46 We contra t ct with i third parties for the manufa u cture of materialsl for our product candid d at d es t and preclin l ical studie d s and clin l ical trials and for commercializa i tion of any n product candid d at d es t that we may a develop. l This reliance on third parties carries and may a increase the risk i that we will i not have suffi u cient quantitie i s of such materials, l product candid d at d es t or any n medicine i s that we may a develop o and commercialize, or that such suppl u yl will i not be availa i blel to us at an acceptablel cost,t which couldl delay, a prevent or impa m ir our developm l ent or commercializa i tion effo f rts. t We do not have any manufac f turing facilities. We currently rely exclusively on a third-party manufact f ur t er, Lonza AG, for the manufact f ur t e of our materials for preclinical studi t es and clinical trials and expect to continue to do so for preclinical studi t es, clinical trials and for commercial suppl u y of any product candidates that we may develop. We may be unabl a e to establ a ish any further agreements with third-party manufac f turers or to do so on acceptable terms. Even if we are able to establ a ish agreements with third-party manufact f ur t ers, reliance on third-party manufac f turers entails additional risks, including: • the possible breach of the manufact f ur t ing agreement by the third party or us; • the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; • the possible early termination of the agreement by us at a time that requires us to pay a cancellation fee; • reliance on the third party for regulatory r compliance, quality assurance, safety and pharmacovigilance and related reporting; and • the inability to produce required volume in a timely manner and to quality standards. Third-party manufact f ur t ers may not be able to comply with cGMP regulations or similar regulatory r requirements outside the United States. Our failure, or the failure of our third-party manufact f ur t ers, to comply with applicable regulations could result in clinical holds on our trials, sanctions being imposed on us, including fines, inju n nctions, civil penalties, delays, suspension or withdrawal of approvals, license revocations, seizures or recalls of product candidates or medicines, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affe f ct suppl u ies of our medicines and harm our business, financial condition, results of operations, and prospects. Any medicines that we may develop may compete with other product candidates and products for access to manufac f turing facilities. There are a limited number of manufact f ur t ers that operate under cGMP regulations and that might be capable of manufact f ur t ing for us. Any performance failure on the part of our existing or future manufact f ur t ers could delay clinical development or marketing approval. We do not currently have arrangements in place for redundant suppl u y for any of our product candidates. If any one of our current contract manufact f ur t ers cannot perform as agreed, we may be required to replace that manufact f ur t er and may incur added costs and delays in identifyi f ng and qualifyi f ng any such replacement. Furthermore, securing and reserving production capa a city with contract manufact f ur t ers may result in signific f ant costs. Our current and anticipated future reliance upon others for the manufact f ur t e of any product candidates we may develop or medicines may adversely affe f ct our future profit f margins and our ability to commercialize any medicines that receive marketing approval on a timely and competitive basis. Reliance on third parties requires us to share our trade secrets, t which increases the possibili i ty i that a competito t r will i disc i over them or that our trade secretst will i be misa i ppr a opriated or disc i losed. Reliance on third parties to conduc d t clinical trials, assist in research and development and to manufact f ur t e our product candidates, will at times require us to share trade secrets with them. We seek to protect our proprietary technology by in part entering into confid f entiality agreements and, if applicable, material transfer f agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confid f ential information, including our trade secrets. Despite the contractua t l provisions employed when working with third parties, the need to share trade secrets and other confid f ential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s independent discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effe f ct on our business.