3 unchanged sentences
If any of the following risks occurs, our business, financial statements and future growth prospects could be materially and adversely affected.
−Removed: Risks Related to the COVID-19 Pandemic
−Removed: Our business has been and may continue to be, directly or indirectly, adversely affected by the recent COVID-19 pandemic.
−Removed: Since being reported in 2019, severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), or COVID-19, has spread to every state in the United States and to multiple countries, including those in which our patients reside and in which we, the healthcare providers with whom we interact, our partners, our contract research organizations, or CROs, our contract manufacturing organizations, or CMOs, and our other vendors operate.
−Removed: On March 11, 2020, the World Health Organization declared COVID-19 a pandemic.
−Removed: The pandemic has continued to have adverse effects on financial markets, general commercial activity and the world economy.
−Removed: In response to the pandemic, on March 13, 2020, the United States declared a national emergency, and federal, state, local and foreign governments have put in place, quarantines, executive orders, shelter-in-place orders and other restrictions in order to control the spread of the disease.
−Removed: The cyclical nature of the pandemic could result in multiple "waves" of the disease and corresponding orders or restrictions, leading to business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions, and cancellation or postponement of events, among other effects.
−Removed: These effects have and may continue to negatively impact productivity and disrupt our operations and those of the healthcare providers with whom we interact, our partners, our CROs, our CMOs and our other vendors.
−Removed: The majority of our office-based employees have been working from home since March 13, 2020 and are not expected to return to the office before the end of 2020.
−Removed: As states re-open, we have permitted our customer-facing employees, including the members of our sales force, to begin in-person interactions with healthcare providers, including dialysis centers and hospitals, where appropriate and permissible.
−Removed: However, healthcare facilities have continued, or begun again, to restrict access for non-patients, including the members of our sales force.
−Removed: For example, DaVita, Inc., or DaVita, and Fresenius Medical Care, or Fresenius, which account for the vast majority of the dialysis population in the United States, have restricted access to their clinics.
−Removed: As a result, we continue to primarily engage with healthcare providers and other customers virtually, where possible.
−Removed: The restrictions on our customer-facing employees' in-person interactions with healthcare providers could negatively impact our access to healthcare providers and, ultimately, our sales.
−Removed: In addition, if the pandemic worsens or there is a resurgence of the pandemic in the United States, sales of Auryxia may be impacted, which, in turn, could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: The dialysis and non-dialysis CKD patient populations, many of whom rely on our innovative therapies, have been disproportionately impacted by COVID-19 based on the number of cases and hospitalizations, which may significantly negatively impact our product demand, payer mix, and net product revenue in the future.
−Removed: While most of our office-based operations can be performed remotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed, many employees may have additional personal needs to attend to (such as looking after children as a result of school closures or family members who may become sick), and employees may become sick themselves and be unable to work.
−Removed: Further, our increased reliance on remote access to our information systems increases our exposure to potential cybersecurity breaches.
−Removed: Moreover, our future success and profitability substantially depends on the management skills of our executives and certain other key employees.
−Removed: The unanticipated loss or unavailability of key employees due to the pandemic could harm our ability to operate our business or execute our business strategy.
−Removed: We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.
−Removed: In addition, the pandemic or the response efforts to the pandemic may cause disruptions to, closures of or other impacts on our CMOs and other vendors in our supply chain on which we rely for the supply of our products and product candidates.
−Removed: These impacts could lead to delays or disruptions in supply of our products and product candidates and have a negative effect on our inventory reserves, which could result in an increase in inventory write-offs due to expiry.
−Removed: The pandemic has resulted in closures of clinical trial sites on which we rely for the completion of certain clinical trials and may delay enrollment of certain planned and ongoing clinical trials.
−Removed: Further, the pandemic could also potentially affect the
−Removed: business of the U.S.
−Removed: Food and Drug Administration, or FDA, the European Medicines Agency, or the EMA, the Japanese Pharmaceuticals and Medical Devices Agency, or the PMDA, or other governmental authorities, which could result in delays in meetings, reviews and approvals relating to our products or product candidates.
−Removed: Any decision by the FDA, EMA, PMDA or other governmental authorities to delay meeting with us or our collaboration partners in light of COVID-19 could have a material adverse effect on clinical trials of our product candidates or on our efforts to obtain marketing approvals for our product candidates, which could increase our operating expenses and have a material adverse effect on our financial results, including the timing and amount of future regulatory milestones we could receive from our partners.
−Removed: If we or any of the third parties with whom we engage, including our collaboration partners, were to experience shutdowns, delays or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted, which could have a material adverse effect on our business and our financial results.
−Removed: The pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, that could impact our ability to raise additional funds and has also impacted, and may continue to impact, the volatility of our stock price and trading in our stock.
−Removed: Moreover, it is possible the pandemic will significantly impact economies worldwide, which could result in adverse effects on our business and operations.
−Removed: Even after the COVID-19 pandemic has been contained or mitigated, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.
−Removed: The global impact of COVID-19 continues to rapidly evolve, and we will continue to monitor the situation closely.
−Removed: In particular, areas we are monitoring include possible COVID-related changes in our commercial revenue payer mix, overall product sales, and reserves and allowances, as well as negative trends that could potentially have a significant impact on product demand and, ultimately, product revenue, or could indicate goodwill, intangible assets, and other assets to be impaired.
−Removed: The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and the magnitude of which cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
Risks Related to our Financial Position and Need for Additional Capital
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Since our inception, we have devoted most of our resources to research and development, including our preclinical and clinical development activities and, following the merger, or the Merger, whereby Keryx Biopharmaceuticals, Inc., or Keryx, became a wholly owned subsidiary of ours, commercialization.
−Removed: We have financed our operations primarily through sales of equity securities, our strategic collaborations and, following the Merger, product revenues and debt.
+Added: We have financed our operations primarily through sales of equity securities, our strategic collaborations and, following the Merger, product revenues, a royalty monetization transaction and debt.
Prior to the Merger, we had no products approved for commercial sale and had not generated any revenue from the sale of products.
−Removed: We are not currently profitable and have incurred net losses each year since our inception, including net losses of $296.5 million for the nine months ended September 30, 2020.
−Removed: As of September 30, 2020, we had an accumulated deficit of $1.1 billion.
+Added: We are not currently profitable and have incurred net losses each year since our inception, including net losses of $69.6 million for the three months ended March 31, 2021.
+Added: As of March 31, 2021, we had an accumulated deficit of $1.2 billion.
We cannot guarantee when, if ever, we will become profitable.
Our ability to generate product revenue and achieve profitability depends significantly on our success in many areas, including the following:
−Removed: • developing, commercializing and marketing Auryxia, vadadustat, if approved, or any other product or product candidate, including those that may be in-licensed or acquired;
−Removed: • completing preclinical and clinical development of our product candidates;
−Removed: • seeking and obtaining marketing approvals for our product candidates after completion of clinical studies and the timing of such approvals, and maintaining marketing approvals for Auryxia or any other product;
+Added: • developing, commercializing and marketing Auryxia, vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired;
+Added: • obtaining marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, and the timing of such approvals, and maintaining marketing approvals for Auryxia and any other product, including those that may be in-licensed or acquired;
• developing sustainable and scalable manufacturing processes for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired;
−Removed: • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate products that are compliant with good manufacturing practices, or GMPs, and services to support the clinical development and the market demand for our products and product candidates, including those that may be in-licensed or acquired;
−Removed: • launching and commercializing our product candidates, if approved, either directly or with a collaborator or distributor;
+Added: • establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate products that are compliant with good manufacturing practices, or GMPs, and services to support the clinical development and the market demand for Auryxia, vadadustat, if approved, and any other product and product candidate, including those that may be in-licensed or acquired;
• obtaining sufficient pricing and reimbursement for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired, from private and governmental payors;
−Removed: • obtaining market acceptance of Auryxia, vadadustat and any other product candidate, including those that may be in-licensed or acquired;
+Added: • obtaining and maintaining market acceptance of Auryxia, vadadustat and any other product candidate, including those that may be in-licensed or acquired;
• the size of any market in which Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired, receives approval and obtaining adequate market share in those markets;
−Removed: • addressing any competing products;
+Added: • competing effectively with any competitive products and any disruptive technologies;
• identifying, assessing, acquiring, in-licensing and/or developing new product candidates;
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We expect to continue to incur significant expenses and operating losses for the foreseeable future.
−Removed: The amount of our future net losses will depend, in part, on the rate of our future expenditures, and our financial position will depend, in part, on revenue from commercial products, and our ability to obtain additional funding.
+Added: The amount of our future net losses will depend, in part, on the rate of our future expenditures, and our financial position will depend, in part, on product revenue, collaboration revenue, and our ability to obtain additional funding.
We expect to continue to incur significant expenses if and as we:
−Removed: • conduct our development program of vadadustat and develop any other potential product candidates;
+Added: • conduct any post-marketing approval studies, Phase 4 studies or any other clinical trials for Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired;
• continue our commercialization activities for Auryxia and plan for the commercialization of vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired;
+Added: • adapt to any regulatory changes, including changes relating to reimbursement;
+Added: • adapt to any changes in reimbursement practices by third party payors;
• continue our Merger-related integration activities;
−Removed: • seek marketing approvals for our product candidates that successfully complete clinical studies, and maintain marketing approvals for Auryxia and any product candidate for which we obtain marketing approval, including complying with any post-marketing regulatory requirements;
−Removed: • have our product candidates manufactured for clinical trials and for commercial sale;
−Removed: • initiate any post-marketing approval studies, Phase 4 studies or any other clinical trials for Auryxia or any other product, including those that may be in-licensed or acquired;
−Removed: • seek to discover additional product candidates;
+Added: • enroll patients in our clinical trials;
+Added: • seek marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, and maintain marketing approvals for Auryxia and any other product, including those that may be in-licensed or acquired;
+Added: • have Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired, manufactured for clinical trials and for commercial sale;
+Added: • seek to discover and develop additional product candidates or platforms that may lead to the discovery of additional product candidates;
• engage in transactions, including strategic, merger, collaboration, acquisition and licensing transactions, pursuant to which we would market and develop commercial products, or develop and commercialize other product candidates and technologies;
1 unchanged sentence
• maintain, protect and expand our intellectual property portfolio;
−Removed: • attract and retain skilled personnel;
−Removed: • continue to create additional infrastructure and expend additional resources to support our operations as a public company, including any additional infrastructure and resources necessary to support the transition from our prior status as an emerging growth company;
+Added: • attract, hire and retain qualified personnel;
+Added: • continue to create additional infrastructure and expend additional resources to support our operations as a fully integrated, publicly traded biopharmaceutical company;
• experience any delays or encounter issues with any of the above.
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Because of the numerous risks and uncertainties associated with pharmaceutical product development and commercialization, we are unable to accurately predict the timing or amount of increased expenses.
−Removed: The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may
−Removed: not be a good indication of our future performance.
+Added: The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.
In any particular quarter, the progress of our clinical development and our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.
−Removed: Even if we succeed in receiving marketing approval for and are able to commercialize vadadustat in the U.S.
−Removed: and other regions, we will continue to incur substantial research and development and other expenditures to develop and market, if approved, any other product candidates as well as any costs relating to continued commercialization and post-marketing requirements for Auryxia, vadadustat and any other products or product candidates that may receive marketing approval, including those that may be in-licensed or acquired.
+Added: Even if we succeed in receiving marketing approval for and are able to commercialize vadadustat in the United States and other regions, we will continue to incur substantial expenditures relating to continued commercialization and post-marketing requirements for Auryxia, vadadustat and any other products, including those that may be in-licensed or acquired, as well as costs relating to the research and development of any other product candidate, including those that may be in-licensed or acquired.
Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.
−Removed: Our expenses could increase beyond expectations if we are required by the FDA, the EMA, or other regulatory authorities, or if we otherwise believe it is necessary, to change our manufacturing processes or assays, to amend or replace our study protocols, to repeat any of our clinical trials, to perform studies in addition to, different from or larger than those currently expected, or if there are any delays in completing our clinical trials or the development of any of our product candidates.
−Removed: Even if our product candidates are approved for commercial sale, we anticipate incurring significant costs associated with commercialization.
+Added: Our expenses could increase beyond expectations if we are required by the U.S.
+Added: Food and Drug Administration, or the FDA, the European Medicines Agency, or the EMA, or other regulatory authorities, or if we otherwise believe it is necessary, to change our manufacturing processes or assays, to amend or replace our study protocols, to repeat any of our clinical trials, to perform studies in addition to, different from or larger than those currently expected, if there are any delays in completing our clinical trials or if there are delays to or issues with obtaining marketing approval for vadadustat in the United States, the EU or other jurisdictions.
+Added: Even if vadadustat and any other product candidate, including those that may be in-licensed or acquired, are approved for commercial sale, we anticipate incurring significant costs associated with commercialization.
In addition, our ability to generate revenue would be negatively affected if the size of our addressable patient population is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the patient population for treatment is narrowed by competition, physician choice, coverage or reimbursement, or payor or treatment guidelines.
−Removed: Even though we generate product revenue from Auryxia and may generate revenues from the sale of any products or product candidates that may be approved in the future, including those that may be in-licensed or acquired, we may never generate revenue that is significant enough to become and remain profitable, and we may need to obtain additional funding to continue operations.
+Added: Even though we generate product revenue from Auryxia and royalties from Riona and Vafseo TM, in Japan and may generate revenue and royalties from the sale of any products that may be approved in the future, including those that may be in-licensed or acquired, we may never generate revenue and royalties that are significant enough to become and remain profitable, and we will need to obtain additional funding to continue operations.
We will require substantial additional financing to achieve our goals.
A failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.
−Removed: As of September 30, 2020, our cash and cash equivalents and available for sale securities were $269.3 million.
−Removed: We expect to continue to expend substantial amounts for the foreseeable future continuing the commercialization of Auryxia and developing and commercializing vadadustat, if approved, and any other products or product candidates, including those that may be in-licensed or acquired.
−Removed: These expenditures will include costs associated with research and development, potentially obtaining marketing approvals and having our products manufactured, as well as marketing and selling products approved for sale, if any.
−Removed: In addition, other unanticipated costs may arise, including as a result of our decision to include certain elements in our development programs.
−Removed: Because the outcome of our current and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amount of funding necessary to successfully complete the development and commercialization of our product candidates.
+Added: As of March 31, 2021, our cash and cash equivalents and available for sale securities were $272.8 million.
+Added: We expect to continue to expend substantial amounts of cash for the foreseeable future as we continue to commercialize Auryxia and develop and commercialize vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired.
+Added: These expenditures will include costs associated with research and development, manufacturing, potentially obtaining marketing approvals and marketing products approved for sale, if any.
+Added: In addition, other unanticipated costs may arise.
+Added: Because the outcome of our current and anticipated clinical trials is highly uncertain, we cannot reasonably estimate the actual amount of funding necessary to successfully complete the clinical development, including post-marketing studies, and commercialization of Auryxia and vadadustat.
Our future capital requirements depend on many factors, including:
−Removed: • the conduct of our development program for vadadustat, and the development of any other potential product candidates;
−Removed: • the cost and timing of commercialization activities for Auryxia, vadadustat and any other products or product candidates, including those that may be in-licensed or acquired, if approved for marketing, including product manufacturing, marketing, sales and distribution costs;
−Removed: • the results of our meetings with the FDA, the EMA and other regulatory authorities and any consequential effects, including on study design, study size and resulting operating costs;
+Added: • the scope, progress, results and costs of conducting clinical studies or any post-marketing approval requirements, Phase 4 studies or any other clinical trials for Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired;
+Added: • the cost and timing of commercialization activities for Auryxia, vadadustat, if approved, and any other product or product candidate, including those that may be in-licensed or acquired, including product manufacturing, marketing, sales and distribution costs;
+Added: • the results of our meetings with the FDA, the EMA and other regulatory authorities and any consequential effects, including on timing of and ability to obtain and maintain marketing approval, study design, study size and resulting operating costs;
+Added: • Merger-related integration costs;
• difficulties or delays in enrolling patients in our clinical trials;
−Removed: • the timing of, and the costs involved in obtaining, and, if approved, maintaining marketing approvals for vadadustat and any other product candidates that we may develop or acquire, including to fund the preparation and filing of regulatory submissions, and the costs of maintaining marketing approvals for Auryxia or any other product, including those that may be in-licensed or acquired;
−Removed: • the cost of conducting clinical studies or any post-marketing approval studies, Phase 4 studies or any other clinical trials for Auryxia;
+Added: • the timing of, and the costs involved in obtaining, and, if approved, maintaining, marketing approvals for vadadustat and any other product candidate, including those that may be in-licensed or acquired, including to fund the preparation and filing of regulatory submissions, and the costs of maintaining marketing approvals for Auryxia or any other product, including those that may be in-licensed or acquired;
• the outcome of our efforts to obtain marketing approval for vadadustat in the United States, Europe and in other jurisdictions and any other product candidates, including those that may be in-licensed or acquired;
−Removed: • the scope, progress, results and costs of additional preclinical, clinical, or other studies for vadadustat and Auryxia, as well as any studies of any other products or product candidates, including those that may be in-licensed or acquired;
−Removed: • the cost of securing and validating commercial manufacturing of vadadustat and any other product candidates, including those that may be in-licensed or acquired, and maintaining our manufacturing arrangements for Auryxia or any other products, including those that may be in-licensed or acquired, or securing and validating additional arrangements;
+Added: • the cost of securing and validating commercial manufacturing of vadadustat and any other product candidate, including those that may be in-licensed or acquired, and maintaining our manufacturing arrangements for Auryxia or any other product, including those that may be in-licensed or acquired, or securing and validating additional arrangements;
• the costs involved in preparing, filing and prosecuting patent applications and maintaining, defending and enforcing our intellectual property rights, including litigation costs, and the outcome of such litigation;
• the costs involved in any legal proceedings to which we are a party;
−Removed: • Merger-related integration costs;
• our ability to attract, hire and retain qualified personnel;
−Removed: • the extent to which we engage in transactions, including collaboration, merger, acquisition and licensing transactions, pursuant to which we would develop and market commercial products, or develop other product candidates and technologies.
−Removed: Furthermore, we expect to continue to incur additional costs associated with operating as a larger company following the Merger and as a public company, including any additional infrastructure and resources necessary to support the transition from our prior status as an emerging growth company.
+Added: • costs related to the creation of additional infrastructure and expansion of additional resources to support our operations as a fully integrated, publicly traded biopharmaceutical company;
+Added: • the extent to which we engage in transactions, including strategic, merger, collaboration, acquisition and licensing transactions, pursuant to which we would develop and market commercial products, or develop other product candidates and technologies.
+Added: Furthermore, we expect to continue to incur costs associated with operating as a fully integrated, publicly traded biopharmaceutical company.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
1 unchanged sentence
We expect our cash resources to fund our current operating plan beyond the expected U.S.
−Removed: launch of our product candidate, vadadustat, assuming regulatory approval.
−Removed: We have based these estimates on assumptions that may prove to be wrong due to a variety of factors, including due to the effects of the COVID-19 pandemic, and we could use our available capital resources sooner than we currently expect.
−Removed: Furthermore, our development milestones may not be achieved, we may not receive the anticipated funding from our collaboration partners, and we may not secure other sources of financing.
+Added: launch of our product candidate, vadadustat, assuming timely regulatory approval and the receipt of associated regulatory milestones.
+Added: We have based these estimates on assumptions that may prove to be wrong due to a variety of factors, including due to the effects of the ongoing severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), or COVID-19, pandemic, and we could use our available capital resources sooner than we currently expect.
+Added: Furthermore, our regulatory milestones may not be achieved, we may not receive the anticipated funding from our collaboration partners, and we may not secure other sources of financing.
We expect to finance future cash needs through product revenue, public or private equity or debt transactions, payments from our collaborators, royalty transactions, strategic transactions, or a combination of these approaches.
Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic objectives.
−Removed: Any additional fundraising efforts may divert our management’s attention away from their day-to-day activities, which may adversely affect our ability to develop and commercialize Auryxia, vadadustat and any other products or product candidates.
+Added: Any additional fundraising efforts may divert our management’s attention away from their day-to-day activities, which may adversely affect our ability to develop and commercialize Auryxia, vadadustat and any other products or product candidates, including those that may be in-licensed or acquired.
Also, additional funds may not be available to us in sufficient amounts or on acceptable terms or at all.
−Removed: If we are unable to raise additional capital in sufficient amounts when needed or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of Auryxia, vadadustat and any other products or product candidates.
+Added: If we are unable to raise additional capital in sufficient amounts when needed or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development and/or commercialization of Auryxia, vadadustat, if approved, and any other products or product candidates, including those that may be in-licensed or acquired.
Any of these events could significantly harm our business, financial condition and prospects.
Our obligations in connection with the Loan Agreement with Pharmakon could adversely affect our financial condition and restrict our operations.
−Removed: We entered into a loan agreement, or the Loan Agreement, with funds managed by Pharmakon Advisors LP, or Pharmakon, pursuant to which term loans in an aggregate principal amount of $100.0 million, or the Term Loans, were made available to us in two tranches.
−Removed: The first tranche of $80.0 million closed on November 25, 2019, and we have the option to draw down the second tranche of $20.0 million on or before December 31, 2020, subject to the satisfaction of customary conditions.
+Added: In November 2019, we entered into a loan agreement, or the Loan Agreement, with funds managed by Pharmakon Advisors LP, or Pharmakon, pursuant to which senior secured term loans in an aggregate principal amount of $100.0 million, or the Term Loans, were made available to us in two tranches.
+Added: The first tranche of $80.0 million closed on November 25, 2019, and the second tranche of $20.0 million closed on December 10, 2020.
See Note 11 to our unaudited condensed consolidated financial statements in Part I, Item 1.
Financial Statements (unaudited) for additional information regarding our obligations under the Loan Agreement.
−Removed: Our Loan Agreement with Pharmakon contains affirmative and negative covenants applicable to us and our subsidiaries, including maintaining, on an annual basis, a minimum liquidity threshold starting in 2021, and on a quarterly basis, a minimum net sales threshold for Auryxia starting in the fourth quarter of 2020.
+Added: Our Loan Agreement with Pharmakon contains affirmative and negative covenants applicable to us and our subsidiaries, including maintaining, on an annual basis, a minimum liquidity threshold starting in 2021, and on a quarterly basis, a minimum net sales threshold for Auryxia, which started in the fourth quarter of 2020.
Failure to maintain compliance with these covenants could result in an event of default under the Loan Agreement.
8 unchanged sentences
Any of these factors could materially and adversely affect our business, financial condition and results of operations.
+Added: Our Royalty Interest Acquisition Agreement with HealthCare Royalty Partners IV, L.P.
+Added: contains various covenants and other provisions, which, if violated, could materially adversely affect our financial condition.
+Added: On February 25, 2021, we entered into a royalty interest acquisition agreement, or the Royalty Agreement, with HealthCare Royalty Partners IV, L.P., or HCR, pursuant to which we sold to HCR our right to the to receive royalties and sales milestones for vadadustat, collectively the Royalty Interest Payments, in each case, payable to us under our Collaboration Agreement dated December 11, 2015, or the MTPC Agreement, with Mitsubishi Tanabe Pharma Corporation, or MTPC, subject to an annual maximum “cap” of $13.0 million, or the Annual Cap, and an aggregate maximum “cap” of $150.0 million, or the Aggregate Cap.
