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Business Related Risks – Risks Related to Our Financial Results
−Removed: • The current pandemic of COVID-19 and its variants and the future outbreak of other highly infectious or contagious diseases, could continue to have an adverse impact on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials and pre-clinical studies, and could impact other areas of our business as well.
−Removed: • The marketing and sale of ONPATTRO, GIVLAARI, OXLUMO or any future products, including vutrisiran, may be unsuccessful or less successful than anticipated and we may be unable to expand the indication for ONPATTRO, or, if approved, vutrisiran.
+Added: • The marketing and sale of our approved products or any future products may be unsuccessful or less successful than anticipated and we may be unable to expand the indications for ONPATTRO and AMVUTTRA.
• We have a history of losses and may never become and remain consistently profitable.
• We will require substantial funds to continue our research, development and commercialization activities.
−Removed: • Although we sold a portion of the expected royalty stream and commercial milestones related to global sales of Leqvio by Novartis, we are entitled to retain the remaining portion of such future royalties and, if certain specified thresholds are met, to the remaining portion of commercial milestone payments, and any negative developments related to Leqvio could have a material adverse effect on the timing or amount of those payments.
+Added: • The current pandemic of COVID-19 and its variants and the future outbreak of other highly infectious or contagious diseases, could continue to have an adverse impact on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials and pre-clinical studies, and could impact other areas of our business as well.
+Added: • Although we sold a portion of the expected royalty stream and commercial milestones related to global sales of Leqvio by Novartis, we are entitled to retain the remaining portion of such future royalties and, if certain specified thresholds
+Added: are met, to the remaining portion of commercial milestone payments, and any negative developments related to Leqvio could have a material adverse effect on the timing or amount of those payments.
Risks Related to Our Dependence on Third Parties
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• If we are unable to attract and retain qualified key management and scientists, development, medical and commercial staff, consultants and advisors, our ability to implement our business plan may be adversely affected.
−Removed: • We recently underwent our first CEO succession.
−Removed: Any leadership transition carries with it disruption risks that could have a negative impact on the execution of our Alnylam P 5 x25 strategy.
−Removed: These risks include our ability to attract and retain qualified employees.
• We may have difficulty expanding our operations successfully as we continue our evolution from a U.S.- and Europe-based company primarily involved in discovery, pre-clinical testing and clinical development into a global company that develops and commercializes multiple drugs in multiple geographies including Asia, Latin America and the Middle East.
−Removed: • We may experience computer system failures or unauthorized or inappropriate use of or access to our information systems or those of our contractors or collaborators, potentially resulting in substantial loss of data, business interruption or other harm.
Industry Related Risks – Risks Related to Development, Clinical Testing and Regulatory Approval of Our Product Candidates and the Commercialization of Our Approved Products
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• We or our partners may be unable to obtain U.S.
−Removed: or foreign regulatory approval for our or our partnered product candidates.
+Added: or foreign regulatory approval for our or our partnered product candidates, or if approved, may fail to obtain desired labeling for such products.
• Even if we or our partners obtain regulatory approvals, our marketed drugs will be subject to ongoing regulatory oversight.
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• We are a multi-product commercial company and expect to continue to invest significant financial and management resources to continue to scale our marketing, sales, market access and distribution capabilities and further establish our global commercial and compliance infrastructure, and our commercial efforts may not be successful.
−Removed: • The patient populations suffering from hATTR amyloidosis with polyneuropathy, AHP, and PH1 are small and have not been established with precision.
• We may incur significant liability if enforcement authorities allege or determine that we are engaging in commercial activities or promoting our commercially approved products in a way that violates applicable regulations, including in connection with the ongoing DOJ investigation.
• Any drugs we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby harming our business.
−Removed: • Governments outside the U.S.
−Removed: may impose strict price controls, and the U.S.
−Removed: government may impose price controls or reference pricing, which may adversely affect our revenues.
Risks Related to Patents, Licenses and Trade Secrets
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• Other companies or organizations may challenge our patent rights or may assert patent rights that prevent us from developing and commercializing our products.
−Removed: • If we become involved in patent litigation or other proceedings related to a determination of rights, we could incur substantial costs and expenses, substantial liability for damages or be required to stop our product development and commercialization efforts.
+Added: • If we become involved in intellectual property litigation or other proceedings related to a determination of rights, including our ongoing patent infringement litigation against Pfizer, Inc., or Pfizer, and Moderna, Inc., we could incur
+Added: substantial costs and expenses, and in the case of such litigation or proceedings against us, substantial liability for damages or be required to stop our product development and commercialization efforts.
• If we fail to comply with our obligations under any licenses or related agreements, we may be required to pay damages and could lose license or other rights that are necessary for developing, commercializing and protecting our RNAi technology.
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• Future sales of shares of our common stock, including by our significant stockholders, us or our directors and officers, could cause the price of our common stock to decline.
−Removed: • Regeneron’s ownership of our common stock could delay or prevent a change in corporate control.
+Added: Risks Related to Our Convertible Notes
+Added: • Servicing our debt may require a significant amount of cash.
+Added: We may not have sufficient cash flow from our business to pay our indebtedness.
+Added: • We may not have the ability to raise the funds necessary to settle for cash conversions of the Notes or to repurchase the Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Notes or to repurchase the Notes.
+Added: • The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
Risks Related to Our Business
Risks Related to Our Financial Results
−Removed: The current pandemic of COVID-19 and its variants, and the future outbreak of other highly infectious or contagious diseases, could continue to have an adverse impact on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials and pre-clinical studies.
−Removed: The novel coronavirus identified in late 2019, SARS-CoV-2, which causes the disease known as COVID-19, has led to an ongoing global pandemic that continues to evolve and the ultimate impact of this pandemic remains highly uncertain.
−Removed: To date, the COVID-19 pandemic has led to the implementation of various responses, including government-imposed quarantines, travel restrictions and other public health safety measures.
−Removed: COVID-19 has and may continue to impact our operations and those of our third-party partners and the ultimate impact on our business and financial results remains uncertain and cannot be predicted with confidence, and will depend on many factors, including the scope, severity, duration and any recurrence of the COVID-19 pandemic, including through any new variant strains of the underlying virus, the actions taken to contain the pandemic or mitigate its impact, the direct and indirect economic effects of the pandemic and containment measures, the effectiveness of vaccination and booster vaccination campaigns, among others.
−Removed: The continued development and fluidity of the COVID-19 pandemic precludes any prediction as to its full impact on our business.
−Removed: In response to the spread of COVID-19, we took, and have continued to take, both temporary and ongoing precautionary measures, intended to help minimize the risk of the virus to our employees and their families, including implementing a global work from home policy in early March 2020 for nearly all employees who were able to perform their duties remotely.
−Removed: In addition, in October 2021, we implemented a mandatory vaccination policy requiring all U.S.
−Removed: employees and contractors to be fully vaccinated, subject to certain medical and religious accommodations.
−Removed: Where and to the extent permitted to be open under local regulations, our office sites are operational with appropriate safety precautions based on COVID-19 vaccination rates and local guidance, and in October 2021, we formally re-opened our U.S.
−Removed: offices to those employees who have been fully vaccinated.
−Removed: Working arrangements for many of our employees differ from the arrangements before the COVID-19 pandemic, and we expect a number of employees will continue to work in a remote capacity or a hybrid of in-person and remote work.
−Removed: We may face several challenges or disruptions during our return to the workplace transition, including re-integration challenges for our employees, and our hybrid of in-person and remote work option may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business.
−Removed: Compliance with governmental measures imposed in response to COVID-19 has caused and will continue to cause us to incur additional costs, and any inability to comply with such measures can subject us to restrictions on our business activities, fines, and other penalties, any of which can adversely affect our business.
−Removed: We cannot predict when certain restrictions that are in place to protect our employees can be further reduced or will no longer be needed.
−Removed: In addition, the increase in certain of our employees working remotely has amplified certain risks to our business, including increased demand on our information technology resources and systems, increased phishing and other cybersecurity attacks, and any failure to effectively manage these risks, including to timely identify and appropriately respond to any cyberattacks, could adversely impact our business operations.
−Removed: As the pandemic continues, and if conditions worsen or if the duration of the pandemic extends significantly, we may experience disruptions that could severely impact our business and operations, including our ability to successfully commercialize our approved products, and we may not be able to meet expectations with respect to commercial sales.
−Removed: In addition, we may also experience decreased patient demand for our approved products if current or potential patients decide to delay treatment as a result of the COVID-19 or a future pandemic.
−Removed: Business interruptions from the current or future pandemics, including staffing shortages, raw material or other supply chain shortages, production slowdowns and disruptions in delivery
−Removed: systems, may also adversely impact the third parties we or our partners rely on in the U.S.
−Removed: and abroad to sufficiently manufacture our approved products and to produce product candidates in quantities we require, which may impair our commercialization efforts, our research and development activities and the potential commercialization of our product candidates.
−Removed: Additionally, timely completion of pre-clinical activities and initiation of planned clinical trials are dependent upon the availability of, for example, pre-clinical and clinical trial sites, researchers and investigators, patients or healthy volunteer subjects available for recruitment and enrollment, and regulatory agency personnel, which may be adversely affected by global health matters, such as the COVID-19 pandemic.
−Removed: We are conducting and plan to continue to conduct pre-clinical activities and clinical trials for our drug product candidates in geographies which have been and continue to be affected by COVID-19, and believe that the COVID-19 pandemic will have an impact on various aspects of our ongoing clinical trials and on the clinical trials and pre-clinical studies we expect to initiate in 2022.
−Removed: For example, certain trial sites in some of our ongoing clinical trials were restricted temporarily by the institutions where they are located from scheduling patient visits or permitting onsite monitoring due to the COVID-19 pandemic, and in some of our ongoing trials, delayed or missed doses of study drug have been reported.
−Removed: Any business interruptions caused by the COVID-19 pandemic could also delay necessary interactions with local regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors, which could adversely impact the clinical trials of our product candidates.
−Removed: Health regulatory agencies globally may also experience disruptions in their operations as a result of the COVID-19 pandemic, which may impact review, inspection and approval timelines.
−Removed: Since March 2020, when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-approval inspections on a prioritized basis.
−Removed: Since April 2021, the FDA has conducted limited inspections and employed remote interactive evaluations, using risk management methods, to meet user fee commitments and goal dates.
−Removed: Ongoing travel restrictions and other uncertainties continue to impact oversight operations both domestic and abroad and it is unclear when standard operational levels will resume.
−Removed: The FDA is continuing to complete mission-critical work, prioritize other higher-tiered inspectional needs (e.g., for-cause inspections), and carry out surveillance inspections using risk-based approaches.
−Removed: Should the FDA determine that an inspection is necessary for approval of a marketing application and an inspection cannot be completed during the review cycle due to restrictions on travel, and the FDA does not determine a remote interactive evaluation to be adequate, the FDA has stated that it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the application until an inspection can be completed.
−Removed: For example, in December 2020, the FDA issued a complete response letter regarding Novartis' NDA for inclisiran, stating that the agency could not approve the NDA by the PDUFA action date due to unresolved facility inspection-related conditions.
−Removed: The FDA ultimately approved Novartis' NDA in December 2021.
−Removed: Regulatory authorities outside the U.S.
−Removed: may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.
−Removed: Some factors from the ongoing COVID-19 pandemic that may delay or otherwise adversely affect enrollment in and the conduct of the clinical trials of our product candidates, as well as adversely impact our business generally, include:
−Removed: • the diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, including the availability of materials necessary to conduct our clinical trials;
−Removed: • limitations on travel that could interrupt key trial activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to clinical trial sites, including any government-imposed travel restrictions or quarantines that will impact the ability or willingness of patients, employees or contractors to travel to our research, manufacturing and clinical trial sites or secure visas or entry permissions, any of which could delay or adversely impact the conduct or progress of our clinical trials;
−Removed: • interruption of, or delays in receiving, supplies of our product candidates from our CMOs due to staffing shortages, production slowdowns, raw material or other supply shortages, or stoppages and disruptions in delivery systems.
−Removed: These and other factors arising from the COVID-19 pandemic could worsen in countries with higher infection rates and case counts, or could return to countries where the pandemic has been partially contained, each of which could further adversely impact our ability to conduct clinical trials and our business generally, and could have a material adverse impact on our operations and financial condition and results.
−Removed: In addition, a recession, depression or other sustained adverse market event resulting from the COVID-19 pandemic could materially and adversely affect our business and the value of our common stock.
−Removed: The marketing and sale of ONPATTRO, GIVLAARI, OXLUMO or any future products, including vutrisiran, may be less successful than anticipated, and we may be unable to expand the indication for ONPATTRO, or, if approved, vutrisiran.
+Added: The marketing and sale of our approved products or any future products may be less successful than anticipated, and we may be unable to expand the indications for ONPATTRO and AMVUTTRA.
In 2018, our first commercial product, ONPATTRO, was approved by the FDA and EMA, and we have since received approval and launched ONPATTRO in several additional territories.
−Removed: In 2019, the FDA approved our second product, GIVLAARI, which was also approved by the EMA and has since received approval in several additional territories, and in 2020, the FDA and EMA approved our third product, OXLUMO, which received additional regulatory approvals in 2021.
−Removed: We also have several product candidates in late-stage clinical development, including vutrisiran, which is currently under review by the FDA, and has a PDUFA date of April 14, 2022, as well as other agencies.
−Removed: While we have commercially launched three
−Removed: products, we cannot predict whether we will successfully overcome many of the risks and uncertainties encountered by companies commercializing products in the biopharmaceutical industry.
−Removed: To execute our business plan of building a profitable, top five biotech company over the next 5 years and achieving our Alnylam P 5 x25 strategy and the metrics associated with such strategy, in addition to successfully marketing and selling our approved products we will need to successfully:
+Added: In 2019, the FDA approved our second product, GIVLAARI, which was also approved by the EMA and has since received approval in several additional territories, and in 2020, the FDA and EMA approved our third product, OXLUMO, which received additional regulatory approvals in 2021 and 2022.
+Added: In June 2022, the FDA approved AMVUTTRA, which was granted marketing authorization in Europe and the UK in September 2022 and has since received regulatory approval in Japan and Brazil.
+Added: We also have multiple product candidates in late-stage clinical development.
+Added: While we have commercially launched four products, we cannot predict whether we will successfully market and sell our approved products, or successfully expand the indications of certain of our approved products.
+Added: For example, in August and September 2022, we reported positive safety and efficacy results from the APOLLO-B Phase 3 clinical trial of patisiran, which was designed and powered to evaluate the effects of patisiran on functional capacity and quality of life in patients with ATTR amyloidosis with cardiomyopathy.
+Added: While we believe that the APOLLO-B results after 12 months validate the therapeutic hypothesis of RNAi therapeutics targeting TTR as potential treatment for patients with ATTR amyloidosis with cardiomyopathy and submitted an sNDA to the FDA for review in December 2022, we cannot be certain that the results from the APOLLO-B clinical trial will support regulatory approval of patisiran for the treatment of patients with ATTR amyloidosis with cardiomyopathy.
