ADXS Ayala Pharmaceuticals Inc (CE)

RISK FACTORS

The combined company will be faced with a market environment that cannot be predicted and that involves significant risks and uncertainties, many of which will be beyond its control. You should carefully consider all of the information set forth in this proxy statement/prospectus. The combined company’s business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of Advaxis common stock. You should also read and consider the other information in this proxy statement/prospectus and additional information about Advaxis set forth in its Annual Report on Form 10-K for the fiscal year ended October 31, 2020, which is filed with the Securities and Exchange Commission, or the SEC, as updated by its Quarterly Reports on Form 10-Q. Please see the section titled “Where You Can Find More Information” beginning on page 238 of this proxy statement/prospectus for further information. This proxy statement/prospectus also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings. See also “Special Note Regarding Forward-Looking Statements” on page 67 of this proxy statement/prospectus.

Summary of Risk Factors

The summary below provides a high-level overview of the risks that the combined company face, as well as those faced by our industry, and is intended to enhance the readability and accessibility of our disclosures. These risks include, but are not limited to:

Risks Related to the Merger

Risks Related to the Proposed Reverse Stock Split

Risks Related to the Combined Company

Risks Relating to Our Business and Capital Requirements

Risks Related to the Discovery and Clinical Development of Our Product Candidates

Risks Related to the Marketing and Other Regulatory Approval of Our Product Candidates

Risks Related to Our Dependence on Third Parties

Risks Related to Legal and Compliance Requirements

Risks Related to Our Intellectual Property

Risks Related to the Merger

The exchange ratio will not be adjusted based on the market price of Advaxis common stock, so the merger consideration at the closing may have a greater or lesser value than at the time the Merger Agreement was signed.

At the effective time of the merger, outstanding Biosight share capital will be converted into shares of Advaxis common stock. Applying the exchange ratio, the former Biosight shareholders immediately before the merger are expected to own approximately 75% of the aggregate number of shares of Advaxis common stock following the merger, and Advaxis stockholders immediately before the merger are expected to own approximately 25% of the aggregate number of shares of Advaxis common stock following the merger, subject to certain assumptions.

Any changes in the market price of Advaxis stock before the completion of the merger will not affect the number of shares Biosight shareholders will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion of the merger, the market price of Advaxis common stock increases from the market price on the date of the Merger Agreement, then Biosight shareholders could receive merger consideration with substantially more value for their Biosight shares than the parties had negotiated when they established the exchange ratio. Similarly, if before the completion of the merger the market price of Advaxis common stock declines from the market price on the date of the Merger Agreement, then Biosight shareholders could receive merger consideration with substantially lower value. The Merger Agreement does not include a price-based termination right.

If the conditions to the merger are not satisfied or waived, the merger may not occur.

Even if the Merger Agreement is adopted by the stockholders of Biosight and Proposal Nos. 1, 2 and 3 as described in this proxy statement/prospectus/information statement are approved by the Advaxis stockholders, specified conditions must be satisfied or waived to complete the merger. These conditions are set forth in the Merger Agreement and described in the section titled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 110 of this proxy statement/prospectus. Advaxis and Biosight cannot assure you that all of the conditions to the consummation of the merger will be satisfied or waived. If the conditions are not satisfied or waived, the merger may not occur or the closing may be delayed, and Advaxis and Biosight each may lose some or all of the intended benefits of the merger.

The merger may be completed even though a material adverse effect may result from the announcement of the merger, industry wide changes or other causes.

In general, neither Advaxis nor Biosight is obligated to complete the merger if there is a material adverse effect affecting the other party between July 4, 2021, the date of the Merger Agreement, and the closing of the merger. However, certain types of changes are excluded from the concept of a “material adverse effect.” Such exclusions include but are not limited to changes in general economic or market conditions, industry wide changes, changes in U.S. GAAP, changes in laws, rules or regulations of general applicability or interpretations thereof, natural disasters, pandemics (including the COVID-19 pandemic), outbreaks of hostilities or acts of terrorism, changes resulting from the announcement, performance or pendency of the merger, changes in the price or trading volume of Advaxis common stock, and failures to meet internal or third-party guidance or forecasts. Therefore, if any of these events were to occur, impacting Advaxis or Biosight, the other party would still be obliged to consummate the closing of the merger. If any such adverse changes occur and Advaxis and Biosight consummate the closing of the merger, the stock price of the combined company may suffer. This in turn may reduce the value of the merger to the stockholders of Advaxis, Biosight or both. For a more complete discussion of what constitutes a material adverse effect on Advaxis or Biosight, see the section titled “The Merger Agreement—Representations and Warranties” beginning on page 113 of this proxy statement/prospectus.

If Advaxis and Biosight complete the merger, the combined company will need to raise additional capital by issuing equity securities or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s stockholders or restrict the combined company’s operations.

Additional financing may not be available to the combined company when it is needed or may not be available on favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such financing will cause additional dilution to all securityholders of the combined company, including Advaxis’ pre-merger stockholders and Biosight’s former shareholders. It is also possible that the terms of any new equity securities may have preferences over the combined company’s common stock. Any debt financing the combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not favorable to the combined company. Alternatively, in connection with the Merger, Advaxis may seek investments from outside sources to provide capital for the combined company.

Advaxis and Biosight directors and executive officers have interests in the merger that are different from yours and that may influence them to support or approve the merger without regard to your interests.

Directors and executive officers of Advaxis and Biosight have interests in the merger that are different from, or in addition to, the interests of other Advaxis stockholders generally. These interests with respect to Advaxis’ directors and executive officers may include, among others, acceleration of equity award vesting and severance payments if employment is terminated in a qualifying termination in connection with the merger. Three current member of the Advaxis board of directors will continue as directors of the combined company after the effective time of the merger, and, following the closing of the merger, two will be eligible to be compensated as non-employee directors of the combined company pursuant to the Advaxis non-employee director compensation policy that is expected to remain in place following the effective time of the merger, and current members of the Advaxis executive management team will continue with the combined company. These interests with respect to Biosight’s directors and executive officers may include, among others, that certain of Biosight’s directors and executive officers have options, subject to vesting, to purchase shares of Biosight ordinary shares which, after the effective time of the merger, will be converted into and become options to purchase shares of the common stock of the combined company; Biosight’s executive officers are expected to continue as executive officers of the combined company after the effective time of the merger; and all of Biosight’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement. Further, certain current members of Biosight’s board of directors will continue as directors of the combined company after the effective time of the merger, and, following the closing of the merger, will be eligible to be compensated as non-employee directors of the combined company pursuant to the Advaxis non-employee director compensation policy that is expected to remain in place following the effective time of the merger. Certain directors and executive officers’ own options to purchase the shares of their respective companies.

The Advaxis and Biosight boards of directors were aware of and considered those interests, among other matters, in reaching their decisions to approve and adopt the Merger Agreement, approve the merger, and recommend the approval of the Merger Agreement to Advaxis and Biosight shareholders. These interests, among other factors, may have influenced the directors and executive officers of Advaxis and Biosight to support or approve the merger.

For more information regarding the interests of Advaxis and Biosight directors and executive officers in the merger, please see the sections titled “The Merger—Interests of Advaxis Directors and Executive Officers in the Merger” beginning on page 97 and “The Merger—Interests of Biosight Directors and Executive Officers in the Merger” beginning on page 101 of this proxy statement/prospectus/information statement.

Advaxis stockholders may not realize a benefit from the merger commensurate with the ownership dilution they will experience in connection with the merger.

During the period of 2020-2021, Advaxis undertook a confidential, strategic review process, which was intended to result in an actionable plan that leverages its assets, capital and capabilities to maximize stockholder value. Following an extensive process of evaluating strategic alternatives and identifying and reviewing potential candidates for a strategic acquisition or other transaction, on July 4, 2021, Advaxis entered into a Merger Agreement with Biosight, under which the privately held Biosight will merge with a wholly-owned subsidiary of Advaxis. Pre-merger Advaxis shareholders will own approximately 25% of the combined company and pre-merger Biosight shareholders will own approximately 75% of the combined company. Advaxis is devoting substantially all of its time and resources to consummating this transaction, however, there can be no assurance that such activities will result in the consummation of this transaction or that such transaction will deliver the anticipated benefits or enhance stockholder value. If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the merger, Advaxis stockholders will have experienced substantial dilution of their ownership interests without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the merger.

If the merger is not completed, Advaxis’ stock price may fluctuate significantly.

The market price of Advaxis common stock is subject to significant fluctuations. During the 12-month period ended August 24, 2021, the closing sales price of Advaxis’ common stock on The Nasdaq Capital Market ranged from a high of $1.41 on February 17, 2021, to a low of $0.28 on November 24, 2020. Market prices for securities of pharmaceutical, biotechnology and other life science companies have historically been particularly volatile. In addition, the market price of Advaxis common stock will likely be volatile based on whether stockholders and other investors believe that Advaxis can complete the merger or otherwise raise additional capital to support Advaxis’ operations if the merger is not consummated and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all. The volatility of the market price of Advaxis common stock is exacerbated by low trading volume. Additional factors that may cause the market price of Advaxis common stock to fluctuate include:

Moreover, the stock markets in general have at times experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of Advaxis common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies.

Advaxis stockholders and Biosight shareholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the combined company following the completion of the merger as compared to their current ownership and voting interests in the respective companies.

After the completion of the merger, the current stockholders of Advaxis and shareholders of Biosight will own a smaller percentage of the combined company than their ownership of their respective companies prior to the merger. Immediately after the merger, Advaxis stockholders as of immediately prior to the merger are expected to own approximately 25% of the outstanding shares of the combined company and former Biosight shareholders are expected to own approximately 75% of the outstanding shares of the combined company.

During the pendency of the merger, Advaxis and Biosight may not be able to enter into a business combination with another party on more favorable terms because of restrictions in the Merger Agreement, which could adversely affect their respective business prospects.

Covenants in the Merger Agreement impede the ability of Advaxis and Biosight to make acquisitions during the pendency of the merger, subject to specified exceptions. As a result, if the merger is not completed, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, proposing, seeking or knowingly encouraging, facilitating or supporting any inquiries, indications of interest, proposals or offers that constitute or may reasonably be expected to lead to certain transactions involving a third party, including a merger, sale of assets or other business combination, subject to specified exceptions. Any such transactions could be favorable to such party’s stockholders, but the parties may be unable to pursue them. For more information, see the section titled “The Merger Agreement—Non-Solicitation.”

Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals, including proposals that may be superior to the transactions contemplated by the Merger Agreement.

The terms of the Merger Agreement prohibit each of Advaxis and Biosight from soliciting or engaging in discussions with third parties regarding alternative acquisition proposals, except in limited circumstances when such party’s board of directors determines in good faith that an unsolicited acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal and that failure to take such action would reasonably be expected to be inconsistent with its fiduciary duties under applicable law, as described in further detail in the section titled “The Merger Agreement—Non-Solicitation.” In addition, if the Merger Agreement is terminated by Advaxis or Biosight under certain circumstances, including because of a decision of Advaxis’ board of directors to accept a superior proposal, Advaxis would be required to pay Biosight a termination fee of $7.5 million or reimburse Biosight’s expenses up to a maximum of $2.0 million. This termination fee may discourage third parties from submitting alternative takeover proposals to Advaxis or its stockholders, and may cause Advaxis’ board of directors to be less inclined to recommend an alternative proposal.

Because the lack of a public market for Biosight’s shares makes it difficult to evaluate the fair market value of Biosight’s share capital, Advaxis may pay more than the fair market value of Biosight’s share capital and/or the shareholders of Biosight may receive consideration in the merger that is less than the fair market value of Biosight’s share capital.

The outstanding share capital of Biosight is privately held and is not traded in any public market. The lack of a public market makes it difficult to determine the fair market value of Biosight’s share capital. Because the percentage of Advaxis equity to be issued to Biosight shareholders was determined based on negotiations between the parties, it is possible that the value of the Advaxis common stock to be received by Biosight shareholders will be less than the fair market value of Biosight’s capital stock, or Advaxis may pay more than the aggregate fair market value for Biosight’s share capital.

The merger may fail to qualify as a “reorganization” for U.S. federal income tax purposes, resulting in recognition of taxable gain or loss by Biosight shareholders in respect of their Biosight capital stock.

Advaxis and Biosight intend for the merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder, as described in the section titled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” in this proxy statement/prospectus. In the event that the merger does not qualify as a “reorganization,” the merger would result in taxable gain or loss for U.S. federal income tax purposes for each Biosight shareholder, with the amount of such gain or loss determined by the amount that each such Biosight shareholder’s adjusted U.S. federal income tax basis in the Biosight capital stock surrendered is less or more than the fair market value of the Advaxis common stock and any cash in lieu of a fractional share received in exchange therefor. Each holder of Biosight capital stock is urged to consult with his, her or its own tax advisor with respect to the tax consequences of the merger.

The announcement and pendency of the merger, whether or not consummated, may adversely affect the trading price of Advaxis’ common stock and its business prospects.

The announcement and pendency of the merger, whether or not consummated, may adversely affect the trading price of Advaxis’ common stock and its business prospects. In the event that the merger is not completed, the announcement of the termination of the Merger Agreement may also adversely affect the trading price of Advaxis’ common stock and its business prospects.

Failure to consummate the merger may result in Advaxis paying a termination fee to Biosight and could harm Advaxis’ common stock price and its future business and operations.

The merger will not be consummated if the conditions precedent to the consummation of the transaction are not satisfied or waived, or if the Merger Agreement is terminated in accordance with its terms. If the merger is not consummated, Advaxis is subject to the following risks:

If the merger does not close for any reason, Advaxis’ board of directors may elect to, among other things, attempt to complete another strategic transaction, attempt to sell or otherwise dispose of Advaxis’ various assets, dissolve or liquidate its assets, declare bankruptcy or seek to continue to operate its business. If Advaxis seeks another strategic transaction or attempts to sell or otherwise dispose of its various assets, there is no assurance that it will be able to do so, that the terms would be equal to or superior to the terms of the merger or as to the timing of such transaction. If Advaxis decides to dissolve and liquidates its assets, Advaxis would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurance as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

If Advaxis was to seek to continue its business, it would need to determine whether to acquire one or more other product candidates. Advaxis would also need to raise funds to support continued operations and re-assess its workforce requirements in consideration of its reduced workforce.

