Item 8.01. Other Events.
On April 21, 2020, the Company provided the following updates
regarding its clinical trials and business operations in light of the ongoing novel coronavirus (Covid-19) pandemic:
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The Company has taken steps in line with guidance from the U.S. Centers for Disease Control and Prevention (CDC) and the State
of New York to protect the health and safety of its employees and the community. In particular, the Company has implemented a work-from-home
policy for all employees and has restricted on-site activities to certain chemical, manufacturing and control (CMC) and clinical
trial activities. The Company is continuing to assess the impact of the Covid-19 pandemic to best mitigate risk and continue the
operations of its business.
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The Company is working closely with its clinical sites to monitor the potential impact of the evolving Covid-19 pandemic. The
Company remains committed to its clinical programs and development plans. As of now, the Company has not experienced any significant
delays to its ongoing or planned clinical trials. Notwithstanding the Company’s current expected timing and milestones, the
ability to continue to enroll patients, conduct patient follow-up and provide data readouts as planned may be impacted by the Covid-19
pandemic and is subject to rapid change as events proceed.
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A COVID-19 Investigational New Drug Application (IND) has been opened with the Food and Drug Administration (FDA) for AT-001,
a novel potent Aldose Reductase inhibitor in global Phase 3 development for Diabetic Cardiomyopathy. Multiple AT-001 investigator-initiated
trials are currently underway to address acute lung inflammation and cardiomyopathy in critical COVID-19 patients. Several New
York City hospitals have initiated Emergency Investigational Drug applications for AT-001 use in critical COVID-19 patients. AT-001
is currently being accessed in these New York City hospitals via “Named Patient” Emergency INDs or Investigator-Initiated
Trials, depending on the patient circumstance and hospital institution. Institutions that have initiated trials include Mount Sinai,
NYU, and Columbia. Data is being gathered through these studies on the effect of AT-001 therapy in critical COVID-19 patients.
Depending on the outcome of such studies, the Company may initiate a limited cost-effective company-sponsored study of AT-001 in
critical COVID-19 patients.
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The Company continues to characterize AT-007’s long-term safety in adult patients for the treatment of Galactosemia and
to evaluate a potential pediatric trial. The Company has not experienced any meaningful delays in treatment or evaluations of patients
in connection with this study. Many of the activities on the AT-007 program have been converted to home health visits.
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The Company is also continuing with its Phase 3 registrational trial for AT-001 in diabetic cardiomyopathy and has experienced
some delays in patient enrollment for this trial, particularly in study sites associated with hospitals. The Company is taking
actions to mitigate the impact of these delays on the timeline for the study, including adding additional study sites globally.
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In addition, in light of recent developments relating to the
Covid-19 pandemic, the Company is amending and restating the risk factor titled “Our business may be adversely affected by
the recent coronavirus outbreak” previously disclosed in Part I., Item 1A. of its Annual Report on Form 10-K for
the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission on March 13, 2020, as follows:
Our business may be adversely affected
by the recent coronavirus outbreak.
In December 2019, a novel strain of coronavirus, referred to
as 2019-ncov, Covid-19 coronavirus epidemic, or Covid-19, was reported to have surfaced in Wuhan, China. Covid-19 has since spread
globally, including the United States where we have our executive offices and principal operations. Infections and deaths related
to Covid-19 have disrupted the United States’ healthcare and healthcare regulatory systems. Such disruptions could divert
healthcare resources away from, or materially delay FDA approval with respect to, our clinical trials. It is unknown how long these
disruptions could continue. In addition, other known and unknown factors caused by Covid-19 could materially
delay our clinical trials, including our ability to recruit and retain patients and principal investigators and site staff who,
as healthcare providers, may have heightened exposure to Covid-19. For example, with respect to our trials related to AT-001 for
the treatment of Diabetic Cardiomyopathy, we have experienced delays in patient enrollment. Though we have undergone efforts to
mitigate such delays, such efforts may not entirely avoid the effects of Covid-19 on our trials. Furthermore, we may experience
additional delays in patient enrollment that we may not be able to mitigate. In addition, we have partnered with clinical research
organizations, or CROs, to conduct clinical studies in jurisdictions, such as the EU, that have been affected by the spread of
Covid-19. There is a possibility that such CROs may become unavailable or that the clinical trials they manage may be delayed due
to Covid-19 or containment efforts associated with it. Such events may lead to termination of our relationship with affected CROs,
affecting the development and study of our product candidates. Any elongation or de-prioritization of our clinical trials or delay
in regulatory review resulting from such disruptions could materially affect the development and study of our product candidates,
and increase the costs related to such development.
