborators.

	●	Oxycodone is a Schedule II controlled substance under the federal CSA, and we must comply with the CSA or its state equivalents.

	●	If we are unable to obtain and maintain patent protection for our products candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize product candidates that are similar or identical to our product candidates.

	●	We may face litigation from third parties claiming that our products or business infringe, misappropriate, or otherwise violate their intellectual property rights, or seeking to challenge the validity of our patents.

	●	We may become involved in lawsuits to protect or enforce our patents or other intellectual property.

	●	The expiration or loss of patent protection may adversely affect our future revenues and operating earnings.

	●	We may not be able to obtain protection under the Hatch-Waxman Amendments by extending the patent term.

	●	We may not be able to protect our intellectual property rights throughout the world.

	●	We may be subject to claims that we infringed, misappropriated or otherwise violated the intellectual property of a third party, or claiming ownership of what we regard as our own intellectual property.

	●	Our intellectual property agreements with third parties may be subject to disagreements.

	●	Intellectual property rights do not necessarily address all potential threats to our business.

	●	Cyber-attacks or other failures in our telecommunications or information technology systems, or those of third parties could result in information theft, data corruption and significant disruption of our business.

	●	Raising additional capital in the public or private equity markets at prices per share below the current market price of our common stock could cause dilution to our stockholders, adversely affect the market price of our common stock, restrict our operations or require us to relinquish rights to our technologies or product candidates.

	●	Our internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of Sarbanes-Oxley Act.

	●	We identified material weaknesses in our internal control over financial reporting as of December 31, 2022 and 2021.

	●	Nasdaq may delist our common stock and/or our Public Warrants may not continue to trade on the OTC Pink Open Market; during most of the period since June 2022 we have not met the listing requirements for Nasdaq.

Definitions:
2013 Framework		Financial reporting criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013)
2021 Notes		The senior secured convertible promissory notes in the aggregate original principal amount of $15.9 million, sold in two closings on September 24, 2021 and November 5, 2021, respectively, pursuant to the Securities Purchase Agreement entered into on September 24, 2021
2021 Omnibus Incentive Plan		Ensysce Biosciences, Inc. Amended and Restated 2021 Omnibus Incentive Plan
2022 Notes		The senior secured convertible promissory notes in the aggregate original principal amount of $8.48 million, sold in two closings on June 30, 2022 and August 8, 2022, respectively, pursuant to the Securities Purchase Agreement entered into on June 30, 2022
ADFs		Abuse deterrent formulations
ADHD		Attention deficit hyperactivity disorder
Aggregate Limit		Up to $60 million of gross proceeds with respect to the GEM Agreement
ANDA		Abbreviated New Drug Application
API		Active pharmaceutical ingredient
AUC		Area under the concentration time curve
Board		Board of directors of Ensysce, or a committee thereof, as applicable
Business Combination		The definitive merger agreement among LACQ, Merger Sub and Former Ensysce, dated January 31, 2021, providing for, among other things, and subject to terms and conditions therein, the business combination between LACQ and Former Ensysce pursuant to the merger of Merger Sub with and into Former Ensysce, with Former Ensysce continuing as the surviving entity and as a wholly-owned subsidiary of LACQ
CARA		Comprehensive Addiction and Recovery Act
CDC		Center for Disease Control
CDER		Center for Drug Evaluation and Research
cGMP		Current Good Manufacturing Practice
Cmax		Maximum plasma concentration
CMC		Chemistry, manufacturing, and controls
CMOs		Contract manufacturing organizations
CNS		Central nervous system
Company		Ensysce Biosciences, Inc. and its consolidated subsidiaries
COVID-19		Novel coronavirus disease
Covistat		A subsidiary renamed EBIR, Inc.
CROs		Contract research organizations
CSA		Controlled Substances Act
CSOS		Controlled Substance Ordering System
DEA		United States Drug Enforcement Agency
Draw Down Limit		400% of the average daily trading volume for the 30 trading days immediately preceding the date the Company delivers the draw down notice with respect to the GEM Agreement
DSCSA		Title II of the Federal Drug Quality and Security Act of 2013, known as the Drug Supply Chain Security Act
EB		Ensysce Biosciences, Inc. prior to its merger with Signature Acquisition Corp. pursuant to the EB-ST Agreement.
EBIR		Previously known as Covistat, Inc., EBIR, Inc. is a clinical stage pharmaceutical company that is developing a compound utilized in the Company’s overdose protection program for the treatment of COVID-19 and 79.2%-owned subsidiary of the Company
EB-ST Agreement		Agreement and Plan of Merger, dated as of December 28, 2015, by and among Signature, SAQ, and EB
EMA		European Medicines Agency

