What changed in this filing

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Item 1A. Risk Factors

2025-03-03 compared with 2024-02-29 · 268 added, 331 removed, 1108 unchanged (35% of the section changed)

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● our BAQSIMI ® , Primatene MIST ® , glucagon, epinephrine, lidocaine, phytonadione, and enoxaparin products collectively represent a significant portion of our net revenues;

if the sales volume or pricing of these 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 actual financial and operating results could differ materially from any expectations or guidance provided by us concerning future results with respect to the acquisition of BAQSIMI ® ;

if the sales volume or pricing of these products decline, or if we are unable to satisfy market demand for these products, this could have a material adverse effect on our business, financial position and results of operations;

● our actual financial and operating results could differ materially from any expectations or guidance provided by us concerning future results;

● 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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● our business may be adversely affected by challenging macroeconomic conditions globally;

● because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impact of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations;

● because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impacts of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations;

● we may be exposed to product liability claims and may not be able to obtain or maintain adequate

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If health, safety, or environmental concerns arise with respect to a product, we may be forced to withdraw it from the market and be exposed to greater liability, including product liability lawsuits.

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.

For example, as a result of environmental concerns over the use of chlorofluorocarbons, or CFCs, the FDA, issued a final rule in 2009, that required the phase-out of the CFC formulation of our Primatene MIST ® product by the end of 2011.

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.

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Delays in any part of the process, or our inability to obtain regulatory approval of our products, including litigation with competitors and regulatory compliance of our suppliers and contractors, could adversely affect our operating results by restricting or delaying our introduction of new products, which could adversely impact our ability to market a prospective product.

FDA and similar regulatory agencies may change or impose new regulatory requirements on our products, which could require us to perform additional studies, expand additional resources on regulatory compliance, or delay our commercialization plan.

The FDA and similar regulatory agencies may change or impose new regulatory requirements on our products, which could require us to perform additional studies, expand additional resources on regulatory compliance, or delay our commercialization plan.

To the extent that we expend significant resources on research and development efforts and are not able, ultimately, to introduce successful new products as a result of those efforts, our business, financial position and results of operations may be materially and adversely affected, and the market value of our common stock could decline.

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If the sales volume or pricing of these 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 BAQSIMI ® product that we acquired in June 2023 represented 8% of our total net revenues for the year ended December 31, 2023.

Sales from our BAQSIMI ® product that we acquired in June 2023 represented 20% and 8% of our total net revenues for the years ended December 31, 2024 and 2023, respectively.

Sales from our Primatene MIST ® product represented 14%, 14%, and 17% of our total net revenues for the years ended December 31, 2024, 2023, and 2022, respectively.

Sales from our glucagon product, which we launched in February 2021 represented 18%, 11% and 11% of our total net revenues for the years ended December 31, 2023, 2022 and 2021, respectively.

Sales from our glucagon product, represented 15%, 18% and 11% of our total net revenues for the years ended December 31, 2024, 2023 and 2022, respectively.

Sales from our epinephrine product represented 13%, 13%, and 15% of our total net revenues for the years ended December 31, 2024, 2023, and 2022, respectively.

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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.

Our actual financial and operating results could differ materially from any expectations or guidance provided by us concerning future results with respect to the acquisition of BAQSIMI ® .

Although we currently expect to realize increased revenues as a result of our acquisition of BAQSIMI ® , the expectations and guidance we have provided, with respect to the potential financial impact of the acquisition of BAQSIMI ® , are subject to numerous assumptions including assumptions derived from our diligence efforts concerning the status of and prospects for BAQSIMI ® business, which we did not control at the time such assumptions were made, and assumptions relating to the near-term prospects for glucagon products generally and the markets for BAQSIMI ® in particular.

Additional assumptions we have made relate to numerous matters, including (without limitation) the following:

projections of BAQSIMI ® ’s future revenues;

the amount of intangibles that resulted from the acquisition of BAQSIMI ® ;

acquisition costs, including transaction costs payable to our financial, legal, and accounting advisors;

our ability to maintain, develop, and deepen relationships with BAQSIMI ® customers and suppliers;

other financial and strategic risks of the acquisition of BAQSIMI ® , including the possible impact of our reduced liquidity resulting from deal-related cash outlays, the credit risk associated from the debt facility described below, and continued uncertainty arising from the global economic downturn.

We cannot provide any assurances with respect to the accuracy of our assumptions, including our assumptions with respect to future revenues or revenue growth rates, if any, of BAQSIMI ® , and we cannot provide assurances with respect to our ability to realize the cost savings that we currently anticipate.

There are a variety of risks and uncertainties, some of which are outside of our control, which could cause our actual financial and operating results to differ materially from any expectations or guidance provided by us, concerning our future results with respect to the acquisition of BAQSIMI ® .

We may fail to realize the projected revenue and other benefits expected from the acquisition and integration of BAQSIMI ® , which could adversely affect the value of our common stock.

Our ability to realize the projected revenue and other benefits from the acquisition of BAQSIMI ® will depend, in part, on our ability to continue to integrate BAQSIMI ® into our current business.

If we are not able to achieve the projected revenue or other benefits within the anticipated time frame, or at all, or if the projected revenue or other benefits take longer to realize than expected, then the value of our common stock may be adversely affected.

It is possible that the ongoing integration process could result in the disruption of our business or ongoing business associated with BAQSIMI ® .

We may also identify inconsistencies in standards, controls, procedures and policies between the two businesses that could adversely affect our ability to maintain relationships with our customers, suppliers, distributors, creditors, lessors, clinical trial investigators or managers or to achieve the anticipated benefits of BAQSIMI ® .

Specifically, in order to realize the anticipated benefits of the acquisition of BAQSIMI ® , we will continue to:

rely on Lilly for manufacturing services and transition services, including for performance of clinical and commercial activities, relating to BAQSIMI ® and transfer of the corresponding activities to Amphastar;

enter into our own arrangements with certain suppliers/manufacturers in the supply chain;

finalize distribution and sales arrangements for BAQSIMI ® including payor and other agreements.

Integration efforts between us and the business associated with BAQSIMI ® will also continue to divert management attention and resources.

In addition, the actual integration of BAQSIMI ® may result in additional and unforeseen expenses or liabilities (including those that may be assumed in connection with the acquisition of BAQSIMI ® ), and any

anticipated benefits of the integration plan may not be realized.

If we are not able to adequately address these challenges, we may be unable to successfully integrate BAQSIMI ® into our business, or to realize some or any of the anticipated benefits of the acquisition of BAQSIMI ® .

Delays encountered in the integration process could have a material adverse effect on our revenues, expenses, operating results and financial condition.

For example, launching the products in certain international countries has encountered delays, which then goes beyond the current Manufacturing Service Agreement, or MSA.

Although we expect significant benefits, such as increased sales revenues, from the acquisition of BAQSIMI ® , there can be no assurance that we will realize these or any other anticipated benefits.

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.

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As noted elsewhere herein, ongoing revenue from current operations is a critical component of being able to adequately fund ongoing research and development efforts in our product pipeline.

Likewise, the ability to borrow funds at an attractive rate is another factor in being able to fund research and development activities.

Finally, being able to access the raise additional funds through the capital markets on favorable terms, if at all, particularly during times of market volatility, changes in the interest rate environment, and general economic instability, is another factor in being able to fund research and development.

We may also fund our research and development using borrowed funds or funds raised through the capital markets.

Our ability to obtain such funds on favorable terms, if at all, may be affected by market volatility, changes in the interest rate environment and general economic instability.

If any one, or all, of these sources become unavailable, our research and development projects may become delayed or negatively impacted.

Our success depends on the integrity of our supply chain, including multiple single source suppliers, the disruption of which could negatively impact our business.

Some of our products are the result of complex manufacturing processes, and some require highly specialized raw materials, and BAQSIMI ® relies on contract manufacturing organizations, or CMO.

Some of our products are the result of complex manufacturing processes, and some require highly specialized raw materials, and BAQSIMI ® relies on CMOs.

Because our business requires outsourcing in some instances, we are subject to inherent uncertainties related to product safety, availability and security.

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Subsequently, we received FDA approval to make heparin USP from crude heparin using processes at our ANP and IMS facilities.

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.

In 2023, our API supplier for medroxyprogesterone discontinued making the active ingredient, which resulted in a halt in sales of the product after the third quarter of 2023.

We were only able to relaunch this product in September 2024 following FDA qualification of our subsidiary ANP to manufacture this API.

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.

If we fail to maintain relationships with our current suppliers, including our CMO, we may not be able to complete development, commercialization or marketing of our products, which would have a material and adverse effect on our business.

If we fail to maintain relationships with our current suppliers, including our CMOs, we may not be able to complete development, commercialization or marketing of our products, which would have a material and adverse effect on our business.

Third-party suppliers may not perform as agreed, may discontinue production, or may terminate their agreements with us.

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Therefore, if our primary suppliers become unable or unwilling to manufacture or deliver materials, we could experience protracted delays or interruptions in the supply of materials.

This would ultimately delay

our manufacture of products for commercial sale, which could materially and adversely affect our development programs, commercial activities, operating results and financial condition.

This would ultimately delay our manufacture of products for commercial sale, which could materially and adversely affect our development programs, commercial activities, operating results and financial condition.

Additionally, any failure by us to forecast demand for, or to maintain an adequate supply of, the raw material and finished product could result in an interruption in the supply of certain products and a decline in sales of that product.

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This lowers the annual minimum quantities and lowers the production levels at AFP.

Mannkind will not be purchasing RHI for the next two years as they are in the process of qualifying our upgraded RHI, which uses our internally produced inclusion bodies made at AFP.

If an increase in supply outpaces the increase in market demand, or if demand decreases, such as a further reduction in sales of insulin API for MannKind, the resulting oversupply could adversely impact our sales and result in the underutilization of our manufacturing capacity, high inventory levels, changes in revenue mix and rapid price erosion, which would lower our margins and adversely impact our financial results.

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We face significant competition in the pharmaceutical industry with respect to both our proprietary and generic drugs, which may result in others developing or commercializing products before or more successfully than we do, which could significantly limit our growth and materially and adversely affect our financial results.