+Added: Under the Royalty Agreement, we are required to comply with various covenants, including obligations to take certain actions, such as actions with respect to the Royalty Interest Payments, the MTPC Agreement, our agreement with MTPC for the commercial supply of vadadustat drug product, and our intellectual property.
+Added: In addition, the Royalty Agreement includes customary events of default upon the occurrence of enumerated events, including failure to perform certain covenants and the occurrence of insolvency events.
+Added: In the event we violate certain covenants and other provisions, we may not receive sales milestones from HCR even if the applicable sales thresholds are met.
+Added: Upon the occurrence of an event of default, HCR would have the ability to exercise all available remedies in law and equity, which could have a material adverse effect on our financial condition.
+Added: Royalties from commercial sales of vadadustat under our Collaboration Agreement with MTPC will likely fluctuate and will impact our rights to receive future payments from our Royalty Agreement with HCR.
+Added: On February 25, 2021, we entered into the Royalty Agreement with HCR, pursuant to which we sold to HCR our right to receive the Royalty Interest Payments payable to us under our the MTPC Agreement, subject to the Annual Cap of $13.0 million and the Aggregate Cap of $150.0 million.
+Added: After HCR receives Royalty Interest Payments equal to the Annual Cap in a given calendar year, we will receive 85% of the Royalty Interest Payments for the remainder of that year.
+Added: After HCR receives Royalty Interest Payments equal to the Aggregate Cap, or we pay the Aggregate Cap to HCR (net of the Royalty Interest Payments already received by HCR), the Royalty Interest Payments will revert back to us, and HCR would have no further right to any Royalty Interest Payments.
+Added: We received $44.8 million from HCR (net of certain transaction expenses) under the Royalty Agreement, and we are eligible to receive an additional $15.0 million under the Royalty Agreement if specified sales milestones are achieved for vadadustat in the territory covered by the MTPC Agreement, subject to the satisfaction of certain customary conditions.
+Added: The royalty revenues under the MTPC Agreement may fluctuate considerably because they depend upon, among other things, the rate of growth of sales of vadadustat in the territory covered under the MTPC Agreement.
+Added: Negative fluctuations in these royalty revenues could delay, diminish or eliminate our right to receive up to the additional $15.0 million under the Royalty Agreement upon achievement of the specified sales milestones, our ability to receive 85% of the Royalty Interest Payments
+Added: after the Annual Cap is achieved in a given calendar year, or our ability to receive 100% of the Royalty Interest Payments after the Aggregate Cap is achieved.
Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product and product candidates on unfavorable terms to us.
4 unchanged sentences
If we raise additional funds through strategic transactions with third parties, we may have to do so at an earlier stage than otherwise would be desirable.
−Removed: In connection with any such strategic transactions, we may be required to relinquish valuable rights to our product and product candidates, future revenue streams or research programs or grant licenses on terms that are not favorable to us.
−Removed: If we are unable to raise additional funds when needed, we may not be able to pursue development and commercial activities related to expanded indications for current products and any additional products and product candidates, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
+Added: In connection with any such strategic transactions, we may be required to relinquish valuable rights to our product and product candidate, future revenue streams or research programs or grant licenses on terms that are not favorable to us.
+Added: If we are unable to raise additional funds when needed, we may not be able to pursue planned development and commercialization activities and we may need to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
We may engage in strategic transactions to acquire assets, businesses, or rights to products, product candidates or technologies or form collaborations or make investments in other companies or technologies that could harm our operating results, dilute our stockholders’ ownership, increase our debt, or cause us to incur significant expense.
−Removed: As part of our business strategy, we may engage in additional strategic transactions to expand and diversify our portfolio, including through the acquisition of assets, businesses, or rights to products, product candidates or technologies or through strategic alliances or collaborations, similar to the Merger and our collaboration and license arrangements.
+Added: As part of our business strategy, we may engage in additional strategic transactions to expand and diversify our portfolio, including through the acquisition of assets, businesses, or rights to products, product candidates or technologies or through strategic alliances or collaborations, similar to the Merger and our existing collaboration and license arrangements.
We may not identify suitable strategic transactions, or complete such transactions in a timely manner, on a cost-effective basis, or at all.
Moreover, we may devote resources to potential opportunities that are never completed or we may incorrectly judge the value or worth of such opportunities.
−Removed: Even if we successfully execute a strategic transaction, we may not be able to realize the anticipated benefits of such transaction, may incur additional debt or assume unknown or contingent liabilities in connection therewith, and may experience losses related to our investments in such transactions.
−Removed: Integration of an acquired company or assets into our existing business may not be successful and may disrupt ongoing operations, require the hiring of additional personnel and the implementation of additional internal systems and infrastructure, and require management resources that would otherwise focus on developing our existing business.
+Added: Even if we successfully execute a strategic transaction, we may not be able to realize the anticipated benefits of such transaction and may experience losses related to our investments in such transactions.
+Added: Integration of an acquired company or assets into our existing business may not be successful and may disrupt ongoing operations, require the hiring of additional personnel and the implementation and integration of additional internal systems and infrastructure, and require management resources that would otherwise focus on developing our existing business.
Even if we are able to achieve the long-term benefits of a strategic transaction, our expenses and short-term costs may increase materially and adversely affect our liquidity.
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In addition, future transactions may entail numerous operational, financial and legal risks, including:
−Removed: • incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;
−Removed: • exposure to known and unknown liabilities, including possible intellectual property infringement claims, violations of laws, tax liabilities and commercial disputes;
+Added: • incurring substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;
+Added: • exposure to known and unknown liabilities, including contingent liabilities, possible intellectual property infringement claims, violations of laws, tax liabilities and commercial disputes;
• higher than expected acquisition and integration costs;
−Removed: • difficulty in integrating operations and personnel of any acquired business;
−Removed: • increased amortization expenses or, in the case of a write-down the value of acquired assets, impairment losses, such as the Auryxia intangible asset impairment in the second quarter of 2020 and corresponding adjustment to the estimated useful life of the developed product rights for Auryxia;
+Added: • difficulty in integrating operations, processes, systems and personnel of any acquired business;
+Added: • increased amortization expenses or, in the case of a write-down of the value of acquired assets, impairment losses, such as the Auryxia intangible asset impairment in the second quarter of 2020 and corresponding adjustments to the estimated useful life of the developed product rights for Auryxia;
• impairment of relationships with key suppliers or customers of any acquired business due to changes in management and ownership;
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Our ability to realize the anticipated benefits of the Merger will depend, to a large extent, on our ability to continue to integrate our business and Keryx’s business and realize anticipated growth opportunities and synergies.
−Removed: If we are unable to successfully integrate the businesses, or integrate them in a timely fashion, we may face material adverse effects including, but not limited to (i) diversion of the attention of management and key personnel and potential disruption of our ongoing business, (ii) the loss of employees, (iii) challenges of managing a larger company, including challenges of conforming standards, controls, procedures and accounting and other policies and compensation structures, (iv) difficulties in achieving anticipated cost savings, (v) declines in our results of operations, financial condition or cash flows, (vi) a decline in the market price of our common stock, and (vii) potential liabilities, adverse consequences, increased expenses or other problems associated with our company following completion of the Merger.
+Added: If we are unable to successfully integrate the businesses, or integrate them in a timely fashion, we have faced, and may continue to face, adverse effects, some of which may be material, including, but not limited to (i) diversion of the attention of management and key personnel and potential disruption of our ongoing business, (ii) the loss of employees, (iii) challenges of managing a larger company, including challenges of conforming standards, controls, procedures and accounting and other policies and compensation structures, (iv) difficulties in achieving anticipated cost savings, (v) declines in our results of operations, financial condition or cash flows, (vi) a decline in the market price of our common stock, and (vii) potential liabilities, adverse consequences, increased expenses or other problems associated with our company following completion of the Merger.
Many of these factors are outside of our control, and any one of them could result in increased costs, decreased expected revenues and further diversion of management time and energy, which could materially impact our business, financial statements and prospects.
In addition, following the Merger, we have become responsible for Keryx’s liabilities and obligations, including with respect to legal, financial, regulatory and compliance matters, including certain post-approval regulatory requirements with respect to Auryxia and obligations under collaboration, license, supply and manufacturing agreements.
−Removed: These obligations will result in additional cost and investment by us and, if we have underestimated the amount of these costs and investments or if we fail to satisfy any such obligations, we may not realize the anticipated benefits of the transaction.
+Added: These obligations have, and will continue to, result in additional cost and investment by us and, if we have underestimated the amount of these costs and investments or if we fail to satisfy any such obligations, we may not realize the anticipated benefits of the transaction.
Also, due to the Merger and ongoing integration, we may forego or delay pursuit of other opportunities that may have proven to have greater commercial potential.
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Any monetary damages, or other adverse judgment could have a material adverse effect on us.
−Removed: There was a putative class action lawsuit filed by purported Keryx shareholders challenging the disclosures made in connection with the Merger, which was dismissed in April 2020.
+Added: There is an ongoing appeal of a putative class action lawsuit filed by purported Keryx shareholders challenging the disclosures made in connection with the Merger.
In addition, a stockholder of Keryx filed a complaint against Keryx pursuant to Section 220 of the Delaware General Corporation Law, which sought inspection of various Keryx books and records, purportedly to investigate “possible wrongdoing,” in connection with Keryx’s negotiation and approval of the Merger, as well as the independence of former members of Keryx’s Board of Directors (some of whom are current members of our Board of Directors).
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Any potential future impairment of goodwill or intangible assets may significantly impact our results of operations and financial condition.
−Removed: As of September 30, 2020, we had approximately $206.4 million of goodwill and a definite lived intangible asset from the Merger.
−Removed: In accordance with generally accepted accounting principles, or GAAP, we are required annually, or more frequently upon certain indicators of impairment, to review our estimates and assumptions underlying the fair value of our goodwill and our definite lived intangible assets when indicators of impairment are present.
+Added: As of March 31, 2021, we had approximately $190.2 million of goodwill and a definite lived intangible asset from the Merger.
+Added: In accordance with generally accepted accounting principles, or GAAP, we are required annually, or more frequently upon
+Added: certain indicators of impairment, to review our estimates and assumptions underlying the fair value of our goodwill and our definite lived intangible assets when indicators of impairment are present.
Events giving rise to impairment of goodwill or intangible assets are an inherent risk in the pharmaceutical industry and often cannot be predicted.
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For example, in the second quarter of 2020, in connection with a routine business review, we reduced our short-term and long-term Auryxia revenue forecast.
−Removed: This reduction was primarily driven by the compounding impact of the September 2018 Centers for Medicare & Medicaid Services, or CMS, decision that rescinded Medicare Part D coverage of Auryxia for the treatment of iron deficiency anemia, or IDA, in adult patients with CKD not on dialysis, or the IDA Indication, and the related imposition by CMS of a prior authorization requirement for Auryxia for the control of serum phosphorus levels in adult patients with CKD on dialysis, or the Hyperphosphatemia Indication, or the CMS Decisions.
−Removed: As a result, we recorded an impairment charge of $115.5 million during the three months ended June 30, 2020, which was entirely allocated to our only intangible asset, the developed product rights for Auryxia, and made a corresponding adjustment to the estimated useful life of the developed product rights for Auryxia.
+Added: This reduction was primarily driven by the impact of the September 2018 Centers for Medicare & Medicaid Services, or CMS, decision that Auryxia would no longer by covered by Medicare for the treatment of iron deficiency anemia, or IDA, in adult patients with CKD not on dialysis, or the IDA Indication.
+Added: While this decision does not impact CMS coverage of the Hyperphosphatemia Indication, it requires all Auryxia prescriptions for Medicare patients to undergo a prior authorization to ensure their use of Auryxia for the control of serum phosphorus levels in adult patients with CKD on dialysis, or the Hyperphosphatemia Indication.
+Added: As a result, we recorded an impairment charge of $115.5 million during the three months ended June 30, 2020, which was entirely allocated to our only intangible asset, the developed product rights for Auryxia, and made a corresponding adjustment to the estimated useful life of the developed product rights for Auryxia, which we again adjusted during the three months ended December 31, 2020.
The estimates, judgments and assumptions used in our impairment testing, and the results of our testing, are discussed in Note 9 to our unaudited condensed consolidated financial statements in Part I, Item 1.
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If these estimates, judgments and assumptions change in the future, including if the Auryxia asset group does not meet its current forecasted projections, additional impairment charges could be recorded in the future and additional corresponding adjustments may need to be made to the estimated useful life of the developed product rights for Auryxia, which could materially impact our financial position, certain of our material agreements, and our future operating results.
+Added: Risks Related to the COVID-19 Pandemic
+Added: Our business has been and may continue to be, directly or indirectly, adversely affected by the COVID-19 pandemic.
+Added: The ongoing COVID-19 pandemic has presented a substantial public health and economic challenge around the world and continues to affect our employees, patients, healthcare providers with whom we interact, customers, collaboration partners, contract research organizations, or CROs, our contract manufacturing organizations, or CMOs, vendors, communities and business operations.
+Added: The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition continues to depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, any resurgences or mutations of COVID-19, the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets where the healthcare providers with whom we interact, our partners, our CROs, our CMOs, and our other vendors operate.
+Added: We believe our revenue growth was negatively impacted in the first quarter of 2021 primarily as the kidney patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.
+Added: While we are unable to quantify the impact of the COVID-19 pandemic on future revenues and revenue growth, COVID-19 continues to adversely and disproportionately impact our patient population;
+Added: therefore, we expect COVID-19 to continue to have a negative impact on our revenue growth for the foreseeable future.
+Added: The majority of our office-based employees have been working from home since March 13, 2020.
+Added: In addition, several healthcare facilities have restricted access for non-patients, including the members of our sales force.
+Added: For example, DaVita, Inc., or DaVita, and Fresenius Medical Care, or Fresenius, which account for a vast majority of the dialysis population in the United States, have restricted access to their clinics.
+Added: As a result, we continue to primarily engage with healthcare providers and other customers virtually, where possible.
+Added: The restrictions on our customer-facing employees' in-person interactions with healthcare providers could negatively impact our access to healthcare providers and, ultimately, our sales.
+Added: Given this uncertain environment and the disproportionate impact of the COVID-19 pandemic on CKD patients, we are actively monitoring the demand for Auryxia, including the potential for further declines or changes in prescription trends and customer orders, which could have a material adverse effect on our business, results of operations, and financial condition.
+Added: While most of our office-based operations can be performed remotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed, many employees may have additional personal needs to attend to (such as looking after children as a result of school closures or family members who may become sick), and employees may become
+Added: sick themselves and be unable to work.
+Added: Further, our increased reliance on remote access to our information systems increases our exposure to potential cybersecurity breaches.
+Added: Moreover, our future success and profitability substantially depends on the management skills of our executives and certain other key employees.
+Added: The unanticipated loss or unavailability of key employees due to the pandemic could harm our ability to operate our business or execute our business strategy.
+Added: We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.
+Added: In addition, the pandemic or the response efforts to the pandemic may cause disruptions to, closures of or other impacts on our CMOs and other vendors in our supply chain on which we rely for the supply of our products and product candidates.
+Added: These impacts could lead to delays or disruptions in supply of our products and product candidates and have a negative effect on our inventory reserves, which could result in an increase in inventory write-offs due to expiry.
+Added: The pandemic has resulted in closures of and may continue to impact clinical trial sites on which we rely and will rely for the completion of certain clinical trials and COVID-19 pandemic precautions have caused moderate delays in enrolling new clinical trials and may cause delays in enrolling other new clinical trials.
+Added: We are using remote monitoring and central monitoring, where possible.
+Added: Further, the pandemic could also potentially affect the business of the FDA, the EMA or other governmental authorities, which could result in delays in meetings, reviews, inspections and approvals relating to our product and product candidate.
+Added: Any decision by the FDA, EMA or other governmental authorities to delay meeting with us or our collaboration partners or scheduling inspections in light of COVID-19 could have a material adverse effect on clinical trials of our product candidates or on our efforts to obtain marketing approvals for our product candidate, which could increase our operating expenses and have a material adverse effect on our financial results, including the timing and amount of future regulatory milestones we could receive from our partners.
+Added: If we or any of the third parties with whom we engage, including our collaboration partners, were to experience shutdowns, delays or other business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively impacted, which could have a material adverse effect on our business and our financial results.
+Added: At this time, our third party contract manufacturing partners continue to operate at or near normal levels.
+Added: However, it is possible that the COVID-19 pandemic and response efforts may have an impact in the future on our contract manufacturing partners' ability to manufacture and deliver Auryxia and vadadustat (which is currently marketed under the trade name Vafseo TM by MTPC in Japan), which may result in delays in or disruptions to manufacturing and supply of our products.
+Added: In addition, COVID-19 precautions may cause a delay in enrolling new clinical trials.
+Added: We are using remote monitoring and central monitoring, where possible.
+Added: The pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, that could impact our ability to raise additional funds and has also impacted, and may continue to impact, the volatility of our stock price and trading in our stock.
+Added: Moreover, it is possible the pandemic will significantly impact economies worldwide, which could result in adverse effects on our business and operations.
+Added: Even after the COVID-19 pandemic has been contained or mitigated, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.
+Added: The global impact of COVID-19 continues to rapidly evolve, and we will continue to monitor the situation closely.
+Added: In particular, areas we are monitoring include possible COVID-related changes in our commercial revenue payer mix, overall product sales, and reserves and allowances, as well as negative trends that could potentially have a further significant impact on product demand and, ultimately, product revenue, or could indicate goodwill, intangible assets, and other assets to be impaired.
+Added: This uncertain COVID-19 pandemic environment has presented new risks to our business.
+Added: While we are working to mitigate the impacts on our business, we are mindful that many of these risks and the impact to the larger healthcare market are outside of our control.
+Added: The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and the magnitude of which cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
Risks Related to Commercialization
−Removed: Our ability to successfully commercialize any approved product(s), including our ability to achieve their widespread market acceptance, is critical to the success of our business.
−Removed: Our ability to generate significant product revenue will depend almost entirely on our ability to execute on our commercialization plans, the level of market adoption for, and the availability of and continued use of any approved product(s) by physicians, hospitals, dialysis clinics, wholesalers, patients, and/or healthcare payors, including government payors, consumers, managed care organizations, pharmacy benefit managers, and pharmacies.
−Removed: If we are not successful in commercializing any approved product(s), including achieving and maintaining an adequate level of market adoption, our profitability and our future business prospects will be adversely impacted.
−Removed: Market acceptance of any approved product(s) depends on a number of other factors, including:
−Removed: • the availability of adequate coverage and reimbursement by third party payors and governmental authorities;
+Added: Our ability to successfully commercialize any approved product, including our ability to achieve widespread market acceptance, is critical to the success of our business.
+Added: Our ability to generate significant product revenue will depend almost entirely on our ability to execute on our commercialization plans, the level of market adoption for, and the availability of and continued use of any approved product by physicians, hospitals, dialysis clinics, wholesalers, patients, and/or healthcare payors, including government payors, consumers,
+Added: managed care organizations, pharmacy benefit managers, or PBMs, and pharmacies.
+Added: If we are not successful in commercializing any approved product, including achieving and maintaining an adequate level of market adoption, our profitability and our future business prospects will be adversely impacted.
+Added: Market acceptance of any approved product depends on a number of other factors, including:
+Added: • the availability of adequate coverage and reimbursement by third party payors, PBMs, and governmental authorities;
• the safety and efficacy of the product, as demonstrated in clinical trials and in the post-marketing setting;
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Market acceptance is critical to our ability to generate significant product revenue.
−Removed: In addition, any product or product candidate, if approved and commercialized, may achieve only limited market acceptance or none at all.
+Added: Any product may achieve only limited market acceptance or none at all.
If any of our approved products is not accepted by the market to the extent that we expect, we may not be able to generate significant product revenue and our business would suffer.
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After the introduction of a generic competitor, a significant percentage of the prescriptions written for a product may be filled with the generic version, resulting in a loss in sales of the branded product.
−Removed: We have received Paragraph IV certification notice letters regarding Abbreviated New Drug Applications, or ANDAs, submitted to the FDA requesting approval for generic versions of Auryxia tablets (210 mg iron per tablet), have filed certain complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with certain such ANDA filers.
+Added: We have received Paragraph IV certification notice letters regarding Abbreviated New Drug Applications, or ANDAs, submitted to the FDA requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet), have filed certain complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with certain such ANDA filers.
See Part II, Item 1.
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In addition, litigation to enforce or defend intellectual property rights is complex, costly and involves significant management time.
−Removed: If our Orange Book-listed patents are successfully challenged by a third party and a generic version of Auryxia is approved and launched, revenue from Auryxia could decline significantly, which would have a material adverse effect on our sales, results of operations and financial condition.
−Removed: If we are unable to maintain sales, marketing and distribution capabilities or to enter into additional agreements with third parties, we may not be successful in commercializing any approved product(s).
−Removed: In order to market any approved product(s), we intend to continue to invest in sales and marketing, which will require substantial effort and significant management and financial resources.
+Added: If our Orange Book-listed patents are successfully challenged by a third party and a generic version of Auryxia is
+Added: approved and launched, revenue from Auryxia could decline significantly, which would have a material adverse effect on our sales, results of operations and financial condition.
+Added: If we are unable to maintain sales, marketing and distribution capabilities or to enter into additional agreements with third parties, we may not be successful in commercializing any approved product.
+Added: In order to market any approved product, we intend to continue to invest in sales and marketing, which will require substantial effort and significant management and financial resources.
We will need to devote significant effort, in particular, to recruiting individuals with experience in the sales and marketing of pharmaceutical products.
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• costs and expenses associated with maintaining our own sales and marketing organization.
−Removed: If we are unable to maintain our own sales, marketing and distribution capabilities and our arrangements with third parties with respect to sales, marketing and distribution, or we are unsuccessful in entering into additional arrangements with third parties to sell, market and distribute or are unable to do so on terms that are favorable to us, we will not be successful in commercializing any approved product(s).
−Removed: Coverage and reimbursement may be limited or unavailable in certain market segments for any approved product(s), which could make it difficult for us or our collaboration partners to sell any approved products profitably.
+Added: If we are unable to maintain our own sales, marketing and distribution capabilities and our arrangements with third parties with respect to sales, marketing and distribution, or we are unsuccessful in entering into additional arrangements with third parties to sell, market and distribute or are unable to do so on terms that are favorable to us, we will not be successful in commercializing any approved product.
+Added: Coverage and reimbursement may be limited or unavailable in certain market segments for any approved product, which could make it difficult for us or our collaboration partners to sell any approved products profitably.
Market acceptance and sales of any approved products depends significantly on the availability of adequate coverage and reimbursement from third party payors and may be affected by existing and future healthcare reform measures.
−Removed: Government authorities, third party payors, and pharmacy benefit managers, or PBMs, decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of products and determine reimbursement levels.
−Removed: Coverage and reimbursement by a third-party payor or PBM may depend upon a number of factors, including the determination that use of a product is:
+Added: Governmental authorities, third party payors, and PBMs, decide which drugs they will cover, as well as establish formularies or implement other mechanisms to manage utilization of products and determine reimbursement levels.