If the merger is not consummated, Advaxis may be unable to retain the services of key remaining members of its management team and, as a result, may be unable to seek or consummate another strategic transaction, properly dissolve and liquidate its assets or continue its business.

If Advaxis does not successfully consummate the transaction with Biosight, Advaxis’ board of directors may dissolve or liquidate its assets to pursue a dissolution and liquidation. In such an event, the amount of cash available for distribution to Advaxis’ stockholders will depend heavily on the timing of such transaction or liquidation.

If the merger does not close for any reason, Advaxis’ board of directors may elect to, among other things, dissolve or liquidate its assets, which may include seeking protection from creditors in a bankruptcy proceeding. If Advaxis decides to dissolve and liquidate its assets, Advaxis would be required to pay all of its debts and contractual obligations, and to set aside certain reserves for potential future claims, and there can be no assurances as to the amount or timing of available cash left to distribute to stockholders after paying its debts and other obligations and setting aside funds for reserves.

In the event of a dissolution and liquidation, the amount of cash available for distribution to Advaxis’ stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation, since the amount of cash available for distribution continues to decrease as Advaxis funds its operations in preparation for the consummation of the merger. Further, the Merger Agreement contains certain termination rights for each party, and provides that, upon termination under specified circumstances, Advaxis may be required to pay Biosight a termination fee of $7.5 million or reimburse Biosight’s expenses up to a maximum of $2.0 million, which would further decrease Advaxis’ available cash resources. If Advaxis’ board of directors were to approve and recommend, and its stockholders were to approve, a dissolution and liquidation, Advaxis would be required under Delaware corporate law to pay its outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to its stockholders. Advaxis’ commitments and contingent liabilities may include (i) regulatory and clinical obligations remaining under its clinical trials; (ii) obligations under its employment, separation and retention agreements with certain employees that provide for severance and other payments following a termination of employment occurring for various reasons, including a change in control of Advaxis; and (iii) potential litigation against Advaxis, and other various claims and legal actions arising in the ordinary course of business. As a result of this requirement, a portion of Advaxis’ assets may need to be reserved pending the resolution of such obligations. In addition, Advaxis may be subject to litigation or other claims related to a dissolution and liquidation of Advaxis. If a dissolution and liquidation were pursued, Advaxis’ board of directors, in consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders of Advaxis common stock could lose all or a significant portion of their investment in the event of its liquidation, dissolution or winding up.

Risks Related to the Proposed Reverse Stock Split

Advaxis is seeking stockholder approval of a reverse stock split of Advaxis common stock for the purpose of maintaining the listing of Advaxis common stock on Nasdaq and as a condition of the merger, but Advaxis may not obtain stockholder approval or it may not have the desired result.

Advaxis is seeking stockholder approval of a reverse stock split of Advaxis common stock for the purpose of raising the per share trading price of the Advaxis common stock and maintaining the listing of Advaxis common stock on Nasdaq and as a condition of the merger. However, there is no assurance that Advaxis’ stockholders will approve the reverse stock split proposal, or even if they do, that it will have the desired result and that Advaxis will be able to maintain its listing on Nasdaq. Even if Advaxis effects the reverse stock split and maintains its listing, shares of Advaxis common stock may still have a relatively low trading price, which could hinder Advaxis’ ability to attract institutional or other potential investors. Furthermore, the price per share of Advaxis common stock after the reverse stock split, if approved and implemented, may not reflect the reverse stock split and the price per share following the effective time of the reverse stock split may not be maintained for any period following the reverse stock split. In many cases, the market price of a company’s shares declines after a reverse stock split. Accordingly, the total market capitalization of Advaxis common stock following the contemplated reverse stock split may be lower than before the reverse stock split. Similarly, the trading liquidity of the Advaxis common stock could be adversely affected by the reduced number of shares outstanding after the reverse stock split. If Advaxis does not maintain compliance with the Nasdaq minimum bid price prior to the merger and this reverse stock split proposal is not approved by Advaxis’ stockholders and the parties waive this closing condition the combined company resulting from the merger will likely not be able to obtain compliance with the minimum bid price requirement for an initial listing on The Nasdaq Capital Market and, as a consequence, Nasdaq will immediately provide the combined company with written notification that the common stock will be delisted.

If Advaxis’ common stock is delisted, Advaxis would expect Advaxis’ common stock to be traded in the over-the-counter market, which could adversely affect the liquidity of Advaxis’ common stock. Additionally, Advaxis could face significant material adverse consequences, including:

The reverse stock split may not increase the combined company’s stock price over the long term.

The principal purpose of the reverse stock split is to increase the per share market price of Advaxis’ common stock above the minimum bid price requirement under the Nasdaq rules so that the listing of Advaxis and the shares of Advaxis common stock being issued in the merger on Nasdaq will be approved. It cannot be assured, however, that the reverse stock split will accomplish this objective for any meaningful period. While it is expected that the reduction in the number of outstanding shares of common stock will proportionally increase the market price of Advaxis’ common stock, it cannot be assured that the reverse stock split will increase the market price of its common stock by a multiple of the reverse stock split ratio mutually agreed by Advaxis and Biosight, or result in any permanent or sustained increase in the market price of Advaxis’ common stock, which is dependent upon many factors, including Advaxis’ business and financial performance, general market conditions and prospects for future success. Thus, while the stock price of Advaxis might meet the listing requirements for Nasdaq initially, it cannot be assured that it will continue to do so.

The reverse stock split may decrease the liquidity of the combined company’s common stock.

Although the Advaxis board of directors believes that the anticipated increase in the market price of the combined company’s common stock resulting from the proposed reverse stock split could encourage interest in its common stock and possibly promote greater liquidity for its stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the reverse stock split. The reduction in the number of outstanding shares may lead to reduced trading and a smaller number of market makers for the combined company’s common stock. In addition, the reverse stock split may not result in an increase in the combined company’s stock price necessary to satisfy Nasdaq’s initial listing requirements for the combined company.

The reverse stock split may lead to a decrease in the combined company’s overall market capitalization.

Should the market price of the combined company’s common stock decline after the reverse stock split, the percentage decline may be greater, due to the smaller number of shares outstanding, than it would have been prior to the reverse stock split. A reverse stock split is often viewed negatively by the market and, consequently, can lead to a decrease in the combined company’s overall market capitalization. If the per share market price does not increase in proportion to the reverse stock split ratio, then the value of the combined company, as measured by its stock capitalization, will be reduced. In some cases, the per share stock price of companies that have effected reverse stock splits subsequently declined back to pre-reverse split levels, and accordingly, it cannot be assured that the total market value of the combined company’s common stock will remain the same after the reverse stock split is effected, or that the reverse stock split will not have an adverse effect on the combined company’s stock price due to the reduced number of shares outstanding after the reverse stock split.

Risks Related to Ownership of Advaxis’ Common Stock and Its Status as a Public Company

Sales of additional equity securities may adversely affect the market price of Advaxis’ common stock and your rights may be reduced.

Advaxis expects to continue to incur drug development and selling, general and administrative costs, and to satisfy its funding requirements, it will need to sell additional equity securities, which may be subject to registration rights and warrants with anti-dilutive protective provisions. The sale or the proposed sale of substantial amounts of Advaxis common stock or other equity securities in the public markets may adversely affect the market price of Advaxis common stock and Advaxis’ stock price may decline substantially. Advaxis’ shareholders may experience substantial dilution and a reduction in the price that they are able to obtain upon sale of their shares. Also, new equity securities issued may have greater rights, preferences or privileges than Advaxis’ existing common stock.

The price of Advaxis’ common stock and warrants may be volatile.

The trading price of Advaxis’ common stock and warrants may fluctuate substantially. The price of Advaxis’ common stock and warrants that will prevail in the market may be higher or lower than the price you have paid, depending on many factors, some of which are beyond Advaxis’ control and may not be related to its operating performance. These fluctuations could cause you to lose part or all of your investment in Advaxis’ common stock and warrants. Those factors that could cause fluctuations include, but are not limited to, the following:

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Due to the potential volatility of Advaxis’ stock price, it may therefore be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from Advaxis’ business.

A limited public trading market may cause volatility in the price of Advaxis’ common stock.

The quotation of Advaxis’ common stock on Nasdaq does not assure that a meaningful, consistent and liquid trading market currently exists, and in recent years such market has experienced extreme price and volume fluctuations that have particularly affected the market prices of many smaller companies like Advaxis. Advaxis’ common stock is thus subject to this volatility. Sales of substantial amounts of common stock, or the perception that such sales might occur, could adversely affect prevailing market prices of Advaxis’ common stock and its stock price may decline substantially in a short time and its shareholders could suffer losses or be unable to liquidate their holdings.

The market prices for Advaxis’ common stock may be adversely impacted by future events.

Advaxis’ common stock began trading on the over-the-counter-markets on July 28, 2005 and is currently quoted on the Nasdaq Capital Market under the symbol ADXS. Market prices for Advaxis’ common stock and warrants will be influenced by a number of factors, including:

Advaxis is not currently in compliance with the continued listing requirements for Nasdaq. If the price of Advaxis’ common stock continues to trade below $1.00 per share for a sustained period or it do not meet other continued listing requirements, its common stock may be delisted from the Nasdaq Capital Market, which could affect the market price and liquidity for its common stock and reduce its ability to raise additional capital.

In order to maintain listing on the Nasdaq Capital Market, Advaxis must satisfy minimum financial and other requirements including, without limitation, a requirement that its closing bid price be at least $1.00 per share. On April 8, 2020, Advaxis received written notice from Nasdaq indicating that Advaxis was not in compliance with this minimum bid price requirement because its common stock had closed below $1.00 per share for the previous 30 consecutive business days. On April 17, 2020, Advaxis received an additional notice from Nasdaq indicating that, due to extraordinary market conditions, Nasdaq had tolled the compliance period for the bid-price requirement through June 30, 2020 (the “tolling period”) and that on April 16, 2020, Nasdaq filed an immediately effective rule change with the SEC to implement the tolling period. In accordance with the April 17, 2020 notice from Nasdaq, Advaxis had until December 21, 2020 to regain compliance with the minimum bid price requirement.

As of December 21, 2020, Advaxis was yet to be in compliance with the minimum bid requirement as discussed above. On December 22, 2020, Advaxis received notification from Nasdaq that its application to transfer the listing of its common stock from the Nasdaq Global Select Market to the Nasdaq Capital Market had been approved. Advaxis’ securities were transferred to the Nasdaq Capital Market at the opening of business on December 24, 2020 and it will have an additional 180 days, or until June 21, 2021, to regain compliance with the minimum bid price per share requirement.

On June 22, 2021, Advaxis received notification from Nasdaq that the Company had not regained compliance with the minimum bid price per share requirement. The notification indicated that the Company’s common stock would be subject to delisting unless the Company timely requests a hearing before a Nasdaq Hearing Panel (the “Panel”). The Company has timely requested a hearing and the hearing is scheduled for July 29, 2021. The hearing request has stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing. On June 25, 2020, Advaxis received a letter from the staff of the Listing Qualifications Department of Nasdaq on April 17, 2020 indicating that, due to extraordinary market conditions, Nasdaq has tolled the compliance period for the bid-price requirement. In accordance with the April 17, 2020 notice from Nasdaq, Advaxis had until December 21, 2020 to regain compliance with the bid price requirement. On August 11, 2021, Advaxis issued a press release announcing that it has received a letter indicating that following the Company’s hearing before the Panel, the Panel determined to grant the Company an extension through November 22, 2021, to evidence compliance with Nasdaq’s $1.00 Minimum Bid Price Rule and complete its previously announced merger transaction with Biosight. Pursuant to the Nasdaq Listing Rules, the combined company will be required to meet all applicable initial listing requirements upon the closing of the merger, including the $4 per share price requirement.

Unless Advaxis’ common stock continues to be listed on a national securities exchange it will become subject to the so-called “penny stock” rules that impose restrictive sales practice requirements.

If Advaxis is unable to maintain the listing of its common stock on The Nasdaq Capital Market or another national securities exchange, its common stock could become subject to the so-called “penny stock” rules if the shares have a market value of less than $5.00 per share. The SEC has adopted regulations that define a penny stock to include any stock that has a market price of less than $5.00 per share, subject to certain exceptions, including an exception for stock traded on a national securities exchange. The SEC regulations impose restrictive sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors. An accredited investor generally is a person whose individual annual income exceeded $200,000, or whose joint annual income with a spouse exceeded $300,000 during the past two years and who expects their annual income to exceed the applicable level during the current year, or a person with net worth in excess of $1.0 million, not including the value of the investor’s principal residence and excluding mortgage debt secured by the investor’s principal residence up to the estimated fair market value of the home, except that any mortgage debt incurred by the investor within 60 days prior to the date of the transaction shall not be excluded from the determination of the investor’s net worth unless the mortgage debt was incurred to acquire the residence. For transactions covered by this rule, the broker-dealer must make a special suitability determination for the purchaser and must have received the purchaser’s written consent to the transaction prior to sale. This means that if Advaxis is unable maintain the listing of its common stock on a national securities exchange, the ability of stockholders to sell their common stock in the secondary market could be adversely affected.

If a transaction involving a penny stock is not exempt from the SEC’s rule, a broker-dealer must deliver a disclosure schedule relating to the penny stock market to each investor prior to a transaction. The broker-dealer also must disclose the commissions payable to both the broker-dealer and its registered representative, current quotations for the penny stock, and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the customer’s account and information on the limited market in penny stocks.

If Advaxis fails to remain current with its listing requirements, it could be removed from the Nasdaq Capital Market, which would limit the ability of broker-dealers to sell its securities and the ability of shareholders to sell their securities in the secondary market.

