What changed in this filing

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Item 1A. Risk Factors

2023-11-02 compared with 2023-08-03 · 76 added, 68 removed, 840 unchanged (15% of the section changed)

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In December 2022, with the passage of the Food and Drug Omnibus Reform Act, Congress required sponsors to develop and submit a diversity action plan for each phase 3 clinical trial or any other "pivotal study" of a new drug product.

These plans are meant to encourage enrollment of more diverse patient populations in late-stage clinical trails of FDA-regulated products.

These plans are meant to encourage enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.

If we are not able to adhere to these new requirements, our ability to conduct clinical trials may be delayed or halted.

In addition, some of our competitors may have ongoing or planned clinical trials for product candidates that would treat the same indications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of our competitors’ product candidates.

For example, Rocket Pharma LTD, or Rocket Pharma, is developing a gene therapy targeting PK deficiency;

Vertex Pharmaceuticals Incorporated, or Vertex, with CRISPR Therapeutics, or CRISPR, is developing a gene therapy targeting SCD;

bluebird bio, Inc., or bluebird, is developing a gene therapy targeting SCD (for which they have a Prescription Drug User Fee Act goal date of December 20, 2023 for their Biologics License Application) and transfusion dependent beta thalassemia;

For example, Vertex Pharmaceuticals Incorporated, or Vertex, with CRISPR Therapeutics, or CRISPR, is developing gene therapies targeting SCD (for which they have a Prescription Drug User Fee Act goal date of December 8, 2023 for their Biologics License Application) and transfusion dependent beta thalassemia (for which they have a Prescription Drug User Fee Act goal date of March 30, 2024 for their Biologics License Application);

bluebird bio, Inc., or bluebird, is developing gene therapies targeting SCD (for which they have a Prescription Drug User Fee Act goal date of December 20, 2023 for their Biologics License Application) and transfusion dependent beta thalassemia;

Novo Nordisk is developing molecules for the treatment of alpha and beta thalassemia, SCD and LR MDS;

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Silence Therapeutics, or Silence, is developing a treatment for alpha and beta non-transfusion dependent thalassemia;

Merck & Co., Inc, or Merck, with Bristol-Myers Squibb Company, or BMS, are developing a treatment for alpha thalassemia and LR MDS patients that are ESA naïve;

Fibrogen, Inc., with AstraZeneca PLC is developing roxadustat for the treatment of anemia in MDS patients;

Geron Corporation, or Geron, is developing imetelstat for the treatment of LR MDS;

Roivant Sciences, or Roviant, is developing RVT-2001 (licensed from Eisai Co., Ltd.) for the treatment of transfusion-dependent anemia in patients with LR MDS;

Keros Therapeutics, or Keros, is developing KER-050 for the treatment of transfusion related iron overload in LR MDS;

Merck & Co., Inc, or Merck, with Bristol-Myers Squibb Company, or BMS, are developing a treatment for alpha thalassemia and LR MDS patients that are ESA naïve and non-transfusion dependent;

Geron Corporation, or Geron, is developing imetelstat for the treatment of LR MDS (for which they have a Prescription Drug User Fee Act goal date of June 16, 2024 for their New Drug Application);

Roivant Sciences, or Roviant, is developing a treatment (licensed from Eisai Co., Ltd.) for transfusion-dependent anemia in patients with LR MDS;

Keros Therapeutics, or Keros, is developing treatments for anemia in LR MDS;

BioMarin Pharmaceutical Inc., or BioMarin, PTC Therapeutics, Inc., or PTC, Synlogic, Inc., or Synlogic, and Jnana Therapeutics, Inc., or Jnana, are developing therapies to treat PKU;

Homology Medicines Inc., or Homology, is developing a gene therapy targeting PKU;

and Protagonist Therapeutics, or Protagonist, Ionis Pharmaceuticals, Inc., or Ionis, and Silence are developing therapies to treat PV.

and Protagonist Therapeutics, or Protagonist, Ionis Pharmaceuticals, Inc., or Ionis, Silence and Merck are developing

therapies to treat PV.

