ANNUAL REPORT FY2025 21 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 Consolidated Entity. The Consolidated Entity has engaged patent attorneys to advise on its intellectual property strategy as it seeks to broaden the Consolidated Entity'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 Consolidated Entity's intellectual property. The Consolidated Entity 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. (e) Third party intellectual property infringement claims The Consolidated Entity's success depends, in part, on its ability to enforce and defend its intellectual property against third party challengers. The Consolidated Entity believes that the manner in which it proposes to conduct activities will minimise the risk of infringement upon another party’s patent rights. However, there can be no assurance that another party will not seek to claim a Consolidated Entity is infringing upon their rights. While the Consolidated Entity relies on the advice of its patent attorneys that its patent applications do not infringe third party patents, the Company is unable to state with certainty that another party will not claim its rights are infringed or, if litigation claiming that a Consolidated Entity Company is infringing the intellectual property rights of a third party is launched, what the result of any such litigation will be. While the Consolidated Entity is pursuing clinical development and commercialisation strategies that it believes will minimise the risk of patent infringement, there can be no certainty that there will not be action taken against a Consolidated Entity, although each Consolidated Entity is prepared to defend its position in a forthright manner if required. Further, there can be no guarantee that competitors will not seek to claim an interest in the intellectual property with a view to seeking a commercial benefit from the Consolidated Entity. If a third-party claims that a Consolidated Entity is infringing its intellectual property rights or commences litigation against that Consolidated Entity for infringement of patent or other intellectual property rights, the Consolidated Entity may incur significant costs defending such action, whether or not it ultimately prevails. Patent litigation in the pharmaceutical and biotechnology industry is typically expensive and any defence against any such action necessarily will divert the time of the Company’s Directors and other key personnel. This may, in turn, have a materially adverse effect on both the financial performance and future prospects of the Consolidated Entity. In addition, parties making claims against a Consolidated Entity may obtain injunctive or other relief to prevent that Consolidated Entity from further developing or commercialising its products. In the event that a successful claim of infringement is made out against a Consolidated Entity, it may be required to pay damages and obtain one or more licences from the prevailing third party. If it is not able to obtain these licences at a reasonable cost, if at all, it may suffer the loss of the prospective drug asset, which in turn may lead a Consolidated Entity to encounter delays and lose substantial resources while seeking to develop alternative product. (f) Risk of delay The Consolidated Entity may experience delays in achieving a number of critical milestones in the development of its drug candidates due to unforeseen delays in contracted works, non-performance or loss of contractors or delay in obtaining regulatory approvals from hospital ethics committees or government agencies for the conduct of preclinical and clinical studies. Any material delays may impact adversely upon the Consolidated Entity, including increasing anticipated costs. The Consolidated Entity is also dependent on its ability to secure sites and patients for the conduct of its clinical trial program. If the Consolidated Entity is unable to engage clinical trial site providers on commercially acceptable terms, or difficulties arise in procuring patients to fill the clinical trials, progress of the Consolidated Entity's clinical program will be delayed.
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