+Added: To execute our business plan of building a profitable, top-tier biotech company over the next 5 years and achieving our Alnylam P 5 x25 strategy and the metrics associated with such strategy, in addition to successfully marketing, selling and expanding the indications of our approved products, we will need to successfully:
• execute product development activities and continue to leverage new technologies related to both RNAi and to the delivery of siRNAs to the relevant tissues and cells, including the liver, CNS, eye, lung and muscle;
−Removed: • successfully execute our leadership succession plan;
• build and maintain a strong intellectual property portfolio;
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• manage our spending as costs and expenses increase due to clinical trials, regulatory approvals and commercialization.
−Removed: If we are unsuccessful in accomplishing the objectives set forth above, we may not be able to develop product candidates, successfully commercialize our approved products or any future products, raise capital, if needed, repay the debt we incurred in 2020 and 2021, expand our business, achieve financial self-sustainability or continue our operations.
+Added: If we are unsuccessful in accomplishing the objectives set forth above, we may not be able to develop product candidates, successfully commercialize our approved products or any future products, raise capital, if needed, repay our indebtedness, achieve financial self-sustainability or continue our operations.
We have a history of losses and may never become and remain consistently profitable.
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As of December 31, 2022, we had an accumulated deficit of $6.57 billion.
−Removed: Although to date we have launched three products in the U.S., EU and various other countries globally, and expect to launch our commercially approved products in additional countries during 2022 and beyond, we may never attain profitability or positive cash flow from operations.
−Removed: For the year ended December 31, 2021, we recognized $662.1 million in net product revenues from sales of ONPATTRO, GIVLAARI and OXLUMO.
−Removed: While our full year operating loss for 2021 and 2020 each improved relative to the prior year, marking 2019 as our peak operating loss year, we expect to continue to incur annual operating losses, and will require substantial resources over the next several years as we expand our efforts to discover, develop and commercialize RNAi therapeutics, and aim to achieve self-sustainability by the end of 2025.
−Removed: While we believe the funding provided by our strategic financing collaboration with Blackstone should enable us to achieve a self-sustainable profile without the need for future equity financing, we will depend on our ability to generate revenues to achieve this goal.
+Added: Although to date we have launched four products in the U.S., EU and various other countries globally, and expect to launch our commercially approved products in additional countries during 2023 and beyond, we may never attain profitability or positive cash flow from operations.
+Added: For the year ended December 31, 2022, we recognized $894.3 million in net product revenues from sales of ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO.
+Added: While we believe 2019 was our peak operating loss year, we expect to continue to incur annual operating losses, and will require substantial resources over the next several years as we expand our efforts to discover, develop and commercialize RNAi therapeutics, and aim to achieve self-sustainability by the end of 2025.
+Added: While we believe our current cash, cash equivalents and marketable equity and debt securities, as well as the revenue we expect to generate from product sales and under our current alliances, including milestones and royalties on Leqvio sales, should enable us to achieve a self-sustainable profile without the need for future equity financing, we will depend on our ability to generate revenues to achieve this goal.
In addition to revenues derived from sales of our current and future, if any, commercially approved products, we anticipate that a portion of any revenues we generate over the next several years will continue to be from alliances with pharmaceutical and biotechnology companies, including Novartis and Regeneron.
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In addition, we may be unable to raise capital, expand our business, develop additional product candidates or continue our operations.
−Removed: We will require substantial funds to continue our research, development and commercialization activities and if the funds we require are greater than what we have estimated, we may need to critically limit or significantly scale back or cease our operations.
−Removed: We have used substantial funds to develop our RNAi technologies and will require substantial funds to conduct further research and development, including pre-clinical testing and clinical trials of our product candidates, and to manufacture, market and sell our three approved products and any other products that are approved for commercial sale.
−Removed: Because the length of time or activities associated with successful development of our product candidates, including vutrisiran, may be greater than we anticipate, we are unable to estimate the actual funds we will require to develop and commercialize them.
−Removed: We believe 2019 was our peak operating loss year, and believe that our strategic financing collaboration with Blackstone will enable us to achieve a self-sustainable financial profile without need for future equity financing.
+Added: We will require substantial funds to continue our research, development and commercialization activities and if the funds we require are greater than what we have estimated, we may need to critically limit or significantly scale back or cease certain of our activities.
+Added: We have used substantial funds to develop our RNAi technologies and will require substantial funds to conduct further research and development, including pre-clinical testing and clinical trials of our product candidates, and to manufacture, market and sell our four approved products and any other products that are approved for commercial sale.
+Added: Because the length of time or activities associated with successful development of our product candidates, including zilebesiran, may be greater than we anticipate, we are unable to estimate the actual funds we will require to develop and commercialize them.
+Added: We believe 2019 was our peak operating loss year, and believe that our current cash, cash equivalents and marketable equity and debt securities, as well as revenue we expect to generate from product sales and under our current alliances, including milestones and royalties on Leqvio sales, will enable us to achieve a self-sustainable financial profile without need for future equity financing.
However, our future capital requirements and the period for which we expect our existing resources to support our operations may vary from what we expect.
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• our ability to manufacture, or contract with third parties for the manufacture of, our product candidates for clinical testing and commercial sale;
−Removed: • the impact of COVID-19 on the initiation or completion of pre-clinical studies or clinical trials and the supply of our products or product candidates;
+Added: • the impact of COVID-19 or the ongoing conflict in Ukraine on the initiation or completion of pre-clinical studies or clinical trials and the supply of our products or product candidates;
• the resources, time and cost required for the preparation, filing, prosecution, maintenance and enforcement of patent claims;
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If our estimates, predictions and financial guidance relating to these factors are incorrect, we may need to modify our operating plan and may be required to seek additional funding in the future.
−Removed: We may do so through either collaborative arrangements, public or private equity offering s or debt financings, royalty or other monetization transactions or a combination of one or more of these funding sources.
+Added: We may do so through either collaborative arrangements, public or private equity offerings or debt financings, royalty or other monetization transactions or a combination of one or more of these funding sources.
Additional funds may not be available to us on acceptable terms or at all.
−Removed: In April 2020, we entered into a credit agreement, or Credit Agreement, for up to $750.0 million among us, certain of our subsidiaries (together with us, the Loan Parties), funds or accounts managed or advised by GSO Capital Partners LP (now Blackstone Alternative Credit Advisors LP) and certain other affiliates of Blackstone, and the other lenders from time to time party thereto and Wilmington Trust, National Association, as the administrative agent for the lenders.
−Removed: The Credit Agreement provided for a senior secured delayed dra w term loan facility, funded in three tranches, or Term Loans, each tranche as requested by certain dates specified in the Credit Agreement, and subject to customary terms and conditions in the case of each tranche.
−Removed: The Term Loans mature seven years from the date of the first draw, and bear interest at a variable rate.
−Removed: All obligations under the Credit Agreement are secured, subject to certain exceptions, by security interests in certain assets, including the intellectual property owned by us relating to ONPATTRO, GIVLAARI and vutrisiran, the equity interests held by the Loan Parties in their subsidiaries, all of our ownership of the inclisiran royalty remaining after the royalty purchase and material real property, and certain personal property, including, without limitation, cash held in certain deposit accounts of the Loan Parties and equipment.
−Removed: The Credit Agreement contains negative covenants that, among other things and subject to certain exceptions, could restrict our ability to, incur additional liens, incur additional indebtedness, make investments, including acquisitions, engage in fundamental changes, sell or dispose of assets that constitute collateral, including certain intellectual property, pay dividends or make any distribution or payment on or redeem, retire or purchase any equity interests, amend, modify or waive certain material agreements or organizational documents and make payments of certain subordinated indebtedness.
−Removed: The Credit Agreement also requires us to have consolidated liquidity of at least $100.0 million as of the last day of each fiscal quarter.
−Removed: Additionally, the Credit Agreement contains certain customary representations and warranties, affirmative covenants and provisions relating to events of default.
−Removed: In August 2020, in connection with execution of the funding agreement for the clinical development of vutrisiran and zilebesiran (formerly ALN-AGT), or Funding Agreement, we entered into the First Amendment to the Credit Agreement.
−Removed: The First Amendment added certain intellectual property owned by us relating to zilebesiran as collateral under the Credit Agreement, as amended, and made ce rtain other amendments related thereto and the Funding Agreement.
−Removed: In December 2020, we drew down the first tranche of $200.0 million and the second and third tranches of $250.0 million each, were drawn under the Credit Agreement, as amended, in June and December 2021, respectively.
−Removed: Our ability to satisfy our obligations under the Credit Agreement, as amended, and meet our debt service obligations will dep end upon our future performan ce, which will be subject to financial, business and other factors affecting our operations, many of which are
−Removed: beyond our control.
−Removed: If we default on our Term Loans, we may not be able to replace the financing commitment on favorable terms, or at all.
−Removed: The terms of any financing we may be required to pursue in the future notwithstanding the funds due or available to us from Blackstone may adversely affect the holdings or the rights of our stockholders.
+Added: The terms of any financing we may be required to pursue in the future may adversely affect the holdings or the rights of our stockholders.
If we raise additional funds by issuing equity securities, further dilution to our existing stockholders will result.
In addition, as a condition to providing additional funding to us, future investors may demand, and may be granted, rights superior to those of existing stockholders.
−Removed: For example, pursuant to our stock purchase agreement with Blackstone, we agreed to register the resale of the shares purchased on a registration statement and filed a registration statement on June 5, 2020.
−Removed: In addition, subject to certain conditions, Blackstone will be entitled to participate in registered underwritten public offerings by us if other selling stockholders are included in the registration.
If we are unable to obtain additional funding on a timely basis, we may be required to significantly delay or curtail one or more of our research or development programs, or delay or curtail the further development of our global commercial infrastructure, and our ability to achieve our long-term strategic goals may be delayed or diminished.
We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our technologies, product candidates or products that we would otherwise pursue on our own.
+Added: The COVID-19 pandemic and its variants, and the future outbreak of other highly infectious or contagious diseases, could continue to have an adverse impact on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials and pre-clinical studies.
+Added: The ongoing COVID-19 pandemic continues to evolve and the ultimate impact of this pandemic remains uncertain.
+Added: COVID-19 has and may continue to impact our operations and those of our third-party partners.
+Added: The length of time and full extent to which the COVID-19 pandemic directly or indirectly impacts our business and financial results remains uncertain and cannot be predicted with confidence, and depends on future developments that are highly uncertain, subject to change and are difficult to predict, including as a result of new information that may emerge concerning COVID-19, new strains of the virus, including any future variants that may emerge, and the actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international markets.
+Added: In response to the spread of COVID-19, we took, and have continued to take, both temporary and ongoing precautionary measures, intended to help minimize the risk of the virus to our employees and their families, including implementing flexible work arrangements for nearly all employees who were able to perform their duties remotely.
+Added: Working arrangements for many of our employees differ from the arrangements before the COVID-19 pandemic, and we expect a number of employees will continue to work in a remote capacity or a hybrid of in-person and remote work.
+Added: We may face several challenges or disruptions as result of these working arrangements, and our hybrid of in-person and remote work option may negatively impact productivity, or disrupt, delay, or otherwise adversely impact our business.
+Added: To the extent that we have less remote work opportunities and less flexibility than our competitors, our ability to attract and retain talent may be materially affected, which could adversely impact our employee recruitment and retention efforts.
+Added: In addition, the increase in certain of our employees working remotely has amplified certain risks to our business, including increased demand on our information technology resources and systems, increased phishing and other cybersecurity attacks, and any failure to effectively manage these risks, including to timely identify and appropriately respond to any cyberattacks, could adversely impact our business operations.
+Added: If the conditions of the pandemic worsen, we may experience disruptions that could impact our business and operations, including our ability to successfully commercialize our approved products, and we may not be able to meet expectations with respect to commercial sales.
+Added: In addition, we may also experience decreased patient demand for our approved products if current or potential patients decide to delay treatment as a result of the COVID-19 or a future pandemic.
+Added: Business interruptions from the current or future pandemics, including staffing shortages, raw material or other supply chain shortages, production slowdowns and disruptions in delivery systems, may also adversely impact the third parties we or our partners rely on in the U.S.
+Added: and abroad to sufficiently manufacture our approved products and to produce product candidates in quantities we require, which may impair our commercialization efforts, our research and development activities and the potential commercialization of our product candidates.
+Added: Additionally, timely completion of pre-clinical activities and initiation of planned clinical trials are dependent upon the availability of, for example, pre-clinical and clinical trial sites, researchers and investigators, patients or healthy volunteer subjects available for recruitment and enrollment, and regulatory agency personnel, which may be adversely affected by global health matters, such as the ongoing COVID-19 pandemic.
+Added: We are conducting and plan to continue to conduct pre-clinical activities and clinical trials for our drug product candidates in geographies which have been and continue to be affected by COVID-19, and believe that the COVID-19 pandemic could continue to have an impact on various aspects of our ongoing clinical trials and on the clinical trials and pre-clinical studies we expect to initiate during 2023.
+Added: For example, certain trial sites in some of our ongoing clinical trials were restricted temporarily by the institutions where they are located from scheduling patient visits or permitting onsite monitoring due to the COVID-19 pandemic, and in some of our ongoing trials, delayed or missed doses of study drug have been reported.
+Added: Any business interruptions caused by the COVID-19 pandemic could also delay necessary interactions with local regulators, ethics committees, manufacturing sites, research or clinical trial sites and other important agencies and contractors, which could adversely impact the clinical trials of our product candidates.
+Added: Health regulatory agencies globally may also experience disruptions in their operations if the conditions of the COVID-19 pandemic worsen, which could impact review, inspection and approval timelines.
+Added: Since March 2020, when foreign and domestic inspections of facilities were largely placed on hold, the FDA has been working to resume pre-pandemic levels of inspection activities, including routine surveillance, bioresearch monitoring and pre-approval inspections.
+Added: Should the FDA determine that an inspection is necessary for approval of a marketing application and an inspection cannot be completed during the review cycle due to restrictions on travel, and the agency does not determine a remote interactive evaluation to be adequate, the FDA has stated that it generally intends to issue, depending on the circumstances, a complete response letter or defer action on the application until an inspection can be completed.
+Added: For example, in December 2020, the FDA issued a complete response letter regarding Novartis' NDA for inclisiran, stating that the agency could not approve the NDA by the Prescription Drug User Free Act, or the PDUFA, action date due to unresolved facility inspection-related conditions.
+Added: The FDA ultimately approved Novartis' NDA in December 2021.
+Added: Regulatory authorities outside the U.S.
+Added: may adopt similar restrictions or other policy measures in response to the ongoing COVID-19 pandemic and may experience delays in their regulatory activities.
Although we sold a portion of the royalty stream and commercial milestones from the global sales of Leqvio by our collaborator, Novartis, we are entitled to retain the remaining portion of future royalties from the global sales of Leqvio and, if certain specified thresholds are met, to the remaining portion of commercial milestone payments, and any negative developments related to Leqvio could have a material adverse effect on our receipt of those payments.
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If the revenues generated by sales of Leqvio are lower than expected, our business could be materially adversely affected.
+Added: Geopolitical risks associated with the ongoing military conflict between Russia and Ukraine could have an adverse impact on our business, financial condition and results of operations, including our clinical trials.
+Added: Russia’s invasion of Ukraine, and the global response, including the imposition of sanctions by the U.S., EU and other countries, may have an adverse impact on our business, including our clinical trials, the financial markets and the global economy.
