RISK FACTORS 4 Any contamination in the manufacturing process for our product 4.5 candidates could result in delays in our clinical development or RISKS RELATED TO THE COMMERCIALIZATION marketing schedules. OF OUR PRODUCT CANDIDATES Given the nature of biologics manufacturing, there is a risk of If we are unable to establish sales, marketing and distribution contamination. Any contamination could material ly adversely capabilities for our product candidates, whether it be an internal affect our ability to produce product candidates on schedule infrastructure or an arrangement with a commercial partner, we and could, therefore, harm our results of operations and cause may not be successful in commercializing those product candidates reputational damage. if and when they are approved. Most of the raw materials required in our manufacturing Other than the recent appointment of our Vice President of process are derived from biologic sources. Such raw materials Marketing, we currently have no sales, marketing, or distribution are difficult to procure and may be subject to contamination or capabilities. To successful ly commercialize any of our product recall. A material contamination, recall or restriction on the use of candidates, we wil l need to develop these capabilities, either biologically derived substances in the manufacture of our product on our own or with others, which wil l be expensive and time- candidates could adversely impact or disrupt the commercial consuming and could delay any product launch. Moreover, we manufacturing or the production of clinical material, which could cannot be certain that we will be able to successfully develop this materially and adversely affect our development timelines. capability. We intend to commercialize our products, on our own or with strategic partners, in Europe and the United States and Interruptions in the supply of product or inventory loss may expect to seek partnership agreements in Asia for sales, marketing adversely affect our operating results and financial condition. and distribution. If any current or future col laborators do not commit sufficient resources to commercialize our products, or we Our product candidates are manufactured using technical ly are unable to develop the necessary capabilities on our own, we complex processes requiring specialized facilities, highly specific will be unable to generate sufficient product revenue to sustain raw materials and other production constraints. The complexity our business. We will be competing with many companies that of these processes, as well as strict government standards for have extensive, experienced and well- funded marketing and sales the manufacture and storage of our products, subjects us to operations to recruit, hire, train and retain marketing and sales production risks. While product batches released for use in personnel. We also face competition in our search for third parties clinical trials undergo sample testing, some defects may only to assist us with the sales and marketing efforts of our product be identified fol lowing product release. In addition, process candidates. Without an internal team or the support of a third deviations or unanticipated effects of approved process changes party to perform marketing, sales and distribution functions, we may result in these intermediate products not complying with may be unable to compete successfully against more established stability requirements or specifications. companies. Our product candidates must be stored and transported at Market opportunities for our product candidates may be smaller temperatures within a certain range. If these environmental than anticipated. conditions deviate, our product candidates’ remaining shelf-lives could be impaired or their efficacy and safety could be adversely Our understanding of both the number of people who have affected, making them no longer suitable for use. the diseases targeted by our product candidates, as well as the subset of people with such diseases who have the potential to The occurrence, or suspected occurrence, of production and benefit from treatment with our product candidates, are based distribution difficulties can lead to lost inventories and, in on estimates. These estimates have been derived from a variety some cases, product recal ls, with consequential reputational of sources, including the scientific literature, surveys of clinics, damage and the risk of product liability. The investigation and patient foundations and market research and may prove to remediation of any identified problems can cause production be incorrect. Further, new studies may reduce the estimated delays, substantial expense, lost sales and delays of new product incidence or prevalence of these diseases. The number of patients launches. Any interruption in the supply of finished products or in the United States, the European Union and elsewhere may turn the loss thereof could hinder our ability to timely distribute our out to be lower than expected, may not be otherwise amenable to products and satisfy customer demand. Any unforeseen failure in treatment with our products or patients may become increasingly the storage of the product or loss in supply could delay our clinical difficult to identify and access. In addition, even if we obtain trials and, if our product candidates are approved, result in a loss significant market share for our product candidates, because the of our market share and negatively affect our business, financial potential target populations are very small, we may not achieve condition, results of operations and prospects. profitability despite obtaining significant market share. 34 – GENSIGHT BIOLOGICS – 2017 Registration Document