We face and will face significant competition for our products and product candidates from pharmaceutical companies that focus on proprietary and generic injectable and inhalation markets such as Pfizer, Inc., Sagent Pharmaceuticals, Inc., Akorn, Inc., Sandoz Inc., Viatris Inc., Fresenius Kabi USA, Nexus Pharmaceuticals, Apotex Corp., Amneal Biosciences, American Regent, Inc., Hikma Pharmaceuticals USA, Par Pharmaceuticals, Cipla USA Inc., Meitheal Pharmaceuticals, Dr.

Reddy’s Laboratories, Inc., Xeris Pharmaceuticals, Novo Nordisk, Medefil Inc., Accord Healthcare, Eugia Pharma, and Teva Pharmaceutical Industries Ltd.

We face and will face significant competition for our products and product candidates from pharmaceutical companies that focus on proprietary and generic injectable and inhalation markets such as Pfizer, Inc., BPI Labs, Lupin Pharmaceuticals, Inc., Viatris Inc., Fresenius Kabi USA, Apotex Corp., American Regent, Inc., Hikma Pharmaceuticals USA Inc., Par Pharmaceuticals, Cipla USA Inc., Meitheal Pharmaceuticals, Dr.

Reddy’s Laboratories, Inc., Xeris Pharmaceuticals, Medefil Inc., Accord Healthcare, and Teva Pharmaceuticals USA Inc.

Competition in the generic pharmaceutical industry has increased as producers of branded products have entered the business by creating generic drug subsidiaries, purchasing generic drug companies, or licensing their products to generic manufacturers prior to patent expiration and/or as their patents expire.

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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.

Our competitors vary depending upon product categories and, within each product category, upon dosage strengths and upon drug-delivery systems.

Our competitors

vary depending upon product categories and, within each product category, upon dosage strengths and upon drug-delivery systems.

Based on total assets, annual revenues and market capitalization, we are smaller than many of our national and international competitors with respect to both our generic and proprietary pharmaceutical products and product candidates.

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Our business may not continue to generate cash flow from operations in the future sufficient to satisfy our obligations under our indebtedness, and any future indebtedness we may incur and to make necessary capital expenditures.

If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying

investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive.

If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive.

Our ability to refinance our existing or future indebtedness will depend on the capital markets and our financial condition at such time.

We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default under the Credit Agreement, the 2029 Convertible Notes or future indebtedness.

We may not be able to engage in any of these activities or engage in these

activities on desirable terms, which could result in a default under the Credit Agreement, the 2029 Convertible Notes or future indebtedness.

If we fail to make required payments under our existing or future indebtedness, we would be in default under the terms of these agreements.

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For example, the Credit Agreement contains financial and operational covenants that may adversely affect our ability to engage in certain activities, including certain financing and acquisition transactions, stock repurchases, guarantees, and similar transactions, without obtaining the consent of the lenders, which may or may not be forthcoming including without limitation, covenants requiring compliance with a maximum consolidated net leverage ratio test and a minimum consolidated interest coverage ratio test.

We may not be able to generate sufficient cash flow or revenue to meet the financial covenants or pay the principal and interest on our debt.

We may not be able to generate sufficient cash flow or revenue to pay the principal and interest on our debt.

In addition, upon the occurrence of an event of default, our lenders, among other things, can declare all indebtedness due and payable immediately, which would adversely impact our liquidity and reduce the availability of our cash flows to fund working capital needs, capital expenditures and other general corporate purposes.

An event of default includes our failure to pay any amount due and payable under the loan agreements, the occurrence of a material adverse change in our business as defined in the loan agreements, our breach of any covenant in the loan agreements, or an involuntary insolvency proceeding.

Additionally, a lender could exercise its lien on substantially all of our assets and our future working capital, borrowings or equity financing may not be available to repay or refinance any such debt.

We may not have sufficient cash to settle conversions of the 2029 Convertible Notes in cash, to repurchase the 2029 Convertible Notes upon a fundamental change, or to repay the principal amount of the 2029 Convertible Notes in cash at their maturity, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Convertible Notes.

Holders of the 2029 Convertible Notes will have the right to require us to repurchase all or a portion of the 2029 Convertible Notes upon the occurrence of a fundamental change, as defined in the Indenture, before the applicable maturity date at a repurchase price equal to 100% of the principal amount of such 2029 Convertible Notes to be repurchased, plus accrued and unpaid interest or special interest, if any, as described in the Indenture governing the 2029 Convertible Notes.

In addition, upon conversion of the 2029 Convertible Notes, we will be required to settle a portion or all of its conversion obligation in respect of the 2029 Convertible Notes being converted in cash, as described in the Indenture.

Holders of the 2029 Convertible Notes will have the right to require us to repurchase all or a portion of the 2029 Convertible Notes upon the occurrence of a fundamental change, as defined in the indenture governing the 2029 Convertible Notes, or the Indenture, before the applicable maturity date at a repurchase price equal to 100% of the principal amount of such 2029 Convertible Notes to be repurchased, plus accrued and unpaid interest or special interest, if any, as described in the Indenture.

In addition, upon conversion of the 2029 Convertible Notes, we will be required to settle a portion or all of the conversion obligation in respect of the 2029 Convertible Notes being converted in cash, as described in the Indenture.

Moreover, we will be required to repay the 2029 Convertible Notes in cash at their maturity unless earlier converted, redeemed or repurchased.

However, we may not have enough available cash on hand or be able to obtain financing at the time we are required to make repurchases of the 2029 Convertible Notes surrendered therefor or pay cash with respect to the 2029 Convertible Notes being converted or at their respective maturity.

In addition, our ability to repurchase the 2029 Convertible Notes or to pay cash upon conversions of the 2029 Convertible Notes or at their maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.

Our failure to repurchase the 2029 Convertible Notes at a time when the repurchase is required by the indenture governing the 2029 Convertible Notes or to pay cash upon the conversion of the 2029 Convertible Notes or at their maturity as required by the indenture would constitute a default under the indenture.

indebtedness.

Our failure to repurchase the 2029 Convertible Notes at a time when the repurchase is required by the Indenture or to pay cash upon the conversion of the 2029 Convertible Notes or at their maturity as required by the Indenture would constitute a default under the Indenture.

A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness.

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In addition, even if holders of the 2029 Convertible Notes do not elect to convert their 2029 Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of such 2029 Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Our business relationships, including customer relationships, and those of the business related to BAQSIMI ® may be subject to disruption due to uncertainty associated with the acquisition of BAQSIMI ® .

Suppliers, vendors, and other third parties with whom we or the business related to BAQSIMI ® do business or otherwise have relationships may experience uncertainty associated with the acquisition of BAQSIMI ® , and this uncertainty could materially affect their decisions with respect to existing or future business relationships with us.

As a result, we are currently unable to predict the effect of the acquisition of BAQSIMI ® on certain assumed contractual rights and obligations, including intellectual property rights.

Contracts, agreements, licenses, permits, authorizations and other arrangements related to the BAQSIMI ® business that contain provisions giving counterparties certain rights (including, in some cases, termination rights) in the event of an “assignment” of such agreement or a “change in control” of Lilly or its subsidiaries.

The definitions of “assignment” and “change in control” vary from contract to contract and, in some cases, the “assignment” or “change in control” provisions may be implicated by the acquisition of BAQSIMI ® .

If an “assignment” or “change in control” occurs, a counterparty may be permitted to terminate its contract with respect to BAQSIMI ® .

We cannot predict the effects, if any, if the acquisition of BAQSIMI ® is deemed to constitute an assignment or change in control under certain of the contracts and other arrangements related to BAQSIMI ® , including the extent to which cancellation rights or other rights would be exercised, if at all, or the effect on our financial condition, results of operations or cash flows.

If we fail to obtain exclusive marketing rights for our generic pharmaceutical products or fail to introduce these generic products on a timely basis, our revenues, gross margin and operating results may decline significantly.

The Hatch-Waxman amendments to the Federal Food, Drug, and Cosmetic Act, or FFDCA, provide for a period of 180 days of generic marketing exclusivity for any applicant that is first-to-file an ANDA containing a certification of invalidity, non-infringement or unenforceability related to a patent listed with respect to the corresponding brand drug, which we refer to as a Paragraph IV certification.

ANDAs that contain Paragraph IV certifications challenging patents, however, generally become the subject of patent litigation that can be both lengthy and costly.

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.

The holder of an approved ANDA containing a Paragraph IV certification that is successful in challenging the applicable brand drug patent(s) is often able to price the applicable generic drug to yield relatively high gross margins during this 180-day marketing exclusivity period, however, there is no certainty 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.

In addition, ANDAs that contain Paragraph IV certifications challenging patents generally become the subject of patent litigation that can be both lengthy and costly and there are no certainty that we would prevail if there were any such litigation.

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.

In addition, brand companies often authorize a generic version of the corresponding brand drug to be sold during any period of marketing exclusivity that is awarded, which reduces gross margins during the marketing exclusivity period.

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As patents and exclusivities protecting a brand name product expire, the first manufacturer to receive regulatory approval for a generic version of the product is generally able to achieve significant market penetration.

Therefore, our ability to increase or maintain revenues and profitability in our generics business is largely dependent on our success in challenging patents and developing non-infringing formulations of proprietary products.

Therefore, our ability to increase or

maintain revenues and profitability in our generics business is largely dependent on our success in challenging patents and developing non-infringing formulations of proprietary products.

As competing manufacturers receive regulatory approvals on generic products or as brand manufacturers launch generic versions of their products (for which no separate regulatory approval is required), market share, revenues and gross profit typically decline, often significantly and rapidly.

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The sale of authorized generics adversely impacts the market share of a generic product that has been granted 180-day exclusivity.

For example, with respect to our enoxaparin product, Sanofi currently markets an authorized generic enoxaparin product through its subsidiary, Winthrop.

For example, as mentioned above, Sanofi currently markets an authorized generic enoxaparin product through its subsidiary, Winthrop.

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.

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.

Such competition can also result from the entry of generic versions of another product in the same therapeutic class as one of our drugs, or in another competing therapeutic class, or from the compulsory licensing of our products by governments, or from a general weakening of intellectual property laws in certain countries around the world.

