Strategic transactions could impact our liquidity, increase our expenses and present significant distractions to our management.
We may enter into strategic transactions, which could include acquisitions of companies, asset purchases and in-licensing and out-licensing of intellectual property. We have entered into a research and collaboration agreement with Lilly pursuant to which Lilly is advancing TRB-051 in a clinical study for autoimmune and inflammatory diseases. The expected synergies in development programs, pipelines and other areas of focus between us and our licensors and collaborators may not be realized on a timely basis or at all, and there may be risks associated with these transactions that we did not previously anticipate, such as unanticipated liabilities.
We also may enter into a variety of other business arrangements, including strategic collaborations, joint ventures, restructurings, divestitures, business combinations and investments. Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our business, financial condition, liquidity and results of operations.
Future acquisitions may require us to obtain additional financing, which may not be available on favorable terms or at all. These transactions may never be successful and may require significant time and attention of our management. In addition, the integration of any business or assets may be disruptive, complex, risky and costly and we may never realize the full benefits of the acquisition.
Recent and future changes to tax laws could adversely affect our company.
The tax regimes we are subject to or operate under, including with respect to income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could adversely affect our company. For example, the Tax Cuts and Jobs Act, the Coronavirus Aid, Relief, and Economic Security Act, the Inflation Reduction Act of 2022 (the “IRA”), and the One Big Beautiful Bill Act, introduced many significant changes to the United States tax laws. Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects thereof could be repealed or modified in future legislation. For example, the IRA includes provisions that will impact the United States federal income taxation of certain corporations, including imposing a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock.
Additionally, the U.S. government may enact other significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income, significant changes to the taxation of income derived from international operations, and further limitations on the deductibility of business interest.
We are unable to predict what changes to the tax laws of the United States and other jurisdictions may be proposed or enacted in the future or what effect such changes would have on our business. New, changed, modified, or newly interpreted or applied tax laws could increase our compliance, operating, and other costs. Further, these events could decrease the capital we have available to operate our business. Any of these or similar developments or changes to tax laws or rulings (which changes may apply retroactively) could adversely affect our effective tax rate and our results of operations and financial condition.
If our internal information technology systems, or those used by our CROs, CDMOs, clinical sites or other third parties, are or were compromised, become unavailable or suffer security incidents, loss or leakage of data or other disruptions, we could suffer material adverse consequences, including operational or service interruption, harm to our reputation, litigation, fines, penalties, compromise of sensitive information related to our business and other adverse consequences.
In the ordinary course of our business, we, and the third parties upon which we rely, process sensitive data including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and other sensitive third-party data (collectively, confidential information). We also rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT systems”). We own and manage some of these IT systems but also rely on third parties for a range of IT systems and related products and services, including cloud computing services.
Our IT systems and those of our CROs, CDMOs, clinical sites and other contractors and consultants, and the confidential information within these systems, are vulnerable to cyberattacks, computer viruses, bugs, worms, or other malicious codes, malware (including as a result of advanced persistent threat intrusions) and other attacks by computer hackers, cracking, application security attacks, social engineering (including through phishing attacks), supply chain attacks and vulnerabilities through our third-party service providers, denial-of-service attacks (such as credential stuffing), credential harvesting, ransomware attacks, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods and other similar threats.