Competition for eligible patients may make it particularly difficult for us to enroll a sufficient number of patients to complete our clinical trials for our product candidates in a timely and cost-effective manner.

In addition, we have a small number of clinical trial sites for certain clinical trials in the Middle East, including in Lebanon and Israel, that could be affected by the current armed conflict in Israel and the Gaza Strip.

We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance.

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It is possible that our clinical trials, or those of any collaborators, may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.

If, following approval of a product candidate, including PYRUKYND®, we, or others, discover that the product is less effective than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur:

If, following approval of a product candidate, including PYRUKYND®, we, or others, discover that the product is less effective

than previously believed or causes undesirable side effects that were not previously identified, any of the following adverse events could occur:

• regulatory authorities may withdraw their approval of the product or seize the product;

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To achieve commercial success for approved medicines for which we retain sales and marketing responsibilities, we must either develop a sales and marketing organization or outsource these functions to other third parties.

Although we have established sales and marketing capabilities to support our commercial launch of PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States and we are currently providing access to PYRUKYND® free of charge for eligible patients in the EU and Great Britain through a global managed access program, we may need to further build our sales and marketing infrastructure, either directly or with a third-party partner, to maintain our ongoing commercialization efforts and to commercialize PYRUKYND® in other indications or outside of the United States or to commercialize any of our other product candidates for which we obtain marketing approval.

We have established sales and marketing capabilities to support our commercial launch of PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States.

In addition, in connection with our regulatory approvals in the EU and Great Britain, we are currently providing access to PYRUKYND® free of charge for eligible patients in those jurisdictions.

We may provide access to PYRUKYND® for adult patients with PK deficiency in other jurisdictions upon request through the global managed access program, on either a free of charge or for charge basis.

We may need to further build our sales and marketing infrastructure, either directly or with a third-party partner, to maintain our ongoing commercialization efforts and to commercialize PYRUKYND® in other indications or outside of the United States or to commercialize any of our other product candidates for which we obtain marketing approval.

There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services.

For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch.

If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses.

commercialization expenses.

This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

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Potential competitors may include major pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing our product or our product candidates, such as PK deficiency, thalassemia, SCD, LR MDS and PKU.

For example, Merck and BMS are marketing therapies to treat beta thalassemia and LR MDS and are conducting clinical trials for alpha thalassemia and LR MDS patients that are ESA naïve;

bluebird is marketing a gene therapy to treat beta thalassemia and is developing a gene therapy to treat SCD;

Novartis International AG, or Novartis, Emmaus Life Sciences and Pfizer are each marketing therapies to treat SCD, with Novartis and Pfizer continuing to conduct clinical trials for therapies in SCD;

For example, Merck and BMS are marketing a therapy to treat beta thalassemia and LR MDS and are conducting clinical trials for alpha thalassemia and LR MDS patients that are ESA naïve and non-transfusion dependent;

bluebird is marketing a gene therapy to treat transfusion dependent beta thalassemia and is developing a gene therapy to treat SCD (for which they have a Prescription Drug User Fee Act goal date of December 20, 2023 for their Biologics License Application);

Novartis International AG, or Novartis, Emmaus Life Sciences, and Pfizer are each marketing therapies to treat SCD, with Pfizer continuing to conduct clinical trials for therapies in SCD;

BioMarin is marketing and conducting clinical trials for therapies to treat PKU;

Novo Nordisk is conducting clinical trials for the treatment of alpha and beta thalassemia, SCD and LR MDS;

Vertex, with CRISPR, is conducting clinical trials of a gene therapy targeting SCD and beta thalassemia, Fulcrum is conducting clinical trials for a potential treatment for SCD;

Silence is conducting clinical trials for a potential treatment for alpha and beta non-transfusion dependent thalassemia;

Geron, Roivant and Keros are conducting clinical trials for potential treatments for LR MDS;