Companies trading on the Nasdaq Marketplace, such as Advaxis, must be reporting issuers under Section 12 of the Exchange Act, as amended, and Advaxis must meet the listing requirements in order to maintain the listing of its common stock on the Nasdaq Capital Market. If Advaxis does not meet these requirements, the market liquidity for its securities could be severely adversely affected by limiting the ability of broker-dealers to sell its securities and the ability of shareholders to sell their securities in the secondary market.

Advaxis may be at an increased risk of securities litigation, which is expensive and could divert management attention.

The market price of Advaxis’ common stock may be volatile, and in the past companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. Advaxis may be the target of this type of litigation in the future. Securities litigation against Advaxis could result in substantial costs and divert its management’s attention from other business concerns, which could seriously harm its business.

Advaxis does not intend to pay cash dividends.

Advaxis has not declared or paid any cash dividends on its common stock, and it does not anticipate declaring or paying cash dividends for the foreseeable future. Any future determination as to the payment of cash dividends on Advaxis’ common stock will be at its board of directors’ discretion and will depend on its financial condition, operating results, capital requirements and other factors that its board of directors considers to be relevant.

Risks Related to the Combined Company

In determining whether you should approve the issuance of shares of Advaxis common stock, the change of control resulting from the merger and other matters related to the merger, as applicable, you should carefully read the following risk factors in addition to the risks described above.

The market price of our common stock is expected to be volatile, and the market price of the common stock may drop following the merger.

The market price of our common stock following the merger could be subject to significant fluctuations. Some of the factors that may cause the market price of our common stock to fluctuate include:

Moreover, the stock markets in general have at times experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock. In addition, a recession, depression or other sustained adverse market event resulting from the spread of COVID-19 or otherwise could materially and adversely affect our business and the value of our common stock. In the past, following periods of volatility in the market price of a company’s securities, stockholders have often instituted class action securities litigation against such companies. Furthermore, market volatility may lead to increased shareholder activism if we experience a market valuation that activists believe is not reflective of our intrinsic value. Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our board of directors could have an adverse effect on our operating results and financial condition.

Following the merger, we may be unable to integrate successfully and realize the anticipated benefits of the merger.

The merger involves the combination of two companies that currently operate as independent companies. We may fail to realize some or all of the anticipated benefits of the merger if the integration process takes longer than expected or is more costly than expected. In addition, Advaxis and Biosight have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process also could result in the diversion of each company’s management’s attention, the disruption or interruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with customers, suppliers and employees or the ability to achieve the anticipated benefits of the merger, or could otherwise adversely affect our business and financial results.

We will need substantial additional funding before we can complete the development of our product candidates. If we are unable to obtain such additional capital on favorable terms, on a timely basis or at all, we would be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business.

Developing therapies, including conducting pre-clinical studies and clinical trials and establishing manufacturing capabilities, is expensive. We have not generated any revenues from the commercial sale of products and will not be able to generate any product revenues until, and only if, we receive approval to sell our product candidates from the Federal Drug Administration (“FDA”) or other regulatory authorities. The cash expected from both Advaxis and Biosight at closing is expected to fund the further development of our programs. However, we may need to raise substantial additional capital in order to fund our general corporate activities and to fund our research and development, including our currently planned clinical trials and plans for new clinical trials and product development.

We may seek to raise additional funds through various potential sources, such as equity and debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available, that such additional financing will be sufficient to meet our needs. Moreover, to the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional significant dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or product candidates, or grant licenses on terms that may not be favorable.

Given our capital constraints, we will need to prioritize spending on our clinical and pre-clinical programs. If we are unable to raise sufficient funds to support our current and planned operations, we may elect to discontinue certain of our ongoing activities or programs. Our inability to raise additional funds could also prevent us from taking advantage of opportunities to pursue promising new or existing programs in the future.

Our forecasts regarding our beliefs in the sufficiency of our financial resources to support our current and planned operations are forward-looking statements and involve significant risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section. These estimates are based on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than currently expected.

We will incur additional costs and increased demands upon management as a result of complying with the laws and regulations affecting public companies.

We will incur significant legal, accounting and other expenses as a public company that Biosight did not incur as a private company, including costs associated with public company reporting obligations under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our management team will consist of certain executive officers of both Advaxis and Biosight prior to the merger. These executive officers and other personnel will need to devote substantial time to gaining expertise related to public company reporting requirements and compliance with applicable laws and regulations to ensure that we comply with all of these requirements. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on the board of directors or on board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.

Once we are no longer a smaller reporting company or otherwise no longer qualifies for applicable exemptions, we will be subject to additional laws and regulations affecting public companies that will increase our costs and the demands on management and could harm our operating results.

We will be subject to the reporting requirements of the Exchange Act, which requires, among other things, that we file with the SEC, annual, quarterly and current reports with respect to our business and financial condition as well as other disclosure and corporate governance requirements. However, as a “smaller reporting company” we may take advantage of some of exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. Once we are no longer a smaller reporting company or otherwise qualifies for these exemptions, we will be required to comply with these additional legal and regulatory requirements applicable to public companies and will incur significant legal, accounting and other expenses to do so. If we are not able to comply with the requirements in a timely manner or at all, our financial condition or the market price of our common stock may be harmed. For example, if we or our independent auditor identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, we could face additional costs to remedy those deficiencies, the market price of our stock could decline or we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

The unaudited pro forma condensed combined financial data for Advaxis and Biosight included in this proxy statement/prospectus is preliminary, and our actual financial position and operations after the merger may differ materially from the unaudited pro forma financial data included in this proxy statement/prospectus.

The unaudited pro forma financial data for Advaxis and Biosight included in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of our actual financial condition or results of operations of future periods, or the financial condition or results of operations that would have been realized had the entities been combined during the periods presented. The unaudited pro forma financial statements have been derived from the historical financial statements of Advaxis and Biosight and adjustments and assumptions have been made regarding the combined company after giving effect to the transaction. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the unaudited pro forma financial statements do not reflect all costs that are expected to be incurred by us in connection with the transactions or that have been incurred since the date of such unaudited pro forma financial statements. The assumptions used in preparing the unaudited pro forma financial information may not prove to be accurate, and other factors may affect our financial condition following the transaction. For more information see the section titled “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 205.

Advaxis’ certificate of incorporation, bylaws and Delaware law have anti-takeover provisions that could discourage, delay or prevent a change in control of the combined company, which may cause our stock price to decline.

Advaxis’ amended and restated certificate of incorporation, second amended and restated bylaws and Delaware law contain provisions which could make it more difficult for a third party to acquire Advaxis, even if closing such a transaction would be beneficial to Advaxis’ shareholders, which provisions will remain in place for the combined company. To date, Advaxis has not issued shares of preferred stock, however, Advaxis is authorized to issue up to 5,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by our board of directors without further action by shareholders. The terms of any series of preferred stock may include voting rights (including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption rights and sinking fund provisions. The issuance of any preferred stock could materially adversely affect the rights of the holders of our common stock, and therefore, reduce the value of our common stock. In particular, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third party and thereby preserve control by then-present management.

Provisions of Advaxis’ certificate of incorporation, Bylaws and Delaware law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control, including changes a shareholder might consider favorable. Such provisions may also prevent or frustrate attempts by our shareholders to replace or remove our management. In particular, the amended and restated certificate of incorporation, second amended and restated bylaws and Delaware law, as applicable, among other things; provide the board of directors with the ability to alter the second amended and restated bylaws without shareholder approval and provide that vacancies on the board of directors may be filled by a majority of directors in office, and less than a quorum.

Advaxis is also subject to Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions, prohibits “business combinations” between a publicly-held Delaware corporation and an “interested shareholder,” which is generally defined as a shareholder who becomes a beneficial owner of 15% or more of a Delaware corporation’s voting stock for a three-year period following the date that such shareholder became an interested shareholder.

These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of Advaxis to first negotiate with Advaxis’ board. These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our common stock to decline.

Our ability to utilize our respective net operating loss carryforwards and tax credit carryforwards may be subject to limitations.

Our ability to use our respective federal and state net operating losses (“NOLs”) to offset potential future taxable income and related income taxes that would otherwise be due is dependent upon our generation of future taxable income, and neither Advaxis nor Biosight can predict with certainty when, or whether, it will generate sufficient taxable income to use all of its NOLs.

Under Section 382 and Section 383 of the Code and corresponding provisions of state law, if a corporation undergoes an “ownership change,” its ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. A Section 382 “ownership change” is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. Advaxis believes that it has experienced an ownership change in the past, and may experience subsequent ownership changes in the future due to subsequent shifts in our stock ownership (some of which are outside of our control). Biosight may have experienced ownership changes in the past, may experience an ownership change as a result of the merger, and may experience ownership changes in the future due to subsequent shifts in our stock ownership (some of which are outside of our control). Furthermore, the merger, if consummated, will constitute an ownership change (within the meaning of Section 382 of the Code) of Advaxis which could eliminate or otherwise substantially limit Advaxis’ ability to use its federal and state NOLs to offset its future taxable income. Consequently, even if we achieve profitability, we may not be able to utilize a material portion of Biosight’s or Advaxis’ NOL carryforwards and other tax attributes, which could have a material adverse effect on cash flow and results of operations. Similar provisions of state tax law may also apply to limit the use of accumulated state tax attributes. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

Changes in tax laws or regulations could materially adversely affect us.

New tax laws or regulations could be enacted at any time, and existing tax laws or regulations could be interpreted, modified or applied in a manner that is adverse to us, which could adversely affect our business and financial condition.

Advaxis and Biosight do not anticipate that we will pay any cash dividends in the foreseeable future.

The current expectation is that we will retain our future earnings, if any, to fund the growth of our business as opposed to paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain, if any, for the foreseeable future.

An active trading market for our common stock may not develop and our stockholders may not be able to resell their shares of common stock for a profit, if at all.

Prior to the merger, there had been no public market for Biosight’s share capital. An active trading market for our shares of common stock may never develop or be sustained. If an active market for our common stock does not develop or is not sustained, it may be difficult for our stockholders to sell their shares at an attractive price or at all.

Future sales of shares by existing stockholders could cause our stock price to decline.

If existing securityholders of Advaxis and Biosight sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. Based on shares outstanding as of     , 2021, and the shares expected to be issued upon completion of the merger, we are expected to have outstanding a total of approximately               shares of common stock immediately following the completion of the merger. Shares of common stock that are subject to outstanding options of Biosight will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements and Rules 144 and 701 under the Securities Act. If these shares are sold, the trading price of our common stock could decline.

After completion of the merger, our executive officers, directors and principal stockholders will have the ability to control or significantly influence all matters submitted to our stockholders for approval.

Upon the completion of the merger, it is anticipated that our executive officers, directors and principal stockholders will, in the aggregate, beneficially own approximately             % of our outstanding shares of common stock. As a result, if these stockholders were to choose to act together, they would be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. This concentration of voting power could delay or prevent an acquisition of the combined company on terms that other stockholders may desire.

We may be exposed to increased litigation, including stockholder litigation, which could have an adverse effect on our business and operations.

We may be exposed to increased litigation from stockholders, customers, suppliers, consumers and other third parties due to the combination of Advaxis’ business and Biosight’s business following the merger. Such litigation may have an adverse impact on our business and results of operations or may cause disruptions to our operations. In addition, in the past, stockholders have initiated class action lawsuits against biotechnology companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert management’s attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

We may be exposed to litigation resulting from the transactions contemplated herein. Such lawsuits could cause us to incur substantial costs and divert management’s attention and resources, which could have a material adverse effect on our business, financial condition and results of operations.

If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that equity research analysts publish about us and our business. Equity research analysts may elect not to provide research coverage of our common stock after the completion of the merger, and such lack of research coverage may adversely affect the market price of our common stock. In the event we have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports. The price of our common stock could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or research. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which in turn could cause our stock price or trading volume to decline.

We will have broad discretion in the use of our cash and cash equivalents and may invest or spend the proceeds in ways with which you do not agree and in ways that may not increase the value of your investment.

We will have broad discretion over the use of our cash and cash equivalents. You may not agree with our decisions, and our use of the proceeds may not yield any return on your investment. Our failure to apply these resources effectively could compromise our ability to pursue our growth strategy and, we might not be able to yield a significant return, if any, on our investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our cash resources.

Our internal control over financial reporting may not meet the standards required by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, could have a material adverse effect on our business and share price.

As a privately held company, Biosight was not required to evaluate its internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404 of the Sarbanes-Oxley Act, or Section 404. Following the merger, our management will be required to report on the effectiveness of our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation.

We cannot assure you that any material weaknesses identified at Biosight will be remediated by us and/or that there will not be additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Risks Relating to Our Combined Businesses and Capital Requirements

We have a limited operating history and have never generated any product revenue.

Both Advaxis and Biosight are clinical-stage biotechnology companies with limited operating history. Biosight was formed on November 10, 1999, and since inception, has incurred significant net losses and has financed its operations with $68.5 million through capital contributions. As of June 30, 2021, Biosight had an accumulated deficit of $45.0 million. Similarly, Advaxis has not generated any revenue from product sales. As of April 30, 2020, Advaxis had cash and cash equivalents of $48.1 million.

To date, both Advaxis and Biosight’s operations have been limited to organizing and staffing our companies, raising capital, developing therapeutic product candidates and advancing those candidates through clinical development and trials. Neither Advaxis nor Biosight has demonstrated the ability to successfully complete a registration-enabling clinical pivotal trial, obtain marketing approval, manufacture a clinical-stage or commercial-scale product (or arrange for a third party to do so on our behalf), or conduct sales and marketing activities necessary for successful, full-scale product commercialization. Therefore, we have no meaningful operations upon which to evaluate our business, and any predictions about our future success, viability or profitability would not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing therapeutic pharmaceutical products.

