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Investing in our common stock involves a high degree of risk. You should carefully consider the risks and
uncertainties described below together with all of the other information contained in this prospectus, including our financial statements and the related notes appearing at the end of this prospectus,
before deciding to invest in our common stock. If any of the following risks actually occurs, our business, prospects, operating results and financial condition could suffer materially, the trading
price of our common stock could decline and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently believe to be immaterial may also adversely affect our business.
Risks Related to Our Financial Position and Capital Needs
We have incurred substantial operating expenses in every year since our inception and anticipate that we will continue to incur substantial operating expenses for the
foreseeable future. We may never achieve profitability from product sales.
We are a clinical stage biotechnology company with no product sales to date. Investment in biotechnology product development is highly
speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety
profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to
incur significant research and development and other expenses related to our ongoing operations. As a result, we have incurred substantial operating expenses in every period since our inception in
2001. With the exception of collaboration revenues from product candidates that we partnered, we have no revenues. For the year ended December 31, 2013 and the six months ended June 30,
2014, we had operating expenses of $20.3 million and $12.1 million, respectively. As of June 30, 2014, we had an accumulated deficit of $120.9 million. Our operating
expenses have resulted principally from costs incurred in our discovery, research and development activities.
anticipate that our expenses will increase in the future as we expand our development, manufacturing and commercialization activities, continue our discovery and research activities,
and seek regulatory approval for our product candidates. If we do not receive the anticipated milestone or royalty payments under our current agreements with Boehringer Ingelheim GmbH, or BI,
or if we do not enter into partnerships for other product candidates on acceptable terms, we may incur substantial operating losses over the next several years as we execute our plan to expand our
development and commercialization activities and continue our discovery and research activities. There can be no assurance that we will enter into a new collaboration or receive milestone payments or
royalties and, therefore, no assurance our operating expenses and net losses will not increase prohibitively in the future.
become and remain profitable, we or our partners must succeed in developing our product candidates, obtaining regulatory approval for them, and manufacturing, marketing and selling
those products for which we or our partners may obtain regulatory approval. We or they may not succeed in these activities, and we may never generate revenue from product sales. Even if we are
profitable in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would depress our market value and could impair our ability to
raise capital, expand our business, discover or develop other product candidates or continue our operations. A decline in the value of our company could cause you to lose all or part of your
We currently have no source of product sales revenue.
To date, we have not generated any revenues from commercial sales of our product candidates. Our ability to generate product revenue
depends upon our ability, alone or with our partners, to successfully commercialize products, including any of our current product candidates or other product candidates that