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● the relative therapeutic advantages and disadvantages of our products compared to competitive products;

● the relative timing of commercial launch of our products compared to competitive products;

● the relative timing of the commercial launch of our products compared to competitive products;

● the relative safety and efficacy of our products compared to competitive products;

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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.

chains may not be willing to stock certain of our new products, and pharmacists may not recommend such products to consumers.

Pharmacy chains may not be willing to stock certain of our new products, and pharmacists may not recommend such products to consumers.

Further, consumers may not be willing to purchase some of our products.

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The group purchasing organizations with which we have relationships may have relationships with manufacturers that sell competing products, and such group purchasing organizations may earn higher margins from these competing products or combinations of competing products or may prefer products other than ours for other reasons.

If we are unable to maintain our group purchasing organization relationships, sales of our products and revenue could decline.

If we are unable to maintain our group purchasing organization relationships, sales of our

products and revenue could decline.

Consolidation in the health care industry could lead to demands for price concessions or for the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, financial condition or results of operations.

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revenues is derived from relatively few customers, any financial difficulties experienced by a single customer, or any delay in receiving payments from a single customer, could have a material adverse effect on our business, financial condition and results of operations.

At the same time, the traditional model for distribution of pharmaceutical products is also undergoing disruption as a

result of the entry or potential entry of new competitors and significant mergers among key industry participants.

At the same time, the traditional model for distribution of pharmaceutical products is also undergoing disruption as a result of the entry or potential entry of new competitors and significant mergers among key industry participants.

For example, in 2020 Amazon launched its pharmaceutical distribution business.

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We do not carry key man life insurance on any key personnel.

Competition among pharmaceutical companies for qualified employees is intense, and the ability to attract and retain qualified individuals is critical to our success.

Competition among pharmaceutical companies

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.

Our business may be adversely affected by challenging macroeconomic conditions globally, as a result of the COVID-19 pandemic or other public health outbreaks in the future.

While the U.S.

government ended the COVID-19 public health emergency on May 11, 2023, the effects of the COVID-19 pandemic continue to impact worldwide economic activity and financial markets and present challenges to our business.

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.

While availability of components has increased since COVID-19, lead times remain longer than pre-pandemic.

More generally, any extended public health outbreaks or emergencies could adversely affect economies and financial markets globally and nationally, including inflationary pressures and changes in interest rates, which have and could continue to decrease spending and adversely affect demand for our products and harm our business and results of operations.

Our business may be adversely affected by challenging macroeconomic conditions globally resulting from pandemics or other public health outbreaks.

Pandemics or other extended public health outbreaks or emergencies could adversely affect economies and financial markets globally and nationally, including inflationary pressures and changes in interest rates, which could continue to decrease spending and adversely affect demand for our products and harm our business and results of operations.

To the extent macroeconomic uncertainty persists or macroeconomic conditions worsen, we may experience a continuing adverse effect on the demand for some of our products.

The degree of impact of any pandemic and the related challenging macroeconomic conditions globally 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 and the challenging macroeconomic conditions globally, all of which continue to evolve and remain uncertain at this time.

During the COVID-19 pandemic, FDA issued various COVID-19 related guidance documents applicable to biopharmaceutical manufacturers and clinical trial sponsors many of which have expired or were withdrawn with the expiration of the COVID-19 public health emergency declaration in May 2023, although some COVID-19 related guidance documents continue in effect.

These and future guidance documents and regulatory requirements, including future legislation, have and may continue to 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.

While we are not currently experiencing any delayed shipments as a result of COVID-19, certain suppliers delayed shipments to us in 2022, and may delay shipments to us in the future.

Future shutdowns could have an adverse impact on our operations.

Any of the negative impacts of any pandemic and any related challenging macroeconomic conditions, including, among others, those described above, alone or in combination with others, may have a material adverse effect on our business and operations, results of operations, financial condition, and cash flows.

It is not possible at this time to estimate the complete impact that the effects of the COVID-19 pandemic and the related challenging economic conditions could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

The degree of impact of any pandemic and the related challenging macroeconomic conditions 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 and the challenging macroeconomic conditions globally.

Macroeconomic conditions may continue to worsen leading to changes in monetary policy and other responses from governmental bodies, infections may resurge and cause closures or supply disruptions, each of which alone or in combination with others, would have a negative impact on our business, financial condition and operating results.

We will continue to monitor the impact of the COVID-19 pandemic and related challenging macroeconomic conditions on all aspects of our business.

We may be exposed to product liability claims and may not be able to obtain or maintain adequate product liability insurance.

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Any of these events could harm or prevent sales of the affected products and could have a material adverse effect upon our business and financial condition.

In addition to our acquisition of BAQSIMI ® , any acquisitions of technologies, products and businesses may be difficult to integrate, could adversely affect our relationships with key customers and/or could result in significant charges to earnings.

Any acquisitions of technologies, products and businesses may be difficult to integrate, could adversely affect our relationships with key customers and/or could result in significant charges to earnings.

We plan to regularly review potential acquisitions of technologies, products and businesses complementary to our business.

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Acquisitions typically entail many risks and could result in difficulties in integrating operations, personnel, technologies and products.

If we are not able to successfully integrate our acquisitions, including BAQSIMI ® , we may not obtain the advantages and synergies that the acquisitions were intended to create, which may have a material adverse effect on our business, results of operations, financial condition and cash flows, our ability to develop and introduce new products and the market price of our stock.

If we are not able to successfully integrate our acquisitions, we may not obtain the advantages and synergies that the acquisitions were intended to create, which may have a material adverse effect on our business, results of operations, financial condition and cash flows, our ability to develop and introduce new products and the market price of our stock.

In addition, some acquisitions may require regulatory approvals before products may be sold by us, which may not be obtained on a timely basis, or at all.

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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.

We may engage in acquisitions or strategic partnerships that could disrupt our business, cause dilution to our stockholders, reduce our financial resources, cause or to incur debt or assume contingent liabilities, and subject us to other risks.

In the future, we may enter into transactions to acquire other businesses, products or technologies or enter into strategic partnerships, including licensing.

If we do identify suitable acquisition or partnership candidates, we may not be able to

make such acquisitions or partnerships on favorable terms, or at all.

Any acquisitions or partnerships we make may not strengthen our competitive position, and these transactions may be viewed negatively by customers or investors.

We may decide to incur debt in connection with an acquisition or issue our common stock or other equity securities to the stockholders of the acquired company, which would reduce the percentage ownership of our existing stockholders.

For example, our Term Loan may restrict our ability to pursue certain mergers, acquisitions or consolidations without obtaining the prior consent of a majority of lenders in our existing syndicate or repaying our outstanding loan amounts.

We could incur losses resulting from undiscovered liabilities of the acquired business or partnership that are not covered by the indemnification we may obtain from the seller or our partner.

In addition, we may not be able to successfully integrate any acquired personnel, technologies and operations into our existing business in an effective, timely and non-disruptive manner.

Acquisitions or partnerships may also divert management attention from day-to-day responsibilities, lead to a loss of key personnel, increase our expenses and reduce our cash available for operations and other uses.

We cannot predict the number, timing or size of future acquisitions or partnerships or the effect that any such transactions might have on our operating results.

Charges to earnings resulting from acquisitions 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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Subject to the agreements governing our existing debt or otherwise, some of these transactions may be financed with our additional borrowings.

We may suffer a loss of key employees, customers or suppliers, loss of revenues, increases in costs or other difficulties in connection with these transactions.

We may suffer a loss of key employees, customers or

suppliers, loss of revenues, increases in costs or other difficulties in connection with these transactions.

Other transactions may advance future cash flows from some of our businesses, thereby yielding increased short-term liquidity, but consequently resulting in lower cash flows from these operations over the longer term.

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Any future goodwill or other intangible asset impairment, if any, would be recorded in operating income and could have a material adverse effect on our results of operations and financial condition.

Our outstanding loan agreements contain restrictive covenants that may limit our operating flexibility.

Our loan agreements are collateralized by substantially all of our presently existing and subsequently acquired personal property assets and subject us to certain affirmative and negative covenants, including limitations on our ability to transfer or dispose of assets, merge with or acquire other companies, make investments, pay dividends, incur additional indebtedness and liens and conduct transactions with affiliates.

We are also subject to certain covenants that require us to maintain certain financial ratios and are required under certain conditions to make mandatory prepayments of outstanding principal.

As a result of these covenants and ratios, we have certain limitations on the manner in which we can conduct our business, and we may be restricted from engaging in favorable business activities or financing future operations or capital needs until our current debt obligations are paid in full or we obtain the consent of our lenders, which we may not be able to obtain.

We may not be able to generate sufficient cash flow or revenue to meet the financial covenants or pay the principal and interest on our debt, and in the past we have not been in compliance with certain financial covenants.

our cash flows to fund working capital needs, capital expenditures and other general corporate purposes.

Counterfeit versions of our products could harm our patients and reputation.

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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 or bugs in our or our third-party providers’ systems, natural disasters, war, terrorism, telecommunications and electrical outages, breakdowns, damage, interruptions), we have experienced and may continue to experience cyber-attacks of varying degrees from time to time.

For example, in the first quarter of 2022, our Chinese subsidiary, ANP, was subject to a security incident that resulted in a temporary disruption to some of their internal computer systems.

We worked with ANP to improve and implement additional security measures to their systems and networks.

For example, in the first quarter of 2022, our Chinese subsidiary, ANP, was subject to a security incident that resulted in a temporary disruption to some of its internal computer systems.

We worked with ANP to improve and implement additional security measures to its systems and networks.

We incurred minimal costs to respond to the ANP incident.

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We notified affected individuals and regulators, as we deemed was required or appropriate.

We incurred minimal cost to respond to this incident, and we expect to continue to incur cost to support our efforts to enhance our security measures.

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.

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 loss of data or the impairment of production and other supply chain processes, adversely affecting our business.

We incurred minimal cost to respond to this incident.

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 the threats described above or otherwise.

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 loss of data or the impairment of production and other supply chain processes, adversely affecting our business.

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.

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.

We and our third-party service providers may be unable to anticipate these techniques, discover threats and react in a timely manner, or implement adequate preventative or mitigating measures.

Further, system breaches, malware, ransomware, computer hacking, and insider threats have become more prevalent.