Government response to Covid-19 may also materially impact our
business. Our executive offices and principal operations are located in New York and are currently subject to a statewide stay-at-home order.
In addition, many of our potential partners and study participants worldwide are similarly impacted. In response, we have implemented
a work-from-home policy for all employees and have restricted on-site activities to certain chemical, manufacturing and control
(CMC) and clinical trial activities. However, many of our clinical trials sites and certain of our vendors, including our third-party
contract manufactures, currently rely on exemptions from stay-at-home, shelter-in-place or similar orders for certain
operations. Any of the applicable exemptions may be curtailed or revoked, which would further adversely impact our business.
In addition, we have in the past and may in the future
source equipment and materials from China and other countries affected by Covid-19. If we were to engage with third party
manufacturers in such countries in the future, there would be an increased risk of supply interruption, resulting in
business/operational disruption. Covid-19’s spread, which has caused a broad impact globally, such as restrictions on
travel and quarantine policies put into place by businesses and governments, may materially affect us economically. While the
potential long-term economic impact of the Covid-19 pandemic may be difficult to assess or predict, there has already been a
significant disruption of the global financial markets and the world economy, including the United States economy. A
prolonged recession or market correction resulting from the spread of Covid-19 could materially affect our business and the
value of our common stock, and reduce our ability to access capital, which could in the future negatively affect our
liquidity.
While it is too early to tell whether Covid-19 will have a material
effect on our business over time, we continue to monitor the situation as it unfolds. The extent to which Covid-19 impacts our
results will depend on many factors and future developments, including new information about Covid-19 and any new government regulations
which may emerge to contain the virus, among others.
This Form 8-K contains “forward-looking
statements” that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private
Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, included herein regarding
strategy, future operations, prospects, plans and objectives of management, including words such as “may,”
“will,” “expect,” “anticipate,” “plan,” “intend,” and similar
expressions (as well as other words or expressions referencing future events, conditions or circumstances) are
forward-looking statements. These include, without limitation, statements regarding (i) the design, scope and results of our
clinical trials, (ii) the timing of the initiation and completion of our clinical trials, including that the Company may
initiate a limited cost-effective company-sponsored study of AT-001 in critical COVID-19 patients, (iii) the likelihood that
data from our clinical trials will support future development of our product candidates, (iv) the likelihood of obtaining
regulatory approval of our product candidates and qualifying for any special designations, such as orphan drug designation,
(v) our cash runway and the timing of our clinical development plan and (vi) the impact of the COVID-19 pandemic on the
timing and progress of our ongoing clinical trials and our business in general. Forward-looking statements in this Form 8-K
involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or
implied by the forward-looking statements, and we, therefore cannot assure you that our plans, intentions, expectations or
strategies will be attained or achieved. Such risks and uncertainties include, without limitation, the uncertainties inherent
in the initiation, execution and completion of clinical trials, in the timing of availability of trial data, in the results
of the clinical trials, in the actions of regulatory agencies, in the commercialization and acceptance of new therapies as
well as the impact of the COVID-19 pandemic on these plans and expectations. Factors that may cause actual results to differ
from those expressed or implied in the forward-looking statements in this Form 8-K are discussed in our filings with the U.S.
Securities and Exchange Commission, including the “Risk Factors” contained therein. Except as otherwise required
by law, we disclaim any intention or obligation to update or revise any forward-looking statements, which speak only as of
the date they were made, whether as a result of new information, future events or circumstances or otherwise.