APLS 2017 Annual Report

35 Scientific Advisory Boards Our scientific advisory board includes physicians and scientists recognized as authorities in the areas of hematology, neurology, ophthalmology and pulmonology. Our scientific advisory board meets annually and provides scientific and clinical insights and strategic guidance to us as we continue to advance our product candidates through research and development. Employees As of February 28, 2018, we had 39 full-time or part-time employees, including three employees with M.D./Ph.D. degrees, one employee with M.D. degree and four employees with Ph.D. degrees. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider the relationship with our employees to be good. Item 1A. Risk Factors. Careful consideration should be given to the following risk factors, in addition to the other information set forth in this Annual Report on Form 10-K and in other documents that we file with the SEC, in evaluating our company and our business. Investing in our common stock involves a high degree of risk. If any of the following risks actually occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected. The risks described below are not the only risks facing us. Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, results of operations and/or prospects. Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant losses since inception, expect to incur significant and increasing losses for at least the next several years, and may never achieve or maintain profitability. We have incurred significant annual net operating losses in every year since our inception. We expect to continue to incur significant and increasing net operating losses for at least the next several years. Our net losses were $46.5 million, $27.1 million and $51.0 million for the years ended December 31, 2015, 2016 and 2017, respectively. As of December 31, 2017, we had an accumulated deficit of $149.3 million. We have not generated any revenues from product sales, have not completed the development of any product candidate and may never have a product candidate approved for commercialization. We have financed our operations to date primarily through the sale of our common stock in our initial public offering and through private placements of our preferred stock. We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and our clinical trials. Our net losses may fluctuate significantly from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we: • continue to develop and conduct clinical trials in our current and new indications with our lead product candidate, APL-2; • initiate and continue research and preclinical and clinical development efforts for any future product candidates; • seek to identify and develop additional product candidates for complement-dependent diseases; • seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any; • establish sales, marketing, distribution and other commercial infrastructure in the future to commercialize any products for which we may obtain marketing approval; • require the manufacture of larger quantities of product candidates for clinical development and, potentially, commercialization; • maintain, expand and protect our intellectual property portfolio; • hire and retain additional personnel, such as clinical, quality control and scientific personnel; • add operational, financial and management information systems and personnel, including personnel to support our product development and help us comply with our obligations as a public company; and • add equipment and physical infrastructure to support our research and development programs.