The
COVID-19
pandemic could materially and adversely affect our ability to conduct clinical trials and engage with our third-party vendors and thereby have a material adverse effect on our financial results.
The FDA has indicated that the staff of the Center for Biologics Evaluation and Research continue to operate according to historical timelines despite the allocation of substantial resources to address the
COVID-19
pandemic. The FDA has noted, however, that its current levels of performance may be impacted by the workload created by
COVID-19
activities. It is possible that the FDA could prioritize and shift more resources to
COVID-19
activities in the future, which could delay future meetings or preclude
in-person
meetings with the FDA regarding next-phase clinical study design for our product candidates, including XLRP, and thus could delay their development programs. Any decision by the FDA to delay or refuse meeting with us or to limit communications with us in light of
COVID-19
could have a material adverse effect on our scheduled clinical trials, which could increase our operating expenses and have a material adverse effect on our financial results.
We have previously experienced delays in enrollment in connection with the
COVID-19
pandemic. We could also experience delays in critical
follow-up
visits required under clinical trial protocols, which could increase the cost of those trials and also impact their expected timelines. Our ability to fully interpret the trial outcomes and the ability of certain
lab-based
employees to perform their jobs due to
orders or other restrictions related to
COVID-19
could also result in delays and increase our operating expenses. We have engaged a mobile vision center as an alternative method of data acquisition in an effort to maintain existing timelines for our programs. However, this method of data acquisition and/or other methods to respond to the impact of
COVID-19
has, and may continue to, increase our operating costs.
Furthermore, third-party vendors, such as raw material suppliers and contracted manufacturing, testing or research organizations, could also be impacted by
COVID-19,
which could result in unavoidable delays and/or increases in our operating costs. In particular, we obtain certain raw materials in the synthesis of our drug candidates and NHPs for toxicology testing in countries affected by the
COVID-19
pandemic. If we are unable to obtain these raw materials or NHPs in sufficient quantity and in a timely manner, the development, testing and clinical trials of our drug candidates may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.
The extent to which the
COVID-19
pandemic may impact our clinical trials and our dealings with vendors will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the severity of
COVID-19,
and the effectiveness of actions to prevent transmission, contain the virus, and treat those who have contracted
COVID-19.
Risks related to our reliance on third parties and our plans to develop manufacturing capacity
We expect to rely on third parties to conduct aspects of our product manufacturing and protocol development, and these third parties may not perform satisfactorily.
In May 2021, we entered into a lease, as amended on May 3, 2022, for
square foot cGMP manufacturing and quality control facility adjacent to our existing Florida facility to prepare for late-stage development of our XLRP and ACHM programs. The lease will commence upon substantial completion of the facility, estimated to be completed in the fourth quarter of 2022. However, even when the manufacturing and quality control facility is built, validated and operational, we do not expect to independently conduct all aspects of our vector production, product manufacturing, protocol development, and monitoring and management of our ongoing and planned preclinical and clinical programs. We currently rely and, until such manufacturing and quality control facility is built, validated and operational, we expect to continue to rely, to a significant degree, on third parties for the production of our clinical trial materials. In such cases, we expect to control only certain aspects of the third parties’ activities. Additionally, we may experience delays in the
build-out
of our proposed manufacturing and quality control facility, which will require completing the construction, development and startup of our new facilities, substantial additional expenditures, time, and various regulatory approvals and