For example, companies have experienced an increase in phishing and social engineering attacks from third parties in connection with the increase in employees working remotely in recent years.

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.

Also, due to political uncertainty and military actions associated with Russia’s invasion of Ukraine, we and our third-party providers are vulnerable to heightened risks of cyber threats and cyber-attacks from or affiliated with nation-state actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products and services.

We and our third-party service providers who may be operating with personnel 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.

Also, due to political uncertainty and military actions such as Russia’s invasion of Ukraine or conflicts in the Middle East, we and our third-party providers are vulnerable to heightened risks of cyber threats and cyber-attacks from or affiliated with nation-state actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products and services.

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.

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● Similarly, any 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.

In an effort to ensure appropriate oversight of cyber security issues and risks, management now updates the Board of Directors on cyber security matters on a quarterly basis, and the Board of Directors has assigned oversight of cyber security to the Audit Committee.

In an effort to ensure appropriate oversight of cyber security issues and risks, management updates the Board of Directors on cyber security matters on a quarterly basis, and the Board of Directors has assigned oversight of cyber security to the Audit Committee.

Additionally, the Company has a security training and compliance program, which employees with access to information technology, must complete annually or more often, if deemed necessary or appropriate.

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Any such security incident could have a material adverse effect on our business and prospects.

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.

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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Such foreign regulations and product approval requirements are expected to be time 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.

We have in the past and may in the future 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.

Those requirements may become more stringent prior to submission of our applications for approval or during the review of our applications due to changes in the law or changes in FDA policy or the adoption of new regulations.

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The FDA can convene an Advisory Committee to assist the FDA in examining specific issues related to the application.

For example, we initially filed an NDA, for our Primatene MIST ® product in July 2013, but FDA approval was not granted until November 2018 due to delays caused by the FDA’s requirement for additional information, label revision and follow-up studies.

Under various user fee enactments, the FDA has committed to timelines for its review of NDAs, ANDAs, BLAs and biosimilar applications.

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Further, the terms of approval of any applications may be more restrictive than our expectations and could affect the marketability of our products.

The FDA also has the authority to revoke or suspend approvals of previously approved products for cause, to debar companies and individuals from participating in the approval process for ANDAs, to request recalls of allegedly violative products, to seize allegedly violative products, to obtain injunctions that may, among other things, close manufacturing plants that are not operating in conformity with cGMP and stop shipments of potentially violative products and to prosecute companies and individuals for violations of the FFDCA.

manufacturing plants that are not operating in conformity with cGMP and stop shipments of potentially violative products and to prosecute companies and individuals for violations of the FFDCA.

One of our API suppliers discontinued manufacturing an API included in one of our commercial products.

We qualified one of our subsidiaries to supply the necessary API, and obtained FDA approval of our new API supply.

However, the approval process for the API supply was delayed, causing us to temporarily stop manufacturing and selling the product

for several months.

However, the approval process for the API supply was delayed, causing us to temporarily stop manufacturing and selling the product for several months.

Similar situations could happen with other suppliers in the future.

If we are forced to stop manufacturing any of our commercial products in the future, for any length of time, it could have a material effect on our operating results and financial condition.

FDA regulations and policies are subject to change, especially in view of changes under a new Presidential administration and new leadership at the agency, which can delay regulatory approval or have a material adverse effect on our operations.

In June 2024, the U.S.

Supreme Court overruled the Chevron doctrine, which gives deference to regulatory agencies’ statutory interpretations in litigation against federal government agencies, such as the FDA, where the law is ambiguous.

This landmark Supreme Court decision may invite various stakeholders to bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, including the FDA’s statutory interpretations of market exclusivities and the “substantial evidence” requirements for drug approvals, which could undermine the FDA’s authority, lead to uncertainty in the industry, and disrupt the FDA’s normal operations.

Clinical failure can occur at any stage of clinical development.

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Delays in our development programs could significantly increase our product development costs and delay product commercialization.

The commencement of clinical trials on our product candidates may be delayed for several reasons, including but not limited to delays in demonstrating sufficient pre-clinical safety required to obtain regulatory clearance to commence a clinical trial, reaching agreements on acceptable terms with prospective contract research organizations, clinical trial sites and licensees, manufacturing and quality assurance release of a sufficient supply of a product candidate for use in our clinical trials, delays in recruiting sufficient subjects for a clinical trial and/or obtaining institutional review board approval to conduct a clinical trial at a prospective clinical site.

clinical trial, reaching agreements on acceptable terms with prospective contract research organizations, clinical trial sites and licensees, manufacturing and quality assurance release of a sufficient supply of a product candidate for use in our clinical trials, delays in recruiting sufficient subjects for a clinical trial and/or obtaining institutional review board approval to conduct a clinical trial at a prospective clinical site.

Once a clinical trial has begun, it may be delayed, suspended or terminated by us or by regulatory authorities for a variety of reasons, including without limitation ongoing discussions with regulatory authorities regarding the scope or design of our clinical trials, a determination by us or regulatory authorities that continuing a trial presents an unreasonable health risk to participants, failure to conduct clinical trials in accordance with regulatory requirements, lower than anticipated recruitment or retention rate of patients in clinical trials, inspection of the clinical trial operations or trial sites by regulatory authorities, the imposition of a clinical hold by the FDA, lack of adequate funding to continue clinical trials and/or negative or unanticipated results of clinical trials.

as to the potential advantages of the drug being studied in relation to available alternatives, including without limitation therapies being investigated by other companies.

Patient enrollment, a significant factor in the time required to complete a clinical study, is affected by many factors, including the size and nature of the study subject population, the proximity of patients to clinical sites, the eligibility criteria for the study, the design of the clinical study, competing clinical studies and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to available alternatives, including without limitation therapies being investigated by other companies.

Further, completion of a clinical study and/or the results of a clinical study may be adversely affected by failure to retain subjects who enroll in a study but withdraw due to, among other things, adverse side effects, lack of efficacy, improvement in condition before treatment has been completed or for personal issues or who fail to return for or complete post-treatment follow-up.

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If data from third-party testing identifies a safety or efficacy concern, such data could adversely affect our or another licensee’s development of such product.

There is significant risk that our products could fail to show anticipated results in nonclinical testing and/or clinical studies and, as a result, we may elect to discontinue the development of a product for a particular indication or altogether.

A failure to obtain requisite regulatory approvals or to obtain approvals of the scope requested may delay or preclude us from marketing our products or limit the commercial use of the products, and would have a material adverse effect on our business, financial condition and results of operations.

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NDAs must include significant information regarding the chemistry, manufacturing and controls for the product.

Obtaining approval of an NDA is a lengthy,

expensive and uncertain process, and we may not be successful in obtaining approval.

Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval.

If we submit an NDA to the FDA, the FDA must decide whether to accept or reject the submission for filing.

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The commercial success of our NDA product candidates will depend in significant measure on the scope of the indication(s) and claims that the FDA approves for such products.

The scientific foundation of our NDA product candidates will be based on our various proprietary technologies and the commercial success of these product candidates will depend in significant measure upon our ability to obtain FDA approval of labeling describing such products’ indication(s) and expected features or benefits.

The scientific foundation of our NDA product candidates will be based on our various proprietary technologies and the

commercial success of these product candidates will depend in significant measure upon our ability to obtain FDA approval of labeling describing such products’ indication(s) and expected features or benefits.

Failure to achieve FDA approval of product labeling containing adequate information on features or benefits will prevent or substantially limit our advertising and promotion of such features in order to differentiate our proprietary technologies from those products that already exist in the market.

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If our generic products are not substitutable at the pharmacy level for their reference listed drugs, or if our drug products do not gain the acceptance of healthcare providers, payors, and patients, this could materially reduce sales of our products and our business would suffer.

Although the FDA may determine that a generic product is therapeutically equivalent to a brand product and indicate this therapeutic equivalence by providing it with an “A” rating in the FDA’s Orange Book, this designation is not binding on

state pharmacy boards or state agencies.

As a result, in states that do not deem our product candidates substitutable at the pharmacy level, physicians may be required to specifically prescribe our product or a generic product alternative in order for our product to be dispensed.

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Our competitive advantage in this area will depend on our success in demonstrating to the FDA that platform technology provides a level of scientific assurance that facilitates determinations of interchangeability, reduces the need for expensive clinical or other testing and raises the scientific quality requirements for our competitors to demonstrate that their products are highly similar to a brand product.

Our ability to succeed will depend in part on our ability to invest in new programs and develop data in a timeframe that enables the FDA to consider our approach as the FDA begins to implement the new law.

Our ability to succeed will depend in part on our ability to invest in new programs and develop data in a timeframe that enables the FDA to consider our approach as the FDA begins to

implement the new law.

BLA holders will develop strategies and precedents for delaying or impeding approvals of biosimilar products and determinations of interchangeability.

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Failure of third-party companies to supply the devices, to successfully complete studies on the devices in a timely manner, or to obtain or maintain required approvals or clearances of the devices could result in increased development costs, delays in or failure to obtain regulatory approval and delays in product candidates reaching the market or in gaining approval or clearance for expanded labels for new indications.

We filed a Field Alert Report for enoxaparin in June 2013, as required by the FDA for certain quality issues with safety implications, because the product did not meet functionality criteria.

The needle-shielding component was breaking during shipping, preventing correct administration of the medication.

While the specific issues related to this Field Alert Report were resolved, we may experience similar issues in the future.

In addition, loss of regulatory approval or clearance of a device that is used with our product may result in the removal of our product from the market.

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Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed abroad.

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.

In addition to regulations in the United States, to market and sell our products in the EU and in 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.

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.

However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.

However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the

regulatory approval process in others.

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.

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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.

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.

If we are unable to obtain approval of any of our product candidates by regulatory or payor authorities in the EU, 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.

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.

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Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.

Further, in Europe, the implementation of the Clinical Trials Regulation depends on confirmation of full functionality of the Clinical Trials Information System through an independent audit, which commenced in September 2020.

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.

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.

Information on the conduct and results of each clinical trial carried out in the European Union will be made publicly available.

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).

Further, in Europe, the implementation of the Clinical Trials Regulation depends on confirmation of full functionality of the Clinical Trials Information System through an independent audit.

This clinical trial portal and database is maintained by the EMA in collaboration with the European Commission and the EU Member States.