+Added: The uncertain nature, magnitude, and duration of hostilities stemming from the conflict in Ukraine, including the potential effects of sanctions limitations, retaliatory cyber-attacks on the world economy and markets, have also contributed to increased market volatility and uncertainty, which could have an adverse impact on macroeconomic factors that affect our business and operations.
+Added: Additionally, the ongoing conflict in Ukraine may disrupt the ability of our contract research organizations, or CROs, to conduct clinical trials at certain sites in Ukraine.
+Added: Moreover, enrollment and retention of clinical trial participants may be adversely affected.
+Added: We cannot be certain what the overall impact of this conflict will be on our ability to conduct and complete our clinical trials on schedule.
+Added: However, interruptions of our clinical trials could significantly delay our clinical development plans and potential authorization or approval of our product candidates, which could increase our costs and jeopardize our ability to successfully commercialize our product candidates.
We expect our operating results to fluctuate in future periods, which may adversely affect our stock price.
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Our operating results may fluctuate due to the impact of the COVID-19 and related variants or a future pandemic, the level of success of our commercial efforts and resulting revenues, as well as the variable nature of our operating expenses as a result of the timing and magnitude of expenditures.
−Removed: For example, due to the impact of the COVID-19 pandemic, product revenues in the second quarter of 2020 for ONPATTRO were less than originally forecast.
+Added: For example, due to the impact of the COVID-19 pandemic, combined net product revenues in the first quarter of 2022 for our commercially approved products were negatively impacted.
In addition, in one or more future periods, our results of operations may fall below the expectations of securities analysts and investors.
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We cannot assure you, however, that our estimates, or the assumptions underlying them, will be correct.
−Removed: Further, from time to time we issue financial guidance relating to our expectations regarding our combined product sales, collaboration and royalty revenues, and GAAP and non-GAAP research and development and selling, general and administrative expenses, and expectations for our cash, cash equivalents and marketable securities available for operations, which guidance is based on estimates and the judgment of management.
−Removed: If, for any reason, our revenues and/or expenses differ materially from our guidance or we utilize our cash more quickly than anticipated, we may have to adjust our publicly announced financial guidance.
+Added: Further, from time to time we issue financial guidance relating to our expectations regarding our combined product sales, collaboration and royalty revenues, and GAAP and non-GAAP combined research and development and selling, general and administrative expenses, which guidance is based on estimates and the judgment of management.
+Added: If, for any reason, our revenues and/or expenses differ materially from our guidance, we may have to adjust our publicly announced financial guidance.
+Added: For example, in April 2022, we decreased our 2022 guidance range for combined net product revenues, and in October 2022, we decreased our guidance range for our collaboration and royalty revenue.
If we fail to meet, or if we are required to change or update any element of, our publicly disclosed financial guidance or other expectations about our business, our stock price could decline.
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The market risks associated with our investment portfolio may have an adverse effect on our results of operations, liquidity and financial condition.
−Removed: Changes in foreign currency exchange rates could have a material adverse effect on our operating results.
+Added: Volatility in foreign currency exchange rates could have a material adverse effect on our operating results.
Our revenue from outside of the U.S.
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dollar strengthens against a specific foreign currency, our revenues will decrease, having a negative impact on net income, but our overall expenses will decrease, having a positive impact.
−Removed: Therefore, significant changes in foreign exchange rates can impact our operating results and financial condition.
+Added: For example, during 2022, we experienced an unfavorable impact from foreign exchange rates on our international revenues.
+Added: Continued volatility in foreign exchange rates is likely to impact our operating results and financial condition.
Changes in tax law could adversely affect our business and financial condition.
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For example, we will rely entirely on (i) Regeneron for the development and commercialization of all programs targeting eye diseases (subject to limited exceptions), and potentially other CNS and liver programs, (ii) Novartis for all future development and commercialization of Leqvio worldwide, and (iii) Sanofi for the development and commercialization of fitusiran worldwide.
−Removed: In the case of each such collaboration referenced in clauses (i)-(iii) above, we are entitled to royalties on the sales of each of these products.
+Added: In the case of each such collaboration referenced in clauses (i)-(iii)
+Added: above, we are entitled to royalties on the sales of each of these products.
If our collaborators are not successful in their development and/or commercialization efforts, our future revenues from RNAi therapeutics for these indications may be adversely affected.
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We may not be successful in entering into future alliances on terms favorable to us due to various factors, including our ability to demonstrate improved product profiles from our new technologies, including our IKARIA and GEMINI platforms, our ability to successfully demonstrate proof-of-concept for our technology in humans in certain tissues or disease areas, including our alternative conjugate approach for delivering CNS or ocular product candidates or other extrahepatic approaches, our ability to demonstrate the safety and efficacy of our specific drug candidates, our ability to manufacture or have third parties manufacture RNAi therapeutics, the strength of our intellectual property and/or concerns around challenges to our intellectual property.
−Removed: For example, our decision in October 2016 to discontinue development of revusiran could give rise to concerns around the safety and/or efficacy of our technology platform or product candidates.
−Removed: In addition, the occurrence of a fatal thrombotic serious adverse event, or SAE, in our fitusiran study in 2017 and a subsequent pause in dosing and enrollment in fitusiran clinical studies in 2020 could contribute to further concerns about the safety of specific therapeutic candidates or therapeutic candidates for specific diseases.
+Added: For example, the occurrence of a fatal thrombotic serious adverse event, or SAE, in our fitusiran study in 2017 and a subsequent pause in dosing and enrollment in fitusiran clinical studies in 2020 could contribute to further concerns about the safety of specific therapeutic candidates or therapeutic candidates for specific diseases.
Even when we succeed in securing such alliances, we may not be able to maintain them if, for example, development or approval of a product candidate is delayed, challenges are raised as to the validity or scope of our intellectual property, we are unable to secure adequate reimbursement from payors or sales of an approved drug are lower than we expected.
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Any such delay related to our collaborations could adversely affect our business.
−Removed: For certain product candidates, we have formed collaborations to fund all or part of the costs of drug development and commercialization, such as our collaborations with Regeneron, Novartis, Vir, Dicerna (acquired by Novo Nordisk) and Sanofi.
+Added: For certain product candidates, we have formed collaborations to fund all or part of the costs of drug development and commercialization, such as our collaborations with Regeneron, Novartis, Vir, Dicerna and Sanofi.
We may not, however, be able to enter into additional collaborations for certain other programs, and the terms of any collaboration agreement we do secure may not be favorable to us.
−Removed: If we are not successful in our efforts to enter into future collaboration arrangements with respect to one or more of our product candidates, we may not have sufficient funds to develop
−Removed: these product candidates or other product candidates internally, or to bring our product candidates to market.
+Added: If we are not successful in our efforts to enter into future collaboration arrangements with respect to one or more of our product candidates, we may not have sufficient funds to develop these product candidates or other product candidates internally, or to bring our product candidates to market.
If we do not have sufficient funds to develop and bring our product candidates to market, we will not be able to generate revenues from these product candidates, and this will substantially harm our business.
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We have limited manufacturing experience.
−Removed: In order to continue to commercialize our approved products, continue to develop our current product candidates, including vutrisiran, apply for regulatory approvals and, if approved, commercialize future products, we will need to develop, contract for, or otherwise arrange for the necessary manufacturing capabilities.
−Removed: Historically, our internal manufacturing capabilities were limited to small-scale production of material for use in in vitro and in vivo experiments that is not required to be produced under cGMP standards.
+Added: In order to continue to commercialize our approved products, continue to develop our current product candidates, apply for regulatory approvals and, if approved, commercialize future products, we will need to develop, contract for, or otherwise arrange for the necessary manufacturing capabilities.
+Added: Historically, our internal manufacturing capabilities were limited to small-scale production of material for use in in vitro and in vivo experiments that is not required to be produced under GMP standards.
During 2012, we developed cGMP capabilities and processes for the manufacture of patisiran formulated bulk drug product for late stage clinical trial use and commercial supply.
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In December 2020, we began cGMP operations, and we believe this facility will enable us to initiate manufacturing for multiple new early-stage programs over the next few years, as well as provide us the manufacturing capabilities to support our late-stage and commercial programs in the future.
−Removed: At the present time, we may manufacture limited quantities of clinical trial materials ourselves, but otherwise we continue to rely on third parties to manufacture the drug substance and finished product we will require for any clinical trials that we initiate and to support the commercial supply of our approved products and any of our other product candidates.
+Added: At the present time, we may manufacture limited quantities of clinical trial materials ourselves, but otherwise we continue to rely on third parties to manufacture the drug substance and finished product we will require for clinical trials that we initiate and to support the commercial supply of our approved products and any of our other product candidates.
There are a limited number of manufacturers that supply synthetic siRNAs.
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If we experience shortages in the supply of our marketed products, as a result of COVID-19 or otherwise, our results could be materially impacted.
−Removed: To date, three vaccines for COVID-19 have received Emergency Use Authorization by the FDA and two of those have since received marketing approval.
−Removed: Additional vaccines may be authorized or approved in the future.
−Removed: The resultant demand for vaccines and potential for manufacturing facilities and materials to be commandeered under the Defense Production Act of 1950, or equivalent foreign legislation, may make it more difficult to obtain materials or manufacturing slots for the products needed for our clinical trials or commercial products, which could lead to delays in these trials or issues with our commercial supply.
In developing manufacturing capabilities by building our own manufacturing facilities, we have incurred substantial expenditures, and expect to incur significant additional expenditures in the future.
Also, we have had to, and will likely need to continue to, hire and train qualified employees to staff our facilities.
−Removed: If we are unable to manufacture sufficient quantities of material or if we encounter problems with our facilities in the future, we may also need to secure alternative suppliers, and such alternative suppliers may not be available, or we may be unable to enter into agreements with them on reasonable terms and in a timely manner.
+Added: If we are unable to manufacture sufficient quantities of
+Added: material or if we encounter problems with our facilities in the future, we may also need to secure alternative suppliers, and such alternative suppliers may not be available, or we may be unable to enter into agreements with them on reasonable terms and in a timely manner.
Given our dependence on a limited number of CMOs to supply our commercial products and clinical candidates, and our dependence on our own facility, any delay in supply caused by the COVID-19 pandemic could impact our ability to procure sufficient supplies for our approved products, and the development of our product candidates could also be delayed.
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The manufacturing process for our approved products and any other products that we may develop, is subject to the FDA and foreign regulatory authority approval process and we will need to meet, and will need to contract with CMOs who can meet, all applicable FDA and foreign regulatory authority requirements on an ongoing basis.
+Added: The failure of any CMO to meet required regulatory authority requirements could result in the delayed submission of regulatory applications, or delays in receiving regulatory approval for any of our or our current or future collaborators' product candidates.
+Added: For example, in April 2022, due to an amendment to our existing regulatory submission to address a pending inspection classification at a third-party secondary packaging and labeling facility, the FDA extended the review timeline of the NDA for vutrisiran.
In addition, if we receive the necessary regulatory approval for any product candidate, we also expect to rely on third parties, including potentially our commercial collaborators, to produce materials required for commercial supply.
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We rely on third parties to conduct our clinical trials, and if they fail to fulfill their obligations, our development plans may be adversely affected.
−Removed: We rely on independent clinical investigators, contract research organizations, or CROs, and other third-party service providers to assist us in managing, monitoring and otherwise carrying out our clinical trials.
+Added: We rely on independent clinical investigators, CROs, and other third-party service providers to assist us in managing, monitoring and otherwise carrying out our clinical trials.
We have contracted, and we plan to continue to contract with, certain third parties to provide certain services, including site selection, enrollment, monitoring, auditing and data management services.
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We cannot assure you that upon inspection by a given regulatory authority in the future, such regulatory authority will determine that any of our clinical trials comply with GCP regulations.
−Removed: If our third-party service providers cannot adequately and timely fulfill their obligations to us for any reason, including due to disruptions caused by the COVID-19 pandemic on their operations or at the sites they are overseeing, or if the quality and accuracy of our clinical trial data is compromised due to failure by such third party to adhere to our protocols or regulatory requirements or if such third parties otherwise fail to meet deadlines, our development plans and/or regulatory reviews for marketing approvals may be delayed or terminated.
+Added: If our third-party service providers cannot adequately and timely fulfill their obligations to us for any reason, including due to disruptions caused by the COVID-19 pandemic or the ongoing conflict in Ukraine on their operations or at the sites they are overseeing, or if the quality and accuracy of our clinical trial data is compromised due to failure by such third party to adhere to our protocols or regulatory requirements or if such third parties otherwise fail to meet deadlines, our development plans and/or regulatory reviews for marketing approvals may be delayed or terminated.
As a result, our stock price would likely be negatively impacted, and our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate additional revenues could be delayed.
Risks Related to Managing Our Operations
−Removed: If we are unable to attract and retain qualified key management and scientists, development, medical and commercial staff, consultants and advisors, in particular following our recent leadership transition, our ability to implement our business plan may be adversely affected.
+Added: If we are unable to attract and retain qualified key management and scientists, development, medical and commercial staff, consultants and advisors, our ability to implement our business plan may be adversely affected.
We are highly dependent upon our senior management and our scientific, clinical, sales and medical staff.
−Removed: We recently underwent our first leadership transition, and we believe our current management team is well-positioned to execute our strategy.
−Removed: Nonetheless, this recent leadership transition may be viewed negatively by employees, investors and/or our strategic partners.
−Removed: Moreover, attrition associated with this transition could significantly delay or prevent the achievement of product development and commercialization, and other business objectives, and adversely impact our stock price.
+Added: The loss of the service of any of the members of our senior management could significantly delay or prevent the achievement of product development and commercialization, and other business objectives, and adversely impact our stock price.
Our employment arrangements with our key personnel are terminable without notice.
We do not carry key person life insurance on any of our employees.
−Removed: We have grown our workforce significantly over the past several years and anticipate continuing to add additional employees as we focus on achieving our Alnylam P 5 x25 strategy.
−Removed: We face intense competition for qualified individuals from numerous pharmaceutical and biotechnology companies, universities, governmental entities and other research institutions, many of which have substantially greater resources with which to attract and reward qualified individuals than we do.
−Removed: In addition, due to the risks associated with developing a new class of medicine, we may face additional challenges in attracting and retaining employees.
−Removed: If we are not successful commercializing our approved products, we may be unable to attract and retain highly qualified sales and marketing professionals to support our approved products and our future products, if approved,
−Removed: including vutrisiran.
+Added: We have grown our workforce significantly over the past several years and we face intense competition for qualified individuals from numerous pharmaceutical and biotechnology companies, universities, governmental entities and other research institutions, many of which have substantially greater resources with which to attract and reward qualified individuals than we do.
+Added: In addition, if we are not successful commercializing our approved products, we may be unable to attract and retain highly qualified sales and marketing professionals to support our approved products and our future products, if approved.
Accordingly, we may be unable to attract and retain suitably qualified individuals in order to support our growing research, development and global commercialization efforts and initiatives, and our failure to do so could have an adverse effect on our ability to implement our future business plans.
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and further develop operations in the EU and other geographies, including Asia and Latin America.
−Removed: To date, we have received regulatory approval for three products, which we have launched in multiple geographies globally, and we continue to expand the reach of these products with additional regulatory filings and launches.
−Removed: In addition, we have a fourth product under review by regulatory authorities.
