Risk Factors Dashboard

Once a year, publicly traded companies issue a comprehensive report of their business, called a 10-K. A component mandated in the 10-K is the ‘Risk Factors’ section, where companies disclose any major potential risks that they may face. This dashboard highlights all major changes and additions in new 10K reports, allowing investors to quickly identify new potential risks and opportunities.

Risk Factors - ALRN

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Item 1A. Risk Factors.

Careful consideration should be given to the following risk factors, in addition to the other information set forth in this Annual Report on Form 10-K and in other documents that we file with the SEC, in evaluating our company and our business. Investing in our common stock involves a high degree of risk. If any of the following risks actually occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected.

Risks Related to Strategic Alternative Process and Potential Strategic Transaction

We may not be successful in identifying and implementing any strategic transaction and any strategic transaction that we may consummate may not be successful.

In February 2023, we made the decision to discontinue further development of ALRN-6924. In connection with this decision, we announced that we would be reducing our remaining workforce from nine to three full-time employees, designed to substantially reduce our operating expenses while we undertake a comprehensive assessment of strategic options to maximize stockholder value. These strategic options may include a merger, reverse merger, sale, wind-down, liquidation and dissolution or other strategic transaction. However, there can be no assurance that we will be able to successfully consummate any particular strategic transaction. However, there can be no assurance that we will be able to regain compliance with the Bid Price Rule. The process of continuing to evaluate these strategic options may be very costly, time-consuming and complex and we may incur significant costs related to this continued evaluation. We may also incur additional unanticipated expenses in connection with this process. A considerable portion of these costs will be incurred regardless of whether any such course of action is implemented or transaction is completed. Any such expenses will decrease the remaining cash available for use in our business and may eliminate, diminish or delay any future distributions to our stockholders.

In addition, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated, lead to increased stockholder value, or achieve the anticipated results. Any failure of such potential transaction to achieve the anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly reduce or delay any future distributions to our stockholders.

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We may not realize any additional value in a strategic transaction.

The market capitalization of our company is below the value of our current cash, cash equivalents and investments. Potential counterparties in a strategic transaction involving our company may place minimal or no value on our assets, including ALRN-6924. Further, the development and any potential commercialization of ALRN-6924 would require substantial additional cash to fund the costs associated with conducting the necessary clinical testing and obtaining regulatory approval. Consequently, any potential counterparty in a strategic transaction involving our company may choose not to spend the additional resources necessary to continue developing ALRN-6924 and may attribute little or no value, in such a transaction, to it or our platform technology.

If we are successful in completing a strategic transaction, we may be exposed to other operational and financial risks.

Although there can be no assurances that a strategic transaction will result from the process we have undertaken to identify and evaluate strategic alternatives, the negotiation and consummation of any such transaction will require significant time on the part of our management.

The negotiation and consummation of any such transaction may also require more time or greater cash resources than we anticipate and expose us to other operational and financial risks, including:

increased near-term and long-term expenditures;
exposure to unknown liabilities;
higher than expected acquisition or integration costs;
write-downs of assets or incurrence of non-recurring, impairment or other charges;
increased amortization expenses;
difficulty and cost in combining the operations and personnel of any combined business with our operations and personnel;
impairment of relationships with key suppliers or customers of any combined business due to changes in management and ownership;
inability to retain key employees of our company or any combined business; and
possibility of future litigation.

Any of the foregoing risks could have a material adverse effect on our business, financial condition and prospects.

Our decision to discontinue further development of ALRN-6924 and the related reduction in our workforce may not result in the anticipated savings and could disrupt our business.

In February 2023, we made the decision to discontinue further development of ALRN-6924 and we decided to reduce our workforce to substantially reduce our operating expenses while we undertake a comprehensive assessment of strategic options to maximize stockholder value. We may not realize, in full or in part, the anticipated benefits and savings in operating expenses from these decisions due to unforeseen difficulties, delays or unexpected costs. This may include higher than expected costs associated with winding down our Phase 1b breast cancer trial. If we are unable to realize the expected cost savings, our financial condition would be adversely affected and it may be more difficult to complete a potential strategic transaction. Furthermore, the reduction in our workforce may result in weaknesses in our infrastructure and operations and may increase the risk that we become unable to comply with legal and regulatory requirements.

