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Summary of Risk Factors
−Removed: Our business is subject to numerous risks and uncertainties that you should consider before investing in our company, as fully described below.
+Added: Our business is subject to numerous risks and uncertainties that you should consider before investing in our company, as more fully described below.
The principal factors and uncertainties that make investing in our company risky include, among others:
● our success depends on our ability to develop and/or acquire and commercialize additional pharmaceutical products;
−Removed: ● our Primatene Mist ® , lidocaine, phytonadione, and enoxaparin products collectively represent a significant portion of our net revenues;
−Removed: if the sales volume or pricing of our lidocaine, phytonadione, and enoxaparin products decline, or if we are unable to satisfy market demand for these products, they could have a material adverse effect on our business, financial position and results of operations;
+Added: ● our Primatene Mist ® , glucagon, lidocaine, phytonadione, and enoxaparin products collectively represent a significant portion of our net revenues;
+Added: if the sales volume or pricing of our Primatene Mist ® , glucagon, lidocaine, phytonadione, and enoxaparin products decline, or if we are unable to satisfy market demand for these products, they could have a material adverse effect on our business, financial position and results of operations;
● our success depends on the integrity of our supply chain, including multiple single source suppliers, the disruption of which could negatively impact our business;
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● sales of our products may be adversely affected by the continuing consolidation of our customer base;
−Removed: ● our business may be adversely affected by the current COVID-19 pandemic or other epidemics;
+Added: ● our business may be adversely affected by the ongoing COVID-19 pandemic or other epidemics;
● we depend upon our key personnel, the loss of whom could adversely affect our operations.
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● we may be exposed to product liability claims and may not be able to obtain or maintain adequate product liability insurance;
−Removed: ● our ability to enter the market with a generic product can hinge upon the success of litigation – challenging existing patents and negotiating favorable settlements or obtaining favorable results.
−Removed: Many variables can impact litigation and adverse rulings or unfavorable settlements could delay anticipated market entries and subject us to damages;
● we are exposed to risks related to our international operations and failure to manage these risks may adversely affect our operating results and financial condition;
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● if clinical studies for our product candidates are unsuccessful or significantly delayed, we will be unable to meet our anticipated development and commercialization timelines, which would have an adverse impact on our business;
−Removed: ● if pharmaceutical companies are successful in limiting the use of generics through their legislative, regulatory and/or other efforts, our sales of generic products may suffer;
−Removed: ● our success depends on our ability to detect, protect, and enforce our intellectual property;
−Removed: ● we have a concentration in our ownership held by a few stockholders, which stockholders will be able to exert significant control over matters subject to stockholder approval.
+Added: ● if branded pharmaceutical companies are successful in limiting the use of generics through their legislative, regulatory and/or other efforts, our sales of generic products may suffer;
+Added: ● our success depends on our ability to obtain, protect, and enforce our intellectual property.
Risks Relating to Our Business and Industry
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For example, as a result of environmental concerns over the use of chlorofluorocarbons, or CFCs, the FDA, issued a final rule on January 16, 2009, that required the phase-out of the CFC formulation of our Primatene Mist ® product by December 31, 2011.
−Removed: As a result, in order to resume selling Primatene Mist ® we had to develop a formulation of the product that uses hydrofluoroalkane, or HFA, as the propellant, and obtain FDA approval for the modified product, which took a significant amount of time and was not re-launched until
−Removed: December 2018.
+Added: As a result, in order to resume selling Primatene Mist ® we had to develop a formulation of the product that uses hydrofluoroalkane, or HFA, as the propellant, and obtain FDA approval for the modified product, which took a significant amount of time and was not re-launched until December 2018.
There can be no guarantee that our investment in research and development activities will result in FDA approval or produce commercially viable new products.
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If we are unable to cost-effectively maintain an adequate flow of successful generic and proprietary products and new indications and/or delivery methods for existing products sufficient to cover our substantial research and development costs and the decline in sales of older products that either become subject to generic competition, or are displaced by competing products or therapies, it could have a material adverse effect on our business, financial condition or results of operations.
−Removed: Our Primatene Mist ® , lidocaine, phytonadione, and enoxaparin products collectively represent a significant portion of our net revenues.
−Removed: If the sales volume or pricing of our lidocaine, phytonadione, and enoxaparin products decline, or if we are unable to satisfy market demand for these products, they could have a material adverse effect on our business, financial position and results of operations.
+Added: Our Primatene Mist ® , glucagon, lidocaine, phytonadione, and enoxaparin products collectively represent a significant portion of our net revenues.
+Added: If the sales volume or pricing of our glucagon, lidocaine, phytonadione, and enoxaparin products decline, or if we are unable to satisfy market demand for these products, they could have a material adverse effect on our business, financial position and results of operations.
Sales from our Primatene Mist ® product represented 17%, 15%, and 6% of our total net revenues for the years ended December 31, 2021, 2020, and 2019, respectively.
+Added: Sales from our glucagon product, which we launched in February 2021 represented 11% of our total net revenues for the year ended December 31, 2021.
Sales from our lidocaine products represented 10%, 12%, and 14% of our total net revenues for the years ended December 31, 2021, 2020, and 2019, respectively.
Sales from our phytonadione product represented 10%, 12%, and 14% of our total net revenues for the years ended December 31, 2021, 2020, and 2019, respectively, and sales of our enoxaparin product represented 8%, 14%, and 13% of our total net revenues for the years ended December 31, 2021, 2020, and 2019, respectively.
−Removed: We have experienced declining revenue from enoxaparin and some of our other existing products in the past and we may operate at a loss in the near term while continuing to invest in developing new products.
+Added: We have experienced declining revenue from enoxaparin and some of our other existing products in the past.
If the sales volume or pricing of enoxaparin continues to decline, or if the sales volume or pricing of lidocaine and phytonadione declines, or if we are unable to satisfy market demand for these products, our business, financial position and results of operations could be materially and adversely affected, and the market value of our common stock could decline.
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We have experienced significant declines in the per unit pricing and gross margins attributable to our enoxaparin product since its commercial launch.
−Removed: Our Primatene Mist ® , lidocaine, phytonadione, and enoxaparin products could be rendered obsolete or negatively impacted by numerous factors, many of which are beyond our control, including:
+Added: Our Primatene Mist ® , glucagon, lidocaine, phytonadione, and enoxaparin products could be rendered obsolete or negatively impacted by numerous factors, many of which are beyond our control, including:
● decreasing average sales prices;
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Any factor adversely affecting the sale of these products may cause our revenues to decline, and we may not be able to achieve and maintain profitability.
−Removed: We incurred losses for fiscal 2018 and we may operate at a loss in future years while continuing to invest in developing new products.
−Removed: We recorded a net loss of $5.7 million for the year ended December 31, 2018.
+Added: We have incurred losses in the past and we may operate at a loss in future years while continuing to invest in developing new products.
Although we achieved net income in the years ended December 31, 2021, 2020 and 2019, we may incur operating and net losses and negative cash flow from operations in the future.
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Our ability to develop new products and additional revenue streams depends upon our ability to invest ongoing revenue, borrow funds or raise additional capital when needed.
−Removed: Developing a single product in the pharmaceutical industry is a very expensive proposition with no certainty of regulatory clearance or commercial success.
+Added: Developing a single product in the pharmaceutical industry is a very expensive proposition with no certainty of
+Added: regulatory clearance or commercial success.
Considerable amounts are invested into the research and development process.
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In 2013, our single source supplier of epinephrine API for our Primatene Mist ® product received a warning letter from the FDA, which our supplier has since addressed.
−Removed: In the future, it is possible that our suppliers will receive warning letters from the FDA and be unsuccessful in their efforts to address the issues raised in such warning letters on a timely basis, or at all, or may
−Removed: discontinue production of raw materials, components or APIs used in our products or product candidates and would result in delays in commercialization and/or manufacturing of our products or product candidates if FDA approval for such products or product candidates is received.
+Added: In the future, it is possible that our suppliers will receive warning letters from the FDA and be unsuccessful in their efforts to address the issues raised in such warning letters on a timely basis, or at all, or may discontinue production of raw materials, components or APIs used in our products or product candidates and would result in delays in commercialization and/or manufacturing of our products or product candidates if FDA approval for such products or product candidates is received.
Furthermore, we may be unable to replace such supplier with an alternate supplier on a commercially reasonable and timely basis, or at all.
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However, if market demand decreases or if market supply surpasses demand, whether because of macroeconomic factors, pharmaceutical industry volatility, or deficiencies specific to our customers, we may not be able to reduce manufacturing expenses or overhead costs proportionately.
−Removed: For example, a significant portion of our manufacturing capacity in our facility in Éragny-sur-Epte, France is utilized for the manufacturing of insulin API for MannKind, and a significant portion of our manufacturing capacity in Rancho Cucamonga is utilized for the manufacture of enoxaparin.
+Added: For example, a significant portion of our manufacturing capacity in our facility in Éragny-sur-Epte, France is utilized for the manufacturing of insulin API for MannKind, and a significant portion of our manufacturing capacity in Rancho
+Added: Cucamonga is utilized for the manufacture of enoxaparin.
In November 2016, we amended our supply agreement with MannKind, or the Supply Agreement and our option purchase agreement with MannKind, or the Option Agreement, to modify and extend the annual minimum purchase commitments under the Supply Agreement and the Option Agreement to cover calendar years 2014 through 2023.
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In August 2019, we amended the Supply Agreement with MannKind to modify and extend the annual minimum purchase commitment under the Supply Agreement for an additional two years through 2026.
+Added: In May 2021, we amended the Supply Agreement with MannKind to modify and extend the annual minimum purchase commitments under the Supply Agreement for an additional year through 2027.
While the aggregate total purchase commitment remains unchanged, the amendments to the Supply Agreement and the Option Agreement have resulted and will continue to result in reduced sales of API for MannKind on an annual basis.
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If alternative technologies or other therapeutic approaches are adopted prior to our new product approvals, then the market for our new products may be substantially decreased, thus reducing our ability to generate future profits.
−Removed: This intensely competitive environment requires an ongoing, extensive search for technological innovations and the ability to market products effectively, including the ability to communicate the effectiveness, safety and value of our products to healthcare professionals in private practice, group practices and managed care organizations.
+Added: This intensely competitive environment requires an ongoing, extensive search for technological innovations and the ability to market products effectively, including the ability to communicate the effectiveness, safety and value of our
+Added: products to healthcare professionals in private practice, group practices and managed care organizations.
Our competitors vary depending upon product categories and, within each product category, upon dosage strengths and upon drug-delivery systems.
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ANDAs that contain Paragraph IV certifications challenging patents, however, generally become the subject of patent litigation that can be both lengthy and costly.
−Removed: There is no certainty that we will prevail in any such litigation, that we will be the first-to-file and granted the 180-day marketing exclusivity period or, if we are granted the 180-day marketing exclusivity
−Removed: period, that we will not forfeit such period.
+Added: There is no certainty that we will prevail in any such litigation, that we will be the first-to-file and granted the 180-day marketing exclusivity period or, if we are granted the 180-day marketing exclusivity period, that we will not forfeit such period.
Even where we are awarded marketing exclusivity, we may be required to share our exclusivity period with other ANDA applicants who submit Paragraph IV certifications.
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For example, enoxaparin is currently marketed by Sanofi, under the brand name Lovenox ® .
−Removed: Sanofi also markets its authorized generic enoxaparin product through its subsidiary, Winthrop, Fresenius Kabi USA, Apotex Corp.
+Added: Sanofi also markets its authorized generic enoxaparin product through its
+Added: subsidiary, Winthrop, Fresenius Kabi USA, Apotex Corp.
and Meithael Pharmaceuticals, Inc.
