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Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, those relating to:
+Added: • we may need to raise substantial funds in the future to fund our operations.
+Added: These funds may not be available on acceptable terms or at all and our ability to fund the execution of our business objectives cannot be assured.
+Added: A failure to obtain this necessary capital when needed could force us to delay, limit, scale back or cease some or all operations.
• we have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability;
−Removed: • our business and operations may be adversely affected by the COVID-19 pandemic;
• we may fail to obtain regulatory approvals to market our products in the United States or in other countries;
−Removed: • we may fail to obtain orphan drug status or other marketing exclusivity approvals for our product candidates;
−Removed: • the delay or failure of approval for U.S.
−Removed: market access for our drug candidate Libervant TM
−Removed: • we will need to raise substantial funds in the future, and these funds may not be available on acceptable terms or at all.
−Removed: A failure to obtain this necessary capital when needed could force us to delay, limit, scale back or cease some or all operations;
+Added: • the failure to overcome a present stay on Libervant entering the U.S.
+Added: market due to a competitor's orphan drug market exclusivity status;
• the development of pharmaceutical products involves a lengthy and expensive process, with an uncertain outcome.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product;
−Removed: • i f our competitors are better able to develop and market products for the diagnosis and treatment of diseases of the central nervous system that are safer, more effective, less costly, easier to use or otherwise more attractive than our PharmFilm technology, our business will be adversely impacted;
−Removed: • even if our products are approved for commercial sale, if we are unable to expand our sales and marketing infrastructure, we may not be successful in commercializing our products in the United States;
+Added: • i f our competitors are better able to develop products for the diagnosis and treatment of diseases of the central nervous system and the treatment for anaphylaxis that are safer, more effective, less costly, easier to use or otherwise more attractive than our PharmFilm technology, our business will be adversely impacted;
+Added: • even if our product candidates are approved for commercial sale, if we are unable to develop a sales and marketing infrastructure, we may not be successful in commercializing our products in the United States;
• our ability to commercialize our product candidates will depend in part on the extent to which reimbursement will be available from government and health administration authorities, private health maintenance organizations and health insurers, and other healthcare payors;
+Added: • any delays or changes to the timing, cost and success of clinical trials for AQST- 109 and our other product candidates;
+Added: • failure to generate sufficient data in our PK and PD comparability submission for FDA approval of AQST-109;
• we have entered into, and may enter into collaborations, licensing arrangements, joint ventures, strategic alliances or partnerships with third-parties that may not result in the development of commercially viable products or the generation of significant future revenues;
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• our ability to protect our intellectual property and proprietary technology is uncertain;
−Removed: • we may be subject to damages resulting from claims that we, or our employees, have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors;
+Added: • we may be subject to damages resulting from claims that we, or our colleagues, have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors;
• our products and operations are subject to extensive governmental regulation, and failure to comply with applicable requirements could cause our business to suffer;
• if we issue more shares of our Common Stock to raise capital, our current stockholders will incur substantial dilution;
−Removed: • we may be subject to damages resulting from legal proceedings regarding Suboxone antitrust litigation matters and other litigation matters currently pending against the Company.
+Added: • we may be subject to damages resulting from litigation matters currently pending against the Company;
+Added: • our business and operations may be adversely affected by the COVID-19 pandemic;
+Added: • adverse developments affecting the financial services industry which could adversely affect our current and projected business operations and our financial condition and results of operations.
Risks Related to Our Financial Condition and Need for Additional Capital
We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.
−Removed: We have a limited operating history and, to date we have focused primarily on developing a broad product portfolio.
−Removed: Some of our product candidates will require substantial additional development time and resources before we are able to receive regulatory approvals, implement commercialization strategies and begin generating revenue from product sales.
−Removed: Our commercialization efforts for our self-developed product and product candidates are still in their early stages and we may not generate substantial revenue from sales of our self-developed product and product candidates in the near term, if ever.
+Added: Some of our product candidates will require substantial additional development time and resources before we are able to receive regulatory approvals, implement commercialization infrastructure and strategies, or license product out to begin generating revenue from product sales or royalty streams.
+Added: Our current product candidates are still in their early stages and we may not generate substantial revenue from sales or royalties of our product candidates in the near term, if ever.
We have devoted most of our financial resources to product development.
−Removed: To date, we have financed our operations primarily through the sale of equity and debt securities, proceeds from our debt facilities, and from revenues from certain product licenses and collaborations and from our self-developed product.
+Added: To date, we have financed our operations primarily through the sale of equity and debt securities, proceeds from our debt facilities, and from revenues from certain product licenses and collaborations.
The extent of future net losses will depend, in part, on the rate of future expenditures and our ability to generate revenue.
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Because of the numerous risks and uncertainties associated with pharmaceutical product development, we are unable to fully predict the timing or amount of our expenses.
−Removed: We expect to incur substantial expenses going forward, which we expect will increase as we expand our development, commercialization activities and product portfolio.
+Added: We expect to incur substantial expenses going forward, which we expect will increase as we expand our development activities and product portfolio.
Some of the expenses we expect to incur going forward include:
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• seeking regulatory approval for any of our product candidates that successfully complete clinical development;
−Removed: • commercialization activities, including product sales, marketing, manufacturing and distribution, for our products, if approved;
• maintaining, expanding and protecting our intellectual property portfolio;
• acquiring or in-licensing new technologies or development-stage or approved products;
−Removed: • adding clinical, scientific, operational, financial, sales, marketing, medical and management information systems personnel, including personnel to support our product development and commercialization efforts and to support our transition to operations as a public company;
+Added: • adding clinical, scientific, operational, financial, and management information systems personnel, including personnel to support our product development and to support our operations as a public company;
• experiencing incremental costs due to delays or encountering any issues with any of the above, including, but not limited to, failed or not fully successful trials, complex results, safety issues or other regulatory challenges.
−Removed: We expect to continue to incur net losses for at least the next few years as we pursue the development, commercialization and marketing of our proprietary product candidates.
−Removed: Our net losses may fluctuate significantly from period to period, depending on regulatory approval developments concerning both our late-stage and earlier-stage product candidates, the timing of our planned clinical trials and expenditures on our other research and development, as well as our commercialization activities.
−Removed: We expect our expenses will continue to be substantial in 2022 and future periods as we continue, subject to any delay as a result of the coronavirus pandemic, to:
−Removed: • focus on the approval of Libervant for marketing in the U.S.
−Removed: and, subsequently, if approved, which we cannot assure, its commercialization,
−Removed: • continue to clinically develop AQST-109, subject to any delay from the coronavirus pandemic;
−Removed: • continue to grow Sympazan revenues as a precursor and complement to the eventual launch of Libervant, if approved for U.S.
−Removed: market access, which we cannot assure.
−Removed: We expect to continue to manage the timing and level of expenses in light of the declining Suboxone revenues, offset in part by increasing revenue contributions from Sympazan, while focusing on the development and commercialization of Libervant and AQST-109 and the subsequent commercialization of Libervant, if approved by the FDA for U.S.
−Removed: market access.
−Removed: Until we become profitable, if ever, we expect to need to raise significant additional capital in the future through equity or debt issuances, or both, to continue to manage our expenses to extend our capital runway, in order to further the development, regulatory approval, commercialization and marketing of our products and product candidates, and to conduct our business.
+Added: We expect to continue to incur net losses for at least the next few years as we pursue the development efforts of our product candidates.
+Added: Our net losses may fluctuate significantly from period to period, depending on regulatory approval developments concerning our product candidates, the timing of our planned clinical trials and expenditures on our other research and development.
+Added: We expect our expenses will continue to be substantial in 2023 and future periods as we continue to:
+Added: • continue to clinically develop AQST-109 and provide supporting data needed for market approval from the FDA;
+Added: • continue to seek licensing and other transactions of our product candidates;
+Added: • continue to engage with the FDA to overcome the present stay on Libervant entering the U.S.
+Added: market due to a competitor's orphan drug market exclusivity status.
+Added: We expect to continue to manage the timing and level of expenses in light of the declining Suboxone revenues, while focusing on the development and commercialization of AQST-109.
+Added: Until we become profitable, if ever, we expect to need to raise significant additional capital in the future through equity or debt issuances, or both, to continue to manage our expenses to extend our capital runway, in order to further the development, and regulatory approval of our products and product candidates, and to conduct our business.
We have no committed sources of additional capital, and there can be no assurance that such needed capital or debt financing will be available on favorable terms, or at all.
−Removed: We may seek to obtain additional capital in the future through the issuance of our common stock, through other public or private equity or debt financings, through potential non-dilutive capital raising events that may result from royalty streams that may be realizable from our licensed
−Removed: products or licensed intellectual property, through collaborations or licensing arrangements with other companie s, and through the sale of assets, including product, product candidates, plants or other tangible assets, or by other means, if available.
+Added: We may seek to obtain additional capital in the future through the issuance of our Common Stock, through other public or private equity or debt financings, through potential non-dilutive capital raising events that may result from royalty streams that may be realizable from our licensed products or licensed intellectual property, through collaborations or licensing arrangements with other companie s, and through the sale of assets, including product, product candidates, plants or other tangible assets, or by other means, if available.
We may not be able to raise additional capital or other funding on terms acceptable to us, or at all, and any failure to raise capital as and when needed could compromise our ability to execute on our business plan and cause us to delay or curtail our operations until such funding is received.
−Removed: To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience dilution, and debt financings, if available (and subject to all of the existing restrictions and conditions under the Indenture) may involve increased restrictive covenants and increased fixed payments or may otherwise further constrain our financial flexibility.
+Added: To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience dilution, and debt financings, if available (and subject to all of the existing restrictions and conditions under the Company's debt instruments) may involve increased restrictive covenants and increased fixed payments or may otherwise further constrain our financial flexibility.
To the extent that we raise additional funds through collaborative or licensing arrangements, it may be necessary to relinquish some rights to our intellectual property or grant licenses on terms that are not favorable to us.
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We will need substantial additional capital to fund our operations, which may not be available on acceptable terms, if at all.
−Removed: The Company’s cash requirements for 2022 and beyond include expenses related to continuing development and clinical evaluation of its products, manufacture and supply costs, costs of regulatory filings, patent prosecution expenses and litigation expenses, expenses related to commercialization of our products, as well as costs to comply with the requirements of being a public company operating in a highly regulated industry.
+Added: The Company’s cash requirements for 2023 and beyond include expenses related to continuing development and clinical evaluation of our products, manufacture and supply costs, costs of regulatory filings, patent prosecution expenses and litigation expenses, as well as costs to comply with the requirements of being a public company operating in a highly regulated industry.
As of December 31, 2022, we had $27.3 million of cash and cash equivalents.
On November 3, 2020, we entered into a Purchase and Sale Agreement (the "Monetization Agreement") with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management ("Marathon").
−Removed: Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine product, KYNMOBI.
−Removed: KYNMOBI, an apomorphine film therapy for the treatment of off episodes in Parkinson’s disease patients, received approval from the U.S.
−Removed: Food and Drug Administration (FDA) on May 21, 2020.
+Added: Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine film product, KYNMOBI®, for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020.
We have received an aggregate amount of $50.0 million through December 31, 2022 under the Monetization Agreement.
−Removed: Under the Monetization Agreement, additional aggregate contingent payments of up to $75.0 million may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125.0 million.
−Removed: Based on the current forecast of estimated KYNMOBI sales as of December 31, 2021, the Company may not receive any of the additional aggregate contingent payments under the Monetization agreement.
−Removed: With the upfront proceeds of the monetization, we repaid $22.5 million of the Senior Secured Notes due 2025 (the "12.5% Notes"), and issued $4.0 million of new 12.5% Notes in lieu of paying a prepayment premium on the early repayment of the 12.5% Notes, reducing the aggregate principal balance of 12.5% Notes outstanding to $51.5 million, and such aggregate principal amount remains outstanding as of December 31, 2021.
−Removed: On August 6, 2021, the holders of the 12.5% Notes agreed to extend to June 30, 2022 our ability to access, at our option, an additional $30.0 million of 12.5% Notes re-openers under the Indenture.
−Removed: The first $10.0 million senior notes re-opener represents a commitment of such amount by current holders of 12.5% Notes, at our option, contingent upon FDA approval of our product candidate Libervant.