+Added: Coverage and reimbursement by a governmental authority, third-party payor or PBM may depend upon a number of factors, including the determination that use of a product is:
• a covered benefit under the health plan;
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• cost effective.
−Removed: Obtaining coverage and reimbursement approval for a product from a government or other third party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor.
−Removed: In the United States, there are multiple government and private third party payors with varying coverage and reimbursement levels for pharmaceutical products, and the timing of commencement of reimbursement by a government payor is dependent on the assignment of codes via the Healthcare Common Procedure Coding System, which codes are assigned on a quarterly basis.
+Added: Obtaining coverage and reimbursement approval for a product from a governmental authority, PBM or a third-party payor is a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor.
+Added: In the United States, there are multiple governmental authorities, PBMs and third-party payors with varying coverage and reimbursement levels for pharmaceutical products, and the timing of commencement of reimbursement by a governmental payor is dependent on the assignment of codes via the Healthcare Common Procedural Coding System, which codes are assigned on a quarterly basis.
Within Medicare, for oral drugs dispensed by pharmacies and also administered in facilities, coverage and reimbursement may vary depending on the setting.
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As an oral drug, Auryxia is covered by Medicare only under Part D.
−Removed: In September 2018, CMS communicated to Medicare Part D sponsors that CMS does not consider Auryxia to be covered under Part D for the IDA Indication.
−Removed: CMS does, however, consider Auryxia to be a covered Part D drug for its other FDA-approved indication, the Hyperphosphatemia Indication.
−Removed: As a result, Part D sponsors require a prior authorization for all Auryxia prescriptions for Medicare beneficiaries to ensure that Auryxia is being used for the Part D covered indication.
−Removed: If we are unsuccessful in our efforts to obtain Part D coverage for the IDA Indication, our ability to commercialize Auryxia for this indication will continue to be adversely impacted.
−Removed: While we believe that the vast majority of the Part D prescriptions written for Auryxia today are for the Hyperphosphatemia Indication and therefore will continue to be covered by Part D plans with prior authorization, the CMS Decisions have had and may continue to have an adverse impact on market acceptance of Auryxia, sales of Auryxia for the Hyperphosphatemia Indication and the IDA Indication, and ultimately on the timing and number of prescriptions and Auryxia product revenue, and may influence physicians’ prescribing decisions.
−Removed: For example, in the second quarter of 2020, we reduced our short-term and long-term Auryxia revenue forecast, primarily driven by the compounding impact of the CMS Decisions.
−Removed: As a result, we recorded an impairment charge of $115.5 million to the Auryxia intangible asset during the three months ended June 30, 2020.
−Removed: Even if the CMS Decisions are ultimately reversed, the negative impact that they have had on the growth of sales of Auryxia for the
−Removed: Hyperphosphatemia Indication and the IDA Indication will continue, although less significantly than if the CMS Decisions are not reversed.
+Added: In September 2018, CMS decided that Auryxia would no longer be covered by Medicare for the IDA Indication.
+Added: While this decision does not impact CMS coverage of the Hyperphosphatemia Indication, it requires all Auryxia prescriptions for Medicare patients to undergo a prior authorization to ensure their use in the Hyperphosphatemia Indication.
+Added: On October 15, 2019, we filed a complaint in the United States District Court for the District of Massachusetts against CMS and the U.S.
+Added: Department of Health and Human Services challenging CMS’s decision that Auryxia would no longer be covered by Medicare for the IDA Indication and imposing a prior authorization requirement for Auryxia in the Hyperphosphatemia Indication, or the CMS Decision.
+Added: While we believe that the
+Added: vast majority of the Medicare prescriptions written for Auryxia today are for the Hyperphosphatemia Indication and therefore will continue to be covered by Medicare with prior authorization, the CMS Decision has had and will continue to have an adverse impact on the sales and future growth of Auryxia for the Hyperphosphatemia Indication and the IDA Indication.
+Added: For example, in the second quarter of 2020, we reduced our short-term and long-term Auryxia revenue forecast, primarily driven by the compounding impact of the CMS Decision.
+Added: As a result, we recorded an impairment charge of $115.5 million to the Auryxia intangible asset associated with the developed product rights for Auryxia during the three months ended June 30, 2020.
Medicaid reimbursement of drugs varies by state.
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If reimbursement is not available or is limited, we may not be able to commercialize certain of our products.
−Removed: Furthermore, vadadustat was approved in Japan for the treatment of anemia due to CKD and is being marketed by MTPC in Japan under the trade name VAFSEO.
−Removed: The pricing and reimbursement strategy is a key component of MTPC's commercialization plans for VAFSEO in Japan.
+Added: Furthermore, vadadustat was approved in Japan for the treatment of adult patients with anemia due to CKD and is being marketed by MTPC in Japan under the trade name Vafseo TM .
+Added: Pricing and reimbursement strategy is a key component of MTPC's commercialization plans for Vafseo in Japan.
If coverage and reimbursement terms change, MTPC may not be able to, or may decide not to, continue commercialization of Vafseo in Japan.
If we are unable to obtain or maintain contracts with key distribution partners, our business could be materially harmed.
−Removed: As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, we had four distributors, Fresenius Medical Care Rx, McKesson Corporation, Cardinal Health, Inc.
−Removed: and Amerisource Bergen Drug Corporation, that, in the aggregate, accounted for a significant percentage of our gross accounts receivable as of December 31, 2019.
+Added: We have four distributors, Fresenius Medical Care Rx, McKesson Corporation, Cardinal Health, Inc.
+Added: and Amerisource Bergen Drug Corporation, that, in the aggregate, accounted for a significant percentage of our gross accounts receivable as of March 31, 2021.
If we are not able to maintain our contracts with these key distributors on favorable terms, on a timely basis or at all, or if there is any adverse change in one or more of these distributors’ business practices or financial condition, or such distributors’ end users’ prescribing practices or clinical protocols, it would adversely impact the market opportunity for Auryxia, our product revenues and operating results.
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If vadadustat is approved and we are not able to maintain the Vifor Agreement or enter into a supply agreement with DaVita, our business may be materially harmed.
−Removed: Although we currently believe it is likely that vadadustat, if approved, will be reimbursed using the TDAPA followed by reimbursement via the bundled reimbursement model, if vadadustat is neither reimbursed under the TDAPA nor the bundled reimbursement model, then the Vifor Agreement will not become effective, and patients would access vadadustat through contracts we negotiate with third party payors for reimbursement of vadadustat, which would be subject to the risks and
−Removed: uncertainties described above.
−Removed: Additionally, if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected.
+Added: Although we currently believe it is likely that vadadustat, if approved, will be reimbursed using the TDAPA followed by reimbursement via the bundled reimbursement model, if vadadustat is neither reimbursed under the TDAPA nor the bundled
+Added: reimbursement model, then the Vifor Agreement will not become effective, and patients would access vadadustat through contracts we negotiate with third party payors for reimbursement of vadadustat, which would be subject to the risks and uncertainties described above.
+Added: Additionally, applying for and obtaining reimbursement under the TDAPA may take several months following approval, which would affect adoption, uptake and product revenue for vadadustat, and if there are updates to the TDAPA rule that decrease the basis for reimbursement or eligibility criteria during the transition period or if the TDAPA is eliminated, then our profitability may be adversely affected .
+Added: For example, the Medicare Payment Advisory Commission, or MedPAC, an independent legislative branch advisory body to Congress on issues related to the Medicare program, has recommended that TDAPA not be provided to newly approved drug products considered to fall within “functional categories” for which costs are already accounted for in the bundled reimbursement model, such as for anemia management drugs.
In addition, we may be unable to sell vadadustat, if approved, to dialysis providers on a profitable basis if CMS significantly reduces the level of reimbursement for dialysis services and providers choose to use alternative therapies or look to negotiate their contracts with us.
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Adequate coverage and reimbursement of our products by government and private insurance plans are central to patient and provider acceptance of any products for which we receive marketing approval.
−Removed: The successful commercialization of any approved product(s), will depend in part on the extent to which third party payors and government authorities establish adequate reimbursement levels and pricing policies.
+Added: The successful commercialization of any approved product, will depend in part on the extent to which third party payors, PBMs and governmental authorities establish adequate reimbursement levels and pricing policies.
Third party payors are increasingly attempting to contain healthcare costs by limiting both coverage and reimbursement levels for new drugs.
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The development and commercialization of new drugs is highly competitive and subject to rapid and significant technological change.
−Removed: Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the development and commercialization of our product and product candidates.
+Added: Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the development and commercialization of Auryxia, vadadustat and any other product or product candidate, including those that may be in-licensed or acquired.
Our objective is to continue to commercialize Auryxia and develop and commercialize new products with superior efficacy, convenience, tolerability and/or safety.
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outside the United States.
−Removed: We and or our partners may also face competition from potential new anemia therapies.
+Added: We and our partners may also face competition from potential new anemia therapies.
There are several other HIF-PHI product candidates in various stages of development for anemia indications that may be in direct competition with vadadustat if and when they are approved and launched commercially.
−Removed: These candidates are being developed by such companies as FibroGen, Japan Tobacco International, GlaxoSmithKline plc and Bayer HealthCare AG.
+Added: These candidates are being developed by such companies as FibroGen Inc., Japan Tobacco International, GlaxoSmithKline plc and Bayer HealthCare AG.
FibroGen, together with its collaboration partners, Astellas Pharma Inc.
and AstraZeneca PLC, is currently in global Phase 3 clinical development of its product candidate, roxadustat.
−Removed: In Japan, roxadustat has launched for the treatment of anemia of CKD in patients on dialysis, or DD-CKD.
−Removed: In China, roxadustat has launched for the treatment of anemia of DD-CKD and for the treatment of anemia of CKD in patients not on dialysis, or NDD-CKD.
−Removed: In January 2020, FibroGen announced the submission of an sNDA for marketing approval for roxadustat for NDD-CKD in Japan.
−Removed: FibroGen announced that the FDA has completed its filing review of its NDA for roxadustat for both DD-CKD and NDD-CKD and set a Prescription Drug User Fee Act date of December 20, 2020.
−Removed: In May 2020, they announced that their marketing authorization application for roxadustat in the European Union had been accepted.
−Removed: GlaxoSmithKline plc is currently in global Phase 3 clinical development of its product candidate, daprodustat.
−Removed: In August 2020, Kyowana Kirin Co., Ltd.
−Removed: announced the launch of GlaxoSmithKline plc's Duvroq (daprodustat) in Japan for the treatment of CKD anemia in patients with stages 3-5 CKD, including DD-CKD and NDD-CKD.
−Removed: In September 2020, Japan Tobacco International announced the approval of Enaroy (enarodustat) in Japan for the treatment of CKD anemia.
−Removed: In addition, Bayer HealthCare AG has submitted an NDA for its product candidate for the treatment of renal anemia in Japan.
+Added: In Japan, roxadustat has launched for the treatment of anemia due to CKD in patients on dialysis, or DD-CKD.
+Added: In November 2020, Astellas and Fibrogen announced the approval of roxadustat for NDD-CKD patients in Japan.
+Added: In China, roxadustat has launched for the treatment of anemia of DD-CKD and for the treatment of anemia due to CKD in patients not on dialysis, or NDD-CKD.
+Added: FibroGen announced that the FDA set an initial Prescription Drug User Fee Act, or PDUFA, date of December 20, 2020;
+Added: however, on December 18, 2020, FibroGen disclosed a new PDUFA date of March 20, 2021 for its NDA for roxadustat for both DD-CKD and NDD-CKD and on March 1, 2021 announced that the Cardiovascular and Renal Drugs Advisory Committee of the FDA will hold an Advisory Committee meeting to review the NDA for roxadustat in the U.S., which FibroGen subsequently indicated has been tentatively scheduled for July 15, 2021.
+Added: In Japan, roxadustat, daprodustat and enarodustat are approved for treatment of anemia due to CKD.
+Added: Bayer HealthCare AG has submitted an NDA for its product candidate for the treatment of renal anemia in Japan.
Furthermore, certain companies are developing potential new therapies for renal-related diseases that could potentially reduce injectable ESA utilization and thus limit the market potential for vadadustat if they are approved and launched commercially.
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In addition, an application for a biosimilar product cannot be approved by the FDA until 12 years after the existing, branded product was approved under a Biologics License Application, or BLA.
−Removed: The patents for epoetin alfa, an injectable ESA, expired in 2004 in the EU, and the remaining patents expired between 2012 and 2016 in the United States.
+Added: The patents for epoetin alfa, an injectable ESA, expired in 2004 in the EU, and the remaining
+Added: patents expired between 2012 and 2016 in the United States.
Because injectable ESAs are biologic products, the introduction of biosimilars into the injectable ESA market in the United States will constitute additional competition for vadadustat if we are able to obtain approval for and commercially launch our product.
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If we are not able to compete effectively against potential competitors, our business will not grow and our financial condition and operations will suffer.
−Removed: The commercialization of Riona and VAFSEO in Japan and our current and potential future efforts with respect to the development and commercialization of our products and product candidates outside of the United States subject us to a variety of risks associated with international operations, which could materially adversely affect our business.
−Removed: Our Japanese sublicensee, Japan Tobacco, Inc., or JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii, commercialize Riona, the trade name for ferric citrate hydrate in Japan, as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD in Japan.
+Added: The commercialization of Riona and Vafseo TM in Japan and our current and potential future efforts with respect to the development and commercialization of our products and product candidates outside of the United States subject us to a variety of risks associated with international operations, which could materially adversely affect our business.
+Added: Our Japanese sublicensee, Japan Tobacco, Inc., or JT, and its subsidiary, Torii Pharmaceutical Co., Ltd., or Torii, commercialize Riona, the trade name for ferric citrate hydrate in Japan, as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of adult patients with iron deficiency anemia, or IDA, in Japan.
We also granted Otsuka Pharmaceutical Co.
Ltd., or Otsuka, exclusive rights to commercialize vadadustat in Europe, China and certain other markets, subject to marketing approvals.
−Removed: In Japan and certain other countries in Asia, we granted Mitsubishi Tanabe Pharma Corporation, or MTPC, exclusive rights to commercialize vadadustat, which has been approved and is being marketed by MTPC in Japan under the trade name VAFSEO.
−Removed: We are also conducting our global Phase 3 development with respect to vadadustat for the treatment of anemia due to CKD.
−Removed: As a result of these and other activities, we are or may become subject to additional risks in developing and commercializing our product and product candidates outside the United States, including:
+Added: In Japan and certain other countries in Asia, we granted Mitsubishi Tanabe Pharma Corporation, or MTPC, exclusive rights to commercialize vadadustat, which has been approved and is being marketed by MTPC in Japan under the trade name Vafseo TM .
+Added: As a result of these and other activities, we are or may become subject to additional risks in developing and commercializing Auryxia and vadadustat outside the United States, including:
• political, regulatory, compliance and economic developments that could restrict our ability to manufacture, market and sell our products;
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In addition, we receive revenues from royalty payments converted to U.S.
−Removed: dollars based on net sales of Riona and VAFSEO in Japanese yen.
+Added: dollars based on net sales of Riona and Vafseo TM in Japanese yen.
The exchange rates between the Japanese yen on the one hand, and the U.S.
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As and if we continue to expand our commercialization efforts, we may encounter new risks.
−Removed: Risks Related to the Clinical Development of Vadadustat and our Other Product Candidates
−Removed: In addition to Auryxia, we will continue to depend heavily on the success of our product candidate, vadadustat, which is currently in Phase 3 development.
+Added: Risks Related to Clinical Development
+Added: In addition to Auryxia, we will continue to depend heavily on the success of our product candidate, vadadustat, for which we completed Phase 3 clinical development in 2020 and submitted an NDA to the FDA in March 2021.
Clinical drug development involves a lengthy and expensive process with an uncertain outcome.
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We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay, prevent or make more challenging our ability to receive or maintain marketing approval or commercialize our product candidates.
−Removed: For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we remain appropriately cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
+Added: For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we are remaining cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
Our clinical trials may take longer to complete than currently anticipated, or may be delayed, suspended, required to be repeated, prematurely terminated or may not successfully demonstrate safety and/or efficacy for a variety of other reasons, such as:
• the costs are greater than we anticipate;
−Removed: • the number of patients required for clinical trials of our product candidates may be larger than we anticipate;
+Added: • the number of patients required for clinical trials may be larger than we anticipate;
• enrollment in our clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate;
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• changes in governmental regulations or administrative actions.
−Removed: The COVID-19 pandemic has resulted in closures of clinical trial sites on which we rely for the completion of certain clinical trials and may delay enrollment of certain planned and ongoing clinical trials.
−Removed: We may be unable to successfully complete clinical trials of our product candidates or other studies, if the results of those trials and studies are not positive or are only modestly positive, or if there are concerns with the profile due to efficacy or safety.
−Removed: For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we remain appropriately cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
+Added: The COVID-19 pandemic has resulted in closures of and may continue to impact clinical trial sites on which we rely and will rely for the completion of certain clinical trials and may delay enrollment of certain planned and ongoing clinical trials.
+Added: We may be unable to successfully complete clinical trials of Auryxia and vadadustat, if the results of those trials and studies are not positive or are only modestly positive, or if there are concerns with the profile due to efficacy or safety.
+Added: For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we are remaining cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
If any of the foregoing occurs, the following may occur:
−Removed: • regulators may require that we conduct additional clinical trials, repeat clinical trials or conduct other studies of our product candidates beyond those that we currently contemplate;
−Removed: • we may be delayed in obtaining marketing approval for our product candidates;
−Removed: • we may not obtain marketing approval for our product candidates at all;
+Added: • regulators may require that we conduct additional clinical trials, repeat clinical trials or conduct other studies beyond those that we currently contemplate;
+Added: • we may be delayed in obtaining marketing approval for vadadustat;
+Added: • we may not obtain marketing approval for vadadustat at all;
• we may obtain approval for indications or patient populations that are not as broad as intended or desired;
−Removed: • we may obtain approval with labeling that includes significant use or distribution restrictions or safety warnings that would reduce the potential market for our products or inhibit our ability to successfully commercialize our products;
+Added: • we may obtain approval with labeling that includes significant use or distribution restrictions or safety warnings that would reduce the potential market for any approved product or inhibit our ability to successfully commercialize any approved product;
• a Risk Evaluation and Mitigation Strategies, or REMS, or FDA-imposed risk management plans that use risk minimization strategies to ensure that the benefits of certain prescription drugs outweigh their risks, may be required;
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• the product may be removed from the market after obtaining marketing approval.
−Removed: Our product development costs will also increase if we experience delays in preclinical and clinical development or receiving the requisite marketing approvals.
+Added: Our product development costs may also increase if we experience development delays or delays in receiving the requisite marketing approvals.
Our preclinical studies or clinical trials may need to be restructured or may not be completed on schedule, or at all.
−Removed: Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do.
+Added: Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize vadadustat or any other product candidate, including those that may be in-licensed or acquired, or allow our competitors to bring products to market before we do.
This could impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
−Removed: We may find it difficult to enroll patients in our clinical studies, which could delay or prevent clinical studies of our products or product candidates.
−Removed: Identifying and qualifying patients to participate in clinical studies of our products or product candidates is critical to our success.
−Removed: The timing of our clinical studies depends, in part, on the speed at which we can recruit patients to participate in testing our products and product candidates.
+Added: We may find it difficult to enroll patients in our clinical studies, which could delay or prevent clinical studies of Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired.
+Added: Identifying and qualifying patients to participate in clinical studies is critical to our success.
+Added: The timing of our clinical studies depends, in part, on the speed at which we can recruit patients to participate in our clinical trials.
Patients may be unwilling to participate in our clinical studies because of concerns about adverse events observed with the current standard of care, competitor products and/or other investigational agents, in each case for the same indications and/or similar patient populations.
−Removed: In addition, in the case of clinical studies of our product candidates, patients currently receiving treatment with the current standard of care or a competitor product may be reluctant to participate in a clinical trial with an investigational drug.
−Removed: Finally, competition for clinical trial sites may limit our access to patients appropriate for studies of our products and product candidates.
+Added: In addition, in the case of clinical studies of any product candidate, patients currently receiving treatment with the current standard of care or a competitor product may be reluctant to participate in a clinical trial with an investigational drug.
+Added: Finally, competition for clinical trial sites may limit our access to patients appropriate for our clinical trials.
As a result, the timeline for recruiting patients and conducting studies may be delayed.
−Removed: These delays could result in increased costs, delays in advancing our development of our product candidates, or termination of the clinical studies altogether.
+Added: These delays could result in increased costs, delays in advancing our development of any product or product candidate, or termination of the clinical studies altogether.
We may not be able to identify, recruit and enroll a sufficient number of patients, or those with required or desired characteristics, to complete our clinical studies in a timely manner.
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• eligibility criteria for, and design of, the study in question;
−Removed: • perceived risks and benefits of the products and product candidate under study, including as a result of adverse effects observed in similar or competing therapies;
+Added: • perceived risks and benefits of the product or product candidate under study, including as a result of adverse effects observed in similar or competing therapies;
• proximity and availability of clinical study sites for prospective patients;
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We may not be able to conduct clinical trials in some jurisdictions outside of the United States.
−Removed: We and our collaboration partners currently expect to seek marketing approval of vadadustat for the treatment of anemia due to CKD in markets outside the United States, including the EU.
−Removed: Our ability to successfully initiate, enroll and complete a clinical
−Removed: study in any country outside of the United States is subject to numerous additional risks unique to conducting business in jurisdictions outside the United States, including:
+Added: Our ability to successfully initiate, enroll and complete a clinical study in any country outside of the United States is subject to numerous additional risks unique to conducting business in jurisdictions outside the United States, including:
• difficulty in establishing or managing relationships with qualified CROs, physicians and clinical trial sites;
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Also, certain jurisdictions require data from studies conducted in their country in order to obtain approval in that country.
−Removed: For example, in Japan, MTPC conducted a Phase 3 program of vadadustat, which is separate from our global Phase 3 program of vadadustat.
−Removed: If we or our collaboration partners have difficulty conducting our clinical studies in jurisdictions outside the United States as planned, we may need to delay, limit or terminate ongoing or planned clinical studies, any of which could have a material adverse effect on our business.
+Added: If we or our collaboration partners have difficulty conducting our clinical studies in jurisdictions outside the United States as planned, we may need to delay, limit or terminate ongoing or planned clinical studies, any of which could have an adverse effect on our business.
Positive results from preclinical and clinical studies are not necessarily predictive of the results of any future clinical studies.
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Success in preclinical studies may not be predictive of similar results in humans during clinical trials, successful results from early or small clinical trials may not be replicated in later and larger clinical trials, and successful interim results from ongoing clinical studies may not be indicative of results obtained when those studies are completed.
−Removed: For example, our encouraging preclinical and clinical results for vadadustat thus far do not ensure that the results of any future clinical trials will demonstrate similar results.
−Removed: Our global Phase 3 development program for vadadustat has enrolled a larger number of patients and will treat patients for longer periods than our prior trials, which will result in a greater likelihood that adverse events may be observed.
−Removed: Due to these and other differences between our global Phase 3 development program for vadadustat and our prior trials, our positive results from preclinical and clinical studies may not be replicated in our global Phase 3 development program for vadadustat.