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Additionally, as new competitors enter the market, there may be increased pricing pressure on certain products, which may result in lower gross margins.
−Removed: In addition to our enoxaparin product, we have experienced pricing pressure on many of our other products, including medroxyprogesterone, and we expect this trend to continue in the future.
+Added: In addition to our enoxaparin product, we have experienced pricing pressure on many of our other products, including naloxone, and we expect this trend to continue in the future.
Competition in the generic drug industry has also increased due to the proliferation of authorized generic pharmaceutical products.
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This is a significant source of competition for us because brand companies do not face any regulatory barriers to introducing authorized generics of their products.
−Removed: Because authorized generics may be sold during our exclusivity periods, if any, they can materially decrease the profits that we could otherwise receive as an exclusive
−Removed: marketer of a generic alternative.
+Added: Because authorized generics may be sold during our exclusivity periods, if any, they can materially decrease the profits that we could otherwise receive as an exclusive marketer of a generic alternative.
Such actions have the effect of reducing the potential market share and profitability of our generic products and may inhibit us from developing and introducing generic pharmaceutical products corresponding to certain brand name drugs.
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Our products, if successfully developed and commercially launched, will compete with both currently marketed products and new products launched in the future by other companies.
−Removed: Health care providers may not accept or utilize some of our
+Added: Health care providers may not accept or utilize some of our products.
Physicians and other prescribers may not be inclined to prescribe our prescription products unless our products demonstrate commercially viable advantages over other products currently marketed for the same indications.
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We do not carry key man life insurance on any key personnel.
−Removed: Competition among pharmaceutical companies for qualified employees is intense, and the ability to attract and retain qualified individuals is critical to our success.
+Added: Competition among pharmaceutical companies
+Added: for qualified employees is intense, and the ability to attract and retain qualified individuals is critical to our success.
We have experienced attrition among our executive officers in the past, and any future loss of key members of our organization or any inability to continue to attract high-quality employees may delay or prevent the achievement of major business objectives.
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Also, to the extent we hire personnel from competitors, we may be subject to allegations that we have improperly solicited, or that they have divulged proprietary or other confidential information, or that their former employers own their inventions or work product.
−Removed: Our business may be adversely affected by the current COVID-19 pandemic or other epidemics.
−Removed: In March 2020, the World Health Organization declared the outbreak of a novel coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the world, including locations where we operate, such as the United States, China and France.
−Removed: We have been actively monitoring the COVID-19 pandemic and its impact globally.
−Removed: In late January 2020, China implemented extensive curfews and travel restrictions to control the outbreak, and started easing these restrictions in March.
−Removed: In March 2020, France also implemented a stay-at-home order limiting movement and restricting travel.
−Removed: In March 2020, the Governors of the States of California and Massachusetts declared a health emergency and issued orders to close all nonessential businesses.
−Removed: As a bio-pharmaceutical company we are deemed to be an essential business.
−Removed: Since then, the government in the United States, China and France, have re-opened and re-imposed restrictions on travel and business as the pandemic recedes and grows.
−Removed: Over the ensuring year, this contagious disease outbreak has continued to impact worldwide economic activity and financial markets.
−Removed: While two vaccines have received Emergency Use Authorization from the FDA, the COVID-19 pandemic remains a challenge to our business until it is abated.
−Removed: Mass and rapid production of the vaccines, for example, has placed increased pressure on the availability of supplies that are also used in our products, such as glass and needles.
+Added: Our business may be adversely affected by the ongoing COVID-19 pandemic or other epidemics.
+Added: The ongoing COVID-19 pandemic, including the recent Omicron variant, has continued to impact worldwide economic activity and financial markets.
+Added: While three vaccines have received Emergency Use Authorization from the FDA, the COVID-19 pandemic remains a challenge to our business until it is abated.
+Added: Mass and rapid production of the vaccines, for example, has placed increased pressure on the availability of supplies that are also used in our products, such as glass vials and needles.
The COVID-19 pandemic is imposing additional burdens on our business to comply with regulations imposed by the State of California.
The COVID-19 pandemic may also disrupt the operations of our customers, suppliers and partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact our business and results of operations, including cash flows.
−Removed: Disruptions to our manufacturing partners
−Removed: and suppliers could result in disruption to the production of our products and failure to satisfy demand.
+Added: Disruptions to our manufacturing partners and suppliers could result in disruption to the production of our products and failure to satisfy demand.
More generally, the outbreak of COVID-19 could adversely affect economies and financial markets globally and nationally, potentially leading to an economic downturn, which could decrease spending and adversely affect demand for our products and harm our business and results of operations.
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The degree of impact of the COVID-19 pandemic on our business will depend on several factors, such as the duration and the extent of the pandemic, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time.
−Removed: Some of our ongoing clinical trials have experienced short-term interruptions in the recruitment of patients due to the COVID-19 pandemic, as hospitals prioritize their resources toward the COVID-19 pandemic and governments impose travel restrictions.
−Removed: Additionally, protocols at certain clinical sites have changed which could slow down the pace of clinical trials and also increase the costs of conducting clinical Trials.
−Removed: These conditions may in turn delay spending and delay the results of these trials.
−Removed: Additionally, certain suppliers have delayed shipments to us in 2020.
−Removed: These delays may have been caused by manufacturing disruptions due to the COVID-19 pandemic.
−Removed: None of these delays caused delays in our manufacturing to date, but future delays could cause manufacturing disruptions at our factories.
As a result of the consequences of the COVID-19 pandemic, FDA has issued various COVID-19 related guidance documents applicable to biopharmaceutical manufacturers and clinical trial sponsors.
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These and future guidance documents and regulatory requirements, including future legislation, may require us to develop and implement new policies and procedures, make significant adjustments to our clinical trials, or increase the amount time and resources needed for regulatory compliance, which may impact our clinical development plans and timelines.
+Added: Some of our ongoing clinical trials have experienced short term interruptions in the recruitment of patients due to the COVID-19 pandemic, as hospitals prioritize their resources toward the COVID-19 pandemic and governments impose travel restrictions.
+Added: Additionally, protocols at certain clinical sites have changed which could slow down the pace of clinical trials while also increasing their cost.
+Added: These conditions may in turn delay spending and delay the results of these trials.
+Added: Additionally, certain suppliers delayed shipments to us in 2020.
+Added: These delays may have been caused by manufacturing disruptions due to the COVID-19 pandemic.
+Added: None of these delays caused delays in our manufacturing, but future delays could cause manufacturing disruptions at our factories.
It is not possible at this time to estimate the complete impact that the COVID-19 pandemic could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.
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Negative publicity could also result in an increased number of product liability claims, whether or not these claims have a basis in scientific fact.
−Removed: We currently maintain a $10.0 million product liability insurance policy, which covers Amphastar, IMS, Armstrong, and
−Removed: AFP, products, but our insurance coverage is subject to deductibles and may not reimburse us or may not be sufficient to reimburse us for all expenses or losses we may suffer from any product liability claims.
+Added: We currently maintain a $10.0 million product liability insurance policy, which covers Amphastar, IMS, Armstrong, and AFP, products, but our insurance coverage is subject to deductibles and may not reimburse us or may not be sufficient to reimburse us for all expenses or losses we may suffer from any product liability claims.
Moreover, insurance coverage is becoming increasingly expensive and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses.
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Intensive due diligence is often time consuming and expensive due to the operations, finance and legal professionals who may be involved in the due diligence process.
−Removed: Even if we conduct extensive due diligence on a target business which we acquire,
−Removed: we may not identify all material issues that are present inside a particular target business.
+Added: Even if we conduct extensive due diligence on a target business which we acquire, we may not identify all material issues that are present inside a particular target business.
If our due diligence fails to discover or identify material issues relating to a target business, industry or the environment in which the target business operates, we may be forced to later write-down or write-off assets, restructure the target business’ operations or incur impairment or other charges that could result in losses to us.
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A significant amount of our total assets is related to goodwill and intangible assets.
−Removed: As of December 31, 2020, the value
−Removed: of our goodwill and intangible assets net of accumulated amortization was $40.6 million.
+Added: As of December 31, 2021, the value of our goodwill and intangible assets net of accumulated amortization was $38.9 million.
Goodwill and other intangible assets are tested for impairment annually when events occur or circumstances change that could potentially reduce the fair value of the reporting unit or intangible asset.
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Our business and operations have been impacted in the past, and may be impacted in the future, in the event of system breach or failure.
−Removed: We, our collaborators, third-party providers, distributors, customers and other contractors utilize information technology systems and networks, including internet-based system, to transmit, store and otherwise process electronic data in connection with our business activities, including our supply chain processes, operations and communications.
−Removed: This includes our clinical data and business proprietary information, Electronic Data Interchange, or EDI, on purchase orders, invoices, chargebacks, etc.
−Removed: We, and others on our behalf, also collect, transmit, store and otherwise process certain data relating to individuals, including about our personnel, business partners, and others, which may be subject to applicable data protection laws and regulations that require adoption of minimum information security standards.
−Removed: The cost of compliance with applicable data protection laws and regulations have increased and may increase in the future.
−Removed: Despite our implementation of security measures to protect the confidentiality, integrity, and availability of the systems and data within our control from various threats (e.g., cyber-attack, insider threat, accidental disclosure, intellectual property theft and economic espionage, exploitable defects or bugs in our third-party providers’ systems, natural disaster, war, terrorism, telecommunications and electrical outage), risks remain, and our systems and networks and the systems and networks of third parties that support us and our services may be breached or disrupted due to these threats.
−Removed: Techniques used to sabotage or obtain unauthorized access to systems and networks are constantly evolving and, in some instances, are not identified until or after they are launched against a target.
−Removed: We and our third-party providers may be
−Removed: unable to anticipate these techniques, discover threats and react in a timely manner, or implement adequate preventative or mitigating measures.
−Removed: Further, system breaches, malware, ransomware, computer hacking, and insider threats have become more prevalent, and experts have warned that the COVID-19 pandemic has resulted in increased threats and malicious activity.
−Removed: Potential legal (regulatory or contractual), financial, operational, and reputational harm may arise from the accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to (i) our data, which is transmitted, stored or otherwise processed by us or by collaborators, third-party providers, distributors and other contractors on our behalf (a “data security incident”);
−Removed: and (ii) the systems upon which we rely for our operations (an “other event”).
+Added: We, our collaborators, third-party providers, distributors, customers and other contractors utilize information technology systems and networks to transmit, store and otherwise process electronic data, including personal information, clinical data and business proprietary information, in connection with our business activities, including our supply chain processes, operations and communications.
+Added: The collection, use, transmission, transfer, storage and processing of personal information, including about our personnel, business partners, and others, may be subject to applicable data protection, security and privacy laws, and regulations that require adoption of minimum information security standards.
+Added: The cost of compliance with applicable data protection, security and privacy laws and regulations have increased and may increase in the future.
+Added: Despite our implementation of security measures to protect the confidentiality, integrity, and availability of the systems, networks and data within our control from various threats (e.g., cyber-attacks, system breaches, malware, viruses, hacking, fraudulent use, social engineering attacks, phishing attacks, ransomware attacks, credential-stuffing attacks, denial-of-service attacks, unauthorized access, insider threats, accidental disclosures, intellectual property theft and economic espionage, exploitable vulnerabilities, defects and bugs, natural disasters, war, terrorism, acts of vandalism, telecommunications and electrical outages, breakdowns, damage, interruptions), risks remain, and our systems and networks and the systems and networks of third parties that support us and our services may be breached or disrupted due to these threats.
+Added: The size and complexity of our systems and networks may make them potentially vulnerable to breakdown or interruption, whether due to computer viruses or other causes, which may result in the loss of data or the impairment of production and other supply chain processes, adversely affecting our business.