−Removed: A second $20.0 million senior notes re-opener represents a right, at our option, to market to current holders of our 12.5% Notes, and/or other lenders, additional senior notes up to such amount, contingent upon FDA approval of Libervant for U.S.
−Removed: market access.
−Removed: If and to the extent that we access these re-openers, we will grant warrants to purchase up to 714,000 shares of common stock, with the strike price calculated based on the 30-day volume weighted average closing price of our common stock at the warrant grant date.
−Removed: In addition, as of the closing of this transaction, we issued to the holders of the 12.5% Notes warrants to purchase 143,000 shares of our common stock.
+Added: Under the Monetization Agreement, additional contingent payments of up to $75.0 million may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125.0 million.
+Added: Based on the current forecast by Sunovion of estimated KYNMOBI sales as of December 31, 2022, we may not receive any of the additional contingent payments under the Monetization agreement.
+Added: With the upfront proceeds of the Marathon monetization, we repaid $22.5 million of the Company's Senior Secured Notes due 2025 (the "12.5% Notes"), and issued $4.0 million of new 12.5% Notes in lieu of paying a prepayment premium due to the holders of the 12.5% Notes (the "Holders") under the Indenture dated July 15, 2019, among Aquestive Therapeutics, Inc., as Issuer, any Guarantor that becomes party thereto and U.S.
+Added: Bank National Association, as Trustee and Collateral Agent (the "Indenture") on the early repayment of the 12.5% Notes.
+Added: As a result, we reduced the aggregate principal balance of the 12.5% Notes outstanding to $51.5 million, and such aggregate principal amount remains outstanding as of December 31, 2022.
+Added: In addition, as of the closing of the Marathon monetization transaction, we issued to the holders of the 12.5% Notes warrants to purchase 143,000 shares of our Common Stock.
On October 7, 2021, we entered into the Fourth Supplemental Indenture in connection with the 12.5% Notes.
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The Fourth Supplemental Indenture did not change the maturity date of June 30, 2025 or the interest payment obligation due under the Notes.
−Removed: We may not be able to raise additional capital or secure other funding on terms acceptable to us, or at all, and any failure to raise additional capital or other funding as and when needed for our cash requirements would have a negative impact on our business, financial condition and prospects and on our ability to execute and achieve our business plan.
−Removed: If adequate funds are not available for our liquidity needs and cash requirements as and when needed, or at all, we may be required to reduce staff, significantly delay, significantly scale back or even discontinue some or all of our research and development programs and clinical and other product development activities, reduce our planned commercialization efforts, enter into potential funding arrangements on unattractive terms, and otherwise significantly reduce our cash spend and adjust our operating plan, and we would need to seek to take other steps intended to improve our liquidity, any of which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained.
−Removed: We also may be required to evaluate additional licensing opportunities, if any become available, of our proprietary products and product candidate programs that we currently plan to self-commercialize or explore other potential liquidity opportunities or other alternatives or options or strategic alternatives, including the sale of assets, although we cannot be assured that any of these actions would be available at all or available on reasonable terms.
−Removed: If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing most if not all of their investment in us.
+Added: On May 13, 2022, pursuant to the Fifth Supplemental Indenture, the Holders agreed to further extend from June 30, 2022 to March 31, 2023 our ability to access, at our option, an additional $30.0 million of 12.5% Notes re-openers under the Indenture.
+Added: The Fifth Supplemental Indenture also provided that the Company's access to re-openers is subject to the full approval of Libervant by the FDA for sale in the United States, which full approval includes U.S.
+Added: market access for Libervant.
+Added: In addition, the Fifth Supplemental Indenture provided that the holders of 12.5% Notes have the right, but not the obligation, to purchase the re-openers.
+Added: If and to the extent that we access these re-openers, we will grant the Holders warrants to purchase up to 714,000 shares of Common Stock, with the strike price calculated based on the 30-day volume weighted average closing price of our Common Stock at the warrant grant date.
+Added: In 2019, we established an “at-the-market” (ATM) facility, under which, from time to time, we may offer and sell shares of our Common Stock.
+Added: In April 2022, we entered into a Purchase Agreement with Lincoln Park, under which, from time to time, we may cause Lincoln Park to purchase shares of our Common Stock.
+Added: We may not be able to raise additional capital or secure other funding on terms acceptable to us, or at all, and any failure to raise additional capital or other funding as and when needed for our cash requirements, including payments on our 12.5% Notes, would have a negative impact on our business, financial condition and prospects and on our ability to execute and achieve our business plan.
+Added: We expect to be subject to the issuer "baby shelf" rules of the SEC upon filing this Annual Report on Form 10-K, which will limit our ability to access all available amounts under our ATM and the Lincoln Park Purchase Agreement and limit our ability to otherwise fully utilize our shelf registration statement for capital raising.
+Added: See "Liquidity and Capital Resources".
+Added: If adequate funds are not available for our liquidity needs and cash requirements, as and when needed, from the sources referred to above or otherwise, or at all, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned research and development programs and clinical and other product development activities, or reducing our planned commercialization efforts and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.
+Added: We also may be required to evaluate additional licensing opportunities, if any become available, of our proprietary product and product candidate programs that we currently plan to self-commercialize or explore other potential liquidity opportunities or other alternatives or options or strategic alternatives, including asset sales, although we cannot assure that any of these actions would be available or available on reasonable terms.
+Added: If we do not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing most, if not all, of their investment in the Company.
We may sell additional equity, incur debt or raise funds through licensing arrangements to fund our operations, which may result in dilution to our stockholders, impose restrictions on our business or require us to relinquish proprietary rights.
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The net losses and accumulated deficits were partially offset by gross margins from sales of commercialized licensed and proprietary products, license fees, milestone and royalty payments from commercial licensees and co-development parties.
−Removed: On November 20, 2020, the Company began utilizing the Company's at-the-market (ATM) facility and through December 31, 2020 sold 930,993 shares which provided net proceeds of approximately $6.1 million after deducting commissions and other transaction costs of $0.5 million.
−Removed: On March 26, 2021, the Company filed a prospectus supplement to offer up to an additional $50 million of shares of common stock under the ATM facility.
+Added: On November 20, 2020, the Company began utilizing the Company's ATM facility.
For the year ended December 31, 2022, the Company sold 2,860,538 shares which provided net proceeds of approximately $3.9 million, after deducting commissions and other transaction costs of $0.3 million.
This ATM facility has approximately $33.4 million available at December 31, 2022.
+Added: For the year ended December 31, 2021, the Company sold 6,550,486 shares which provided net proceeds of approximately $29.8 million after deducting commissions and other transaction costs of $1.3 million.
Until such time, if ever, that we can generate sufficient revenue to fully fund our operations, we would need to seek additional capital and cash resources through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
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• the timing of process validation for particular product candidates;
−Removed: • the timing of product launches and market acceptance of such launched products;
+Added: • the timing of addressing any additional data required to obtain FDA approval of AQST-109 and delays as a result thereof;
• changes in the timing of and the amount we spend to research, develop, acquire, license or promote new product candidates;
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• the introduction of new branded and generic products by others that render our product candidates obsolete, subject to greater competition or noncompetitive;
−Removed: • our ability to maintain selling prices and gross margins on our commercial products;
+Added: • our ability to maintain selling prices and gross margins on our products;
+Added: • changes in coverage and reimbursement policies of health plans and other health insurers, including changes to Medicare, Medicaid
+Added: and similar government healthcare programs;
• our ability to comply with complex governmental regulations applicable to many aspects of our business;
−Removed: • changes in coverage and reimbursement policies of health plans and other health insurers, including changes to Medicare, Medicaid and similar government healthcare programs;
−Removed: • increases in the cost of raw materials used to manufacture our commercial products and product candidates;
+Added: • increases in the cost of raw materials used to manufacture our products and product candidates;
• manufacturing and supply interruptions, including product rejections or recalls due to failure to comply with manufacturing specifications or current Good Manufacturing Practices;
• timing of revenue recognition related to our collaboration agreements;
−Removed: • our ability and the significant cost to protect our intellectual property and avoid infringing the intellectual property of others and any adverse developments in any related legal proceeding or in other legal proceeding of any nature;
+Added: • our ability and the significant cost to protect our intellectual property and avoid infringing the intellectual property of others and any adverse developments in any related legal proceeding or in other legal proceedings of any nature;
• the outcome and cost of existing or possible future litigation with third parties.
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At December 31, 2022, we had an aggregate principal amount of $51.5 million of outstanding indebtedness, represented by the 12.5% Notes.
−Removed: In the future, we may need to borrow additional funds.
+Added: In the future, we may need to raise additional funds.
Because of our indebtedness:
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• we may be more vulnerable to general economic downturns and adverse industry conditions;
−Removed: • if cash flows from product sales and revenues from licensed product or collaborative arrangements are insufficient to satisfy our obligations with respect to our existing indebtedness, we may be forced to seek to sell assets (subject to obtaining consent under the Indenture) or seek additional capital, which we may not be able to accomplish on favorable terms, if at all;
+Added: • if cash flow from revenues from licensed product or collaborative arrangements are insufficient to satisfy our obligations with respect to our existing indebtedness, we may be forced to seek to sell assets (subject to obtaining consent under the Indenture) or seek additional capital, which we may not be able to accomplish on favorable terms, if at all;
• we could be limited in our flexibility in planning for, or reacting to, changes in our business and in our industry in general;
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Failure to make required debt service payments or comply with other covenants under our existing debt facilities or such other debt instruments would result in an event of default and acceleration of amounts due, which would have a material adverse effect on our business, financial condition and results of operations.
−Removed: We are dependent upon the commercial success of our licensed and self-commercialized products and other licensing activities to generate revenue for the near future.
−Removed: Although we are in the process of testing and developing proprietary product candidates and may seek to acquire rights in other approved drugs, we anticipate that our ability to generate revenue and to become profitable in the near future will depend upon the continued commercial success of Suboxone, Exservan, KYNMOBI ® and Sympazan, our ability to license Zuplenz, and our ability to commercialize our product candidate Libervant subject to FDA approval including our ability to demonstrate that Libervant will, if approved by the FDA for U.S.
−Removed: market access, represent a "major contribution to patient care" within the meaning of FDA regulations and guidance, as compared to available treatment options.
−Removed: There is no assurance that we will become commercially successful to the extent necessary to become profitable.
+Added: We are dependent upon the commercial success of our licensed products and other licensing activities to generate revenue for the near future.
+Added: Although we are in the process of testing and developing proprietary product candidates and may seek to acquire rights in other approved drugs, we anticipate that our ability to generate revenue and to become profitable in the near future will depend upon the continued commercial success of Sympazan, Suboxone, Exservan, Azstarys, and KYNMOBI in the U.S., the continued commercial success of Ondif® in Brazil, and our ability to commercialize our product candidate Libervant subject to FDA approval for U.S.
+Added: market access, including our ability to overcome the current orphan drug market exclusivity of another approved drug, which is difficult to establish and with limited precedent.
+Added: There can be no assurance that the FDA will agree with our position seeking to overcome such market exclusivity and approve Libervant for U.S.
+Added: market access.
+Added: Further, there is no assurance that we will become commercially successful to the extent necessary to become profitable.
If our current products are not commercially successful, our ability to generate manufacturing and sale margins and licensing or royalty revenues will be impaired.
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If revenues from such key customer were to decline significantly, it would materially adversely affect our business, financial condition and results of operations.
−Removed: In April 2019, the U.S.
−Removed: Department of Justice announced that a federal grand jury sitting in the Western District of Virginia had criminally indicated Indivior PLC, or Indivior, for which we exclusively manufacture and supply Suboxone film products and license certain of our intellectual property, in connection with Indivior’s allegedly deceptive and misleading marketing and distribution practices in its distribution and sale of Suboxone film products, dating back a number of years, and seeking a monetary judgment of not less than $3 billion.
−Removed: Indivior has denied the claims and publicly stated that it intends to contest the allegations vigorously.
Indivior accounted for approximately 76% and 73% of our revenues for 2022 and 2021, respectively, and we believe in the future will continue to account for a substantial part of our revenues.