Our ability to generate product revenue and become profitable depends on our ability to successfully complete the development of, and obtain regulatory approvals for, our product candidates, including BST-236. We have never been profitable, have no products currently approved for commercial sale, and have not generated any revenue from product sales. Even if we receive regulatory approval for our product candidates, we do not know when or if such candidates will generate product revenue. Our ability to generate product revenue depends on a number of factors, including, but not limited to, our ability to:

Because of the numerous risks and uncertainties associated with biotechnology product development, we are unable to predict the timing or amount of increased expenses, or the extent to which we will be able to achieve or maintain profitability. Our expenses could increase beyond expectations if we are required by the FDA, EMA or comparable regulatory authorities in other countries, to perform studies or clinical trials in addition to those that we currently anticipate. Even if our product candidates are approved for commercial sale, we anticipate incurring significant costs associated with their commercial launch. If we cannot successfully execute any one of the foregoing, our business may be unsuccessful, and your investment will be adversely affected.

Our combined business, operations and clinical development plans and timelines could be adversely impacted by the effects of health epidemics, including the recent COVID-19 pandemic.

Our combined business could be harmed by health epidemics wherever we have clinical trial sites or conduct operations performed by us or by third parties with whom we conduct business, including contract manufacturers, CROs, shippers and others. In December 2019, a novel strain of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, surfaced in Wuhan, China and has since spread to multiple countries worldwide, including the United States, Israel and Europe. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

Our combined company will have business operations in Israel, the United States and Europe. Certain of our contract manufacturers are located in the United States and Europe. The Israeli, United States and European governments have imposed a variety of continuing aggressive orders, health directives and recommendations to reduce the spread of the disease, including shelter-in-place directives and executive orders directing that all non-essential businesses close their physical operations and implement work-from-home schedules. The effects of these orders and our work-from-home policies could negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition. In addition, COVID-19 infection of our members of our workforce could result in a temporary disruption in our business activities, including manufacturing and other functions. Further, while the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce our ability to access capital, which could negatively affect our short-term and long-term liquidity. Additionally, the stock market has been unusually volatile during the COVID-19 outbreak and such volatility may continue. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. we do not yet know the full extent of potential delays or impacts on our business, financing or clinical trial activities, or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on our liquidity, capital resources, operations and business and those of the third parties on which we rely.

We are dependent on an international supply chain for products to be used in our clinical trials and, if approved by the regulatory authorities, for commercialization. Quarantines, shelter-in-place and similar government orders, or the expectation that such orders, shutdowns or other restrictions could occur, whether related to COVID-19 or other infectious diseases, could impact personnel at third-party manufacturing facilities or the availability or cost of materials. Any manufacturing supply interruption of our product candidates could harm our ability to conduct ongoing and future clinical trials of our product candidates. In addition, closures of transportation carriers and modal hubs could materially impact our clinical development and any future commercialization timelines.

If our relationships with our third-party manufacturers, suppliers or other vendors are terminated or scaled back as a result of the COVID-19 pandemic or other health epidemics, we may be unable to enter into arrangements with alternative suppliers or vendors or do so on commercially reasonable terms or in a timely manner. There is a natural transition period when a new supplier or vendor commences work. As a result, delays occur, which could adversely impact our ability to meet our desired clinical development and any future commercialization timelines.

In addition, our clinical trials have been affected by the COVID-19 pandemic and could continue to be affected in the future. Clinical trial progression, dosing, patient enrollment and related activities have been delayed, and could continue to be delayed, due to prioritization of hospital resources toward the COVID-19 pandemic or concerns among patients about participating in clinical trials during a pandemic, and reporting of some clinical data could be incomplete or delayed if patients enrolled in our clinical trials are unable to fully participate as a result of any such hospital resource prioritization, patient participation concerns or other factors. Federal, state, and local guidelines for reopening in Israel, the United States and Europe, where our clinical trials are being run, could negatively impact our ability to enroll additional patients in any of our clinical programs. Some patients could have difficulty following certain aspects of clinical trial protocols if quarantines impede patient movement or interrupt healthcare services. For example, patients in our clinical trials for BST-236 are elderly adults, often with advanced disease who could not be able to safely participate in clinical trials for this product candidate during the COVID-19 pandemic. Similarly, our inability to successfully recruit and retain patients and principal investigators and site staff who, as healthcare providers, could have heightened exposure to COVID-19 or experience additional restrictions by their institutions or local, state or national governments, could adversely impact our clinical trial operations. In addition, the COVID-19 pandemic has affected the operations of the FDA and other health authorities, which can result in delays of reviews and approvals, including with respect to our product candidates.

The spread of COVID-19, which has caused a broad impact globally, could materially affect us economically. While the potential economic impact brought by, and the duration of, COVID-19 could be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could harm our business and the value of our common shares.

We expect to incur significant losses for the foreseeable future and could never achieve or maintain profitability. Biosight’s independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern.

Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that a product candidate will fail to gain regulatory approval or fail to become commercially viable. Both Advaxis and Biosight have never generated any product revenue, and we cannot estimate with precision the extent of our future losses. We do not currently have any products that are available for commercial sale and could never generate product revenue or achieve profitability. As of June 30, 2021, Biosight had an accumulated deficit of $45.0 million.

We expect to continue to incur substantial and increasing losses through the commercialization of any current or future candidates if they receive approval. Our product candidates, including BST-236, the investigational product candidate, have not been approved for marketing anywhere in the world, and it is likely that they could never receive such approval. As a result, we are uncertain when or if we will achieve profitability and, if so, whether we will be able to sustain profitability. Our ability to generate product revenue and achieve profitability is dependent on our ability to complete the development of BST-236, continue developing new product candidates, obtain necessary regulatory approvals for such product candidates and manufacture and successfully market our product candidates. There can be no assurance that we will be profitable even if we successfully commercialize BST-236 or any current and future product candidates we develop. If we do obtain regulatory approval to market any of our product candidates, our revenue will be dependent upon, in part and among other things, the size of the markets in the territories for which we gain regulatory approval, the number of competitors in those markets, the accepted price for any such product candidate and whether we own the commercial rights for those territories. If the indication approved by regulatory authorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we would not generate significant revenue from sales of any of our product candidates, even if they receive approval. Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Any failure to become and remain profitable could adversely impact the market price of our ordinary shares and our ability to raise capital and continue operations. A decline in the shares’ value also could cause the stockholders to lose all or part of their investment.

We expect our research and development expenses in connection with development programs for BST-236 and any current and future product candidates to be significant. In addition, if we obtain regulatory approval for our product candidates, we expect to incur increased sales, marketing and manufacturing expenses. As a result, we expect to continue to incur significant and increasing operating losses and negative cash flows for the foreseeable future. These losses have harmed and will continue to harm our results of operations, financial position and working capital.

Biosight’s independent registered public accounting firm has issued a going concern opinion on Biosight’s financial statements as of December 31, 2020, expressing substantial doubt as to Biosight’s ability to continue as a going concern. Biosight’s consolidated financial statements do not include any adjustments that could result from the outcome of this uncertainty.

Management believes that, after completion of the merger, with the receipt of the cash available to Advaxis, the combined company’s cash will be sufficient to fund its project operations through the 4^th quarter of 2022. We continually assess multiple options to obtain additional funding to support our operations, including proceeds from offerings of our equity securities or debt, or transactions involving product development, technology licensing or collaboration arrangements or other sources of capital to complete our currently planned development programs. Additional capital may not be available in sufficient amounts or on reasonable terms, if at all, and our ability to raise additional capital could be adversely impacted by potentially worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic.

We face significant competition, and our commercial opportunities will be negatively affected if our competitors develop and market products that are more effective, safer or less expensive than the products we develop.

The biotechnology and pharmaceutical industry is highly competitive. We are currently developing advanced therapeutical products to treat oncology and hematological malignancies and life-threatening diseases in patients who are elderly or are medically unfit to undergo standard chemotherapy treatments. As a significant unmet medical need exists in this market, there are several large and small pharmaceutical companies which may be focused on developing therapeutics for the treatment of these life-threatening diseases. Therefore, the product candidates that we develop, if they receive regulatory approval, will compete with those products currently available, in development, or that will be developed in the future.

We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical companies, universities and other research institutions. In particular, there are a number of companies that are developing or marketing treatments for oncology and hematological malignancies. A number of biotechnology companies are developing treatments for our target markets. Many of our competitors have significantly greater financial, manufacturing, marketing, product development, technical and human resources than we do, and may also use more effective or advanced technology to develop their product candidates, which could render our products obsolete, less competitive or not economical.

Large pharmaceutical companies have many capabilities that exceed our own, such as extensive experience in clinical testing, obtaining marketing approvals, recruiting patients and manufacturing pharmaceutical products. These companies also have significantly greater research and marketing capabilities than we do, with products in the late stages of development or which are already approved, as well as collaborative development arrangements with leading organizations. Large pharmaceutical companies also have greater resources and can invest heavily to accelerate discovery and development. Smaller and other early-stage companies could also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Finally, mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. As a result of all of these factors, our competitors and particularly, larger pharmaceutical companies, could succeed in discovering, developing, receiving marketing approval for and commercializing product candidates in our target markets before we are able.

We could lose or have reduced commercial opportunities if any competitors successfully develop and commercialize products that are safer, more effective, have fewer or less-severe effects, are more convenient, have a broader label, are marketed more effectively, are reimbursed or are less expensive than any product candidate that we develop. Our competitors also may obtain marketing approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we can enter the market. Even if the product candidates we develop receive marketing approval, they may be priced at a significant premium over competitive products that have already received approval, which will further reduce our competitive position.

If we are unable to establish sales, marketing and distribution capabilities either on our own or in collaboration with third parties, we could be unsuccessful in commercializing our product candidates and generating product revenues.

We do not have an infrastructure for the sales, marketing or distribution of our product candidates if they receive regulatory approval for marketing and commercialization, and the cost of establishing and maintaining such capabilities could exceed the cost-effectiveness of doing so. In order to market any product for which we receive approval, we must build our sales, distribution, marketing, managerial and other non-technical capabilities, or alternatively make arrangements with third parties to obtain the requisite licenses and perform these services on our behalf.

We currently plan to commercialize our product candidates initially in the United States, Israel and Europe. If we receive regulatory approval in those jurisdictions to market our products, including the investigational product candidate, BST-236, we may build a focused sales, distribution and marketing infrastructure to market them. There are significant expenses and risks involved with establishing our own sales, marketing and distribution capabilities, including the ability to hire, retain and appropriately incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel, and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities, or to obtain and maintain the requisite licenses, could delay product launches and adversely impact the commercialization of our product candidates.

In lieu of establishing our own sales, marketing and distribution capabilities ourselves, we could enter into arrangements with collaborative partners or other third parties. Any terms of these arrangements could be unfavorable to us, and we could be unable to enter into any arrangements at all. If we are unable to build our own sales force or negotiate a collaborative relationship with a third party, we could be forced to delay the potential commercialization of such products or reduce the scope of our sales or marketing activities. If we increase our expenditures to fund commercialization activities ourselves, we will need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we will not be able to bring our product candidates to market or generate product revenue.

We will require substantial additional capital to fund our operations. If we are unable to raise sufficient capital, we could be forced to delay, reduce or eliminate our product discovery, development programs or commercialization efforts.

The development, marketing and commercialization of pharmaceutical products require a substantial amount of capital. We expect our expenses to increase in connection with our ongoing activities, particularly as we continue ongoing Phase 2b clinical trials, seek marketing approval for our investigational product candidate, BST-236, as well as initiate new research and preclinical development efforts for any current and future product candidates. If we obtain marketing approval for BST-236, we could incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such capabilities are not the responsibility of a third party collaborator. In addition, after completion of the merger, we expect to incur substantial additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding to continue our operations, and any failure to receive a sufficient amount of funding will hinder our ability to effectively market and commercialize BST-236, as well as develop any new product candidates in the future.

We will be required to expend significant funds in order to advance the development of the product candidates in our pipeline, as well as other product candidates we may seek to develop. Biosight expects that its existing cash will be sufficient to fund our operating expenses and capital expenditure requirements through the middle of 2022. However, existing cash will not be sufficient to fund all of the efforts that we plan to undertake or to fund the completion of development of any of our product candidates. Even if we seek to enter into, and are successful in securing, collaborative agreements for development of product candidates, we do not expect to enter into agreements for every product. Accordingly, we will need to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements, among other sources. Adequate additional funding may not be available to us on acceptable terms or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our products or product candidates or one or more of our other research and development initiatives. Our failure to raise any necessary capital could have a negative impact on our financial condition and our ability to develop product candidates in line with our business strategy and product pipeline.

Because the length of time and the activities associated with our product candidates are highly uncertain, we cannot estimate the actual funds we will require for developing and the extent and costs of our marketing and commercialization efforts, if any. The estimates of what activities our existing cash will cover could prove to be inaccurate, and we could use our available capital resources sooner than we currently expect. We could also need additional funding sooner than we expect as a result of changing circumstances, some of which are beyond our control, which could cause us to consume capital significantly faster than we anticipate. Our future funding requirements, both short-term and long-term, will depend on many factors, including:

We have received and may receive in the future Israeli governmental grants to assist in the funding of our research and development activities.

Through the date hereof, we had received an aggregate of $2.4 million in the form of grants from the Israel Innovation Authority, previously known as the Office of the Chief Scientist (the “IIA”). The requirements and restrictions for such grants are found in the Law for Encouragement of Industrial Research and Development—1984 (the “Research Law”). Under the Research Law, royalties of 3% to 3.5% on the revenues derived from sales of products or services developed in whole or in part using these IIA grants are payable to the Israeli government. We developed our investigational product candidate, BST-236, at least in part, with funds from these grants, and accordingly we would be obligated to pay these royalties on sales of any of our product candidates that achieve regulatory approval. The maximum aggregate royalties paid generally cannot exceed 100% of the grants made to us, plus annual interest equal to the 12-month LIBOR applicable to dollar deposits, as published on the first business day of each calendar year. As of June 30, 2021, we had not paid any royalties to the IIA.

The Israeli government grants we have received for research and development expenditures restrict our ability to manufacture products and transfer technologies outside of Israel and require us to satisfy specified conditions. If we fail to satisfy these conditions, we may be required to refund grants previously received together with interest and penalties.