Rocket Pharma is conducting a clinical trial of a gene therapy targeting PK deficiency;

PTC, Synlogic, and Jnana are conducting clinical trials for potential treatments for PKU, Homology is conducting clinical trials for a gene therapy for PKU;

Protagonist, Ionis and Silence are developing therapies to treat PV;

Vertex, with CRISPR, is conducting clinical trials of gene therapies targeting SCD (for which they have a Prescription Drug User Fee Act goal date of December 8, 2023 for their Biologics License Application) and beta thalassemia (for which they have a Prescription Drug User Fee Act goal date of March 30, 2024 for their Biologics License Application);

Fulcrum is conducting clinical trials for a potential treatment for SCD;

Silence is conducting clinical trials for a potential treatment for alpha and beta non-transfusion dependent thalassemia and PV;

Geron, Roivant and Keros are conducting clinical trials for potential treatments for LR MDS (for which Geron has a Prescription Drug User Fee Act goal date of June 16, 2024 for their New Drug Application);

PTC, Synlogic, and Jnana are conducting clinical trials for potential treatments for PKU;

Homology is conducting clinical trials for a gene therapy for PKU;

PharmaEssentia Corp, or PharmaEssentia, and Incyte Corporation, or Incyte, are marketing therapies to treat PV, with Protagonist, Ionis, and Merck are developing therapies to treat PV;

and a number of other biotechnology companies have product candidates in clinical development in similar indications as ours.

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There are also a number of product candidates in preclinical or clinical development by third parties to treat rare diseases by targeting similar mechanisms of action or target indications as our product candidates.

These companies include large pharmaceutical companies, such as Novartis, Novo Nordisk, Pfizer, BMS, Merck and Vertex as well as biotechnology companies of various sizes, such as BioMarin, bluebird, PTC and Rocket Pharma.

These companies include large pharmaceutical companies, such as Novartis, Novo Nordisk, Pfizer, BMS, Merck and Vertex as well as biotechnology

companies of various sizes, such as BioMarin, bluebird, PTC and Rocket Pharma.

Our competitors may develop products that are more effective, safer, more convenient or less costly than PYRUKYND® or any product candidates that we are developing or that would render PYRUKYND® or our product candidates obsolete or non-competitive.

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Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and globally marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more

resources being concentrated among a smaller number of our competitors.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

Smaller and clinical stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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If we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts.

Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and

security standards, we could face civil and criminal penalties.

Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face civil and criminal penalties.

Enforcement activity by the U.S.

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Following the sale of our oncology business to Servier in March 2021, we have focused our resources and efforts on product and product candidates for the treatment of rare diseases.

The success of the rare disease business is subject to various risks and uncertainties, including the possibility that we may not be able to successfully commercialize PYRUKYND®, the possibility of adverse clinical and other developments in respect of PYRUKYND® or our other product candidates of the rare disease business, and unanticipated changes in applicable laws and regulations that may adversely affect the rare disease business.

The success of the rare disease business is subject to various risks and

uncertainties, including the possibility that we may not be able to successfully commercialize PYRUKYND®, the possibility of adverse clinical and other developments in respect of PYRUKYND® or our other product candidates of the rare disease business, and unanticipated changes in applicable laws and regulations that may adversely affect the rare disease business.

We developed most of our initial products and product candidates for the treatment of various types of cancer.

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In addition, even with the FDA approval of PYRUKYND®, the diversification of our revenues, costs and cash flows has diminished following the sale of our oncology business.

of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments or satisfy other financial commitments may be diminished.

Our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments or satisfy other financial commitments may be diminished.

Raising additional capital may restrict our operations, require us to relinquish rights to our technologies or product candidates or cause dilution to our stockholders.

Until such time, if ever, as we can generate substantial product revenue, including from sales of PYRUKYND®, we expect to finance our cash needs primarily through cash on hand, a potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

In addition, in connection with potential future strategic transactions, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

We do not have any committed external source of funds other than the potential milestone and royalty payments that we are eligible to receive with respect to vorasidenib under our purchase agreement with Servier.