+Added: Techniques used to sabotage or obtain unauthorized access to systems and networks are constantly evolving and may not be identified until or after they are launched against us or our third-party providers.
+Added: We and our third-party providers may be unable to anticipate these techniques, discover threats and react in a timely manner, or implement adequate preventative or mitigating measures.
+Added: Further, these types of security incidents have become more prevalent.
+Added: For example, companies have experienced an increase in phishing and social engineering attacks from third parties in connection with working remotely as a result of the ongoing COVID-19 pandemic.
+Added: We and our third-party providers who may be operating in remote work environments may have increased security risks, due to increased use of home Wi-Fi networks and virtual private networks, as well as increased disbursement of physical machines.
+Added: While we implement security measures designed to reduce these risks, there is no guarantee that these measures will be adequate to safeguard all systems and networks, especially with an increased number of employees working remotely.
+Added: Any failure to maintain performance, reliability, security and availability of our systems and networks may result in accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to our data, including personal information.
+Added: Potential legal, regulatory, contractual, financial, operational, or reputational harm may arise from any such security incident that results in the accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to our systems, network, or data, including data which is transmitted, stored or otherwise processed by us or by collaborators, third-party providers, distributors and other contractors on our behalf.
● The accidental or unlawful loss, unavailability or alteration of clinical trial data from completed or ongoing clinical trials for any of our product candidates could affect our ability to operate, result in delays in our development and regulatory approval efforts, and significantly increase our costs to recover or reproduce the data.
−Removed: ● The size and complexity of our systems may make them potentially vulnerable to breakdown or interruption, whether due to computer viruses or other causes, which may result in the loss of key information or the impairment of production and other supply chain processes, adversely affecting our business.
−Removed: ● Any data security incident or other event, either on its own or as a pattern, may require costly response and remediation efforts, trigger notification obligations under breach notification laws, result in litigation or adverse regulatory action arising from or related to such an incident or event, damage our reputation, and result in significant additional expense to implement further data protection measures.
+Added: ● Any such security incident may require costly response and remediation efforts, trigger notification obligations under breach notification laws or contractual notification requirements, result in time consuming, distracting and expensive litigation or adverse regulatory action arising from or related to such an incident, damage our reputation, and result in significant additional expense to implement further data protection measures.
Integrating the systems and data of any acquired entity may increase these risks due to unforeseen threats and vulnerabilities.
−Removed: ● Similarly, any data security incident or other event experienced by our collaborators, third-party providers, distributors and other contractors may hinder our product development, supply chain, other business operations, or our regulatory and contractual obligations to others and could also give rise to litigation or adverse regulatory action.
+Added: ● Similarly, any such security incident experienced by our collaborators, third-party providers, distributors and other contractors may hinder our product development, supply chain, other business operations, or our regulatory and contractual obligations to others and could also give rise to litigation or adverse regulatory action.
We have experienced and may continue to experience cyberattacks of varying degrees from time to time.
−Removed: In the second quarter of 2020, we were subject to a cyber-event that resulted in a temporary disruption to some of our internal computer systems.
+Added: In the second quarter of 2020, we were subject to a security incident that resulted in a temporary disruption to some of our internal computer systems.
In response to this incident, we engaged a third-party forensic expert to investigate, and determined that cyber criminals illegally obtained certain personal information of certain current and former employees.
We notified affected individuals and regulators, as we deemed was required or appropriate.
−Removed: We have incurred costs to respond to this incident and may continue to incur costs to support our efforts to enhance our security measures.
−Removed: There can be no assurance that we will be successful in preventing data security incidents or other events nor that we will be successful in mitigating their effects, despite the implementation of security measures for systems and data within our control.
−Removed: Similarly, there can be no assurance that our collaborators, third-party providers, distributors and other contractors will be successful in protecting our data on their systems or in protecting other systems upon which we may rely.
−Removed: Furthermore, breach notification laws are not consistent among jurisdictions, and compliance and other measures in the event of a widespread data security incident could result in a substantial cost and diversion of resources, distract management and technical personnel.
−Removed: Any such data security incident or other event could have a material adverse effect on our business and prospects.
−Removed: Although we maintain cyber liability insurance coverage that may cover certain liabilities in connection with a security breach or other security incident, we cannot be certain our insurance coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on commercially reasonable terms (if at all) or that any insurer will not deny coverage as to any future claim.
+Added: We have incurred costs to respond to this incident, and we expect to continue to incur costs to support our efforts to enhance our security measures.
+Added: There can be no assurance that we will be successful in preventing security incidents nor that we will be successful in mitigating their effects, despite the implementation of security measures for systems, networks and data within our control.
+Added: Similarly, there can be no assurance that our collaborators, third-party providers, distributors and other contractors will be successful in protecting our data on their systems and networks or in protecting other systems and networks upon which we may rely.
+Added: Furthermore, breach notification laws are not consistent among jurisdictions, and compliance and other measures in the event of a security incident could result in a substantial cost expenditure of significant financial or other resources in efforts to investigate or correct the security incident, address and eliminate vulnerabilities and prevent future security incidents, and remediate the security incident, which repairing systems and responding to claims of damages for actual or asserted contract breaches.
+Added: Any such security incident or could have a material adverse effect on our business and prospects.
+Added: Although we maintain cyber insurance coverage that may cover certain of our losses in connection with a security incident, we cannot be certain our insurance coverage will be adequate for losses actually incurred, that insurance will continue to be available to us on commercially reasonable terms (if at all) or that any insurer will not deny coverage as to any future claim.
The successful assertion of one or more large claims against us that exceed available insurance coverage, the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, or denials of coverage, could have a material adverse effect on our business, including our financial condition, results of operations and reputation.
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In addition, in the event we are successful in developing product candidates for distribution and sale in other countries, we would become subject to regulation in such countries.
−Removed: Such foreign regulations and product approval requirements are expected to be time consuming and expensive as well.
+Added: Such foreign regulations and product approval requirements are expected to be time
+Added: consuming and expensive as well.
We may encounter delays or agency rejections during any stage of the regulatory review and approval process based upon a variety of factors, including without limitation the failure to provide clinical data demonstrating compliance with the FDA’s requirements for safety, efficacy and quality.
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In addition, data obtained from trials and studies are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent regulatory approval.
−Removed: Success in preclinical studies and
−Removed: early clinical trials does not ensure that subsequent clinical trials will generate the same or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate.
+Added: Success in preclinical studies and early clinical trials does not ensure that subsequent clinical trials will generate the same or similar results or otherwise provide adequate data to demonstrate the efficacy and safety of a product candidate.
A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in Phase 3 clinical trials, even after seeing promising results in earlier clinical trials.
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Protocol amendments may require us to resubmit protocols to institutional review boards for reexamination or renegotiate terms with contract research organizations and study sites and investigators, all of which may adversely impact the costs or timing of or our ability to successfully complete a trial.
−Removed: Clinical trials required by the FDA for approval of our products may not produce the results we need to move forward in
−Removed: product development or to submit or obtain approval of an NDA.
+Added: Clinical trials required by the FDA for approval of our products may not produce the results we need to move forward in product development or to submit or obtain approval of an NDA.
Success in pre-clinical testing and early phase clinical trials does not assure that late phase clinical trials will be successful.
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In addition, delays in approvals or rejections of marketing applications in the U.S.
−Removed: or other countries may be based upon many factors, including regulatory requests for additional analyses, reports, data, preclinical studies and clinical trials,
−Removed: regulatory questions regarding different interpretations of data and results, changes in regulatory policy during the period of product development and the emergence of new information regarding our product candidates or other products.
+Added: or other countries may be based upon many factors, including regulatory requests for additional analyses, reports, data, preclinical studies and clinical trials, regulatory questions regarding different interpretations of data and results, changes in regulatory policy during the period of product development and the emergence of new information regarding our product candidates or other products.
Also, regulatory approval for any of our product candidates may be withdrawn.
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If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for fast track designation.
−Removed: The FDA has broad discretion whether or not to grant this designation.
+Added: The FDA has broad discretion whether or not to grant
+Added: this designation.
Even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it.
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The process for bringing a biosimilar product to market is uncertain and may be drawn out for an extended period of time.
−Removed: The FDA is in the process of publishing regulations governing this process and only 16 biosimilar applications have been approved as of December 31, 2018.
Approval of biosimilar applications may be delayed by exclusivity on the BLA for the reference product for up to 12 years.
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Biosimilar applicants must seek a separate FDA determination that they are “interchangeable” with the reference drug, meaning that they can be expected to produce the same clinical result in any given patient without an increase in risk due to switching from the brand product.
−Removed: None of the 16 biosimilar products that have been approved by the FDA have been approved as “interchangeable” and therefore, are not substitutable for the referenced drug.
−Removed: The statutory standards for determining biosimilarity and interchangeability are broad and uncertain, and the FDA has broad discretion to determine the nature and extent of product characterization, nonclinical testing and clinical testing on a product-by-product basis.
−Removed: Products approved based on biosimilarity without an FDA determination of interchangeability may not be substitutable at the retail pharmacy level.
+Added: The first interchangeable biosimilar product, an insulin glargine product, was approved in July 2021.
+Added: The statutory standards for determining biosimilarity and interchangeability are broad and subject to change, and the FDA has broad discretion to determine the nature and extent of product characterization, nonclinical testing and clinical testing on a product-by-product basis.
+Added: Products approved based on biosimilarity without an FDA determination of interchangeability may not be substitutable
+Added: at the retail pharmacy level.
Some states have passed laws limiting pharmacy substitution to biosimilar products that the FDA has determined to be interchangeable, as well as restrictions on the substitution of interchangeable biosimilar products.
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Although the drug delivery devices we currently use in our products and product candidates are provided by third parties, we have entered into collaboration agreements with various medical device manufacturers to develop drug delivery systems to be used for our pipeline products.
−Removed: These drug-device combination products are particularly complex, expensive and time-consuming to develop due to the number of variables involved in
−Removed: the final product design, including ease of patient and doctor use, establishing clinical efficacy, reliability and cost of manufacturing, regulatory approval requirements and standards and other important factors.
+Added: These drug-device combination products are particularly complex, expensive and time-consuming to develop due to the number of variables involved in the final product design, including ease of patient and doctor use, establishing clinical efficacy, reliability and cost of manufacturing, regulatory approval requirements and standards and other important factors.
We will be responsible for any regulatory filings arising from this collaboration and, although we have significant in-house and external regulatory expertise, we have never prepared or submitted an NDA to the FDA for a drug-device combination product.
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A reduction in the availability of, or the coverage and/or reimbursement for, drug delivery devices used with our products could have a material adverse effect on our product sales, business and results of operations.
+Added: Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
+Added: Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed abroad.
+Added: In addition to regulations in the United States, to market and sell our products in the European Union, many Asian countries and other jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements, both from a clinical and manufacturing perspective.
+Added: Approval by the FDA does not ensure approval by regulatory or payor authorities in other countries or jurisdictions, and approval by one regulatory or payor authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA.
+Added: However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.
+Added: For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.
+Added: Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.
+Added: In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction.
+Added: In some cases, the price that we intend to charge for our products is also subject to approval.
+Added: A product candidate that has been approved for sale in a particular country may not receive reimbursement approval in that country.
+Added: We may not be able to obtain approvals from regulatory authorities or payor authorities outside the United States on a timely basis, if at all.
+Added: Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions.
+Added: Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries.
+Added: We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets.
+Added: If we are unable to obtain approval of any of our product candidates by regulatory or payor authorities in the European Union, Asia or elsewhere, or if we fail to comply with the regulatory requirements in foreign jurisdictions, the commercial prospects of that product candidate may be significantly diminished, and our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.