Our research and development efforts have been financed, in part, through the grants that we have received from the IIA. Therefore, we must comply with the requirements of the Research Law. Under the Research Law, we are prohibited from manufacturing products developed using these grants outside of the State of Israel without special approvals. We may not receive the required approvals for any proposed transfer of manufacturing activities. Even if we do receive approval to manufacture products developed with government grants outside of Israel, the royalty rate may increase, and we may be required to pay up to 300% of the grant amounts plus interest, depending on the manufacturing volume that is performed outside of Israel. This restriction may impair our ability to outsource manufacturing or engage in our own manufacturing operations for those products or technologies.

Additionally, under the Research Law, we are prohibited from transferring, including by way of license, the IIA-financed technologies and related intellectual property rights and know-how outside of the State of Israel, except under limited circumstances and only with the approval of the IIA Research Committee. We may not receive the required approvals for any proposed transfer and, even if received, we may be required to pay the IIA a portion of the consideration that we receive upon any sale of such technology to a non-Israeli entity, up to 600% of the grant amounts plus interest. The scope of the support received, the royalties that we have already paid to the IIA, the amount of time that has elapsed between the date on which the know-how or the related intellectual property rights were transferred and the date on which the IIA grants were received, the sale price and the form of transaction will be taken into account in order to calculate the amount of the payment to the IIA. Approval of the transfer of technology to residents of the State of Israel is required, and may be granted only if the recipient abides by the provisions of applicable laws, including the restrictions on the transfer of know-how and the obligation to pay royalties. There is no assurance that approval of any such transfer, if requested, will be granted.

These restrictions may impair our ability to sell our technology assets, to perform or outsource manufacturing outside of Israel, to engage in change of control transactions or to otherwise transfer our know-how outside of Israel and may require us to obtain the approval of the IIA for certain actions and transactions and to pay additional royalties and other amounts to the IIA. In addition, any change of control and any change of ownership of our shares that would make a non-Israeli citizen or resident an “interested party,” as defined in the Research Law (such as the change of ownership which will take place as a result of the merger contemplated herein) requires prior written notice to the IIA, and our failure to comply with this requirement could result in criminal liability. These restrictions will continue to apply even after we have repaid the full amount of royalties on the grants. If we fail to satisfy the conditions of the Research Law, we may be required to repay certain grants previously received together with interest and penalties, and may become subject to criminal charges.

Our future success depends on our ability to retain key employees, consultants and advisors and to attract, retain and motivate qualified personnel.

We are highly dependent on principal members of our executive team listed under “Management” herein, including Dr. Ruth Ben Yakar, Biosight’s current chief executive officer and a member of Biosight’s Board until the closing of the merger completed herein, the loss of whose services may adversely impact the achievement of our objectives. Biosight and Dr. Ben Yakar have negotiated a separation agreement pursuant to which Dr. Ben Yakar shall resign from her position in Biosight and, effective as of the closing of the merger, Dr. Ben Yakar shall not act as a Board member or officer of Biosight. Biosight and Dr. Ben Yakar have agreed to the principal terms of the separation agreement, which have also been approved by Biosight’s board of directors, subject to the approval of Biosight’s shareholders, but the parties have not executed the separation agreement yet.

While we have entered into employment agreements with each of our executive officers, any of them could leave our employment at any time, as all of our employees are “at will” employees. Recruiting and retaining other qualified employees, consultants and advisors for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled executives in our industry, which is likely to continue. As a result, competition for skilled personnel is intense, and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill sets. In addition, failure to succeed in pre-clinical studies or clinical trials may make it more challenging to recruit and retain qualified personnel. The inability to recruit or loss of the services of any executive, key employee, consultant or advisor may impede the progress of our research, development and commercialization objectives.

Our employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on Advaxis’ business.

We are exposed to the risk of employee and third party fraud or other misconduct. Misconduct by employees, independent contractors, consultants, commercial partners, manufacturers, investigators, or contract research organizations (“CROs”) could include intentional, reckless, negligent, or unintentional failures to comply with FDA regulations, comply with applicable fraud and abuse laws, provide accurate information to the FDA, properly calculate pricing information required by federal programs, comply with federal procurement rules or contract terms, report financial information or data accurately or disclose unauthorized activities to us. This misconduct could also involve the improper use or misrepresentation of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter this type of misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Moreover, it is possible for a whistleblower to pursue a False Claims Act case against us even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim. Further, due to the risk that a judgment in an FCA case could result in exclusion from federal health programs or debarment from government contracts, whistleblower cases often result in large settlements. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting its rights, those actions could have a significant impact on its business, financial condition, and results of operations, including the imposition of significant fines or other sanctions.

Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Our internal computer systems and those of our current and any future collaborators and other contractors or consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we are not aware of any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and business operations, whether due to a loss of Advaxis’ trade secrets or other proprietary information or other similar disruptions. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, our competitive position could be harmed and the further development and commercialization of its product candidates could be delayed.

We may be exposed to significant foreign exchange risk.

We incur significant portions of our expenses, and may in the future derive revenue, in currencies other than the U.S. dollar, in particular, the euro and the Israeli Shekel. As a result, we are exposed to foreign currency exchange risk as our results of operations and cash flows are subject to fluctuations in foreign currency exchange rates. Any fluctuation in the exchange rate of these foreign currencies may negatively impact our business, financial condition and operating results. Global economic events, such as the COVID-19 pandemic, have and may continue to significantly impact local economies and the foreign exchange markets, which may increase the risks associated with sales denominated in foreign currencies. We currently do not engage in hedging transactions to protect against uncertainty in future exchange rates. Therefore, for example, an increase in the value of the euro against the U.S. dollar could be expected to have a negative impact on our operating expenses as euro denominated expenses, if any, would be translated into U.S. dollars at an increased value. We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our financial condition, results of operations and cash flows.

Risks Related to the Discovery and Clinical Development of Our Product Candidates

Our business is heavily dependent on the successful development, regulatory approval and commercialization of our investigational product candidates, BST-236, ADXS-503 and ADXS-504.

Currently, none of our product candidates has received approval for commercial sale. As a result, we were not able to develop a marketable product. We expect a substantial portion of our efforts and expenditures to be devoted to the continued clinical evaluation of BST-236 and its commercialization following regulatory approval, if received, as well as the development, manufacture, preclinical and clinical evaluation of any other product candidates. Therefore, our business depends significantly on the successful completion of clinical trials, regulatory approval and commercialization for BST-236, as well as any product candidates that we seek to develop in the future.

We cannot be certain that BST-236 or any of our future product candidates will receive regulatory approval or will be successfully commercialized even if they receive approval. The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of our product candidates are, and will remain, subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, each of which has different regulations. We have not completed Phase 2b or any later-stage clinical trials for BST-236 and will not be permitted to market BST-236 or any other product candidate in the United States until we receive approval of an NDA, or in any foreign country until we receive the requisite marketing approval or authorization. Even if we do receive regulatory approval to market BST-236 or any other product candidate, such approval could be subject to limitations on the indicated uses or patient for which we are able to market the product.

We have not submitted an NDA to the FDA or any comparable application to another regulatory authority in any other country. Obtaining approval of an NDA or similar regulatory approval is an extensive, lengthy, expensive and inherently uncertain process. The FDA or relevant foreign regulatory authority may delay, limit or deny approval of BST-236 or our Lm-LLO immunotherapies product candidates, including axalimogene filolisbac (“AXAL”), ADXS-PSA, ADXS-503, ADXS-504, ADXS-HER2 or any of our future product candidates for many reasons, including, but not limited to:

Clinical studies required for our product candidates are expensive, time-consuming, difficult to design and implement and involve uncertain outcomes.

Obtaining marketing approvals, both in the United States and abroad, is lengthy, time-consuming and expensive. It may take many years or more per study, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of our product candidates. To secure marketing approval, we must conduct preclinical and clinical trials and submit extensive data to the relevant regulatory authorities in order to establish the product candidate’s safety and efficacy. We could experience delays in the commencement and rate of completion of clinical studies due to a number of factors, including, for example: the inability to manufacture sufficient quantities of stable and qualified materials under the relevant regulatory standards for use in clinical studies; slower than expected rates of patient recruitment and enrollment; modification of clinical study protocols; changes in regulatory requirements for clinical studies; the lack of effectiveness during clinical studies; the emergence of unforeseen safety issues; and government or regulatory delays which could require us to suspend or terminate the studies. For example, in June 2019, Advaxis announced that it was closing its AIM2CERV Phase 3 clinical trial with AXAL in cervical cancer due to the delays it incurred as a result of the recent FDA partial clinical hold on the trial, as well as the estimated cost and time to completion of the trial. This Phase 3 clinical trial with ADXS-HPV (AXAL) in cervical cancer was closed on June 11, 2021. Furthermore, Advaxis has completed the clinical study report from Part A of the ADXS-NEO study and closed the study and IND closure has been requested.

The results of any clinical studies we conduct are uncertain. In particular, the results we obtain from early clinical studies are not predictive of the results we will obtain in later clinical studies. It is also possible that clinical studies will fail to demonstrate the safety and effectiveness required to obtain the relevant regulatory approvals to market and commercialize our product candidates. Any failure to demonstrate safety and effectiveness could harm the development of that product candidate and others that we may develop in the future, particularly because it may cause us to abandon the development of that product candidate or significantly delay plans to develop other product candidates. Delaying or terminating our clinical studies will delay the filing of our NDAs, or their foreign equivalents, and will also hinder our ability to commercialize our product candidates and generate product revenues. In addition to the foregoing, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions.

Enrollment and retention of patients in clinical trials could be made more difficult or rendered impossible by multiple factors that are outside our control.

We have completed enrollment into our Phase 2b clinical trial for our investigational product candidate, BST-236, as a first-line, single-agent treatment for patients with AML, are currently enrolling patients into the Phase 2 trial sponsored by the Groupe Francophone des Myélodysplasies (“GFM”), and expect to enroll patients into additional clinical trials by the end of 2021. We could encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials. Even once we enroll patients, we could be unable to retain the number of patients necessary to complete any of our trials.

Our ability to enroll and retain patients clinical trials depends on many factors, including: the size of the patient population; the nature of the trial protocol; the effectiveness of our patient recruitment efforts; delays in enrollment due to travel or quarantine policies, or other factors, related to COVID-19; the existing body of safety and efficacy data with respect to the study candidate; the perceived risks and benefits of cytarabine for the treatment of hematological diseases; the number and nature of competing existing treatments for our target indications, the number and nature of ongoing trials for other product candidates in development for our target markets; any pre-existing conditions in patients that preclude participation; the proximity of patients to clinical sites; and the eligibility criteria for the study.

Delays or failures in planned patient enrollment or retention may result in increased costs and program delays, which could have an adverse effect on our ability to develop our product candidates or could render further development impossible. In addition, we expect to rely on CROs and clinical trial sites to ensure that clinical trials are conducted under proper conditions, and, while have entered into agreements governing their services, we will be limited in our ability to control their actual performance.

Results of preclinical studies and early clinical trials may not be predictive of results of future clinical trials.

The outcome of preclinical studies and early clinical trials are not always predictive of the success of later clinical trials, and interim results of clinical trials do not necessarily predict success in the results of completed clinical trials. For example, even though our Phase 1/2a and Phase 2 clinical trials provided promising data that our investigational product candidate, BST-236, has safe and effective qualities in the treatment of AML, these results may not be indicative of any results we achieve in future randomize Phase 3 clinical trials that may be conducted with a different patient pool.

Preclinical and clinical data are susceptible to varying interpretations and analyses. Even if we, or any collaborators, believe that the results of clinical trials for our product candidates warrant marketing approval, the FDA or comparable foreign regulatory authorities could disagree and reject marketing approval. In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and the rate of dropout among clinical trial participants. If we fail to receive positive results in clinical trials, the development timeline and regulatory approval and commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects would be negatively impacted.

The results of clinical trials conducted at clinical trial sites outside the United States might not be accepted by the FDA, and data developed outside of a foreign jurisdiction similarly might not be accepted by such foreign regulatory authority.

Some of the clinical trials for our product candidates that are being or will be conducted through our partnerships and collaborations may be conducted outside the United States, and we intend in the future to conduct additional clinical trials outside the United States. Although the FDA, European Medicines Agency (“EMA”) or comparable foreign regulatory authorities may accept data from clinical trials conducted outside the relevant jurisdiction, acceptance of these data is subject to certain conditions. For example, the FDA requires that the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles such as IRB or ethics committee approval and informed consent, the trial population must adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. In addition, while these clinical trials are subject to the applicable local laws, acceptance of the data by the FDA will be dependent upon its determination that the trials were conducted consistent with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States as adequate support of a marketing application. Similarly, we must also ensure that any data submitted to foreign regulatory authorities adheres to their standards and requirements for clinical trials and there can be no assurance a comparable foreign regulatory authority would accept data from trials conducted outside of its jurisdiction.

Because the target patient populations for many of the product candidates we may develop are small, we must be able to successfully identify patients and achieve a significant market share to achieve and maintain profitability and growth.

BST-236 seeks to address a highly unmet need by developing therapeutic products for rare, oncology and hematological illnesses among a small subset of affected patients. We focus our research and product development on treatments for diseases such as, but not limited to, AML, acute lymphoblastic leukemia (“ALL”), and MDS. We have also conducted clinical studies of Lm Technology immunotherapies in non-small cell lung cancer and other solid tumor types, prostate cancer and HPV-associated cancers.

Our investigational product candidate, BST-236, targets elderly patients, who are more likely to develop these diseases, or patients who cannot tolerate the high levels of toxicity associated with standard chemotherapy commonly used to treat these conditions. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with the product candidates we may develop, are based on estimates. These estimates may prove to be incorrect and new studies may change the estimated incidence or prevalence of these diseases. The number of patients in the United States, Israel, Europe and elsewhere may turn out to be lower than expected. In addition, patients may not be amenable to treatment with our products, or may become increasingly difficult to identify or gain access to. If the market opportunities for any product candidates we may develop are smaller than we believe they are, our revenues, if any, may be adversely affected, and our ability to locate and enroll eligible patients, conduct clinical trials and perform other necessary requirements needed for marketing and commercialization approval may suffer.