Our board of directors may decide to pursue a dissolution and liquidation or seek protection under the bankruptcy laws. In such an event, the amount of cash available for distribution to our stockholders will depend

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heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no assurance that a strategic transaction will be completed and our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, as with the passage of time the amount of cash available for distribution will be reduced as we continue to fund our operations. In addition, if our board of directors were to approve and recommend, and our stockholders were to approve, a dissolution and liquidation, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders. As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such obligations and the timing of any such resolution is uncertain. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation. If a dissolution and liquidation were pursued, our board of directors, in consultation with our advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. It is unclear whether and to what extent any resources would be available for distribution to our stockholders and when such distributions could be made, and holders of our common stock could lose all or a significant portion of their investment in the event of a liquidation, dissolution or winding up.

We also may consider seeking protection under the bankruptcy laws in order to continue to pursue potential transactions and conduct a wind-down of our company. If we decide to seek protection under the bankruptcy laws, we would expect that we would file for bankruptcy at a time that is significantly earlier than when we would otherwise exhaust our cash resources. If we decide to seek protection under the bankruptcy laws, it is unclear to what extent we will be able to pay our obligations, and, accordingly, it is further unclear whether, to what extent and when any resources would be available for distributions to stockholders and holders of our common stock could lose all or a significant portion of their investment.

Our ability to consummate a strategic transaction depends on our ability to retain our employees required to consummate such transaction.

Our ability to consummate a strategic transaction depends upon our ability to retain our employees required to consummate such a transaction, and the loss of such employees’ services may adversely impact the ability to consummate such transaction. In February 2023, we announced a reduction in our workforce intended to substantially reduce our operating expenses while we undertake a comprehensive assessment of strategic options to maximize stockholder value. Our cash conservation activities may yield unintended consequences, such as attrition beyond our planned reduction in workforce and reduced employee morale, which may cause remaining employees to seek alternative employment. Our ability to successfully complete a strategic transaction depends in large part on our ability to retain our remaining personnel. If we are unable to successfully retain our remaining personnel, we are at risk of a disruption to our exploration and consummation of strategic options as well as business operations.

We may become involved in securities class action litigation that could divert management’s attention and harm the company’s business, and insurance coverage may not be sufficient to cover all costs and damages.

In the past, securities class action litigation has often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of negative events, such as negative results from clinical trials. These events may also result in or be concurrent with investigations by the SEC. We may be exposed to such litigation or investigation even if no wrongdoing occurred. Litigation and investigations are usually expensive and divert management’s attention and resources, which could adversely affect our business and cash resources and our ability to consummate a potential strategic transaction or the ultimate value our stockholders receive in any such transaction.

We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern.

Due to the inherent uncertainty in the timing and cost of potential strategic alternatives, including their impact on our cash consumption, we believe there is substantial doubt about our ability to continue as a going concern as of the date of this Annual Report on Form 10-K. See Note 1 to our financial statements appearing elsewhere in this Annual Report on Form 10-K for additional information on our assessment. If we are unable to obtain additional capital and continue as a going concern, we might have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements.

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Our lack of cash resources and our conclusion that we may be unable to continue as a going concern may materially adversely affect our share price and our ability to raise new capital or to enter into critical contractual relations with third parties.

Risks Related to Our Financial Position

If we continued to pursue product development, we would have needed substantial additional funding to continue such activities.

Developing pharmaceutical products, including conducting preclinical studies and clinical trials, is a time-consuming, expensive and uncertain process that takes years to complete. Although we are not currently developing any product candidates, if we continued pursuing development of ALRN-6924, we would have been required to expend significant funds in order to advance the development of, conduct clinical trials of, and seek marketing approval for ALRN-6924. If we were able to obtain marketing approval for ALRN-6924, we would have incurred significant commercialization expenses related to drug sales, marketing, manufacturing and distribution to the extent that such sales, marketing, manufacturing and distribution were not then the responsibility of any collaborator.

Our future capital requirements will depend on many factors, including:

whether we realize the anticipated cost savings in connection with our February 2023 workforce reduction;
our ability to consummate a strategic transaction and the nature and type of such transaction;
the time and cost necessary to close out our Phase 1b breast cancer trial; and
the costs associated with operating as a public company.

