RISK FACTORS 4 carry out the production of our preclinical study, clinical trial and to extensive regulation. For example, components of a finished commercial materials. We can control only certain aspects of therapeutic product approved for commercial sale or used in these third-party activities. late-stage clinical trials must be manufactured in accordance with cGMP requirements. These regulations govern manufacturing Under certain circumstances, Brammer, Lonza and Novasep are processes and procedures, including record keeping, and the entitled to terminate their engagements with us. If we need to implementation and operation of quality systems to control enter into alternative arrangements, it could delay our product and assure the quality of investigational products and products development activities. Our reliance on Brammer, Lonza and approved for sale. Poor control of production processes can lead Novasep for certain manufacturing activities will reduce our control to the introduction of outside agents or other contaminants, or over these activities but will not relieve us of our responsibility to inadvertent changes in the properties or stability of product to ensure compliance with all required regulations. If Brammer, candidates that may not be detectable in final product testing. We Lonza or Novasep do not successfully carry out their contractual must supply all necessary documentation in support of a BLA or duties, meet expected deadlines or manufacture our clinical trial other marketing authorization application on a timely basis and materials in accordance with regulatory requirements, or if there must adhere to the FDA’s and the EMA’s cGMP requirements. are disagreements between us and Brammer, Lonza or Novasep, we will not be able to complete, or may be delayed in completing, the In addition, the regulatory authorities may, at any time following preclinical studies required to support future IND submissions and approval of a product for sale, audit the manufacturing facilities the clinical trials required for approval of our product candidates. In for such product. If any such inspection or audit identifies a failure such instances, we would need to find an appropriate replacement to comply with applicable regulations, or if a violation of product third-party relationship, which may not be readily available or on specifications or applicable regulations occurs independent of acceptable terms, causing additional delay or increased expense such an inspection or audit, the relevant regulatory authority may prior to the approval of our product candidates. require remedial measures that may be costly or time-consuming to implement and that may include the temporary or permanent In addition to Brammer, Lonza or Novasep, we rely on additional suspension of a clinical trial or commercial sales or the temporary third parties to manufacture ingredients of our product or permanent closure of a manufacturing facility. Any such candidates and to perform quality testing, and reliance on these remedial measures imposed upon a third-party manufacturer or third parties rather than manufacturing the product candidates us could materially harm our business, financial condition, results ourselves, exposes us to additional risks, including: of operations and prospects. • reduced control for certain aspects of manufacturing activities; If any of our third-party manufacturers fails to comply with • termination or nonrenewal of such manufacturing agreements applicable cGMP regulations, the FDA, the EMA and other in a manner or at a time that is costly or damaging to us; and regulatory authorities can impose regulatory sanctions including, • disruptions to the operations of our third-party manufacturers among other things, refusal to approve a pending application for caused by conditions unrelated to our business or operations, a new product candidate or suspension or revocation of a pre- including the bankruptcy of the manufacturer or service existing approval. Such an occurrence may cause our business, provider. financial condition, results of operations and prospects to be Any of these events could lead to clinical trial delays or failure to materially harmed. obtain regulatory approval, or impact our ability to successfully Additional ly, if supply from our third-party manufacturer is commercialize future product candidates. Some of these events interrupted, there could be a significant disruption in commercial could be the basis for FDA, EMA or other regulatory authority supply of our products. We do not currently have a backup action, including injunction, recal l, seizure or partial or total manufacturer of our product candidate supply for clinical suspension of product manufacture. trials. An alternative manufacturer would need to be qualified, Failure to comply with regulatory requirements related to through a supplement to its regulatory filing, which could result manufacturing could result in suspension or delay of commercial in further delay. For example, for our GS010 product candidate, sales. in 2018, in anticipation of commercial launch, we transferred manufacturing technology from a third-party manufacturer that In the future, we may rely on third parties’ manufacturing fulfilled our preclinical, Phase I , Phase I I and Phase I I I product facilities for commercial supplies of our product candidates, and candidate supply and product requirements to a new third-party the facilities and quality systems of such parties must pass an manufacturer, BrammerBio. Any failure or delay of this new third- inspection for compliance with the applicable regulations as a party manufacturer to successfully and timely produce adequate condition of regulatory approval. This is because the preparation supply would result in potentially significant delays to our GS010 of therapeutics for clinical trials or commercial sale is subject clinical development and commercialization plan. GENSIGHT BIOLOGICS – 2017 Registration Document– 33