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We have a history of incurring operating losses.

Our net loss for the six months ended June 30, 2023 and 2022 were $164.8 million and $186.6 million, respectively.

As of June 30, 2023, we had an accumulated deficit of $635.4 million.

Our net losses for the nine months ended September 30, 2023 and 2022 were $256.1 million and $268.3 million, respectively.

As of September 30, 2023, we had an accumulated deficit of $726.7 million.

Prior to the sale of our oncology business to Servier in March 2021, we had generated only modest revenue from sales of TIBSOVO® and, prior to our sale to Royalty Pharma of our royalty rights to IDHIFA®, from royalties on sales of IDHIFA®.

Following receipt of marketing approval in February 2022, we have begun to commercialize PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States, and we are currently providing access to PYRUKYND® free of charge for eligible patients in the EU and Great Britain through a global managed access program.

Following receipt of marketing approval in February 2022, we have begun to commercialize PYRUKYND® for the treatment of hemolytic anemia in adults with PK deficiency in the United States.

We are currently providing access to PYRUKYND® free of charge for eligible patients in the EU and Great Britain through a global managed access program, and we may provide access to PYRUKYND® for adult patients with PK deficiency in other jurisdictions through the global managed access program on either a free of charge or for charge basis.

PYRUKYND® is the first product we have received marketing approval for following the sale of our oncology business.

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net sales of TIBSOVO® to Sagard, a potential milestone payment and royalties from Servier if vorasidenib is approved by the FDA, the actual and potential future sales of PYRUKYND® and, potentially, collaborations, strategic alliances, licensing arrangements and other nondilutive strategic transactions.

In addition, we may pursue opportunistic debt offerings, and equity or equity-linked offerings.

We expect to continue to incur significant expenses and net losses until such time as we are able to report profitable results.

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We cannot assure you a given regulatory authority will determine that any of our clinical trials comply with cGCP regulations.

We also are required to register

ongoing clinical trials and post the results of completed clinical trials on a U.S.

We also are required to register ongoing clinical trials and post the results of completed clinical trials on a U.S.

government-sponsored database, clinicaltrials.gov, within certain timeframes.

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Our failure, or the failure of our third-party manufacturers, to comply with currently applicable regulations, or regulations or specifications to which we become subject in the future, could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or medicines, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our medicines and harm our business and results of operations.

If either we or any third parties on which we rely are adversely impacted by restrictions resulting from the recent COVID-19 pandemic, the emergence of another public health epidemic and/or by rising global energy costs or energy shortages or rationing, our supply chain may be disrupted, limiting our ability to manufacture our product candidates for our clinical trials and research and development operations and our product for commercialization.

or the impacts of the Russia-Ukraine war, our supply chain may be disrupted, limiting our ability to manufacture our product candidates for our clinical trials and research and development operations and our product for commercialization.

Any performance failure on the part of our existing or future manufacturers could delay preclinical development, clinical development, marketing approval or our commercialization efforts.

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Disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our medicines or product candidates or that result in costly litigation or arbitration that diverts management attention and resources.

In addition, our ability to enter into arrangements with collaborators in specific regions, such as the Middle East, may be affected by localized geopolitical unrest or military conflict, such as the current armed conflict in Israel and the Gaza Strip.

Our ability to generate revenue from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

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The patent prosecution process is costly and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

It is also possible that we will fail to identify and/or file patent applications on every aspect of our research and development output that is or may be eligible for patent protection.

It is also possible that we will fail to identify and/or file

patent applications on every aspect of our research and development output that is or may be eligible for patent protection.

Although we enter into non-disclosure and confidentiality agreements with parties who may have access to patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.

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We cannot be certain that these patents and applications will be prosecuted and enforced in a manner consistent with the best interests of our business.

If any such licensors fail to

maintain such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated and our right to develop and commercialize any of our products that are the subject of such licensed rights could be adversely affected.