−Removed: We have grown our workforce significantly over the last five years and anticipate continuing to hire additional employees globally in the future as we focus on the commercialization of ONPATTRO, GIVLAARI and OXLUMO, preparing for the potential launch of vutrisiran and achieving our Alnylam P 5 x25 strategy.
+Added: To date, we have received regulatory approval for four products, which we have launched in multiple geographies globally, and we continue to expand the reach of these products with additional regulatory filings and launches.
+Added: We have grown our workforce significantly over the last several years and anticipate additional employee growth globally in the future as we focus on the commercialization of our approved products, and achieving our Alnylam P 5 x25 strategy.
This growth has placed a strain on our administrative and operational infrastructure and, as a result, we will need to continue to develop additional and/or new infrastructure and capabilities to support our growth and obtain additional space to conduct our global operations in the U.S., the EU, Japan, Latin America and other geographies.
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The use of social media presents risks and challenges.
−Removed: Social media is being used to communicate about our clinical development programs and the diseases our investigational RNAi therapeutics are being developed to treat, and we are utilizing what we believe is appropriate social media in connection with our commercialization efforts for our approved products, and we intend to do the same for our future products, if approved, including vutrisiran.
+Added: Social media is being used to communicate about our clinical development programs and the diseases our investigational RNAi therapeutics are being developed to treat, and we are utilizing what we believe is appropriate social media in connection with our commercialization efforts for our approved products, and we intend to do the same for our future products, if approved.
Social media practices in the biopharmaceutical industry continue to evolve and regulations and regulatory guidance relating to such use are evolving and not always clear.
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For example, for our clinical-stage candidates, patients may use social media channels to comment on their experience in an ongoing blinded clinical study or to report an alleged AE.
−Removed: When such disclosures occur, there is a risk that study enrollment may be adversely impacted, we fail to monitor and comply with applicable adverse event, or AE, reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational products.
+Added: When such disclosures occur, there is a risk that study enrollment may be adversely impacted, we fail to monitor and comply with
+Added: applicable AE reporting obligations or that we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational products.
There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any online platform, including a blog on the internet, or a post on a website, that can be distributed rapidly and could negatively harm our reputation.
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We are increasingly dependent on our information technology systems and infrastructure for our business.
−Removed: We collect, store and transmit sensitive information including intellectual property, proprietary business information and personal information in connection with business operations.
+Added: We collect, store and transmit sensitive information including intellectual property, proprietary business information, including highly sensitive clinical trial data, and personal information in connection with business operations.
The secure maintenance of this information is critical to our operations and business strategy.
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The pervasiveness of cybersecurity incidents in general and the risks of cyber-crime are complex and continue to evolve.
−Removed: Although we are making significant efforts to maintain the security and integrity of our information systems and are exploring various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and
−Removed: measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
−Removed: Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to damage or interruption from computer viruses, unauthorized or inappropriate access or use, natural disasters, pandemics (including COVID-19), terrorism, war, and telecommunication and electrical failures.
+Added: Although we are making significant efforts to maintain the security and integrity of our information systems and are exploring various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
+Added: Despite the implementation of security measures, our internal computer systems and those of our contractors and consultants are vulnerable to damage or interruption from computer viruses, unauthorized or inappropriate access or use, natural disasters, pandemics (including COVID-19), terrorism, war (including the ongoing conflict in Ukraine), and telecommunication and electrical failures.
Such events could cause interruption of our operations.
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To the extent that any disruption, security breach or unauthorized or inappropriate use or access to our systems were to result in a loss of or damage to our data, or inappropriate disclosure of confidential or proprietary information, including but not limited to patient, employee or vendor information, we could incur notification obligations to affected individuals and government agencies, liability, including potential lawsuits from patients, collaborators, employees, stockholders or other third parties and liability under foreign, federal and state laws that protect the privacy and security of personal information, and the development and potential commercialization of our product candidates could be delayed.
−Removed: Our business and operations may be negatively impacted by the United Kingdom’s withdrawal from the EU.
−Removed: Following the results of a referendum in 2016, the United Kingdom, or UK, left the EU on January 31, 2020, commonly referred to as “Brexit.” Pursuant to the formal withdrawal arrangements agreed between the UK and the EU, the UK was subject to a transition period until December 31, 2020, or the Transition Period, during which EU rules continued to apply, while the future relationship between the UK and EU was formally negotiated.
−Removed: The UK and the EU have signed an EU-UK Trade and Cooperation Agreement, or TCA, which became provisionally applicable on January 1, 2021 and has been formally applicable since May 1, 2021.
−Removed: The TCA includes specific provisions concerning pharmaceuticals, which include the mutual recognition of GMP, inspections of manufacturing facilities for medicinal products and GMP documents issued, but does not foresee wholesale mutual recognition of UK and EU pharmaceutical regulations.
−Removed: At present, Great Britain has implemented EU legislation on the marketing, promotion and sale of medicinal products through the Human Medicines Regulations 2012 (as amended) (under the Northern Ireland Protocol, the EU regulatory framework will continue to apply in Northern Ireland).
−Removed: The regulatory regime in Great Britain therefore currently aligns with EU regulations, however it is possible that these regimes will diverge in future now that Great Britain’s regulatory system is independent from the EU and the TCA does not provide for mutual recognition of UK and EU pharmaceutical legislation.
−Removed: It remains to be seen how Brexit will impact regulatory requirements for medicinal products and devices in the UK in the long-term.
−Removed: Since the expiry of the Transition Period, Great Britain is no longer covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland).
−Removed: For a period of two years from January 1, 2021, the MHRA, the UK medicines regulator, may rely on a decision taken by the EC on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a new Great Britain marketing authorization.
−Removed: A separate application will, however, still be required.
−Removed: Any new divergent regulations in Great Britain and the EU could add time and expense to the conduct of our business, as well as the process by which our products receive regulatory approval in the UK, the EU and elsewhere.
−Removed: Any of these longer-term effects of Brexit, and others we cannot anticipate, could negatively impact our business and results of operations.
Risks Related to Our Industry
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We currently have multiple programs in clinical development, including internal and partnered programs in Phase 3 development, as well as several earlier-stage clinical programs.
−Removed: In January 2021, we announced positive topline results from the HELIOS-A Phase 3 study of vutrisiran, an investigational RNAi therapeutic in development for the treatment of ATTR amyloidosis.
−Removed: Based on these positive results in patients with hATTR amyloidosis with polyneuropathy, we submitted an NDA for vutrisiran with the FDA in April 2021, which was accepted by the FDA.
−Removed: The FDA has set an action date of April 14, 2022 under PDUFA, and indicated that they were not currently planning an advisory committee meeting as part of the NDA review.
−Removed: In September 2021, we presented additional 9-month data from the HELIOS-A Phase 3 study of vutrisiran, and submitted an MAA in the EU with the EMA.
−Removed: Further, in January 2022, we reported positive full results for 18-month endpoints and safety from the HELIOS-A Phase 3 study of vutrisiran.
−Removed: We are also conducting additional Phase 3 trials of vutrisiran and patisiran in ATTR patients with cardiomyopathy.
−Removed: However, we may not be able to further advance these or any other product candidate through clinical trials and regulatory approval.
−Removed: Additionally, several of our planned and ongoing clinical trials, such as our HELIOS-A study, utilize an “open-label” trial design.
+Added: However, we may not be able to further advance any of our product candidates through clinical trials and regulatory approval.
+Added: Additionally, several of our planned and ongoing clinical trials utilize an “open-label” trial design.
An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo.
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For example, we are conducting the APOLLO-B and HELIOS-B Phase 3 clinical trials of patisiran and vutrisiran, respectively, which are investigating the potential of patisiran and vutrisiran to treat the cardiac manifestations of disease in patients with ATTR amyloidosis with cardiomyopathy.
−Removed: While both patisiran and vutrisiran have demonstrated positive results in patients with hATTR amyloidosis with polyneuropathy, we cannot be certain that the results from APOLLO-B and/or HELIOS-B will be positive or support approval of patisiran and/or vutrisiran for the treatment of patients with ATTR amyloidosis with cardiomyopathy.
+Added: We announced positive topline results from the APOLLO-B study in August 2022, and patients enrolled in the study are receiving patisiran as part of an open-label extension period.
+Added: While both patisiran and vutrisiran have demonstrated positive results in patients with hATTR amyloidosis with polyneuropathy, we cannot be certain that the results from HELIOS-B will be positive or that the results from APOLLO-B and/or HELIOS-B will support approval of patisiran and/or vutrisiran for the treatment of patients with ATTR amyloidosis with cardiomyopathy.
There is a high failure rate for drugs proceeding through clinical studies.
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In addition, in November 2018 we announced that due to recruitment challenges, we had discontinued a Phase 2 study of cemdisiran in atypical hemolytic uremic syndrome and are focusing our cemdisiran clinical development efforts in a different indication.
−Removed: Delays or difficulties in patient enrollment or difficulties retaining trial participants, including as a result of the availability of existing or other investigational treatments or safety concerns, including the impact of public health emergencies such as the COVID-19 pandemic, can result in increased costs, longer development times or termination of a clinical trial.
+Added: Delays or difficulties in patient enrollment, including the enrollment delays in our KARDIA-1 Phase 2 monotherapy study of zilebesiran resulting from the ongoing situation in Ukraine, or difficulties retaining trial participants, including as a result of the availability of existing or other investigational treatments or safety concerns, including the impact of public health emergencies such as the COVID-19 pandemic, can result in increased costs, longer development times or termination of a clinical trial.
Although our investigational RNAi therapeutics have been generally well-tolerated in our clinical trials to date, new safety findings may emerge.
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More recently, in October 2020, Sanofi voluntarily paused dosing in all ongoing fitusiran clinical studies to assess reports of non-fatal thrombotic events in patients participating in the ATLAS Phase 3 program.
−Removed: Following an assessment of available data and alignment with regulators, patients restarted on fitusiran under amended protocols in ongoing adolescent and adult clinical studies.
−Removed: In October 2021, Sanofi announced that a potential filing date for fitusiran has been moved to 2024 due to the introduction of a lower dose cohort in the ongoing phase 3 studies.
+Added: Following an assessment of available data and alignment with regulators, patients restarted on fitusiran under amended protocols in ongoing clinical studies.
+Added: In October 2021, Sanofi announced that a potential filing date for fitusiran has been moved to 2024 due to the introduction of a revised dosing regimen in the ongoing phase 3 studies.
As demonstrated by the discontinuation of our revusiran program in October 2016, the temporary suspension of dosing in September 2017 in our fitusiran studies, as well as Sanofi's voluntary pause of fitusiran studies in October 2020, the occurrence of SAEs and/or AEs can result in the suspension or termination of clinical trials of a product candidate by us, our partners, or the FDA or a foreign regulatory authority.
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• problems in engaging IRBs or ethics committees to oversee clinical trials or problems in obtaining or maintaining IRB or ethics committee approval of trials;
−Removed: • delays in enrolling patients and volunteers into clinical trials, and variability in the number and types of patients and volunteers available for clinical trials, including as a result of the COVID-19 pandemic;
−Removed: • disruptions caused by man-made or natural disasters or public health pandemics or epidemics or other business interruptions, including the current COVID-19 pandemic;
+Added: • delays in enrolling patients and volunteers into clinical trials, and variability in the number and types of patients and volunteers available for clinical trials, including as a result of the COVID-19 pandemic and the ongoing conflict in Ukraine;
+Added: • disruptions caused by man-made or natural disasters or public health pandemics or epidemics or other business interruptions, including the ongoing COVID-19 pandemic;
• high drop-out rates for patients and volunteers in clinical trials;
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Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays.
−Removed: It is possible that the product candidates we and our partners are developing will not obtain the regulatory approvals necessary for us or our collaborators to begin selling them.
+Added: It is possible that the product candidates we and our partners are developing will not obtain the regulatory approvals necessary for us or our collaborators to begin selling them, or, in the case of patisiran and vutrisiran, will not obtain
+Added: regulatory approval to be sold for broader indications than are currently approved.
+Added: It is also possible that the FDA or other regulatory authorities may determine that the data generated in clinical trials for a product candidate, including patisiran, while positive, is not sufficient to support the approval of an application for regulatory approval.
+Added: In February 2023, the FDA accepted our sNDA for ONPATTRO for filing and set an action date of October 8, 2023, under the PDUFA.
+Added: The FDA also indicated in the sNDA filing communication letter that it is planning to hold an advisory committee meeting to discuss the application and that it had not identified any potential review issues at such time.
+Added: Even though the sNDA has been accepted for filing, we may receive a complete response letter rather than approval, including for reasons that may be identified during a meeting of the advisory committee.
The time required to obtain FDA and other regulatory approvals is unpredictable but typically takes many years following the commencement of clinical trials, depending upon the type, complexity and novelty of the product candidate.
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Such responses could lead to significant delays and increased costs in the development of our or our partnered product candidates.
−Removed: In addition, because there may be approved treatments for some of the diseases for which we or our partners may seek approval, or treatments in development which are approved by the time we or they apply for approval, in order to receive regulatory approval, we or they may need to demonstrate through clinical trials that the product candidates we develop to treat these diseases, if any, are not only safe and effective, but safer or more effective than existing products.
+Added: In addition, because there may be approved treatments for some of the diseases for which we or our partners may seek approval, including patisiran and vutrisiran for the treatment of ATTR amyloidosis with cardiomyopathy, or treatments in development which are approved by the time we or they apply for approval, in order to receive regulatory approval, we or they may need to demonstrate through clinical trials that the product candidates we develop to treat these diseases, if any, are not only safe and effective, but safer or more effective than existing products.
Interruption or delays in the operations of the FDA, EMA and comparable foreign regulatory agencies due to the COVID-19 pandemic, may impact the review, inspection and approval timelines for our or our partnered product candidates.
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In December 2020, the FDA issued a complete response letter regarding Novartis' NDA for inclisiran, stating that the agency could not approve the NDA by the PDUFA action date due to unresolved facility inspection-related conditions.
−Removed: In July 2021, Novartis announced that the resubmission to the FDA of the inclisiran NDA to address the complete response letter was filed, and the FDA approved Leqvio (which is the trade name under which inclisiran will be marketed in the U.S.) in December 2021.
+Added: In July 2021, Novartis announced that the resubmission to the FDA of the inclisiran NDA to address the complete response letter was filed, and the FDA approved Leqvio (which is the trade name under which inclisiran is marketed in the U.S.) in December 2021.
The delay in the approval of Leqvio resulted in delayed milestone and royalty revenue to us.
−Removed: Any similar interruption or delay by the FDA, EMA or comparable foreign regulatory agency in light of the COVID-19 pandemic could have a material adverse effect on our efforts to obtain regulatory approval for our product candidates, including vutrisiran, which could have a material adverse effect on our financial results.
+Added: Any similar interruption or delay by the FDA, EMA or comparable foreign regulatory agency could have a material adverse effect on our efforts to obtain regulatory approval for our product candidates, which could have a material adverse effect on our financial results.
+Added: For instance, the FDA may request additional clinical or other data or information in connection with the regulatory review of our or our partners’ product candidates, including patisiran, including by issuing a complete response letter which may require that we or our partners’ submit additional clinical or other data or impose other conditions that must be met in order to secure final approval of our or our partners’ NDA applications, including potentially requiring a facility inspection.
+Added: Even if such data and information are submitted, or any such inspection is completed, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.