Information on the conduct and results of each clinical trial carried out in the EU is made publicly available.

In addition this database is complementary to the database established for pharmacovigilance (Regulation (EC) No 726/2004 with respect to centrally authorized medicinal products).

The Commission Implementing Regulation (EU) No 520/2012 outlines the practical implications for marketing authorization holders, national competent authorities, and the EMA.

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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 medicinal product under real-life conditions indicate that previous efficacy evaluations might have to be revised significantly.

Brexit is also expected to disrupt the operation of pre- and post-authorization clinical trial infrastructure.

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.

Since Brexit, although the rules around GMP and pharmacovigilance in the UK currently remain similar to the EU requirements, 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.

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.

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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.

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.

We do not have any product candidates approved for sale in any foreign jurisdiction, and we do not have experience in obtaining regulatory approval in such jurisdictions.

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.

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.

There could also be disruption to the supply and distribution as well as the import/export both of active pharmaceutical ingredients and finished product.

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 through pharmacovigilance programs, the evaluation of the benefit-risk profiles of new medicinal products, and determination of marketing authorization across different jurisdictions.

There could also be disruption to the supply and distribution as well as the import/export both of active

pharmaceutical ingredients and finished product.

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.

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.

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 EU and/or the United Kingdom and increase our costs.

We cannot predict the impact of such changes and future regulation on our business or the results of our operations.

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● seeking federal or state regulatory restrictions on the use of the same non-proprietary name as the reference brand product for a biosimilar or interchangeable biologic.

If pharmaceutical companies or other third parties are successful in limiting the use of generic products through these or

other means, our sales of generic products may decline.

If pharmaceutical companies or other third parties are successful in limiting the use of generic products through these or other means, our sales of generic products may decline.

If we experience a material decline in generic product sales, our results of operations, financial condition and cash flows will suffer.

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Government and other third-party payers increasingly are limiting both coverage and the level of reimbursement for new drugs.

Third-party insurance coverage may not be available to patients for some of our products candidates.

Third-party insurance coverage may not be available to patients for some of our product candidates.

The continuing efforts of government and third-party payers to contain or reduce the costs of health care may limit our commercial opportunity.

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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.

We currently have managed care organization agreements for BAQSIMI ® .

We must manufacture our drug products at our facilities in conformity with cGMP regulations;

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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.

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.

For example, our facilities in Rancho Cucamonga, CA, Éragny Sur Epte, France, and Nanjing, China have previously been subject to FDA cGMP inspections since 2019 as well as pre-approval, routine and other inspections by the FDA, state, and other regulatory authorities and may be again 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.

Compliance with such standards requires substantial expenditures of time, money and effort in such areas as production and quality control to ensure full technical compliance.

Failure to comply with cGMP or with other state, federal, or foreign requirements may result in unanticipated compliance expenditures, total or partial suspension of production or distribution, suspension of review of applications submitted for approval of our product candidates, termination of ongoing research, disqualification of data derived from studies on our products and/or enforcement actions such as recall or seizure of products, injunctions, civil penalties and criminal prosecutions of the company and company officials.

derived from studies on our products and/or enforcement actions such as recall or seizure of products, injunctions, civil penalties and criminal prosecutions of the company and company officials.

Any suspension of production or distribution would require us to engage contract manufacturing organizations to manufacture our products or to accept a hiatus in marketing our products.

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Any delays caused by the transfer of manufacturing to a contract manufacturing organization may have a material adverse effect on our results of operations.

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.

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.

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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These environmental laws and regulations also could require us to pay for environmental remediation and response costs at third-party locations where we dispose of or recycle hazardous substances.

The costs of complying with these various environmental requirements, as they now exist or as may be altered in the future, could adversely affect our financial condition and results of operations.

For example, as a result of environmental concerns about the use of CFCs, the FDA issued a final rule on January 16, 2009 that required the phase-out of the CFC version of our Primatene MIST ® product by December 31, 2011.

The costs of complying with these various environmental requirements, as they now exist or as may be altered in the future, have in the past and could in the future adversely affect our financial condition and results of operations.

For example, as a result of environmental concerns about the use of CFCs, the FDA issued a final rule in 2009 that required the phase-out of the CFC version of our Primatene MIST ® product by the end of 2011.

This phase out caused us to discontinue sales of the CFC version of our Primatene MIST ® product subsequent to December 31, 2011 and write off our inventory for the product, which had an adverse effect on our financial results.

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The AIM Act directs the United States Environmental Protection Agency to address usage of hydrofluorocarbons, or HFC, by reducing production and consumption of certain HFCs.

One of our products, Primatene MIST ® , utilizes HFCs subject to the AIM Act’s reduction mandate.

Two of our products, Primatene MIST ® and Albuterol, utilize HFCs subject to the AIM Act’s reduction mandate.

Moreover, many of our inhalation pipeline assets use HFCs subject to the AIM Act’s reduction mandate.

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Accordingly, the ACA remains in effect in its current form.

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.

It is unclear how this Supreme Court decision, future litigation, or healthcare measures promulgated by the current administration will impact our business, financial condition and results of operations.

Complying with any new legislation or changes in healthcare regulation could be time-intensive and expensive, resulting in material adverse effect on our business.

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For example, in November 2013, Congress passed the Drug Quality and Security Act, or the DQSA.

The DQSA establishes federal pedigree tracking standards requiring drugs to be labeled and tracked at the lot level, preempts state drug pedigree requirements, and will eventually require all supply-chain stakeholders to participate in an electronic, interoperable prescription drug track and trace system.

DQSA establishes federal pedigree tracking standards requiring drugs to be labeled and tracked at the lot level, preempts state drug pedigree requirements, and, since November 27, 2024, requires all supply-chain stakeholders to participate in an electronic, interoperable prescription drug track and trace system.

The DQSA also establishes new requirements for drug wholesale distributors and third-party logistics providers, including licensing requirements in states that had not previously licensed such entities.

Recently, FDA promulgated enhanced drug distribution security requirements under the Drug Supply Chain Security Act, including requiring trading partners to provide, receive and maintain documentation about products and ownership only electronically using interoperable systems and processes.

Recently, the FDA promulgated enhanced drug distribution security requirements under the Drug Supply Chain Security Act, including requiring trading partners to provide, receive and maintain documentation about products and ownership only electronically using interoperable systems and processes.

If we or our partners fail to comply with these and other regulatory requirements that apply to our operations, our business may be materially impacted.

result of these and other new requirements implemented by the government, we may determine to change our current manner of operation, provide additional benefits or change our contract arrangements, any of which could have a material adverse effect on our business, financial condition and results of operations.

As a result of these and other new requirements implemented by the government, we may determine to change our current manner of operation, provide additional benefits or change our contract arrangements, any of which could have a material adverse effect on our business, financial condition and results of operations.

Former President Barack Obama also signed into law the Food and Drug Administration Safety and Innovation Act.

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● requires electronic submission of certain marketing applications following the issuance of final FDA regulations.

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.

The full impact of new laws and regulations and changes to any existing regulations by the current administration is uncertain.

Some changes may have an adverse effect on our results of operations.

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.

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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.

In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

Various industry stakeholders, including pharmaceutical companies, the U.S.

Chamber of Commerce, the National Infusion Center Association, the Global Colon Cancer Association, and the Pharmaceutical Research and Manufactures of America, have initiated lawsuits against the federal government asserting that the price negotiation provision of the Inflation Reduction Act are unconstitutional.

The impact of these judicial challenges, legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

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.

their out-of-pocket spending limit, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

Various industry stakeholders, including pharmaceutical companies and the Pharmaceutical Research and Manufactures of America, have initiated lawsuits against the federal government asserting that the price negotiation provision of the Inflation Reduction Act are unconstitutional.

The impact of these judicial challenges, legislative, executive, and administrative actions, including future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

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.

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Additionally, we encounter similar regulatory and legislative issues in most other countries.

In the European Union, or EU, and some other international markets, the government provides health care at low cost to consumers and regulates pharmaceutical prices, patient eligibility or reimbursement levels to control costs for the government-sponsored health care system.

In the EU, and some other international markets, the government provides health care at low cost to consumers and regulates pharmaceutical prices, patient eligibility or reimbursement levels to control costs for the government-sponsored health care system.

This international system of price regulations may lead to inconsistent prices.

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Significant fines, penalties, damages and harm to our global reputation and our brand could result from actual or perceived non-compliance.

We collect, process, use, store, transmit and transfer personal information from individuals located in the EU in connection with our business.

The collection, processing, storage, transmission, transfer and use of personal information in the EU are governed by the provisions of the General Data Protection Regulation ((EU) 2016/679), or the GDPR.

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.

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.

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.

We collect, process, use, store, transmit and transfer personal information from individuals located in the EU and the United Kingdom in connection with our business.

The collection, storage, transmission, transfer, use, and other processing of personal information in the EU are governed by the provisions of the General Data Protection Regulation ((EU) 2016/679), or the GDPR.

In the UK, the applicable legislation is the UK General Data Protection Regulation, or the UK GDPR.

This legislation imposes requirements relating to having legal bases for processing personal information relating to identifiable individuals, transferring such information outside of the UK or 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.

Failure to comply with the requirements of the GDPR, the UK GDPR and related national data protection laws of the UK and 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.

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.

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.

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;

however, this adequacy decision is subject to a four-year “sunset” period, after which the European Commission’s adequacy decision may be renewed.

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.

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.

The United Kingdom may introduce legislation reforming the UK GDPR in 2025, which could result in further inconsistencies requiring us to

modify our compliance measures and incur costs.

The European Commission issued an adequacy decision to the United Kingdom under the GDPR on June 28, 2021, pursuant to which personal information generally may be transferred from the EU to the United Kingdom without restriction;

however, this adequacy decision is subject to a four-year “sunset” period, meaning that the adequacy decision will last until June 27, 2025, unless the European Commission renews it.

The European Commission may intervene at any time with respect to its adequacy decision.

The United Kingdom’s adequacy determination therefore is subject to future uncertainty and may be subject to modification or revocation, with the United Kingdom potentially being considered an inadequate third country under the GDPR, meaning that transfers of personal information from the European Economic Area to the United Kingdom would require an alternative transfer mechanism.