For example, while we announced positive top-line results from INNO 2 VATE and vadadustat achieved the primary and key secondary efficacy endpoint in each of the two PRO 2 TECT studies, the PRO 2 TECT program did not meet the primary MACE safety endpoint.
Many companies in the biopharmaceutical industry have suffered significant setbacks in late-stage clinical trials after achieving positive results in early stage development, and we may face similar setbacks.
−Removed: If the results of our ongoing or future clinical trials for vadadustat or any other product candidates are inconclusive with respect to efficacy, if we do not meet our clinical endpoints with statistical significance, or if there are safety concerns or adverse events, we may be prevented from or delayed in obtaining marketing approval for vadadustat or any other product candidates.
−Removed: For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we remain appropriately cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
+Added: If the results of our ongoing or future clinical trials for a product candidate are inconclusive with respect to efficacy, if we do not meet our clinical endpoints with statistical significance, or if there are safety concerns or adverse events, we may be prevented from or delayed in obtaining marketing approval a product candidate.
+Added: For example, the PRO 2 TECT program did not meet the primary MACE safety endpoint, and we are remaining cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
We may not be successful in our efforts to identify, acquire, discover, develop and commercialize additional products or product candidates, which could impair our ability to grow.
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In addition, we cannot provide assurance that any products that we develop or approved products that we acquire will be manufactured profitably, achieve market acceptance or not require substantial post-marketing clinical trials.
−Removed: Accordingly, there can be no assurance that we will ever be able to identify additional therapeutic opportunities for our product candidates or to acquire or develop suitable potential product candidates or approved products, which could materially adversely affect our future growth and prospects.
−Removed: We may focus our efforts and resources on potential product candidates or other programs that ultimately prove to be unsuccessful.
−Removed: Auryxia, vadadustat or any other products and product candidates may cause undesirable side effects or have other properties that delay or limit their commercial potential, or in the case of our product candidates, prevent their marketing approval.
−Removed: Undesirable side effects caused by or other undesirable properties of our product or product candidates or competing commercial products or product candidates in development that utilize a common mechanism of action could cause us or regulatory authorities to interrupt, delay or halt clinical trials, could result in a more restrictive label or the delay, denial or withdrawal of marketing approval by the FDA or other regulatory authorities, and could lead to potential product liability claims.
−Removed: Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
−Removed: If we or others identify undesirable side effects caused by or other undesirable properties of Auryxia, vadadustat, or any other products or product candidates, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:
+Added: Accordingly, there can be no assurance that we will ever be able to identify additional therapeutic opportunities for Auryxia or vadadustat or to acquire or develop suitable additional products or product candidates, which could materially adversely affect our future growth and prospects.
+Added: We may focus our efforts and resources on potential products, product candidates or other programs that ultimately prove to be unsuccessful.
+Added: Auryxia, vadadustat or any other product and product candidate, including those that may be in-licensed or acquired, may cause undesirable side effects or have other properties that delay or limit their commercial potential, or in the case of vadadustat, prevent its marketing approval.
+Added: Undesirable effects caused by, or other undesirable properties of, Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired, or competing commercial products or product candidates in development that utilize a common mechanism of action could cause us or regulatory authorities to interrupt, delay or halt clinical trials, could result in a more restrictive label or the delay, denial or withdrawal of marketing approval by the FDA or other regulatory authorities, and could lead to potential product liability claims.
+Added: Results of our clinical trials could reveal a high and unacceptable severity and prevalence of undesirable effects or unexpected characteristics.
+Added: If we or others identify undesirable effects caused by or other undesirable properties of Auryxia, vadadustat, or any other product or product candidate, including those that may be in-licensed or acquired, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:
• our clinical trials may be put on hold;
• patient recruitment could be slowed, and enrolled patients may not want to complete the clinical trial;
−Removed: • we may be unable to obtain marketing approval for our product candidates or regulatory authorities may withdraw approvals of products;
+Added: • we may be unable to obtain marketing approval or regulatory authorities may withdraw marketing approval;
• regulatory authorities may require warnings on the label, such as the warning on Auryxia’s label regarding iron overload;
−Removed: • REMS or FDA-imposed risk management plans that use risk minimization strategies to ensure that the benefits of certain prescription drugs outweigh their risks, may be required;
+Added: • REMS or FDA-imposed risk management plans that use restrictive risk minimization strategies, may be required;
• we could be sued and held liable for harm caused to patients;
• our reputation may suffer.
−Removed: Any of these events could prevent us from achieving or maintaining marketing approval and, ultimately, market acceptance of Auryxia, vadadustat or any other products or product candidates, could substantially increase our costs, and could significantly impact our ability to successfully commercialize Auryxia, vadadustat or any other products and product candidates and generate revenues.
−Removed: The patient populations treated with Auryxia and the patients in our clinical studies for vadadustat, have CKD, a serious disease that increases the risk of cardiovascular disease including heart attacks and stroke and, ultimately, may cause kidney failure.
−Removed: Many patients with CKD are elderly with comorbidities making them susceptible to significant health risks.
−Removed: Therefore, the likelihood of these patients having adverse events, including serious adverse events, while participating in our studies is high.
−Removed: In our clinical studies of vadadustat, adverse events were reported.
−Removed: For example, in our Phase 2b study of vadadustat in non-dialysis patients with anemia due to CKD, one subject with multiple co-morbidities and concomitant medications, including chlorthalidone, had a serious adverse event of liver function test abnormal, considered a case of drug induced liver injury meeting the biochemical criteria of Hy’s Law, which was assessed as probably related to vadadustat.
+Added: Any of these events could prevent us from achieving or maintaining marketing approval and, ultimately, market acceptance or penetration of Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired, could substantially increase our costs, and could significantly impact our ability to successfully commercialize Auryxia, vadadustat or any other product and product candidate, including those that may be in-licensed or acquired, and generate product revenue.
+Added: The patient populations treated with Auryxia and potential patient populations for vadadustat, if approved, have CKD, a serious disease that increases the risk of cardiovascular disease including heart attacks and stroke and, in its most severe form, results in, kidney failure and the need for dialysis or kidney transplant.
+Added: Many patients with CKD are elderly with comorbidities making
+Added: them susceptible to significant health risks.
+Added: Therefore, the likelihood of these patients having adverse events, including serious adverse events is high.
With respect to the global INNO 2 VATE Phase 3 program, the incidence of treatment emergent adverse events during the incident dialysis patient study ( Correction and Conversion ) in vadadustat treated patients was 83.8% and 85.5% in darbepoetin alfa treated patients.
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Serious treatment emergent adverse events were 58.5% for vadadustat-treated patients and 56.6% for darbepoetin alfa-treated patients.
−Removed: Serious adverse events considered related to vadadustat and any other product candidates could have a material adverse effect on the development of such product candidates and our business as a whole.
−Removed: Our understanding of adverse events in prior clinical trials of our product candidates may change as we gather more information, and additional unexpected adverse events may be observed in future clinical trials.
+Added: Serious adverse events considered related to vadadustat and any other product candidates could have material adverse consequences on the development of such product candidates and our business as a whole.
+Added: Our understanding of adverse events in prior clinical trials of our product candidates may change as we gather more information, and additional unexpected adverse events may be observed in future clinical trials or in the market.
+Added: For example, we previously reported that in our Phase 2b study of vadadustat in non-dialysis patients with anemia due to CKD, one subject had a serious adverse event of an abnormal liver function test, considered a case of drug induced liver injury, or DILI, meeting the biochemical criteria of Hy’s Law.
+Added: Following the completion of our global Phase 3 clinical program for vadadustat, there was a review of hepatic safety across the vadadustat clinical program.
+Added: The review of hepatic safety included a blinded assessment of all hepatic events in the studies by a panel of hepatic experts and analysis by an independent hepatic expert and our team.
+Added: Based on this review, we concluded that the data across the clinical program showed that the overall hepatic safety profiles of vadadustat and darbepoetin alfa appear to be similar.
+Added: In addition, we concluded that there were no events across the clinical program that met the biochemical criteria for Hy’s Law.
+Added: More specifically, we concluded that the DILI from our Phase 2b study of vadadustat in non-dialysis patients with anemia due to CKD that we previously reported as Hy’s Law did not, in fact, meet the biochemical criteria of Hy’s Law.
+Added: Our conclusion on this case was reflected in our NDA for vadadustat .
The most commonly reported adverse reactions in the clinical trials that supported the approval of Auryxia for the Hyperphosphatemia Indication in the United States included diarrhea (21%), discolored feces (19%), nausea (11%), constipation (8%), vomiting (7%), and cough (6%).
Gastrointestinal adverse reactions were the most common reason for discontinuing Auryxia (14%) in clinical trials for the Hyperphosphatemia Indication.
−Removed: The most commonly reported adverse
−Removed: reactions in the clinical trials that supported the approval of Auryxia in the United States for the IDA Indication included discolored feces (22%), diarrhea (21%), constipation (18%), nausea (10%), abdominal pain (5%) and hyperkalemia (5%).
+Added: The most commonly reported adverse reactions in the clinical trials that supported the approval of Auryxia in the United States for the IDA Indication included discolored feces (22%), diarrhea (21%), constipation (18%), nausea (10%), abdominal pain (5%) and hyperkalemia (5%).
Diarrhea was the most common reason for discontinuing Auryxia (2.6%) in clinical trials for the IDA Indication.
−Removed: Furthermore, any post-marketing clinical trials conducted, if successful, may expand the patient populations treated with Auryxia, or any other products we acquire or for which we receive marketing approval, within or outside of their current indications or patient populations, which could result in the identification of previously unknown side effects, increased frequency or severity of known side effects, or detection of unexpected safety signals.
−Removed: In addition, as Auryxia and any other products are commercialized, they will be used in larger patient populations and in less rigorously controlled environments than in clinical studies.
−Removed: As a result, regulatory authorities, healthcare practitioners, third party payors or patients may perceive or conclude that the use of Auryxia or any other products are associated with serious adverse effects, undermining our commercialization efforts.
−Removed: Further, if we or others identify previously unknown side effects, if known side effects are more frequent or severe than in the past, if we or others detect unexpected safety signals for our products or product candidates, including Auryxia, vadadustat, or any product or product candidate perceived to be similar to Auryxia, vadadustat or any other products or product candidates, or if any of the foregoing are perceived to have occurred, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:
+Added: Any post-marketing clinical trials conducted, if successful, may expand the patient populations treated with Auryxia, vadadustat or any other product we acquire or for which we receive marketing approval, within or outside of their current indications or patient populations, which could result in the identification of previously unknown undesirable effects, increased frequency or severity of known undesirable effects, or result in the identification of unexpected safety signals.
+Added: In addition, as Auryxia and any other products are commercialized, they will be used in significantly larger patient populations, in less rigorously controlled environments and, in some cases, by less experienced and less expert treating practitioners, than in clinical studies.
+Added: As a result, regulatory authorities, healthcare practitioners, third party payors or patients may perceive or conclude that the use of Auryxia or any other products are associated with serious undesirable effects, undermining our commercialization efforts.
+Added: Further, if we or others identify previously unknown undesirable effects, if known undesirable effects are more frequent or severe than in the past, if we or others detect and confirm unexpected safety signals for Auryxia, vadadustat, or any other product or product candidate perceived to be similar to Auryxia, vadadustat, or if any of the foregoing are perceived to have occurred, either before or after receipt of marketing approval, a number of potentially significant negative consequences could result, including:
• sales may be impaired;
1 unchanged sentence
• we may decide to, or be required to, send drug warnings or safety alerts to physicians, pharmacists and hospitals (or the FDA or other regulatory authorities may choose to issue such alerts), or we may decide to conduct a product recall or be requested to do so by the FDA or other regulatory authority;
−Removed: • reformulation of the product, additional nonclinical or clinical studies, changes in labeling or changes to or re-approvals of manufacturing facilities may be required;
+Added: • reformulation of the product, additional nonclinical or clinical studies, restrictive changes in labeling or changes to or re-approvals of manufacturing facilities may be required;
• we may be precluded from pursuing additional development opportunities to enhance the clinical profile of a product within its indicated populations, or studying the product or product candidate in additional indications and populations or in new formulations;
• government investigations or lawsuits, including class action suits, may be brought against us.
−Removed: Any of the above occurrences could delay or prevent us from achieving or maintaining marketing approval, harm or prevent sales of Auryxia or, if approved, vadadustat or other product candidates, increase our expenses and impair or prevent our ability to successfully commercialize Auryxia, vadadustat or any other products or product candidates
−Removed: Risks Related to Regulatory Approval of Our Product Candidates
+Added: Any of the above occurrences could delay or prevent us from achieving or maintaining marketing approval, harm or prevent sales of Auryxia or, if approved, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired, increase our expenses and impair or prevent our ability to successfully commercialize Auryxia, vadadustat or any other products or product candidate.
+Added: Risks Related to Regulatory Approval
We may not be able to obtain marketing approval for, or successfully commercialize, vadadustat, or we may experience significant delays in doing so, any of which would materially harm our business.
−Removed: The clinical trials of our product candidates are, and the manufacturing and marketing of our product candidates will be, subject to extensive and rigorous review and regulation by numerous governmental authorities in the United States, and in other countries where we and our collaborators intend to test and, if approved, market any product candidates.
+Added: Clinical trials, manufacturing and marketing of any product or product candidate are subject to extensive and rigorous review and regulation by numerous governmental authorities in the United States and other jurisdictions.
Before obtaining marketing approval for the commercial sale of any product candidate, we must demonstrate through extensive preclinical testing and clinical trials that the product candidate is safe and effective for use in each target indication.
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Of the large number of drugs in development in the United States and in other jurisdictions, only a small percentage successfully complete the FDA’s and other jurisdictions’ marketing approval processes and are commercialized.
−Removed: Accordingly, even if we are able to obtain the requisite capital to continue to fund our development programs, we may be unable to successfully develop or commercialize vadadustat or any other product candidates.
+Added: Accordingly, even if we are able to obtain the requisite capital to continue to fund our development and commercialization efforts, we may be unable to continue commercialization of Auryxia or successfully develop or commercialize vadadustat or any other product or product candidate, including those that may be in-licensed or acquired.
We and Otsuka, our collaboration partner, are not permitted to market vadadustat in the United States until we receive approval from the FDA, in the EU until we receive approval from the EMA, or in any other jurisdiction until the requisite approval from regulatory authorities in such jurisdiction is received.
−Removed: As a condition to receiving marketing approval for vadadustat, we must complete Phase 3 studies and any additional preclinical or clinical studies required by the FDA, the EMA, the PMDA or other regulatory authorities.
−Removed: Vadadustat may not be successful in clinical trials or receive marketing approval.
−Removed: We plan to submit to the FDA an NDA for vadadustat for the treatment of anemia due to CKD in adult dialysis-dependent and non-dialysis dependent patients as early as possible in 2021.
−Removed: However, as vadadustat did not meet the primary safety endpoint of the
−Removed: PRO 2 TECT program, we remain appropriately cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
+Added: As a condition to receiving marketing approval for vadadustat, we must complete Phase 3 studies and any additional preclinical or clinical studies required by the FDA, the EMA or other regulatory authorities.
+Added: Vadadustat may not receive marketing approval.
+Added: We submitted an NDA to the FDA for vadadustat for the treatment of anemia due to CKD in adult dialysis-dependent and non-dialysis dependent patients in March 2021.
+Added: Our NDA submission did not include a Priority Review Voucher.
+Added: Based on standard FDA review timelines, the FDA has a 60-day period to determine whether the NDA is complete and acceptable for review.
+Added: As vadadustat did not meet the primary safety endpoint of the PRO 2 TECT program, we are remaining cautious in our outlook for potential approval of vadadustat for the treatment of anemia due to CKD in adult non-dialysis dependent patients.
Further, vadadustat may not receive marketing approval even if it is approved in other countries.
−Removed: For example, although vadadustat is approved in Japan for the treatment of anemia due to CKD, such approval does not guarantee approval in the United States by the FDA.
−Removed: Obtaining marketing approval in the United States and other jurisdictions is a complex, lengthy, expensive and uncertain process that typically takes many years and depends upon numerous factors, including the substantial discretion of the regulatory authorities.
−Removed: Even if our product candidates demonstrate safety and efficacy in clinical studies, the regulatory agencies may not complete their review processes in a timely manner, or we may not be able to obtain marketing approval.
+Added: For example, although vadadustat is approved in Japan for the treatment of adult patients with anemia due to CKD, such approval does not guarantee approval in the United States by the FDA.
+Added: Obtaining marketing approval in the United States and other jurisdictions depends upon numerous factors, many of which are subject to the substantial discretion of the regulatory authorities, including that regulatory agencies may not complete their review processes in a timely manner and, following completion of the review process, may not grant marketing approval.
Furthermore, approval of a drug does not ensure successful commercialization.
For example, on September 23, 2015, the European Commission, or EC, approved Fexeric for the control of hyperphosphatemia, in adult patients with CKD.
−Removed: Pursuant to the sunset clause under EU law, the EC’s approval of Fexeric in the EU was contingent on, among other things, our commencing marketing of Fexeric within three years;
+Added: Pursuant to the sunset clause under EU law, the EC’s approval of Fexeric in the EU was contingent on, among other things, our
+Added: commencing marketing of Fexeric within three years;
although we successfully negotiated an extension to December 23, 2019, we did not commence marketing Fexeric by such date and therefore the Fexeric approval in the EU has ceased to be valid.
−Removed: In February 2020, we entered into a letter agreement, or the Letter Agreement, with Vifor Pharma relating to Vifor Pharma’s agreement with a third party to purchase a Priority Review Voucher issued by the FDA, or the PRV, subject to satisfaction of customary closing conditions, or the PRV Purchase.
−Removed: Although a PRV entitles the holder to priority review of an NDA or a Biologics License Application for a new drug, which reduces the target FDA review time to six months after official acceptance of the submission, the utilization of a PRV does not ensure a faster review or faster approval compared to products considered for approval under conventional FDA procedures, and in any event does not assure ultimate approval by FDA.
−Removed: Furthermore, even if utilization of the PRV enables a faster approval of vadadustat, it may not result in faster commercialization of vadadustat.
−Removed: For more information on risks related to commercialization of vadadustat, see “Risks Related to Commercialization”.
−Removed: In addition, pursuant to the Letter Agreement, we paid Vifor Pharma $10.0 million in connection with the closing of the PRV Purchase.
−Removed: Vifor Pharma is obligated to retain all rights to, and maintain the validity of, the PRV until we and Vifor Pharma (a) enter into a definitive agreement setting forth the financial and other terms by which Vifor Pharma will assign the PRV to us for use with our planned NDA for vadadustat for the treatment of anemia due to CKD in both dialysis-dependent and non-dialysis dependent patients, or (b) make a mutual decision to sell the PRV and share the proceeds based on certain terms.
−Removed: We may not come to terms with Vifor Pharma on assigning the PRV to us, and even if we do, we and Vifor Pharma may decide not to use the PRV for vadadustat and, instead, resell it.
−Removed: In the event of resale of the PRV at a price lower than the purchase price, our share of the proceeds from the resale would be lower than our $10.0 million contribution.
−Removed: In addition, the safety concerns associated with the current standard of care for the indications for which we are seeking marketing approval for our product candidates may affect the FDA’s, the EMA’s, the PMDA’s or other regulatory authorities’ review of the safety results of our compounds in development.
+Added: In addition, the safety concerns associated with the current standard of care for the indications for which we are seeking marketing approval for vadadustat and any other product candidate, including those that may be in-licensed or acquired, may affect the FDA’s, the EMA’s or other regulatory authorities’ review of the safety results of our compounds in development.
Further, the policies or regulations, or the type and amount of clinical data necessary to gain approval, may change during the course of a product candidate’s clinical development and may vary among jurisdictions.
−Removed: It is possible that vadadustat and any other product candidates will never obtain marketing approval.
−Removed: The FDA may delay, limit or deny approval of vadadustat or any other product candidates for many reasons including, among others:
−Removed: • we may not be able to demonstrate that vadadustat is safe and effective in treating anemia due to CKD or that any other product candidate is safe and effective for its proposed indication(s) to the satisfaction of the FDA;
+Added: It is possible that vadadustat and any other product candidate, including those that may be in-licensed or acquired, will never obtain marketing approval in certain jurisdictions or at all.
+Added: The FDA may delay, limit or deny approval of vadadustat or any other product candidate, including those that may be in-licensed or acquired, for many reasons including, among others:
+Added: • we may not be able to demonstrate that vadadustat is safe and effective in treating adult patients with anemia due to CKD or that any other product candidate is safe and effective for its proposed indications to the satisfaction of the FDA;
• the results of our clinical trials may only be modestly positive, or there may be concerns with the profile due to efficacy or safety;
−Removed: • the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for marketing approval;
+Added: • the FDA may determine during its 60-day preliminary review period following submission of our NDA that the vadadustat NDA is not sufficiently complete to permit substantive review;
+Added: • the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA for review and/or for marketing approval;
• the FDA may disagree with the number, design, size, conduct or implementation of our clinical trials;
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• the FDA may grant approval contingent on the performance of costly post-marketing clinical trials;
−Removed: • we, or our CROs or other vendors, may fail to comply with GXP;
+Added: • the FDA's onsite inspections may be delayed due to the COVID-19 pandemic;
+Added: • we, or our CROs or other vendors, may fail to comply with GXP or fail to pass any regulatory inspections or audits;
• the CROs that we retain to conduct our clinical trials may not perform effectively or take actions that adversely impact our clinical trials, or we may fail to communicate effectively or provide the appropriate level of oversight of our CROs;
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• the FDA could deem that our financial relationships with certain principal investigators constitute a conflict of interest, such that the data from those principal investigators may not be used to support our applications;
−Removed: • an FDA Advisory Committee or other regulatory advisory group or authority could recommend non-approval or restrictions on approval;
−Removed: • the FDA’s decision-making regarding vadadustat and any other product candidates may be impacted by the results of competitors’ clinical trials and safety concerns of marketed products used to treat the same indications as the indications for which vadadustat and any other product candidates are being developed;
+Added: • the FDA may ask an Advisory Committee to review portions of the NDA, the FDA may have difficulty scheduling an Advisory Committee meeting in a timely manner or, if convened, an FDA Advisory Committee could recommend non-approval, conditions of approval or restrictions on approval, and the FDA may ultimately agree with the recommendations;
+Added: • the FDA may require development of a REMS as a condition of approval or post-approval;
+Added: • the FDA’s review process and decision-making regarding vadadustat and any other product candidate may be impacted by the results of our and our competitors’ clinical trials and safety concerns of marketed products used to treat the same indications as the indications for which vadadustat and any other product candidate are being developed;
• the FDA may not approve the manufacturing processes or facilities of third party manufacturers with whom we contract;
• the policies or regulations of the FDA may significantly change in a manner that renders our clinical data insufficient for approval, or requires us to amend or submit new clinical protocols.
−Removed: In addition, similar reasons may cause the EMA or the PMDA or other regulatory authorities to delay, limit or deny approval of vadadustat or any other product candidate outside the United States.
−Removed: If we experience delays in obtaining approval, or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired, which could have a material adverse effect on our business.
+Added: In addition, similar reasons may cause the EMA or other regulatory authorities to delay, limit or deny approval of vadadustat or any other product candidate outside the United States.