Ensysce		Ensysce Biosciences Inc.
EPO		European Patent Office
ETASU		Elements to assure a products safe use
Exchange Act		Securities Exchange Act of 1934, as amended
FDA		United States Food and Drug Administration
FDC Act		Federal Food, Drug and Cosmetic Act, as amended
Former Ensysce		Ensysce Biosciences, Inc., a Delaware corporation, prior to the consummation of the merger with and into Merger Sub
GAAP		Generally Accepted Accounting Principles in the United States of America
GCP		Good Clinical Practices
GEM Agreement		Share Purchase Agreement between the Company, GEM Global, and GYBL, dated as of December 29, 2020, including a Registration Rights Agreement between the same parties and dated as of the same date
GEM Global		GEM Global Yield LLC SCS
GEM Warrants		55,306 shares of common stock that may be issued upon the exercise of warrants issued to GYBL under the terms of the GEM Agreement at an exercise price of $0.7512 per share
GMP		Good Manufacturing Practices
GYBL		GEM Yield Bahamas Limited
Hatch-Waxman Act or Hatch-Waxman Amendments		Drug Price Competition and Patent Term Restoration Act of 1984
HHS		United States Department of Health and Human Services
IMPDs		Investigational Medicinal Product Dossiers
IND		Investigational New Drug
Investor Notes		The 2021 Notes and the 2022 Notes, collectively.
IRB		Institutional Review Board
JOBS Act		Jumpstart Our Business Startups Act of 2012
LACQ		Leisure Acquisition Corp., a Delaware Corporation
LACQ Warrants		Warrants that relate to the Business Combination or were issued prior to it and are exercisable for 351,663 shares of our common stock at a weighted average exercise price of $227.87 per share
Merger		The merger of Merger Sub with and into Former Ensysce, with Former Ensysce continuing as the surviving entity and a wholly owned subsidiary of LACQ, which changed its name to Ensysce Biosciences, Inc. following consummation of the Merger.
Merger Agreement		Agreement and Plan of Merger, dated as of January 31, 2021, by and among LACQ, Merger Sub and Former Ensysce, providing for, among other things, and subject to the terms and conditions therein, a business combination between Former Ensysce and LACQ pursuant to the proposed merger of Merger Sub with and into Former Ensysce, with Former Ensysce surviving the transaction as a wholly-owned subsidiary of LACQ, which changed its name to Ensysce Biosciences, Inc. following consummation of the Merger
Merger Sub		EB Merger Sub, Inc., a Delaware corporation, a wholly-owned subsidiary of LACQ prior to the consummation of the Merger
MPAR Grant		Research and development grant related to the development of its MPAR^TM overdose prevention technology awarded to the Company by NIH through NIDA in September 2018
Nasdaq		The Nasdaq Stock Market LLC
NCE		New Chemical Entity
NDA		New Drug Application
NIDA		National Institute of Drug Abuse
NIH		National Institutes of Health
NME		New molecular entity
Orange Book		FDA’s publication Approved Drug Products with Therapeutic Equivalence Evaluations
OUD Grant		Research and development grant related to the development of its TAAP/MPAR^TM abuse deterrent technology for Opioid Use Disorder awarded to the Company by NIH/NIDA in September 2019
PCT		Patent Cooperation Treaty