If we had continued to pursue development of ALRN-6924 our capital requirements would have depended on many factors, including:

the scope, progress, results and costs of our preclinical studies, CMC, and clinical trials of ALRN-6924;
the costs, timing and outcome of regulatory review of ALRN-6924;
our ability to establish and maintain collaborations with third parties on favorable terms, if at all, and the extent to which any third party collaborator would have assumed the costs of development and commercialization activities;
the success of any collaborations that we may have entered into with third parties;
the extent to which we acquired or invested in businesses, products and technologies, including entering into licensing or collaboration arrangements for ALRN-6924, although we currently have no commitments or agreements to complete any such transactions;
the costs and timing of commercialization activities, including drug sales, marketing, manufacturing and distribution, for any product candidate for which we receive marketing approval; and
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims.

Subject to the outcome of our exploration of strategic alternatives, we believe that, based on our current operating plan, our cash, cash equivalents and investments as of December 31, 2022 will enable us to fund our operating expenses for at least twelve months following the date of this Annual Report on Form 10-K. However, due to the inherent uncertainty in the timing and cost of these potential strategic alternatives, including their impact on our cash consumption, we have concluded that as of the date of this Annual Report on Form 10-K there is substantial doubt about our ability to continue as a going concern. Our funding estimates are based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate. While we have implemented certain cash preservation measures, we cannot be certain that such measures will result in the savings anticipated.

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We have incurred significant losses since inception. We expect to incur losses for the foreseeable future and do not expect to achieve or maintain profitability. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability.

Since our inception, we have incurred significant losses on an aggregate basis. Our net loss was $27.3 million and $26.2 million for the years ended December 31, 2022 and December 31, 2021, respectively. Our net loss was $26.2 million and $21.2 million for the years ended December 31, 2021 and 2020, respectively. We have not generated any revenue to date from sales of any drugs and have financed our operations principally through sales of our common stock, through private placements of our preferred stock prior to our initial public offering, and, to a lesser extent, through a collaboration agreement. We have devoted substantially all of our efforts to research and development. In February 2023, we discontinued development of ALRN-6924 in order to substantially reduce our operating expenses while we undertake a comprehensive assessment of our strategic options. Notwithstanding these events, we expect to continue to incur operating losses for the foreseeable future. In addition, our losses from operations may fluctuate significantly from quarter to quarter.

While we recently made the decision to discontinue development of ALRN-6924 and are not currently developing product candidates, to become and remain profitable, we would have needed to develop, obtain approval for and eventually commercialize a product or products with significant market potential. This would have required us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of ALRN-6924, obtaining marketing approval for ALRN-6924, manufacturing, marketing and selling ALRN-6924 following any marketing approval we may have obtained and establishing and managing any collaborations for the development, marketing and/or commercialization of ALRN-6924. We may never have succeeded in these activities and, even if we did, may never have generated revenues that would have been significant or large enough to achieve profitability. This will require us to be successful in a range of challenging activities, including completing preclinical studies and clinical trials of ALRN-6924, obtaining marketing approval for ALRN-6924, manufacturing, marketing and selling ALRN-6924 following any marketing approval we may obtain and establishing and managing any collaborations for the development, marketing and/or commercialization of ALRN-6924. We may never succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability.

We hold a portion of our cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.

We hold a portion of cash and cash equivalents that we use to meet our working capital and operating expense needs in deposit accounts. The balance held in these accounts may exceed the Federal Deposit Insurance Corporation, or FDIC, standard deposit insurance limit of $250,000. If a financial institution in which we hold such funds fails or is subject to significant adverse conditions in the financial or credit markets, we could be subject to a risk of loss of all or a portion of such uninsured funds or be subject to a delay in accessing all or a portion of such uninsured funds. Any such loss or lack of access to these funds could adversely impact our short-term liquidity and ability to meet our operating expense obligations.