+Added: If we experience delays in obtaining approval, or if we fail to obtain approval of vadadustat or any other product candidate, including those that may be in-licensed or acquired, the commercial prospects for vadadustat or any other such product candidate may be harmed and our ability to generate revenues will be materially impaired, which could have a material adverse effect on our business.
We may be delayed in obtaining, or be unable to obtain, marketing approval or reimbursement for vadadustat or any other product candidate in certain countries outside of the United States.
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The approval procedures vary among jurisdictions and may involve requirements for additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval.
−Removed: In addition, in many countries outside the United States, a drug product must be approved for reimbursement before it can be marketed or sold in that country.
+Added: In addition, in many countries outside the United States, a drug must be approved for reimbursement before it can be marketed or sold in that country.
In some cases, the prices that we intend to charge for our products are also subject to approval.
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The marketing approval process in countries outside of the United States may include all of the risks associated with obtaining FDA approval and, in some cases, additional risks.
−Removed: We may not obtain such regulatory or reimbursement approvals on a timely basis, if at all.
−Removed: We may not be able to file for marketing approvals and may not receive the necessary approvals to commercialize our product candidates in any market.
+Added: We may not be able to file for or obtain such regulatory or reimbursement approvals on a timely basis, if at all.
Also, favorable pricing in certain countries depends on a number of factors, some of which are outside of our control.
−Removed: Additionally, on June 23, 2016, the electorate in the United Kingdom voted in favor of leaving the European Union, commonly referred to as Brexit.
−Removed: Following protracted negotiations, the United Kingdom left the European Union on January 31, 2020.
−Removed: Under the withdrawal agreement, there is a transitional period until December 31, 2020 (extendable for up to two years).
−Removed: Discussions between the United Kingdom and the European Union have so far mainly focused on finalizing withdrawal issues and transition agreements but have been extremely difficult to date.
−Removed: To date, only an outline of a trade agreement has been reached.
−Removed: Much remains open, but the Prime Minister has indicated that the United Kingdom will not seek to extend the transitional period beyond the end of 2020.
−Removed: If no trade agreement has been reached before the end of the transitional period, there may be significant market and economic disruption.
−Removed: The Prime Minister has also indicated that the United Kingdom will not accept high regulatory alignment with the European Union.
−Removed: Since the regulatory framework for pharmaceutical products in the United Kingdom covering quality, safety, and efficacy of pharmaceutical products, clinical trials, marketing authorization, commercial sales, and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit could materially impact the future regulatory regime that applies to products and the approval of product candidates in the United Kingdom.
−Removed: Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of Brexit or otherwise, may force us to restrict or delay efforts to seek regulatory approval in the United Kingdom and/or the EU for our product candidates, which could significantly and materially harm our business.
+Added: Additionally, we could face heightened risks with respect to seeking marketing approval in the United Kingdom as a result of the recent withdrawal of the United Kingdom from the European Union, commonly referred to as Brexit.
+Added: Pursuant to the formal withdrawal arrangements agreed between the United Kingdom and the European Union, the United Kingdom withdrew from the European Union, effective December 31, 2020.
+Added: On December 24, 2020, the United Kingdom and European Union entered into a Trade and Cooperation Agreement.
+Added: The agreement sets out certain procedures for approval and recognition of medical products in each jurisdiction.
+Added: Any delay in obtaining, or an inability to obtain, any marketing approvals, as a result of the Trade and Cooperation Agreement would prevent us from commercializing vadadustat or any other product candidate, including those that may be in-licensed or acquired, in the United Kingdom and/or the European Union and restrict our ability to generate revenue and achieve and sustain profitability.
+Added: If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the United Kingdom and/or the European Union for vadadustat or any other product candidate, which could significantly and materially harm our business.
Products approved for marketing are subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, or product candidates, when and if any of them is approved.
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Our request to extend this deadline was denied, and the study is considered delayed.
−Removed: With regard to the IDA Indication, we did not meet a milestone relating to the post-approval pediatric study of Auryxia in a timely manner and received a notification from the FDA.
+Added: With regard to the IDA Indication, we did not meet a milestone relating to the post-approval pediatric study of Auryxia in a
+Added: timely manner and received a notification from the FDA.
Subsequently, the FDA agreed to extend the pediatric clinical study timelines for the IDA Indication.
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These requirements and guidance include manufacturing processes and procedures (including record keeping), the implementation and operation of quality systems to control and assure the quality of the product, submissions of safety and other post-marketing information and reports, as well as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post-approval.
−Removed: If we, our CMOs or other third parties we engage fail to adhere to such regulatory requirements and guidance, we could suffer significant consequences, including product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs, and our development or commercialization efforts may be materially harmed.
+Added: If we, our CMOs or other third parties we engage fail to adhere to such regulatory requirements and guidance, we could suffer significant consequences, including product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, loss of customer confidence, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs, and our development or commercialization efforts may be materially harmed.
Moreover, the FDA and other regulatory authorities closely regulate the post-approval marketing and promotion of drugs to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved labeling.
−Removed: The FDA and other regulatory authorities impose stringent restrictions on companies’ communications regarding use of their products, and if we promote our products beyond their approved indications or inconsistent with the approved label, we may be subject to enforcement actions or prosecution arising from such activities.
+Added: The FDA and other regulatory authorities impose stringent restrictions on companies’ communications regarding use of their products, and if we promote any approved product beyond its approved indications or inconsistent with the approved label, we may be subject to enforcement actions or prosecution arising from such activities.
Violations of the U.S.
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• injunctions or the imposition of civil or criminal penalties.
−Removed: For example, in the second quarter of 2020, we initiated a limited, voluntary recall of specific lots of Auryxia because it was determined that certain lots were not manufactured in conformance with the FDA's GMP guidance relating to validation.
−Removed: In addition, we recorded write-downs of inventory associated with affected lots during the second and third quarters of 2020.
−Removed: While the costs of the recall were immaterial, should another recall or quality issues occur in the future, they could result in material costs, have a material adverse effect on our business and results of operations, and may impact our ability to supply Auryxia, VAFSEO in Japan or vadadustat for commercial and clinical use.
+Added: For example, we recently had three limited, voluntary recalls of Auryxia.
+Added: These and any other recalls or any supply, quality or manufacturing issues in the future could result in significant negative consequences, including reputational harm, loss of customer confidence, and a negative impact on our financials, any of which could have a material adverse effect on our business and results of operations, and may impact our ability to supply Auryxia, Vafseo TM, in Japan or vadadustat for commercial and clinical use.
Non-compliance with FDA, the EMA, the PMDA and other regulatory authorities’ requirements regarding safety monitoring or pharmacovigilance can also result in significant financial penalties.
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If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would materially adversely affect our business.
−Removed: Risks Related to Government Regulation and Compliance
+Added: Risks Related to Governmental Regulation and Compliance
We are subject to a complex regulatory scheme that requires significant resources to ensure compliance.
−Removed: Failure to comply with applicable laws could subject us to government scrutiny or government enforcement, potentially resulting in costly investigations and/or fines or sanctions, or impacting our relationships with key regulatory agencies such as the FDA, SEC or the EMA.
+Added: Failure to comply with applicable laws could subject us to government scrutiny or government enforcement, potentially resulting in costly investigations and/or fines or sanctions, or impacting our relationships with key regulatory agencies such as the FDA, the U.S.
+Added: Securities and Exchange Commission or the EMA.
A variety of laws apply to us or may otherwise restrict our activities, including the following:
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Compliance with these and other applicable laws and regulations requires us to expend significant resources.
−Removed: Failure to comply with these laws and regulations may subject us to government investigations, enforcement actions by regulatory authorities, penalties, damages, fines, the restructuring of our operations, or the imposition of a clinical hold, any of which could materially adversely affect our business and would result in increased costs and diversion of management attention and could delay or prevent the development, regulatory approval and commercialization of our product candidates, any of which could have a material adverse effect on our business.
+Added: Failure to comply with these laws and regulations may subject us to government investigations, enforcement actions by regulatory authorities, penalties, damages, fines, the restructuring of our operations, or the imposition of a clinical hold, any of which could materially adversely affect our business and would result in increased costs and diversion of management attention and could negatively impact the development, regulatory approval and commercialization of Auryxia or vadadustat, any of which could have a material adverse effect on our business.
We will incur significant liability if it is determined that we are promoting any “off-label” use of Auryxia or any other product we may develop, acquire or in-license or if it is determined that any of our activities violates the federal Anti-Kickback Statute.
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In addition, laws and regulations govern the distribution and tracing of prescription drugs and prescription drug samples, including the Prescription Drug Marketing Act of 1976 and the Drug Supply Chain Security Act, which regulate the distribution and tracing of prescription drugs and prescription drug samples at the U.S.
−Removed: federal level and set minimum standards for the regulation of drug distributors by the states.
+Added: federal level and set minimum standards for the
+Added: regulation of drug distributors by the states.
A company that is found to have improperly promoted off-label uses or to have otherwise engaged in false or misleading promotion or improper distribution of drugs will be subject to significant liability, potentially including civil and administrative remedies as well as criminal sanctions.
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If any of our relationships or activities is determined to violate applicable federal and state anti-kickback laws, false claims laws, or other laws or regulations, the company and/or company executives, employees, and other representatives could be subject to significant fines and criminal sanctions, imprisonment, and potential exclusion from Medicare and Medicaid.
−Removed: Efforts to pursue regulatory reform may limit the FDA’s ability to engage in oversight and implementation activities in the normal course, and that could negatively impact our business.
−Removed: There have been several executive actions taken, including the issuance of a number of executive orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.
−Removed: On January 30, 2017, an executive order, applicable to all executive agencies including the FDA, was issued that requires that for each notice of proposed rulemaking or final regulation to be issued in fiscal year 2017, the agency shall identify at least two existing regulations to be repealed, unless prohibited by law.
−Removed: These requirements are referred to as the “two-for-one” provisions.
−Removed: This executive order includes a budget neutrality provision that requires the total incremental cost of all new regulations in the 2017 fiscal year, including repealed regulations, to be no greater than zero, except in limited circumstances.
−Removed: For fiscal years 2018 and beyond, the executive order requires agencies to identify regulations to offset any incremental cost of a new regulation.
−Removed: Interim guidance issued by the Office of Information and Regulatory Affairs within the Office of Management and Budget on February 2, 2017, indicates that the “two-for-one” provisions may apply not only to agency regulations, but also to significant agency guidance documents.
−Removed: More recently, on October 9, 2019, the President issued another executive order meant to ensure that agency guidance documents do not establish legally binding requirements and directing each agency to rescind guidance documents that it determines should no longer be in effect.
−Removed: If these executive actions impose constraints on FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.
+Added: Disruptions in the FDA and other government agencies caused by funding shortages or global health concerns could prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.
+Added: The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes and other events that may otherwise affect the FDA’s ability to perform routine functions.
+Added: Average review times at the FDA have fluctuated in recent years as a result.
+Added: In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
+Added: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed or approved by necessary government agencies, which would adversely affect our business.
+Added: For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.
+Added: government has shut down.
+Added: If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
+Added: In response to the COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities, and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities.
+Added: Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system.
+Added: The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities.
+Added: Regulatory authorities outside the U.S.
+Added: may also impose similar restrictions or other policy measures in response to the COVID-19 pandemic.
+Added: If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Compliance with privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.
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For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including personal health data, is subject to the GDPR, which took effect across all member states of the European Economic Area, or EEA, in May 2018.
−Removed: The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data when required, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third party processors.
+Added: The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data when required, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, when required, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third party processors.
The GDPR increases our obligations with respect to sponsors with clinical trial sites in the EEA by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial patients and investigators.
In addition, the GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States.
−Removed: The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater, and it also confers a private right of action on data patients and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
+Added: The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
In addition, the GDPR provides that EU member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data.
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A broad range of legislative measures also have been introduced at the federal level.
−Removed: Accordingly, failure to comply with current and any
−Removed: future federal and state laws regarding privacy and security of personal information could expose us to fines and penalties.
+Added: Accordingly, failure to comply with current and any future federal and state laws regarding privacy and security of personal information could expose us to fines and penalties.
We also face a threat of potential consumer class actions related to these laws and the overall protection of personal data.
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Healthcare providers, physicians and third party payors play a primary role in the recommendation and prescription of Auryxia and any other product candidates for which we obtain marketing approval.
−Removed: Our arrangements with healthcare providers, physicians and third party payors expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute Auryxia and any other products or product candidates for which we obtain marketing approval.
−Removed: In addition, we may be subject to transparency laws and patient privacy regulation by federal and state governments and by governments in foreign jurisdictions in which we conduct our business.
+Added: Our arrangements with healthcare providers, physicians and third party payors expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute Auryxia and vadadustat, if approved, and any other products for which we may obtain marketing approval.
+Added: In addition, we may be subject to transparency laws and patient privacy regulation by federal and state governments and by governments in foreign
+Added: jurisdictions in which we conduct our business.
Restrictions under applicable federal and state healthcare laws and regulations include the following:
2 unchanged sentences
• the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;
−Removed: • the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties, currently set at $11,181 to $22,363 per false claim, and violations of the FD&C Act, the federal government pricing laws, and the federal Anti-Kickback Statute trigger liability under the federal False Claims Act;
+Added: • the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties, currently set at $11,181 to $22,363, per false claim for penalties assessed between January 29, 2018 and June 19, 2020 , and $11,665 to $23,331, per false claim for penalties assessed after June 19, 2020 , and violations of the FD&C Act, the federal government pricing laws, and the federal Anti-Kickback Statute trigger liability under the federal False Claims Act;
• HIPAA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
15 unchanged sentences
One of the potential areas for governmental scrutiny involves federal and state requirements for pharmaceutical manufacturers to submit accurate price reports to the government.
−Removed: Because our processes for calculating applicable government prices and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to risk of errors and differing interpretations.
+Added: Because our processes for calculating
+Added: applicable government prices and the judgments involved in making these calculations involve subjective decisions and complex methodologies, these calculations are subject to risk of errors and differing interpretations.
In addition, they are subject to review and challenge by the applicable governmental agencies, or potential qui tam complaints, and it is possible that such reviews could result in changes, recalculations, or defense costs that may have adverse legal or financial consequences.
3 unchanged sentences
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain for any products that are approved in the United States or foreign jurisdictions.
−Removed: In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell Auryxia and any other products or product candidates for which we obtain marketing approval.
+Added: In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of vadadustat, or any other product candidate, restrict or regulate post-approval activities and affect our ability to profitably sell Auryxia and vadadustat, if approved.
The pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by legislative initiatives.
19 unchanged sentences
In addition, other legislative changes and regulatory have been proposed and adopted since the ACA was enacted.
−Removed: These changes include the Budget Control Act of 2011, which, among other things, led to aggregate reductions to Medicare payments to providers of 2% per fiscal year which will remain in effect through 2029 unless additional congressional action is taken.
−Removed: The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030.
+Added: These changes include the Budget Control Act of 2011, which, among other things, led to aggregate reductions to Medicare payments to providers of 2% per fiscal year.
+Added: The Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester, through 2030.
The American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
1 unchanged sentence
For example, in July 2019, HHS proposed regulatory changes in kidney health policy and reimbursement.
−Removed: Any new legislative or regulatory changes may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for Auryxia or any product candidates for which we may obtain regulatory approval or the frequency with which Auryxia and any such product candidate is prescribed or used.
−Removed: Further, there have been several recent U.S.
−Removed: congressional inquiries and proposed state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.
+Added: Any new legislative or regulatory changes may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for Auryxia or vadadustat, if approved, or the frequency with which Auryxia and vadadustat, if approved, is prescribed or used.
We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product.
3 unchanged sentences
According to the Congressional Budget Office, the repeal of the individual mandate will cause an estimated 13 million fewer Americans to be insured in 2027 and premiums in insurance markets may rise.
−Removed: Additionally, on January 22, 2018, the President signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices.
−Removed: Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.
−Removed: Additionally, while the ACA temporarily restrained, for the years from 2014 to 2019, the growth rate for the threshold at which the Medicare Part D catastrophic coverage phase begins, in 2020, the threshold reverted to the amount that would have applied for 2020 if the growth rate had not been temporarily restrained.
−Removed: This is commonly referred to as the "coverage gap cliff." Beginning in 2021, the threshold will continue to increase each year by a statutorily-specified amount.
−Removed: Further, each chamber of the U.S.
−Removed: Congress has put forth multiple bills designed to repeal or repeal and replace portions of the ACA.
−Removed: Although none of these measures has been enacted by Congress to date, Congress may consider other legislation to repeal and replace elements of the ACA.
−Removed: The current administration has also taken executive actions to undermine or delay implementation of the ACA.
−Removed: Since January 2017, the President has signed two Executive Orders designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA.
−Removed: One Executive Order directs 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.
−Removed: The second Executive Order terminates the cost-sharing subsidies that reimburse insurers under the ACA.
−Removed: Several state Attorneys General filed suit to stop the administration from terminating the subsidies, but their request for a restraining order was denied by a federal judge in California on October 25, 2017.
−Removed: In addition, CMS has recently proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
−Removed: Further, on June 14, 2018, the U.S.
−Removed: Court of Appeals for the Federal Circuit ruled that the federal government was not required to pay more than $12 billion in ACA risk corridor payments to third party payors who argued that such payments were owed to them.
−Removed: On April 27, 2020, however, the U.S.
−Removed: Supreme Court reversed the federal circuit decision upholding Congress' denial of such risk corridor funding.
+Added: The prior administration also took executive actions to undermine or delay implementation of the ACA.
+Added: In addition, CMS has proposed regulations that would give states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces.
Further, on December 14, 2018, a U.S.
District Court judge in the Northern District of Texas ruled that the individual mandate portion of the ACA is an essential and inseverable feature of the ACA and, therefore, because the mandate was repealed as part of the Tax Cuts and Jobs Act, the remaining provisions of the ACA are invalid as well.
−Removed: The current administration and CMS have both stated that the ruling will have no immediate effect, and on December 30, 2018 the same judge issued an order staying the judgment pending appeal.
−Removed: The current administration has recently represented to the court of appeals considering this judgment that it does not oppose the lower court’s ruling.
−Removed: On July 10, 2019, the Court of Appeals for the Fifth Circuit heard oral argument in this case.
−Removed: In those arguments, the current administration argued in support of upholding the lower court decision.
−Removed: However, in a subsequent filing, the U.S.
−Removed: Department of Justice contended that the ACA should be invalidated only in the states that are suing, rather than all states.
−Removed: On December 18, 2019, that court affirmed the lower court’s ruling that the individual mandate portion of the ACA is unconstitutional and it remanded the case to the district court for reconsideration of the severability question and additional analysis of the provisions of the ACA.
−Removed: On March 3, 2020, the U.S.
−Removed: Supreme Court agreed to hear the case.
−Removed: On June 25, 2020, the current administration and a coalition of 18 states asked the court to strike down the entirety of the ACA.
−Removed: Oral argument is scheduled in the case for November 10, 2020.
+Added: On November 10, 2020, the U.S.
+Added: Supreme Court heard this case and a decision is expected sometime this year.
+Added: Pending resolution of the litigation, all of the provisions in the ACA but the individual mandate to buy health insurance remains in effect.
It is unclear how such litigation and other efforts to repeal and replace the ACA will impact the ACA and our business.
−Removed: The costs of prescription pharmaceuticals have also been the subject of considerable discussion in the United States, and members of U.S.
−Removed: Congress and the current administration have stated that they will address such costs through new legislative and administrative measures.
+Added: The costs and prices of prescription pharmaceuticals have also been the subject of considerable discussion in the United States.
To date, there have been several recent U.S.
congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.
−Removed: At the federal level, Congress and the current administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.
−Removed: Including measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients.
Specifically, there have been several recent U.S.
1 unchanged sentence
At the federal level, Congress and the current administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.
−Removed: For example, on May 11, 2018, the current administration issued a plan to lower drug prices.
−Removed: Under this blueprint for action, the current administration indicated that HHS will take steps to end the gaming of regulatory and patent processes by drug makers to unfairly protect monopolies, advance biosimilars and generics to boost price competition, evaluate the inclusion of prices in drug makers’ ads to enhance price competition, speed access to and lower the cost of new drugs by clarifying policies for sharing information between insurers and drug makers, avoid excessive pricing by relying more on value-based pricing by expanding outcome-based payments in Medicare and Medicaid, work to give Medicare Part D plan sponsors more negotiation power with drug makers, examine which Medicare Part B drug prices could be negotiated by Medicare Part D plans, improve the design of the Medicare Part B Competitive Acquisition Program, update Medicare’s drug-pricing dashboard to increase transparency, prohibit Medicare Part D contracts that include “gag rules” that prevent pharmacists from informing patients when they could pay less out-of-pocket by not using insurance, and require that Medicare Part D plan members be provided with an annual statement of plan payments, out-of-pocket spending, and drug price increases.
−Removed: The current presidential administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs, and has issued five executive orders intended to lower the costs of prescription drug products.
−Removed: More recently, the President has issued five executive orders that are intended to lower the costs of prescription drug products.
+Added: For example, the former administration issued five executive orders intended to lower the costs of prescription drug products.
+Added: Several of these orders are reflected in recently promulgated regulations, and one of these regulations is currently subject to a nationwide preliminary injunction.
+Added: The current administration has frozen certain of the previous administration’s measures to reform drug prices, pending further review It remains to be seen how the current administration will address this issue but, under Medicare Part D, the new administration may seek to establish a ceiling for the launch prices of all branded, biologic, and certain generic drugs by referencing the average price of these drugs in other developed countries.
+Added: At the same time, the administration may seek to limit Medicare Part D and public option drug prices through a tax penalty on manufacturers for increases in the cost of drugs and biologics above the general inflation rate.
+Added: The American Rescue Plan Act of 2021, comprehensive COVID-19 relief legislation recently enacted under the current administration, includes a number of healthcare-related provisions, such as support to rural health care providers, increased tax subsidies for health insurance purchased through insurance exchange marketplaces, financial incentives to states to expand Medicaid programs and elimination of the Medicaid drug rebate cap effective in 2024.
At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
26 unchanged sentences
We do not own the rights to our product, Auryxia.
−Removed: We have licensed and sublicensed the rights, patent or otherwise, to Auryxia from a third party, Panion, who in turn licenses certain rights to Auryxia from one of the inventors of Auryxia.
+Added: We have licensed and sublicensed the rights, patent and otherwise, to Auryxia from a third party, Panion, who in turn licenses certain rights to Auryxia from one of the inventors of Auryxia.
The license agreement with Panion, or the Panion License Agreement, requires us to meet development milestones and imposes development and commercialization due diligence requirements on us.
−Removed: In addition, under the license agreement, we must pay royalties based on a mid-single digit percentage of net sales of product resulting from the licensed technologies, including Auryxia, and pay the patent filing, prosecution and maintenance costs related to the license.
−Removed: If we do not meet our obligations in a timely manner, or if we otherwise breach the terms of our license agreement, Panion could terminate the agreement, and we would lose the rights to Auryxia.
−Removed: For example, following announcement of the Merger, Panion notified Keryx in writing that Panion would terminate the license agreement on November 21, 2018 if Keryx did not cure the breach alleged by Panion,
−Removed: specifically, that Keryx failed to use commercially reasonable best efforts to commercialize Auryxia outside the United States.