In addition, cancer therapies are sometimes characterized as first-line, second-line, or third-line, and the FDA often approves new therapies initially only for third-line use. When cancer is detected early enough, first-line therapy, usually chemotherapy, hormone therapy, surgery, radiation therapy, immunotherapy or a combination of these, is sometimes adequate to cure the cancer or prolong life without a cure. Second- and third-line therapies are administered to patients when prior therapy is not effective. We are seeking approval of our investigational product candidate, BST-236, for patients who have received one or more prior treatments. If BST-236 proves to be sufficiently beneficial, we would expect to seek approval potentially as a first-line therapy, but there is no guarantee that product candidates we develop, even if approved, would be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials. Even if we obtain a significant market share for BST-236, or any other product candidate and the potential target populations are small, we could fail to achieve profitability without obtaining marketing approval for additional indications, including use as first- or second-line therapy.

We may not be successful in our efforts to identify, discover or maintain certain rights to additional product candidates.

Although we intend to explore other therapeutic opportunities in addition to our investigational product candidate, BST-236, as well as our other current product candidates such as AXAL, ADXS-PSA, ADXS-503 and ADXS-504, we could fail to identify additional product candidates for clinical development for several reasons. For example, our research methodology could be unsuccessful in identifying potential product candidates. In addition, any product candidates we identify could have harmful side effects that make them unmarketable or unlikely to receive regulatory approval. Additional product candidates will require additional, time-consuming development efforts prior to commercialization, including preclinical studies, clinical trials and approval by the relevant regulatory authorities. Moreover, all product candidates are prone to risks of failure that are inherent in therapeutic product development, and our failure to successfully identify, develop, market and commercialize product candidates in the future will adversely affect our ability to grow our business and generate product revenue.

Additionally, we could be required to relinquish valuable or beneficial rights to product candidates in connection with collaborative agreements we enter into with third parties to develop and commercialize our product candidates in the United States, Israel, Europe or other countries or territories of the world. For instance, since July 2020 we have been working with the French Study Group of the European Myelodysplastic Syndrome Cooperative Group, led by GFM, to continue our research and development efforts of BST-236. In our collaboration with GFM and any future collaboration with another third party in the future, we can expect to lose some or all of the control over the future success of that product candidate to the third party.

The commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community.

We are currently investigating BST-236 as a single-agent, first-line treatment in a Phase 2b clinical study, and aim to launch a Phase 3 trial and submit our NDA application to the FDA and seek marketing approval from other regulatory authorities by 2024. In addition, we closed the Phase 1/2 study with ADXS-PSA ± pembrolizumab in metastatic castration resistant prostate cancer patients on January 25, 2021. The MEDI Phase 2 combo study (AZ) with AXAL ± durvalumab in Cervical and Head and Neck Cancer and the AIM2CERV Phase 3 clinical trial with ADXS-HPV (AXAL) in cervical cancer were closed August 22, 2019 and June 11, 2021, respectively. The study with personalized neoantigen-directed therapies (ADXS-NEO) was closed on May 22, 2020 and the NEO program-IND inactivation request was submitted to FDA on May 10, 2021.

Accordingly, we have never commercialized a product, and even if we obtain any regulatory approval for BST-236 or other product candidates, their commercial success will depend in part on the medical community, patients and third-party payors accepting them as effective, safe and cost-effective. Any product that we bring to the market could fail to gain market acceptance by those in the medical community. For instance, physicians are often reluctant to switch their patients from existing therapies even when new and potentially more effective or convenient treatments enter the market. Patients could acclimate to the therapies that they are currently taking and do not want to switch unless their physicians recommend doing so or they are required to switch therapies due to lack of reimbursement for existing therapies. If approved for commercial sale by the FDA and other relevant regulatory authorities, the degree to which the medical community and other stakeholders accept BST-236 and other product candidates we develop will depend on, among other factors:

Even if a product candidate displays a favorable efficacy and safety profile in preclinical studies and clinical trials, market acceptance of the product, if approved for commercial sale, will not be known until after it is launched. For example, initial Phase 1/2a clinical trials for BST-236 indicate that the treatment is safe and well-tolerated amongst the patients in our target population who are older adults or those not fit for intensive chemotherapy. Our efforts to educate the medical community and third-party payors on these benefits of BST-236, or any of the product candidates we may develop in the future, will likely require significant resources and their success is uncertain. If we are unable to receive an adequate level of acceptability for BST-236 and any other product candidates, we could be unable to generate significant product revenue and become profitable.

We could expend our limited resources to pursue a product candidate and fail to capitalize on other product candidates that are more profitable or for which there is a greater likelihood of success.

We have limited financial and managerial resources and intend to focus on developing product candidates for specific indications that we identify as most likely to succeed, in terms of both their potential for marketing approval and commercialization. Currently, we are prioritizing the development of BST-236, our investigational product candidate that seeks to treat patients with AML and other related hematological malignancies and who are older and susceptible to experiencing severe side effects associated with standard chemotherapy, or who have already responded poorly to prior chemotherapy treatments. In prioritizing our efforts on BST-236, we could forego or delay pursuing opportunities with other product candidates or for other indications that could prove to have greater potential for commercialization. Additionally, our resource allocation decisions could cause us to fail to capitalize on viable commercial products or profitable market opportunities. The spending decisions we do choose to make with respect to research and development programs could fail to yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we could relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of its product candidates in other jurisdictions.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, the EMA or comparable foreign regulatory authorities must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Risks Related to the Marketing and Other Regulatory Approval of Our Product Candidates

If we are not able to obtain required regulatory approvals, or if we or our third-party collaborators fail to comply with the requisite regulatory requirements, we will not be able to commercialize our product candidates and generate product revenue.

We have not received approval from any regulatory authority to market our product candidates in any jurisdiction. We are currently conducting Phase 2b clinical trials in the United States and Israel for our investigational product candidate, BST-236 and plan to launch a Phase 3 study in 2022, and expect to submit an NDA to the FDA for accelerated market approval by 2024, provided we can demonstrate that BST-236 provides a clinical benefit at the time of submission. We cannot make the necessary submissions to seek regulatory approvals unless and until we successfully complete pivotal clinical trials that indicate the safety and efficacy of the treatment. It is possible that BST-236, or any other product candidates we may develop in the future, will never obtain the appropriate regulatory approvals necessary for us to commence product sales as anticipated.

Our activities in connection with developing and commercializing our product candidates, such as the design, research, testing, manufacture, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation in the United States and abroad, including the FDA, the EMA and similar foreign regulatory authorities. We, or the third-party CROs with whom we expect to rely on and collaborate, cannot successfully commercialize our product candidates if we do not obtain marketing approval from these regulators or fail to comply with the requisite regulatory requirements on an ongoing basis. Securing marketing approval requires that we submit extensive nonclinical and clinical data and supporting information for our product candidates for each therapeutic indication to establish safety and efficacy of the product candidate for that indication. We must also submit information about the product manufacturing process to, and arrange for the inspection of manufacturing facilities by, the relevant regulatory authorities. Delays or errors in the submission of applications for marketing approval or issues, including those related to gathering the appropriate data and the inspection process, will ultimately delay or affect our ability to obtain regulatory approval, commercialize our product candidates and generate product revenue.

Even if we obtain marketing approval for our product candidates in one jurisdiction, we may never obtain marketing approval for them in any other jurisdiction, which would limit our ability to realize their full market potential.

We may also submit marketing applications in other countries. Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

We and any third-party collaborators, our CROs and contract manufacturers must establish and comply with numerous and varying regulatory requirements on a country-by-country basis in order to market our product candidates in any particular jurisdiction. Regulatory approval in one country does not guarantee regulatory approval in any other country. As part of the regulatory approval process in certain jurisdictions, we must conduct preclinical and clinical trials of our product candidates to prove their safety and efficacy. However, the preclinical or clinical trials that we conduct in one country will not necessarily be accepted by regulatory authorities in other countries. In addition, the approval processes vary by country and can involve additional product testing and validation, as well as prolonged administrative review periods. Seeking foreign regulatory approval could result in difficulties and extraneous costs, such as, for example, requirements to conduct additional nonclinical or clinical trials above and beyond the studies we have already performed. The variation of regulatory approval requirements in different countries could delay or prevent us from introducing our product candidates in those countries. We are currently conducting Phase 2b clinical trials in the United States and Israel for our investigational product candidate, BST-236 and plan to launch a Phase 3 study in 2022, and expect to submit an NDA to the FDA for accelerated market approval by 2024, provided we can demonstrate that BST-236 provides a clinical benefit at the time of submission. If the FDA approves our NDA and permits us to market BST-236 in the United States, any such approval will not ensure that regulatory authorities in other countries or jurisdictions will provide similar approval.

We do not currently have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of any product we develop will be unrealized.

Our current and future relationships with healthcare providers, customers and third-party payors could be subject to fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Members of the medical community, such as healthcare providers and physicians, as well as patients and third-party payors, will play a primary role in recommending BST-236 or any other product candidates for which we obtain marketing approval, if any. Any relationships that we enter into with healthcare providers, patients and third-party payors could expose us to fraud and abuse and other healthcare laws and regulations. These requirements could constrain the arrangements and relationships that we use to market, sell and distribute BST-236 or any product candidates for which we obtain marketing approval. In the United States, where we intend to seek marketing approval of BST-236, we will face restrictions under applicable federal and state healthcare laws and regulations, including the following:

We will likely incur substantial costs by taking efforts to ensure that our arrangements with healthcare providers, patients and third-party payors will comply with applicable healthcare laws and regulations so that we can ensure that we obtain and maintain marketing approval. It is possible that governmental authorities, both in the United States or in any foreign country or territory where we conduct business, will conclude that our business practices do not comply with current or future fraud and abuse or other healthcare laws and regulations. If government authorities determine that our operations violate any of the requirements that apply to us, we could lose or fail to obtain marketing approval for our product candidate.

We could also be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from government funded healthcare programs (such as, in the United States, Medicare and Medicaid and other federal healthcare programs), contractual damages, reputational harm, diminished profits and future earnings, additional integrity reporting and oversight obligations, and the curtailment or restructuring of our operations, any of which could adversely affect our business and results of operations. If any of the healthcare providers, physicians or entities with whom we expect to do business is found to be not in compliance with applicable laws, they could be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs, which could have a material adverse effect on our business and results of operations. Even the mere issuance of a subpoena or the fact of an investigation alone, regardless of the merit, may lead to negative publicity, a drop in our share price, and other harm to our business.

Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any products for which we obtain marketing approval.

For example, in March 2010, the ACA was enacted to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms. The law has continued the downward pressure on pharmaceutical pricing, especially under the Medicare program, and increased the industry’s regulatory burdens and operating costs. Among the provisions of the ACA of importance to our product candidates are the following:

There remain judicial and Congressional challenges to certain aspects of the ACA, as well as efforts by the current administration to repeal or replace certain aspects of the ACA. Since January 2017, the former President of the United States signed Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” Additionally, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the ACA’s “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax.

Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” In addition, the federal government eliminated federal cost-sharing reduction (“CSR”) payments to insurance companies. The loss of such federal CSR payments has resulted in increased premiums on certain policies issued by qualified health plans under the ACA. Moreover, in December 2018, CMS published a new final rule permitting further collections and payments to and from certain ACA qualified health plans and health insurance issuers under the ACA risk adjustment program in response to the outcome of federal district court litigation regarding the method CMS uses to determine this risk adjustment. On April 27, 2020, the United States Supreme Court reversed a Federal Circuit decision that previously upheld Congress’ denial of $12 billion in “risk corridor” funding. On December 14, 2018, a United States District Court Judge in the Northern District of Texas ruled that the individual mandate is a critical and inseverable feature of the ACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act of 2017, the remaining provisions of the ACA are invalid as well. In December 2019, the U.S. Court of Appeals for the Fifth Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the ACA are invalid as well. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case. It is unclear how such litigation and other efforts to repeal and replace the ACA will impact the ACA and our business. The ACA is likely to continue the downward pressure on pharmaceutical pricing and may also increase our regulatory burdens and operating costs. We continue to evaluate the effect that the ACA and its possible repeal and replacement has on our business.

Other legislative changes have been proposed and adopted since the ACA was enacted. For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This included further reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2030 unless additional Congressional action is taken. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers and increased the statute of limitations period in which the government may recover overpayments to providers from three to five years.

Further, there have been several recent United States Congressional inquiries and proposed federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the out-of-pocket cost of prescription drugs and reform government program reimbursement methodologies for drugs. Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to pharmaceutical product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the federal level, the current administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the United States presidential administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases.

Additionally, on May 11, 2018, the then President of the United States laid out his administration’s “Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs” to reduce the cost of prescription drugs while preserving innovation and cures. The Department of Health and Human Services has solicited feedback on some of these measures and has implemented others under its existing authority. For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020. This final rule codified CMS’s policy change that was effective January 1, 2019. Congress and the United States presidential administration under President Trump each indicated that they would continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have become increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Additionally, on July 24, 2020, then President Trump announced four executive orders related to prescription drug pricing that attempt to implement several of the Trump administration proposals, including (i) a policy that would tie certain Medicare Part B drug prices to international drug prices, or the “most favored nation price,” the details of which were released on September 13, 2020 and also expanded the policy to cover certain Part D drugs; (ii) an order that directs HHS to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada; (iii) an order that directs HHS to finalize the rulemaking process on modifying the Anti-Kickback Statute safe harbors for discounts for plans, pharmacies, and pharmaceutical benefit managers; and (iv) a policy that reduces costs of insulin and EpiPen’s to patients of federally qualified health centers. The FDA also recently released a final rule, effective November 30, 2020, implementing a portion of the importation executive order providing guidance for states to build and submit importation plans for drugs from Canada.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We are not sure whether additional legislative changes will be enacted, whether the current regulations, guidance or interpretations will be changed, or what the impact of such changes on our business, if any, may be. In addition, increased scrutiny by the United States Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. In addition, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

The FDA has granted BST-236, AXAL and ADXS-HER2 fast track designation. Any such designation or grant of priority review status by the FDA or comparable foreign regulatory authority does not guarantee a faster development, regulatory review or approval process and will not assure approval of our product candidates.