−Removed: On July 24, 2020, Indivior disclosed a $600 million settlement and disposition of this matter with the U.S.
−Removed: Department of Justice.
−Removed: We cannot assess whether this settlement and disposition will have a material adverse financial impact on our business, prospects, liquidity, financial condition and operating results.
Further, the Indivior License Agreement under which we manufacture and supply Suboxone to Indivior on an exclusive basis, may be terminated should certain causes or events occur.
−Removed: For example, either party may terminate the relationship in connection with a material breach by the other party of its contractual obligations.
+Added: For example, either party to the Indivior License Agreement may terminate the relationship in connection with a material breach by the other party of its contractual obligations.
Indivior may also terminate the Indivior License Agreement if the FDA or other applicable regulatory authority declares our manufacturing site to no longer be suitable for the manufacture of Suboxone or Suboxone is no longer suitable to be manufactured due to health or safety reasons.
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Any such termination would have a material adverse impact on our business, results of operations, capital position and prospects.
−Removed: Indivior has ceased production of the authorized generic product of Suboxone which can be expected to continue to have a material impact on our manufactured product sales and revenues.
−Removed: In early 2019, certain third-party pharmaceutical companies launched at risk, generic film products for buprenorphine-naloxone.
−Removed: Also, in early 2019 Indivior began to market and sell an authorized generic sublingual film product for Suboxone, which we also exclusively manufactured and supplied.
−Removed: In October 2019, Indivior publicly announced its intention to cease production of the authorized generic sublingual film product.
−Removed: Indivior accounted for approximately 73% of our annual revenues in fiscal year 2021.
−Removed: As a result of Indivior’s decision to cease production of the authorized generic sublingual film product, our manufacturing and supply revenue for that product has ceased, which has and we believe will continue to have a material negative impact on our manufacture and supply revenues and our results of operations.
−Removed: Although branded Suboxone has continued to retain meaningful market share, we have planned for the erosion of this sunsetting branded product over time, which will further affect our total revenues and our results from operations.
−Removed: We are currently involved in antitrust litigation in connection with the launch of Suboxone® and any adverse decisions in such litigation could impair our ability to raise addition capital and significantly harm our business.
−Removed: We are named as a defendant in antitrust litigation brought against us and Indivior.
+Added: Although Suboxone has continued to retain meaningful market share, we expect erosion of this sunsetting branded product over time, which will further affect our total revenues and our results from operations.
+Added: Indivior is a party to a number of lawsuits alleging Indivior engaged in deceptive and misleading marketing and distribution practices in its distribution and sale of Suboxone and seeking a monetary relief.
+Added: We cannot assess whether this settlement and disposition will have a material adverse financial impact on our business, prospects, liquidity, financial condition and operating results.
+Added: We have been involved in antitrust litigation in connection with the launch of Suboxone and any adverse decisions in such litigation could impair our ability to raise addition capital and significantly harm our business.
+Added: We were named as a defendant in antitrust litigation brought against us and Indivior.
The litigation involves allegations that we have engaged in conduct intended to interfere with the introduction of generic drug products that would compete with Suboxone in the marketplace.
−Removed: We have denied any wrongdoing and are defending the litigation.
−Removed: However, depending on the outcome of the litigation, including whether or not any judgements are entered against us or Indivior and, if so, the extent of those judgements, our ability to earn revenues from Suboxone may be impaired, which may affect our business, profitability, prospects, financial condition ability to generate sufficient revenues, and our ability to raise additional funding.
−Removed: Moreover, regardless of the merits of any claim, the continued legal and other costs arising from these judicial proceedings may result in substantial additional expenses and divert management’s time and attention away from our other business operations, which could also significantly harm our business .
+Added: On October 19, 2022, the court in that lawsuit entered an order dismissing all claims against the Company in the lawsuit.
+Added: The order dismissing all claims against the Company could be appealed by the plaintiffs in the case.
+Added: The Company is not able to determine or predict whether the plaintiffs will appeal the order or the ultimate outcome of this proceeding or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.
For more information, please see Part II Item 8.
−Removed: Financial Statements and Supplementary Data, Note 20.
−Removed: Contingencies.
−Removed: KYNMOBI ® is commercialized by Sunovion Pharmaceuticals, Inc., therefore, there is no assurance that we will receive additional contingent payments pursuant to the Monetization Agreement in the amount or at the time we have planned, or at all, and any failure to receive such payments would have a material adverse impact on our financial position and capital needs.
+Added: Financial Statements and Supplementary Data, Note 20, Contingencies .
+Added: KYNMOBI ® is commercialized by Sunovion Pharmaceuticals, Inc., therefore, it is unlikely we will receive additional contingent payments pursuant to the Monetization Agreement in the amount or at the time we have planned, or at all, and any failure to receive such payments would have a material adverse impact on our financial position and capital needs.
On November 3, 2020, we entered into a Purchase and Sale Agreement (the "Monetization Agreement") with MAM Pangolin Royalty, LLC, an affiliate of Marathon Asset Management ("Marathon").
−Removed: Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine product, KYNMOBI.
−Removed: KYNMOBI, an apomorphine film therapy for the treatment of off episodes in Parkinson’s disease patients, received approval from the U.S.
−Removed: Food and Drug Administration (FDA) on May 21, 2020.
+Added: Under the terms of the Monetization Agreement, we sold all of our contractual rights to receive royalties and milestone payments due under the Sunovion License Agreement related to Sunovion's apomorphine film product, KYNMOBI, for the treatment of off episodes in Parkinson’s disease patients, which received approval from the FDA on May 21, 2020.
We have received an aggregate amount of $50.0 million through December 31, 2022 under the Monetization Agreement.
Under the Monetization Agreement, additional aggregate contingent payments of up to $75.0 million may be due to us upon the achievement of worldwide royalty and other commercial targets within a specified timeframe, which could result in total potential proceeds of $125.0 million.
−Removed: Based on the current forecast of estimated KYNMOBI sales as of December 31, 2021, the Company may not receive any of the additional aggregate contingent payments under the Monetization agreement.
−Removed: With the upfront proceeds of the monetization, we repaid $22.5 million of the 12.5% Notes, and issued $4.0 million of new 12.5% Notes in lieu of paying a prepayment premium on the early repayment of the 12.5% Notes, reducing the aggregate principal balance of 12.5% Notes outstanding to $51.5 million.
+Added: Based on the current forecast by Sunovion of estimated KYNMOBI sales as of December 31, 2022, the Company likely may not receive any of the additional contingent payments under the Monetization agreement.
+Added: With the upfront proceeds received under the Monetization Agreement, we repaid $22.5 million of the 12.5% Notes, and issued $4.0 million of new 12.5% Notes in lieu of paying a prepayment premium due to the Holders under the Indenture on the early repayment of the 12.5% Notes, reducing the aggregate principal balance of 12.5% Notes outstanding to $51.5 million as of December 31, 2022.
Risks Related to Development and Commercialization of Our Products and Product Candidates
−Removed: We will be required to demonstrate to the FDA that our drug candidate Libervant TM provides a “major contribution to patient care” relative to the approved drugs with the same active moiety for the same indication, and there can be no assurance that we will be successful .
−Removed: We are developing Libervant as an alternative to device-dependent rescue therapies currently available to patients with refractory epilepsy, which are a rectal gel and nasal sprays.
−Removed: We completed the rolling submission of our NDA filing with the FDA for Libervant on November 27, 2019, our NDA for Libervant was accepted by the FDA on February 10, 2020, and a Prescription Drug User Fee Act ("PDUFA") target goal date of September 27, 2020 was assigned by the FDA.
−Removed: On January 10, 2020 Neurelis, Inc.
−Removed: obtained FDA approval of its drug candidate Valtoco ® (diazepam nasal spray).
−Removed: We are seeking to demonstrate that Libervant will, if approved by the FDA for U.S.
−Removed: market access, represent a "major contribution to patient care" within the meaning of FDA regulations and guidance, as compared to available treatment options, as the first, non-device delivered, oral diazepam-based product available to manage seizure clusters in epilepsy patients.
−Removed: However, overcoming the orphan drug marketing exclusivity is difficult to establish, with limited precedent, and there can be no assurance that the FDA will agree with our position seeking to overcome such market exclusivity and approve Libervant for U.S.
+Added: Our business was significantly adversely affected by the determination by FDA that Libervant is approvable, but not approved for U.S.
market access.
−Removed: A company that obtains FDA approval for a designated orphan drug receives market exclusivity for that drug for the designated indication for a period of seven years from the grant date in the United States.
−Removed: This orphan drug exclusivity approval may prevent a subsequent product seeking FDA approval from being marketed in the United States during the exclusivity period for the same active moiety for the same orphan drug indication except in the case where the drug candidate sponsor is able to demonstrate, and the FDA concludes, that the later drug is “clinically superior” to the approved products ( e.g.
−Removed: , safer, more effective, or providing a major contribution to patient care) within the meaning of FDA regulations and guidance.
−Removed: In assessing whether a drug candidate sponsor has demonstrated that its drug candidate provides a “major contribution to patient care” over and above the currently approved drugs, which is evaluated by the FDA on a case by case basis, there is no one objective standard and the FDA may, in appropriate circumstances, consider such factors as convenience of treatment location, duration of treatment, patient comfort, reduced treatment burden, advances in ease and comfort of drug administration, longer periods between doses, and potential for self-administration.
−Removed: If the FDA does not approve our NDA for Libervant, or the continued development of Libervant is significantly delayed or terminated, our business and results of operations could be significantly adversely affected.
On September 25, 2020, we received a Complete Response Letter (CRL) from the FDA for Libervant.
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The Company resubmitted a revised weight-based dosing regimen with modeling and simulations in December 2020.
−Removed: In February 2021, the FDA provided feedback on the December 2020 submission which provided clarity regarding the information that the Agency expected to see in our population pharmacokinetic ('PK") model and safety data as it relates specifically to the patient population included in the studies.
+Added: In February 2021, the FDA provided feedback on the December 2020 submission which provided clarity regarding the information that the FDA expected to see in our
+Added: population pharmacokinetic (PK) model and safety data as it relates specifically to the patient population included in the studies.
In June 2021, we resubmitted our New Drug Application ("NDA") to the FDA.
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On December 20, 2021, we received notification from the FDA that it was not ready to act by the PDUFA target goal date of December 23, 2021 for the Company’s NDA for Libervant Buccal Film, and was unable to provide an estimate of the timing of an expected action.
−Removed: On February 15, 2022, the FDA again corresponding that it was continuing to consider whether the orphan-drug exclusivity granted for another approved product affects the approvability of Libervant and could not provide a specific update regarding timeliness or an anticipated action date for approval of Libervant.
−Removed: Any failure to obtain FDA approval of, and to demonstrate clinical superiority to gain U.S.
−Removed: market access for, Libervant would have a material adverse effect on our business, financial condition and results of operations in 2022 and later.
+Added: On February 15, 2022, the FDA notified us that it was continuing to consider whether the orphan-drug exclusivity granted for another approved product affects the approvability of Libervant and could not provide a specific update regarding timeliness or an anticipated action date for approval of Libervant.
+Added: On August 30, 2022, the FDA provided an approvable letter for Libervant that stated that Libervant was not cleared for U.S.
+Added: market access until the orphan drug market exclusivity for Valtoco, a competing product, ends in January 2027.
+Added: A company that obtains FDA approval for a designated orphan drug receives market exclusivity for that drug for the designated indication for a period of seven years from the grant date in the United States.
+Added: This orphan drug exclusivity approval may prevent a subsequent product seeking FDA approval from being marketed in the United States during the exclusivity period for the same active moiety for the same orphan drug indication except in the case where the drug candidate sponsor is able to demonstrate, and the FDA concludes, that the later drug is “clinically superior” to the approved products ( e.g.
+Added: , safer, more effective, or providing a major contribution to patient care) within the meaning of FDA regulations and guidance.
+Added: In assessing whether a drug candidate sponsor has demonstrated that its drug candidate provides a “major contribution to patient care” over and above the currently approved drugs, which is evaluated by the FDA on a case by case basis, there is no one objective standard and the FDA has determined that Libervant is not "clinically superior" to Valtoco.