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.

The United Kingdom has introduced legislation that, if enacted, would result in its data protection and regulatory scheme diverging from the GDPR.

In addition, U.S.

states are adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements related to personal information.

For example, California enacted the California Consumer Privacy Act, or the CCPA, on June 28, 2018, which took effect on January 1, 2020 and has been dubbed the first “GDPR-like” law in the United States.

For example, California enacted the California Consumer Privacy Act, or the CCPA, which took effect on January 1, 2020.

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.

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.

The CPRA will, among other things, give consumers the ability to limit use of information deemed to be sensitive, establish the California Privacy Protection Agency to implement and enforce the CPRA and impose administrative fines.

The CCPA was 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, became fully operative.

The CPRA among other things, gives consumers the ability to limit use of information deemed to be sensitive and establishes the California Privacy Protection Agency to implement and enforce the CPRA and impose administrative fines.

Aspects of the CCPA and CPRA, and their interpretation and enforcement remain uncertain.

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The CCPA has prompted a number of proposals for federal and state privacy legislation.

For example, Virginia, Colorado, Utah and Connecticut have each passed laws similar to but different from the CCPA and CPRA that have taken effect in 2023;

Florida, Montana, Oregon and Texas have enacted similar laws that go into effect in 2024;

For example, Virginia, Colorado, Utah and Connecticut have each passed laws similar to but different from the CCPA and CPRA that took effect in 2023;

Florida, Montana, Oregon and Texas have enacted similar laws that went into effect in 2024;

Tennessee, Delaware and Iowa have enacted similar laws that go into effect in 2025;

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Further, several states have enacted laws that provide additional protection to consumer health data, including Washington, which enacted the My Health, My Data Act, which, among other things, provides for a private right of action, and Nevada and Connecticut, which have enacted similar laws.

Responsibilities and liabilities under, and other potential impacts of, the GDPR, the UK GDPR, the CCPA, and other U.S.

state laws are significant, and we may be required to put in place additional measures designed to comply with these regimes.

We may also publicly post privacy policies and other documentation regarding our collection, use, storage, transmission, transfer, and other processing of personal information.

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Additionally, other jurisdictions are considering new or expanded laws or regulations relating to privacy, security and data protection.

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.

With 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.

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.

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.

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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For example, 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.

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.

In August 2022, Congress passed the Inflation Reduction Act of 2022, which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, manufacturers are required to pay higher rebates on brand-name drugs once a patient reaches their out-of-pocket spending limits, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

With the transition to the current administration, including changes in the leadership of various federal government agencies, the impact of these legislative, executive, and administrative actions and future healthcare measures and agency rules implemented by the current administration on us and the pharmaceutical industry as a whole is unclear.

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.

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The regulations regarding reporting and payment obligations with respect to Medicare and/or Medicaid reimbursement and rebates and other governmental programs are complex.

Because our processes for these calculations and the judgments involved in making these calculations involve, and will continue to involve, subjective decisions and complex methodologies, these calculations are subject to the risk of errors.

Because our processes for these calculations and the judgments involved in making these calculations involve, and will continue to involve, subjective decisions and complex

methodologies, these calculations are subject to the risk of errors.

In addition, they are subject to review and challenge by the applicable governmental agencies, and it is possible that such reviews could result in material changes.

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Specifically, the final rule attempts to clarify the definition of what constitutes a manufacturer’s “best price” and aligns it, where appropriate, to the definition of “Average Manufacturer Price”, which is used to calculate drug rebates.

Notwithstanding the final rule’s guidance, a number of state and federal government agencies will continue to conduct investigations of manufacturers’ reporting practices with respect to Average Wholesale

Prices, or AWP, in which reports of inflated AWP may lead to excessive payments for prescription drugs.

Notwithstanding the final rule’s guidance, a number of state and federal government agencies have continued to conduct investigations of manufacturers’ reporting practices with respect to Average Wholesale Prices, or AWP, in which reports of inflated AWP may lead to excessive payments for prescription drugs.

These investigations could have a material adverse effect on our business, financial position and results of operations.

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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.

The impact of these legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the current 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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The laws that may affect our ability to operate include:

● the federal Anti-kickback statue, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

● federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party

payers that are false or fraudulent;

service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

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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.

Although there are several statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor.

Although there are several statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution, the exemptions and safe

harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor.

Most states also have statutes or regulations similar to the federal anti-kickback law and federal false claims laws, which apply to items and services covered by Medicaid and other state programs, or, in several states, apply regardless of the type of payer.

Administrative, civil and criminal sanctions may be imposed under these federal and state laws.

In addition, we are also

subject to federal and state consumer protection and unfair competition laws that broadly regulate marketplace activities and activities that potentially harm consumers.

In addition, we are also subject to federal and state consumer protection and unfair competition laws that broadly regulate marketplace activities and activities that potentially harm consumers.

Further, the Affordable Care Act, among other things, amends the intent requirement of the federal anti-kickback and criminal healthcare fraud statutes.

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The scope and enforcement of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.

Federal or state regulatory authorities might challenge our current or future activities under these laws.

Federal or state regulatory

authorities might challenge our current or future activities under these laws.

Any such challenge could have a material adverse effect on our reputation, business, results of operations and financial condition.

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Risks Relating to our International Business

Because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impact of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations.

We currently manufacture the starting material for Amphadase ® and enoxaparin as well as the APIs for isoproterenol and nitroprusside at our manufacturing facility in China, and we plan to use this facility to manufacture several of the APIs for products in our pipeline.

Because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impacts of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations.

We currently manufacture the starting material for Amphadase ® and enoxaparin as well as the APIs for isoproterenol, nitroprusside, and medroxyprogesterone at our manufacturing facility in China, and we plan to use this facility to manufacture several of the APIs for products in our pipeline.

Additionally, we intend to continue to invest in the expansion of this manufacturing facility.

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● disruptions in the construction of the manufacturing facility;

● 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 the COVID-19 pandemic, which resulted in import and export complications, and otherwise cause shortages in the supply of raw materials or cause disruptions in our manufacturing capability ;

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;

● the imposition of additional tariffs, export controls or other trade barriers as a result of changes in social,

political, and economic conditions or in laws, regulations, and policies governing foreign trade, including U.S.

● the imposition of additional tariffs, export controls or other trade barriers as a result of changes in social, political, and economic conditions or in laws, regulations, and policies governing foreign trade, including U.S.

and foreign export controls such as U.S.

controls preventing the export of a wide-range of items to Russia, new controls impacting the ability to send certain products and technology, specifically related to semi-conductor manufacturing and supercomputing to China without an export license, and the addition of new China-based entities to certain U.S.

restricted party lists including the Entity List and Unverified List, trade sanctions and import laws and regulations, the tariffs previously implemented and additional tariffs that have been proposed by the U.S.

government on various imports from China and by the Chinese government on certain U.S.

goods, the scope and duration of which, if implemented, remain uncertain;

controls, increasing controls impacting the ability to send certain products and technology, specifically related to semi-conductor manufacturing and supercomputing worldwide (including a prohibition on exports, reexports, and transfers to and within China without an export license, and the addition of new China-based entities to certain U.S.

restricted party lists including the Entity List and Unverified List, trade sanctions and import laws and regulations, tariffs on various imports from China and by the Chinese government on certain U.S.

goods including those previously implemented (including additional 10% tariffs levied on imports of Chinese-origin items into the United States as of February 4, 2025) and additional tariffs that have been proposed by the U.S.

government (including additional 25% tariffs proposed on imports of pharmaceutical products into the United States, among other proposed tariffs), the implementation, scope, and duration of which remain uncertain;

● the imposition of retaliatory trade measures by China or other countries in response to new or escalated tariffs, export controls, or other trade measures by the United States, which may affect the availability and/or price of materials used in our supply chain, and the implementation, scope, and duration of which remain uncertain;

● the nationalization or other expropriation of private enterprises or intellectual property by the Chinese government, which could result in the total loss of our investment in China;

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● different labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;

● the uncertainty of protection for intellectual property rights in some countries and resulting exposure to misappropriation of intellectual property or information that is proprietary to us, our customers and other

third parties;

● tariffs and trade barriers, export regulations and other regulatory and contractual limitations on our ability to sell our products;

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trade tariffs and trade disputes between the U.S.

and other countries, instability in the global credit markets, the impact and uncertainty regarding global central bank monetary policy, rising interest rates and increased inflation, the instability in the geopolitical environment as a result of the United Kingdom’s “Brexit” decision to withdraw from the European Union, economic challenges in China and ongoing U.S.

and other countries, instability in the global credit markets, the impact and uncertainty regarding global central bank monetary policy, high interest rates and inflation rates, instability in the geopolitical environment, economic challenges in China and ongoing U.S.

and foreign governmental debt concerns.

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Market uncertainty and instability in Europe or Asia could intensify or spread further, particularly if ongoing stabilization efforts prove insufficient.

Continuing or worsening economic instability could adversely affect sales of our products.

Continuing or worsening economic instability could adversely affect sales of our

Continued turmoil in the geopolitical environment in many parts of the world may also affect the overall demand for our products.

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Circumstances may arise in which we need, or desire, to raise additional capital, and such capital may not be available on commercially reasonable terms, or at all.

In addition, the expansion of our existing international operations, including our facility expansion in Nanjing, China, and entry into additional international markets, including our acquisition of a manufacturing business in Éragny-sur-Epte, France, have required and will continue to require significant management attention and financial resources.

In addition, any further expansion of our existing international operations or entry into additional international markets, would require significant management attention and financial resources.

These and other factors could harm our ability to gain future revenues and, consequently, materially impact our business, results of operations and financial condition.

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Since that time USTR has modified these tariff rates and imposed tariffs on additional goods.

As of February 4, 2025, the U.S.

government has imposed an additional tariff of 10% on the import of almost all Chinese-origin items, and further tariffs have been proposed on additional products, including pharmaceutical products, in an amount of 25% or greater.

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.

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.

Administration has shown on issues related to China, including the imposition of new restrictions on exports related to semi-conductor manufacturing and supercomputing and the addition of entities based in China to various restricted party lists, along with uncertainty regarding how the U.S.

