OPERATING AND FINANCIAL REVIEW 9 discovery of GS030. In 2017, we have initiated good laboratory and clinical studies beyond those which we currently anticipate practice, toxicology studies on non-human primates. We will be required for the completion of clinical development, or if received the approval to initiate Phase I/I I clinical trials in we experience significant delays in enrollment in any clinical trials, December 2017 and expect to treat the first subject in the we could be required to spend significant additional financial United Kingdom in the second quarter of 2018. resources and time on the completion of clinical development. For a discussion on the risks associated with completing the Our direct research and development expenses consist primarily development projects on schedule, see Section 4.2, “Risks Related of external costs, such as manufacturing expenses, non-clinical to the Discovery and Development of and Obtaining Regulatory studies, startup fees paid to investigators, consultants, central Approval for Our Product Candidates.” laboratories and CROs in connection with our clinical trials, acquiring and manufacturing clinical trial materials and costs 9.2.4.2 General and Administrative related to col laborations, which we al locate to our specific research programs. In addition, we allocate personnel-related General and administrative expense consists primarily of costs, depreciation and other indirect costs to specific programs. personnel costs and share-based compensation for personnel other than research and development staff. General and Research and development activities are central to our business. administrative expense also consists of fees for professional Product candidates in later stages of clinical development services, mainly related to audit, IT, accounting, recruitment generally have higher development costs than those in earlier and legal services, communication and travel costs, real-estate stages of preclinical and clinical development, primarily due to the leasing costs, office furniture and equipment costs, al lowance increased size and duration of later-stage clinical trials, as well as for amortization and depreciation, directors’ attendance fees, the ramp-up of CMC and manufacturing activities in preparation insurance costs and overhead costs, such as telecommunications for regulatory submission, and ultimately commercialization. We expenses. expect that our research and development expenses will continue to increase in the foreseeable future as we initiate clinical trials for We anticipate that our general and administrative expenses will our product candidates, and complete clinical development and increase in the future as we grow our support functions for the prepare for commercialization of other product candidates. expected increase in our research and development activities and the potential commercialization of our product candidates. We cannot determine with certainty the duration or costs of We also anticipate increased expenses associated with being a the current or future clinical trials of our product candidates or public company in France, including costs related to audit, legal, if, when, or to what extent we wil l generate revenue from the regulatory and tax-related services associated with maintaining commercialization and sale of any of our product candidates that compliance with Euronext Paris listing and AMF requirements, obtain regulatory approval. We may never succeed in achieving director and officer insurance premiums, and media and investor regulatory approval for any of our product candidates. The relations costs. duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including: 9.2.4.3 Sales and Marketing • the scope, rate of progress and expense of our ongoing, as well Sales and marketing expenses consist primarily of professional as any additional, non-clinical studies, clinical trials and other fees, communication and branding fees and personnel costs. If research and development activities; and when we believe that regulatory approval of the first product • clinical trial and early-stage results; candidate appears likely, we anticipate an increase in payroll and • the terms and timing of regulatory approvals; related expenses as a result of our preparation for commercial operations. • the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights; and In the meantime, we anticipate some increased expenses related • the ability to market, commercialize and achieve market to our current activities and pursuing investments, as required. acceptance for GS010, GS030 or any other product candidate 9.2.4.4 Finance Income (Expense) that we may develop in the future. A change in the outcome of any of these variables with respect Our financial expenses exclusively relate to foreign currency to the development of GS010, GS030 or any other product losses related to the purchase of services denominated in U.S. candidate that we are developing could mean a significant change dollars. in the costs and timing associated with the development of such Our cash and cash equivalents have been deposited only in a product candidates. For example, if the FDA, the EMA or other non-interest bearing current account. We expect to fol low an regulatory authority were to require us to conduct non-clinical investment philosophy whereby our cash and cash equivalents 116– GENSIGHT BIOLOGICS – 2017 Registration Document