+Added: Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country.
+Added: Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods.
+Added: Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials, which would be costly and time consuming.
+Added: Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
+Added: Further, in Europe, the implementation of the Clinical Trials Regulation depends on confirmation of full functionality of the Clinical Trials Information System (CTIS) through an independent audit, which commenced in September 2020.
+Added: This new clinical trial portal and database will be maintained by the EMA in collaboration with the European Commission and the European Union Member States.
+Added: The objectives of the new regulation include consistent rules for conducting trials throughout the European Union, consistent data standards and adverse events listing, and consistent information on the authorization status.
+Added: Information on the conduct and results of each clinical trial carried out in the European Union will be made publicly available.
+Added: In addition, a new pan-European clinical trial data information database has been created that will be complementary to the database established for pharmacovigilance (Regulation (EC) No 726/2004 with respect to centrally authorized medicinal products).
+Added: The Commission Implementing Regulation (EU) No 520/2012 outlines the practical implications for marketing authorization holders, national competent authorities, and the EMA.
+Added: Also, Commission Delegated Regulation (EU) No 357/2014 on post-authorization efficacy studies specifies the situations in which such studies may be required.
+Added: Post-authorization efficacy studies may be required where concerns relating to some aspects of efficacy of the medicinal product are identified and can be resolved only after the medicinal product has been marketed, or where the understanding of the disease, the clinical methodology or the use of the
+Added: medicinal product under real-life conditions indicate that previous efficacy evaluations might have to be revised significantly.
+Added: Brexit is also expected to disrupt the operation of pre- and post-authorization clinical trial infrastructure.
+Added: The rules around GMP and pharmacovigilance in the UK currently remain similar to the EU requirements, but new UK-specific requirements or changes to current requirements could be implemented in the future, which could expose us to liability under UK-specific laws and regulations and increased costs associated with compliance with such new laws and regulations.
+Added: Within the UK, requirements for clinical trials, marketing authorization, and post-approval compliance in Great Britain may differ from those of Northern Ireland, Scotland, and/or Wales.
+Added: Satisfying these and other regulatory requirements can be costly, time consuming, uncertain and subject to unanticipated delays.
+Added: In addition, our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in other countries.
+Added: We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets.
+Added: If we fail to comply with regulatory requirements in international markets or fail to obtain and maintain required approvals, our ability to realize the full market potential of our products will be harmed.
+Added: Uncertainty in the regulatory framework and future legislation can lead to disruption in the execution of international multi-center clinical trials, the monitoring of adverse events in through pharmacovigilance programs, the evaluation of the benefit-risk profiles of new medicinal products, and determination of marketing authorization across different jurisdictions.
+Added: There could also be disruption to the supply and distribution as well as the import/export both of active pharmaceutical ingredients and finished product.
+Added: Such a disruption could create supply difficulties for ongoing clinical trials and may damage the integrity of the pharmacovigilance database for the safety of new products.
+Added: The cumulative effects of the disruption to the regulatory framework, uncertainty in future regulation, and changes to existing regulations may add considerably to the development lead time to marketing authorization and commercialization of products in the European Union and/or the United Kingdom and increase our costs.
+Added: We cannot predict the impact of such changes and future regulation on our business or the results of our operations.
If branded pharmaceutical companies are successful in limiting the use of generics through their legislative, regulatory and/or other efforts, our sales of generic products may suffer.
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In addition to formulary tier co-pay differentials, private health insurance companies and self-insured employers have been raising co-payments required from beneficiaries, particularly for proprietary pharmaceuticals and biotechnology products.
−Removed: Private health insurance companies also are increasingly imposing utilization management tools, such as requiring prior authorization for a proprietary product if a generic product is available or requiring the patient to first fail on one or more generic products
−Removed: before permitting access to a proprietary medicine.
+Added: Private health insurance companies also are increasingly imposing utilization management tools, such as requiring prior authorization for a proprietary product if a generic product is available or requiring the patient to first fail on one or more generic products before permitting access to a proprietary medicine.
We do not currently have any managed care organization agreements and do not intend to have managed care organization agreements in the future.
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All facilities of Amphastar and our subsidiaries are periodically subject to inspection by the FDA and other governmental entities, and operations at these facilities could be interrupted or halted if the FDA or another governmental entity deems such inspections as unsatisfactory.
−Removed: For example, our facilities in Rancho Cucamonga, CA, South El Monte, CA and Nanjing, China were all subject to FDA cGMP inspections during 2019.
+Added: For example, our facilities in Rancho Cucamonga, CA, South El Monte, CA and Nanjing, China were all subject to FDA cGMP inspections during 2019 as well as pre-approval, routine and other inspections by the FDA, state, and other regulatory authorities in the future per applicable law.
Products manufactured in our facilities must be made in a manner consistent with cGMP or similar standards in each territory in which we manufacture.
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Additionally, any contract manufacturing organization that we engage will be subject to the same cGMP regulations as us, and any failure on their part to comply with FDA or other governmental regulations will result in similar consequences.
+Added: From June 14, 2021 through June 22, 2021, our Amphastar facility in Rancho Cucamonga, California was subject to a pre-approval inspection by the FDA.
+Added: The inspection included a review of our corrective actions taken from the previous cGMP inspection in February 2019, as well as a review of the data supporting our pending applications.
+Added: The inspections resulted in multiple observations on Form 483.
+Added: We fully responded to those observations on July 14, 2021.
+Added: We believe that our responses to the observations have satisfied the requirements of the FDA
Our operations are subject to environmental, health and safety and other laws and regulations, with which compliance is costly and which exposes us to penalties for non-compliance.
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The Affordable Care Act made extensive changes to the delivery of health care in the United States.
−Removed: We expect that the rebates, discounts, taxes and other costs resulting from the Affordable Care Act over time will have a negative effect on our expenses and profitability in the future.
+Added: We expect that the rebates, discounts, taxes and other costs resulting from the Affordable Care Act over time will have a negative effect
+Added: on our expenses and profitability in the future.
Furthermore, the Independent Payment Advisory Board created by the Affordable Care Act to reduce the per capita rate of growth in Medicare spending could potentially limit access to certain treatments or mandate price controls for our products.
Moreover, expanded government investigative authority and increased disclosure obligations may increase the cost of compliance with new regulations and programs.
−Removed: Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, and we expect that there will be additional challenges and amendments to the Affordable Care Act in the future, which may result in the modification, repeal, or invalidation of all or certain provisions of the Affordable Care Act.
−Removed: Most recently, the Tax Act was enacted, which, among other things, removes penalties for not complying with the individual mandate to carry health insurance.
−Removed: On December 18, 2019, the U.S.
−Removed: Court of Appeals for the 5th Circuit upheld the District Court ruling that the individual mandate was unconstitutional and remanded the case to the District Court to determine whether the remaining provisions of the ACA are invalid.
−Removed: On March 2, 2020, the U.S.
−Removed: Supreme Court granted the petitions for writs of certiorari to review this case and held oral arguments in November 2020.
−Removed: It is unclear how this decision, subsequent appeals, other efforts to repeal and replace the ACA, and healthcare measures of the incoming Administration will impact the ACA and our business.
−Removed: In addition, the Trump administration announced several executive orders related to prescription drug pricing in 2020.
−Removed: The FDA also released a final rule in September 2020 providing guidance for states to build and submit importation plans for drugs from Canada.
−Removed: We cannot predict what other health care programs and regulations will ultimately be implemented at the federal or state level or the effect of any future legislation or regulation in the United States may have on our business.
+Added: Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, or ACA.
+Added: In June 2021, the United States Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA.
+Added: Accordingly, the ACA remains in effect in its current form.
+Added: It is unclear how this Supreme Court decision, future litigation, or healthcare measures promulgated by the Biden administration will impact our business, financial condition and results of operations.
+Added: Complying with any new legislation or changes in healthcare regulation could be time-intensive and expensive, resulting in material adverse effect on our business.
In addition, there have been a number of other legislative and regulatory proposals aimed at changing the pharmaceutical industry.
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● requires electronic submission of certain marketing applications following the issuance of final FDA regulations.
−Removed: The full impact on our business of the new laws is uncertain;
+Added: The full impact of new laws and regulations and changes to any existing regulations by the Biden administration is uncertain;
however, we anticipate that it will have an adverse effect on our results of operations.
−Removed: 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.
−Removed: For example, at the federal level, the Trump administration released a “Blueprint” to lower drug prices and reduce out-of-pocket costs of prescription drugs that contains additional proposals to increase manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products and reduce the out-of-pocket costs of drug products paid by consumers.
−Removed: Additionally, on January 31, 2019, HHS Office of Inspector General proposed modifications to federal Anti-Kickback Statute safe harbors which, among other things, may affect rebates paid by manufactures to Medicare Part D plan sponsors, Medicaid managed care organizations, and those entities’ pharmacy benefit managers, the purpose of which is to further reduce the cost of drug products to consumers.
−Removed: On October 9, 2019, HHS, OIG and CMS issued two proposed rules that set forth modifications to the Federal Anti-Kickback Statute, Civil Monetary Penalties Law and Physician Self-Referral Law (or the Stark Law) regulations to promote value-based and coordinated care arrangements, which were finalized in final rules published in December 2020.
−Removed: In particular, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
−Removed: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturer.
−Removed: In December 2020, CMS issued a final rule that sets forth various changes to manufacturer price reporting under the Medicaid Drug Rebate Program and provisions relating to pharmacy benefit manager accumulator programs, Best Price reporting related to certain value-based purchasing arrangements, line extensions, and Average Manufacturer Price reporting for authorized generics.
+Added: 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
+Added: pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.
+Added: For example, in 2020, HHS and CMS under the Trump administration issued final rules that were expected to impact, among others, price reductions from pharmaceutical manufacturers to plan sponsors under Part D, fee arrangements between pharmacy benefit managers and manufacturers, manufacturer price reporting requirements under the Medicaid Drug Rebate Program, including regulations that affect manufacturer-sponsored patient assistance programs subject to pharmacy benefit manager accumulator programs and Best Price reporting related to certain value-based purchasing arrangements.
+Added: Multiple lawsuits have been brought against the HHS challenging various aspects of the rules.
+Added: The impact of these lawsuits as well as legislative, executive, and administrative actions of the Biden administration on us and the pharmaceutical industry as a whole is currently unknown.
+Added: Further, in January 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare.
+Added: Under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated.
+Added: Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business.
+Added: In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at increasing competition for prescription drugs.
+Added: In response to this executive order, the HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and potential legislative policies that Congress could pursue to advance these principles.
+Added: In November 2021, the Biden administration also announced a prescription drug plan in Build Back Better framework, which proposes allowing Medicare to negotiate prescription drug prices, imposing a tax penalty if drug companies increase their prices faster than inflation, and directly lowering out-of-pocket costs for seniors.
+Added: Congress is considering legislation that addresses these proposals which, if passed, could have significant impact on prices of prescription drugs covered by Medicare.
+Added: The impact of these legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is unclear.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our approved products.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
+Added: For example, in September 2020, the Governor of California signed legislation that brings California one step closer to establishing its own generic drug label, which could have significant impact on the generic drug industry and generic drug pricing.
+Added: A number of states are also considering or have recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws.
Additionally, we encounter similar regulatory and legislative issues in most other countries.
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health care system, or to the health care systems of other markets in which we operate, those reforms could have a material adverse effect on our business, financial position and results of operations and could cause the market value of our common stock to decline.
−Removed: Laws in the U.S., Europe, and other jurisdictions impose restrictive regulations addressing the collection, use, and other processing of personal information.
−Removed: We also must comply with data protection and privacy requirements.