+Added: In addition, under the Panion License Agreement, we must pay royalties based on a mid-single digit percentage of net sales of product resulting from the licensed technologies, including Auryxia, and pay the patent filing, prosecution and maintenance costs related to the license.
+Added: If we do not meet our obligations in a timely manner, or if we otherwise breach the terms of the Panion License Agreement, Panion could terminate the agreement, and we would lose the rights to Auryxia.
+Added: For example, following announcement of the Merger, Panion notified Keryx in writing that Panion would terminate the Panion License Agreement on November 21, 2018 if Keryx did not cure the breach alleged by Panion, specifically, that Keryx failed to use commercially reasonable best efforts to commercialize Auryxia
+Added: outside the United States.
Keryx disagreed with Panion’s claims, and the parties entered discussions to resolve this dispute.
−Removed: On October 24, 2018, prior to the consummation of the Merger, we, Keryx and Panion entered into a letter agreement, or the Panion Letter Agreement, pursuant to which Panion agreed to rescind any and all prior termination threats or notices relating to the license agreement and waived its rights to terminate the license agreement based on any breach by us of our obligation to use commercially reasonable efforts to commercialize Auryxia outside the United States until the parties executed an amendment to the license agreement in accordance with the terms of the Panion Letter Agreement, following consummation of the Merger.
+Added: On October 24, 2018, prior to the consummation of the Merger, we, Keryx and Panion entered into a letter agreement, or the Panion Letter Agreement, pursuant to which Panion agreed to rescind any and all prior termination threats or notices relating to the Panion License Agreement and waived its rights to terminate the license agreement based on any breach by us of our obligation to use commercially reasonable efforts to commercialize Auryxia outside the United States until the parties executed an amendment to the Panion License Agreement in accordance with the terms of the Panion Letter Agreement, following consummation of the Merger.
On April 17, 2019, we and Panion entered into an amendment and restatement of the Panion License Agreement, or the Panion Amended License Agreement, which reflects certain revisions consistent with the terms of the Panion Letter Agreement.
4 unchanged sentences
In addition, in the event that the owners and/or licensors of the rights we license were to enter into bankruptcy or similar proceedings, we could potentially lose our rights to Auryxia or our rights could otherwise be adversely affected, which could prevent us from continuing to commercialize Auryxia.
−Removed: We rely on third parties to conduct preclinical and clinical studies for our product and product candidates.
−Removed: If they do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to optimize the commercialization of Auryxia or obtain marketing approval for or commercialize vadadustat or any other product candidates, and our business could be substantially harmed.
−Removed: We do not have the ability to independently conduct preclinical and clinical trials.
+Added: We rely on third parties to conduct our clinical studies and certain of our preclinical studies.
+Added: If they do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to optimize the commercialization of Auryxia or obtain marketing approval for or commercialize vadadustat, and our business could be substantially harmed.
+Added: We do not have the ability to independently conduct certain preclinical and clinical trials.
We are currently relying, and expect to continue to rely, on third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct our current and future preclinical studies and our clinical trials.
5 unchanged sentences
• if they form relationships with other entities, some of which may be our competitors.
−Removed: Any of these events could cause our preclinical and clinical trials, including post-approval clinical trials, to be extended, delayed, suspended, required to be repeated or terminated, or we may receive untitled warning letters or be the subject of an enforcement action which could result in our failing to obtain marketing approval of vadadustat or any other product candidates on a timely basis, or at all, or fail to maintain marketing approval of Auryxia or any other approved products, any of which would adversely affect our business operations.
−Removed: In addition, if the third parties on whom we rely fail to perform effectively or terminate their engagement with us, we may need to enter into alternative arrangements, which could delay, perhaps significantly, the continued optimization of the commercialization of Auryxia and the development and commercialization of vadadustat and any other product candidates.
−Removed: Even though we do not directly control the third parties on whom we rely to conduct our preclinical and clinical trials and therefore cannot guarantee the satisfactory and timely performance of their obligations to us, we are nevertheless responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal and regulatory requirements, including GXP requirements, and scientific standards, and our reliance on these third parties, including CROs, will not relieve us of our regulatory responsibilities.
−Removed: If we or any of our CROs, their subcontractors, or clinical trial sites fail to comply with applicable GXP requirements, the clinical data generated in our clinical trials may be deemed unreliable or
−Removed: insufficient, our clinical trials could be put on hold, and/or the FDA, the EMA or other regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
−Removed: In addition, our clinical trials must be conducted with drug product that meets certain specifications and is manufactured under applicable cGMP regulations.
+Added: Any of these events could cause our preclinical and clinical trials, including post-approval clinical trials, to be extended, delayed, suspended, required to be repeated or terminated, or we may receive untitled warning letters or be the subject of an enforcement action, which could result in our failing to obtain and maintain marketing approval of vadadustat or any other product candidates on a timely basis, or at all, or fail to maintain marketing approval of Auryxia, or any other products, any of which would adversely affect our business operations.
+Added: In addition, if the third parties on whom we rely fail to perform effectively or terminate their engagement with us, we may need to enter into alternative arrangements, which could delay, perhaps significantly, the continued optimization of the commercialization of Auryxia and the development and commercialization of vadadustat or any other product candidates.
+Added: Even though we do not directly control the third parties on whom we rely to conduct our preclinical and clinical trials and therefore cannot guarantee the satisfactory and timely performance of their obligations to us, we are nevertheless responsible for ensuring that each of our clinical and preclinical trials is conducted in accordance with the applicable protocol, legal and regulatory requirements, including GXP requirements, and scientific standards, and our reliance on these third parties, including CROs, will not relieve us of our regulatory responsibilities.
+Added: If we or any of our CROs, their subcontractors, or clinical or preclinical trial sites fail to comply with applicable GXP requirements, the clinical data generated in our trials may be deemed unreliable or insufficient, our clinical trials could be put on hold, and/or the FDA, the EMA or other regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
+Added: In addition, our clinical and
+Added: preclinical trials must be conducted with drug product that meets certain specifications and is manufactured under applicable cGMP regulations.
These requirements include, among other things, quality control, quality assurance, and the satisfactory maintenance of records and documentation.
We also rely on third parties to store and distribute drug supplies for our clinical trials.
−Removed: Any performance failure on the part of our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, resulting in additional costs and depriving us of potential product revenue.
+Added: Any performance failure on the part of our distributors could delay clinical development, marketing approval or commercialization, resulting in additional costs and depriving us of potential product revenue.
We rely on third parties to conduct all aspects of our product manufacturing.
1 unchanged sentence
We do not have any manufacturing facilities and do not expect to independently manufacture any product or product candidates.
−Removed: We currently rely on third party manufacturers to produce all of our commercial, clinical and preclinical material supply, including the commercial drug product that we supply to our collaboration partner, MTPC, for the Japanese market.
−Removed: We expect to continue to rely on existing or alternative third party manufacturers to supply our ongoing and planned preclinical and clinical trials and for commercial production.
−Removed: Our reliance on third party manufacturers increases the risk that we will not have sufficient quantities of our product and product candidates or the ability to obtain such quantities at an acceptable cost or quality, which could delay, prevent or impair our and our partners' development or commercialization efforts.
−Removed: We currently have two suppliers of Auryxia drug substance, one of them with two approved sites, and one supplier with three approved sites for the supply of Auryxia drug product.
−Removed: If any of our suppliers were to limit or terminate production, or otherwise fail to meet the quality or delivery requirements needed to supply Auryxia or VAFSEO in Japan at adequate levels, we could experience losses of revenue that could materially and adversely impact our results of operations.
+Added: We currently rely, and expect to continue to rely, on third party manufacturers to produce all of our commercial, clinical and preclinical supply, including the vadadustat drug product that we supply to our collaboration partner, MTPC, for the Japanese market.
+Added: Our reliance on third party manufacturers increases the risk that we will not have sufficient quantities of Auryxia and vadadustat or the ability to obtain such quantities at an acceptable cost or quality, which could delay, prevent or impair our and our partners' development or commercialization efforts.
+Added: We currently have two suppliers of Auryxia drug substance, Siegfried Evionnaz SA (two approved sites) and BioVectra Inc.
+Added: (one approved site), and one supplier of Auryxia drug product, Patheon Inc., or Patheon (three approved sites).
We have entered into supply agreements with Esteve Química, S.A.
−Removed: and STA Pharmaceutical Hong Kong Limited, a subsidiary of Wuxi AppTec, for the commercial manufacture of vadadustat drug substance and Patheon Inc.
−Removed: for the commercial manufacture of vadadustat drug product.
−Removed: While we intend to put an additional supply arrangement in place for commercial manufacturing of vadadustat drug product, we may be unsuccessful in doing so or achieving sufficient redundancy due to a number of factors, including that we may not be able to negotiate binding agreements at commercially reasonable terms.
−Removed: For example, a contract manufacturer may require a substantial financial commitment, including a commitment to fund the purchase of a new facility or equipment.
−Removed: We could experience delays to our marketing approval for vadadustat and may not have sufficient quantities of our product candidates and products for clinical trials and commercialization if any of the following occur:
−Removed: • we are unsuccessful in implementing redundant supply arrangements for commercial quantities of vadadustat;
+Added: and STA Pharmaceutical Hong Kong Limited, a subsidiary of Wuxi AppTec, or STA, for the commercial manufacture of vadadustat drug substance and Patheon Inc.
+Added: and STA for the commercial manufacture of vadadustat drug product.
+Added: If any of the following occurs, we may not have sufficient quantities of Auryxia and/or vadadustat to support our clinical trials, commercialization, or obtaining and maintaining marketing approvals, which could materially and adversely impact our business and results of operations:
+Added: • we are unsuccessful in implementing additional redundant supply arrangements for commercial quantities of vadadustat or in maintaining our redundant supply arrangements for commercial quantities of Auryxia and vadadustat;
• our commercial supply arrangements for Auryxia or vadadustat are terminated;
1 unchanged sentence
• any of our third party manufacturers breaches our supply agreements, does not comply with quality or regulatory requirements and guidance, is subject to regulatory review or ceases its operations for any reason.
−Removed: Even if we are ultimately successful in entering into an additional supply arrangement for commercial manufacturing of vadadustat drug product, the timing of such additional arrangements is uncertain.
−Removed: If any of our third party manufacturers cannot or do not perform as agreed or expected, including a misappropriation of our proprietary information, if they terminate their engagements with us, if we terminate our engagements with them, or if there is a significant disagreement, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into agreements with other third party manufacturers, which we may not be able to do in a timely manner or on favorable or reasonable terms, if at all.
+Added: If any of our third party manufacturers cannot or do not perform as agreed or expected, including as a result of COVID-19, a misappropriation of our proprietary information, if they terminate their engagements with us, if we terminate our engagements with them, or if there is a significant disagreement, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or resources, or enter into agreements with other third party manufacturers, which we may not be able to do in a timely manner or on favorable or reasonable terms, if at all.
In some cases, there may be a limited number of qualified replacement manufacturers, or the technical skills or equipment required to manufacture a product or product candidate may be unique or proprietary to the original manufacturer and we may have difficulty transferring such skills or technology to another third party, or a feasible alternative may not exist.
−Removed: These factors would increase our reliance on our current manufacturers or require us to obtain a license from such manufacturer in order to have another third party manufacture Auryxia, VAFSEO in Japan or our product candidates.
−Removed: If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations
−Removed: and guidelines.
−Removed: The delays associated with the verification of a new manufacturer could negatively affect our ability to continue to commercialize or satisfy patient demand for Auryxia, VAFSEO in Japan or any other product candidate for which we receive marketing approval, or develop and receive marketing approval for our product candidates in a timely manner or within budget.
−Removed: Each of our third party manufacturers must comply with cGMP and other stringent regulatory requirements and guidance enforced by the FDA and other regulatory authorities.
+Added: These factors would increase our reliance on our current manufacturers or require us to file to obtain licenses in order to have another third party manufacture Auryxia or vadadustat.
+Added: If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.
+Added: The delays associated with the qualification of a new manufacturer and validation of manufacturing processes would negatively affect our ability to supply clinical trials, obtain and maintain marketing approval, or commercialize or satisfy patient demand for Auryxia and vadadustat, where approved, in a timely manner within budget or at all.
+Added: There are a limited number of manufacturers that are capable of manufacturing Auryxia and vadadustat for us and complying with cGMP regulations and guidance and other stringent regulatory requirements and guidance enforced by the FDA, EMA, PDMA and other regulatory authorities.
These requirements include, among other things, quality control, quality assurance and the maintenance of records and documentation, which occur in addition to our own quality assurance releases.
−Removed: The facilities and processes used by our third party manufacturers to manufacture Auryxia may be inspected by the FDA and other regulatory authorities at any time, and the facilities and processes used by our third party manufacturers to manufacture our product candidates will be inspected by the FDA, the EMA, PMDA and other regulatory authorities prior to or after we submit our marketing application.
−Removed: We do not control the manufacturing processes of, and have little control over, our third party manufacturers, including, without limitation, their compliance with cGMP requirements and guidance for the manufacture of certain starting materials, drug substance and finished drug product.
+Added: The facilities and processes used by our third party manufacturers to manufacture Auryxia may be inspected by the FDA and other regulatory authorities at any time, and the facilities and processes used by our third party manufacturers to manufacture vadadustat will be inspected by the FDA, the EMA and other regulatory authorities prior to or after we submit our marketing applications.
+Added: We do not control the manufacturing processes of, and have little control over, our third party manufacturers, including, without
+Added: limitation, their compliance with cGMP requirements and guidance for the manufacture of certain starting materials, drug substance and finished drug product.
In addition, we have little control over the ability of our third party manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
1 unchanged sentence
We may also encounter difficulties relating to our own quality processes and procedures, including regulatory compliance, lot release, quality control and quality assurance, as well as shortages of qualified personnel.
−Removed: If our third party manufacturers cannot successfully manufacture material that conforms to our specifications and regulatory requirements and guidance or if we or our third party manufacturers experience manufacturing, operations and/or quality issues, including an inability or unwillingness to continue manufacturing our products at all, in accordance with agreed-upon processes or on currently validated manufacturing lines, we may not be able to supply patient demand or maintain marketing approval for Auryxia or secure and/or maintain marketing approval for our product candidates.
−Removed: If the FDA, the EMA or other regulatory authorities do not approve the facilities being used to manufacture our product candidates, or if they withdraw any approval of the facilities being used to manufacture Auryxia or any other product candidates for which we receive marketing approval, we may need to find alternative manufacturing facilities, which would significantly impact our ability to continue commercializing Auryxia or develop, obtain marketing approval for or market our product candidates, if approved.
−Removed: Moreover, our failure or the failure of our third party manufacturers to comply with applicable regulations or guidance, or our failure to oversee or facilitate such compliance, could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of Auryxia or our product candidates operating restrictions, receipt of a Form 483 or warning letter, or criminal prosecutions, any of which could significantly and adversely affect the supply of Auryxia, VAFSEO in Japan or our product candidates.
−Removed: For example, in the second quarter of 2020, we initiated a limited, voluntary recall of specific lots of Auryxia because it was determined that these lots were not manufactured in conformance with the FDA's GMP guidance relating to validation.
−Removed: In addition, we recorded a write-down of inventory associated with affected lots during the second and third quarters of 2020.
−Removed: While the costs of this recall were immaterial, should another recall or quality issues occur in the future, they could result in material costs, have a material adverse effect on our business and results of operations, and may impact our ability to supply Auryxia, VAFSEO in Japan or vadadustat for commercial and clinical use.
−Removed: Also, if our starting materials, drug substance or drug product are damaged or lost while in our third party manufacturers’ control, it may impact our ability to supply our products or product candidates and we may incur significant financial harm.
−Removed: In addition, Auryxia, VAFSEO in Japan and our product candidates may compete with other products and product candidates for access to third party manufacturing facilities.
+Added: If our third party manufacturers cannot successfully manufacture material that conforms to our specifications and regulatory requirements and guidance, or if we or our third party manufacturers experience manufacturing, operations and/or quality issues, including an inability or unwillingness to continue manufacturing our products at all, in accordance with agreed-upon processes or on currently validated manufacturing lines, we may not be able to supply patient demand or maintain marketing approval for Auryxia or secure and maintain marketing approval for vadadustat.
+Added: If the FDA, the EMA or other regulatory authorities do not approve the facilities being used to manufacture vadadustat, or if they withdraw any approval of the facilities being used to manufacture Auryxia or Vafseo TM, in Japan, we may need to find alternative manufacturing facilities, which would significantly impact our ability to continue commercializing Auryxia or develop, obtain marketing approval for or market our product candidates, if approved.
+Added: Moreover, our failure or the failure of our third party manufacturers to comply with applicable regulations or guidance, or our failure to oversee or facilitate such compliance, could result in sanctions being imposed on us or our third party manufacturers, including, where applicable, clinical holds, fines, injunctions, civil penalties, delays in, suspension of or withdrawal of approvals, license revocation, seizures or recalls of Auryxia or vadadustat, operating restrictions, receipt of a Form 483 or warning letter, or criminal prosecutions, any of which could significantly and adversely affect the supply of Auryxia or vadadustat.
+Added: For example, we recently had three limited, voluntary recalls of Auryxia.
+Added: These and any other recalls or any supply, quality or manufacturing issues in the future and any related write-downs of inventory or other consequences could result in significant negative consequences, including reputational harm, loss of customer confidence, and a negative impact on our financials, any of which could have a material adverse effect on our business and results of operations, and may impact our ability to supply Auryxia, Vafseo in Japan or vadadustat for commercial and clinical use.
+Added: Also, if our starting materials, drug substance or drug product are damaged or lost while in our or our third party manufacturers’ control, it may adversely impact our ability to supply Auryxia or vadadustat, and we may incur significant financial harm.
+Added: In addition, Auryxia and vadadustat may compete with other products and product candidates for access to third party manufacturing facilities.
A third party manufacturer may also encounter delays or operational issues brought on by sudden internal resource constraints, labor disputes, shifting priorities or shifting regulatory protocols, including, in each case, relating to the COVID-19 pandemic.
−Removed: Certain of these third party manufacturing facilities may be contractually prohibited from manufacturing our product candidates or products, due to exclusivity provisions in agreements with our competitors.
−Removed: There are a limited number of manufacturers that operate under cGMP regulations and guidance and are capable of manufacturing Auryxia and our product candidates for us.
−Removed: Our current and anticipated future dependence on third parties for the manufacture of Auryxia, VAFSEO in Japan and our product candidates may adversely affect our and our partners' ability to continue to commercialize Auryxia, VAFSEO in Japan or any product candidates that receive marketing approval on a timely and competitive basis and any future profit margins.
−Removed: Third party manufacturers may be unable to manufacture our products and product candidates in sufficient quality and quantity, which would delay or prevent us from commercializing approved products and developing our product candidates.
−Removed: As a result of the large quantity of materials required for the production of Auryxia and VAFSEO for Japan and the large quantities of tablets that are required for our commercial success, the continued commercial viability of Auryxia and VAFSEO for Japan depends on adequate supply of starting materials that meet quality, quantity and cost standards and the ability of our
−Removed: contract manufacturers to continually produce drug substance and finished drug product that meets all manufacturing requirements on a commercial scale.
−Removed: Failure to achieve and maintain these levels of supply can jeopardize and prevent the successful continued commercialization of Auryxia and VAFSEO in Japan.
−Removed: Moreover, issues that may arise in any scale-up and technology transfer and continued commercial scale manufacture of our products may lead to significant delays in our development and commercial timelines and negatively impact our financial performance.
+Added: Certain of these third party manufacturing facilities may be contractually prohibited from manufacturing Auryxia or vadadustat due to exclusivity provisions in agreements with our competitors.
+Added: Any of the foregoing could negatively impact our third party manufacturers' ability to meet our demand, which could adversely impact our ability to supply Auryxia or vadadustat, and we may incur significant financial harm.
+Added: Our current and anticipated future dependence on third parties for the manufacture of Auryxia and vadadustat may adversely affect our and our partners' ability to commercialize Auryxia and vadadustat, where approved, on a timely and competitive basis and any future profit margins.
+Added: Third party manufacturers may be unable to manufacture Auryxia and vadadustat in sufficient quality and quantity, which would delay or prevent us from commercializing and developing.
+Added: As a result of the large quantity of materials required for the production of Auryxia and vadadustat and the large quantities of tablets that are required for our commercial success, the commercial viability of Auryxia and vadadustat, if and where approved, depends on adequate supply of starting materials that meet quality, quantity and cost standards and the ability of our contract manufacturers to continually produce drug substance and finished drug product that meets all manufacturing requirements on a commercial scale.
+Added: Failure to achieve and maintain these levels of supply can jeopardize and prevent the successful continued commercialization of Auryxia and commercialization of vadadustat, if and where approved.
+Added: Moreover, issues that may arise in any scale-up and technology transfer and continued commercial scale manufacture of our products may lead to significant delays in our development, marketing approval and commercial timelines and negatively impact our financial performance.
For example, a production-related issue resulted in an interruption in the supply of Auryxia in the third and fourth quarters of 2016.
This supply interruption negatively impacted Keryx’s revenues in 2016.
−Removed: Although this supply interruption was resolved and actions designed to prevent future interruptions in the supply of Auryxia have been taken, any future supply interruptions for Auryxia, VAFSEO in Japan or any of our product candidates for which we receive marketing approval would negatively and materially impact our reputation and financial condition.
−Removed: In addition, in order to complete our development of and commercialize, if approved in regions beyond Japan, vadadustat and any other product candidates, we will need to work with third party manufacturers to manufacture them in large quantities.
−Removed: Our current and future third party manufacturers may be unable to successfully achieve commercial scale production of vadadustat or increase the manufacturing capacity of any other product candidates for the conduct of clinical trials and commercialization in a timely or cost-effective manner, if at all.
+Added: Although this supply interruption was resolved and actions designed to prevent future interruptions in the supply of Auryxia are ongoing, any future supply interruptions, whether quality or quantity based, for Auryxia and vadadustat, if and where approved, would negatively and materially impact our reputation and financial condition.
+Added: In addition, in order to complete our development of and commercialize vadadustat, if approved in regions beyond Japan, we will need to work with third party manufacturers to manufacture vadadustat in large quantities, including to prepare for launch demand.
+Added: Our current and future third party manufacturers may be unable to successfully achieve commercial scale production of vadadustat in a timely or cost-effective manner, if at all.
+Added: COVID-19 may also impact our third party manufacturers and their ability to supply vadadustat in sufficient quantities, or at all.
In addition, quality issues may arise during scale-up activities.
Any changes in our manufacturing processes as a result of scaling up may result in the need to obtain additional marketing approvals.
−Removed: If our third party manufacturers are unable to achieve commercial scale production or there is a need for additional marketing approvals of vadadustat or any other product candidates, or if there are difficulties in increasing the manufacturing capacity for any other product candidates, the development, marketing approval and commercialization of that product candidate may be delayed or infeasible, or ongoing commercialization may be unsuccessful, any of which could significantly harm our business.
−Removed: We do not know whether our third party manufacturers will be able to meet our demand, either because of the nature of our agreements with those third party manufacturers, or, in some cases, our limited experience with those third party manufacturers or our relative importance as a customer to those third party manufacturers.