PDMA		U.S. Prescription Drug Marketing Act
PK		Pharmacokinetics
Prior Warrants		Warrants issued pursuant to the Securities Purchase Agreement. The Prior Warrants issued in (i) 2021 are exercisable for an aggregate of 54,174 shares of our common stock at an exercise price of $15.60 per share and (ii) 2022 are exercisable for an aggregate of 466,788 shares of our common stock at an exercise price of $2.006 per share
PTA		Patent Term Adjustment
PTE		Patent Term Extension
Public Warrants		The redeemable warrants issued by us and sold as part of the units in the LACQ IPO (whether they were purchased in the LACQ IPO or thereafter in the open market). The Public Warrants are exercisable for an aggregate of approximately 500,000 shares of our common stock at an exercise price of $230.00 per share
R&D		Research and Development
Recro		Recro Gainesville LLC
Recro Agreement		Manufacturing Agreement, dated September 19, 2019, by and between Recro Gaineville LLC and the Company
REMS		Risk evaluation and mitigation strategy
Resale Registration Statement		Ensysce’s Resale Registration Statement filed on August 9, 2021
SARS-CoV-2		Severe acute respiratory syndrome coronavirus 2
SAQ		Signature Acquisition Corp., a wholly-owned subsidiary of Signature
SEC		U.S. Securities and Exchange Commission
Securities Act		Securities Act of 1933, as amended
Securities Purchase Agreement		The Securities Purchase Agreement, dated as of September 24, 2021 or June 30, 2022, as the context dictates, by and between Ensysce and the institutional investors party thereto
Signature		Signature Therapeutics Inc.
SPA		A Securities Purchase Agreement, dated as of September 24, 2021 or June 30, 2022, as the context dictates, by and between Ensysce and the institutional investors party thereto
SUPPORT Act		Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act
TAAP		Trypsin Activated Abuse Protection
TEAEs		Treatment-emergent adverse events
USPTO		United States Patent and Trademark Office

	●	our estimates regarding expenses, revenue, capital requirements and timing and availability of and the need for additional financing will almost certainly not match actual amounts and timing;

	●	our ability to continue as a going concern for the next twelve months;

	●	the risk that our lead product candidate PF614 and PF614-MPAR™ may not be successful in limiting or impeding abuse, overdose, or misuse or providing additional safety upon commercialization;

	●	reliance by us on third-party contract research organizations, or CROs, for our research and development activities and clinical trials;

	●	the need for substantial additional funding to complete the development and commercialization of our product candidates;

	●	the risk that our clinical trials may fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties;

	●	the risk that the potential product candidates that we develop may not progress through clinical development or receive required regulatory approvals within expected timelines or at all;

	●	the risk that clinical trials may not confirm any safety, potency, or other product characteristics described or assumed in this Annual Report on Form 10-K;

	●	the risk that we will be unable to successfully market or gain market acceptance of our product candidates;

	●	the risk that our product candidates may not be beneficial to patients or successfully commercialized;

	●	the risk that we have overestimated the size of the target market, patients’ willingness to try new therapies, and the willingness of physicians to prescribe these therapies;

	●	effects of competition;

	●	the risk that third parties on which we depend for laboratory, clinical development, manufacturing, and other critical services will fail to perform satisfactorily;

	●	the risk that our business, operations, clinical development plans and timelines, and supply chain could be adversely affected by the effects of health epidemics, including the ongoing COVID-19 pandemic;

	●	the risk that we will be unable to obtain and maintain sufficient intellectual property protection for its investigational products or will infringe the intellectual property protection of others;

	●	the loss of key members of our management team;

	●	changes in our regulatory environment;

	●	the ability to attract and retain key scientific, medical, commercial, or management personnel;

	●	changes in our industry;

	●	our ability to remediate any material weaknesses or establish and maintain effective internal controls over financial reporting;

	●	the risk that our common stock will be delisted from Nasdaq;

	●	The risk that we may not be able to regain or maintain compliance with applicable listing standards of Nasdaq;

	●	potential litigation associated with the Business Combination Transactions;

	●	other factors disclosed in this Annual Report on Form 10-K; and

	●	other factors beyond our control.

	●	Oral Excessive Tablet Abuse. Generally recognized as the most prevalent route of administration by abusers, an abuser orally ingests more tablets (or capsules) than is recommended for pain relief.

	●	Nasal snorting. Crushed tablets are insufflated for absorption of the drug through the nasal tissues.

	●	Injection. The opioid is physically or chemically removed from the dosage and injected into the vein using a syringe.

	●	Oral Manipulated Tablet Abuse. Extended-release tablets or patches are crushed, chewed, or otherwise physically or chemically manipulated to defeat an extended-release mechanism and provide an immediate-release of the opioid for oral ingestion.

	●	Poly-pharmacy. Opioids are sometimes used in conjunction with alcohol, methamphetamine, benzodiazepines or other drugs to enhance the euphoria.

	●	Overdose. Users may accidentally introduce excessive quantities of drugs in their systems or combine drugs that may heighten the chance of adverse effects of drugs. Some patients may over-ingest drugs accidentally or with the express intent of suicide.
	●	Chronic or prolonged use. Chronic or prolonged use of opioids resulting in dependence is another form of misuse or abuse.

	●	As new virus strains of influenza and coronavirus create new outbreaks, there is a window of opportunity to grow or boost sales before production of the appropriate vaccine is increased.