Fast track designation by the FDA, or an equivalent designation by a comparable foreign authority, will not always lead to accelerated approval of a product candidate, or approval at all. The FDA will grant a product candidate with fast track designation, or designate it for priority review, if it determines that the product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness. Such designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if we believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Additionally, even if we do receive a priority review designation, it does not result in expedited development and does not necessarily result in expedited regulatory review or approval process. Moreover, such designation not necessarily confer any advantage with respect to approval compared to conventional FDA procedures. The FDA may also withdraw the designation if it believes that the designation is no longer supported by data from our clinical development program.

In July 2020, the FDA granted our investigational product candidate, BST-236, with fast track designation for the treatment of patients with AML who are unfit for standard chemotherapy. As a result, we intend to submit an NDA to the FDA for marketing approval of BST-236 on an accelerated timeline, following the completion of our Phase 2b clinical trials in 2022. The FDA has also granted Fast Track Designation for AXAL for adjuvant therapy for high-risk locally advanced cervical cancer patients, and has granted Fast Track Designation for ADXS-HER2 for patients with newly-diagnosed, non-metastatic, surgically-respectable osteosarcoma. We could request priority review for any other product candidates we are developing or that we will develop in the future. Even though we have received fast track designation for BST-236, there is no guarantee that the FDA will approve our NDA at all, or within the six-month review cycle after we submit the NDA.

BST-236, AXAL and ADXS-HER2 have received orphan drug designation by the FDA and orphan medicinal product designation by the EMA. There is no guarantee that we will be able to maintain these designations, receive these designations for any of our other product candidates, or receive or maintain any corresponding benefits, including periods of exclusivity.

Product candidates that receive orphan drug designation by the FDA or orphan drug medicinal product designation by the EMA are entitled to certain benefits, including, for example, tax credits, reduced fees and clinical trial assistance. Additionally, if a product candidate with either designation subsequently receives marketing approval before another product that the FDA or the EMA considers to be the same product for the same indication, the product candidate can receive a period of marketing exclusivity. The marketing exclusivity period precludes the FDA or the EMA from approving another marketing application for the same product for the same indication for a specified time period. The applicable periods are seven years in the United States and ten years in Europe. The European exclusivity period can be reduced to six years if a product candidate no longer meets the criteria for orphan drug medicinal product designation, or if the product is sufficiently profitable such that market exclusivity is no longer justified.

We received orphan drug designation from the FDA in May 2019, and orphan medicinal product designation from the EMA in November 2020 for our investigational product candidate, BST-236. In addition, the FDA has granted orphan drug designation for AXAL for use in the treatment of anal cancer, HPV-associated head and neck cancer, Stage II-IV invasive cervical cancer and for ADXS-HER2 for the treatment of osteosarcoma in the United States, as well as EMA orphan drug designation for AXAL for the treatment of anal cancer and for ADXS-HER2 for the treatment of osteosarcoma in the EU. However, we cannot guarantee that we will obtain any orphan drug designations or orphan drug medicinal product designations for any future product candidates. In addition, orphan drug designation and orphan drug medicinal product designation by the FDA and the EMA, respectively, neither shorten the development time or regulatory review time of a product candidate, nor provide a product candidate with any advantage in the regulatory review or approval process. Therefore, even with these designations, we cannot guarantee that we will be able to successfully develop BST-236 or any other product candidates, or that we will be able to maintain any orphan drug or orphan drug medicinal product designations we have already received. For instance, the FDA may revoke its orphan drug designation if the FDA finds that the request for designation contained an untrue statement of material fact or omitted material information, or if the FDA finds that the product candidate was not eligible for designation at the time of the submission of the request.

Even if we maintain our orphan drug and orphan drug medicinal product designations, we may not receive any period of regulatory exclusivity if BST-236 or any other product candidate is approved. Any exclusivity period that we receive for BST-236, or any other product candidates, could not effectively protect us from competition. Even if we obtain exclusivity, the FDA could subsequently approve another product containing the same principal molecular features for the same condition if the FDA concludes that the later drug is clinically superior to ours in that it is shown to be safer, more effective or makes a major contribution to patient care. A competitor also may receive approval of different products for the same indication for which our orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. Moreover, we may not be able to maintain our orphan drug designation or exclusivity and our product candidates would not be eligible for exclusivity if the approved indication is broader than the orphan drug designation. For example, it is possible that product candidates will still be approved either for the same condition that BST-236 seeks to treat, such as AML, or which are the same products as BST-236 but seek to treat different conditions.

In addition, the European exclusivity period is ten years but can be reduced to six years if the drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

Our product candidates could become subject to unfavorable pricing regulations, third-party payor reimbursement practices or healthcare reform initiatives that could harm our ability to successfully commercialize our product candidates.

Our ability to commercialize our investigational product candidate, BST-236, or any other product candidates, will depend substantially on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities (such as, in the United States, Medicare and Medicaid), private health coverage insurers and other third-party payors. If reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize our products. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish and maintain pricing sufficient to realize meaningful revenue.

Government authorities and third-party payors decide which medications they will cover and establish reimbursement levels. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:

The healthcare industry is acutely focused on cost containment, both in the United States and elsewhere. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, and could view our products as not being cost-effective. As a result, coverage and reimbursement could be unavailable to our customers, or be insufficient to allow our products to be competitively marketed. If the prices for our products, if any, decrease or if governmental and other third-party payors do not provide adequate coverage or reimbursement, our prospects for revenue and profitability will suffer.

There is also significant uncertainty related to third-party payor coverage and reimbursement of newly-approved product candidates because pricing and reimbursement for new product candidates vary widely by country. Some countries require approval of the sale price of a product candidate before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. In addition, increasingly, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged. We cannot be sure that coverage will be available for any product candidate that we may commercialize and, if available, that the reimbursement rates will be adequate.

In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors. As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained. Even if we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Additionally, third-party payors may not cover, or provide adequate reimbursement for, long-term follow-up evaluations required following the use of product candidates, once approved. Patients are unlikely to use our product candidates, once approved, unless coverage is provided and reimbursement is adequate

There could also be delays in obtaining coverage and reimbursement for newly approved drugs, and coverage can be more limited than the indications for which the drug is approved by the FDA or comparable foreign regulatory authorities. Even if our products are eligible for reimbursement, such eligibility does not imply that they will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Reimbursement rates can vary, for example, according to the use of the drug and the clinical setting in which it is used, or can in some cases be based on reimbursement levels that have already been set for lower-cost drugs. As a result, we could obtain marketing approval for a product in a particular country, but then be subject to reimbursement delays that prolong the commercial launch of the product, possibly for lengthy time periods, which can negatively impact product revenues we are able to generate from sales in that country.

Risks Related to Our Dependence on Third Parties

We depend on third-party collaborators to develop and conduct clinical trials with, obtain regulatory approvals for, and if approved, market and sell product candidates.

For our current investigational product candidate, BST-236, we depend on our third-party collaborator, GFM, to conduct a clinical trial in Europe. We may in the future form additional collaborations and may depend on other third-parties to develop, conduct clinical trials of, and, if approved, commercialize that product candidates. Our current and any future collaborations that we enter into are subject to numerous risks, including the following:

In addition, certain collaboration agreements provide our collaborators with rights to terminate such agreements, which rights may or may not be subject to conditions, and, if exercised, would adversely affect our product development efforts and make it difficult for us to attract new collaborators. Our rights to recover tangible and intangible assets and intellectual property rights needed to advance a product candidate or product after termination of a collaboration are, in some cases, limited by contract, in those cases we would not be able to advance a program post-termination. If a collaborator terminates its agreement with us, we would likely be required to limit the size and scope of efforts for the development and commercialization of such product candidates or products or be required to seek additional financing to fund further development or identify alternative strategic collaborations. Moreover, our potential to generate future revenue from such product candidates would be significantly reduced.

We intend to rely on third parties to manufacture product candidates, which increases the risk that we will not have sufficient quantities of such product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We will depend on third-party manufacturers to supply our clinical materials. We do not own or operate manufacturing facilities for the production of clinical or commercial supplies of our investigational product candidate, BST-236. We have limited personnel with experience in drug manufacturing and lack the resources and the capabilities to manufacture any of our product candidates on a clinical or commercial scale. We rely on third parties for the supply of our product candidates, and our strategy is to outsource all manufacturing of our product candidates to third parties. We use contract manufacturing operations in the United States and Europe to supply the requisite doses of BST-236 for our ongoing, Phase 2b clinical studies in the United States, Israel and Europe.

In order to conduct clinical trials of product candidates, including for BST-236, we need to have them manufactured in potentially large quantities. Our contract manufacturing organizations may be unable to successfully increase the manufacturing capacity for BST-236 or any of our current and future product candidates in a timely or cost- effective manner, or at all. In addition, quality issues may arise during scale-up activities and at any other time. For example, ongoing data on the stability of our product candidates may shorten the expiry of our product candidates and lead to clinical trial material supply shortages, and potentially clinical trial delays. In addition, there could be solubility and stability issues in the manufacturing of BST-236. We had issues in the past relating to the solubility and stability of BST-236, which led to modification in the manufacturing of the API, drug product, and the formulation. These issues may occur again. If these contract manufacturers are unable to successfully scale up the manufacture of our product candidates in sufficient quality and quantity, the development, testing and clinical trials of that product candidate may be delayed or infeasible, and regulatory approval or commercial launch of that product candidate may be delayed or not obtained, which could significantly harm our business and results of operations.

If we hire new contract manufacturers, we increase the risk that we will experience delays in production or receive insufficient supplies of our product candidates, because we will be required to transfer our manufacturing technology to these manufacturers and allow them to gain experience manufacturing our product candidates. Even after gaining such experience, there can be no assurance that a contract manufacturer will produce sufficient quantities of our product candidates in a timely manner or continuously over time, or at all. In addition, if any of our contract manufacturers should cease to continue producing our product candidates, we will likely experience delays in advancing our preclinical and clinical studies while we seek replacement manufacturers. We may be unable to obtain replacement supplies on terms that are favorable to us, or else be unable to obtain adequate supplies of our product candidates.

We contract with licensed pharmaceutical manufacturers which are compliant with cGMP. While we have engaged several third-party vendors to provide clinical and non-clinical supplies and fill-finish services, we do not currently have any agreements with third-party manufacturers for long-term commercial supplies. In the future, we may fail to enter into agreements with third-party manufacturers for commercial supplies of any product candidate that we develop, or may be unable to do so on acceptable terms. Even if we are able to establish and maintain arrangements with third-party manufacturers, our reliance on them entails risks, including:

Contract manufacturers may not be able to comply with cGMP requirements or similar regulatory requirements outside of the United States. Our failure, or the failure of our contract manufacturers, to comply with applicable requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and/or criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates.

In addition to the cGMP requirements, the production and manufacturing of BST-236 require our contract manufacturers to handle toxic or hazardous substances. In order to handle toxic or hazardous substances, our contract manufacturers may need to obtain certifications and meet other regulatory requirements.

BST-236 and any current or future product candidates that we develop will likely compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP requirements that are capable of manufacturing for us and our products. Our current and anticipated future dependence upon third parties for the manufacture of our product candidates may adversely affect our future profit margins, our ability to develop product candidates and our success in commercializing product candidates that receive marketing approval.

Risks Related to Legal and Compliance Requirements

Our operations and product candidates are subject to extensive and costly government regulation in the United States and abroad.

We and our third party collaborators, including our CROs and contract manufacturing organizations, are subject to extensive government regulation in the United States, Israel, Europe and various other countries or territories. In the United States, we and our third-party collaborators are subject to regulatory oversight by federal authorities, such the FDA, the Centers for Medicare and Medicaid Services, other divisions of the United States Department of Health and Human Services, the United States Department of Justice, as well as state and local governments. In Europe, we are subject to regulatory oversight by the EMA and its various regulatory networks, including the European Commission through the Centralized Procedure, the National Competent Authority. We are also subject to the respective equivalents of these authorities in any foreign country or territory where we or our third-party collaborators research and develop product candidates, conduct clinical trials and seek to market and commercialize our products. Such foreign regulation may be equally or more demanding than corresponding United States regulation.

Government regulation substantially increases the cost and risk of researching, developing, manufacturing, marketing and commercializing of our product candidates. The regulatory review and approval process, which includes preclinical and nonclinical testing and clinical studies of each product candidate, is lengthy, expensive and uncertain. We and our collaborators, if any, must obtain and maintain regulatory authorization to conduct clinical studies and must obtain regulatory approval for each product that we intend to market. In addition, the facilities that we or our collaborators use to manufacture our product candidates must be inspected and meet legal requirements. In order to secure regulatory approval, we must submit extensive preclinical, nonclinical and clinical data and other supporting information for each proposed therapeutic indication in order to establish the product’s safety and efficacy. The development and approval process takes many years, requires substantial resources and may never lead to the approval of a product.

If we, our collaborators, or the contract manufacturers upon which we rely fail to comply with applicable regulatory requirements at any stage during the regulatory oversight or approval process, such noncompliance could result in various penalties or consequences, including: delays in, or refusal by the relevant regulatory agency to review, the approval of applications or supplements to approved applications; warning letters; fines; import or export restrictions; product recalls or seizures; injunctions or suspensions of manufacturing; withdrawals of previously-approved marketing applications or licenses; recommendations by the relevant regulatory authorities against our ability to enter into governmental contracts; civil penalties; and criminal prosecutions.

