RISK FACTORS 4 Investors should carefully consider all of the information set forth in this Registration Document before making an investment decision, including the risk factors set forth in this Section. Such risks are, as of the date of this Registration Document, the risks that we believe, were they to occur, could have a material adverse effect on our business, results of operations, financial condition and prospects. Investors should note that there may be other risks that have not yet been identified as of the date of this Registration Document, or the occurrence, as of the date hereof, we do not consider likely to have a material adverse effect on our business, results of operations, financial condition and prospects. Among these important risks are the following: on programs or product candidates that may be a greater • We have never generated revenue from product sales and have commercial opportunity or for which there is a greater incurred significant operating losses since our inception. We likelihood of success. expect to continue to incur significant losses for the foreseeable • We do not own any issued patents and our rights to develop future and may never achieve profitability. and commercialize our product candidates are subject to the • We may need to raise additional capital in the future, which terms and conditions of intellectual property licenses granted may not be available on acceptable terms, or at all, and failure to us by others. to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or 4.1 other operations. • Our product candidates are based on novel technologies, RISKS RELATED TO OUR FINANCIAL CONDITION including gene therapy, which may implicate ethical, social and AND CAPITAL REQUIREMENTS legal concerns about genetic testing and genetic research in We have never generated revenue from product sales and have general, and such novel technologies make it difficult to predict incurred significant operating losses since our inception. We expect the timing and costs of development of new and unforeseen to continue to incur significant losses for the foreseeable future and regulatory requirements and of subsequently obtaining may never achieve profitability. regulatory approval. Since inception, we have devoted substantially all of our efforts • The regulatory approval process of the FDA, the EMA and to research and development, including preclinical and clinical other regulatory authorities and the clinical trials that our development of our product candidates, as wel l as to building product candidates will need to undergo, are time-consuming our team. We have never generated revenue from product and expensive, the outcomes of which are unpredictable, and sales, and we have incurred operating losses since inception. for which there is a high risk of failure. We incurred net losses of €22.1 million and €24.1 million for the • We have not completed the evaluation of our lead product fiscal years ended December 31, 2016 and 2017, respectively, candidate, GS010, in clinical trials, and we are currently and these losses have adversely impacted and will continue to conducting a Phase I/I I clinical trial for our second most adversely impact, our equity attributable to shareholders and advanced product candidate, GS030. net assets. We anticipate that our operating losses will continue • Our product candidates and the process for administering our for at least the coming years as we continue with our research product candidates using AAV vectors may cause undesirable and development activities and until we generate substantial side effects or have other properties that could delay or prevent revenues from approved product candidates. As of December 31, their regulatory approval, limit the commercial potential or 2017, we had an accumulated deficit of €75.8 million. result in significant negative consequences fol lowing any Our capacity to generate revenues from product sales and potential marketing approval. to achieve profitability wil l depend on our ability, alone or • Success in preclinical studies or early clinical trials may not be with col laborative partners, to successful ly complete the indicative of results obtained in later trials. development of and to obtain the regulatory approvals necessary • We have entered, and may in the future enter, into collaborations to commercialize product candidates with significant market with third parties for the development and commercialization potential. We do not currently have the required approvals to of our product candidates. If we are unable to enter into such market GS010, GS030 or any other product candidates and we collaborations on acceptable terms, or if these collaborations may never obtain such approvals or be able to commercialize are not successful, our business could be adversely affected. any of our current or future product candidates. Our ability to • Gene therapies are novel, complex and difficult to manufacture. generate future revenues from product sales will depend heavily We have limited manufacturing experience and could on our and any of our collaborators’ success in: experience production problems that result in delays in our • continuing our research and development of our two lead development or commercialization programs. product candidates, including our Phase I I I clinical trials for • We may not be successful in our efforts to identify or discover our lead product candidate, GS010, and clinical trials for our additional product candidates and may fail to capitalize second most advanced product candidate, GS030; 18 – GENSIGHT BIOLOGICS – 2017 Registration Document