−Removed: Compliance with these laws, rules and regulations regarding privacy, security and protection of personal data and personal information, including about our personnel, business partners, and others, could result in higher compliance and technology costs for us.
+Added: Complying with laws in the U.S., Europe, and other jurisdictions that impose restrictive regulations addressing the collection, use, and other processing of personal information may be expensive, and failure to comply with such laws and regulations could cause substantial harm to our business.
+Added: We also must comply with data protection, security and privacy requirements.
+Added: Compliance with laws, rules and regulations regarding privacy, security and protection of personal information, including about our personnel, business partners, and others, could result in higher compliance and technology costs for us.
Significant fines, penalties, damages and harm to our global reputation and our brand could result from actual or perceived non-compliance.
−Removed: We may collect, process, use or transfer personal information from individuals located in the European Union in connection with our business.
−Removed: The collection and use of personal data in the European Union are governed by the provisions of the General Data Protection Regulation ((EU) 2016/679), or the GDPR.
−Removed: This legislation imposes requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such information outside of the European Economic Area, including to the United States, providing details to those individuals regarding the processing of their personal information, keeping personal information secure, having data processing agreements with third parties who process personal information, responding to individuals’ requests to exercise their rights in respect of their personal information, reporting security breaches involving personal data to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments and record-keeping.
−Removed: The GDPR imposes significant responsibilities and liabilities in relation to personal data that we process, and we may be required to put in place additional mechanisms designed to comply with the GDPR.
−Removed: Failure to comply with the requirements of the GDPR and related national data protection laws of the member states of the European Union may result in investigations, substantial fines, civil claims, and damages
−Removed: being brought against us, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Further, the United Kingdom exited the EU effective January 31, 2020, subject to a transition period that ended December 31, 2020.
−Removed: Brexit has created uncertainty with regard to the regulation of data protection in the United Kingdom.
−Removed: The United Kingdom has implemented legislation that substantially implements the GDPR, and the European Commission and the United Kingdom government announced a EU-UK Trade and Cooperation Agreement on December 24, 2020, providing for a temporary free flow of personal data between the EU and the United Kingdom, but it remains to be seen how the United Kingdom’s withdrawal from the EU will impact the manner in which United Kingdom data protection laws or regulations will develop and how data transfers to and from the United Kingdom will be regulated and enforced by the UK Information Commissioner’s Office, EU data protection authorities, or other regulatory bodies in the longer term.
+Added: We collect, process, use, store, transmit and transfer personal information from individuals located in the EU in connection with our business.
+Added: The collection, processing, storage, transmission, transfer and use of personal information
+Added: in the EU are governed by the provisions of the General Data Protection Regulation ((EU) 2016/679), or the GDPR.
+Added: This legislation imposes requirements relating to having legal bases for processing personal information relating to identifiable individuals and transferring such information outside of the European Economic Area, to third countries that have not been found to provide adequate protection to such personal information, including to the U.S., providing details to those individuals regarding the processing of their personal information, keeping personal information secure, having data processing agreements with third parties who process personal information, responding to individuals’ requests to exercise their rights in respect of their personal information, reporting security breaches involving personal information to the competent national data protection authority and affected individuals, appointing data protection officers, conducting data protection impact assessments and record-keeping.
+Added: The GDPR imposes significant responsibilities and liabilities in relation to personal information that we process, and we may be required to put in place additional mechanisms designed to comply with the GDPR.
+Added: Failure to comply with the requirements of the GDPR and related national data protection laws of the member states of the EU may result in investigations, substantial fines up to the greater of €20 million or 4% of annual global turnover, civil claims, and damages being brought against us, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: While the GDPR applies uniformly across the EU, each EU member State is permitted to issue nation-specific data protection legislation, which has created inconsistencies on a country-by country basis.
+Added: Further, the United Kingdom’s exit from the EU, often referred to as Brexit, and ongoing developments in the United Kingdom have created further uncertainty with regard to the regulation of data protection and privacy in the United Kingdom.
+Added: The United Kingdom has implemented legislation that substantially implements the GDPR, and the European Commission and issued an adequacy decision under the GDPR and the Law Enforcement Directive on June 28, 2021, pursuant to which personal information generally may be transferred from the EU to the United Kingdom without restriction;
+Added: however, this adequacy decision is subject to a four-year “sunset” period, after which the European Commission’s adequacy decision may be renewed.
+Added: During that period, the European Commission will monitor the legal situation in the United Kingdom and may intervene at any time with respect to its adequacy decision.
+Added: The United Kingdom’s adequacy determination therefore is subject to future uncertainty and may be subject to modification or revocation in the future, with the United Kingdom potentially being considered an inadequate third country under the GDPR and transfers of personal information from the European Economic Area to the United Kingdom will require a transfer mechanism.
+Added: Furthermore, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection law as between the United Kingdom and European Economic Area.
In addition, U.S.
2 unchanged sentences
The CCPA gives California residents, among other things, expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.
−Removed: The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.
+Added: The CCPA also provides for civil penalties for violations, as well as a private right of action for certain data breaches that may increase data breach litigation.
The CCPA will be expanded substantially on January 1, 2023 when the California Privacy Rights Act of 2020, or the CPRA, which was approved by California voters in November 2020, becomes fully operative.
2 unchanged sentences
The potential effects of the CCPA and CPRA are far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
−Removed: Additionally, other jurisdictions are considering new or expanded laws or regulations relating to privacy and data protection.
−Removed: With the GDPR, CCPA, CPRA, and other laws, regulations and other obligations relating to privacy and data protection imposing new and relatively burdensome obligations, and with substantial uncertainty over the interpretation and application of these and other obligations, we may face challenges in addressing their requirements, putting in place additional compliance mechanisms and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.
−Removed: Additionally, if third parties we work with, such as vendors or service providers, violate applicable laws or regulations or our policies, such violations may also put our data at risk and could in turn have an adverse effect on our business.
−Removed: Any failure or perceived failure by us or our service providers to comply with our applicable policies or notices relating to privacy or data protection, our contractual or other obligations to third parties, or any of our other legal obligations relating to privacy or data protection, may result in governmental investigations or enforcement actions, litigation, claims and other proceedings, and could result in significant fines, penalties, and other liability.
+Added: The CCPA and CPRA could mark the beginning of a trend toward more stringent data protection, security and privacy legislation in the U.S.
+Added: The CCPA has prompted a number of proposals for federal and state privacy legislation.
+Added: For example, in March 2021, Virginia enacted the Virginia Consumer Data Protection Act, or CDPA, a comprehensive privacy statute that becomes effective on January 1, 2023 and shares similarities with the CCPA and the CPRA, but also imposes security and assessment requirements for businesses.
+Added: In addition, on July 7, 2021, Colorado enacted the Colorado Privacy Act, or CPA, which closely resembles the CDPA.
+Added: The CPA and CDPA will be enforced by the respective states’ Attorney General and district attorneys.
+Added: Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent data protection, security and privacy legislation in the U.S.
+Added: The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
+Added: We may also publicly post privacy policies and other documentation regarding our collection, use, storage, transmission, transfer and other processing of personal information.
+Added: Although we endeavor to comply with our public policies and
+Added: documentation, we may at times fail to do so or be alleged to have failed to do so.
+Added: Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or contractors fail to comply with our published policies and documentation.
+Added: Such failures can subject us to potential regulatory action if they are found to be deceptive, unfair or misrepresentative of our actual practices.
+Added: Additionally, other jurisdictions are considering new or expanded laws or regulations relating to privacy, security and data protection.
+Added: With these laws, regulations and other obligations relating to privacy, security and data protection imposing new and relatively burdensome obligations, which may be inconsistent between jurisdictions or in conflict with each other due to differing applications and interpretations, and with substantial uncertainty over further interpretation and application of these and other obligations, we may face challenges in addressing their requirements, putting in place additional compliance mechanisms and making necessary changes to our policies, contracts and practices, and may incur significant costs and expenses in an effort to do so.
+Added: Additionally, if we or third parties we work with, such as our third-party providers, violate applicable laws or regulations or our policies, such violations may also put our data at risk and could in turn have an adverse effect on our business.
+Added: Any failure or perceived failure by us or our service providers to comply with our applicable policies or notices relating to privacy, security or data protection, our contractual or other obligations to third parties, or any of our other legal obligations relating to privacy, security or data protection, may result in public criticism, governmental investigations or enforcement actions, litigation, claims and other proceedings, and could result in significant fines, penalties, and other liability.
Additionally, defending against any claims, litigation, regulatory proceedings, or other proceedings can be costly, time-consuming and may require significant financial and personnel resources.
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Such pressures have increased as a result of the Medicare Prescription Drug Improvement and Modernization Act of 2003, or the MMA, due to the enhanced purchasing power of the private sector plans that negotiate on behalf of Medicare beneficiaries.
−Removed: In 2020, the Trump administration announced several executive orders related to prescription drug pricing that seek to implement several of the administration's proposals.
−Removed: The FDA also released a final rule on September 24, 2020 providing guidance for states to build and submit importation plans for drugs from Canada.
−Removed: Recently, the HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
−Removed: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.
−Removed: The likelihood of implementation of any of the other Trump administration reform initiatives is uncertain, particularly in light of the transition to the incoming Administration.
−Removed: We cannot predict how these and future federal and state cost control initiatives will impact our business or the pricing of our products.
−Removed: In addition, if the MMA or the Affordable Care Act were amended to impose direct governmental price controls and access restrictions, it would have a significant adverse impact on our business.
−Removed: Furthermore, managed care organizations, as well as Medicaid and other government agencies, continue to seek price discounts.
−Removed: Some states have implemented, and other states are considering, price controls or patient access constraints under the Medicaid program, and some states are considering price-control regimes that would affect rebate levels and apply to broader segments of their populations that are not Medicaid-eligible.
−Removed: Further, there continue to be legislative proposals to amend U.S.
−Removed: laws to allow the importation into the U.S.
−Removed: of prescription drugs, which can be sold at prices that are regulated by the governments of various foreign countries.
−Removed: In addition to well-documented safety concerns, such as the increased risk of counterfeit products entering the supply chain, such importation could impact pharmaceutical prices in the U.S.
−Removed: At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
−Removed: Some of our products are marketed without FDA approval and may be subject to enforcement actions by the FDA.
−Removed: Some of our prescription products are marketed without FDA approval.
−Removed: These products, like many other prescription drugs on the market that have not been formally evaluated as being effective by the FDA, contain active ingredients that were first marketed prior to the enactment of the Federal Food, Drug, and Cosmetic Act, or FFDCA.
−Removed: The FDA has assessed these products in a program known as the “Prescription Drug Wrap-Up” and has stated that these drugs cannot be lawfully marketed unless they comply with certain “grandfather” exceptions to the definition of “new drug” in the FFDCA.
−Removed: These exceptions have been strictly construed by FDA and by the courts, and the FDA has stated that it is unlikely that any of the unapproved prescription drugs on the market, including certain of our drugs, qualify for the exceptions.
−Removed: At any time, the FDA may require that some or all of our unapproved prescription drugs be submitted for approval and may direct us to recall these products and/or cease marketing the products until they are approved.
−Removed: The FDA may also take enforcement actions based on our marketing of these unapproved products, including but not limited to the issuance of an untitled letter or a warning letter, judicial action seeking an injunction, product seizure and/or civil or criminal penalties.
+Added: In 2020, HHS and CMS under the Trump administration issued final rules that were expected to impact, among others, price reductions from pharmaceutical manufacturers to plan sponsors under Part D, fee arrangements between pharmacy benefit managers and manufacturers, manufacturer price reporting requirements under the Medicaid Drug Rebate Program, including regulations that affect manufacturer-sponsored patient assistance programs subject to pharmacy benefit manager accumulator programs and Best Price reporting related to certain value-based purchasing arrangements.