If any such licensors fail to maintain such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated and our right to develop and commercialize any of our products that are the subject of such licensed rights could be adversely affected.

In addition to the foregoing, the risks associated with patent rights that we license from third parties also apply to patent rights we own.

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To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming.

In addition, in an infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

In addition, in an infringement

proceeding, a court may decide that a patent of ours is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly.

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Our commercial success depends upon our ability and the ability of our collaborators to develop, manufacture, market and sell our product and product candidates and use our proprietary technologies without infringing the proprietary rights and intellectual property of third parties.

We have in the past and may in the future become party to, or

threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our medicines and technology, including opposition, derivation, revocation, reexamination, post-grant and inter partes review or interference proceedings before the USPTO or other patent offices around the world.

We have in the past and may in the future become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our medicines and technology, including opposition, derivation, revocation, reexamination, post-grant and inter partes review or interference proceedings before the USPTO or other patent offices around the world.

For example, in 2011, The Leonard and Madlyn Abramson Family Cancer Research Institute at the Abramson Cancer Center of the University of Pennsylvania initiated a lawsuit against us, one of our founders, Craig B.

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Enforcing a claim that a party illegally disclosed or misappropriated proprietary information is difficult, expensive and time-consuming, and the outcome is unpredictable.

If any of our proprietary technical

information and know-how were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us.

If any of our proprietary technical information and know-how were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them from using that technology or information to compete with us.

Moreover, we anticipate that with respect to this platform, at least some of this technical information and know-how will, over time, be disseminated within the industry through independent development, the publication of journal articles describing the methodology, and the movement of personnel skilled in the art from academic to industry scientific positions.

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Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application.

In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate.

In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a

product candidate.

Any marketing approval we or our collaborators ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved medicine not commercially viable.

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The FDA and DOJ impose stringent restrictions on manufacturers’ communications regarding off-label use and if we market our medicines for uses other than their respective approved indications, we may be subject to enforcement action for off-label marketing.

Violations of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations and

enforcement actions alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws, which violations may result in the imposition of significant administrative, civil and criminal penalties.

Violations of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations and enforcement actions alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protection laws, which violations may result in the imposition of significant administrative, civil and criminal penalties.

Our relationships with healthcare providers, physicians and third-party payors are subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which, in the event of a violation, could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

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• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws and transparency statutes, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures.

expenditures.

State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

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Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States.

These requirements are provided in the

national laws, industry codes or professional codes of conduct, applicable in the EU Member States.

These requirements are provided in the national laws, industry codes or professional codes of conduct, applicable in the EU Member States.

Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

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We have built our commercial infrastructure to support the commercial launch of PYRUKYND® in adult PK deficiency in the United States.

We are providing access to PYRUKYND® free of charge for eligible patients in the EU and Great Britain through a global managed access program.

We are providing access to PYRUKYND® free of charge for eligible patients in the EU and Great Britain through a global managed access program, and we may provide access to PYRUKYND® for adult patients with PK deficiency in other jurisdictions through the global managed access program on either a free of charge or for charge basis.

The commercial success of PYRUKYND® or of any of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our product candidates will be paid by third-party payors, including government health administration authorities and private health coverage insurers.

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Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.

Therefore, our ability, and the ability of any collaborators, to commercialize PYRUKYND® or any of our product candidates will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from third-party payors.

Therefore, our ability, and the ability of any collaborators, to commercialize

PYRUKYND® or any of our product candidates will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from third-party payors.

Third-party payors decide which medications they will cover and establish reimbursement levels.

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On February 10, 2021, the Biden Administration withdrew the federal government’s support for overturning the ACA.

On June 17, 2021, the Supreme Court struck down the lower court rulings, finding that the plaintiffs did not have standing to challenge the ACA’s minimum essential coverage provision at issue in the case.

