RISK FACTORS 4 institutions for the advancement of our gene therapy platform, as ours generally cannot be fully characterized. As a result, assays we must share our proprietary technology and confidential of the finished product may not be sufficient to ensure that the information with them. We seek to protect our proprietary product wil l perform in the intended manner. Accordingly, we technology, in part, by entering into confidentiality agreements and, employ multiple steps to control the manufacturing process if applicable, material transfer agreements, collaborative research to assure that the product candidate is made in strict and agreements, consulting agreements or other similar agreements consistent compliance with our requirements. Problems with the with our collaborators, advisors, employees and consultants prior manufacturing process, including even minor deviations from our to beginning research or disclosing proprietary information. These requirements, could result in product defects or manufacturing agreements limit the rights of the third parties to use or disclose our failures that result in lot failures, product recalls, product liability confidential information. Despite these confidentiality agreements, claims or insufficient inventory. In addition, we may encounter the need to share trade secrets and other confidential information problems achieving adequate quantities and quality of clinical- increases the risk that such trade secrets become known by our grade materials that meet FDA, EMA or other applicable competitors, are inadvertently incorporated into the technology standards or specifications with consistent and acceptable of others or are disclosed or used in violation of these agreements. production yields and costs. Given that our proprietary position is based on our know-how and trade secrets, a competitor’s discovery of our proprietary The FDA, the EMA and other regulatory authorities may also technology and confidential information or other unauthorized use require submission of samples of any lot of an approved product or disclosure would impair our competitive position and may have a together with the protocols showing the results of applicable material adverse effect on our business, financial condition, results tests. Under some circumstances, the FDA, the EMA or other of operations and prospects. regulatory authorities may require that a lot not be distributed until the agency authorizes its release. Slight deviations in the manufacturing requirements, including those affecting quality attributes and stability, may result in unacceptable changes in 4.4 the product that could result in lot failures or product recalls. Lot RISKS RELATED TO MANUFACTURING failures or product recalls could cause us to delay product launches Gene therapies are novel, complex and difficult to manufacture. or clinical trials, which could be costly to us and otherwise harm our We have limited manufacturing experience and could experience business, financial condition, results of operations and prospects. production problems that result in delays in our development or We may also encounter problems hiring and retaining commercialization programs. the experienced specialist scientific, quality control and We have limited experience manufacturing our product candidates. manufacturing personnel needed to supervise manufacturing We may be unable to produce commercial materials or meet demand processes carried out by third parties, which could result in delays to support a commercial launch for our product candidates. Any in our production or difficulties in complying with applicable such failure could delay or prevent the development of our product regulatory requirements. candidates and would have a negative impact on our business, Any problems in the manufacturing process or facilities for our financial condition and results of operations. product candidates could make us a less attractive collaborator As of the date of this Registration Document, we have contracts for potential partners, including larger pharmaceutical companies with Brammer, Lonza and Novasep to manufacture clinical and and academic research institutions, which could limit our access commercial supplies of our product candidates, and we expect to additional attractive development programs. Problems in our to continue to rely on third parties for our manufacturing needs. manufacturing process or facilities also could restrict our ability This is and wil l continue to be especial ly chal lenging as the to meet market demand for our products. manufacturing process to produce our product candidates is We rely, and expect to continue to rely, on Brammer, Lonza, complex, novel and has not been validated for commercial use. Novasep and other third parties to conduct, supervise and monitor Several factors could cause production interruptions, including manufacturing for our preclinical studies and clinical trials. If these equipment malfunctions, facility contamination, raw material third parties do not meet our deadlines, successfully carry out their shortages or contamination, natural disasters, disruption in utility contractual duties or otherwise conduct the manufacturing for services, human error or disruptions in the operations of our these studies and trials as required, we may not be able to obtain current and future suppliers. regulatory approval for or commercialize our product candidates when expected or at all. Our product candidates require processing steps that are more complex than those required for most chemical pharmaceuticals We currently rely, and expect to continue to rely to a significant because the physical and chemical properties of a biologic such degree, on Brammer, Lonza, Novasep and other third parties to 32 – GENSIGHT BIOLOGICS – 2017 Registration Document