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PARATEK PHARMACEUTICALS, INC. filed this Form 10-Q on 05/09/2018
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We have not completed development of any product candidates. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially as we:


conduct additional clinical trials of omadacycline;


seek regulatory approvals for omadacycline;


establish a sales, marketing and distribution infrastructure and increases to our manufacturing demand and capabilities to commercialize omadacycline; and


add personnel to support our product development and planned commercialization efforts.

Based upon our current operating plan, we anticipate that our existing cash, cash equivalents and marketable securities of $184.3 million as of March 31, 2018 as well as the $158.8 million in net proceeds from our April 2018 convertible notes offering, future contingent regulatory and commercial milestone payments from our collaborations with Allergan and Zai, and estimated omadacycline product sales, if omadacycline is approved by the FDA on its anticipated timeline, will enable us to fund our operating expenses and capital expenditure requirements through the first quarter of 2021. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, and the unknown extent to which we will enter into collaborations with third parties to participate in the development and commercialization of our product candidates, we are unable to estimate with certainty the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials. Our future capital requirements will depend on many factors, including:


the progress of clinical development of omadacycline;


the number and characteristics of other product candidates that we pursue;


the scope, progress, timing, cost and results of research, preclinical development and clinical trials;


the costs, timing and outcome of seeking and obtaining FDA and non-U.S. regulatory approvals;


the costs associated with manufacturing and establishing sales, marketing and distribution capabilities;


our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in connection with the licensing, filing, defense and enforcement of any patents or other intellectual property rights;


our need and ability to hire additional management, scientific and medical personnel;


the effect of competing products that may limit market penetration of our product candidates;


our need to implement additional internal systems and infrastructure, including financial and reporting systems; and


the economic and other terms, timing and success of our existing collaboration and licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future, including the timing of receipt of any milestone or royalty payments under such arrangements.

Until we can generate a sufficient amount of product revenue to finance our cash requirements, we expect to finance our future cash needs primarily through a combination of public or private equity offerings, debt or other structured financings, strategic collaborations and grant funding. We do not have any committed external sources of funds other than contingent milestone payments and royalties under the Allergan Collaboration Agreement and the Zai Collaboration Agreement, which are terminable by Allergan and Zai, respectively, upon prior written notice. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect stockholders’ rights. Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with generally accepted accounting principles of the United States of America.