+Added: Multiple lawsuits have been brought against the HHS challenging various aspects of the rules.
+Added: Among other legislative proposals on prescription drug pricing, in November 2021, the Biden administration also announced a prescription drug plan in Build Back Better framework, which proposes allowing Medicare to negotiate prescription drug prices, imposing a tax penalty if drug companies increase their prices faster than inflation, and directly lowering out-of-pocket costs for seniors.
+Added: Congress is considering legislation that addresses these proposals which, if passed, could have significant impact on prices of prescription drugs covered by Medicare.
+Added: The impact of these legislative, executive, and administrative
+Added: actions and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is unclear.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our approved products.
+Added: Our epinephrine prefilled syringe is marketed without FDA approval and may be subject to enforcement actions by the FDA.
+Added: Our epinephrine prefilled syringe prescription product is marketed without FDA approval.
+Added: This product, like many other prescription drugs on the market that have not been formally evaluated as being effective by the FDA, contains active ingredients that were first marketed prior to the enactment of the Federal Food, Drug, and Cosmetic Act, or FFDCA.
+Added: The FDA has assessed this product in a program known as the “Prescription Drug Wrap-Up” and has stated that this drug cannot be lawfully marketed unless they comply with certain “grandfather” exceptions to the definition of “new drug” in the FFDCA.
+Added: These exceptions have been strictly construed by FDA and by the courts, and the FDA has stated that it is unlikely that any of the unapproved prescription drugs on the market, including of our drug, qualify for the exceptions.
+Added: At any time, the FDA may require that our unapproved prescription drug be submitted for approval and may direct us to recall this product and/or cease marketing the product until they are approved.
+Added: The FDA may also take enforcement actions based on our marketing of this unapproved product, including but not limited to the issuance of an untitled letter or a warning letter, judicial action seeking an injunction, product seizure and/or civil or criminal penalties.
The enforcement posture could change at any time and our ability to market such drugs could terminate with little or no notice.
−Removed: Moreover, if our competitors seek and obtain approval and market FDA-approved prescription products that compete against our unapproved prescription products, we would be subject to a higher likelihood that the FDA may seek to take action against our unapproved products.
+Added: Moreover, if our competitors seek and obtain approval and market FDA-approved prescription products that compete against our unapproved prescription product, we would be subject to a higher likelihood that the FDA may seek to take action against our unapproved product.
Such competitors have brought and may bring claims against us alleging unfair competition or related claims.
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During the third quarter of 2010, the FDA requested that we reintroduce several of the withdrawn products to help address a national drug shortage, while we prepared and filed applications for approval of the products.
−Removed: Between August and October 2010, we reintroduced morphine, dextrose, and epinephrine prefilled syringes.
+Added: Between August and October 2010, we reintroduced our epinephrine prefilled syringes.
In February 2017, the FDA requested that we discontinue the manufacturing and distribution of our epinephrine injection, USP vial product, which had been marketed under the “grandfather” exception to the “FDA’s Prescription Drug Wrap-Up program”.
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In April 2020, the FDA granted approval of our Epinephrine Injection USP 30mg/mL Multiple Dose Vial, and we launched the product in May 2020.
−Removed: The FDA granted approval of our Atropine Sulfate Injection 0.1mg/mL in the 10mL Luer-Jet ® Prefilled Syringe in October 2020.
−Removed: For the years ended December 31, 2020, 2019, and 2018, we recorded net revenues of $23.1 million, $27.1 million, and $19.1 million, respectively, from our unapproved products.
−Removed: Our unapproved products currently on the market include:
−Removed: morphine, dextrose and epinephrine prefilled syringes.
−Removed: We have filed two ANDAs and one NDA with respect to our remaining unapproved products in order to mitigate all risk associated with the marketing of unapproved drug products.
−Removed: Prior to the approval of our ANDA and NDA submissions, we continue to operate in compliance with the FDA Compliance Policy Guide, CPG Sec.
+Added: The FDA granted approval of our Atropine Sulfate Injection 0.1mg/mL in the 10mL Luer-Jet ® Prefilled Syringe in October 2020, our Dextrose Injection 50% in the 50mL Luer-Jet ® Prefilled Syringe in March 2021 and our Morphine Sulfate Injection USP, 1mh/mL 30mL in April 2021.
+Added: Our only unapproved product currently on the market is epinephrine prefilled syringes.
+Added: For the years ended December 31, 2021, 2020, and 2019, we recorded net revenues of $27.8 million, $13.2 million, and $13.9 million, respectively, for epinephrine prefilled syringes.
+Added: We filed an NDA for our epinephrine prefilled syringes in order to mitigate all risk associated with the marketing of unapproved drug products.
+Added: Prior to the approval of our NDA submission, we continue to operate in compliance with the FDA Compliance Policy Guide, CPG Sec.
440.100 Marketed New Drugs Without Approved NDAs and ANDAs.
−Removed: Recently, the HHS announced that termination of the FDA Unapproved Drugs Initiative (UDI), citing that the Compliance Policy Guide (CPG) issued with the UDI was “linked to prescription drug price increases and shortages” and announced its withdrawal.
−Removed: The long-term impact of this policy and other measures of the incoming Administration on our business remains unclear.
+Added: In 2020, the HHS announced that termination of the FDA Unapproved Drugs Initiative (UDI), citing that the Compliance Policy Guide (CPG) issued with the UDI was “linked to prescription drug price increases and shortages” and announced its withdrawal.
+Added: However, under the Biden administration, in May 2021, HHS and FDA, each under new leadership, jointly issued a withdrawal-of-the-termination notice, withdrawing the prior HHS notice of termination issued under the Trump administration, citing multiple legal and factual inaccuracies.
+Added: New guidance from the agency is anticipated in the future.
+Added: The long-term impact of this policy and other measures promulgated by the Biden administration on our business remains unclear.
Our reporting and payment obligations under the Medicare and/or Medicaid drug rebate programs and other governmental purchasing and rebate programs are complex and may involve subjective decisions that could change as a result of new business circumstances, new regulatory guidance or advice of legal counsel.
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These investigations could have a material adverse effect on our business, financial position and results of operations.
−Removed: In December 2020, CMS issued a final rule that sets forth various changes to manufacturer price reporting under the Medicaid Drug Rebate Program and provisions relating to pharmacy benefit manager accumulator programs, Best Price reporting related to certain value-based purchasing arrangements, line extensions, and Average Manufacturer Price reporting for authorized generics.
+Added: For example, under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated.
+Added: Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business.
+Added: In November 2021, the Biden administration also announced a prescription drug plan in Build Back Better framework, which proposes allowing Medicare to negotiate prescription drug prices, imposing a tax penalty if drug companies increase their prices faster than inflation, and directly lowering out-of-pocket costs for seniors.
+Added: As part of the No Surprises Act and the Consolidated Appropriations Act of 2021, the Biden administration has issued an interim final rule that requires private insurers to report prescription drug costs to the federal government.
+Added: The impact of these legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the Biden administration on us and the pharmaceutical industry as a whole is unclear.
Any governmental agencies that have commenced, or may commence, an investigation of our business relating to the sales, marketing, pricing, quality or manufacturing of pharmaceutical products could seek to impose, based on a claim of violation of fraud and false claims laws or otherwise, civil and/or criminal sanctions, including fines, penalties and possible exclusion from federal health care programs including Medicare and/or Medicaid.
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Although our policy is to refrain from statements that could be considered off-label promotion of our products, the FDA or another regulatory agency could disagree and conclude that we have engaged in off-label promotion.
−Removed: In addition, the off-label use of our products may increase the risk of product liability claims.
+Added: In addition, the off-label use of our products may
+Added: increase the risk of product liability claims.
Product liability claims are expensive to defend and could divert our management’s attention, result in substantial damage awards against us and harm our reputation.
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● the federal Physician Payment Sunshine Act, created under the ACA, and its implementing regulations, require applicable manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.
−Removed: Department of Health and Human Services under the Open Payments Program, information related to certain payments or other transfers of value made to physicians, as defined by such law, and teaching
−Removed: hospitals, as well as ownership and investment interests held by physicians and their immediate family members;
−Removed: effective January 1, 2022, reporting obligations of applicable manufacturers will be extended to include additional covered recipients, including payments and transfers of value made during the previous year to certain non-physician providers, such as physician assistants and nurse practitioners, among others;
+Added: Department of Health and Human Services under the Open Payments Program, information related to certain payments and other transfers of value made in the previous year to physicians (defined to include doctors of medicine and osteopathy, dentists, podiatrists, optometrists and licensed chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members;
Foreign Corrupt Practices Act, which prohibits corrupt payments, gifts or transfers of value to non-U.S.
3 unchanged sentences
● state and local laws that require the registration of pharmaceutical sales representatives;
−Removed: ● state and foreign laws also govern the privacy and security of personal information (including health information) in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
+Added: ● state and foreign laws also govern the privacy, protection and security of personal information (including health information) in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
The federal false claims laws have been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers or formulary managers on the other.
15 unchanged sentences
providing free trips, free goods, sham consulting fees and grants and other monetary benefits to prescribers;
−Removed: reporting inflated average wholesale prices that were then used by
−Removed: federal programs to set reimbursement rates;
+Added: reporting inflated average wholesale prices that were then used by federal programs to set reimbursement rates;
engaging in off-label promotion;
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While we have implemented numerous risk mitigation measures to comply with such regulations in this complex operating environment, we cannot guarantee that we will be able to effectively mitigate all operational risks.
−Removed: While we have developed and instituted a corporate compliance program, we cannot guarantee that we, our employees, our consultants or our contractors are or will be in compliance with all potentially applicable U.S.
+Added: have developed and instituted a corporate compliance program, we cannot guarantee that we, our employees, our consultants or our contractors are or will be in compliance with all potentially applicable U.S.
federal and state regulations and/or laws, all potentially applicable foreign regulations and/or laws and/or all requirements of the corporate integrity agreement.
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● disruptions in the construction of the manufacturing facility;
−Removed: ● interruptions to our operations in China or the inability of our manufacturing facility to produce adequate quantities of raw materials or APIs to meet our needs as a result of natural catastrophic events or other causes beyond our control such as power disruptions or widespread disease outbreaks, including the recent outbreaks that impact animal-derived products, such as the importation of pig-derived crude heparin from countries impacted by the African swine flu, and outbreak of the COVID-19 pandemic, which has resulted in and may in the future result in , business closures, transportation restrictions, import and export complications, and otherwise cause shortages in the supply of raw materials or cause disruptions in our manufacturing capability ;
+Added: ● interruptions to our operations in China or the inability of our manufacturing facility to produce adequate quantities of raw materials or APIs to meet our needs as a result of natural catastrophic events or other causes beyond our control such as power disruptions or widespread disease outbreaks, including the recent outbreaks that impact animal-derived products, such as the importation of pig-derived crude heparin from countries impacted by the African swine flu, and ongoing COVID-19 pandemic, which has resulted in and may in the future result in , business closures, transportation restrictions, import and export complications, and otherwise cause shortages in the supply of raw materials or cause disruptions in our manufacturing capability ;
● product supply disruptions and increased costs as a result of heightened exposure to changes in the policies of the Chinese government, political unrest or unstable economic conditions in China;
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These interruptions or failures could impair our ability to operate our business, impede the commercialization of our product candidates or delay the introduction of new products, impact our product quality, or impair our competitive position.
−Removed: We are actively monitoring and assessing the potential impact of the COVID-19 pandemic.
+Added: We are actively monitoring and assessing the ongoing impact of the COVID-19 pandemic.
