ANNUAL REPORT FY23 23 (b) Commercialisation The Group’s current business strategy is early-stage drug development, which may include a trade sale or license of its drug candidates to a third party with greater resources and expertise to undertake late-stage drug development, regulatory approvals, and sales and marketing. There is no certainty that any of the drug candidate will be of interest to such a third party or, if a drug candidate is of interest to such a third party, that terms can be negotiated that are commercially acceptable to the Group or will adequately realise the value of the drug candidate. (c) Additional capital requirements R&D activities require a high level of funding over a protracted period of time. However, additional development costs may arise during this period and the Company may require additional funding to meet its stated objectives or may decide to accelerate or diversify its activities within the same area The Company’s requirement for additional capital may be substantial and will depend on many factors, some of which are beyond the Company’s control, including: (1) slower than anticipated research progress; (2) the requirement to undertake additional research; (3) competing technological and market developments; (4) the cost of protecting the Company’s intellectual property. The Company will constantly evaluate data arising from its R&D activities that may indicate new uses for its products and allow the Company to file patents, thereby providing potential new development and partnering opportunities. Accordingly, the Company may alter its funding strategies to take advantage of such new opportunities if and when they present themselves. There is no assurance that the funding required by the Company from time to time to meet its business requirements and objectives will be available to it, on favourable terms or at all. To the extent available, any additional equity financing may dilute the holdings of existing shareholders and any debt financing may involve restrictions on the Company’s financing and operating activities. If the Company is unsuccessful in obtaining funds when required, it may be necessary for it to reduce the scope of its operations. (d) Intellectual property rights Obtaining, securing and maintaining the Group’s intellectual property rights is an integral part of securing potential value arising from conduct of the Group’s business. If patents are not granted, or if granted only for limited claims, the Group’s intellectual property may not be adequately protected and may be able to be copied or reproduced by third parties. The Group may not be able to achieve its objectives, to commercialise its products or to generate revenue or other returns. The Group has been granted patents in the US and Europe in relation to its Cholesterol Lowering Program and also has a provisional patent application under examination. The Company’s brain injury drug candidate will be the subject of a provisional patent application in due course. The patent position of biotechnology and pharmaceutical companies can be highly uncertain and frequently involves complex legal and factual questions. Accordingly, there can be no guarantee that the provisional patent applications will be successful and lead to granted patents or all of the claims in any application will be granted. Furthermore, should such applications be granted, there is no guarantee competitors will not develop technology to avoid those patents, or that third parties will not seek to claim an interest in the intellectual property with a view to seeking a commercial benefit from the Group. The Group has engaged patent attorneys to advise on its intellectual property strategy as it seeks to broaden the Group’s patent protection to enable it to guard its exclusivity, maintain an advantage over competitors and provide it with a basis for enforcement in the event of infringement, but there is no guarantee that this intellectual property strategy will be successful. There also can be no assurance employees, consultants or third parties will not breach their confidentiality obligations or not infringe or misappropriate the Group’s intellectual property. The Group seeks to mitigate the risk of unauthorised use of its intellectual property by limiting disclosure of sensitive material to particular employees, consultants and others on a need to know basis. Where appropriate, parties having potential access to such sensitive material will be required to provide written commitments to confidentiality and ownership of intellectual property.
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