For example, on March 10, 2023, Silicon Valley Bank, or SVB, and Signature Bank, were closed by state regulators and the FDIC was appointed receiver for each bank. The FDIC created successor bridge banks and all deposits of SVB and Signature Bank were transferred to the bridge banks under a systemic risk exception approved by the United States Department of the Treasury, the Federal Reserve and the FDIC. If financial institutions in which we hold funds for working capital and operating expenses were to fail, we cannot provide any assurances that such governmental agencies would take action to protect our uninsured deposits in a similar manner.

We also maintain investment accounts in which we hold our investments and, if access to the funds we use for working capital and operating expenses is impaired, we may not be able to open new operating accounts or to sell investments or transfer funds from our investment accounts to new operating accounts on a timely basis sufficient to meet our operating expense obligations.

Risks Related to the Discovery, Development and Commercialization of Product Candidates

The approach we took to discover and develop novel drugs is unproven and may never lead to marketable products.

We concentrated our efforts and therapeutic product research on stabilized cell-permeating alpha-helical peptide technology. Neither we nor any other company has received marketing approval to market therapeutics utilizing stabilized cell-permeating peptides. The scientific discoveries that formed the basis for our efforts to discover and develop new drugs are relatively new. The scientific discoveries that form the basis for our efforts to discover and develop new drugs are relatively new. The scientific evidence to support the feasibility of developing drugs based on these discoveries is both preliminary and limited. Very few drug candidates based on these discoveries have ever been tested in animals, and development of an earlier stabilized cell-permeating peptide

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product candidate by us was suspended following a clinical trial due to the anticipated costs of required reformulation. Peptides do not naturally possess the inherent molecular properties typically required of drugs, such as the ability to be stable in the body long enough to reach the tissues in which their effects are required, nor the ability to enter cells within these tissues in order to exert their effects. Peptides, the class of molecule we are trying to develop into drugs, do not naturally possess the inherent molecular properties typically required of drugs, such as the ability to be stable in the body long enough to reach the tissues in which their effects are required, nor the ability to enter cells within these tissues in order to exert their effects. We currently have only limited data to suggest that we can introduce these properties into peptides. In addition, stabilized cell-permeating peptide product candidates may not demonstrate in patients the chemical and pharmacological properties ascribed to them in laboratory studies, and they may interact with human biological systems in unforeseen, ineffective or harmful ways. In addition, our stabilized cell-permeating peptide product candidates may not demonstrate in patients the chemical and pharmacological properties ascribed to them in laboratory studies, and they may interact with human biological systems in unforeseen, ineffective or harmful ways.

Moreover, we believe ALRN-6924 reactivates p53 by disrupting the interactions between p53 and its endogenous inhibitors, MDM2 and MDMX, thereby freeing p53 to transit to its DNA target in the nucleus and initiate cell cycle arrest in healthy cells and/or apoptosis in cancerous cells. We believe that ALRN-6924 was the first and only product candidate in clinical development that could bind to and disrupt the interaction of MDM2 and MDMX with p53 with equivalent effectiveness, or equipotently. We believe that ALRN-6924 is the first and only product candidate in clinical development that can bind to and disrupt the interaction of MDM2 and MDMX with p53 with equivalent effectiveness, or equipotently. Although we have evaluated ALRN-6924 in preclinical studies and early-stage clinical trials, and are aware of published literature supporting the role of MDM2 and MDMX in reactivating non-mutated or wild type, or WT, p53 as well as clinical results for small molecule inhibitors that act to disrupt the interaction of p53 and MDM2, we believe that we were the first to clinically test a molecule that binds directly to both MDM2 and MDMX. As such, the effect of binding to and simultaneously disrupting the interactions of MDM2 and MDMX with WT p53 in cancer patients has not been established in clinical trials. In addition, the role of factors other than MDM2 and MDMX in circumventing the p53 mechanism is still the subject of continued research.

The use of a dual inhibitor of MDM2 and MDMX to reduce chemotherapy-related toxicities in the bone marrow and healthy normal cells outside of the bone marrow is a novel approach and we believe that we were the only company developing in clinical trials a MDM2 and MDMX inhibitor for this purpose. The scientific evidence to support the feasibility of developing this product candidate for this purpose is limited. Even though ALRN-6924 has demonstrated positive results in some preclinical studies and clinical trials, if we had continued product development of ALRN-6924, we may not have succeeded in demonstrating safety and efficacy of ALRN-6924 as a chemoprotective agent in additional or later-stage clinical trials. Even though ALRN-6924 has demonstrated positive results in preclinical and clinical studies, we may not succeed in demonstrating safety and efficacy of ALRN-6924 as a chemoprotective agent in additional or later-stage clinical trials.