This includes evaluating the impact on our employees, suppliers, and logistics providers as well as evaluating governmental actions being taken to curtail the spread of the virus.
−Removed: While the Chinese government has been relaxing work restrictions, at this time, it is unclear if the Chinese government will reinstate restrictions or if further restrictions will be put into place by the government.
−Removed: In addition, many countries have placed significant bans on travel to and from China, with many countries
−Removed: and airlines suspending flights to and from mainland China.
+Added: While the Chinese government has been relaxing work restrictions, at this time, it is unclear if the Chinese government will reinstate restrictions or if further restrictions will be put into place by the government in response to new variants.
Any material adverse effect on our employees, suppliers, and logistics providers could have a material adverse effect on our manufacturing operations in China or the supply of raw materials or APIs originating from China.
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For example, we have suppliers in Asia and Europe, and we own manufacturing facilities in Nanjing, China, and Éragny-sur-Epte, France.
−Removed: As a result, a significant portion of our operations is conducted by and/or rely on entities outside the markets in which our products are sold, and, accordingly, we import a substantial number of products into such markets.
+Added: As a result, a significant portion of our operations is conducted by and/or rely on entities outside the markets in which our products are sold, and, accordingly,
+Added: we import a substantial number of products into such markets.
We may, therefore, be denied access to our customers or suppliers or denied the ability to ship products from any of our sites as a result of a closing of the borders of the countries in which we sell our products, or in which our operations are located, due to economic, legislative, political and military conditions in such countries.
17 unchanged sentences
● uneven electricity supply that can negatively impact manufacturing;
−Removed: ● heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent
−Removed: sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
+Added: ● heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;
● fluctuations in currency exchange rates and regulatory compliance;
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We anticipate that our current supply of heparin USP in the United States is useable and sufficient for our manufacturing needs for the foreseeable future, and we are investigating the use of heparin USP produced at ANP.
−Removed: If we are unable to import raw materials, rely upon existing supplies of raw materials or manufacture raw materials in sufficient amounts for our manufacturing needs, we may be required to find alternative suppliers or sources of such
−Removed: materials, which could disrupt or delay the manufacturing of our products.
+Added: If we are unable to import raw materials, rely upon existing supplies of raw materials or manufacture raw materials in sufficient amounts for our manufacturing needs, we may be required to find alternative suppliers or sources of such materials, which could disrupt or delay the manufacturing of our products.
The success of our business operations and sales with respect to our heparin products will also depend on our continued efforts to maintain the proper product quality and safety profile of the crude heparin obtained either from China or an alternative source.
2 unchanged sentences
There is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs.
−Removed: There is a possibility that the United States could continue to impose greater restrictions on international trade and significant increases in tariffs on goods imported into the United States.
+Added: There is a possibility that the United States could continue to impose greater restrictions on international trade and significant increases in tariffs on goods imported
+Added: into the United States.
In September 2018, the U.S.
Trade Representative (the “USTR”) enacted a tariff on the import of other Chinese products, with a combined import value of approximately $200 billion.
−Removed: Since that time USTR has imposed tariffs on additional goods.
+Added: Since that time USTR has modified these tariff rates and imposed tariffs on additional goods.
Tariffs on imports of APIs and starting materials used in our products, or retaliatory trade measures taken by China or other countries, including restricted access to APIs or starting materials used in our products, causing us to raise prices or make changes to our products, could materially harm our business, financial condition and results of operations.
Further, the continued threats of tariffs, trade restrictions, and trade barriers could have a generally disruptive impact on the global economy and, therefore, negatively impact our sales.
−Removed: Although the United States and China signed a phase one trade deal on January 15, 2020, given the relatively fluid regulatory environment in China and the United States and uncertainty regarding how the U.S.
−Removed: and the incoming Administration or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could occur and could directly and adversely impact our financial results and results of operations.
+Added: Although the United States and China signed a phase one trade deal on January 15, 2020, given the relatively fluid regulatory environment in China and the United States and the focus that the current U.S.
+Added: Administration has shown on issues related to China along with uncertainty regarding how the U.S.
+Added: or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could occur and could directly and adversely impact our financial results and results of operations.
We are subject to various governmental export control and trade sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate these controls.
2 unchanged sentences
As such, a license may be required to export or re-export our products, or provide related services, to certain countries and end-users, and for certain end-uses.
−Removed: The process for obtaining necessary licenses may be time-consuming or unsuccessful, potentially causing delays in sales or losses of sales opportunities.
+Added: The process for obtaining necessary licenses may be time-consuming or unsuccessful, potentially causing delays in sales or losses of sales opportunities and these licenses may not be issued.
Trade Controls are complex and dynamic regimes and monitoring and ensuring compliance can be challenging.
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For example, we may have to resort to administrative and court proceedings to enforce the legal protections under law or contract.
−Removed: However, since Chinese administrative and court authorities have significant discretion in interpreting and implementing statutory and contract terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and our level of legal protection in China compared to other legal systems.
+Added: However, since Chinese administrative and court authorities have
+Added: significant discretion in interpreting and implementing statutory and contract terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and our level of legal protection in China compared to other legal systems.
Such uncertainties, including the inability to enforce our contracts and intellectual property rights, could materially and adversely affect our business and operations.
17 unchanged sentences
● ANP’s ability to control costs, including its operating expenses.
−Removed: The United Kingdom’s vote to leave the European Union will have uncertain effects and could adversely affect us.
−Removed: On January 31, 2020, the United Kingdom, or UK, left the European Union, or EU, (commonly referred to as the “Brexit”).
−Removed: Brexit creates an uncertain political and economic environment in the UK and potentially across other EU member states for the foreseeable future, including during the transitional period while the UK government continues to negotiate the terms of the UK’s future relationship with the EU, and such uncertainties could impair or limit our ability to transact business in the member EU states.
−Removed: In the long term, the UK may develop its own legislation that diverges from that in the EU.
−Removed: Since the regulatory framework for pharmaceutical products, clinical trials, marketing authorization, commercial sales and distribution of pharmaceutical products is derived from EU directives and regulations, Brexit will materially impact the future regulatory regime which applies to products and the approval of product candidates in the
−Removed: Further, Brexit could adversely affect European and worldwide economic or market conditions and could contribute to instability in global financial markets, and the value of the British pound sterling currency or other currencies, including the euros.
−Removed: We are exposed to the economic, market and fiscal conditions in the UK and the EU and to changes in any of these conditions.
−Removed: Depending on the terms reached regarding Brexit, it is possible that there may be adverse operational implications and disruptions to our commercial and business operations in the UK, including our relationships with potential customers, distribution partners, suppliers and employees.
−Removed: A significant amount of the regulatory regime that applies to us in the UK is derived from EU directives and regulations.
−Removed: No assurance can be given as to the impact of Brexit and, in particular, no assurance can be given that our operating results, financial condition and prospects would not be adversely impacted by the result.
+Added: Our business may be affected by new sanctions and export controls targeting Russia and other responses to Russia's invasion of Ukraine.
+Added: As a result of Russia's invasion of Ukraine, the U.S., the U.K.
+Added: and the EU governments, among others, have developed coordinated sanctions and export-control measure packages.
+Added: Based on the public statements to date, these packages include:
+Added: ● comprehensive financial sanctions against major Russian banks (including SWIFT cut off);
+Added: ● additional designations of Russian individuals with significant business interests and government connections;
+Added: ● designations of individuals and entities involved in Russian military activities;
+Added: ● enhanced export controls and trade sanctions targeting Russia's imports of technological goods as a whole, including potentially tighter controls on exports and reexports of dual-use items, stricter licensing policy
+Added: with respect to issuing export licenses, and/or increased use of "end-use"
+Added: controls to block or impose licensing requirements on exports.
+Added: We currently sell API indirectly to Russian customers.
+Added: The imposition of enhanced export controls and economic sanctions on transactions with Russia and Russian entities by the U.S., the U.K., and/or the EU could prevent us from selling our products to Russian customers.
+Added: In addition, even if a Russian entity is not formally subject to sanctions, customers of such Russian entity may decide to reevaluate, or cancel projects with such entity, and such actions could have a similar impact on us as if sanctions were applied directly as described above.
+Added: Depending on the extent and breadth of new sanctions or export controls that may be imposed against Russia, it is possible that our business, results of operations and financial condition could be adversely affected.
Risks Relating to our Intellectual Property
−Removed: Our success depends on our ability to detect, protect, and enforce our intellectual property.
+Added: Our success depends on our ability to obtain, protect, and enforce our intellectual property.
In addition to obtaining FDA approval for our generic and proprietary drug candidates, our success also depends on our ability to obtain and maintain patent protection for new products developed utilizing our technologies, in the U.S.
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Luo, each of whom serves as a director and an executive officer, own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
−Removed: As of March 1, 2021, Jack Y.
+Added: As of December 31, 2021, Jack Y.
Zhang and Mary Z.
−Removed: Zhang and Luo, each of whom serves as one of our directors and executive officers, and their affiliates beneficially own approximately 25.7% of our outstanding common stock, including shares of common stock subject to options exercisable within 60 days of March 1, 2021.
−Removed: Our directors, executive officers and each of our stockholders who own greater than 5% of our outstanding common stock and their affiliates, in the aggregate, own approximately 28.7% of the outstanding, including shares of our common stock, based on the number of shares outstanding and shares of our common stock subject to options exercisable within 60 days of March 1, 2021.
+Added: Zhang and Luo, each of whom serves as one of our directors and executive officers, and their affiliates beneficially own approximately 25.5% of our outstanding common stock, including shares of common stock subject to options exercisable within 60 days of December 31, 2021.
+Added: Our directors, executive officers and each of our stockholders who own greater than 5% of our outstanding common stock and their affiliates, in the aggregate, own approximately 27.7% of the outstanding, including shares of our common stock, based on the number of shares outstanding and shares of our common stock subject to options exercisable within 60 days of December 31, 2021.
As a result, these stockholders, if acting together, will be able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions.
2 unchanged sentences
Zhang and Mary Z.
−Removed: Luo have pledged shares of our common stock to secure funds borrowed under existing credit lines from three financial institutions.
+Added: Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines from three financial institutions.
Each of the lenders has varying rights as a lender, including one which has the right to conduct a forced sale at its sole discretion.
−Removed: An action by one of the lenders could include a sale of certain shares of the Company’s stock pledged as collateral, the sale of which could cause our stock price to decline.
−Removed: An action to cure and cover indebtedness by any one of the lender could also have other negative impacts on our business.
+Added: An action by one of the lenders could include a sale of certain shares of our common stock pledged as collateral, the sale of which could cause the price our common stock to decline.
+Added: An action to cure and cover indebtedness by any one of the lenders could also have other negative impacts on our business.
Since September 2015, UBS Bank USA, or UBS Utah, has made extensions of credit up to the amount of $8.0 million to Applied Physics & Chemistry Laboratories, Inc., or APCL, which is controlled by Jack Y.
2 unchanged sentences
Since February 2017, UBS AG has also provided an extension of credit up to the amount of $8.0 million to APCL.
−Removed: In 2021, the outstanding UBS AG credit line was transferred to UBS Bank USA due to a UBS organizational change.
−Removed: The total UBS combined credit lines are $17.6 million, which is $11.0 million from UBS Utah plus $6.6 million transferred from UBS AG.
+Added: In 2021, the outstanding UBS AG credit line was transferred to UBS Utah due to a UBS organizational change.
+Added: As of February 16, 2022, the total outstanding UBS combined credit lines were $17.6 million, which consisted of $11.0 million from UBS Utah plus $6.6 million transferred from UBS AG.
The credit lines are secured by a pledge of 2,582,898 shares of our common stock currently held by APCL.
−Removed: Interest on the loan accrues at market rates.