	●	Applying our antiviral in situations of waning immunity to vaccines, particularly in the elderly, and in immunocompromised patients; seasonal influenza vaccines are approximately 45% effective since the 2010 influenza season.

	●	There are only four antiviral treatments for early symptoms of influenza for hospitalized patients that have severe, complicated, or progressive illness, or who are at high risk for complications.

	●	The reality of unexpected and rapidly spreading influenza or coronavirus outbreaks causes healthcare systems to stockpile and replenish first response antivirals.

	●	Utilizing a drug repurposing model and the Hatch Waxman Act, we believe that we will be able to receive eight to ten years of market exclusivity in North America, European Union, and Japan. See “—Intellectual Property” for further detail.

	Countries of Filings	Natural or Projected Expiry Date
*TAAP and MPAR™ Patents and Applications for Opioids*
Compositions Comprising Enzyme-Cleavable Ketone-Modified Opioid Prodrugs and Optional Inhibitors Thereof	U.S., Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Mexico, Russia	2030
Compositions Comprising Enzyme-Cleavable Opioid Prodrugs and Inhibitors Thereof	U.S.	2030
Compositions Comprising Enzyme-Cleavable Oxycodone Prodrugs	U.S., Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Russia	2032
Compositions Comprising Enzyme-Cleavable Prodrugs and Controlled Release Nafamostat and Methods of Use Thereof	U.S., PCT, Taiwan	2042
Active Agent Prodrugs with Heterocyclic Linkers	U.S., Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Russia	2032
Enzyme-Cleavable Methadone Prodrugs and Methods of Use Thereof	U.S., PCT	2042
*Nafamostat Patents and Applications*
Methods of Treating Coronavirus Infections and COVID-19	U.S., Canada, Europe	2041
Oral formulations of Nafamostat	U.S., PCT, Taiwan	2042
Methods of Treating Respiratory Diseases with Mucostasis	Germany, France, Italy, United Kingdom	2028
*TAAP and MPAR™ Patents and Applications for Amphetamines*
Compositions Comprising Enzyme-Cleavable Amphetamine Prodrugs and Inhibitors Thereof	U.S., Europe	2031
Compositions Comprising Enzyme-Cleavable Amphetamine Prodrugs and Inhibitors Thereof	U.S., Europe, Hong Kong	2040

	●	FDA guidance: In April 2015, the FDA adopted final guidance regarding studies and clinical trials that should be conducted to demonstrate that a given formulation has abuse-deterrent properties, how those studies and clinical trials will be evaluated, and what product labeling claims may be approved based on the results of those studies and clinical trials. The guidance describes four categories of abuse-deterrence studies and clinical trials: Categories 1, 2, and 3 consist of pre-marketing studies and clinical trials designed to evaluate a product candidate’s potentially abuse-deterrent properties under controlled conditions, while Category 4, post-marketing clinical trials and studies, assesses the real-world impact of abuse-deterrent formulations. The final guidance also provides examples of product label claims that may be made based on the results of the corresponding studies and clinical trials.

	●	FDA Opioids Action Plan: In February 2016, the FDA released an action plan to address the opioid abuse epidemic and reassess the FDA’s approach to opioid medications. The FDA’s plan is part of a broader initiative led by the U.S. Department of Health and Human Services (“HHS”), to address opioid-related overdose, death, and dependence.

	●	CDC Prescribing Guidelines: In November 2022, the CDC released a new Guideline for Prescribing Opioids for Pain to update their 2016 Guidelines. The new guidance includes recommendations for managing acute (duration of <1 month), subacute (duration of 1–3 months), and chronic (duration of >3 months) pain. The guideline addresses the following four areas: 1) determining whether or not to initiate opioids for pain, 2) selecting opioids and determining opioid dosages, 3) deciding duration of initial opioid prescription and conducting follow-up, and 4) assessing risk and addressing potential harms of opioid use. The guideline addresses the following four areas: 1) determining whether or not to initiate opioids for pain, 2) selecting opioids and determining opioid dosages, 3) deciding duration of initial opioid prescription and conducting follow-up, and 4) assessing risk and addressing potential harms of opioid use.

	●	Enhanced Warnings and Safety Labeling: In March 2016, the FDA announced required enhanced warnings for immediate-release opioid pain medications related to risks of misuse, abuse, addiction, overdose, and death. Subsequently, there have been several class-wide labeling changes, including the addition of boxed warnings relating to serious risks of using certain opioids medications along with benzodiazepines and other central nervous system depressants, including alcohol (Decembers 2016); and additional information relating to the new class-wide REMS (Septembers 2018).