Any delay or failure in obtaining required approvals for our product candidates or our partnered product candidates could have a material adverse effect on our ability to generate revenues from any product candidate for which we or our partners may seek approval in the future.
−Removed: Furthermore, any regulatory approval to market any product may be subject to limitations on the approved uses for which we or our partners may market the product or the labeling or other restrictions, which could limit each such product’s market opportunity and have a negative impact on our results of operations and our stock price.
+Added: Furthermore, any regulatory approval to market any product, including patisiran, may be subject to limitations on the approved uses for which we or our partners may market the product or the labeling or other restrictions, which could limit each such product’s market opportunity and have a negative impact on our results of operations and our stock price.
In addition, the FDA has the authority to require a Risk Evaluation and Mitigation Strategy, or REMS, plan as part of an NDA, or after approval, which may impose further requirements or restrictions on the distribution or use of an approved drug, such as limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry.
−Removed: In the EU, we or our partners could be required to adopt a similar plan, known as a risk management plan, and our products could be subject to specific risk minimization measures, such as restrictions on prescription and supply, the conduct of post-marketing safety or efficacy studies, or the distribution of patient and/or prescriber educational materials.
+Added: In the EU, we or our partners could be required to adopt a similar plan, known as a risk management plan, and our products could be subject to specific risk minimization measures, such as restrictions on prescription and supply, the conduct of post-marketing safety or efficacy studies,
+Added: or the distribution of patient and/or prescriber educational materials.
In either instance, these limitations and restrictions may limit the size of the market for the product and affect reimbursement by third-party payors.
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and foreign requirements, our approvals could be limited or withdrawn, we could be subject to other penalties, and our business would be seriously harmed.
−Removed: Following any initial regulatory approval of drugs we or our partners may develop, including our three approved drugs, we will also be subject to continuing regulatory oversight, including the review of adverse drug experiences and clinical results that are reported after our drug products are made commercially available.
+Added: Following any initial regulatory approval of drugs we or our partners may develop, including our four approved drugs, we will also be subject to continuing regulatory oversight, including the review of adverse drug experiences and clinical results that are reported after our drug products are made commercially available.
This would include results from any post-marketing tests or surveillance to monitor the safety and efficacy of our approved drugs or other drug products required as a condition of approval or agreed to by us.
−Removed: The regulatory approvals that we receive for ONPATTRO, GIVLAARI and OXLUMO, as well as any regulatory approvals we receive for any other product candidates, including vutrisiran, may also be subject to limitations on the approved uses for which the product may be marketed.
+Added: The regulatory approvals that we receive for ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO, as well as any regulatory approvals we receive for any other product candidates may also be subject to limitations on the approved uses for which the product may be marketed, including any expanded label for ONPATTRO or AMVUTTRA.
Other ongoing regulatory requirements include, among other things, submissions of safety and other post-marketing information and reports, registration and listing, as well as continued compliance with good practice quality guidelines and regulations, including cGMP requirements and GCP requirements for any clinical trials that we conduct post-approval.
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The discovery of any new or previously unknown problems with our facilities or our CMOs, or our or their manufacturing processes or facilities, may result in restrictions on the drug or CMO or facility, including delay in approval or, in the future, withdrawal of the drug from the market.
+Added: For example, due to a routine inspection by the FDA at a CMO facility that resulted in a pending inspection classification, we amended our regulatory submission for vutrisiran, which delayed our PDUFA goal date and AMVUTTRA's FDA approval.
We have developed cGMP capabilities and processes for the manufacture of patisiran formulated bulk drug product for commercial use.
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If we or our collaborators, CMOs or service providers fail to comply with applicable continuing regulatory requirements in the U.S.
−Removed: or foreign jurisdictions in which we may seek to market our products, we or they may be subject to, among other things, fines, warning letters, holds on clinical trials, refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications, suspension or withdrawal of regulatory approval, product recalls and seizures, refusal to permit the import or export of products, operating restrictions, injunction, civil penalties and criminal prosecution.
+Added: or foreign jurisdictions in which we may seek to market our products, we or they may be subject to, among other
+Added: things, fines, warning letters, holds on clinical trials, refusal by the FDA or foreign regulatory authorities to approve pending applications or supplements to approved applications, suspension or withdrawal of regulatory approval, product recalls and seizures, refusal to permit the import or export of products, operating restrictions, injunction, civil penalties and criminal prosecution.
We may incur significant liability if enforcement authorities allege or determine that we are engaging in commercial activities or promoting our commercially approved products in a way that violates applicable regulations.
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Manufacturers and their agents may not promote drugs for off-label uses or provide off-label information in the promotion of drug products that is not consistent with the approved labeling for those products.
−Removed: For example, we may not promote ONPATTRO in the U.S.
+Added: For example, we may not promote ONPATTRO or AMVUTTRA in the U.S.
for use in any indications other than the treatment of the polyneuropathy of hATTR amyloidosis in adults.
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• availability of alternative effective treatments for the diseases that product candidates we develop are intended to treat and the relative risks, benefits and costs of those treatments.
−Removed: For example, ONPATTRO utilizes an intravenous mode of administration with pre-medication that physicians and/or patients may not readily adopt, or which may not compete favorably with other available options, including inotersen, marketed by Ionis in several countries, which is administered subcutaneously, or tafamidis, marketed by Pfizer Inc., or Pfizer, in several countries, which is in pill form.
+Added: For example, one of our two commercially approved therapeutics for the treatment of the polyneuropathy of hATTR amyloidosis in adults, ONPATTRO, utilizes an intravenous mode of administration with pre-medication that physicians and/or patients may not readily adopt, or which may not compete favorably with other available options, including inotersen, marketed by Ionis in several countries, which is administered subcutaneously, or tafamidis, marketed by Pfizer in several countries, which is in pill form.
In addition, fitusiran represents a new approach to treating hemophilia which may not be readily accepted by patients and their caregivers.
+Added: Patisiran, if approved for the treatment of ATTR amyloidosis with cardiomyopathy, could face similar challenges in market acceptance.
We are a multi-product commercial company and expect to continue to invest significant financial and management resources to continue to build our marketing, sales, market access and distribution capabilities and further establish our global infrastructure.
Even if we successfully scale our commercial capabilities, the market may not be receptive to our commercial products.
−Removed: Having received our first product approval only four years ago, we have established our capabilities for marketing, sales, market access and distribution over the last several years.
+Added: Having received our first product approval in August 2018, we have established our capabilities for marketing, sales, market access and distribution over the last several years.
We currently expect to rely on third parties to launch and market certain of our product candidates in certain geographies, if approved.
−Removed: However, we intend to commercialize ONPATTRO, GIVLAARI and OXLUMO, as well as several of our late-stage product candidates if approved, including vutrisiran, on our own globally in major markets.
+Added: However, we are commercializing ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO, and intend to commercialize several of our late-stage product candidates, if approved, on our own globally in major markets.
Accordingly, we have developed internal marketing, sales, market access and distribution capabilities as part of our core product strategy initially in the U.S., Europe and Japan, with expansion ongoing globally, which has, and will continue to, require significant financial and management resources.
−Removed: For those products for which we will perform marketing, sales, market access and distribution functions ourselves, including ONPATTRO, GIVLAARI, OXLUMO and, if approved, vutrisiran, and for future products we successfully develop where we may retain certain product development and commercialization rights, we could face a number of additional risks, including:
+Added: For those products for which we will perform marketing, sales, market access and distribution functions ourselves, including ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO, and for future products we successfully develop where we may retain certain product development and commercialization rights, we could face a number of additional risks, including:
• scaling and retaining our global sales, marketing and administrative infrastructure and capabilities;
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• our direct sales and marketing efforts may not be successful.
−Removed: If we are unable to continue to develop and scale our own global marketing, sales, market access and distribution capabilities for ONPATTRO, GIVLAARI, OXLUMO and any future products, including vutrisiran, we will not be able to successfully commercialize our products without reliance on third parties.
+Added: If we are unable to continue to develop and scale our own global marketing, sales, market access and distribution capabilities for our current and any future products, we will not be able to successfully commercialize our products without reliance on third parties.
The patient populations suffering from hATTR amyloidosis, AHP and PH1 are small and have not been established with precision.
If the actual number of patients is smaller than we estimate, or if we cannot raise awareness of these diseases and diagnosis is not improved, our revenue and ability to achieve profitability from these products may be adversely affected.
−Removed: Our estimates regarding the potential market size for ONPATTRO, GIVLAARI, OXLUMO or any future products, including vutrisiran, at the time we commence commercialization, may be materially different from the actual market size, including as a result of the indication approved by regulatory authorities, which could result in significant changes in our business plan and may have a material adverse effect on our results of operations and financial condition.
−Removed: For example, the indication approved by the FDA for ONPATTRO is for the treatment of the polyneuropathy of hATTR amyloidosis and not for the treatment of cardiomyopathy or other manifestations of the disease.
+Added: Our estimates regarding the potential market size for ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO or any future products at the time we commence commercialization, may be materially different from the actual market size, including as a result of the indication approved by regulatory authorities, which could result in significant changes in our business plan and may have a material adverse effect on our results of operations and financial condition.
+Added: For example, the initial indication approved by the FDA for ONPATTRO is for the treatment of the polyneuropathy of hATTR amyloidosis and not for the treatment of cardiomyopathy or other manifestations of the disease.
In addition, the U.S.
−Removed: label does not include data from the exploratory cardiac endpoints included in our APOLLO Phase 3 study.
−Removed: This could have an adverse impact on the market opportunity for ONPATTRO in the U.S.
−Removed: In addition, our efforts to raise disease awareness and improve diagnosis of hATTR amyloidosis have been and may in the future be impacted by the COVID-19 pandemic.
−Removed: For example, Alnylam Act, our third-party genetic screening initiative in the U.S., Canada and Brazil, experienced a decrease in submitted samples in the second quarter of 2020 as a result of the COVID-19 pandemic.
+Added: label does not include cardiac data included in our APOLLO-B Phase 3 study results.
+Added: This had an adverse impact on the market opportunity for ONPATTRO in the U.S.
+Added: While data from the APOLLO-B study of patisiran in ATTR amyloidosis patients with cardiomyopathy was positive, the FDA may determine that the data is not supportive of a label expansion of ONPATTRO for the treatment of cardiomyopathy, which would further impact ONPATTRO's market opportunity.
+Added: In addition, our efforts to raise disease
+Added: awareness and improve diagnosis of our relevant disease states have been and may in the future be impacted by the COVID-19 pandemic.
+Added: For example, in 2020 and 2021, we saw a reduction in peer to peer educational opportunities, reduced physician attendance at congresses and symposia and overall opportunities for physician engagement.
As is the case with most orphan diseases, if we cannot successfully raise awareness of these diseases and improve diagnosis, it will be more difficult or impossible to achieve profitability.
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In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.
−Removed: We are actively monitoring these regulations as we market and sell ONPATTRO, GIVLAARI and OXLUMO, and as several of our other programs move through late stages of development.
+Added: We are actively monitoring these regulations as we market and sell our approved products and as several of our other programs move through late stages of development.
However, a number of our programs are currently in the earlier stages of development, and we will not be able to assess the impact of price regulations for such programs for a number of years.
We might obtain regulatory approval for a product, including one or more of our approved products, in a particular country, but then be subject to price regulations that delay our commercial launch of the product and negatively impact the revenues we are able to generate from the sale of the product in that country and potentially in other countries due to reference pricing.
−Removed: Our ability to commercialize our approved products or any future products, including vutrisiran, successfully also will depend in part on the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
−Removed: One or more of our approved products and other products for which we are able to obtain marketing approval, including vutrisiran, may not be considered cost-effective, and the amount reimbursed may be insufficient to allow us to sell such product(s) or any future products, including vutrisiran on a competitive basis.
+Added: Our ability to commercialize our approved products or any future products successfully also will depend in part on the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.
+Added: One or more of our approved products and other products for which we are able to obtain marketing approval may not be considered cost-effective, and the amount reimbursed may be insufficient to allow us to sell such product(s) or any future products on a competitive basis.
Increasingly, the third-party payors who reimburse patients or healthcare providers, such as government and private insurance plans, are requiring that drug companies provide them with predetermined discounts from list prices, and are seeking to reduce the prices charged or the amounts reimbursed for drug products.
−Removed: In the U.S., we have entered into at least 40 VBAs, and are negotiating additional VBAs with commercial health insurers.
+Added: In the U.S., we have entered into over 40 value-based agreements, or VBAs, and are negotiating additional VBAs with commercial health insurers.
The goal of these agreements is to ensure that we are paid based on the ability of our commercially approved products to deliver results in the real world setting comparable to those demonstrated in clinical trials, and the agreements are structured to link the performance of our approved products in real-world use to financial terms.
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Our patient access philosophy could also negatively impact the revenues we are able to generate from the sale of one or more of our products in the future.
−Removed: Some of the drugs we market need to be administered under the supervision of a physician or other healthcare professional on an outpatient basis, including ONPATTRO, GIVLAARI and OXLUMO.
+Added: Some of the drugs we market need to be administered under the supervision of a physician or other healthcare professional on an outpatient basis, including ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO.
Under currently applicable U.S.
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Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the U.S.
−Removed: President Biden signed an Executive Order on July 9, 2021, affirming the administration’s policy to (i) support legislative reforms that would lower the prices of prescription drugs, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and, by supporting the development and market entry of lower-cost generic drugs and biosimilars;
+Added: President Biden signed an Executive Order on July 9, 2021 affirming the administration’s policy to (i) support legislative reforms that would lower the prices of prescription drugs, including by allowing Medicare to negotiate drug prices, by imposing
+Added: inflation caps, and, by supporting the development and market entry of lower-cost generic drugs and biosimilars;
and (ii) support the enactment of a public health insurance option.
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Department of Health and Human Services, or HHS, to provide a report on actions to combat excessive pricing of prescription drugs, continue to clarify and improve the approval framework for generic drugs and identify and address any efforts to impede generic drug competition, enhance the domestic drug supply chain, reduce the price that the Federal government pays for drugs, and address price gouging in the industry;
−Removed: and directs the FDA to work with states and Indian Tribes that propose to develop
−Removed: section 804 Importation Programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and the FDA’s implementing regulations.
+Added: and directs the FDA to work with states and Indian Tribes that propose to develop section 804 Importation Programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and the FDA’s implementing regulations.
The FDA released such implementing regulations on September 24, 2020, which went into effect on November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada.
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If implemented, importation of drugs from Canada and the Most Favored Nation, or MFN, Model may materially and adversely affect the price we receive for any of our commercially approved products.
−Removed: Further, on November 20, 2020, CMS issued an Interim Final Rule implementing the MFN Model under which Medicare Part B reimbursement rates will be calculated for certain drugs based on the lowest price drug manufacturers receive in Organization for Economic Cooperation and Development countries with a similar gross domestic product per capita.
+Added: Further, on November 20, 2020, CMS issued an Interim Final Rule implementing the MFN Model under which Medicare Part B reimbursement rates will be calculated for certain drugs based on the lowest price drug manufacturers receive in OECD countries with a similar gross domestic product per capita.
The MFN Model regulations mandate participation by identified Part B providers and would have applied to all U.S.
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Pursuant to court order, the removal and addition of the aforementioned safe harbors have been delayed until January 1, 2023, requiring manufacturers to ensure the full value of co-pay assistance is passed on to the patient or these dollars will count toward the Average Manufacturer Price and Best Price calculation of the drug.