+Added: There is no assurance that the FDA will determine that Libervant is "clinically superior" to Valtoco prior to January 2027, and therefore we would not earn any revenues, if any, until then in the United States.
We cannot be certain that we will be able to successfully develop our product candidates or obtain regulatory approval for our product candidates.
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If development within these parameters is unsuccessful, our business could be harmed, and our stock price could be adversely affected.
−Removed: We currently have multiple product candidates in preclinical and clinical development.
+Added: We currently have product candidates in preclinical and clinical development.
Our business depends primarily on the successful clinical development, regulatory approval and commercialization of our product candidates.
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If we do not obtain market exclusivity for our certain of our products, including orphan drug exclusivity, our business may be harmed .
−Removed: We intend to seek exclusivity for certain of our product candidates, including orphan drug exclusivity for Libervant.
+Added: We have sought orphan drug market exclusivity for our drug candidate Libervant and may in the future seek market exclusivity for other product candidates, including orphan drug market exclusivity.
Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs.
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In addition, even if we intend to seek orphan drug designation for any of our product candidates or indications, we may never receive such designations or obtain orphan drug exclusivity.
−Removed: Also, overcoming the orphan drug marketing exclusivity is difficult to establish, with limited precedent, and there can be no assurance that the FDA will agree with our position seeking to overcome such marking exclusivity and approve Libervant for U.S.
+Added: Also, overcoming the orphan drug exclusivity is difficult to establish, with limited precedent, and there can be no assurance that the FDA will agree with our position seeking to overcome such market exclusivity and approve Libervant for U.S.
market access with orphan drug exclusivity.
−Removed: If we fail to receive such extensions or exclusive rights, our ability to prevent competitors from manufacturing, marketing and selling competing products will be materially impaired, and our results of operations and financial condition may be significantly adversely affected.
+Added: If we fail to receive such exclusive rights, our ability to prevent competitors from manufacturing, marketing and selling competing products will be materially impaired, and our results of operations and financial condition may be significantly adversely affected.
C linical trials may be delayed, suspended or terminated for many reasons, which will increase our expenses and delay the time it takes to develop our product candidates.
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• delays or failure to reach an agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites;
−Removed: • the inability to enroll or delays enrolling a sufficient number of patients in trials, particularly in orphan indications, to observe statistically significant treatment effects in the trial;
+Added: • the inability to enroll or delays in enrolling a sufficient number of patients in trials, particularly in orphan indications, to observe statistically significant treatment effects in the trial;
• having clinical sites deviate from the trial protocol;
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We have directly marketed just a single product, Sympazan.
−Removed: With this limited experience, we may lack the necessary expertise, personnel and resources to successfully commercialize this product or our other products that must first receive regulatory approval, either on our own or together with collaborators.
−Removed: We rely on our third-party licensees to commercialize our licensed products, KYNMOBI, Suboxone and Exservan, and to date have only marketed, through our own efforts and with the services of third-party outsourcing vendors including contract sales personnel, our first
−Removed: self-developed product, Sympazan, launched in December 2018.
−Removed: Thus, we have a very limited history of direct experience in commercializing product candidates, and we have no long-term experience upon which to measure our ability or success in commercializing a product or our ability to make predictions about financial results or prospects of any product.
−Removed: To achieve commercial success of our existing product as well as our product candidates, if any more are approved, we are in the process of continuing to develop our own sales, marketing and supply capabilities, including through third-party outsourcing and contract sales personnel.
−Removed: Our ongoing commercial strategy for our products and product candidates involves the development of a commercial infrastructure that spans multiple jurisdictions and is dependent upon our ability to continue to build an infrastructure that is capable of implementing our commercial product launch strategy.
−Removed: The establishment and development of our commercial infrastructure will continue to be expensive and time consuming, and we may not be able to develop our commercial infrastructure successfully or in a timely manner or at all.
+Added: With this limited experience, we may lack the necessary expertise, personnel and resources to successfully commercialize our other product candidates that must first receive regulatory approval, either on our own or together with collaborators.
+Added: We rely on our third-party licensees to commercialize our multiple licensed products and to date have only marketed, through our own efforts and with the services of third-party outsourcing vendors, including contract sales personnel, our first self-developed product, Sympazan, launched in December 2018.
+Added: With the license of Sympazan to Assertio in October, 2022, we scaled back many of our commercial operations, including elimination of our sales and marketing force.
+Added: Given our limited history of direct experience in commercializing product candidates, and current limited commercial operations, we have no long-term experience upon which to measure our ability or success in commercializing future product candidates, if approved, or our ability to make predictions about financial results or prospects of any future launches of product candidates, if approved.
+Added: Our ongoing commercial strategy for our product candidates involves the development of a commercial infrastructure that spans multiple jurisdictions and is dependent upon our ability to build an infrastructure that is capable of implementing our commercial product launch strategy.
+Added: The establishment and development of our commercial infrastructure will be expensive and time consuming, and we may not be able to develop our commercial infrastructure successfully or in a timely manner, or at all.
Doing so will require a high degree of coordination and compliance with laws and regulations in numerous territories, including in the United States, each state, and other countries in which we do business, including restrictions on advertising practices, enforcement of intellectual property rights, restrictions on pricing or discounts, transparency laws and regulations, and unexpected changes in regulatory requirements and tariffs.
−Removed: If we are unable to effectively coordinate such activities or comply with such laws and regulations, our ability to commercialize our products and product candidates in the United States and other jurisdictions in which they are or may be available will be materially adversely affected.
−Removed: Factors that may affect our ability to commercialize our products and product candidates on our own include:
−Removed: recruiting and retaining adequate numbers of effective sales and marketing personnel, including both internally and through contractual third-party outsourcing arrangements, cultivating effective relationships with third-party physicians and overall pharmaceutical industry payors, obtaining access to or persuading adequate numbers of physicians to prescribe our product candidates and other unforeseen costs associated with creating an independent sales and marketing organization.
−Removed: Maintaining a sales and marketing organization requires significant investment and resources, is time-consuming and could delay or impair the launch of our product candidates.
−Removed: We may not be able to build an effective sales and marketing organization in the United States or other key global markets.
+Added: If we are unable to effectively coordinate such activities or comply with such laws and regulations, our ability to commercialize our product candidates in the United States and other jurisdictions in which they are or may be available will be materially adversely affected.
We also intend to enter into strategic licenses with third parties to commercialize our product candidates outside of the United States.
We may have difficulty establishing relationships with third parties on terms that are acceptable to us, or in all of the regions where we wish to commercialize our products, or at all.
−Removed: If we are unable to build our own distribution and marketing capabilities or to find suitable licensees for the commercialization of our products and product candidates, we may have difficulties generating revenue from them and our business, results of operations, financial condition and prospects and the trading price of our stock may be materially adversely affected.
−Removed: Our commercial success depends upon attaining significant market acceptance of our products and product candidates, if approved, among patients, physicians, pharmacists and the medical community.
+Added: If we are unable to build our own distribution and marketing capabilities or to find suitable licensees for the commercialization of our products and product candidates, if approved, we may have difficulties generating revenue from them and our business, results of operations, financial condition and prospects and the trading price of our stock may be materially adversely affected.
+Added: Our success depends upon attaining significant market acceptance of our licensed products and product candidates, if approved, among patients, physicians, pharmacists and the medical community.
It is possible that we may not complete development of our product candidates or obtain regulatory approval for those product candidates.
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While we believe that our internal assumptions are reasonable, these assumptions may be inaccurate.
−Removed: If any of the assumptions proves to be inaccurate, then the actual market for our product candidates could be smaller than our
−Removed: estimates of the potential market opportunity.
+Added: If any of the assumptions proves to be inaccurate, then the actual market for our product candidates could be smaller than our estimates of the potential market opportunity.
If the actual market for our product candidates is smaller than we expect, or if the products fail to achieve an adequate level of acceptance by physicians, health care payors and patients, our revenue from product sales may be limited and we may be unable to achieve or maintain profitability.
−Removed: Further, we may not be able to hire or contract for a sales force that is sufficient in size or has adequate expertise in the medical markets that we intend to target.
−Removed: Any failure or delay in the development of our sales, marketing and distribution capabilities would adversely impact the commercialization of our products.
+Added: Further, we may not be able to hire or contract for a sales force that is sufficient in size or has adequate expertise in the medical markets that we intend to target for our product candidates in the future.
+Added: Any failure or delay in the development of our sales, marketing and distribution capabilities would adversely impact the commercialization of our product candidates, if approved.
Regulatory approval for any approved product is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated, and any allegations of our failure to comply with such approved indications could limit our sales efforts and have a material adverse effect on our business.
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Regulatory authorities do, however, restrict communications by pharmaceutical companies on the subject of off-label use.
−Removed: If our promotional activities fail to comply with the FDA’s regulations or guidelines, we may be subject to warnings from, or enforcement action by, these authorities.
−Removed: In addition, our failure to follow FDA rules and guidelines relating to promotion and advertising may cause the FDA to issue warning letters or untitled letters, bring an enforcement action against us, suspend or withdraw an approved product from the market, require a recall or institute fines, or could result in disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which could materially harm our reputation and our business significantly.
+Added: Promotional activities that fail to comply with the FDA’s regulations or guidelines may be subject to warnings from, or enforcement action by, these authorities and may cause the FDA to issue warning letters or untitled letters, bring an enforcement actions, suspend or withdraw an approved product from the market, require a recall or institute fines, or could result in disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which could materially harm our reputation and our business significantly.
We could incur substantial costs and disruption to our business and delays in the launch of our product candidates if our competitors and/or collaborators bring legal actions against us, which could harm our business and operating results.
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• our ability to maintain a good relationship with regulatory authorities;
−Removed: • our ability to commercialize and market any of our product candidates that receive regulatory approval;
+Added: • our ability to commercialize and market any of our product candidates after receiving regulatory approval;
• the price of our products relative to pricing of branded or generic competitors;
−Removed: • whether coverage and adequate levels of reimbursement are available under private and governmental health insurance plans, including Medicare and Medicaid;
+Added: • whether coverage and adequate levels of reimbursement are available under private and governmental health insurance plans,
+Added: including Medicare and Medicaid;
• our ability to protect intellectual property rights related to our products and product candidates;
−Removed: • our ability to manufacture on a cost-effective basis and sell commercial quantities of our products and product candidates that receive regulatory approval;
+Added: • our ability to manufacture on a cost-effective basis for our products and product candidates that receive regulatory approval;
• acceptance by physicians and other healthcare providers of any of our products and product candidates that receive regulatory approval.
−Removed: If our competitors' market products that are more effective, safer or less expensive than our product candidates, or that reach the market sooner than our product candidates, we may enter the market too late in the cycle and may not achieve commercial success.
+Added: If our competitors' market products that are more effective, safer or less expensive than our product candidates, or that reach the market sooner than our product candidates, our products may enter the market too late in the cycle and may not achieve commercial success.
In addition, the biopharmaceutical industry is characterized by rapid technological change.
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Technological advances or products developed by our competitors may render our technologies or product candidates obsolete, less competitive or not economical.
−Removed: If we are unable to achieve and maintain coverage and adequate reimbursement from third-party payors for our products or product candidates, if approved, their commercial success may be severely hindered.
−Removed: Our ability to commercialize our product candidates successfully will depend in part on the extent to which coverage and adequate reimbursement are available for our product candidates, once approved, from third-party payors, including governmental healthcare programs such as Medicare and Medicaid, commercial health insurers and managed care organizations, and how quickly we obtain such coverage and reimbursement, if we are able to obtain it at all.
+Added: If we are unable to achieve and maintain coverage and adequate reimbursement from third-party payors for our licensed products or product candidates, if approved, their commercial success may be severely hindered.
+Added: Successful commercialization of our licensed products and product candidates, if approved, will depend in part on the extent to which coverage and adequate reimbursement are available from third-party payors, including governmental healthcare programs such as Medicare and Medicaid, commercial health insurers and managed care organizations, and how quickly such coverage and reimbursement can be obtained, if obtained at all.
Third-party payors determine which medications they will cover and establish reimbursement levels.
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• neither experimental nor investigational.