	●	Enactment of the Comprehensive Addiction and Recovery Act (“CARA”): In 2016, the CARA was enacted to address the national epidemics of prescription opioid abuse and heroin use. Consistent with the initiatives of HHS, this legislation sought to, among other things, expand the availability of naloxone for law enforcement and other first responders; form an interagency task force to develop best practices for pain management with opioid medications; and provide resources to improve state monitoring of controlled substances, including opioids. In 2018, CARA 2.0 was introduced as follow-up legislation to limit initial prescriptions for opioids to 3 days, while exempting initial prescriptions for chronic care, cancer care, hospice or end of life care, and palliative care.

	●	Enactment of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“SUPPORT Act”): In November 2018, the SUPPORT Act was enacted as a comprehensive legislative response to the continuing opioid epidemic. It includes a number of measures directed towards regulation and improvement of treatment for substance use-disorder and increased coverage by CMS of medically assisted treatment options. In addition, the SUPPORT Act requires HHS to report to Congress on existing barriers to access to abuse-deterrent opioid formulations by Medicare Part C and D beneficiaries. It also includes a number of requirements directed at reducing the potential for oversupply of opioids to reduce the potential for misuse and diversion.

Name	Age*	Officer Since	Position

Dr. Lynn Kirkpatrick, Ph.D	66	2009	President, Chief Executive Officer and Class III Director
Geoffrey Birkett	60	2018	Chief Commercial Officer
David Humphrey, CPA	54	2021	Chief Financial Officer, Secretary and Treasurer
Dr. Jeffrey Millard, Ph.D.	47	2019	Chief Operating Officer
Dr. Linda Pestano, Ph.D.	54	2021	Chief Development Officer
Dr. William Schmidt, Ph.D.	71	2016	Chief Medical Officer

	●	meet the requirements and demands of being a public company;

	●	expand our operational, financial and management systems and increases personnel to support our operations;

	●	hire additional clinical, quality control, medical, scientific and other technical personnel to support our clinical operations;

	●	advance our clinical-stage product candidate PF614 through clinical development;

	●	advance our preclinical stage product candidates into clinical development;

	●	seek regulatory approvals for any product candidates that successfully complete clinical trials;

	●	undertake any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own or jointly with third parties;

	●	maintain, expand and protect our intellectual property portfolio; and

	●	make milestone, royalty or other payments due under any future in-license or collaboration agreements.

	●	the scope, progress, results and costs of researching and developing our current product candidates, as well as other additional product candidates we may develop and pursue in the future, including the costs related to preclinical and clinical development of the product;

	●	the timing of, and the costs involved in, obtaining marketing approvals for our product candidates and any other additional product candidates we may develop and pursue in the future;

	●	the number of future product candidates that we may pursue and their development requirements;

	●	subject to receipt of regulatory approval, the costs of commercialization activities for our product candidates, to the extent such costs are not the responsibility of any future collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

	●	subject to receipt of regulatory approval, the amount of revenue, if any, received from commercial sales of our product candidates or any other additional product candidates we may develop and pursue in the future;

	●	the extent to which we in-license or acquire rights to other products, product candidates or technologies;

	●	our ability to establish collaboration arrangements for the development of our product candidates on favorable terms, if at all;

	●	dependent on financing, our headcount growth and associated costs as we expand our research and development and establishes a commercial infrastructure;

	●	the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and

	●	the costs of operating as a public company.

	●	changes in the industries in which we and our customers operate;

	●	variations in our operating performance and the performance of our competitors in general;

	●	material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy;

	●	actual or anticipated fluctuations in our quarterly or annual operating results;

	●	publication of research reports by securities analysts about us, our competitors or our industry;

	●	the public’s reaction to our press releases, other public announcements and filings with the SEC;

	●	our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;

	●	additions and departures of key personnel;

	●	changes in laws and regulations affecting our business;

	●	commencement of, or involvement in, litigation involving us;

	●	news about, among other things, the results of our clinical trials or other developments, or the use or abuse of opioids,

	●	changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

	●	sales, or anticipated sales, of large blocks of our common stock;

	●	the volume of shares of our common stock available for public sale; and

	●	general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.