−Removed: On May 21, 2021, PhRMA sued the HHS in the U.S.
−Removed: District Court for the District of Columbia, to stop the implementation of the rule claiming that the rule contradicts federal law surrounding Medicaid rebates.
−Removed: It is unclear how the outcome of this litigation will affect the rule.
−Removed: We cannot predict how the implementation of and any further changes to this rule will affect our business.
+Added: On May 17, 2022, the U.S.
+Added: District Court for the District of Columbia granted the Pharmaceutical Research and Manufacturers of America’s motion for summary judgement invalidating the accumulator adjustment rule.
Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the current U.S.
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and other major healthcare markets have been proposed or enacted in recent months and years, and such efforts have expanded substantially in recent years.
−Removed: These developments could, directly or indirectly, affect our ability to sell ONPATTRO, GIVLAARI, OXLUMO or future products, if approved, including vutrisiran, at a favorable price.
+Added: These developments could, directly or indirectly, affect our ability to sell ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO or future products, if approved, at a favorable price.
In particular, in March 2010, the ACA was signed into law.
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Since we expect our branded pharmaceutical sales to constitute a small portion of the total federal healthcare program pharmaceutical market, we do not expect this annual assessment to have a material impact on our financial condition.
−Removed: • The law provides that approval of an application for a follow-on biologic product may not become effective until 12 years after the date on which the reference innovator biologic product was first licensed by the FDA, with a possible six-month extension for pediatric products.
+Added: • The law provides that approval of an application for a follow-on biologic product may not become effective until 12 years after the date on which the reference innovator biologic product was first licensed by the FDA, with a possible
+Added: six-month extension for pediatric products.
After this exclusivity ends, it will be easier for generic manufacturers to enter the market, which is likely to reduce the pricing for such products and could affect our profitability.
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A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.
−Removed: These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2030;
−Removed: however, pursuant to the CARES Act, and subsequent legislation, these Medicare sequester reductions have been suspended from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic.
+Added: These changes included aggregate reductions to Medicare payments to providers of 2% per fiscal year.
+Added: These reductions went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic.
+Added: Following the suspension, a 1% payment reduction began April 1, 2022, lasting through June 30, 2022.
+Added: The 2% payment reduction resumed on July 1, 2022.
The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
−Removed: These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for our approved products or any of our product candidates for which we may obtain regulatory approval, including vutrisiran, or the frequency with which our products or any future product, including vutrisiran, is prescribed or used.
+Added: These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for our approved products or any of our product candidates for which we may obtain regulatory approval, or the frequency with which our products or any future product is prescribed or used.
Further, there have been several changes to the 340B Drug Pricing Program, which imposes ceilings on prices that drug manufacturers can charge for medications sold to certain healthcare facilities.
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Plaintiffs-appellees filed a petition for a writ of certiorari at the Supreme Court on February 10, 2021.
−Removed: On Friday July 2, 2021, the Supreme Court granted the petition.
+Added: On July 2, 2021, the Supreme Court granted the petition.
+Added: On June 15, 2022, the Supreme Court unanimously reversed the Court of Appeals’ decision, holding that HHS’s 2018 and 2019 reimbursement rates for 340B hospitals were contrary to the statute and unlawful.
It is unclear how these developments could affect covered hospitals who might purchase our future products and affect the rates we may charge such facilities for our approved products in the future, if any.
+Added: The IRA, which among other things, allows for CMS to negotiate prices for certain single-source drugs and biologics reimbursed under Medicare Part B and Part D, beginning with ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.
+Added: The legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.
+Added: The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation.
+Added: Further, the legislation caps Medicare beneficiaries’ annual out-of-pocket drug expenses at $2,000.
+Added: Under the IRA, a second FDA approval for vutrisiran for Stargardt Disease would cause us to lose the single-orphan exemption for AMVUTTRA from Medicare price negotiation.
+Added: As a result, in October 2022, we announced we would not pursue a Phase 3 clinical trial to study vutrisiran in Stargardt Disease.
+Added: The effect of the IRA on our business and the healthcare industry in general is developing and may have an additional adverse impact on our industry.
The full effects of the U.S.
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Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.
−Removed: If pricing is set at unsatisfactory levels or if reimbursement of our products is unavailable or limited in scope or amount, our revenues from sales by us or our strategic partners and the potential profitability of our approved products or any future products, including vutrisiran, in those countries would be negatively affected.
+Added: If pricing is set at unsatisfactory levels or if reimbursement of our products is unavailable or limited in scope or amount, our revenues from sales by us or our strategic partners and the potential profitability of our approved products or any future products in those countries would be negatively affected.
Another impact from the tightening pricing control could be felt from greater competition from less expensive generic or biosimilar products once the exclusivity expires;
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and requires notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information.
−Removed: • Federal “sunshine” requirements imposed by the ACA on drug, device, biological and medical supply manufacturers when payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS under the Open Payments Program, information regarding any payment or other “transfer of value” made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
+Added: • Federal “sunshine” requirements imposed by the ACA on drug, device, biological and medical supply manufacturers when payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS under the Open Payments Program, information regarding any payment or other “transfer of value” made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers such as physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.
Failure to submit required information may result in civil monetary penalties for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission.
−Removed: Effective January 1, 2022, these reporting obligations extend to include transfers of value made to certain non-physician providers such as physician assistants and nurse practitioners.
• Federal price reporting laws, which require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products.
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• State and foreign laws comparable to each of the above federal laws, including in the EU laws prohibiting giving healthcare professionals any gift or benefit in kind as an inducement to prescribe our products, national transparency laws requiring the public disclosure of payments made to healthcare professionals and institutions, and data privacy laws, in addition to anti-kickback and false claims laws applicable to commercial insurers and other non-federal payors, requirements for mandatory corporate regulatory compliance programs, and laws relating to government reimbursement programs, patient data privacy and security.
−Removed: • European Privacy Laws including Regulation 2016/679, known as the General Data Protection Regulation, or the GDPR, and the e-Privacy Directive (202/58/EC), and the national laws implementing each of them, as well as the privacy laws of Japan and other territories.
+Added: • European privacy laws including Regulation 2016/679, known as the General Data Protection Regulation, or the EU GDPR, and the EU GDPR as transposed into the laws of the UK, the UK GDPR, collectively referred to as the GDPR, and the e-Privacy Directive (2002/58/EC), and the national laws implementing each of them, as well as the Public and Electronic Communications Regulations 2003 in the UK and the privacy laws of Japan and other territories.
Failure to comply with our obligations under the privacy regime could expose us to significant fines and/or adverse publicity, which could have material adverse effects on our reputation and business.
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The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.
+Added: • Additionally, a new California ballot initiative, the California Privacy Rights Act of 2020, or CPRA, was passed in November 2020.
+Added: Effective as of January 1, 2023, the CPRA imposes additional obligations on companies covered by the legislation and will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.
+Added: The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.
+Added: Furthermore, similar laws were enacted in four other states and proposed in numerous others.
+Added: The effects of the CCPA and the CPRA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.
Some state laws also require pharmaceutical manufacturers to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, in addition to requiring manufacturers to report information related to payments to physicians and other healthcare provides or marketing expenditures and pricing information.
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If our operations are found to be in violation of any of the aforementioned requirements, we may be subject to penalties, including civil or criminal penalties (including individual imprisonment), criminal prosecution, monetary damages, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, or exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, or the imposition of a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services, any of which could adversely affect our financial results.
−Removed: As detailed above, we remain focused on enhancing our global compliance infrastructure following the commercial launch of our three products over the last three years in the U.S., EU and multiple other geographies, and as we prepare for the launch of our products in additional countries, assuming regulatory approvals.
+Added: We remain focused on enhancing our global compliance infrastructure following the commercial launch of our four products over the last four years in the U.S., EU and multiple other geographies, and as we prepare for the launch of our products in additional countries, assuming regulatory approvals.
Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated.
−Removed: Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our management’s attention from the operation of our business, even if our defense is successful.
+Added: For additional information, see the Risk Factor captioned “We may incur significant liability if enforcement authorities allege or determine that we are engaging in commercial activities or promoting
+Added: our commercially approved products in a way that violates applicable regulations.” Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our management’s attention from the operation of our business, even if our defense is successful.
In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time and resources.
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Moreover, federal, state or foreign laws or regulations are subject to change, and while we, our collaborators, CMOs and/or service providers currently may be compliant, that could change due to changes in interpretation, prevailing industry standards or the legal structure.
+Added: Third party patient assistance programs that receive financial support from companies have become the subject of enhanced government and regulatory scrutiny.
+Added: The OIG has established guidelines that suggest that it is lawful for pharmaceutical manufacturers to make donations to charitable organizations who provide co-pay assistance to Medicare patients, provided that such organizations, among other things, are bona fide charities, are entirely independent of and not controlled by the manufacturer, provide aid to applicants on a first-come basis according to consistent financial criteria and do not link aid to use of a donor's product.
+Added: However, donations to patient assistance programs have received some negative publicity and have been the subject of multiple government enforcement actions, related to allegations regarding their use to promote branded pharmaceutical products over other less costly alternatives.
+Added: Specifically, in recent years, there have been multiple settlements resulting out of government claims challenging the legality of their patient assistance programs under a variety of federal and state laws.
+Added: It is possible that we may make grants to independent charitable foundations that help financially needy patients with their premium, co-pay, and co-insurance obligations.
+Added: If we choose to do so, and if we or our vendors or donation recipients are deemed to fail to comply with relevant laws, regulations or evolving government guidance in the operation of these programs, we could be subject to damages, fines, penalties, or other criminal, civil, or administrative sanctions or enforcement actions.
+Added: We cannot ensure that our compliance controls, policies, and procedures will be sufficient to protect against acts of our employees, business partners, or vendors that may violate the laws or regulations of the jurisdictions in which we operate.
+Added: Regardless of whether we have complied with the law, a government investigation could impact our business practices, harm our reputation, divert the attention of management, increase our expenses, and reduce the availability of foundation support for our patients who need assistance.
We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and we are subject to consumer protection laws that regulate our marketing practices and prohibit unfair or deceptive acts or practices.
Our actual or perceived failure to comply with such obligations could harm our business.
−Removed: The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for “special category data,” which includes health, biometric and genetic information of data subjects located in the EU and UK.
−Removed: Further, GDPR provides a broad right for EU Member States to create supplemental national laws, such as laws relating to the processing of health, genetic and biometric data, which could further limit our ability to use and share such data or could cause our costs to increase, and harm our business and financial condition.
−Removed: GDPR grants individuals the opportunity to object to the processing of their personal information, allows them to request deletion of personal information in certain circumstances, and provides the individual with an express right to seek legal remedy in the event the individual believes his or her rights have been violated.
−Removed: Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States, which may deviate slightly from the GDPR, may result in fines of up to 4% of total global annual revenue, or €20,000,000, whichever is greater, and in addition to such fines, we may be the subject of litigation and/or adverse publicity, which could have material adverse effect on our reputation and business.
−Removed: As a result of the implementation of the GDPR, we are required to put in place additional mechanisms to ensure compliance with the new data protection rules.
−Removed: For example, the GDPR requires us to make more detailed disclosures to data subjects, requires disclosure of the legal basis on which we can process personal data, may make it harder for us to obtain valid consent for processing, will require the appointment of a data protection officer where sensitive personal data (i.e., health data) is processed on a large scale, introduces mandatory data breach notification requirements throughout the EU and UK, imposes additional obligations on us when we are contracting with service providers and requires us to adopt appropriate privacy governance including policies, procedures, training and data audit.
−Removed: Significantly, the GDPR imposes strict rules on the transfer of personal data out of the EU to the U.S.
+Added: The GDPR imposes strict requirements on controllers and processors of personal data, including special protections for “special category data,” which includes health, biometric and genetic information of data subjects located in the EEA and UK.
+Added: Further, GDPR provides a broad right for EEA Member States to create supplemental national laws, such as laws relating to the processing of health, genetic and biometric data, which could further limit our ability to use and share such data or could cause our costs to increase, and harm our business and financial condition.
+Added: Failure to comply with the requirements of the GDPR and the related national data protection laws of the EEA Member States and the UK, which may deviate slightly from the GDPR, may result in fines of up to 4% of total global annual revenue, or €20.0 million (₤17.5 million under the UK GDPR), whichever is greater, and in addition to such fines, we may be the subject of litigation and/or adverse publicity, which could have a material adverse effect on our reputation and business.
+Added: As a result of the implementation of the GDPR, we are required to put in place a number of measures to ensure compliance with the data protection regime.
+Added: The GDPR requires us to inform data subjects of how we process their personal data and how they can exercise their rights, ensure we have a valid legal basis to process personal data (if this is consent, the requirements for obtaining consent carries a higher threshold), appoint a data protection officer where sensitive personal data (i.e., health data) is processed on a large scale, introduces mandatory data breach notification requirements throughout the EEA and UK, requires us to maintain records of our processing activities and to document data protection impact assessments where there is high risk processing, imposes additional obligations on us when we are contracting with service providers, requires appropriate technical and organisational measures to be put in place to safeguard personal data and requires us to adopt appropriate privacy governance including policies, procedures, training and data audit.
+Added: Significantly, the GDPR imposes strict rules on the transfer of personal data out of the EEA and UK to the U.S.
or other regions that have not been deemed to offer “adequate” privacy protections.
In the past, companies in the U.S.
−Removed: were able to rely upon the EU-U.S.
+Added: were able to rely upon the EU-U.S., UK-U.S.
and the Swiss-U.S.
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data transfers and also raised questions about the validity of the SCCs as a mechanism for transferring personal data from Switzerland.
−Removed: While Standard Contractual Clauses provide an alternative to our Privacy Shield certification for EU-U.S.
+Added: While SCCs provide an alternative to our Privacy Shield certification for EU-U.S.
data flows, the decision (and certain regulatory guidance issued in its wake) casts doubt on the legality of EU-U.S.
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in compliance with data protection laws may impede our ability to conduct trials and may adversely affect our business and financial position.
−Removed: The UK is not subject to the EC’s new SCCs but has published a draft version of its International Transfer Agreement, which, once finalized, will enable transfer from the UK.
−Removed: We are subject to the supervision of local data protection authorities in those jurisdictions where we are monitoring the behavior of individuals in the EU or UK (i.e., undertaking clinical trials).
+Added: The UK is not subject to the EC’s new SCCs but has published its own transfer mechanism, the International Data Transfer Agreement or International Data Transfer Addendum, which enables transfers from the UK.
+Added: On March 25, 2022, the EC and the U.S.
+Added: announced to have reached a political agreement on a new “Trans-Atlantic Data Privacy Framework”, which will replace the invalidated Privacy Shield and on December 13, 2022, the EC published a draft adequacy decision on the Trans-Atlantic Data Privacy Framework.
+Added: EEA Member States have adopted implementing national laws to implement the GDPR which may partially deviate from the GDPR and the competent authorities in the EEA Member States may interpret GDPR obligations slightly differently from country to country, so that we do not expect to operate in a uniform legal landscape in the EU.
+Added: In addition, the UK has announced plans to reform the country’s data protection legal framework in its Data Reform Bill, but these have been put on hold.