−Removed: UBS has an unlimited and unilateral right to call the credit lines for any reason whatsoever.
+Added: Interest on the loans accrues at market rates.
+Added: UBS has an unlimited and unilateral right to call each of the credit lines for any reason whatsoever.
In October 2017, East West Bank, or East West, entered into an agreement with Drs.
Zhang and Luo whereby East West would loan them up to $5.0 million.
−Removed: The loan is secured by a pledge of 650,000 shares of our common stock held by Dr.
−Removed: Zhang and 550,000 shares of our common stock held by Dr.
+Added: As of February 16, 2022, the loan is secured by a pledge of 600,000 shares of our common stock held by Dr.
Interest on the loan accrues at market rates.
−Removed: East West Bank has acceleration rights to protect it in the event of a default.
−Removed: In May 2018, Drs.
−Removed: Zhang and Luo entered into a business loan agreement with Cathay Bank, or Cathay, for the extension of a credit line up $25.0 million.
−Removed: The loan is secured by pledged shares of 3,800,000 our common stock currently held by APCL or Drs.
+Added: East West Bank has acceleration rights to protect itself in the event of a default.
+Added: During 2021, Drs.
+Added: Zhang and Luo repaid and terminated a previous loan with Cathay Bank, which had been secured by a pledge of 3,800,000 shares of our common stock held by APCL or Drs.
Zhang and Luo.
−Removed: Interest on the loan accrues at market rates.
−Removed: Cathay received customary fees and expense reimbursements in connection with this loan.
−Removed: The credit facility with Cathay Bank has a fifteen day cure period in the event of a default.
We are not a party to these loans, which are full recourse against APCL and each of Drs.
−Removed: Zhang and Luo, respectively, and are secured by pledges of a portion of the shares of our common stock currently beneficially owned by Drs.
+Added: Zhang and Luo, respectively, and are secured by pledges of a portion of the shares of our common stock currently held by APCL and each of Drs.
Zhang and Luo.
+Added: In 2021, we created a pledging policy to restrict the pledging of shares by our executive officers and directors.
+Added: The policy prohibits our executive officers and directors from entering into any transaction whereby the executive officer or director, directly or indirectly, pledges, hypothecates, or otherwise encumbers more than twenty (20) percent of shares of common stock held by the individual or more than five (5) percent of our total outstanding shares of common stock as of the date of the transaction, whichever is lower, as collateral for indebtedness.
+Added: This restriction extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.
+Added: For already existing pledges made by executive officers and directors, those existing pledges must be reduced to no more than twenty (20) percent of the shares of our common stock held by such individual as collateral for indebtedness within three years of December 31, 2021.
+Added: As a result of this policy, Drs.
+Added: Zhang and Luo reduced their total number of pledged shares to 3,182,898 in February 2022 from 8,582,898 in February 2021.
If the price of our common stock declines, Drs.
Zhang and Luo may be forced by these financial institutions to provide additional collateral for the loans or to sell shares of our common stock held by them in order to remain within the margin limitations imposed under the terms of their loans.
−Removed: Furthermore, the pledged shares may be acquired and sold by the lenders.
−Removed: These factors may limit Dr.
−Removed: Zhang and Dr.
−Removed: Luo’s ability to either pledge additional shares of our common stock or sell shares of our common stock held by them as a means to avoid or satisfy a margin call with respect to their pledged common stock in the event of a decline in our stock price that is large enough to trigger a margin call.
−Removed: Any significant sales of our common stock by one or more of these three lenders could cause the price of our common stock to decline further.
+Added: Furthermore, the pledged shares of our common stock may be acquired and sold by the lenders.
+Added: These factors may limit Drs.
+Added: Zhang and Luo’s ability to either pledge additional shares of our common stock or sell shares of our common stock held by them as a means to avoid or satisfy a margin call with respect to their pledged shares of our common stock in the event of a decline in our stock price that is large enough to trigger a margin call.
+Added: Any significant sales of shares of our common stock by one or more of these three lenders could cause the price of our common stock to decline further.
We do not intend to pay dividends for the foreseeable future.
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In addition, our existing loan agreements restrict, and any future indebtedness may restrict, our ability to pay dividends.
−Removed: Investors seeking cash dividends should not purchase our common stock.
+Added: Investors seeking cash dividends should not purchase our
+Added: common stock.
Accordingly, realization of a gain on your investment will depend on the appreciation of the price of our common stock, which may never occur.
While we have engaged in repurchases of our common stock, any future decisions to reduce or discontinue repurchasing our common stock pursuant to our previously announced repurchase program could cause the market price for our common stock to decline.
−Removed: Although our Board has authorized a share repurchase program, and we repurchased approximately 1.4 million of our shares during 2020 for $24.4 million, any determination to continue to execute our stock repurchase program as planned will be subject to, among other things, our financial position and results of operations, available cash and cash flow,
−Removed: capital requirements, and other factors, as well as our Board's continuing determination that the repurchase program is in the best interests of our shareholders and is in compliance with all laws and agreements applicable to the repurchase program.
+Added: Although our Board has authorized a share repurchase program, and we repurchased approximately 1.5 million of our shares during 2021 for $28.9 million, any determination to continue to execute our stock repurchase program as planned will be subject to, among other things, our financial position and results of operations, available cash and cash flow, capital requirements, and other factors, as well as our Board's continuing determination that the repurchase program is in the best interests of our shareholders and is in compliance with all laws and agreements applicable to the repurchase program.
Our stock repurchase program does not obligate us to acquire any specific number of shares.
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(i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a breach of fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws;
−Removed: or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine.
+Added: or (iv) any action
+Added: asserting a claim against us that is governed by the internal affairs doctrine.
This provision is not intended to apply to actions arising under the Securities Act or the Exchange Act, or any claim for which the federal courts have exclusive jurisdiction.
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It is uncertain how long these effects will last or whether economic and financial trends will worsen or improve.
+Added: Changes in economic conditions and supply chain constraints and steps taken by governments and central banks could lead to higher inflation than previously experienced or expected, which could, in turn, lead to an increase in costs.
+Added: In an inflationary environment, we may be unable to raise the prices of our products sufficiently to keep up with the rate of inflation.
Such uncertain economic times may have a material adverse effect on our revenues, results of operations, financial condition and, if circumstances worsen, our ability to raise capital at reasonable rates.
If slower growth in the global economy or in any of the markets we serve continues for a significant period, if there is significant deterioration in the global economy or such markets or if improvements in the global economy don’t benefit the markets we serve, our business and financial statements could be adversely affected.
−Removed: Additionally, as a result of any future global economic downturn, our third-party payers may delay or be unable to satisfy their reimbursement obligations.
+Added: Additionally, as a result of any future global economic downturn, our third-party payers may delay or be unable to
+Added: satisfy their reimbursement obligations.
Sales of our principal products are dependent, in part, on the availability and extent of reimbursement from third-party payers, including government programs such as Medicare and Medicaid and private payer healthcare and insurance programs.
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Although we make efforts to monitor these third parties’ financial condition and their liquidity, our ability to do so is limited, and some of them may become unable to pay their bills in a timely manner, or may even become insolvent, which could negatively impact our business and results of operations.
−Removed: These risks may be elevated with respect to our interactions with third parties with substantial operations in countries where current economic conditions are the most severe, particularly where such third parties are themselves exposed to sovereign risk from
−Removed: business interactions directly with fiscally-challenged government payers.
+Added: These risks may be elevated with respect to our interactions with third parties with substantial operations in countries where current economic conditions are the most severe, particularly where such third parties are themselves exposed to sovereign risk from business interactions directly with fiscally-challenged government payers.
At the same time, significant changes and volatility in the financial markets, in the consumer and business environment, in the competitive landscape and in the global political and security landscape make it increasingly difficult for us to predict our revenues and earnings into the future.
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Though we endeavor to give reasonable estimates of future revenues and earnings at the time we give such guidance, based on then-current conditions, there is a significant risk that such guidance or outlook will turn out to be, or to have been, incorrect.
+Added: Our results of operations can be adversely affected by labor shortages, turnover and labor cost increases.
+Added: Labor is a primary component of operating our business.
+Added: A number of factors may adversely affect the labor force available to us or increase labor costs, including high unemployment levels, federal unemployment subsidies, including unemployment benefits offered in response to the COVID-19 pandemic, and other government regulations.
+Added: We are also experiencing and may continue to experience additional pressure in our supply chain due to labor.
+Added: A sustained labor shortage or increased turnover rates within our employee base, caused by COVID-19 or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business.
+Added: If we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we may take to respond to a decrease in labor availability, such as overtime and third-party outsourcing, have negative effects, our business could be adversely affected.
+Added: An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, caused by COVID-19 or as a result of general macroeconomic factors, could have a material adverse impact on our business, financial condition or operating results.
Failure to maintain adequate internal controls or to implement new or improved controls could have a material adverse effect on our business, financial position and results of operations and could cause the market value of our common stock to decline.
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Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.
−Removed: In addition, we may encounter problems or delays in completing the implementation of any requested improvements and receiving a favorable attestation by our independent registered public accounting firm.
+Added: In addition, we may encounter problems or delays in completing the implementation of any requested
+Added: improvements and receiving a favorable attestation by our independent registered public accounting firm.
In the event that our Chief Executive Officer, Chief Financial Officer, or independent registered public accounting firm determines that our internal control over financial reporting is not effective as defined under Section 404, we could be subject to one or more investigations or enforcement actions by state or federal regulatory agencies, stockholder lawsuits, breaches of the covenants under our credit facilities, or other adverse actions requiring us to incur defense costs, pay fines, make settlements or seek judgments, which may adversely affect investor perceptions and potentially result in a decline in our stock price.
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
−Removed: Generally accepted accounting principles, or U.S.
−Removed: GAAP, in the United States are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles.
+Added: Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles.
A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.
For example, in May 2014, the FASB issued ASU No.
−Removed: 2014-09, Revenue From Contracts With Customers (Topic 606), or ASC 606, as subsequently amended, which supersedes nearly all existing revenue recognition guidance under U.S.
+Added: 2014-09, Revenue From Contracts With Customers (Topic 606), or ASC 606, as subsequently amended, which supersedes nearly all existing revenue recognition guidance under GAAP.
ASC 606 became effective for us beginning the first quarter of fiscal 2018, and we have adopted it using the modified retrospective transition method.
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tax laws that may be enacted in the future, could impact the tax treatment of our earnings, as well as cash and cash equivalent balances we currently maintain.
−Removed: Furthermore, due to shifting economic and political conditions, tax policies or rates in various jurisdictions
−Removed: may be subject to significant change.
+Added: Furthermore, due to shifting economic and political conditions, tax policies or rates in various jurisdictions may be subject to significant change.
Additionally, increases in our effective tax rate as a result of a change in the mix of earnings in countries with differing statutory tax rates, changes in our overall profitability, changes in the valuation of deferred tax assets and liabilities, the results of audits and the examination of previously filed tax returns by various taxing authorities and continuing assessments of our tax exposures could impact our tax liabilities and affect our income tax expense, which could have a material adverse effect on our business, financial position and results of operations and could cause the market value of our common stock to decline.
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This variability and unpredictability could result in our failing to meet our revenue, billings or operating results expectations or those of securities analysts or investors for any period.
−Removed: In addition, a significant percentage of our operating expenses are fixed in nature and based on forecasted revenue trends.
+Added: addition, a significant percentage of our operating expenses are fixed in nature and based on forecasted revenue trends.
Accordingly, in the event of revenue shortfalls, we are generally unable to mitigate the negative impact on operating results in the short term.
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As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results.
−Removed: Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which
−Removed: will increase our costs and expenses.
+Added: Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.
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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.