−Removed: It may be difficult for us to assess their ability to timely meet our demand in the future based on past performance.
−Removed: While our current third party manufacturers have generally met our demand for their products on a timely basis in the past, they may subordinate our needs in the future to their other customers, including as a result other customers' demands with respect to the COVID-19 pandemic.
−Removed: We depend on collaborations with third parties for the development and commercialization of our products and product candidates.
−Removed: If our collaborations are not successful or if our collaborators terminate their agreements with us, we may not be able to capitalize on the market potential of our products and product candidates, and our business could be materially harmed.
+Added: If our third party manufacturers are unable to achieve commercial scale production or there is a need for additional marketing approvals of vadadustat, the development, marketing approval and commercialization of vadadustat may be delayed or infeasible, or ongoing commercialization of Auryxia or Vafseo TM, in Japan may be unsuccessful, any of which could significantly harm our business.
+Added: We depend on collaborations with third parties for the development and commercialization of Auryxia, Riona and vadadustat.
+Added: If our collaborations are not successful or if our collaborators terminate their agreements with us, we may not be able to capitalize on the market potential of Auryxia, Riona and vadadustat, and our business could be materially harmed.
We sublicensed the rights to commercialize Riona to JT and Torii in Japan.
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In addition, we have a license agreement with Vifor Pharma pursuant to which we granted an exclusive license to sell vadadustat to FKC and the Third Party Dialysis Organizations, approved by us, in the United States, which license would become effective only upon the satisfaction of certain conditions.
−Removed: We may form or seek other strategic alliances, joint ventures, or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our and our partners' commercialization efforts with respect to Auryxia, Riona and VAFSEO in Japan, and our and our partners' development and commercialization efforts with respect to vadadustat and any other product candidates.
+Added: We may form or seek other strategic alliances, joint ventures, or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our and our partners' commercialization efforts with respect to Auryxia, Riona, Vafseo and our and our partners' development and commercialization efforts with respect to vadadustat and any other product candidates.
Our likely collaborators for any collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies.
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• collaborations may be terminated in accordance with the terms of the collaborations and, if terminated, may make it difficult for us to attract new collaborators or adversely affect how we are perceived in scientific and financial communities, and may result in a need for additional capital and expansion of our internal capabilities to pursue further development or commercialization of the applicable products and product candidates;
−Removed: • if permitted by the terms of the collaborations, collaborators may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus, availability of
−Removed: funding or other external factors such as a business combination that diverts resources or creates competing priorities;
+Added: • if permitted by the terms of the collaborations, collaborators may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus, availability of funding or other external factors such as a business combination that diverts resources or creates competing priorities;
• if permitted by the terms of the collaborations, collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
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• if permitted by the terms of the collaboration, we and our collaborator may have a difference of opinion regarding the development or commercialization strategy for a particular product or product candidate, and our collaborator may have ultimate decision making authority;
−Removed: • disputes may arise between a collaborator and us that cause the delay or termination of activities related to research, development or commercialization of Auryxia, VAFSEO in Japan, vadadustat and any other product candidates, or that result in costly litigation or arbitration that diverts management attention and resources;
−Removed: • collaborations may not lead to development or commercialization of products and product candidates in the most efficient manner or at all;
−Removed: • a significant change in the senior management team, a change in the financial condition or a change in the business operations, including a change in control or internal corporate restructuring, of any of our collaborators, could result in delayed timelines, re-prioritization of our programs, decreasing resources or funding allocated to support our programs, or termination of the collaborations;
+Added: • disputes may arise between a collaborator and us that cause the delay or termination of activities related to research, development or commercialization of Auryxia or vadadustat and any other product candidate, or that result in costly litigation or arbitration that diverts management attention and resources;
+Added: • collaborations may not lead to development or commercialization of products and product candidates, if approved, in the most efficient manner or at all;
+Added: • a significant change in the senior management team, a change in the financial condition or a change in the business operations, including a change in control or internal corporate restructuring, of any of our
+Added: collaborators, could result in delayed timelines, re-prioritization of our programs, decreasing resources or funding allocated to support our programs, or termination of the collaborations;
• collaborators may not comply with all applicable regulatory requirements.
−Removed: If any of these events occurs, the market potential of our products and product candidates could be reduced, and our business could be materially harmed.
+Added: If any of these events occurs, the market potential of Auryxia and vadadustat, if and where approved, and any other products or product candidates, could be reduced, and our business could be materially harmed.
We also cannot be certain that, following a collaboration, the benefits of the collaboration will outweigh the potential risks.
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• inability to negotiate collaborations on a timely basis;
−Removed: • a potential collaborator’s evaluation of our product or product candidates;
+Added: • a potential collaborator’s evaluation of Auryxia, vadadustat and any other product or product candidate;
• a potential collaborator’s resources and expertise;
• restrictions due to an existing collaboration agreement.
−Removed: If we are unable to enter into additional collaborations, we may have to curtail the commercialization of the product or the development of the product candidate on which we are seeking to collaborate, reduce or delay its development program or other of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
+Added: If we are unable to enter into additional collaborations, we may have to delay or curtail the commercialization of Auryxia or vadadustat, if and where approved, reduce or delay its development program or other of our other development programs, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all.
−Removed: If we do not have sufficient funds, we may not be able to further commercialize Auryxia or develop or commercialize our product candidates.
+Added: If we do not have sufficient funds, we may not be able to further develop or commercialize Auryxia or vadadustat, in the case of commercialization, where approved.
Even if we enter into additional collaboration agreements and strategic partnerships or license our intellectual property, we may not be able to maintain them or they may be unsuccessful, which could delay our timelines or otherwise adversely affect our business.
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Our commercial success will depend in part on our ability, and the ability of our licensors, to obtain and maintain patent protection on our drug product and technologies, and to successfully defend these patents against third party challenges.
−Removed: We seek to protect our proprietary products and technology by filing patent applications in the United States and certain foreign jurisdictions.
+Added: seek to protect our proprietary products and technology by filing patent applications in the United States and certain foreign jurisdictions.
The process for obtaining patent protection is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications in a cost effective or timely manner.
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Thus, these patent applications and patents may not under these circumstances, be prosecuted or enforced in a manner consistent with the best interests of the company.
−Removed: Our pending patent applications may not issue as patents and may not issue in all countries in which we develop, manufacture or potentially sell our product(s) or in countries where others develop, manufacture and potentially sell products using our technologies.
+Added: Our pending patent applications may not issue as patents and may not issue in all countries in which we develop, manufacture or potentially sell our product or in countries where others develop, manufacture and potentially sell products using our technologies.
Moreover, our pending patent applications, if issued as patents, may not provide additional protection for our product.
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We cannot be assured that such claims in the divisional application will be granted by the European Patent Office.
−Removed: If such claims are not granted, or the scope of the claims is significantly narrowed, we may not be able to adequately protect our rights, provide sufficient exclusivity, or preserve our competitive advantage.
+Added: If such claims are not granted, or the scope of the
+Added: claims is significantly narrowed, we may not be able to adequately protect our rights, provide sufficient exclusivity, or preserve our competitive advantage.
We may become involved in addressing patentability objections based on third party submission of references, or we may become involved in defending our patent rights in oppositions, derivation proceedings, reexamination, inter partes review, post grant review, interference proceedings or other patent office proceedings or litigation, in the United States or elsewhere, challenging our patent rights or the patent rights of others.
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Alternatively, we can prove that our competitors induce or contribute to others in engaging in direct infringement.
−Removed: Proving that a competitor contributes to, or induces, infringement of a
−Removed: patented method by another has additional proof requirements.
+Added: Proving that a competitor contributes to or induces infringement of a patented method by another has additional proof requirements.
For example, proving inducement of infringement requires proof of intent by the competitor.
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On August 23, 2018, Keryx submitted a Citizen Petition requesting, inter alia, that FDA recognize that Auryxia is eligible for five years of new chemical entity, or NCE, exclusivity based on its novel active ingredient and for three years exclusivity for the IDA Indication.
−Removed: On January 19, 2019, FDA responded that Auryxia is eligible for a three-year exclusivity period for the IDA Indication, which expires on November 6, 2020.
+Added: On January 19, 2019, FDA responded that Auryxia is eligible for a three-year exclusivity period for the IDA Indication, which expired on November 6, 2020.
FDA, however, denied the NCE exclusivity based on its determination that Auryxia contains a previously-approved active moiety (ferric cation).
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The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.
−Removed: The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is
−Removed: favorable to the ANDA applicant.
−Removed: We have received Paragraph IV certification notice letters regarding ANDAs submitted to the FDA, from generic drug manufacturers requesting approval for generic versions of Auryxia tablets (210 mg iron per tablet), have filed certain complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with certain such ANDA filers.
+Added: The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.
+Added: We have received Paragraph IV certification notice letters regarding ANDAs submitted to the FDA, from generic drug manufacturers requesting approval for generic versions of Auryxia tablets (210 mg ferric iron per tablet), have filed certain complaints for patent infringement relating to such ANDAs, and have entered into settlement and license agreements with certain such ANDA filers.
See Part II, Item 1.
Legal Proceedings for further information relating to the ANDAs, lawsuits and settlements.
−Removed: In cases where NCE exclusivity has been granted to a new drug product, the 30-month stay triggered by such litigation is extended by the amount of time such that 7.5 years will elapse from the date of approval of the NDA for that product.
+Added: In cases where NCE exclusivity has been granted to a new drug product, the 30-month stay triggered by such litigation is extended by the amount of time such that seven years and six months will elapse from the date of approval of the NDA for that product.
Without NCE exclusivity, the 30-month stay on FDA final approval of an ANDA runs from the date on which the sponsor of the reference listed drug receives notice of a Paragraph IV certification from the ANDA applicant.
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Because we rely on third parties to assist with research, development and manufacture of our product candidates, we must, at times, share trade secrets with them.
−Removed: We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, services agreements, material transfer agreements, consulting agreements, research agreements or other similar agreements with our advisors, employees, third party contractors, collaborators and consultants prior to beginning research or disclosing proprietary information.
+Added: We seek to protect our proprietary technology in part by entering into confidentiality
+Added: agreements and, if applicable, services agreements, material transfer agreements, consulting agreements, research agreements or other similar agreements with our advisors, employees, third party contractors, collaborators 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 confidential information, including our trade secrets.
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If we are required to defend against suits brought by third parties, or if we sue third parties to protect our rights, we may be required to pay substantial litigation costs, and our management’s attention may be diverted from operating our business.
−Removed: In addition, any legal action against our licensor, licensees or us that seeks damages or an injunction of commercial activities relating to Auryxia, vadadustat or any other product candidates or other technologies could subject us to monetary liability, a temporary or permanent injunction preventing the development, marketing and sale of such products or such technologies, and/or require our licensor, licensees or us to obtain a license to continue to use such products or other technologies.
+Added: In addition, any legal action against our licensor, licensees or us that seeks damages or an injunction of commercial activities relating to Auryxia, vadadustat or any other product candidates or other technologies, including those that may be in-licensed or acquired, could subject us to monetary liability, a temporary or permanent injunction preventing the development, marketing and sale of such products or such technologies, and/or require our licensor, licensees or us to obtain a license to continue to use such products or other technologies.
We cannot predict whether our licensor, licensees or we would prevail in any of these types of actions or that any required license would be made available on commercially acceptable terms, if at all.
Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties.
−Removed: The pharmaceutical and biotechnology industries are characterized by extensive litigation over patent and other intellectual property
−Removed: We have in the past and may in the future become a party to, or be threatened with, future adversarial litigation or other proceedings regarding intellectual property rights with respect to our drug candidates.
+Added: The pharmaceutical and biotechnology industries are characterized by extensive litigation over patent and other intellectual property rights.
+Added: We have in the past and may in the future become a party to, or be threatened with, future adversarial litigation or other proceedings regarding intellectual property rights with respect to our product and product candidate.
As the pharmaceutical and biotechnology industries expand and more patents are issued, the risk increases that our drug candidates may give rise to claims of infringement of the patent rights of others.
−Removed: While our product candidates are in preclinical studies and clinical trials, we believe that the use of our product candidates in these preclinical studies and clinical trials in the United States falls within the scope of the exemptions provided by 35 U.S.C.
+Added: While our product candidate is in preclinical studies and clinical trials, we believe that the use of our product candidate in these preclinical studies and clinical trials in the United States falls within the scope of the exemptions provided by 35 U.S.C.
Section 271(e), which provides that it shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention solely for uses reasonably related to the development and submission of information to the FDA.
−Removed: As a result of the Merger, our portfolio now includes a commercial product, Auryxia.
+Added: As a result of the Merger, our portfolio includes a commercial product, Auryxia.
Consequently, there is an increased possibility of a patent infringement claim against us.
−Removed: We attempt to ensure that our product candidates and the methods we employ to manufacture them, as well as the methods for their use which we intend to promote, do not infringe other parties’ patents and other proprietary rights.
+Added: We attempt to ensure that our product and product candidate and the methods we employ to manufacture them, as well as the methods for their use which we intend to promote, do not infringe other parties’ patents and other proprietary rights.
There can be no assurance they do not, however, and competitors or other parties may assert that we infringe their proprietary rights in any event.
−Removed: Third parties may hold or obtain patents or other intellectual property rights and allege in the future that the use of our products or product candidates infringes these patents or intellectual property rights, or that we are employing their proprietary technology without authorization.
+Added: Third parties may hold or obtain patents or other intellectual property rights and allege in the future that the use of our product or product candidate infringes these patents or intellectual property rights, or that we are employing their proprietary technology without authorization.
We do not believe that there are any currently issued U.S.
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nor do we make any admission that any of such patents are valid, enforceable or infringed.
−Removed: law, a party may be able to patent a discovery of a new way to use a previously known compound, even if such compound itself is patented, provided the newly discovered use is novel and nonobvious.
+Added: law, a party may be able to patent a discovery of a new way to use a previously known compound, even
+Added: if such compound itself is patented, provided the newly discovered use is novel and nonobvious.
Such a method-of-use patent, however, if valid, only protects the use of a claimed compound for the specified methods claimed in the patent.
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Legal Proceedings of this Quarterly Report on Form 10-Q.
−Removed: There may be other patents of FibroGen or patents of other third parties of which we are currently unaware with claims to compounds, materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our drug candidates.
+Added: There may be other patents of FibroGen or patents of other third parties of which we are currently unaware with claims to compounds, materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidate.
Also, because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe.
−Removed: Third parties, including FibroGen, may in the future claim that our product candidates and other technologies infringe upon their patents and may challenge our ability to commercialize vadadustat.
−Removed: Parties making claims against us or our licensees may seek and obtain injunctive or other equitable relief, which could effectively block our or their ability to continue to commercialize Auryxia or further develop and commercialize vadadustat or any other product candidates.
+Added: Third parties, including FibroGen, may in the future claim that our product and product candidate and other technologies infringe upon their patents and may challenge our ability to commercialize Auryxia and vadadustat, if approved.
+Added: Parties making claims against us or our licensees may seek and obtain injunctive or other equitable relief, which could effectively block our or their ability to continue to commercialize Auryxia or further develop and commercialize vadadustat or any other product candidates, including those that may be in-licensed or acquired.
If any third party patents were held by a court of competent jurisdiction to cover the manufacturing process of any of our products or product candidates, any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product or product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable.
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Should a license to a third party patent become necessary, we cannot predict whether we would be able to obtain a license or, if a license were available, whether it would be available on commercially reasonable terms.
−Removed: If such a license is necessary and a license under the applicable patent is unavailable on commercially reasonable terms, or at all, our ability to
−Removed: commercialize our products or product candidates may be impaired or delayed, which could in turn significantly harm our business.
+Added: If such a license is necessary and a license under the applicable patent is unavailable on commercially reasonable terms, or at all, our ability to commercialize our product or product candidate may be impaired or delayed, which could in turn significantly harm our business.
Further, defense of infringement claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties or redesign our products, which may be impossible or require substantial time and monetary expenditure.
−Removed: We are currently involved in patent infringement lawsuits and opposition and invalidity proceedings and may in the future be involved in additional lawsuits or administrative proceedings to challenge the patents of our competitors or to protect or enforce our patents, which could be expensive, time consuming, and unsuccessful.
+Added: We are currently involved in a patent infringement lawsuit and opposition and invalidity proceedings and may in the future be involved in additional lawsuits or administrative proceedings to challenge the patents of our competitors or to protect or enforce our patents, which could be expensive, time consuming, and unsuccessful.
Competitors may infringe our patents or misappropriate our trade secrets or confidential information.
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Even if we are successful, participation in interference or other administrative proceedings before the USPTO or a foreign patent office may result in substantial costs and distract our management and other employees.
−Removed: For example, we are currently involved in patent infringement lawsuits against several generic companies in the federal district courts.
+Added: For example, we are currently involved in a patent infringement lawsuit against a generic company in the federal district courts.
In addition, we are currently involved in opposition or invalidation proceedings in the European Patent Office, the Japan Patent Office, the Canadian Federal Court and the United Kingdom Patents Court.
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While an inadvertent lapse in many cases can be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
−Removed: Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal
+Added: Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees, and failure to properly legalize and submit formal documents.
In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.
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Competitors may use our technologies in countries where we have not obtained patent protection to develop their own products and, further, may infringe our patents in territories where we have patent protection, but enforcement is not as strong as in the United States.
−Removed: These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
+Added: These products may compete with our product and product candidate and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in certain countries.
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Risks Related to our Business and Industry
−Removed: If we fail to attract, keep and motivate senior management and key personnel, we may be unable to successfully develop and commercialize any product candidates and approved product(s).
−Removed: Recruiting and retaining qualified scientific, clinical, medical, manufacturing and sales and marketing personnel is critical to our success.
+Added: If we fail to attract, keep and motivate senior management and key personnel, we may be unable to successfully develop, obtain and/or maintain marketing approval of and commercialize Auryxia and vadadustat.
+Added: Recruiting and retaining qualified personnel is critical to our success.
We are also highly dependent on our executives, certain members of our senior management and certain members of our commercial organization.
−Removed: The loss of the services of our executives, senior managers or other key employees, including employees in our commercial organization, could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
+Added: The loss of the services of our executives, senior managers or other key employees, including employees in our commercial, development, regulatory, manufacturing and quality organizations, could impede the achievement of our research, development, regulatory and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
Losing such key personnel subjects us to a number of risks, including the failure to coordinate responsibilities and tasks, the necessity to create new management systems and processes, the impact on corporate culture, and the retention of historical knowledge.
−Removed: Furthermore, replacing executives, senior managers and other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain marketing approval of and commercialize products.
−Removed: Our future financial performance and our ability to develop and commercialize our products and product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
+Added: Furthermore, replacing executives, senior managers and other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, obtain and/or maintain marketing approval of and commercialize Auryxia and vadadustat.
+Added: Our future financial performance and our ability to develop, obtain and/or maintain market approval of and commercialize Auryxia and vadadustat and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
To that end, we must be able to hire, train, integrate, and retain additional personnel with sufficient experience.
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Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.
−Removed: If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
−Removed: Security breaches and unauthorized use of our IT systems and information, or the IT systems or information in the possession of our collaborators and other third parties, could damage the integrity of our clinical studies, impact our regulatory filings, compromise our ability to protect our intellectual property, and subject us to regulatory actions that could result in significant fines or other penalties.
+Added: do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
+Added: Security breaches and unauthorized use of our Information Technology systems and information, or the Information Technology systems or information in the possession of our collaborators and other third-parties, could damage the integrity of our clinical studies, impact our regulatory filings, compromise our ability to protect our intellectual property, and subject us to regulatory actions that could result in significant fines or other penalties.
We, our collaborators, contractors and other third parties rely significantly upon information technology, and any failure, inadequacy, interruption or security lapse of that technology, including any cyber security incidents, could harm our ability to operate our business effectively.
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We rely on commercially available systems, software, tools and monitoring to provide security for the processing, transmission and storage of company and customer information.
−Removed: In the ordinary course of our business, we and our third party contractors maintain personal and other sensitive data on our and their respective networks, including our intellectual property and proprietary or confidential business information relating to our business and that of our clinical trial subjects and business partners.
+Added: In the ordinary course of our business, we and our third party contractors maintain personal and other sensitive data on our and their respective networks, including our intellectual property and proprietary or confidential business information relating to our business and that of our clinical trial patients and business partners.
In particular, we rely on CROs and other third parties to store and manage information from our clinical trials.
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Security breaches, whether through physical or electronic break-ins, computer viruses, ransomware, impersonation of authorized users, attacks by hackers or other means, can create system disruptions or shutdowns or the unauthorized disclosure of confidential information.
−Removed: Likewise, although we believe our collaborators, vendors and service providers, such as our CROs, take steps to manage and avoid information security risks and respond to attacks, we may be vulnerable to attacks against our collaborators, vendors or service providers, and we may not have adequate contractual remedies against such collaborators, vendors and service providers
−Removed: in such event.
+Added: Likewise, although we believe our collaborators, vendors and service providers, such as our CROs, take steps to manage and avoid information security risks and respond to attacks, we may be vulnerable to attacks against our collaborators, vendors or service providers, and we may not have adequate contractual remedies against such collaborators, vendors and service providers in such event.
Additionally, outside parties may attempt to fraudulently induce employees, collaborators, or other contractors to disclose sensitive information or take other actions, including making fraudulent payments or downloading malware, by using “spoofing” and “phishing” emails or other types of attacks.
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In the recent past, cyber-attacks have become more prevalent and much harder to detect and defend against and, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and continuously become more sophisticated, often are not recognized until launched against a target and may be difficult to detect for a long time, we may be unable to anticipate these techniques or to implement adequate preventive or detective measures, and we might not immediately detect such incidents and the damage caused by such incidents.
−Removed: Such attacks, whether successful or unsuccessful, or other compromises with respect to our information security and the measures we implement to prevent, detect and respond to them, could result in our incurring significant costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages or fines, or taking other remedial steps with respect to third parties, inadvertent diversion of cash, divert the attention of our management and key information technology resources, disrupt key business operations, harm our reputation and deter business partners from working with us.
−Removed: A compromise with respect to our information security could lead to public exposure of personal information of our clinical trial subjects, Auryxia patients and others, and negative publicity.
+Added: Such attacks, whether successful or unsuccessful, or other compromises with respect to our information security and the measures we implement to prevent, detect and respond to them, could result in our incurring significant costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying
+Added: damages or fines, or taking other remedial steps with respect to third parties, inadvertent diversion of cash, divert the attention of our management and key information technology resources, disrupt key business operations, harm our reputation and deter business partners from working with us.
+Added: A compromise with respect to our information security could lead to public exposure of personal information of our clinical trial patients, Auryxia patients and others, and negative publicity.
Publicity about vulnerabilities and attempted or successful incursions could damage the integrity of our studies or delay their completion.
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• laws that require the reporting of true and accurate financial information and data;
−Removed: securities laws and regulations and their non-U.S.
−Removed: We are conducting global clinical trials in countries where corruption is prevalent, and violations of any of these laws by our personnel or by any of our vendors or agents, such as our CROs or CMOs, could have a material adverse impact on our clinical trials and our business and could result in criminal or civil fines and sanctions.
−Removed: We are subject to complex laws that govern our
−Removed: international business practices.
+Added: state and federal securities laws and regulations and their non-U.S.