−Removed: Obtaining coverage and reimbursement approval for our product candidates from third-party payors may be a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data, including results from expensive
−Removed: pharmacoeconomic studies, beyond the data required to obtain marketing approval, to each third-party payor.
+Added: Obtaining coverage and reimbursement approval from third-party payors may be a time consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data, including results from expensive pharmacoeconomic studies, beyond the data required to obtain marketing approval, to each third-party payor.
There is no guarantee that we will be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement.
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It is also possible that a third-party payor may consider our products or product candidates as substitutable by less expensive therapies and only offer to reimburse patients for the less expensive product.
−Removed: Even if we show improved efficacy or improved convenience of administration with our products or product candidates, pricing of existing drugs may limit the amount we will be able to charge for our products or product candidates.
+Added: Even if we show improved efficacy or improved convenience of administration with our products or product candidates, pricing of existing drugs may limit the amount that can be charged for our licensed products or product candidates.
These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on investment in product development.
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Levels of reimbursement may also decrease in the future, and future legislation, regulation or reimbursement policies of third-party payors may adversely affect the reimbursement available for and the pricing of our product candidates, once approved, which in turn, could negatively impact the demand for our product candidates.
−Removed: If payors are not adequately reimbursed for our product candidates, they may reduce or discontinue purchases of them, which would result in a significant shortfall in achieving revenue expectations and negatively impact our business, prospects and financial condition.
+Added: If payors are not adequately reimbursed for our licensed products or product candidates, they may reduce or discontinue purchases of them, which would result in a significant shortfall in achieving revenue expectations and negatively impact our business, prospects and financial condition.
Our relationships with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.
If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.
−Removed: Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of our existing proprietary product, any licensed products we are currently marketing and any product candidates for which we obtain marketing approval.
+Added: Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any licensed products currently marketed and any product candidates for which we obtain marketing approval in the future.
Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may subject us to various federal and state fraud and abuse laws and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims laws and the law commonly referred to as the Physician Payments Sunshine Act and regulations promulgated thereunder.
−Removed: These laws will impact, among other things, our clinical research programs and our proposed sales, marketing and educational programs.
+Added: These laws will impact, among other things, our clinical research programs and our proposed sales, marketing and educational programs for our product candidates, if approved.
In addition, we may be subject to patient privacy laws by both the federal government and the states in which we conduct or may conduct our business.
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A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it;
−Removed: • federal civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
+Added: • federal civil and criminal false claims laws, including, without limitation, the False Claims Act, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for
+Added: payment or approval from Medicare, Medicaid or other government payors that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
The PPACA provides, and recent government cases against pharmaceutical and medical device manufacturers support, the view that federal Anti-Kickback Statute violations and certain marketing practices, including off-label promotion, may implicate the False Claims Act;
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Sequestration may result in additional reductions in Medicare and other healthcare funding and, if we obtain regulatory approvals, may otherwise affect the prices we may obtain for our product candidates or the frequency with which our product candidates may be prescribed or used if approved.
−Removed: Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, which is required to be fully implemented in 2019.
+Added: Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, which was fully implemented in 2022.
At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement and their choice of medications to use.
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We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.
+Added: Most recently, the Inflation Reduction Act of 2022, or IRA, included a number of significant drug pricing reforms, which include the establishment of a drug price negotiation program within the U.S.
+Added: Department of Health and Human Services, or HHS (beginning in 2026) that requires manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation (first due in 2023), and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs (beginning in 2025).
The pricing of prescription pharmaceuticals is also subject to governmental control outside the United States.
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Because of the unique equipment and process for manufacturing our thin film foil, transferring manufacturing activities for our foil to an alternate supplier would be a time-consuming and costly endeavor, and there are only a limited number of manufacturers that we believe are capable of performing this function for us.
−Removed: Switching thin film foil suppliers may involve substantial cost and could result in a delay in our desired clinical and commercial
+Added: Switching thin film foil suppliers may involve substantial cost and could result in a delay in our desired clinical and commercial timelines.
If any of our thin film foil manufacturers breach or terminate their agreements with us, we would need to identify an alternative source for the thin film foil manufacture and supply of foil to us for the development and commercialization of the applicable products.
−Removed: Identifying an appropriately qualified source of alternative thin film foil supply for any one or more of these product candidates could be time consuming, and we may not be able to do so without incurring material delays in the development and commercialization of our product candidates, or in satisfying our manufacturing and supply commitments and obligations for our licensed products and our commercialized self-developed products, which could harm our financial position, the commercial potential for our products, and our results of operations, as well as to result in a default in our supply commitments and obligations.
+Added: Identifying an appropriately qualified source of alternative thin film foil supply for any one or more of these product candidates could be time consuming, and we may not be able to do so without incurring material delays in the development and commercialization of our product candidates, or in satisfying our manufacturing and supply commitments and obligations for our licensed products, which could harm our financial position, the commercial potential for our licensed products and product candidates, and our results of operations, as well as to result in a default in our supply commitments and obligations.
Any alternative thin film foil vendor would also need to be qualified through an NDA supplement which could result in further delay.
−Removed: The FDA or other regulatory agencies outside of the United States may also require additional studies if we appoint a new manufacturer for supply of our product candidates that differs from the manufacturer used for clinical development of such product candidates.
−Removed: For our other product candidates, we expect that only one supplier will initially be qualified as a vendor with the FDA.
−Removed: If supply from the approved vendor is interrupted, there could be a significant disruption in commercial supply.
−Removed: These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our approved products and product candidates, cause us to incur higher costs and prevent us from commercializing them successfully.
−Removed: Furthermore, if our suppliers fail to deliver the required commercial quantities of components and active pharmaceutical ingredient on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, we would likely be in default in our supply obligations, which could result in the termination of our supply obligations, our incurring potential default damages and our loss of significant revenues.
−Removed: We rely on third parties to manufacture active pharmaceutical ingredients, or API, for our product candidates, and we intend to rely on third parties to manufacture the API for any other approved products.
−Removed: The commercialization of any of our products could be stopped, delayed or made less profitable if those third parties fail to provide us with sufficient quantities of API or fail to do so at acceptable quality levels or prices or fail to maintain or achieve satisfactory regulatory compliance.
−Removed: We currently rely, and expect to continue to rely, on third parties to manufacture API for our licensed products, our existing proprietary product and our product candidates, and control only certain aspects of their activities.
+Added: The FDA or other regulatory agencies outside of the United States may also require additional studies if we appoint a new manufacturer for supply of our licensed products that differs from the manufacturer used for clinical development of such products.
+Added: For our product candidates, we expect that only one supplier will initially be qualified as a vendor with the FDA.
+Added: If supply from the approved vendor is interrupted, there could be a significant disruption in our development and supply activities.
+Added: These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our approved products and product candidates, cause us to incur higher costs and prevent successful commercialization of our licensed products and product candidates, if approved.
+Added: Furthermore, if our suppliers fail to deliver the required commercial quantities of components and active pharmaceutical ingredient on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, we would likely be in default in our supply obligations, which could result in the termination of our supply agreements, our incurring potential default damages and our loss of significant revenues.
+Added: We rely on third parties to manufacture active pharmaceutical ingredients, or API, for our licensed products and product candidates, and we intend to rely on third parties to manufacture the API for other approved products.
+Added: The commercialization of any of our licensed products and product candidates, if approved, could be stopped, delayed or made less profitable if those third parties fail to provide us with sufficient quantities of API or fail to do so at acceptable quality levels or prices or fail to maintain or achieve satisfactory regulatory compliance.
+Added: We currently rely, and expect to continue to rely, on third parties to manufacture API for our licensed products and our product candidates, and control only certain aspects of their activities.
Any of these third parties may terminate their engagements with us at any time.
−Removed: If we need to enter into alternative arrangements, it could delay our proprietary product candidate programs and commercialization activities.
+Added: If we need to enter into alternative arrangements, it could delay our supply of licensed products, proprietary product candidate programs and commercialization activities.
Our reliance on these third parties reduces our control over these activities but does not relieve us of our responsibility to ensure compliance with all required legal, regulatory and scientific standards and any applicable trial protocols or our obligations under our product supply commitments and obligations.
−Removed: If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated study plans and protocols, we will not be able to complete, or may be delayed in completing, clinical trials required to support future regulatory submissions and approval of our product candidates and we would likely be in default in our supply commitments and obligations, which could result in the termination of our supply obligations, our incurring potential default damages and our loss of significant revenues.
−Removed: Our products and product candidates are highly reliant on very complex sterile techniques and personnel aseptic techniques.
−Removed: The facilities used by us, and by our third-party API manufacturers, to manufacture our products and product candidates must maintain a compliance status acceptable to the FDA or other applicable regulatory authorities pursuant to inspections that will be conducted after we submit our NDA to the FDA.
+Added: If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we will not be able to complete, or may be delayed in completing, clinical trials required to support future regulatory submissions and approval of our product candidates and we would likely be in default in our supply commitments and obligations for our licensed products, which could result in the termination of our supply agreements, our incurring potential default damages and our loss of significant revenues.
+Added: Our licensed products and product candidates are highly reliant on very complex sterile techniques and personnel aseptic techniques.
+Added: The facilities used by us, and by our third-party API manufacturers, to manufacture our licensed products and product candidates must maintain a compliance status acceptable to the FDA or other applicable regulatory authorities pursuant to inspections that will be conducted after we submit our NDA to the FDA.
If we or any of our third-party API manufacturers cannot successfully manufacture material that conforms to our specifications and the applicable regulatory authorities’ strict regulatory requirements, or pass regulatory inspection, we or they will not be able to secure or maintain regulatory approval for the manufacturing facilities.
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Further, as we scale up manufacturing of our product candidates and conduct required stability testing, product, packaging, equipment and process-related issues may require refinement or resolution in order for us to proceed with our planned clinical trials and obtain regulatory approval for commercialization of our product candidates.
−Removed: In the future, for example, we may identify impurities in the product manufactured by us or for us for commercial supply, which could result in increased scrutiny by the regulatory agencies, delays in our clinical program and regulatory approval, increases in our operating expenses, or failure to obtain or maintain approval for our products and product candidates.
−Removed: If the FDA or any other applicable regulatory authority does not approve these facilities for the manufacture of our products or if they withdraw any such approval in the future, or if our suppliers or third-party manufacturers decide they no longer want to manufacture our products, we would need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our products or product candidates and which could also result in default in our supply commitments and obligations, our incurring potential default damages and our loss of significant revenues.
+Added: In the future, for example, we may identify impurities in the product manufactured by us or for us for commercial supply, which could result in increased scrutiny by the regulatory agencies, delays in our clinical program and regulatory approval, increases in our operating expenses, or failure to obtain or maintain approval for our licensed products and product candidates.
+Added: If the FDA or any other applicable regulatory authority does not approve these facilities for the manufacture of our products or if they withdraw any such approval in the future, or if our suppliers or third-party manufacturers decide they no longer want to manufacture our products, we would need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates and which could also result in default in our supply commitments and obligations for our licensed products, our incurring potential default damages and our loss of significant revenues.
More generally, we and our API manufacturers of pharmaceutical products, may often encounter difficulties in production, particularly in scaling up and validating initial production.
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Additionally, we and our API manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments, such as recent events in Ukraine and Russia, or other geopolitical uncertainty.
−Removed: If we or our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to manufacture our products, or to make our product candidates available for clinical trials and development purposes or to further commercialize any of our products and product candidates in the United States, would be jeopardized.
−Removed: Any delay or interruption in our ability to meet commercial demand may result in the loss of significant potential revenues and could adversely affect our ability to gain market acceptance for approved products as well as a potential default of our supply commitments or
+Added: If we or our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to manufacture our products, or to make our product candidates available for clinical trials and development purposes or to further commercialize any of our licensed products and product candidates in the United States, would be jeopardized.
+Added: Any delay or interruption in our ability to meet commercial
+Added: demand may result in the loss of significant potential revenues and could adversely affect our ability to gain market acceptance for approved products as well as a potential default of our supply commitments or obligations.
In addition, any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.
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The occurrence of any of these factors could have a material adverse effect on our business, results of operations, financial condition and prospects.
−Removed: The design, development, manufacture, supply, and distribution of our products and our product candidates is highly regulated and technically complex.
