ACHN 2017 Annual Report

such sales, marketing, manufacturing and distribution are not the responsibility of a future collaborator. Accordingly, we will need to obtain additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we may be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts. We will be required to expend significant funds in order to advance the development of our complement factor D inhibitor platform. In addition, while we may seek one or more collaborators for future development of our drug candidates, we may not be able to enter into a collaboration for any of our drug candidates on suitable terms or at all. In any event, our existing cash, cash equivalents and marketable securities 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 drug candidates. Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources. We do not have any committed external source of funds. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. Furthermore, as a result of the termination of the Janssen Agreement, we will not receive any future milestone-based or royalty payments under that arrangement. We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2017, will enable us to fund our current projected operating requirements for at least the next 12 months. Our estimate as to how long we expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Further, changing circumstances, some of which may be beyond our control, could cause us to consume capital significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned. Our future funding requirements, both short-term and long-term, will depend on many factors, including: • the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our drug candidates; • our ability to realize the planned cost savings benefits of the restructuring we implemented in February 2018, which included a significant reduction in our workforce; • our ability to enter into and the terms and timing of any collaborations, licensing or other arrangements that we may establish; • the number of future drug candidates that we pursue and their development requirements; • the outcome, timing and costs of seeking regulatory approvals; • the costs of commercialization activities for any of our drug candidates that receive marketing approval to the extent such costs are not the responsibility of any collaborators, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities; • subject to receipt of marketing approval, revenue, if any, received from commercial sales of our drug candidates; • our headcount growth and associated costs as we seek to expand our research and development and establish a commercial infrastructure; • the costs involved in preparing, filing, prosecuting, maintaining, enforcing and defending patent and other intellectual property rights and defending against intellectual property-related claims; • our ability to raise debt or equity capital, including any changes in the credit or equity markets that may impact our ability to obtain capital in the future; • the costs associated with, and the outcome of, lawsuits against us, if any; • our acquisition and development of new technologies and drug candidates; and • competing technological and market developments, including those currently unknown to us. 47