	●	inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective;

	●	insufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies;

	●	negative or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates that are similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program;

	●	product-related adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs or therapeutic biologics similar to our product candidates;

	●	delays in submitting an Investigational New Drug application, or IND, or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial once commenced;

	●	conditions imposed by the FDA, the European Medicines Agency, or EMA, or comparable foreign regulatory authorities regarding the scope or design of our clinical trials;

	●	poor effectiveness of our product candidates during clinical trials;

	●	better than expected performance of control arms, such as placebo groups, which could lead to negative or inconclusive results from our clinical trials;

	●	delays in enrolling subjects in clinical trials;

	●	high drop-out rates of subjects from clinical trials;

	●	inadequate supply or quality of product candidates or other materials necessary for the conduct of our clinical trials;

	●	greater than anticipated clinical trial or manufacturing costs;

	●	unfavorable FDA, EMA or comparable regulatory authority inspection and review of a clinical trial site;

	●	failure of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise meet their contractual obligations in a timely manner, or at all;

	●	unfavorable FDA, EMA or comparable regulatory authority inspection and review of manufacturing facilities or inability of those facilities to maintain a compliance status acceptable to the FDA, EMA or comparable regulatory authorities;

	●	delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our therapies in particular; or

	●	varying interpretations of data by the FDA, EMA and comparable foreign regulatory authorities.

	●	the research methodology used may not be successful in identifying potential product candidates;

	●	competitors may develop alternatives that render our product candidates obsolete;

	●	product candidates that we develop may nevertheless be covered by third parties’ patents or other exclusive rights;

	●	a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

	●	a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and

	●	a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.

	●	exposure to unknown liabilities;

	●	disruption of our business and diversion of our management’s time and attention to develop acquired products or technologies;

	●	incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;

	●	higher than expected acquisition and integration costs;

	●	difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel;

	●	increased amortization expenses;

	●	impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership; and

	●	inability to motivate key employees of any acquired businesses.

	●	our available capital resources or capital constraints we experience;

	●	the rate of progress, costs and results of our clinical trials and research and development activities, including the extent of scheduling conflicts with participating clinicians and collaborators;

	●	our ability to identify and enroll patients who meet clinical trial eligibility criteria;

	●	our receipt of approvals by the FDA and other regulatory authorities and the timing thereof;

	●	clinical outcomes;

	●	other actions, decisions or rules issued by regulators;

	●	our ability to access sufficient, reliable and affordable supplies of materials used in the manufacture of our product candidates;

	●	the efforts of our collaborators with respect to the commercialization of our product candidates; and

	●	the securing of, costs related to, and timing issues associated with, product manufacturing as well as sales and marketing activities.

	●	our inability to recruit and retain effective sales and marketing personnel;

	●	the inability of sales personnel to obtain access to or persuade physicians to prescribe any future products;

	●	the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

	●	unforeseen costs and expenses associated with creating an independent sales and marketing organization.

	●	the FDA or comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;

	●	we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for our proposed indication;

	●	the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

	●	we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

	●	the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from clinical trials or preclinical studies;

	●	the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an NDA to the FDA or other submission or to obtain regulatory approval in the United States, the European Union or elsewhere;

	●	the FDA or comparable foreign regulatory authorities may find deficiencies with the manufacturing processes of third-party manufacturers with which we contract for clinical and commercial supplies; and

	●	the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

	●	we may not reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

	●	we may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trials;

	●	the number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;

	●	our third-party contractors, including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

	●	we may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to resubmit to an IRB and regulatory authorities for re-examination;

	●	regulators or other reviewing bodies may find deficiencies with or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, or the supply or quality of any product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and

	●	the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.

	●	the patient eligibility criteria defined in the protocol;

	●	the size of the patient population required for analysis of the trial’s primary endpoints;

	●	the proximity of patients to study sites;

	●	the design of the trial;

	●	our ability to recruit clinical trial investigators with the appropriate competencies and experience;

	●	competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications that we are investigating;

	●	our ability to obtain and maintain patient consents; and

	●	the risk that patients enrolled in clinical trials will drop out of the trials before completion.

	●	decreased demand for any of our future approved products;

	●	injury to our reputation;

	●	withdrawal of clinical trial participants;

	●	termination of clinical trial sites or entire trial programs;

	●	significant litigation costs;

	●	substantial monetary awards to, or costly settlements with, patients or other claimants;

	●	product recalls or a change in the indications for which they may be used;

	●	loss of revenue;

	●	diversion of management and scientific resources from our business operations; and

	●	the inability to commercialize our product candidates.