+Added: The design, development, manufacture, supply, and distribution of our licensed products and our product candidates is highly regulated and technically complex.
All entities involved in the preparation of therapeutics for clinical trials or commercial sale are subject to extensive regulation.
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If we or any of our third-party API or component manufacturers fail to maintain regulatory compliance, the FDA can impose regulatory sanctions including, among other things, refusal to approve a pending NDA for a new drug product or revocation of a pre-existing approval.
−Removed: As a result, our business, financial condition and results of operations may be materially harmed resulting in a significant loss of revenues and results and resulting in a potential default in our supply commitments or obligations, which could lead to termination of our supply obligations our incurrence of default damages and our loss of significant revenues.
+Added: As a result, our business, financial condition and results of operations may be materially harmed resulting in a significant loss of revenues and results and resulting in a potential default in our supply commitments or obligations, which could lead to termination of our supply agreements, our incurrence of default damages and our loss of significant revenues.
We may not be successful in establishing development and commercialization collaborations, which could adversely affect, and potentially prohibit, our ability to develop our product candidates.
Because developing pharmaceutical products, conducting clinical trials, obtaining regulatory approvals, establishing manufacturing capabilities and marketing approved products are expensive, we continue to explore collaborations or licensing arrangements with third parties that have available resources and experience both in the United States and in territories outside of the United States.
−Removed: We continue to explore selective collaborations with third parties for development and commercialization of our product candidates both in and outside of the United States.
−Removed: We may, however, be unable to advance the development and/or commercialization of our products and product candidates in territories outside of the United States, which may limit the market potential for certain product candidates outside the U.S.
−Removed: In situations where we enter into a development and commercial collaborative arrangement for a product or product candidate, we may also seek to establish additional collaborations for development and commercialization in territories outside of those addressed by the first collaborative arrangement for such product candidate.
+Added: We continue to explore selective collaborations with third parties for development and commercialization of our products and candidates both in and outside of the United States.
+Added: We may, however, be unable to advance the development and/or commercialization of our products and product candidates in territories outside of the United States, which may limit the market potential for certain products and product candidates outside the U.S.
+Added: In situations where we enter into a development and commercial collaborative arrangement for a product or product candidate, we may also seek to establish additional collaborations for development and commercialization in territories outside of those addressed by the first collaborative arrangement for such product or product candidate.
There are a limited number of potential licensees, and we expect to face competition in seeking appropriate licensees.
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Whether we reach an agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors.
−Removed: Those factors may include the likelihood of approval by the FDA or foreign regulatory authorities, the potential market for the product candidate, the costs and complexities of delivering such product candidate to patients, competing products, and industry and market conditions generally.
+Added: Those factors may include the likelihood of approval by the FDA or foreign regulatory authorities, the potential market for the product or product candidate, the costs and complexities of delivering such product or product candidate to patients, competing products, and industry and market conditions generally.
Collaborations are complex and time-consuming to negotiate and document.
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If we do not have sufficient funds, we may not be able to further develop our product candidates or bring them to market and generate product revenue.
−Removed: We rely on third parties to perform many essential services for Sympazan and any other products that we commercialize, including services related to sales, marketing, customer service support, warehousing and inventory program services, distribution services, contract administration and chargeback processing services, accounts receivable management and cash application services, and financial management and information technology services.
−Removed: If these third parties fail to perform as expected or to comply with legal and regulatory requirements, our ability to commercialize Sympazan and other products we commercialize will be significantly impacted and we may be subject to regulatory sanctions.
−Removed: We have entered into agreements with third-party service providers to perform a variety of functions related to the sale and distribution of our self-developed products, including Sympazan, key aspects of which are out of our direct control.
−Removed: These service providers provide key services related to sales, marketing, customer service support, warehousing and inventory program services, distribution services, contract administration and chargeback processing services, accounts receivable management and cash application services, financial management and information technology services.
−Removed: In addition, our inventory is stored at a warehouse maintained by a third party service provider.
−Removed: We substantially rely on the provider as well as other third-party providers that perform services for us.
−Removed: If these third-party service providers fail to comply with applicable laws and regulations, fail to meet expected deadlines or otherwise do not carry out their contractual duties to us, or encounter damage or disruption at their facilities, our ability to deliver product to meet commercial demand would be significantly impaired.
−Removed: In addition, we may engage third parties to perform various other services for us relating to adverse event reporting, safety database management, fulfillment of requests for medical information regarding our product candidates and related services.
−Removed: If the quality or accuracy of the data maintained by these service providers is insufficient, we could be subject to regulatory sanctions.
−Removed: We may not be successful in maintaining development and commercialization collaborations, and any collaborators may not devote sufficient resources to the development or commercialization of our product candidates or may otherwise fail in development or commercialization efforts, which could adversely affect our ability to develop and successfully commercialize certain of our products and product candidates and our financial condition and operating results.
+Added: We may not be successful in maintaining development and commercialization collaborations, and any collaborators may not devote sufficient resources to the development or commercialization of our products or product candidates or may otherwise fail in development or commercialization efforts, which could adversely affect our ability to develop and successfully commercialize certain of our products and product candidates and our financial condition and operating results.
When we establish collaborative arrangements, such collaboration may not ultimately be successful, which could have a negative impact on our business, results of operations, financial condition and prospects.
−Removed: If we collaborate with a third-party for development and commercialization of a product or product candidate, we can expect to relinquish some or all of the control over the future success of that product candidate to the third-party.
+Added: If we collaborate with a third-party for development and commercialization of a product or product candidate, we can expect to relinquish some or all of the control over the future success of that product or product candidate to the third-party.
It is possible that a third-party collaborator may not devote sufficient resources to the development or commercialization of our product or product candidate or may otherwise fail in development or commercialization efforts, in which event the development and commercialization of such product or product candidate could be delayed or terminated and our business could be substantially harmed.
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• collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.
−Removed: If any such collaborations do not result in the successful development and commercialization of product candidates, or if one of our collaborators terminates its agreement with us, the development or commercialization of our product candidates could be delayed and our business and prospects harmed.
+Added: If any such collaborations do not result in the successful development and commercialization of product candidates, or if one of our collaborators terminates its agreement with us, the development or commercialization of our products or product candidates could be delayed and our business and prospects harmed.
All of the risks relating to product development, regulatory approval and commercialization apply to the activities of our existing and future collaborators.
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During the years ended December 31, 2022 and 2021, Indivior represented 76% and 73% of our total revenue, respectively.
−Removed: If any such conflicts were to arise with Indivior or any such third party could act in its own self-interest, which may be averse to our interests.
−Removed: Any such disagreement between us and a third-party collaborator could result in one or more of the following, each of which could delay or prevent the development or commercialization of our product or product candidates and harm our business:
+Added: If any such conflicts were to arise with Indivior or any other third party collaborators, one or more of the following events could result, each of which could delay or prevent the development or commercialization of our product or product candidates and harm our business:
• reductions in the payment of royalties or other payments we believe are due pursuant to the applicable collaborative arrangement;
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Risks Related to Our Business Operations and Industry
−Removed: We will need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.
−Removed: Our Company has been rapidly growing based upon the number of products and product candidates in our pipeline, and we expect to continue to grow over the next number of years.
−Removed: As our Company matures, we expect to expand our employee base to increase our managerial, scientific and engineering, operational, sales, marketing, financial and other resources and to hire more consultants and contractors.
+Added: We may experience difficulties in managing growth if our business expands to meet future needs, which could disrupt our operations.
+Added: Although it is not expected to be imminent, if our Company needs to expand to meet demands in growth of our manufacturing operations, commercialization of Libervant, if granted U.S.
+Added: market access, or additions to our product pipeline in the future, we would expect to expand our employee base to increase our managerial, scientific and engineering, operational, sales, marketing, financial and other resources and to hire more consultants and contractors.
Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants, contractors and contract employees.
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Our future financial performance and our ability to commercialize our products and product candidates, if approved, and compete effectively will depend, in part, on our ability to effectively manage any future growth.
−Removed: In addition, our expected continuing growth in our management team adds increased expense which we must absorb, without necessarily having commensurate growth in our revenues.
+Added: In addition, any growth in our management team could add increased expense which we must absorb, without necessarily having commensurate growth in our revenues.
Also, to date, we have only directly marketed one product in the market.
−Removed: commercialize and directly market Libervant, this could require a significant upfront expense and create a rapid growth in our workforce.
+Added: If we commercialize and directly market Libervant, if approved for U.S.
+Added: market access, this could require a significant upfront expense and create a rapid growth in our workforce.
This increase in expense may negatively impact our results of operations and may add to our need for additional funds.
−Removed: Our products and, if approved, product candidates, may give rise to potential product liability claims or false marketing claims, and, if successful claims are brought against us, we may incur substantial liability.
+Added: Our licensed products and, if approved, product candidates, may give rise to potential product liability claims or false marketing claims, and, if successful claims are brought against us, we may incur substantial liability.
As a pharmaceutical company, we operate in a market that is subject to significant risk of liability.
−Removed: The sales of our approved products and of any product candidates for which we obtain marketing approval and the use of our product candidates in clinical trials, if any, exposes us to the risk of product liability claims alleging adverse effects from such products or product candidates and false marketing claims relating to the commercialization of such products or product candidates.
−Removed: Product liability or false marketing claims might be brought against us by consumers, healthcare providers, pharmaceutical companies, others selling or otherwise coming into contact with our product candidates, or governmental agencies.
+Added: The sales of any of our licensed products and product candidates for which we may obtain marketing approval and the use of our product candidates in clinical trials, if any, exposes us to the risk of product liability claims alleging adverse effects from such products or product candidates and false marketing claims relating to the commercialization of such products or product candidates.
+Added: Product liability claims might be brought against us by consumers, healthcare providers, pharmaceutical companies, others selling or otherwise coming into contact with our products or product candidates, or governmental agencies.
Suboxone, which treats opioid addiction, has as one of its active ingredients an opioid, buprenorphine.
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• substantial monetary awards to patients or other claimants;
−Removed: • the inability to commercialize our products or product candidates;
−Removed: • decreased demand for our products or product candidates, if approved for commercial sale.
+Added: • the inability to commercialize our licensed products and product candidates;
+Added: • decreased demand for our licensed products or product candidates, if approved for commercial sale.
We may not be able to maintain insurance coverage, and our existing or any future insurance policies or our own resources may not sufficiently cover claims for damages that we may receive in the future.
1 unchanged sentence
It is generally necessary for us to secure certain levels of insurance as a condition for the conduct of clinical trials and any sale or use of our products.
−Removed: We have procured product liability insurance with respect to the sale of our approved products and all clinical trials performed to date for which we were responsible ( i.e., in respect of our internal product pipeline).
−Removed: Further, we may seek to expand our insurance coverage for our approved products and our marketing and commercialization of such products as well as any future approved products as well as other risks related to our business.
+Added: We have procured product liability insurance with respect to the sale of our licensed products and all clinical trials performed to date for which we were responsible ( i.e., in respect of our internal product pipeline).
+Added: Further, we may seek to expand our insurance coverage for our licensed products and our marketing and commercialization of any future approved product candidates as well as other risks related to our business.
Our current product liability insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer.
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We cannot eliminate the risk of accidental contamination or injury from these materials, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.
−Removed: We cannot guarantee that that the safety procedures utilized by third-party manufacturers and suppliers with whom we may contract will comply with the standards prescribed by laws and regulations or will eliminate the risk of accidental contamination or injury from these materials.
+Added: We cannot guarantee that
+Added: that the safety procedures utilized by third-party manufacturers and suppliers with whom we may contract will comply with the standards prescribed by laws and regulations or will eliminate the risk of accidental contamination or injury from these materials.
In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and U.S.
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We expect that our competitors could file citizens’ petitions with the FDA in an attempt to persuade the FDA that our product candidates, or the clinical studies that support their approval, contain deficiencies.
−Removed: If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may be required to
−Removed: change its Section 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2).
+Added: If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may be required to change its Section 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2).
Our products or product candidates may cause adverse effects or have other properties that could delay or prevent their regulatory approval or limit the scope of any approved label or market acceptance, cause us to suspend or discontinue clinical trials, abandon product candidates, or result in significant negative consequences following marketing approval, if any.