Given the focus of the U.S.

government on issues related to China, including the imposition of new restrictions on exports related to semi-conductor manufacturing and supercomputing, the imposition of outbound investment controls affecting U.S.

persons’ ability to invest in certain enterprises in China, and the addition of entities based in China to various restricted party lists, along with uncertainty regarding how the U.S.

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.

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Department of Commerce, and our activities may be subject to trade and economic sanctions, including those administered by the United States Department of the Treasury’s Office of Foreign Assets Control, or OFAC (collectively, “Trade Controls”).

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.

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.

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.

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Although we have procedures in place designed to ensure our compliance with Trade Controls, any failure to comply could subject us to both civil and criminal penalties, including substantial fines, possible incarceration of responsible individuals for willful violations, possible loss of our export or import privileges, and reputational harm.

Although we have no knowledge that our activities have resulted in violations of Trade Controls, any failure by us or our partners to comply with applicable laws and regulations would have negative consequences for us, including reputational harm, government investigations, and penalties.

Although we have no knowledge that our activities have resulted in violations of Trade Controls, any failure by us or our partners to comply with applicable laws and regulations could have negative consequences for us, including reputational harm, government investigations, and penalties.

The Chinese government may exert substantial influence over the manner in which we conduct our business operations in China.

The Chinese government has exercised, and continues to exercise, substantial control over virtually every sector of the Chinese economy through regulation and state ownership.

Our ability to conduct our proposed manufacturing operations in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property ownership and other matters.

Our ability to conduct our proposed manufacturing operations in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs and other trade restrictions, environmental regulations, land use rights, property ownership and other matters.

We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements.

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● ANP’s ability to control costs, including its operating expenses.

Our business may be affected by new sanctions and export controls targeting Russia and other responses to Russia’s invasion of Ukraine.

Our business may be affected by increasing sanctions and export controls targeting Russia and other responses to Russia’s invasion of Ukraine.

As a result of Russia's invasion of Ukraine, the U.S., the U.K.

and the EU governments, among others, have developed coordinated sanctions and export-control measure packages.

and the EU governments, among others, developed coordinated sanctions and export-control measure packages that continue to include increasing controls.

Based on the public statements to date, these packages include:

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● additional designations of Russian individuals including but not limited to those with significant business interests and government connections;

● enhanced export controls and trade sanctions targeting Russia’s imports of a wide range of goods as a whole, including potentially tighter controls on exports and reexports of items previously subject to only a low level of control, stricter licensing policy with respect to issuing export licenses, and/or increased use of “end-use” controls to block or impose licensing requirements on exports.

● enhanced export controls and trade sanctions targeting Russia’s imports of a wide range of goods and services as a whole, including potentially tighter controls on exports and reexports of items previously subject to only a low level of control, stricter licensing policy with respect to issuing export licenses, increased restrictions on services, and/or increased use of “end-use” controls to block or impose licensing requirements on exports.

Although we do not export any items to Russia, depending on the extent and breadth of any new sanctions or export controls, it is possible that our business, results of operations and financial condition could be adversely affected.

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We may not be granted patents for any of our pending patent applications or any patent applications that we may file in the future and our issued patents may not be upheld if challenged.

Further, we may not be able to detect an unauthorized use of our intellectual property rights if a competitor uses our intellectual property confidentially, in-house, with no public disclosure.

In March 2013, the U.S.

transitioned to a first inventor to file system in which, assuming the other requirements for patentability are met, the first inventor to file a patent application is entitled to receive a patent (rather than the first to invent as was the case under prior U.S.

Further, we may not be able to detect an unauthorized use of our intellectual property rights if a competitor

uses our intellectual property confidentially, in-house, with no public disclosure.

uses a first inventor to file system in which, assuming the other requirements for patentability are met, the first inventor to file a patent application is entitled to receive a patent (rather than the first to invent as was the case under prior U.S.

Accordingly, it is possible that potentially invalidating prior art may become available in between the time that we develop an invention and file a patent application that covers the invention.

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Further, our competitors may infringe our trademarks or we may not have adequate resources to enforce our trademarks.

We are currently, have in the past and in the future may become involved in patent litigations or other intellectual property proceedings relating to our future product approvals, which could result in liability for damages or delay or stop our development and commercialization efforts.

We have in the past and in the future may become involved in patent litigations or other intellectual property proceedings relating to our future product approvals, which could result in liability for damages or delay or stop our development and commercialization efforts.

The pharmaceutical industry has been characterized by significant litigation and other proceedings regarding patents, patent applications and other intellectual property rights.

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If we are unsuccessful in enforcing and protecting our intellectual property rights and protecting our products, it could materially harm our business.

For example, we received a complaint on December 20, 2018, related to our ANDA submitted seeking approval to engage in the commercial manufacture, use and sale of a proposed generic vasopressin injection USP.

Additionally, we have also been involved in patent litigation and antitrust litigation related to our sales of enoxaparin.

For example, we have been involved in patent litigation and antitrust litigation related to our sales of enoxaparin and other products, including albuterol.

For further details, see the section titled Litigation in Note 20 in the accompanying “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.

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Any future adverse determinations in a judicial or administrative proceeding or failure to obtain necessary licenses, whether in these litigations or in other litigations, could result in substantial monetary damage awards and could prevent us from manufacturing and selling our products, which could have a material and adverse effect on our financial condition.

There may also be situations where we use our business judgment and decide to market and sell products, notwithstanding the fact that allegations of patent infringement(s) have not been finally resolved by the courts, which

situation is commonly referred to as an at-risk launch.

The risk involved in doing so can be substantial because the remedies available to the owner of a patent for infringement may include, among other things, damages measured by the profits lost by the patent owner and not necessarily by the profits earned by the infringer as well as injunctive relief, which would halt our ability to market and sell such products altogether.

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These parties may breach or terminate these agreements, and we may not have adequate remedies for such breaches.

Furthermore, these agreements may not provide meaningful protection for our trade secrets, know-how, or other confidential or proprietary information and technologies or result in the effective assignment to us of intellectual property, and may not provide an adequate remedy in the event of unauthorized use or disclosure of confidential information or other breaches of the agreements.

Furthermore, these agreements may not provide meaningful protection for our trade secrets, know-how, or other confidential or proprietary information and technologies or result in the effective

assignment to us of intellectual property, and may not provide an adequate remedy in the event of unauthorized use or disclosure of confidential information or other breaches of the agreements.

Despite our efforts to protect our trade secrets, know-how, and our other confidential and proprietary information and technologies, we or our collaboration partners, board members, employees, consultants, contractors, or scientific and other advisors may unintentionally or willfully disclose our proprietary information to competitors.

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If we or our existing stockholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline.

We maintain a shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $250 million of our common stock, preferred stock, depositary shares, warrants, units, or debt securities.

We may also issue shares of common stock or securities convertible into our common stock from time to time in connection with financings, acquisitions, investments or otherwise.

Any such issuances would result in dilution to our existing stockholders and could cause our stock price to fall.

In addition, we have registered approximately 16.3 million shares subject to options and RSUs outstanding or reserved for future issuance under our equity compensation plans.

In addition, we have registered approximately 16.0 million shares subject to options and RSUs outstanding or reserved

for future issuance under our equity compensation plans.

If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

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Zhang and Luo, each of whom serves as one of our directors and executive officers, and their affiliates beneficially own approximately 25.1% of our outstanding common stock, including shares of common stock subject to options exercisable within 60 days of December 31, 2024.

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 28.1% 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, 2023.

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 27.3% 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, 2024.

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.

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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.

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.

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 of our common stock to decline.

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.

Zhang and Mary Z.

In May 2019, the credit amount was increased to $11.0 million.

Since February 2017, UBS AG has also provided an extension of credit up to the amount of $8.0 million to APCL.

In 2021, the outstanding UBS AG credit line was transferred to UBS Utah due to a UBS organizational change.

As of February 16, 2023, the total outstanding UBS combined credit lines were $11.0 million.

The UBS credit lines are secured by a pledge of 1,750,000 shares of our common stock currently held by APCL.

Interest on the loans accrues at market rates.

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.

As of February 16, 2023, 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.

East West Bank has acceleration rights to protect itself in the event of a default.

During 2021, Drs.

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.

We are not a party to these loans, which are full recourse against APCL and each of Drs.

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.

In 2021, we created a pledging policy to restrict the pledging of shares by our executive officers and directors.

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.

Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines by UBS Group and its affiliates, or UBS, East West Bank, or East West, and Cathay Bank.

As of December 31, 2024, UBS had extended combined credit lines of $11.9 million to Applied Physics & Chemistry Laboratories, Inc., or APCL, which is controlled by Dr.

Zhang and Dr.

Luo, East West had agreed to a loan of up to $8.0 million to Drs.

Zhang and Luo, and Cathay Bank had agreed to a loan of up to $20.0 million to APCL and Dr.

The UBS credit lines are secured by a pledge of 400,000 shares of our common stock currently held by APCL, the East West loan is secured by a pledge of 500,000 shares of our common stock held by Dr.

Zhang and the Cathay Bank loan is secured by a pledge of 1,000,000 shares of our common stock held by APCL and Dr.

Interest on each of these loans accrues at market rates.

UBS has an unlimited and unilateral right to call each of the credit lines for any reason whatsoever, and each of East West and Cathay Bank has acceleration rights to protect itself in the event of a default.

We have a pledging policy to restrict the pledging of shares by our executive officers and directors, which was created in 2021 and most recently amended in 2024.

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-five (25) 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.

This restriction extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.

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 (3) years of December 31, 2021.

As a result of this policy, Drs.

Zhang and Luo reduced their total number of pledged shares to 1,500,000 in January 2024 from 2,350,000 in May 2022, 3,182,898 in February 2022, and 8,582,898 in February 2021.

If the price of our common stock declines, Drs.

While we are not a party to these loans, which are full recourse against APCL and each of Drs.

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, 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.

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● eliminating the ability of stockholders to call a special meeting of stockholders;

● establishing advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at stockholder meetings;

● establishing a classified Board of Directors, whereby only one-third of the members of our Board of Directors are elected at one time;

● providing that vacancies on our board of directors may be filled only by a majority of directors then in office;

● advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management.

