AKAO 2017 Annual Report

38 Item 1A. Risk Factors. Risks Related to Our Business and Capital Requirements We have a limited operating history, have incurred net losses in each year since our inception and anticipate that we will continue to incur significant losses for the foreseeable future, and if we are unable to achieve and sustain profitability, the market value of our common stock will likely decline. We are a late-stage biopharmaceutical company with a limited operating history. We have not generated any revenue from the sale of products and have incurred losses in each year since we commenced operations in 2004. All of our product candidates are in development, and none has been approved for sale. In the years ended December 31, 2017, 2016 and 2015, we derived all of our revenue from non-profit foundation and government contracts for research and development. We will seek continued revenue from such contracts and additional sources of public health funding. Revenues from such contracts and other sources can be uncertain because milestones or other contingent payments under them may not be achieved or received. In addition, we may not be able to enter into other contracts that will generate significant cash. Our net losses for the years ended December 31, 2017, 2016 and 2015 were $125.6 million, $71.2 million and $27.1 million, respectively. As of December 31, 2017, we had an accumulated deficit of $372.8 million. We expect to continue incurring significant expenses and increasing operating losses for the foreseeable future as we seek marketing approvals from the U.S. Food and Drug Administration (“FDA”) and similar regulatory authorities outside the United States, build commercial supply and conduct pre-commercial launch activities for plazomicin, and continue the development of our other product candidates, including C-Scape. Our expenses will also increase substantially if and as we: • conduct additional clinical trials for our product candidates; • continue to discover and develop additional product candidates; • establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval; • establish a manufacturing and supply chain sufficient for commercial quantities of any product candidates for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, scientific and commercial personnel; • add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts, as well as operating as a public reporting company; and • acquire or in-license other product candidates and technologies. If our product candidates fail to demonstrate safety and efficacy in clinical trials, do not gain regulatory approval, or do not achieve market acceptance following regulatory approval and commercialization, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. If we are unable to achieve and sustain profitability, the market value of our common stock will likely decline. Because of the numerous risks and uncertainties associated with developing biopharmaceutical products, we are unable to predict the extent of any future losses or when, if ever, we will become profitable.