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We cannot predict the likelihood, nature or extent of adverse government regulation that may arise from pending or future legislation or administrative action, either in the United States or abroad.
−Removed: If we are not able to achieve and maintain regulatory compliance, we may not be permitted to market our products and/or product candidates, which would materially adversely affect our ability to generate revenue and achieve or maintain profitability.
−Removed: We are required to obtain regulatory approval for each of our products in each jurisdiction in which we intend to market such products, and the inability to obtain such approvals would limit our ability to realize their full market potential.
−Removed: In order to market products outside of the United States, we must comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy.
+Added: If we are not able to achieve and maintain regulatory compliance, we may not be permitted to market or license our products and/or product candidates, which would materially adversely affect our ability to generate revenue and achieve or maintain profitability.
+Added: Regulatory approval is required for each of our products in each jurisdiction in which we intend to market or license such products, and the inability to obtain such approvals would limit our ability to realize their full market potential.
+Added: In order to market products outside of the United States, we or our licensees must comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy.
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.
−Removed: However, the failure to obtain regulatory approval in one jurisdiction may adversely impact our ability to obtain regulatory approval in another jurisdiction.
+Added: However, the failure to obtain regulatory approval in one jurisdiction may adversely impact the ability to obtain regulatory approval in another jurisdiction.
Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods.
−Removed: Seeking foreign regulatory approval could result in difficulties and costs for us and require additional non-clinical studies or clinical trials which could be costly and time consuming.
+Added: Seeking foreign regulatory approval could result in difficulties and costs and require additional non-clinical studies or clinical trials which could be costly and time consuming.
Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries.
−Removed: If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approval in international markets is delayed, our target market will be reduced and our ability to realize the full market potential of our products will be harmed.
+Added: If we or our licensees fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, or if regulatory approval in international markets is delayed, our target market will be reduced and our ability to realize the full market potential of our products will be harmed.
If we fail to develop, acquire or in-license other product candidates or products, our business and prospects will be limited.
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The FDAAA also significantly expands the federal government’s clinical trial registry and results databank, which we expect will result in significantly increased government oversight of clinical trials.
−Removed: Under the FDAAA, companies that violate these and other provisions of the new law are subject to substantial civil monetary penalties, among other regulatory, civil and criminal penalties.
−Removed: The increased attention to drug safety issues may result in a more cautious
−Removed: approach by the FDA in its review of data from our clinical trials.
+Added: Under the FDAAA, companies that violate these and other provisions of this law are subject to substantial civil monetary penalties, among other regulatory, civil and criminal penalties.
+Added: The increased attention to drug safety issues may result in a more cautious approach by the FDA in its review of data from our clinical trials.
Data from clinical trials may receive greater scrutiny, particularly with respect to safety, which may make the FDA or other regulatory authorities more likely to require additional preclinical studies or clinical trials.
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Risks Related to Our Intellectual Property
−Removed: If we are unable to obtain or protect intellectual property rights of any of our product candidates, we may not be able to compete effectively in our market.
+Added: If we are unable to obtain or protect intellectual property rights of any of our products and product candidates, we may not be able to compete effectively in our market.
We rely upon a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to our products and our product candidates.
The issuance, scope, validity, enforceability, strength and commercial value of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain.
−Removed: The patent applications that we own or in-license may fail to result in issued patents with claims that cover the products, if approved, or product candidates in the United States or in foreign countries or territories.
−Removed: If this were to occur, early generic competition could be expected against our products, if approved, and our product candidates in development.
+Added: The patent applications that we own or in-license may fail to result in issued patents with claims that cover the products or product candidates, if approved, in the United States or in foreign countries or territories.
+Added: If this were to occur, early generic competition could be expected against our products and product candidates, if approved.
There may be relevant prior art relating to our patents and patent applications which could invalidate a patent or prevent a patent from issuing based on a pending patent application.
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Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.
−Removed: In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce or which we choose not to seek to patent, and any other elements of our drug development and reformulation processes that involve proprietary know-how, information or technology that is not covered by patents.
−Removed: Although we generally require all of our employees to assign their inventions to us, and we generally seek to have all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
+Added: In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce or which we choose not to seek to patent, and any other elements of our drug development and reformulation processes that involve proprietary know-how, information or technology that is not covered by
+Added: Although we generally require all of our colleagues to assign their inventions to us, and we generally seek to have all of our colleagues, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.
We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.
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We may enjoy only limited geographical protection with respect to certain patents and we may not be able to protect our intellectual property rights throughout the world.
−Removed: Filing and prosecuting patent applications and defending patents covering our products, if approved, or product candidates in all countries throughout the world would be prohibitively expensive.
+Added: Filing and prosecuting patent applications and defending patents covering our products or product candidates, if approved, in all countries throughout the world would be prohibitively expensive.
Competitors may use our and our licensors’ technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we and our licensors have patent protection, but enforcement rights are not as strong as those in the United States or Europe.
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These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation.
−Removed: The United States Patent and Trademark Office, or USPTO, has developed new and untested regulations and procedures to govern the full implementation of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in March 2013.
+Added: The United States Patent and Trademark Office, or USPTO, has developed new and untested regulations and procedures to govern the full implementation of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only
+Added: became effective in March 2013.
The Leahy-Smith Act has also introduced procedures making it easier for third parties to challenge issued patents, as well as to intervene in the prosecution of patent applications.
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District Court for the District of Delaware for the approval by the FDA of generic versions of Suboxone in the United States.
−Removed: Of these, cases against three of the six generic companies have been resolved.
+Added: Of these, cases against all but one of the six generic companies have been resolved.
We are also seeking to enforce our patent rights in multiple cases as further described in Part II Item 8.
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As described in Part II Item 8.
−Removed: Financial Statements and Supplementary Data, Note 20.
−Removed: Contingencies to our consolidated financial statements, a number of our issued patents are involved in litigations.
−Removed: In addition to the challenges we face in those litigations, a number of our issued patents are or have been involved in administrative proceedings, such as reexamination and inter partes review at the USPTO and opposition at the EPO.
+Added: Financial Statements and Supplementary Data, Note 20, Contingencies to our consolidated financial statements, a number of our issued patents are involved in litigation.
+Added: In addition to the challenges we face in those litigation matters, a number of our issued patents are or have been involved in administrative proceedings, such as reexamination and inter partes review at the USPTO and opposition at the EPO.
There can be no assurance that all claims of the challenged patents will be upheld or that the patents challenged by us will be found infringed.
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For more information, please s ee Part II Item 8.
−Removed: Financial Statements and Supplementary Data, Note 20.
−Removed: Contingencies to our consolidated financial statement s.
+Added: Financial Statements and Supplementary Data, Note 20, Contingencies to our consolidated financial statement s.
Third parties may commence legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business.
−Removed: Our commercial success depends, in part, upon our ability, and the ability of our existing and future collaborators, to develop, manufacture, market and sell our product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation or other violation of the patents and proprietary rights of third parties.
+Added: Our commercial success depends, in part, upon our ability, and the ability of our existing and future collaborators, to develop, manufacture, market and sell our products and product candidates, if approved, and use our proprietary technologies without alleged or actual infringement, misappropriation or other violation of the patents and proprietary rights of third parties.
There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries.
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In addition, patent holding companies that focus solely on extracting royalties and settlements by enforcing patent rights may target us.
−Removed: We may have been and in the future may become party to or be threatened with adversarial proceedings or litigation regarding intellectual property rights with respect to our product candidates and technology, which may include interference or derivation proceedings, post grant review and inter partes review before the USPTO or similar adversarial proceedings or litigation in any jurisdiction.
+Added: We may have been and in the future may become party to or be threatened with adversarial proceedings or litigation regarding intellectual property rights with respect to our products, product candidates and technology, which may include interference or derivation proceedings, post grant review and inter partes review before the USPTO or similar adversarial proceedings or litigation in any jurisdiction.
Similarly, we or our licensors or collaborators have initiated, and in the future may initiate, such proceedings or litigation against third parties, which may include challenging the validity or scope of intellectual property rights controlled by third parties.
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Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates.
−Removed: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at
+Added: We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.
In such event, we may be unable to further practice our technologies or develop and commercialize any of our product candidates at issue, which could significantly harm our business.
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The commercial opportunity for our products or product candidates could be significantly harmed if competitors are able to develop and commercialize alternative formulations of our products or product candidates that are different from ours and do not infringe our issued patents covering our products or use of our products.
−Removed: Suboxone, Zuplenz, Sympazan, Exservan and Azstarys have been approved by the FDA, and we anticipate that other product candidates may be approved by the FDA in the future.
+Added: Suboxone, Zuplenz, Sympazan, Exservan, KYNMOBI, and Azstarys have been approved by the FDA, and other product candidates may be approved by the FDA in the future.
As additional products of ours are on the market, one or more third parties may also challenge the patents that we control covering our products, which could result in the invalidation or unenforceability of some or all of the relevant patent claims of our issued patents covering our products.
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In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are common, and there are numerous grounds upon which a third-party can assert invalidity or unenforceability of a patent.
−Removed: Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
+Added: parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation.
Such mechanisms include re-examination, post-grant review, and equivalent proceedings in foreign jurisdictions ( e.g., opposition proceedings).
−Removed: Such proceedings could result in revocation of or amendment to our patents in such a way that they no longer cover our product candidates.
+Added: Such proceedings could result in revocation of or amendment to our patents in such a way that they no longer cover our products or product candidates.
The outcome following legal assertions of invalidity and unenforceability is unpredictable.
With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution.
−Removed: If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates.
+Added: If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our products or product candidates.
Such a loss of patent protection could have a material adverse impact on our business.
−Removed: For more information, please see Part II Item 8.
−Removed: Financial Statements and Supplementary Data, Note 20.
−Removed: Contingencies to our consolidated financial statements.
+Added: For more information, please see Part IV, Note 20, Contingencies to our consolidated financial statements.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
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Litigation may be necessary to defend against these and other claims challenging inventorship or ownership.
−Removed: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual
+Added: If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.
Such an outcome could have a material adverse effect on our business.
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• our execution of other collaborative, licensing or similar arrangements and the timing of payments we may make or receive under these arrangements;
+Added: • our limited cash resources and substantial indebtedness;
• variations in the level of expenses related to our future development programs;
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We may incur substantial costs relating to “excess parachute payments” under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended.
−Removed: We entered into employment agreements with Keith Kendall, our Chief Executive Officer, and A.
−Removed: Mark Schobel, our Chief Innovation and Technology Officer, pursuant to which they are each entitled to receive an additional tax indemnification payment, or a “gross-up” payment, if the payments and benefits under their respective employment agreements or any other benefits plans and programs trigger excise tax liability under Section 4999 of the Internal Revenue Code of 1986, as amended, or the Code, for “excess parachute payments.” Under Sections 280G and 4999 of the Code, the excise tax is triggered by change in control-related payments that, in general, equal or exceed three times Mr.
−Removed: Kendall’s or Mr.
−Removed: Schobel’s, as applicable, average annual taxable compensation over the five calendar years preceding the change in control.
+Added: We entered into an employment agreement with A.
+Added: Mark Schobel, our Chief Innovation and Technology Officer, pursuant to which he is entitled to receive an additional tax indemnification payment, or a “gross-up” payment, if the payments and benefits under his employment agreement or any other benefits plans and programs trigger excise tax liability under Section 4999 of the Internal Revenue Code of 1986, as amended, or the Code, for “excess parachute payments.” Under Sections 280G and 4999 of the Code, the excise tax is triggered by change in control-related payments that, in general, equal or exceed three times Mr.
+Added: Schobel’s average annual taxable compensation over the five calendar years preceding the change in control.
The excise tax equals 20% of the amount of the payment in excess of Mr.
−Removed: Kendall’s or Mr.
−Removed: Schobel’s, as applicable, average taxable compensation over the preceding five calendar year period ( i.e., the excess parachute payments).
+Added: Schobel’s average taxable compensation over the preceding five calendar year period ( i.e., the excess parachute payments).
In addition to providing Mr.
−Removed: Kendall or Mr.
Schobel with a tax gross-up payment, we may not take a federal tax deduction for Mr.