In addition, any product candidate for which we obtain marketing approval, along with the manufacturing processes, post-approval clinical data, labeling, packaging, distribution, adverse event reporting, storage, recordkeeping, export, import, advertising and promotional activities for such product, among other things, will be subject to extensive and ongoing requirements of and review by the FDA and comparable foreign regulatory authorities. These requirements include submissions of safety and other post-marketing information and reports, establishment registration and drug listing requirements, continued compliance with the FDA’s current good manufacturing practices (“cGMP”) requirements relating to manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements regarding the distribution of samples to physicians and recordkeeping and good clinical practice requirements for any clinical trials that we conduct post-approval.

Even if we successfully obtain regulatory approval for a particular product candidate, such approval could limit the indicated medical uses for the product, otherwise limit our ability to promote, sell and distribute the product, require that we conduct costly post-marketing surveillance, and require that we conduct ongoing, post-marketing studies. We could be required to undergo additional regulatory review and approval if we make changes to an approved product, such as, for example, by making formulation or manufacturing changes or revising our labeling of the product. Even if we receive regulatory approval for our product candidate, the relevant regulatory authority can withdraw its approval, such as, for example, if there is a later discovery of previously unknown problems or safety issues with the product.

The FDA may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information, imposition of post-market studies or clinical trials to assess new safety risks or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. The policies of the FDA, EMA and comparable foreign regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that it has obtained and it may not achieve or sustain profitability.

We are subject to extensive environmental, health and safety laws and regulations and our failure to comply with these requirements could subject us to substantial fines, penalties, or costs.

We and the CROs, contract manufacturers and other third parties with which we collaborate are subject to numerous environmental, health and safety laws and regulations in the United States, Israel, Europe and the jurisdictions where we operate. These requirements include, but are not limited to, those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations, particularly the development, formulation and testing of our product candidates, involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent over time. We cannot predict how and the extent to which such changes will impact our ability to operate, develop product candidates and conduct clinical trials, and cannot be certain of our future compliance.

In addition, we could incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions or liabilities, which could materially adversely affect our business, financial condition, results of operations and prospects.

We face potential product liability claims that, if successful, would subject us to substantial liability and costs, as well as potential revocation or other negative impacts to any regulatory approvals we receive.

The use of our product candidates in clinical trials and the sale of any product candidate for which we obtain marketing approval expose us to the inherent risk of product liability claims, and we will face an even greater risk if the approved products are sold commercially. We may receive product liability claims from patients, healthcare providers, pharmaceutical companies or other third parties that sell or otherwise come into contact with our products. In addition, our investigational product candidate, BST-236, or any other product candidates we are developing now or in the future, may induce adverse events. If we cannot successfully defend against product liability claims, we could incur substantial liability and costs. Product liability claims, regardless of their merit or eventual outcome, may result in the following:

Patients with the diseases that our investigational product candidate, BST-236, targets, including AML, ALL and MDS, are often already in severe and advanced stages of their disease and have both known and unknown significant pre-existing and potentially life-threatening health risks. For example, our target population for BST-236 includes older adults who are more susceptible to extreme side effects, including bone marrow suppression and infections, as well as adults whose medical conditions preclude their ability to handle the highly toxic effects of standard chemotherapy. During the course of treatment, patients may suffer adverse events, including death, for reasons that may be related to BST-236 or any other product candidates we may develop in the future. Such events could subject us to costly litigation, require us to pay substantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintain regulatory approval to market our products, or require us to suspend or abandon our commercialization efforts. Even in a circumstance in which we do not believe that an adverse event is related to our product candidates, the investigation into the circumstances may be expensive, time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approval process or impact and limit the type of regulatory approvals our product candidates receive or maintain. A product liability claim, even if successfully defended, could have a material adverse effect on our business, financial condition or results of operations.

We have acquired product liability insurance coverage, which includes coverage for human clinical trials, in Israel and in the US for our Phase 1/2a and Phase 2b studies, for BST-236, however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. We intend to expand our insurance coverage each time we commercialize an additional product; however, we may be unable to obtain product liability insurance on commercially reasonable terms or in adequate amounts. A successful product liability claim or series of claims brought against us could cause our share price to decline and, if judgments exceed our insurance coverage, could adversely affect our results of operations and business. Further, we may not be able to obtain insurance coverage that will be adequate to satisfy any liability that may arise.

Risks Related to Our Intellectual Property

If we are unable to obtain and maintain patent and other intellectual property protection for our product candidates, or if the scope of protection obtained is not sufficiently broad, we could be unable to compete effectively in our markets.

Our ability to compete effectively will depend, in part, on our ability to maintain the proprietary nature of the formulations, technology and manufacturing processes of the product candidates we are currently developing and will develop in the future. We rely on patents to establish our intellectual property rights and protect our product candidates. These legal means, however, afford only limited protection and may not adequately protect our rights. In certain situations and as considered appropriate, we have sought, and we intend to continue to seek to protect our proprietary position by filing patent applications in the United States and one or more countries outside the United States relating to current and future product candidates that are important to our business.

As of July 30, 2021, Biosight’s intellectual property portfolio consisted of 49 Patents/Patent Applications. Biosight currently owns all of its intellectual property. Biosight has filed patent applications in Australia, Brazil, Canada, China, Europe, France, Germany, India, Israel, Italy, Japan, Korea, Netherlands, Russia, Switzerland, United Kingdom, and the United States for Biosight’s investigational product candidate, BST-236. Biosight has filed patent applications in the US, EU, Israel, Australia, Brazil, Russia, India, Canada, China, Japan and Korea and intends to file additional applications in the US, EU, Israel, Australia, Brazil, Russia, India, Canada, China, Japan and Korea. Biosight’s patents in Australia, Europe, France, Germany, India, Israel, Italy, Netherlands, Russia, Switzerland, United Kingdom, and the United States have been granted, and Biosight’s patents in Australia, Brazil, Canada, China, Europe, Israel, Japan, Korea, and the United States remain pending. In addition, Advaxis owns or has the rights to several hundred patents and applications, which are owned, licensed from, or co-owned with Penn and Merck. Advaxis has obtained the rights to all future patent applications in this field originating in the laboratories of Dr. Yvonne Paterson and Dr. Fred Frankel, at the University of Pennsylvania. However, we cannot predict whether these applications and others we pursue will issue as patents, or whether the claims of any resulting patents will give us a competitive advantage or whether we will be able to successfully pursue patent applications in the future.

The patent application and approval process is expensive and time-consuming. We could fail to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We or any of our current and future third-party collaborators could fail to identify patentable aspects of inventions before it is too late to obtain patent protection on them. In such cases, we will miss potential opportunities to seek additional patent protection. It is possible that defects of form in the preparation or filing of patent applications could exist, such as, for example, with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments. If we fail to establish, maintain or protect patents and other intellectual property rights, they could be reduced or eliminated. If there are material defects in the form, preparation, prosecution or enforcement of our patents or patent applications, they could be invalid or unenforceable. Even if unchallenged, our patents and patent applications, if issued, may not provide us with any meaningful protection or prevent competitors from designing around our patent claims. For example, a third party could develop a competitive therapy that provides benefits similar BST-236 but that falls outside the scope of its patent protection. If the patent protection provided by the patents and patent applications we hold or pursue are not sufficiently broad to impede such competition, our ability to successfully commercialize our product candidates could be negatively affected.

Other parties and competitors, many of whom have greater resources and have made significant investments in advanced technologies, have developed or plan to develop product candidates that are compete with ours. These parties could file patent applications with claims that overlap or conflict with our applications, such as by claiming the same compositions, formulations or methods or by claiming subject matter. Our competitors could also seek to market generic versions of any approved products by submitting NDAs to the FDA in which they claim that our patents are invalid, unenforceable or not infringed. In these circumstances, we could be required to defend or assert our patents by filing lawsuits alleging patent infringement. A court or other agency with jurisdiction may find our patents invalid or unenforceable, or that our competitors are competing in a non-infringing manner. Thus, even if we have valid and enforceable patents, these patents still may not protect us from competitive product candidates.

The patent position of biotechnology companies is highly uncertain. In the United States and many foreign jurisdictions, there is no consistent policy regarding the breadth of claims allowed for biotechnology patents. In addition, determining patent rights for biotechnology and pharmaceutical compounds commonly involves complex legal and factual questions, which has, in recent years, been the subject of much litigation. In addition, the laws of foreign countries may protect our rights to the same extent as the laws of the United States. As a result, any patents we obtain may not provide us with patent protection sufficient to exclude others from commercializing product candidates similar to ours.

In the future, we and third parties may collaborate to in-license one or more of our product candidates. In some cases, the availability and scope of potential patent protection is limited based on prior decisions by our licensors or the inventors, such as decisions on when or whether to file patent applications. Our failure to obtain, maintain, enforce or defend such intellectual property rights, for any reason, could allow third parties to make competing products or impact our ability to develop, manufacture and market our products and product candidates, even if approved, on a commercially viable basis, if at all, which could have a material adverse effect on our business.

In addition to patent protection, we expect to rely on research, manufacturing and other know-how, trade secrets, license agreements and contractual provisions, many of which are difficult to protect. We seek protection in part by entering into confidentiality agreements with third parties who have access to proprietary information, but we cannot be certain that these agreements will not be breached, adequate remedies for any breach would be available, or our information will not otherwise become known to or be independently developed by our competitors. If we cannot protect our intellectual property rights, our product sales could suffer and we could fail to generate sufficient product revenue.

We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.

We also rely on trade secrets to protect our proprietary technologies, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. We rely in part on confidentiality agreements with our employees, consultants, outside scientific collaborators, sponsored researchers, and other advisors to protect our trade secrets and other proprietary information. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover our trade secrets and proprietary information. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

Some of the products developed by Advaxis are dependent upon license agreement with University of Pennsylvania (“Penn”); if we breach the license agreement and/or fail to make payments due and owing to Penn under the license agreement, our development may be materially and adversely affected.

Pursuant to the terms of Advaxis’ license agreement with Penn, which has been amended from time to time, Advaxis has acquired exclusive worldwide licenses for patents and patent applications related to its proprietary Listeria vaccine technology. The license provides Advaxis with the exclusive commercial rights to the patent portfolio developed at Penn as of the effective date of the license, in connection with Dr. Paterson and requires Advaxis to pay various milestone, legal, filing and licensing payments to commercialize the technology. As of October 31, 2020, Advaxis did not have outstanding payables to Penn. We can provide no assurance that we will be able to make all future payments due and owing thereunder, that such licenses will not be terminated or expire during critical periods, that we will be able to obtain licenses from Penn for other rights that may be important to it, or, if obtained, that such licenses will be obtained on commercially reasonable terms. The loss of any current or future licenses from Penn or the exclusivity rights provided therein could materially harm our business, financial condition and operating results.

If we are unable to obtain licenses needed for product candidates developed Advaxis, or if we breach any of the agreements under which Advaxis has licensed rights to patents or other intellectual property from third parties, we could lose license rights that are important to our business.

If we are unable to maintain and/or obtain licenses needed for the development of product candidates developed by Advaxis in the future, we may have to develop alternatives to avoid infringing on the patents of others, potentially causing increased costs and delays in drug development and introduction or precluding the development, manufacture, or sale of planned products. Some of the licenses that Advaxis has obtained provide for limited periods of exclusivity that require minimum license fees and payments and/or may be extended only with the consent of the licensor. We can provide no assurance that we will be able to meet these minimum license fees in the future or that these third parties will grant extensions on any or all such licenses. This same restriction may be contained in licenses obtained in the future.

Additionally, we can provide no assurance that the patents underlying any licenses will be valid and enforceable. To the extent any products developed by Advaxis are based on licensed technology, royalty payments on the licenses will reduce our gross profit from such product sales and may render the sales of such products uneconomical. In addition, the loss of any current or future licenses or the exclusivity rights provided therein could materially harm our business, financial condition and its operations.

Obtaining and maintaining patent protection depends on our ability to comply with various requirements of governmental patent agencies and, in some cases, receiving patent term extensions.

We are required to comply with a number of procedural, documentary, fee payment and other similar provisions during the patent application process and after a patent has issued in the United States and the foreign jurisdictions where we seek patent rights. For example, we are required to pay periodic maintenance fees, renewal fees, annuity fees and various other governmental fees to the United States Patent and Trademark Office (the “USPTO”) in the United States, as well as foreign governmental patent agencies, in several stages over the lifetime of the patents and applications. Our failure to comply can result in abandonment or lapse of the patent or patent application, which will result in partial or complete loss of patent rights in the relevant jurisdiction. In addition, the terms of any licenses we may enter into in the future may not give us the ability to maintain or prosecute patents in the portfolio, and in such cases, we will have to rely on third parties to prosecute on our behalf.

In some cases, we will seek to maintain our patent protection by extending the term of our issued patents. Patents and the protection they afford have a limited lifespan. For example, in the United States, if we timely pay all maintenance fees, the natural expiration of a patent is generally 20 years from its earliest United States non-provisional filing date. Once the life of any patent issued for a product candidate expires, that product candidate will become susceptible to competition from similar products, or products that seek to treat the same conditions. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents could expire before or shortly after we begin to commercialize those products, and in such cases, we will be unable to exclude our competitors from commercializing products similar or identical to ours.

Any issued patents covering BST-236 or our current and future product candidates could be eligible for limited patent extension in the United States under the Drug Price Competition and Patent Term Restoration Act of 1984, or Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process. The remaining term of a patent cannot be extended beyond a total of 14 years from the date of product approval, and can only be extended once and based on a single approved product. We could fail to receive an extension if we do not satisfy applicable requirements, including, for example, if we fail to: obtain a granted patent before approval of a product candidate; exercise due diligence during the testing phase or regulatory review process; apply within applicable deadlines; or apply prior to expiration of relevant patents. Moreover, the time period or the scope of patent protection we are afforded, if any, could be less than we request. If we do not obtain patent term extension or the term is less than we request, our competitors could obtain approval of competing product candidates following our patent expiration, and the competitiveness of our products could be significantly reduced. The expiration of our owned or licensed patents before completing the research and development of our product candidates and receiving all required approvals in order to sell and distribute the products on a commercial scale can adversely affect our business and results of operations.