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establish the safety and efficacy of our drug candidates, obtain regulatory approvals and achieve market
acceptance of products developed from our drug candidates. We also depend on our collaborators to
manufacture clinical scale quantities of some of our drug candidates and would depend on them in the
future for commercial scale manufacture, distribution and direct sales. Our collaborators may not be
successful in manufacturing our drug candidates on a commercial scale or in successfully
commercializing them.
We face additional risks in connection with our collaborations, including the following:
collaborators may develop and commercialize, either alone or with others, products and services
that are similar to, or competitive with, the products that are the subject of the collaboration with us;
collaborators may under-fund or not commit sufficient resources to the testing, marketing,
distribution or other development of our drug candidates;
collaborators may not properly maintain or defend our intellectual property rights or they may
utilize our proprietary information in such a way as to invite litigation that could jeopardize or
potentially invalidate our intellectual property or proprietary information or expose us to potential
liability;
collaborators may encounter conflicts of interest, changes in business strategy or other business
issues which could adversely affect their willingness or ability to fulfill their obligations to us (for
example, pharmaceutical and biotechnology companies historically have re-evaluated their
priorities following mergers and consolidations, which have been common in recent years in these
industries); and
disputes may arise between us and our collaborators delaying or terminating the research,
development or commercialization of our drug candidates, resulting in significant litigation or
arbitration that could be time-consuming and expensive, or causing collaborators to act in their
own self-interest and not in the interest of our stockholders.
If we or our collaborators fail to adequately conduct clinical trials, regulatory approvals necessary
for the sale of drugs may not be obtained when anticipated, or at all, which would reduce or
eliminate our potential return on that program.
Before any of our drug candidates can be sold commercially, we or our collaborators must conduct clinical
trials that demonstrate that the drug is safe and effective for use in humans for the indications sought. The
results of these clinical trials are used as the basis to obtain regulatory approval from government
authorities such as the FDA. Conducting clinical trials is a complex, time-consuming and expensive
process that requires an appropriate number of trial sites and patients to support the product label claims
being sought. The length of time, number of trial sites and number of patients required for clinical trials
vary substantially according to their type, complexity, novelty and the drug candidate's intended use and
therefore, we may spend as much as several years completing certain trials. Further, the time within
which we can complete our clinical trials depends in large part on the ability to enroll eligible patients who
meet the enrollment criteria and who are in proximity to the trial sites. We and our collaborators also face
competition with other clinical trials for eligible patients. As a consequence, there may be limited
availability of eligible patients, which can result in increased development costs, delays in regulatory
approvals and associated delays in drug candidates reaching the market. Patients may also suffer
adverse medical events or side effects in the course of our clinical trials that may delay or prohibit
regulatory approval of our drug candidates. Even if we or our collaborators successfully conduct clinical
trials, we or our collaborators may not obtain favorable clinical trial results and may not be able to obtain
regulatory approval on this basis.
In addition, we plan to conduct, further clinical trial activities in territories outside the U.S. through third-
party clinical trial service providers that contract with clinical sites and enroll patients in foreign
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jurisdictions, including Eastern Europe and South America, and may do so in new geographic locations
where our experience conducting clinical trials is more limited. Some of these foreign jurisdictions may
impose requirements on us or our third-party clinical trial service providers or contract manufacturers that
are more stringent than those imposed by the FDA, which may delay the development and approval of our
drug candidates.
If we or our collaborators fail to adequately manage the increasing number, size and complexity of clinical
trials, the clinical trials and corresponding regulatory approvals may be delayed or we or our collaborators
may fail to gain approval for our drug candidates altogether. If we or our collaborators are unable to
market and sell our drug candidates or are unable to obtain approvals in the timeframe needed to execute
our product strategies, our business and results of operations would be materially adversely affected.
Delays in the commencement or completion of clinical testing could result in increased costs to
us and delay or limit our ability to generate revenues.
Delays in the commencement or completion of clinical testing of our products or products of our
collaborators could significantly affect our product development costs and our ability to generate revenue
from these products, including programs that we have out-licensed. We do not know whether planned
clinical trials will begin on time or be completed on schedule, if at all. The commencement and completion
of clinical trials can be delayed for a number of reasons, including delays related to the ability of Array or
our collaborators to do the following:
obtain regulatory approval to commence a clinical trial;
reach agreement on acceptable terms with prospective drug manufacturers, clinical research
organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation
and may vary significantly among different CROs and trial sites;
select CROs, trial sites and, where necessary, contract manufacturers that do not encounter any
regulatory compliance problems;
manufacture sufficient quantities of a product candidate for use in clinical trials;
obtain institutional review board, or IRB, approval to conduct a clinical trial at a prospective site;
recruit and enroll patients to participate in clinical trials, which can be impacted by many factors
outside our or our collaborators' control, including competition from other clinical trial programs for
the same or similar indications; and
retain patients who have initiated a clinical trial but may be prone to withdraw due to side effects
from the therapy, lack of efficacy or personal issues.
Clinical trials may also be delayed as a result of ambiguous or negative interim results. In addition, a
clinical trial may be suspended or terminated by us or our collaborator, the FDA, the IRB overseeing the
clinical trial at issue, any of our clinical trial sites with respect to that site, or other regulatory authorities
due to a number of factors, including:
failure to conduct the clinical trial in accordance with regulatory requirements (including Good
Clinical Practices, or GCP) or our clinical protocols;
inspection of the clinical trial operations, trial sites or manufacturing facility by the FDA or other
regulatory authorities resulting in findings of non-compliance and the imposition of a clinical hold;
unforeseen safety issues or results that do not demonstrate efficacy; and
lack of adequate funding to continue the clinical trial.
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