−Removed: Kendall’s and/or Mr.
Schobel’s excess parachute payments.
If an “excess parachute payment” is made to Mr.
−Removed: Kendall and/or Mr.
Schobel, we may incur substantial costs related to a change in control of the Company due to the gross-up payment and the lost federal tax deduction for Mr.
−Removed: Kendall’s and/or Mr.
Schobel’s excess parachute payments.
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• eliminating the ability of stockholders to call a special meeting of stockholders;
−Removed: • 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.
+Added: • establishing advance notice and other requirements, including compliance with the SEC Universal Proxy Rules, for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings.
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.
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Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
−Removed: Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our amended and restated bylaws or any other action asserting a claim against us that is governed by the internal affairs doctrine.
+Added: Our amended and restated certificate of incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, any action asserting a claim against us
+Added: arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our amended and restated bylaws or any other action asserting a claim against us that is governed by the internal affairs doctrine.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.
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• If any third-party in our supply chain for any materials, including active pharmaceutical ingredients and other raw materials supply, which we need for our product candidates for our clinical trials and for the approved products we manufacture and distribute, are adversely impacted by restrictions resulting from the coronavirus pandemic, including staffing shortages, production slowdowns, or disruptions in freight and other transportation services and delivery distribution systems, our supply chain may be disrupted, limiting our ability to manufacture our product candidates for our clinical trials, conduct our research, development and clinical operations, and manufacture, distribute and sell our approved products.
−Removed: • We have closed our business office and requested most of our colleagues located there to work from home, restricted full-time on-site staff generally to those colleagues who must perform essential activities on-site and implemented staggered schedules for full-time on-site staff in our research and development laboratory in order to reduce risk of transmission.
−Removed: Our increased reliance on colleagues and other third parties on whom we rely working from home or having health issues may negatively impact productivity and has limited our in-person commercialization activities for our existing approved proprietary product and would limit commercial launch activities for any new approved product, or disrupt, delay, or otherwise adversely impact our business.
+Added: • Although we have reopened our business office after several months of closure during the coronavirus pandemic, if there is a resurgence of COVID-19 exposures, we may be forced to close our business office again.
+Added: However, we would expect that our colleagues in our research and development laboratory and manufacturing facilities would continue to work on site, with appropriate safety and health measures reimplemented in order to reduce risk of transmission, as they did throughout the pandemic.
+Added: Should such a resurgence occur, our increased reliance on colleagues and other third parties on whom we rely working from home or having health issues may negatively impact productivity and could limit commercial launch activities for any new approved product, or disrupt, delay, or otherwise adversely impact our business.
In addition, this could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations.
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For example, Indivior, our significant customer for Suboxone, had announced that it anticipated coronavirus impact on its product sales.
−Removed: Further, sales force expansion may not be as productive during a time when a significant number of interactions are virtual and such interactions may not be as effective as face-to-face interactions.
−Removed: Additionally, an increasing number of patient visits to their Healthcare Professionals have been virtual during the coronavirus pandemic which may reduce the likelihood that a change in medicine would occur which could impact Sympazan growth.
−Removed: We cannot accurately predict the adverse impact the coronavirus pandemic will have on orders of our approved products Suboxone and Sympazan.
+Added: Although we currently do not anticipate any significant interruption in supply, we continue to monitor this situation closely and there is no assurance that disruptions or delay will not occur as a result of a resurgence of COVID-19 and we cannot accurately predict the adverse impact the coronavirus pandemic will have on orders of our approved product, including Suboxone.
We also have experienced in one instance, and could in the future experience, extended customer payment cycles.
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Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel.
−Removed: We are highly dependent on the principal members of our executive team referenced under Part III.
−Removed: Directors, Executive Officers and Corporate Governance located elsewhere or incorporated by reference in this Annual Report on Form 10-K, and other key executives, the loss of whose services may adversely impact the achievement of our objectives.
+Added: We are highly dependent on the principal members of our executive team and other key executives, the loss of whose services may adversely impact the achievement of our objectives.
Any of our executive officers could leave our employment at any time.
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Failure to comply with data protection laws and regulations could result in government enforcement actions and create liability for us, which could include civil and/or criminal penalties, private litigation and/or adverse publicity that could negatively affect our operating results and business.
−Removed: EU member states and other countries have also adopted data protection laws and regulations which impose significant compliance obligations.
+Added: Member states in the European Union and other countries have also adopted data protection laws and regulations which impose significant compliance obligations.
In the European Union, the collection and use of personal health data has been governed by the provisions of the EU Data Protection Directive.
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Any failure to comply with these laws and regulations or the manner in which they are interpreted or implemented could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results.
−Removed: Our employees, principal investigators, consultants and agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
−Removed: We are exposed to the risk of fraud or other misconduct by our employees, principal investigators, consultants and agents.
+Added: Our colleagues, principal investigators, consultants and agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
+Added: We are exposed to the risk of fraud or other misconduct by our colleagues, principal investigators, consultants and agents.
Misconduct by these parties could include failure to:
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• disclose unauthorized activities to us.
−Removed: In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.
−Removed: These laws and regulations restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
−Removed: Such misconduct also could involve the improper use of information obtained in the course of clinical trials or interactions with the FDA or other regulatory authorities, which could result in regulatory sanctions and cause serious harm to our reputation.
−Removed: It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from government investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
−Removed: If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to
−Removed: resolve allegations of non-compliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our operations, any of which could have a negative impact on our business, financial condition, results of operations and prospects.
−Removed: We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
+Added: We may be subject to claims that our colleagues, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
We employ individuals who were previously employed at other biotechnology or pharmaceutical companies.
−Removed: We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our employees’ former employers or other third parties.
+Added: We may be subject to claims that we or our colleagues, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of our colleagues’ former employers or other third parties.
We may also be subject to claims that former employers or other third parties have an ownership interest in our patents.
Litigation may be necessary to defend against these claims.
−Removed: There is no guarantee of success in defending these claims and even if we are successful, litigation could result in substantial cost and be a distraction to our management and other employees from our core business.
+Added: There is no guarantee of success in defending these
+Added: claims and even if we are successful, litigation could result in substantial cost and be a distraction to our management and other colleagues from our core business.
The market price of our Common Stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock.
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The market price for our Common Stock may be influenced by many factors, including:
−Removed: • sales of our approved products;
• results of clinical trials of our current and any future product candidates or those of our competitors;
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• variations in our financial results or those of companies that are perceived to be similar to us, or our failure to achieve anticipated financial results or funding;
−Removed: • changes in the structure of healthcare payment systems;
• market conditions in the pharmaceutical and biotechnology sectors;
+Added: • inflation and rising interest rates;
• general economic, industry and market conditions;
• the other factors described in this “Risk Factors” section.
−Removed: If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.
+Added: If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our Common Stock could decline.
The trading market for our Common Stock relies, in part, on the research and reports that industry and financial analysts publish about us or our business.
We currently have limited research coverage by industry and financial analysts.
−Removed: Should any analysts then covering
−Removed: our business downgrade their evaluations of our stock, the price of our stock could decline.
+Added: Should any analysts then covering our business downgrade their evaluations of our stock, the price of our stock could decline.
If any analysts then covering our business cease to cover our stock, we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.
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For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation.
−Removed: We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
+Added: We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
+Added: of the completion of our IPO (which is December 31, 2023), (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
We also qualify as a “smaller reporting company,” meaning we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a "smaller reporting company" which allows us to take advantage of many of the same exemptions from disclosure requirements including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and certain reduced financial disclosures in our periodic reports, including this Annual Report on Form 10-K.
−Removed: In addition, we are eligible to remain a smaller reporting company, for so long as we have a public float (based on our common equity) of less than $250 million measured as of the last business day of our most recently completed second fiscal quarter or a public float (based on our common equity) or less than $700 million as of such date and annual revenues of less than $100 million during the most recently completed fiscal year.
+Added: In addition, we are eligible to remain a smaller reporting company, for so long as we have a public float (based on our Common Stock equity) of less than $250 million measured as of the last business day of our most recently completed second fiscal quarter or a public float (based on our Common Stock equity) or less than $700 million as of such date and annual revenues of less than $100 million during the most recently completed fiscal year.
We cannot predict if investors will find our Common Stock less attractive because we may rely on these exemptions.
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Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Common Stock.
+Added: If we fail to or exceed $1.00 per share for a minimum of ten consecutive business days by June 28, 2023, the Company's common stock may become subject to delisting pursuant to Nasdaq's Listing Rule 5450(a)(1).
+Added: On December 30, 2022, the Company received a notice from The Nasdaq Stock Market (“Nasdaq”) that the Company is not in compliance with Nasdaq’s Listing Rule 5450(a)(1), as the minimum bid price of the Company’s Common Stock has been below $1.00 per share for 30 consecutive business days (the “Minimum Bid Price Requirement”).
+Added: The notification of noncompliance has no immediate effect on the listing or trading of the Company’s Common Stock on The Nasdaq Global Market.
+Added: The Company has 180 calendar days, or until June 28, 2023, to regain compliance with the Minimum Bid Price Requirement.
+Added: To regain compliance, the minimum bid price of the Company’s Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period.
+Added: In the event the Company does not regain compliance with the Minimum Bid Price Requirement by June 28, 2023, the Company may be eligible for an additional 180-calendar day compliance period if it elects to transfer to The Nasdaq Capital Market to take advantage of the additional compliance period offered on that market.
+Added: To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period.
+Added: If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the compliance period (or the second compliance period, if applicable), the Company’s Common Stock will become subject to delisting.
+Added: In the event that the Company receives notice that its Common Stock is being delisted, the Nasdaq listing rules permit the Company to appeal a delisting determination by the Staff to a hearings panel.
Sales of a substantial number of shares of our Common Stock in the public market by our existing stockholders would cause our stock price to fall.
−Removed: Sales of a substantial number of shares of our common stock by our existing stockholders, including shares issued to employees and directors in respect of the termination of our Performance Unit Plans, or PUP Plans, in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
+Added: Sales of a substantial number of shares of our Common Stock by our existing stockholders, including shares issued to colleagues and directors in respect of the termination of our Performance Unit Plans, or PUP Plans, in the public market or the perception that these sales might occur, could depress the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities.
We are unable to predict the effect that such sales may have on the prevailing market price of our Common Stock.
2 unchanged sentences
Any sales of securities by these stockholders could have a material adverse effect on the trading price of our Common Stock.
+Added: Adverse developments affecting the financial services industry could adversely affect out current and projected business operations and our financial conditions and results of operation.
+Added: Adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to bank failures and market-wide liquidity problems.
+Added: For example, on March 10, 2023, Silicon Valley Bank ("SVB") was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver.
+Added: Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.
+Added: were each sent into receivership.
+Added: The Department of the Treasury, the Federal Reserve and the FDIC released a statement that indicated that all depositors of SVB would have access to all of their funds, including funds held in uninsured deposit accounts, after only one business day of closure.
+Added: Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program.
+Added: There is no guarantee, however, that the U.S.
+Added: Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.
+Added: We do not hold cash deposits or securities at SVB and have not experienced any adverse impact to our liquidity or to our current and projected business operations, financial condition or results of operations.
+Added: However, uncertainty remains over liquidity concerns in the broader financial services industry, and our business, our business partners, or industry as a whole may be adversely impacted in ways that we cannot predict at this time.
+Added: Although we assess our banking relationships as we believe necessary or appropriate, our access to cash in amounts adequate to finance or capitalization our current projected future business operations could be significantly impaired by factors that affect the financial institutions with which we have banking relationships, and in turn, us.
+Added: These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.
+Added: These factors could also include factors involving financial markets or the financial services industry generally.
+Added: The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations.
+Added: These could include, but may not be limited to, delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;
+Added: or termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.
+Added: In addition, widespread investor concerns regarding the U.S.
+Added: or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
+Added: Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws.
+Added: Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.
+Added: In addition, a critical vendor or business partner could be adversely affected by any of the liquidity or other risks that are described above as factors, which in turn, could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition.
+Added: Any business partner or supplier bankruptcy or insolvency, or any breach or default by a business partner or supplier, or the loss of any significant business partner or supplier relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition.
Unresolved Staff Comments
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.