+Added: We are subject to the supervision of local data protection authorities in those jurisdictions where we are monitoring the behavior of individuals in the EEA or UK (i.e., undertaking clinical trials).
We depend on a number of third parties in relation to the provision of our services, a number of which process personal data of EU and/or UK individuals on our behalf.
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The EU is in the process of replacing the e-Privacy Directive (2002/58/EC) with a new set of rules taking the form of a regulation, which will be directly implemented in the laws of each European member state, without the need for further enactment.
−Removed: While the e-Privacy
−Removed: Regulation was originally intended to be adopted on May 25, 2018 (alongside the GDPR), it is still going through the European legislative process.
+Added: While the e-Privacy Regulation was originally intended to be adopted on May 25, 2018 (alongside the GDPR), it is still going through the European legislative process.
Draft regulations were rejected by the Permanent Representatives Committee of the Council of EU on November 22, 2019;
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and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.
−Removed: Failure to comply with these laws and regulations could result in government enforcement actions (which could include civil, criminal and administrative penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.
+Added: Failure to comply with these laws and regulations could result in government enforcement actions
+Added: (which could include civil, criminal and administrative penalties), private litigation, and/or adverse publicity and could negatively affect our operating results and business.
Moreover, clinical trial subjects, employees and other individuals about whom we or our potential collaborators obtain personal information, as well as the providers who share this information with us, may limit our ability to collect, use and disclose the information.
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Due to legislation amending the statute, including the Bipartisan Budget Act of 2018, these reductions will stay in effect through 2030 unless additional Congressional action is taken.
−Removed: Pursuant to the CARES Act, as well as subsequent legislation, these reductions have been suspended from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic.
+Added: Pursuant to the CARES Act, as well as subsequent legislation, these reductions were suspended from May 1, 2020 through December 31, 2021 due to the COVID-19 pandemic.
The full impact on our business of these automatic cuts is uncertain.
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Amounts allocated to federal grants and contracts may be reduced or eliminated.
−Removed: These reductions may also impact the ability of relevant agencies to timely review and approve drug research and development, manufacturing, and marketing activities, which may delay our ability to develop, market and sell our approved products and any other products we may develop, including vutrisiran.
+Added: These reductions may also impact the ability of relevant agencies to timely review and approve drug research and development, manufacturing, and marketing activities, which may delay our ability to develop, market and sell our approved products and any other products we may develop.
+Added: Further, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
There is a substantial risk of product liability claims in our business.
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Misconduct by employees could include intentional failures to comply with governmental regulations, comply with healthcare fraud and abuse and anti-kickback laws and regulations in the U.S.
−Removed: and abroad, or failure to report financial information or data accurately or disclose unauthorized
−Removed: activities to us.
+Added: and abroad, or failure to report financial information or data accurately or disclose unauthorized activities to us.
In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.
−Removed: These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
+Added: These laws and
+Added: regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
Employee misconduct could also involve the improper use of, including improper trading based upon, information obtained in the course of clinical studies, which could result in regulatory sanctions and serious harm to our reputation.
−Removed: As detailed above, we maintain a global compliance program and remain focused on its evolution and enhancement.
−Removed: Our program includes efforts such as risk assessment and monitoring, fostering a culture encouraging employees and third parties to raise good faith questions or concerns, and defined processes and systems for reviewing and remediating allegations and identified potential concerns.
+Added: We maintain a global compliance program and remain focused on its evolution and enhancement.
+Added: Our program includes efforts such as risk assessment and monitoring, fostering a speak up culture encouraging employees and third parties to raise good faith questions or concerns, and defined processes and systems for reviewing and remediating allegations and identified potential concerns.
It is not always possible, however, to identify and deter employee misconduct, 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 comply with these laws or regulations.
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While issued patents are presumed valid, this does not guarantee that the patent will survive a validity challenge or be held enforceable.
−Removed: Any patents we have obtained, or obtain in the future, may be challenged, invalidated, adjudged unenforceable or circumvented by
−Removed: parties attempting to design around our intellectual property.
+Added: Any patents we have obtained, or obtain in the future, may be challenged, invalidated, adjudged unenforceable or circumvented by parties attempting to design around our intellectual property.
Moreover, third parties or the United States Patent and Trademark Office, or USPTO, may commence interference proceedings involving our patents or patent applications.
−Removed: Any challenge to, finding of unenforceability or invalidation or circumvention of, our patents or patent applications, would be costly, would require significant time and attention of our management, could reduce or eliminate royalty payments to us from third party licensors and could have a material adverse effect on our business.
+Added: Any challenge to,
+Added: finding of unenforceability or invalidation or circumvention of, our patents or patent applications, would be costly, would require significant time and attention of our management, could reduce or eliminate royalty payments to us from third party licensors and could have a material adverse effect on our business.
Our pending patent applications may not result in issued patents.
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We are a party to a number of licenses that give us rights to third-party intellectual property that is necessary or useful for our business.
−Removed: In particular, we have obtained licenses from, among others, Stanford University, Ionis, the Massachusetts Institute of Technology, or MIT, Whitehead Institute for Biomedical Research, or Whitehead, Max Planck Innovation GmbH (formerly known as Garching Innovation GmbH), or Max Planck, Arbutus, and Dicerna.
+Added: In particular, we have obtained licenses from, among others, Ionis, Arbutus, and Dicerna.
We also intend to enter into additional licenses to third-party intellectual property in the future.
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There is uncertainty about which patents will issue, and, if they do, as to when, to whom, and with what claims.
−Removed: It is likely that there will be significant litigation and other proceedings, such as interference, re-examination and opposition proceedings, as well as inter partes and post-grant review proceedings introduced by provisions of the AIA, which became available to third party challengers on September 16, 2012, in various patent offices relating to patent rights in the RNAi field.
+Added: It is likely that there will be significant litigation and other proceedings, such as interference, re-examination and opposition proceedings, as well as inter partes and post-grant review proceedings introduced by provisions of the AIA, which
+Added: became available to third party challengers on September 16, 2012, in various patent offices relating to patent rights in the RNAi field.
In addition, third parties may challenge the validity of our patents.
For example, a third party has filed an opposition in the European Patent Office, or EPO, against our owned patent EP 2723758, with claims directed to compositions and methods of ANGPTL3, arguing that the granted claims are invalid.
−Removed: An oral hearing was held at the EPO on February 17, 2021, where the patent was revoked.
−Removed: A notice of appeal of the EPO's decision was filed on June 23, 2021.
+Added: An oral hearing was held at the EPO in February 2021, where the patent was revoked.
+Added: A notice of appeal of the EPO's decision was filed in June 2021.
+Added: In addition, in February 2023, a third party filed an opposition with the EPO against our owned patent EP 3366775, titled “Modified RNA Agents” seeking to revoke the patent.
+Added: An oral hearing is anticipated at a time to be determined by the EPO.
We expect that additional oppositions will be filed in the EPO and elsewhere, and other challenges will be raised relating to other patents and patent applications in our portfolio.
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Our defense against any attempt by third parties to circumvent or invalidate our intellectual property rights could be costly to us, could require significant time and attention of our management and could have a material adverse effect on our business and our ability to successfully compete in the field of RNAi.
−Removed: There are many issued and pending patents that claim aspects of oligonucleotide chemistry and modifications that we may need for our siRNA products marketed by us or our licensees, our late-stage therapeutic candidates being developed by us or our licensees, including vutrisiran, zilebesiran and fitusiran, as well as our other pipeline products.
+Added: There are many issued and pending patents that claim aspects of oligonucleotide chemistry and modifications that we may need for our siRNA products marketed by us or our licensees, our late-stage therapeutic candidates being developed by us or our licensees, including zilebesiran and fitusiran, as well as our other pipeline products.
There are also many issued patents that claim targeting genes or portions of genes that may be relevant for siRNA drugs we wish to develop.
−Removed: In addition, there may be issued and pending patent applications that may be asserted against us in a court proceeding or otherwise based upon the asserting party’s belief that we may need such patents for our siRNA therapeutic candidates or marketed products, or further develop and commercialize future products such as vutrisiran, currently under review with the FDA, or continuing to develop candidates in our pipeline being developed by us or our licensees.
+Added: In addition, there may be issued and pending patent applications that may be asserted against us in a court proceeding or otherwise based upon the asserting party’s belief that we may need such patents for our siRNA therapeutic candidates or marketed products, or to further develop and commercialize future products, or to continue to develop candidates in our pipeline that are being developed by us or our licensees.
Thus, it is possible that one or more organizations will hold patent rights to which we may need a license, or hold patent rights which could be asserted against us.
−Removed: If those organizations refuse to grant us a license to such patent rights on reasonable terms and/or a court rules that we need such patent rights that have been asserted against us and we are not able to obtain a license on reasonable terms, we may be unable to market products, including ONPATTRO, GIVLAARI or OXLUMO, or perform research and development or other activities covered by such patents.
+Added: If those organizations refuse to grant us a license to such patent rights on reasonable terms and/or a court rules that we need such patent rights that have been asserted against us and we are not able to obtain a license on reasonable terms, we may be unable to market products, including ONPATTRO, AMVUTTRA, GIVLAARI or OXLUMO, or perform research and development or other activities covered by such patents.
For example, during 2017 and 2018, Silence filed claims in several jurisdictions, including the High Court of England and Wales, and named us and our wholly owned subsidiary Alnylam UK Ltd.
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In December 2018, we entered into a Settlement and License Agreement with Silence, resolving all ongoing claims, administrative proceedings, and regulatory proceedings worldwide between us regarding, among other issues, patent infringement, patent invalidity and breach of contract.
−Removed: If we become involved in patent litigation or other proceedings related to a determination of rights, we could incur substantial costs and expenses, substantial liability for damages or be required to stop our product development and commercialization efforts.
+Added: If we become involved in intellectual property litigation or other proceedings related to a determination of rights, we could incur substantial costs and expenses, and in the case of such litigation or proceedings against us, substantial liability for damages or be required to stop our product development and commercialization efforts.
Third parties may sue us for infringing their patent rights.
For example, in October 2017 Silence sued us in the UK alleging that ONPATTRO and other investigational RNAi therapeutics we or MDCO are developing infringed one or more Silence patents.
−Removed: Likewise, we may need to resort to litigation to enforce a patent issued or licensed to us or to determine the scope and validity of proprietary rights of others or protect our proprietary information and trade secrets.
−Removed: For example, during the second quarter of 2015, we filed a trade secret misappropriation lawsuit against Dicerna to protect our rights in the RNAi assets we purchased from Merck Sharp & Dohme Corp., or Merck.
−Removed: We and Dicerna settled the ongoing litigation between us in April 2018 and in December 2018 we and Silence settled all ongoing litigation between us.
+Added: In December 2018 we and Silence settled all ongoing litigation between us.
A third party may also claim that we have improperly obtained or used its confidential or proprietary information.
−Removed: In protecting our intellectual patent rights through litigation or other means, a third party may claim that we have improperly asserted our rights against them.
−Removed: For example, in August 2017, Dicerna successfully added counterclaims against us in the above-referenced trade secret lawsuit alleging that our lawsuit represented abuse of process and claiming tortious interference with its business.
−Removed: In addition, in August 2017, Dicerna filed a lawsuit against us in the United States District Court of Massachusetts alleging attempted monopolization by us under the Sherman Antitrust Act.
−Removed: As noted above, in April 2018, we and Dicerna settled the ongoing litigation between us.
Furthermore, third parties may challenge the inventorship of our patents or licensed patents.
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After several years of court proceedings and discovery, the court granted our motions for summary judgment, and dismissed Utah’s state law damages claims as well.
−Removed: During the pendency of this litigation, as well as the Dicerna litigation described above, we incurred significant
−Removed: costs, and in each case, the litigation diverted the attention of our management and other resources that would otherwise have been engaged in other activities.
+Added: During the pendency of this litigation, as well as the Dicerna litigation described above, we incurred significant costs, and in each case, the litigation diverted the attention of our management and other resources that would otherwise have been engaged in other activities.
+Added: We may need to resort to litigation to enforce a patent issued or licensed to us or to determine the scope and validity of proprietary rights of others or protect our proprietary information and trade secrets.
+Added: For example, during the second quarter of 2015, we filed a trade secret misappropriation lawsuit against Dicerna to protect our rights in the RNAi assets we purchased from Merck Sharp & Dohme Corp., or Merck.
+Added: We and Dicerna settled the ongoing litigation between us in April 2018.
+Added: In March 2022, we announced that we separately filed suit in United States District Court for the District of Delaware against Pfizer and Moderna, Inc., seeking damages for infringement of U.S.
+Added: 11,246,933 in the parties’ manufacture and sale of their messenger RNA, or mRNA, COVID-19 vaccines.
+Added: Pfizer joined BioNTech SE, or BioNTech, to the suit and filed counterclaims.
+Added: In July 2022, we filed a new lawsuit in United States District Court for the District of Delaware against each of Pfizer/BioNTech and Moderna seeking damages for infringing our newly granted U.S.
+Added: The Court combined the two patents in a single suit for each of Pfizer/BioNTech and Moderna with trial dates set for each in November
+Added: The aforementioned patents relate to our biodegradable cationic lipids that are foundational to the success of the mRNA COVID-19 vaccines.
+Added: In protecting our intellectual patent rights through litigation or other means, a third party may claim that we have improperly asserted our rights against them.
+Added: For example, in August 2017, Dicerna successfully added counterclaims against us in the above-referenced trade secret lawsuit alleging that our lawsuit represented abuse of process and claiming tortious interference with its business.
+Added: In addition, in August 2017, Dicerna filed a lawsuit against us in the United States District Court of Massachusetts alleging attempted monopolization by us under the Sherman Antitrust Act.
+Added: As noted above, in April 2018, we and Dicerna settled the ongoing litigation between us.
In addition, in connection with certain license and collaboration agreements, we have agreed to indemnify certain third parties for certain costs incurred in connection with litigation relating to intellectual property rights or the subject matter of the agreements.
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In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such party.
−Removed: Costly and time-
−Removed: consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
+Added: Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
Risks Related to Competition
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We will face intense competition from drugs that have already been approved and accepted by the medical community for the treatment of the conditions for which we may develop drugs.
+Added: For example, if approved by the FDA, patisiran, our RNAi therapeutic in development for ATTR amyloidosis patients with cardiomyopathy, would compete with tafamidis, marketed by Pfizer, which is currently approved to treat this disease.
We also expect to face competition from new drugs that enter the market.
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In August 2018, the FDA approved ONPATTRO lipid complex injection for the treatment of the polyneuropathy of hATTR amyloidosis in adults, and the EC granted marketing authorization for ONPATTRO for the treatment of hATTR amyloidosis in adults with stage 1 or stage 2 polyneuropathy.
−Removed: We are aware of other approved products used to treat this disease, including tafamidis, marketed by Pfizer, which is approved in a number of jurisdictions, and inotersen, developed and marketed by Ionis, as well as product candidates in various stages of clinical development, including an additional investigational drug.
+Added: We are aware of other approved products used to treat this disease, including tafamidis, and inotersen, developed and marketed by Ionis, as well as product candidates in various stages of clinical development, including eplontersen, an additional investigational drug developed by Ionis in partnership with AstraZeneca, which met co-primary and secondary endpoints in an interim analysis of a Phase 3 study for the polyneuropathy of hATTR amyloidosis, and is currently under regulatory review by the FDA.