On June 17, 2021, the Supreme Court struck down the lower court

rulings, finding that the plaintiffs did not have standing to challenge the ACA’s minimum essential coverage provision at issue in the case.

The Trump Administration also took executive actions to undermine or delay implementation of the ACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices.

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To those ends, President Trump issued several executive orders intended to lower the costs of prescription products.

Certain provisions of these orders have been reflected in promulgated regulations, including an interim final rule implementing a most favored nation model for

prices, which would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries.

Certain provisions of these orders have been reflected in promulgated regulations, including an interim final rule implementing a most favored nation model for prices, which would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the lowest price paid in other economically advanced countries.

Such final rule has been subject to a nationwide preliminary injunction, and, on December 29, 2021, Centers for Medicare & Medicaid Services, or CMS, issued a final rule to rescind it.

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We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

On June 6, 2023, Merck filed a lawsuit against HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.

Subsequently, other parties, including the U.S.

Chamber of Commerce, Bristol Myers Squibb Company, and the Pharmaceutical Research and Manufacturers of America also filed lawsuits in various courts with similar constitutional claims against HHS and CMS.

On July 11, 2023, Merck moved for summary judgment in its action and, the next day, the Chamber of Commerce moved for preliminary injunctive relief seeking to stop implementation of the drug pricing provisions of the IRA.

We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.

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If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations and financial condition could be materially harmed.

In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense and compliance costs and other professional fees.

In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense and

compliance costs and other professional fees.

In certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs and administrative burdens.

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Drug products on FDA’s drug shortage list are exempt from these new provisions unless the product has been on the list for more than six continuous months or the FDA determines that the supply of the product will help alleviate or prevent a shortage.

For the purposes of the statute, the term “commercially reasonable, market-

based terms” is defined as (1) the nondiscriminatory price at or below the most recent wholesale acquisition cost for the product, (2) a delivery schedule that meets the statutorily defined timetable, and (3) no additional conditions on the sale.

For the purposes of the statute, the term “commercially reasonable, market-based terms” is defined as (1) the nondiscriminatory price at or below the most recent wholesale acquisition cost for the product, (2) a delivery schedule that meets the statutorily defined timetable, and (3) no additional conditions on the sale.

To bring an action under the statute, an ANDA or 505(b)(2) sponsor must take certain steps to request the reference product, which, in the case of products covered by a Risk Evaluation and Mitigation Strategy with elements to assure safe use, include obtaining authorization from the FDA for the acquisition of the reference product.

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We are highly dependent on the principal members of our management and scientific teams, each of whom is employed “at will,” meaning we or they may terminate the employment relationship at any time.

We do not maintain “key person” insurance for any of our executives or other employees.

We do not maintain “key person” insurance

for any of our executives or other employees.

The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives.

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• limit who may call stockholder meetings;

• authorize our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a shareholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors;

potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors;

• require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.

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While the full extent of the economic impact of the recent COVID-19 pandemic or recent increases in inflation rates (particularly as it relates to clinical- or manufacturing-related costs) may be difficult to assess or predict, such impacts have already caused, and are likely to result in further, significant disruption of global financial markets, which may reduce our ability to access capital either at all or on favorable terms.

If we are unable to raise additional funds through equity or debt financings when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

The market price for our common stock may be influenced by many factors, including:

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Our executive officers, directors and principal stockholders maintain the ability to significantly influence all matters submitted to stockholders for approval.

As of June 30, 2023, our executive officers, directors and principal stockholders, in the aggregate, beneficially owned shares representing a significant percentage of our capital stock.

As of September 30, 2023, our executive officers, directors and principal stockholders, in the aggregate, beneficially owned shares representing a significant percentage of our capital stock.

As a result, if these stockholders were to choose to act together, they would be able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.

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The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Global Select Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations.

Stockholder activism, the current political environment and the current high level of government intervention and

regulatory reform may lead to substantial new regulations.

Our management and other personnel devote, and will need to continue to devote, a substantial amount of time to these compliance initiatives.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors