RISK FACTORS 4 us to cease further development of our product candidates for which is generally defined as having a patient population of fewer any or all targeted indications. Even if we are able to demonstrate than 200,000 individuals annual ly in the United States, or a that all future serious adverse events are not product-related, patient population greater than 200,000 in the United States such occurrences could affect patient recruitment or the ability where there is no reasonable expectation that the cost of of enrolled patients to complete the clinical trial. Moreover, if we developing the drug will be recovered from sales in the United elect or are required to delay, suspend or terminate any clinical States. In the European Union, the European Commission, after trial of any of our product candidates, the commercial prospects receiving a recommendation from the EMA’s Committee for of such product candidates may be harmed and our ability to Orphan Medicinal Products, grants orphan medicinal product generate product revenues from any of these product candidates designation to promote the development of products that are may be delayed or eliminated. Any of these occurrences may harm intended for the diagnosis, prevention or treatment of a life- our ability to develop other product candidates and may harm our threatening or chronical ly debilitating condition affecting not business, financial condition and prospects significantly. more than five in 10,000 persons in the European Union when the Additionally, if any of our product candidates receives marketing application is made. Additionally, orphan designation is granted approval, the FDA and the EMA could require us to adopt for products intended for the diagnosis, prevention or treatment a Risk Evaluation and Mitigation Strategy, or REMS, or a Risk of a life-threatening, seriously debilitating or serious and chronic Management Plan, or RMP, to ensure that its benefits outweigh condition when, without incentives, it is unlikely that sales of the its risks, which may include, among other things, a medication drug in the European Union would be sufficient to justify the guide outlining the risks of the product for distribution to patients necessary investment in the drug or biologic product. and a communication plan to healthcare practitioners. Moreover, in order to obtain orphan designation in the European Furthermore, if we or others later identify undesirable side effects Union, it is necessary to demonstrate that there exists no caused by any of our product candidates, several potential ly satisfactory method of diagnosis, prevention or treatment of significant negative consequences could result, including: the condition authorized for marketing in the European Union, or if such a method exists, that the product will be of significant • regulatory authorities may suspend or withdraw approvals of benefit to those affected by the condition. The EMA will reassess such product candidate; whether GS010 and GS030 continue to meet the criteria for • regulatory authorities may require additional warnings on the orphan medicinal product designation in the European Union at label; the time it reviews a marketing authorization application for each • we may be required to change the way a product candidate is product candidate. If the EMA considers that either of GS010 administered or conduct additional clinical trials; or GS030 no longer meets these criteria, for example, because • we could be sued and held liable for harm caused to patients; either product candidate does not offer a significant benefit over and existing therapies, it may revoke the applicable orphan medicinal product designation prior to approval. • our reputation may suffer. GS010 and GS030 have been granted orphan drug designation by Any of these events could prevent us from achieving or the FDA and the European Commission for the treatment of Leber maintaining market acceptance of our product candidates Hereditary Optic Neuropathy, or LHON, and for the treatment of and could significantly harm our business, prospects, financial Retinitis Pigmentosa, or RP, respectively. If we request orphan condition and results of operations. drug designation for our other product candidates, there can We may be unable to obtain orphan drug designation for our be no assurances that the FDA or the European Commission product candidates other than GS010 and GS030, and may be wil l grant any of our product candidates such designation. unable to obtain exclusivity for any of our product candidates. Additionally, the designation of any of our product candidates as If our competitors are able to obtain orphan drug exclusivity an orphan product does not guarantee that any regulatory agency for products that constitute the same drug and treat the same wil l accelerate regulatory review of, or approve, that product indications as our product candidates, we may not be able to candidate, nor does it limit the ability of any regulatory agency have competing products approved by the applicable regulatory to grant orphan drug designation to product candidates of other authority for a significant period of time. companies that treat the same indications prior to our product Regulatory authorities in some jurisdictions, including the United candidates receiving exclusive marketing approval. States and the European Union, may designate drugs for relatively Even if we were to obtain orphan drug exclusivity for a product smal l patient populations as orphan drugs. Under the Orphan candidate, such as for GS010 and GS030, that exclusivity may Drug Act of 1983, the FDA may designate a product candidate as not effectively protect the product candidate from competition an orphan drug if it is intended to treat a rare disease or condition, because different drugs can be approved for the same condition. 26 – GENSIGHT BIOLOGICS – 2017 Registration Document