Finally, we are aware that BridgeBio Pharma, Inc.
(formerly Eidos Therapeutics, Inc.), or BridgeBio, announced topline results from Part A of its Phase 3 clinical trial of acoramidis, a TTR stabilizer, in ATTR-CM in December 2021, which did not meet the primary endpoint of the study at month 12.
−Removed: BridgeBio initiated enrollment in Part B of its Phase 3 clinical trial of acoramidis in ATTR-PN patients in the fourth quarter of 2020, and anticipates topline results in 2023.
−Removed: While we believe that ONPATTRO has and will continue to have a competitive product profile for the treatment of patients with hATTR amyloidosis with polyneuropathy, and if approved, that vutrisiran will have a competitive product profile in this indication, it is possible that ONPATTRO and/or vutrisiran may not compete favorably with these products and product candidates, or others, and, as a result, may not achieve commercial success.
+Added: BridgeBio initiated enrollment in Part B of its Phase 3 clinical trial of acoramidis in ATTR-PN patients in the fourth quarter of 2020, and anticipates topline results in mid-2023.
+Added: While we believe that ONPATTRO has and will continue to have a competitive product profile for the treatment of patients with hATTR amyloidosis with polyneuropathy, and that AMVUTTRA has a competitive product profile in this indication, it is possible that ONPATTRO and/or AMVUTTRA may not compete favorably with these products and product candidates, or others, and, as a result, may not achieve commercial success.
Moreover, positive or negative data and/or the commercial success or failure of competitive products could negatively impact our stock price.
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and EU for the treatment of this disease, including Oxabact®, a bacteria-based investigational therapy in development by OxThera AB, reloxaliase an investigational enzyme therapy in Phase 3 development for primary or severe secondary hyperoxaluria by Allena Pharmaceuticals, Inc., and nedosiran, an investigational RNAi therapeutic in development by Dicerna for the treatment of primary hyperoxaluria.
−Removed: In July 2019, the FDA granted a Breakthrough Therapy Designation to nedosiran for the treatment of patients with primary hyperoxaluria, and in August 2021, Dicerna (acquired by Novo Nordisk in December 2021) announced positive topline results in its PHYOX2 pivotal
−Removed: clinical trial of nedosiran and expects to submit an NDA to the FDA in the first quarter of 2022.
+Added: In July 2019, the FDA granted a Breakthrough Therapy Designation to nedosiran for the treatment of patients with primary hyperoxaluria, and in August 2021, Dicerna reported positive topline results from its PHYOX2 pivotal clinical trial of nedosiran for the treatment of primary hyperoxaluria.
+Added: Based on the results of the trial, Novo Nordisk submitted an NDA to the FDA in September 2022 for the treatment of PH1 in patients aged six years and older.
In April 2020, we and Dicerna granted each other a non-exclusive cross-license to our respective intellectual property related to lumasiran, and Dicerna’s nedosiran product candidate.
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Like RNAi therapeutics, antisense drugs target mRNAs in order to suppress the activity of specific genes.
−Removed: Akcea has received marketing approval for an antisense drug, inotersen that was developed by Ionis, for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis.
+Added: Akcea (acquired by Ionis in October 2020), has received marketing approval for an antisense drug, inotersen that was developed by Ionis, for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis.
Several antisense drugs developed by Ionis have been approved and are currently marketed, and Ionis has multiple antisense product candidates in clinical trials.
Ionis is also developing antisense drugs using ligand-conjugated GalNAc technology licensed from us, and these drugs have been shown to have increased potency at lower doses in clinical and pre-clinical studies, compared with antisense drugs that do not use such licensed GalNAc technology.
−Removed: The development of antisense drugs is more advanced than that of RNAi therapeutics, and antisense technology may become the preferred technology for drugs that target mRNAs to silence specific genes.
+Added: The development of antisense drugs and antisense technology may become the preferred technology for drugs that target mRNAs to silence specific genes.
In addition to competition with respect to RNAi and with respect to specific products, we face substantial competition to discover and develop safe and effective means to deliver siRNAs to the relevant cell and tissue types.
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The stock market in general has from time to time experienced extreme price and volume fluctuations, and the biotechnology sector in particular has experienced extreme price and volume fluctuations.
−Removed: The market prices of securities of pharmaceutical and biotechnology companies have been extremely volatile, and have experienced fluctuations that often have been unrelated or disproportionate to the clinical development progress or operating performance of these companies, including as a result of adverse development events.
+Added: The market prices of securities of pharmaceutical and biotechnology companies have been extremely volatile, and have experienced fluctuations that often have been unrelated or disproportionate to the clinical development progress or operating performance of these companies, including as a result of adverse development events reported by other companies.
For example, the trading price for our common stock and the common stock of other biopharmaceutical companies was highly volatile during the initial stages of the COVID-19 pandemic.
−Removed: The COVID-19 pandemic has continued to evolve, and the extent to which the pandemic may impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
−Removed: These broad market
−Removed: and sector fluctuations have resulted and could in the future result in extreme fluctuations in the price of our common stock, which could cause purchasers of our common stock to incur substantial losses.
+Added: These broad market and sector fluctuations have resulted and could in the future result in extreme fluctuations in the price of our common stock, which could cause purchasers of our common stock to incur substantial losses.
We may incur significant costs from class action litigation.
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When the market price of a stock has been volatile as our stock price has been, holders of that stock have occasionally brought securities class action litigation against the company that issued the stock.
−Removed: For example, a class action complaint was filed on September 26, 2018 in the United States District Court for the Southern District of New York (and transferred to the United States District Court for the District of Massachusetts by stipulation of the parties and Order of the Court dated November 20, 2018).
−Removed: The complaint, as amended, or the Complaint, alleged that we and our Chief Executive Officer, former Chief Financial Officer and certain of our other executive officers violated certain federal securities laws, specifically under Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder.
−Removed: The plaintiff sought unspecified damages on behalf of a purported class of purchasers of our common stock between September 20, 2017 and September 12, 2018.
−Removed: On March 23, 2020, the Court granted our motion to dismiss and dismissed the Complaint without prejudice, and subsequently in March 2021 denied plaintiffs' motion seeking leave to file a further amended complaint.
−Removed: Plaintiffs did not file a notice of appeal from such denial.
−Removed: This type of litigation is often expensive and diverts management’s attention and resources, which could adversely affect the operation of our business.
−Removed: If we are ultimately required to pay significant defense costs, damages or settlement amounts, in excess of our insurance coverage, such payments could adversely affect our operations.
−Removed: We may be the target of similar litigation in the future.
For example, on September 12, 2019, the Chester County Employees Retirement Fund, individually and on behalf of all others similarly situated, filed a purported securities class action complaint alleging violation of federal securities laws against us, certain of our current and former directors and officers, and the underwriters of our November 14, 2017 public stock offering, in the Supreme Court of the State of New York, New York County.
−Removed: While we believe the allegations in the New York State Securities Litigation are without merit, in August 2021 the parties reached an agreement in principle to resolve the matter.
−Removed: A hearing is scheduled for April 12, 2022 in the Supreme Court of the State of New York regarding final approval of the settlement.
−Removed: Proceedings in the First Department are adjourned until February 2022, subject to further adjournment, pending final approval of any settlement.
+Added: While we believe the allegations in the New York State Securities Litigation were without merit, in August 2021, the parties reached an agreement in principle to resolve the matter.
+Added: At a hearing on April 12, 2022, the Supreme Court of the State of New York granted final approval to the settlement.
+Added: Proceedings in the First Department were adjourned until April 2022, pending final approval of any settlement, and were withdrawn as a result of final approval on April 18, 2022.
Future litigation could result in substantial costs and divert our management’s attention and resources, which could cause serious harm to our business, operating results and financial condition.
We maintain liability insurance;
−Removed: however, if any costs or expenses associated with this or any other litigation exceed our insurance coverage, we may be forced to bear some or all of these costs and expenses directly, which could be substantial.
−Removed: In addition, we have obligations to indemnify third parties in connection with certain litigation, including the New York State matter, and such obligations are not covered by insurance.
+Added: however, if any costs or expenses associated with litigation exceed our insurance coverage, we may be forced to bear some or all of these costs and expenses directly, which could be substantial.
+Added: In addition, we have obligations to indemnify third parties in connection with certain litigation, and such obligations are not covered by insurance.
Future sales of shares of our common stock, including by our significant stockholders, us or our directors and officers, could cause the price of our common stock to decline.
A small number of our stockholders beneficially own a substantial amount of our common stock.
−Removed: As of January 31, 2022, our seven largest stockholders beneficially owned in excess of 50% of our outstanding shares of common stock.
+Added: As of January 31, 2023, our six largest stockholders beneficially owned in excess of 50% of our outstanding shares of common stock.
If our significant stockholders, or we or our officers and directors, sell substantial amounts of our common stock in the public market, or there is a perception that such sales may occur, the market price of our common stock could be adversely affected.
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Provisions in our certificate of incorporation and our bylaws may delay or prevent an acquisition of us or a change in our management.
−Removed: In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our
−Removed: current management by making it more difficult for stockholders to replace members of our board of directors.
−Removed: Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.
+Added: In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
+Added: board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.
These provisions include:
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These provisions would apply even if the proposed merger or acquisition could be considered beneficial by some stockholders.
+Added: Risks Related to Our Convertible Notes
+Added: Servicing our debt may require a significant amount of cash.
+Added: We may not have sufficient cash flow from our business to pay our indebtedness.
+Added: On September 12, 2022, we commenced a private offering of $900.0 million in aggregate principal amount of 1% Convertible Senior Notes due 2027, or the Initial Notes.
+Added: On September 13, 2022, the initial purchasers in such offering exercised their option to purchase an additional $135.0 million in aggregate principal amount of our 1% Convertible Senior Notes due 2027, or the Additional Notes, and together with the Initial Notes, collectively referred to as the Notes, bringing the total aggregate principal amount of the Notes to $1.04 billion.
+Added: The interest rate for the Notes is fixed at 1.00% per annum and is payable semi-annually in arrears on May 15 and September 15 of each year, beginning on March 15, 2023.
+Added: Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, including the Notes, or to make cash payments in connection with any conversions of Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
+Added: Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures.
+Added: If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive.
+Added: Our ability to refinance any future indebtedness will depend on the capital markets and our financial condition at such time.
+Added: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
+Added: In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives.
+Added: Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt.
+Added: We may not have the ability to raise the funds necessary to settle for cash conversions of the Notes or to repurchase the Notes for cash upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion of the Notes or to repurchase the Notes.
+Added: Holders of the Notes have the right to require us to repurchase their Notes upon the occurrence of a fundamental change (as defined in the indenture governing the Notes) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.
+Added: Upon conversion of the Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Notes being converted.
+Added: We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Notes surrendered or Notes being converted.
+Added: In addition, our ability to repurchase the Notes or to pay cash upon conversions of the Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
+Added: Our failure to repurchase Notes at a time when the repurchase is required by the indenture governing such notes or to pay any cash payable on future conversions of the Notes as required by such indenture would constitute a default under such indenture.
+Added: A default under the indenture governing the Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
+Added: If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or make cash payments upon conversions.
+Added: In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences.
+Added: For example, it could:
+Added: • make us more vulnerable to adverse changes in general U.S.
+Added: and worldwide economic, industry and competitive conditions and adverse changes in government regulation;
+Added: • limit our flexibility in planning for, or reacting to, changes in our business and our industry;
+Added: • place us at a disadvantage compared to our competitors who have less debt;
+Added: • limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes;
+Added: • make an acquisition of our company less attractive or more difficult.
+Added: Any of these factors could harm our business, results of operations and financial condition.
+Added: In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.
+Added: The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
+Added: In the event the conditional conversion feature of the Notes is triggered, holders of the Notes will be entitled to convert the Notes at any time during specified periods at their option.
+Added: If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
+Added: In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
+Added: Transactions relating to our Notes may affect the value of our common stock.
+Added: The conversion of some or all of the Notes would dilute the ownership interests of existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our common stock upon any conversion of such Notes.
+Added: Our Notes may become in the future convertible at the option of their holders under certain circumstances.
+Added: If holders of our Notes elect to convert their notes, we may settle our conversion obligation by delivering to them a significant number of shares of our common stock, which would cause dilution to our existing stockholders.
+Added: In addition, in connection with the issuance of the Notes, we entered into the Capped Calls with certain financial institutions, or the Option Counterparties.
+Added: The Capped Calls are generally expected to reduce potential dilution to our common stock upon any conversion or settlement of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, with such reduction and/or offset subject to a cap.
+Added: In connection with establishing their initial hedges of the Capped Calls, the Option Counterparties or their respective affiliates entered into various derivative transactions with respect to our common stock and/or purchased shares of our common stock concurrently with or shortly after the pricing of the Notes.
+Added: From time to time, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Notes (and are likely to do so following any conversion of the Notes, any repurchase of the Notes by us on any fundamental change repurchase date, any redemption date, or any other date on which the Notes are retired by us, in each case, if we exercise our option to terminate the relevant portion of the Capped Calls).
+Added: This activity could cause a decrease and/or increased volatility in the market price of our common stock.
+Added: We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of the Notes or our common stock.
+Added: In addition, we do not make any representation that the Option Counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
+Added: We are subject to counterparty risk with respect to the Capped Calls.
+Added: The Option Counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the Capped Calls.
+Added: Our exposure to the credit risk of the Option Counterparties will not be secured by any collateral.
+Added: Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions.
+Added: If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the Capped Calls with such Option Counterparty.
+Added: Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock.
+Added: In addition, upon a default by an Option Counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.
+Added: We can provide no assurances as to the financial stability or viability of the Option Counterparties.
+Added: The accounting method for convertible debt securities that may be settled in cash, such as the Notes, could have a material effect on our reported financial results.
+Added: The accounting method for reflecting the Notes on our consolidated balance sheet, accruing interest expense for the Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
+Added: In August 2020, the Financial Accounting Standards Board published an Accounting Standards Update, which we refer to as ASU 2020-06, which simplified certain of the accounting standards that apply to convertible notes.
+Added: ASU 2020-06 became effective for us beginning January 1, 2022.
+Added: In accordance with ASU 2020-06, the Notes will be reflected as a liability on our consolidated balance sheets, with the initial carrying amount equal to the principal amount of the Notes, net of issuance costs.
+Added: The issuance costs will be treated as a debt discount for accounting purposes, which will be amortized into interest expense over the term of the Notes.
+Added: As a result of this amortization, the interest expense that we expect to recognize for the Notes for accounting purposes will be greater than the cash interest payments we will pay on the Notes, which will result in lower reported net income or higher reported net loss, as the case may be.
+Added: In addition, we expect that the shares of common stock underlying the Notes will be reflected in our diluted earnings per share using the “if converted” method, in accordance with ASU 2020-06.
+Added: Under that method, diluted earnings per share would generally be calculated assuming that all the Notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive.
+Added: The application of the if-converted method may reduce our reported diluted earnings per share to the extent we are profitable in the future, and accounting standards may change in the future in a manner that may adversely affect our diluted earnings per share.
+Added: Furthermore, if any of the conditions to the convertibility of the Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the Notes as a current, rather than a long-term, liability.
+Added: This reclassification could be required even if no holders convert their notes and could materially reduce our reported working capital.
UNRESOLVED STAFF COMMENTS
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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.