+Added: We are currently closing out global clinical trials in countries where corruption is prevalent, and violations of any of these laws by our personnel or by any of our vendors or agents, such as our CROs or CMOs, could have a material adverse impact on our clinical trials and our business and could result in criminal or civil fines and sanctions.
+Added: We are subject to complex laws that govern our international business practices.
These laws include the FCPA, which prohibits U.S.
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Our ability to transfer people and products among certain countries is subject to maintaining required licenses and complying with these laws and regulations.
+Added: Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.
+Added: This could include violations of HIPAA, other U.S.
+Added: federal and state law, and requirements of non-U.S.
+Added: jurisdictions, including the European Union Data Protection Directive.
+Added: We are also exposed to risks in connection with any insider trading violations by employees or others affiliated with us.
The internal controls, policies and procedures, and training and compliance programs we have implemented to deter prohibited practices may not be effective in preventing our employees, contractors, consultants, agents or other representatives from violating or circumventing such internal policies or violating applicable laws and regulations.
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It is not always possible to identify and deter misconduct by employees and third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
−Removed: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, or if any such action is instituted against our employees, consultants, vendors or principal investigators, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, curtailment of our operations, disclosure of our confidential information and imprisonment, any of which could adversely affect our ability to operate our business and our results of operations.
+Added: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, or if any such action is instituted against our employees, consultants, independent contractors, CROs, CMOs, vendors or principal investigators, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, curtailment of our operations, disclosure of our confidential information and imprisonment, any of which could adversely affect our ability to operate our business and our results of operations.
We may encounter difficulties in managing our growth and expanding our operations successfully.
−Removed: As we commercialize Auryxia and advance our product candidates through development and commercialization, we have expanded and may need to further expand our clinical, medical, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us.
+Added: As we commercialize Auryxia and advance vadadustat through development and, if approved, commercialization, we have expanded and may need to further expand our capabilities or contract with third parties to provide these capabilities for us.
In addition, we may encounter difficulties in managing the expanded operations of a larger and more complex company following the Merger as well as challenges associated with managing an increasingly diversified business.
−Removed: We have strategic collaborations for the commercialization of Riona and the development and commercialization of vadadustat, which is now being marketed under the trade name VAFSEO by our collaboration partner, MTPC, in Japan.
−Removed: As our operations expand, we expect that we will need to manage additional relationships with various strategic collaborators, consultants, vendors, suppliers and other third parties.
+Added: We have strategic collaborations for the commercialization of Riona and the development and commercialization of vadadustat, which is now being marketed under the trade name Vafseo TM by our collaboration partner, MTPC, in Japan.
+Added: As our operations expand, including as they relate to vadadustat in the United States, we expect that we will need to manage additional relationships with various strategic collaborators, consultants, vendors, suppliers and other third parties.
Future growth will impose significant added responsibilities on members of management.
−Removed: In addition, in connection with the Merger, we have experienced and may to continue to experience significant growth in our employee base for sales, marketing, operational, managerial, financial, human resources, compliance, drug development, quality, regulatory and medical affairs and other areas.
+Added: In addition, in connection with the Merger and our increasingly diversified business, we have experienced and may to continue to experience significant growth in our employee base.
This growth has imposed and will continue to impose significant added responsibilities on members of management, including the need to recruit, hire, retain, motivate and integrate additional employees, including employees who joined us in connection with the Merger.
Also, our management may have to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities, including the integration of Keryx’s business with our business.
−Removed: Our future financial performance and our ability to commercialize Auryxia and vadadustat or any other product candidate, if approved, and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
−Removed: To manage our recent and anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, procedures and processes, expand our facilities and continue to recruit, train, and retain additional qualified personnel.
+Added: Our future financial performance and our ability to commercialize Auryxia and vadadustat, if and where approved, and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
+Added: To manage our recent and
+Added: anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, procedures and processes, expand our facilities and continue to recruit, train, and retain additional qualified personnel.
We may not be able to implement these improvements in an efficient or timely manner and may discover deficiencies in existing systems, procedures and processes.
Moreover, the systems, procedures and processes currently in place or to be implemented may not be adequate for such growth.
−Removed: Due to our limited financial resources and the limited experience of our management team in managing a company with such growth, we may not be able to effectively manage the expansion of our operations or recruit, train, and retain additional qualified personnel.
+Added: Due to our limited financial resources and the limited experience of our management team in managing a company with such growth, along with the competitive landscape for talent acquisition and retention in the biopharmaceutical industry, we may not be able to effectively manage the expansion of our operations or recruit, train, and retain additional qualified personnel.
In addition, we may need to adjust the size of our workforce as a result of changes to our expectations for our business, which can result in diversion of management attention, disruptions to our business, and related expenses.
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We may not be able to accomplish these tasks, and our failure to accomplish any of them could prevent us from successfully growing our company or realizing the anticipated benefits of the Merger.
−Removed: If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product and product candidates.
−Removed: We face an inherent risk of product liability as a result of the use of our product commercially, and clinical testing of our product candidates, and we will face an even greater risk if we commercialize any additional products in the future.
−Removed: For example, we may be sued if our product or any of our product candidates allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.
+Added: If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of Auryxia and vadadustat, if approved.
+Added: We face an inherent risk of product liability as a result of the clinical and commercial use of Auryxia and vadadustat.
+Added: For example, we may be sued if Auryxia or vadadustat allegedly causes injury or is found to be otherwise unsuitable during product testing, manufacturing, marketing or sale.
Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product or product candidate, negligence, strict liability and breach of warranties.
Claims could also be asserted under state consumer protection acts.
−Removed: If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our products and product candidates.
+Added: If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of Auryxia or vadadustat, if approved.
Even a successful defense would require significant financial and management resources.
Regardless of the merits or eventual outcome, product liability claims may result in:
−Removed: • decreased demand for any product or product candidates;
+Added: • decreased demand for Auryxia or vadadustat, if approved;
• injury to our reputation and significant negative media attention;
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• delay or termination of clinical trials;
−Removed: • our inability to continue to develop a product candidate;
+Added: • our inability to continue to develop Auryxia or vadadustat;
• significant costs to defend the related litigation;
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• product recalls or withdrawals, or labeling, marketing or promotional restrictions;
−Removed: • decreased demand for a product or product candidate;
+Added: • decreased demand for Auryxia or vadadustat;
• loss of revenue;
−Removed: • the inability to commercialize any product or product candidates;
+Added: • the inability to commercialize any Auryxia or vadadustat, if approved;
• a decline in our stock price.
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We currently carry product liability insurance that we believe is appropriate for our company.
−Removed: Although we maintain product liability insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our
−Removed: insurance or that is in excess of the limits of our insurance coverage.
+Added: Although we maintain product liability insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.
Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have insufficient or no coverage.
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Our stock price has been and will likely continue to be volatile.
−Removed: The stock market in general and the market for similarly situated pharmaceutical and biotechnology companies have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
+Added: The stock market in general and the market for similarly situated biopharmaceutical companies have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
Since our initial public offering in March 2014, the price of our common stock as reported on The Nasdaq Global Market has ranged from a low of $2.09 on October 30, 2020 to a high of $31.00 on June 20, 2014.
−Removed: The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, developments related to and results of our clinical studies, developments related to our regulatory submissions, developments related to our ability to commercialize Auryxia and any other approved product candidates, announcements by us or our competitors of significant mergers, acquisitions, licenses, strategic collaborations, joint ventures, collaborations or capital commitments, negative publicity around Auryxia, vadadustat or any other product or product candidate, the results of competitive clinical trials, products or technologies, regulatory or legal developments in the United States and other countries, developments or disputes concerning patent applications, issued patents or other proprietary rights, the recruitment or departure of key personnel, the level of expenses related to Auryxia, vadadustat or any other product or product candidate or clinical development programs, actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts, variations in our financial results or those of companies that are perceived to be similar to us, changes in the structure of healthcare payment systems, market conditions in the pharmaceutical and biotechnology sectors, general economic, industry and market conditions and others beyond our control.
+Added: The daily closing market price for our common stock has varied between a high price of $13.58 on June 30, 2020 and a low price of $2.09 on October 30, 2020 in the twelve-month period ending on March 31, 2021.
+Added: During this time, the price of our common stock has ranged from an intra-day low of $2.09 per share to an intra-day high of $13.71 per share.
+Added: The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, developments related to and results of our clinical studies, developments related to our regulatory submissions, developments related to our ability to commercialize Auryxia and vadadustat, if approved, and any other product candidates, announcements by us or our competitors of significant mergers, acquisitions, licenses, strategic collaborations, joint ventures, collaborations or capital commitments, negative publicity around Auryxia or vadadustat, the results of competitive clinical trials, products or technologies, regulatory or legal developments in the United States and other countries, developments or disputes concerning patent applications, issued patents or other proprietary rights, the recruitment or departure of key personnel, the level of expenses related to Auryxia and vadadustat or any other product or product candidate, actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts, variations in our financial results or those of companies that are perceived to be similar to us, changes in the structure of healthcare payment systems, market conditions in the biopharmaceutical sector, general economic, industry and market conditions and others beyond our control.
As a result of this volatility, our shareholders may not be able to sell their common stock at or above the price at which they purchased it.
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These sales, or the perception in the market that the holders of a large number of shares intend to sell such shares, could reduce the market price of our common stock.
−Removed: According to the most recent filings made under Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, our former director, Muneer Satter, beneficially owned approximately 2% of our outstanding common stock.
+Added: As of March 31, 2021 and based on the amounts reported in the most recent filings made under Section 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, BlackRock, Inc., or BlackRock, beneficially owned approximately 7.2% of our outstanding shares of common stock, State Street Corporation, or State Street, beneficially owned approximately 14.2% of our outstanding shares of common stock, Wellington Management Group LLP, or Wellington, beneficially owned approximately 7.9% of our outstanding common stock.
+Added: In addition, as of March 31, 2021, our former director, Muneer Satter, beneficially owned approximately 1.9% of our outstanding common stock.
Subject to certain restrictions, Mr.
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Following their registration and sale under the applicable registration statement, those shares would become freely tradable.
−Removed: By selling a large number of shares of common stock, State Street or Mr.
+Added: By selling a large number of shares of common stock, BlackRock, State Street, Wellington, or Mr.
Satter could cause the price of our common stock to decline.
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These sales also might make it difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
−Removed: Also, the Merger was financed by the issuance of shares of our common stock to shareholders of Keryx, comprising approximately 50.6% of our issued and outstanding shares of common stock, calculated based on our fully diluted market capitalization as of the date of signing the Agreement and Plan of Merger relating to the Merger.
+Added: Also, the Merger was financed by the issuance of shares of our common stock to shareholders of Keryx, comprising approximately 50.6% of our issued and outstanding shares of common stock, calculated based on our fully diluted market capitalization as of the date of
+Added: signing the Agreement and Plan of Merger relating to the Merger.
Keryx shareholders may decide not to hold the shares of our common stock they received in the Merger.
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Such sales of our common stock could result in higher than average trading volume and may cause the market price for our common stock to decline.
−Removed: In addition, we currently have on file with the SEC a universal shelf registration statement, which allows us to offer and sell certain registered securities, such as common stock, preferred stock, warrants and units, from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale.
−Removed: Sales of substantial amounts of shares of our common stock or other securities by our employees or our other shareholders or by us under our universal shelf registration statement, pursuant to at-the-market offerings or otherwise, could dilute our stockholders, lower the market price of our common stock and impair our ability to raise capital through the sale of equity securities.
+Added: In addition, we currently have on file with the U.S.
+Added: Securities and Exchange Commission a shelf registration statement, which allows us to offer and sell certain registered securities, such as common stock, preferred stock, debt securities, warrants and units, from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale.
+Added: Sales of substantial amounts of shares of our common stock or other securities by our employees or our other shareholders or by us under our shelf registration statement, pursuant to at-the-market offerings or otherwise, could dilute our stockholders, lower the market price of our common stock and impair our ability to raise capital through the sale of equity securities.
Insiders and significant stockholders could cause us to take actions that may not be, or refrain from taking actions that may be, in our best interest or in the best interest of all of our stockholders.
−Removed: As of September 30, 2020, we believe that our directors and executive officers, together with their affiliates, beneficially owned, in the aggregate, approximately 2% of our outstanding common stock.
−Removed: In addition, we have certain significant stockholders, including State Street, which beneficially owned approximately 11% of our outstanding common stock according to the most recent filings made under Section 13(d) and 13(g) of the Exchange Act.
+Added: As of March 31, 2021, we believe that our directors and executive officers, together with their affiliates, owned, in the aggregate, approximately 1.8% of our outstanding common stock.
+Added: In addition, we have certain significant stockholders, including BlackRock, which beneficially owned approximately 7.2% of our outstanding shares of common stock, State Street, which beneficially owned approximately 14.2% of our outstanding shares of common stock, Wellington, which beneficially owned approximately 7.9% of our outstanding common stock,according to the most recent filings made under Section 13(d) and 13(g) of the Exchange Act.
If they were to choose to act together, they would have significant influence on all matters submitted to our stockholders for approval, as well as our management and affairs, such as:
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We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives and corporate governance practices.
−Removed: As a public company, and particularly on and after December 31, 2019 when we ceased to be an “emerging growth company”, we will continue to incur significant legal, accounting and other expenses.
−Removed: The Sarbanes-Oxley Act of 2002, or the SOX Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Global Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and
−Removed: maintenance of effective disclosure and financial controls and corporate governance practices.
+Added: As a public company, and particularly since December 31, 2019 when we ceased to be an “emerging growth company” and December 31, 2020 when we became a "large accelerated filer", we have and will continue to incur significant legal, accounting and other expenses.
+Added: The Sarbanes-Oxley Act of 2002, or the SOX Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Global 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 certain corporate governance practices.
Our management and other personnel will need to continue to devote a substantial amount of time to these compliance initiatives.
−Removed: Moreover, these rules and regulations have and will continue to increase our legal and financial compliance costs and make some activities more time-consuming and costly, especially since, as of December 31, 2019, we are no longer an “emerging growth company” and we therefore may no longer take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are “emerging growth companies.”
+Added: Moreover, these rules and regulations have and will continue to increase our legal and financial compliance costs and make some activities more time-consuming and costly.
We cannot predict or estimate the amount of additional costs we may incur to continue to operate as a public company, nor can we predict the timing of such costs.
−Removed: These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
−Removed: If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act or fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
+Added: These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by
+Added: regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
+Added: We have identified a material weakness in our internal control over financial reporting relating to our inventory process.
+Added: If we are not able to remediate this material weakness, or if we experience additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
As a result, stockholders could lose confidence in our financial and other public reporting which would harm our business and the trading price of our common stock.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.
−Removed: Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations.
−Removed: In addition, any testing by us, as and when required, conducted in connection with Section 404 of the SOX Act, or Section 404, or any testing by our independent registered public accounting firm, which became required as of December 31, 2019, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.
−Removed: As a larger company following the Merger, implementing and maintaining effective controls may require more resources, and we may encounter internal control integration difficulties.
−Removed: For example, as of December 31, 2019, management and our independent registered public accounting firm concluded that our disclosure controls and procedures were not effective because of a material weakness in our internal control over financial reporting relating to our inventory process.
−Removed: During fiscal 2020, we are enhancing our system of internal controls over financial reporting to remediate this material weakness.
−Removed: As the revised and enhanced controls need to be in operation for a sufficient period of time and be tested to ensure that the controls are operating as designed, management has concluded that the material weakness cannot be considered remediated as of September 30, 2020.
−Removed: Even if this material weakness is remediated, our internal control over financial reporting could in the future have material weaknesses, deficiencies or conditions that could require correction or remediation.
+Added: Any failure to maintain or implement required new or improved controls, or difficulties encountered in implementation could cause us to fail to meet our reporting obligations.
+Added: In addition, any testing by us, as and when required, conducted in connection with Section 404 of the SOX Act, or Section 404, or any testing by our independent registered public accounting firm, which became required for us as of December 31, 2019, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.
+Added: For example, as of December 31, 2019, management and our independent registered public accounting firm concluded that our internal control over financial reporting relating to our inventory process was not effective because of a material weakness due to our failure to design and maintain effective controls over the completeness, accuracy and presentation and disclosure of inventory.
+Added: Despite remediation efforts we undertook during fiscal 2020 and continue to make, our management and independent registered public accounting firm concluded that, as of December 31, 2020, our internal control over financial reporting relating to our inventory process was not effective because of a material weakness due to our failure to design and
+Added: maintain effective controls over the completeness, accuracy and presentation and disclosure of inventory.
+Added: For more information about this material weakness, see Part I, Item 4.
+Added: Controls and Procedures of this Quarterly Report on Form 10-Q and Part II, Item 9A.
+Added: Controls and Procedures of our 2020 Annual Report on Form 10-K.
+Added: Additionally, as revised and enhanced controls need to be in operation for a sufficient period of time and be tested to ensure that the controls are operating as designed, management has concluded that the material weakness cannot be considered remediated as of March 31, 2021.
+Added: Although we have initiated remediation measures to address the material weakness, we cannot provide assurance that we will be able to correct this material weakness in a timely manner or that our remediation efforts will be adequate to allow us to conclude that our internal controls will be effective in the future.
+Added: Even if this material weakness is remediated in the future, our internal control over financial reporting could in the future have additional material weaknesses, deficiencies or conditions that could require correction or remediation.
+Added: We will need to continue to dedicate internal resources, engage outside consultants and maintain a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to remediate the material weakness relating to our inventory process described above and any future control deficiencies or material weaknesses, and improve control processes as appropriate, validate through testing that controls are functioning as documented and maintain a continuous reporting and improvement process for internal control over financial reporting.
+Added: If we are not able to correct material weaknesses or deficiencies in internal controls in a timely manner or otherwise comply with the requirements of Section 404 in a timely manner, our ability to record, process, summarize and report financial information accurately and within applicable time periods may be adversely affected and we could be subject to sanctions or investigations by the U.S.
+Added: Securities and Exchange Commission, the Nasdaq Stock Market or other regulatory authorities as well as shareholder litigation which would require additional financial and management resources and could adversely affect the market price of our common stock.
+Added: Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed.
Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.
−Removed: We will need to continue to dedicate internal resources, potentially engage outside consultants and maintain a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to remediate control deficiencies and improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.
−Removed: Despite our efforts, there is a risk that we will not be able to conclude within the prescribed timeframe that our internal control over financial reporting is effective as required by Section 404.
−Removed: If we are not able to comply with the requirements of Section 404 in a timely manner each year, we could be subject to sanctions or investigations by the Securities and Exchange Commission, the Nasdaq Stock Market or other regulatory authorities which would require additional financial and management resources and could adversely affect the market price of our common stock.
−Removed: Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed and investors could lose confidence in our reported financial information.
+Added: Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
+Added: Our Charter and Amended and Restated Bylaws contain provisions that eliminate, to the maximum extent permitted by the General Corporation Law of the State of Delaware, or DGCL, the personal liability of our directors and executive officers for monetary damages for breach of their fiduciary duties as a director or officer.
+Added: Our Charter and our Amended and Restated Bylaws also provide that we will indemnify our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the DGCL.
+Added: In addition, as permitted by Section 145 of the DGCL our Amended and Restated Bylaws and our indemnification agreements that we have entered into with our directors and executive officers provide that:
+Added: • We will indemnify our directors and officers, as defined in our Amended and Restated Bylaws, for serving us in those capacities or for serving other related business enterprises at our request, to the fullest extent permitted by Delaware law.
+Added: Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
+Added: • We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law.
+Added: • We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
+Added: • The rights conferred in our Amended and Restated Bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons.
+Added: Any claims for indemnification made by our directors or officers could impact our cash resources and our ability to fund the business.
Provisions in our organizational documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
−Removed: Provisions in our Charter and our Amended and Restated By-Laws may have the effect of discouraging, delaying or preventing a change in control of us or changes in our management.
+Added: Provisions in our Charter and our Amended and Restated By-Laws contain provisions that may have the effect of discouraging, delaying or preventing a change in control of us or changes in our management.
These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.
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These provisions, alone or together, could delay or prevent hostile takeovers, changes in control or changes in our management.
−Removed: In addition, Section 203 of the Delaware General Corporation Law prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.
+Added: In addition, Section 203 of the DGCL prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.
Any provision of our Charter, our Amended and Restated By-Laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.
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A valuation allowance has been provided for the entire amount of our NOLs.
−Removed: Our Charter designates the state or federal courts located in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
−Removed: Our Charter provides that, subject to limited exceptions, the state and federal courts located in the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our Charter or our Amended and Restated By-Laws, or (4) any other action asserting a claim against us that is governed by the internal affairs doctrine.
−Removed: Under our Charter, this exclusive forum provision will not apply to claims that are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of Chancery of the State
−Removed: of Delaware does not have subject matter jurisdiction.
−Removed: For instance, the provision would not apply to actions arising under federal securities laws, including suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the rules and regulations thereunder.
+Added: Our Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
+Added: Our Charter provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL our Charter or our Amended and Restated By-Laws, or (4) any other action asserting a claim against us, our directors, officers or other employees that is governed by the internal affairs doctrine.
+Added: Under our Charter, this exclusive forum provision will not apply to claims that are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of Chancery of the State of Delaware does not have subject matter jurisdiction.
+Added: For instance, the provision would not apply to actions arising under federal securities laws, including suits brought to enforce any liability or duty created by the Exchange Act, or the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our Charter described above.
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We are currently subject to legal proceedings as described in Part II, Item 1.
−Removed: Legal Proceedings.
+Added: Legal Proceedings and additional claims may arise in the future.
In addition, securities class action and derivative lawsuits and other legal proceedings are often brought against companies for any of the risks described in this Quarterly Report on Form 10-Q following a decline in the market price of their securities.
In connection with any litigation or other legal proceedings, we could incur substantial costs, and such costs and any related settlements or judgments may not be covered by insurance.
−Removed: We could also suffer an adverse impact on our reputation and a diversion of management’s attention and resources, which could have a material adverse effect on our business.
+Added: In addition, if other resolution or actions taken as a result of legal proceedings were to restrain our ability to operate or market our products and services, our consolidated financial position, results of operations or cash flows could be materially adversely affected.
+Added: We could also suffer an adverse impact on our reputation, negative publicity and a diversion of management’s attention and resources, which could have a material adverse effect on our business.
Because we do not anticipate paying any cash dividends on our capital in the foreseeable future, capital appreciation, if any, will be our stockholders’ sole source of gain.
We have never declared or paid cash dividends on our capital stock.
+Added: Any payment of cash dividends in the future would be at the discretion of our Board of Directors and would depend on, among other things, our earnings, financial condition, capital
+Added: requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the Board of Directors deems relevant.
We currently intend to retain all of our future earnings, if any, to finance the development and growth of our business.
−Removed: In addition, the terms of our current or future debt agreements may preclude us from paying dividends.
+Added: In addition, the terms of the Loan Agreement preclude us from paying cash dividends and future debt agreements may preclude us from paying cash dividends.
As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain for the foreseeable future.
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Sales of Unregistered Securities
−Removed: During the quarter ended September 30, 2020, we did not have any sales of unregistered securities.
+Added: During the quarter ended March 31, 2021, we did not have any sales of unregistered securities.
Defaults Upon Senior Securities.
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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.