As a result, we do not know whether the mechanism of action of ALRN-6924 would have the expected effect on patients receiving chemotherapy in any cancer indications and whether ALRN-6924 could or would demonstrate the safety and efficacy needed to advance in clinical development and obtain marketing approval.

We were dependent on the success of ALRN-6924 and there was no guarantee that our clinical trials of ALRN-6924 would have been successful.

We invested a substantial portion of our efforts and financial resources in the research and development of ALRN-6924 as a chemoprotective agent, and our business depended entirely on the successful development and commercialization of ALRN-6924.

If we had decided to continue the development of ALRN-6924, instead of ceasing clinical development of ALRN-6924, we would have been required to conduct additional clinical development, preclinical and manufacturing activities, obtained marketing approval in multiple jurisdictions and established commercial capabilities before we could have generated any revenues from product sales. We were not permitted to market or promote ALRN-6924 before we receive marketing approval from the U.S. Food and Drug Administration, or the FDA, and comparable foreign regulatory authorities, and we may never have received such marketing approvals.

The success of ALRN-6924 would have been dependent on several factors, including the following:

successful and timely patient enrollment and completion of preclinical studies and clinical trials of ALRN-6924;
safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority for marketing approval;
timely receipt of marketing approvals for both ALRN-6924 and any required companion diagnostic from applicable regulatory authorities;
the extent of any required post-marketing approval commitments to applicable regulatory authorities;

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establishment of supply arrangements with third-party raw materials and drug product suppliers and manufacturers;
establishment of scaled production arrangements with third-party manufacturers to obtain finished products that are appropriately packaged for sale;
obtaining and maintaining patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally;
protection of our rights in our intellectual property portfolio, including our licensed intellectual property;
successful launch of commercial sales following any marketing approval;
a continued acceptable safety profile following any marketing approval;
commercial acceptance by patients, the medical community and third-party payors; and
the ability to compete with other therapies.

We were pursuing the development of ALRN-6924 in combination with other approved chemotherapeutics. If the FDA revoked approval of any such therapeutic, or if safety, efficacy, manufacturing or supply issues arose with any therapeutic that we used in combination with ALRN-6924, we would have been unable to further develop and/or market ALRN-6924, or we may have experienced significant regulatory delays. If the FDA revokes approval of any such therapeutic, or if safety, efficacy, manufacturing or supply issues arise with any therapeutic that we use in combination with ALRN-6924 in the future, we may be unable to further develop and/or market ALRN-6924, or we may experience significant regulatory delays, and our business could be materially harmed.

We were pursuing the development of ALRN-6924 in combination with approved chemotherapeutics. We did not develop or obtain regulatory approval for, and we do not manufacture or sell, any of these approved chemotherapeutics. If the FDA revoked its approval of any of these therapeutics, we would not have been able to continue clinical development of or market ALRN-6924 in combination with such revoked therapeutic. 48 If the FDA revokes its approval of any of these therapeutics, we will not be able to continue clinical development of or market ALRN-6924 or any other product candidate in combination with such revoked therapeutic. If safety or efficacy issues arose with these or any other therapeutics that we sought to combine with ALRN-6924, we would have experienced significant regulatory delays, and the FDA may have required us to redesign or terminate the applicable clinical trials. If safety or efficacy issues arise with these or any other therapeutics that we seek to combine with ALRN-6924 in the future, we may experience significant regulatory delays, and the FDA may require us to redesign or terminate the applicable clinical trials. Moreover, if these therapeutics were to receive regulatory approval in combination with a different therapeutic in any indication for which we pursued approval, such approval could have impacted the feasibility and design of any subsequent clinical trials that we may have sought to conduct evaluating ALRN-6924 in combination with such therapeutic. Moreover, if these therapeutics were to receive regulatory approval in combination with a different therapeutic in any indication for which we are pursuing approval, such approval could impact the feasibility and design of any subsequent clinical trials that we may seek to conduct evaluating ALRN-6924, or any other product candidate, in combination with such therapeutic. If manufacturing, cost or other issues resulted in a supply shortage of these therapeutics or any other combination therapeutics, we may not have been able to complete clinical development of ALRN-6924.