● establishing advance notice procedures and requirements for stockholders to nominate candidates for election as directors or to bring matters before meetings of stockholders.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current

management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management.

Furthermore, our amended and restated certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for:

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or (iv) any action 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.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to this provision.

This exclusive-forum provision may discourage lawsuits against us or our directors, officers, and employees.

This provision is not intended to apply to actions arising under the Securities Act of 1933, as amended, or the Securities Act, or the Exchange Act, or any claim for which the federal courts have exclusive jurisdiction.

In addition, our amended and restated bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with any offering of the Company’s securities, including, without limitation, any auditor, underwriter, expert, control person or other defendant.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to these provisions.

These exclusive-forum provisions may discourage lawsuits against us or our directors, officers, and employees.

In addition, we are subject to Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, unless such transactions are approved by our Board of Directors.

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General Risk Factors

Global macroeconomic conditions may negatively affect us and may magnify certain risks that affect our business.

Our business is sensitive to general economic conditions, both inside and outside the U.S.

Slower global economic growth, credit market crises, high levels of unemployment, reduced levels of capital expenditures, government deficit reduction, changes in inflation and interest rate environments, sequestration and other austerity measures and other challenges affecting the global economy adversely affects us and our distributors, customers and suppliers.

It is uncertain how long these effects will last or whether economic and financial trends will worsen or improve.

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.

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 do not benefit the markets we serve, our business and financial statements could be adversely affected.

Additionally, as a result of any future global economic downturn, our third-party payers may delay or be unable to 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.

A reduction in the availability or extent of reimbursement from government and/or private payer healthcare programs could have a material adverse effect on the sales of our products, our business and results of operations.

Current economic conditions may adversely affect the ability of our distributors, customers, suppliers and service providers to obtain the liquidity required to pay for our products or to buy necessary inventory or raw materials and to perform their obligations under agreements with us, which could disrupt our operations, and could negatively impact our business and cash flow.

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.

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.

As a result, any revenue or earnings guidance or outlook which we have given or might give may be overtaken by events, or may otherwise turn out to be inaccurate.

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.

We could be materially and adversely affected by violations of the U.S.

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These risks could cause 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.

Global macroeconomic conditions may negatively affect us and may magnify certain risks that affect our business.

Our business is sensitive to general economic conditions, both inside and outside the U.S.

Slower global economic

growth, credit market crises, high levels of unemployment, reduced levels of capital expenditures, government deficit reduction, changes in inflation and interest rate environments, sequestration and other austerity measures and other challenges affecting the global economy adversely affects us and our distributors, customers and suppliers.

It is uncertain how long these effects will last or whether economic and financial trends will worsen or improve.

In an inflationary environment, we may be unable to raise the prices of our products sufficiently to keep up with the rate of inflation.

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.

Additionally, as a result of any future global economic downturn, our third-party payers may delay or be unable to satisfy their reimbursement obligations.

As a result, any revenue or earnings guidance or outlook which we have given or might give may be overtaken by events, or may otherwise turn out to be inaccurate.

Our results of operations can be adversely affected by labor shortages, turnover and labor cost increases.

Labor is a primary component of operating our business.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high unemployment levels and other government regulations.

We are also experiencing and may continue to experience additional pressure in our supply chain due to labor.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels and government regulations.

A sustained labor shortage or increased turnover rates within our employee base 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.

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Ensuring that we have adequate internal financial and accounting controls and procedures in place to help produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be evaluated frequently.

We are required to disclose changes made in our internal control and procedures on a quarterly basis.

We are required to disclose certain changes made in our internal control and procedures on a quarterly basis.

Our independent registered public accounting firm is required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.

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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.

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 Accounting Standards Update, or ASU, No.

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.

Accounting Standards Codification, or ASC, 606 became effective for us beginning the first quarter of fiscal 2018, and we have adopted it using the modified retrospective transition method.

In addition, were we to change our critical accounting estimates, our results of operations could be significantly impacted.

These or other changes in accounting principles could adversely affect our financial results.

For information regarding the effect of new accounting pronouncements on our financial statements see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes 2 – Summary of Significant Accounting Policies.” Any difficulties in implementing these pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.

There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with GAAP.

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in greater detail in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as discussed in greater detail in “Part II – Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.” the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in our stock price.

Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, provision for chargebacks and rebates, accruals for product returns, valuation of inventory, impairment of intangibles and long-lived assets, accounting for income taxes and share-based compensation.

Furthermore, although we have recorded reserves for litigation related contingencies based on estimates of probable

future costs, such litigation related contingencies could result in substantial further costs.

Furthermore, although we have recorded reserves for litigation related contingencies based on estimates of probable future costs, such litigation related contingencies could result in substantial further costs.

Also, any new or revised accounting standards may require adjustments to previously issued financial statements.

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Changes to existing rules or the questioning of current practices may adversely affect our business and financial results.

Changes in income tax laws, tax rulings and other factors may have a significantly adverse impact on our effective tax rate and 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.

Changes in tax laws, tax rulings and other factors may have a significantly adverse impact on our effective tax rate and 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.

Changes in tax laws, tax rulings, or the way in which such laws and rulings are interpreted or implemented, could adversely affect our effective tax rate and tax expense.

For example, on December 22, 2017, the U.S.

government enacted the Tax Act, which includes significant changes to the taxation of business entities.

These changes include, among others, a federal statutory rate reduction from 35% to 21% effective January 1, 2018, the elimination or reduction of certain domestic deductions and credits, limitations on the deductibility of executive compensation and interest, and a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred.

Our financial statements for the current year now reflect the effects of the Tax Act based on current guidance, including remeasurement of our deferred tax assets and liabilities, as well as the effects of the reduced rate of the U.S.

corporate income tax and certain other provisions of the Tax Act on our effective tax rate and operating results.

Treasury Department, the IRS, and state tax authorities will continue to interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered.

As future guidance is issued, we may make adjustments to amounts that we have previously recorded that may materially impact our financial statements in the period in which the adjustments are made.

In addition, in 2022 the U.S.

government enacted the Inflation Reduction Act, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income.

For example, in 2022 the U.S.

government enacted the Inflation Reduction Act of 2022, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to

our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income.

In addition, beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them over five or fifteen years, and this requirement may impact our effective tax rate and our cash tax liability in future years.

Further, may countries, and organizations such as the Organization for Economic Cooperation and Development have proposed implementing changes to existing tax laws, including a proposed 15% global minimum tax that has been and is being adopted by several countries, with implementation beginning in 2024.

In addition to income taxes in the United States, we are subject to income taxes in many foreign jurisdictions.

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The final determination of any tax audits or related litigation could be materially different from our historical income tax provisions and accruals.

In addition, tax laws are dynamic and subject to change as evidenced by the Tax Act and the Inflation Reduction Act.

In addition, tax laws are dynamic and subject to change.

As new laws are passed and new interpretations of the law are issued or applied, our provision for income taxes may be affected.

Changes to U.S.

tax laws, including taxation of earnings outside of the U.S., the introduction of a base erosion anti-abuse tax and the disallowance of tax deductions for certain book expenses, as well as changes to U.S.

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.

tax laws now or in the future could impact the tax treatment of our earnings, as well as cash and cash equivalent balances we currently maintain.

Furthermore, due to shifting economic and political conditions, tax policies or rates in various jurisdictions may be subject to significant change.

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A significant percentage of the facilities we use for our manufacturing, packaging, warehousing, distribution and administration offices are also located in these areas.

Earthquakes or other natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial

condition and prospects.

If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our facilities, that damaged critical infrastructure, such as our manufacturing facilities, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

Earthquakes or other natural disasters could severely disrupt our operations, and have a material adverse effect on our business, results of operations, financial condition and prospects.

Additionally, we currently rely on third parties whose operations may be disrupted by natural disasters.

For example, in the aftermath of Hurricane Helene we experienced delays in shipments of certain products.

If a natural disaster, power outage or other event occurred that prevented us or the third parties upon whom we depend from using all or a significant portion of our facilities, that damaged critical infrastructure, such as our or third parties’ manufacturing facilities, or that otherwise disrupted operations of ours or those of third parties, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.

The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event.

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● our overall effective tax rate, including impacts caused by any reorganization in our corporate structure, and any new legislation or regulatory developments, including the Tax Act;

● changes in accounting principles;

● general economic and market conditions and overall fluctuations in U.S.

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If we fail to meet or exceed such expectations for these or any other reasons, our business could be materially adversely affected and our stock price could fluctuate or decline substantially.

In addition, if the market for pharmaceutical company stocks or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition.

In addition, if the market for pharmaceutical company stocks or the stock market in general, experiences a loss of

investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition.

The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us.

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As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the Nasdaq Stock Market LLC and other applicable securities rules and regulations.

Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required.

As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results.

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.

Compliance with these rules and regulations imposes significant legal and financial compliance costs and may divert management’s attention from other business concerns, which could adversely affect our business and operating results.

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.

These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.

This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices, including increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.

If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

Failure to comply with these requirements could also subject us to enforcement actions by the SEC, further increase

costs and divert management’s attention, damage our reputation and adversely affect our business, operating results or financial condition.

Failure to comply with these requirements could also subject us to enforcement actions by the SEC, further increase costs and divert management’s attention, damage our reputation and adversely affect our business, operating results or financial condition.

We also believe that being a public company and these rules and regulations make it more expensive for us to obtain director and officer liability insurance.

As a result of disclosure of information in this Annual Report on Form 10-K and in filings required of a public company, our business and financial condition are more visible, which we believe may result in threatened or actual litigation by competitors and other third parties.

If such claims are successful, our business and operating results could be adversely affected.

Even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

We may become involved in securities class action litigation that could divert management’s attention from our business and adversely affect our business and could subject us to significant liabilities.

10 unchanged sentences

PAGA allows an aggrieved staff member to bring a lawsuit on behalf of other current and former staff members for labor code violations.

In addition, third parties may, from time to time, assert claims against us in the form of letters and other communications.

In addition, third parties may, from time to time, assert claims against us in the form

of letters and other communications.

Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices.

1 unchanged sentence

Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, financial condition, results of operations and prospects.

If such claims are successful, our business and operating results could be adversely affected.

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

What changed 10-K

Item 1A. Risk Factors