In addition, we may have needed, for supply, data referencing or other purposes, to collaborate or otherwise engage with the companies who market these approved chemotherapeutics. If we were unable to do so on a timely basis, on acceptable terms or at all, we may have had to curtail the development of a product candidate or indication, reduce or delay its development, delay its potential commercialization or reduce the scope of any sales or marketing activities. If we are unable to do so on a timely basis, on acceptable terms or at all, we may have to curtail the development of a product candidate or indication, reduce or delay its development program, delay its potential commercialization or reduce the scope of any sales or marketing activities.

Even if ALRN-6924 received regulatory approval and was commercialized for use in combination with an approved chemotherapeutic, we would have continued to be subject to the risk that the FDA could revoke its approval of such therapeutic, that safety, efficacy, manufacturing, cost or supply issues could arise with one of these therapeutic agents, or that the current standard of care may be replaced. This could have resulted in ALRN-6924, if approved, being removed from the market or being less successful commercially. This could result in ALRN-6924 or any such other product candidate, if approved, being removed from the market or being less successful commercially.

The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, interim results of a clinical trial do not necessarily predict final results and the results of clinical trials may not satisfy the requirements of the FDA or comparable foreign regulatory authorities.

Clinical trials may produce negative or inconclusive results, such as the initial results of our most recent Phase 1b trial of ALRN-6924. Success in preclinical studies and early-stage clinical trials does not mean that future larger registration clinical trials will be successful because product candidates in later-stage clinical trials may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and non-U.S. regulatory authorities despite having progressed through preclinical studies and early-stage clinical trials. Product candidates that have shown promising results in preclinical studies and early-stage clinical trials may still suffer significant setbacks in subsequent registration clinical trials. Additionally, the outcome of preclinical studies and early-stage clinical trials,

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such as the results of our Phase 1b trial of ALRN-6924 in patients with small cell lung cancer, may not be predictive of the success of later-stage clinical trials in the same or different indications, including in patients with non-small cell lung cancer and breast cancer.

Interim or preliminary data from clinical trials may not be indicative of the final results of the trial and there is a risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Interim or preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the interim or preliminary data. As a result, interim or preliminary data should be viewed with caution until the final data are available.

In addition, the design of a clinical trial can determine whether its results will support approval of a drug and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in preclinical studies and earlier clinical trials.

In some instances, there can be significant variability in safety and efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in size and type of the patient populations, differences in and adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants.

In the event that an adverse safety issue, clinical hold or other adverse finding occurred in one or more of our clinical trials of ALRN-6924, such event could have adversely affected our clinical trials of ALRN-6924. Moreover, there is a relatively limited safety data set for product candidates utilizing stabilized cell-permeating peptides or that are designed to reactivate p53. An adverse safety issue or other adverse finding in a clinical trial conducted by a third party with a product candidate utilizing stabilized cell-permeating peptides or that is designed to reactivate p53, such as the small molecules in development that target the p53-MDM2 interaction, could have adversely affected our clinical trials of ALRN-6924.

Further, ALRN-6924 may not have been approved even if it achieved its primary endpoints in Phase 3 clinical trials or registration trials. The FDA or non-U.S. regulatory authorities may have disagreed with our trial design, including the lack of a concurrent control arm or the use of historical controls, and our interpretation of data from preclinical studies and clinical trials.

In addition, any of these regulatory authorities may have also approved ALRN-6924 for fewer or more limited indications than we requested or may have granted approval contingent on the performance of costly post-marketing clinical trials. In addition, the FDA or other non-U.S. regulatory authorities may not have approved the labeling claims that we believed would be necessary or desirable for the successful commercialization of ALRN-6924.

Before obtaining marketing approvals for the commercial sale of any product candidate for a target indication, we would have been required to demonstrate with substantial evidence gathered in preclinical studies and well-controlled clinical trials, and, with respect to approval in the United States, to the satisfaction of the FDA, that the product candidate is safe and effective for use for that target indication