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Item 1. Business

2024-03-05 compared with 2023-03-31 · 178 added, 148 removed, 441 unchanged (43% of the section changed)

Business Overview

Aquestive Therapeutics, Inc.

("we", "Aquestive", the "Company") is a pharmaceutical company advancing medicines to solve patients' problems with current standards of care and provide transformative products to improve their lives.

We are developing pharmaceutical products that deliver complex molecules through alternative administrations to invasive and inconvenient standard of care therapies.

Aquestive has five licensed commercialized products which are marketed by our licensees in the U.S.

Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients’ lives through innovative science and delivery technologies.

We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies.

We have five licensed commercialized products which are marketed by our licensees in the U.S.

and around the world.

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Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm ® , and has proven drug development and commercialization capabilities.

Aquestive is advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis.

The Company has also developed a product pipeline focused on treating diseases of the central nervous system, or CNS.

We are advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis.

We have also developed a product pipeline focused on treating diseases of the CNS.

Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.

We manufacture licensed products at our facilities and anticipate that our current manufacturing capacity is sufficient for commercial quantities of our products and product candidates currently in development.

Our facilities have been inspected by the Food and Drug Administration (FDA), Australian Government Department of Health's Therapeutics Goods Administration (TGA), and Drug Enforcement Agency (DEA), and are subject to inspection by all applicable health agencies, including the Brazilian Health Regulatory Agency (ANVISA) and European Medicines Agency (EMA).

Not all collaborative or licensed products of the Company that may be commercially launched in the future will necessarily be manufactured by us, such as the case with KYNMOBI®.

We manufacture licensed products at our facilities and anticipate that our current manufacturing capacity is sufficient for commercial quantities of our licensed products and product candidates currently in development.

Our facilities have been inspected by the FDA, TGA, and DEA and are subject to inspection by all applicable health agencies, including ANVISA and EMA.

Not all collaborative or licensed products of Aquestive that may be commercially launched in the future will necessarily be manufactured by us, such as the case with KYNMOBI.

PharmFilm – Our Oral Film Technology

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We believe the innovative nature of our drug delivery platform has the potential to offer a number of meaningful advantages to patients, caregivers and physicians compared to current standard of care therapies, including:

• preferred alternative to more invasive drug administration methods such as injection, rectal or nasal applications;

• faster, or at least equivalent, onset of action;

• ease of administration and availability (no device required, no gel to transport);

• ease of administration and availability (no device required);

• direct absorption into the bloodstream reducing or avoiding “first pass” effects in the liver;

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• stable, durable, portable and quick dissolving (with or without water);

• customizable delivery routes for tailored pharmacokinetic, or PK, profiles (buccal, sublingual or lingual);

• customizable delivery routes for tailored PK, profiles (buccal, sublingual or lingual);

• customizable taste profiles.

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The active programs in our complex molecule pipeline portfolio are:

• AQST-109-SF (or sublingual film)– the first and only orally delivered epinephrine product candidate that has shown clinical results comparable to autoinjectors (such as EpiPen® and Auvi-Q®) for the emergency treatment of allergic reactions, including anaphylaxis.

Epinephrine is the standard of care in the treatment of anaphylaxis and is currently administered via intramuscular injection (IM) including auto-injectors, such as EpiPen® and Auvi-Q®, which require patients or caregivers to inject epinephrine into their thighs during an emergency allergic reaction.

• Anaphylm (epinephrine sublingual film, pronounced “ana-film”) – the first and only non-device based, orally delivered epinephrine product candidate that has shown clinical results comparable to auto-injectors (such as EpiPen® and Auvi-Q®) for the emergency treatment of allergic reactions, including anaphylaxis.

Epinephrine is the standard of care in the treatment of anaphylaxis and is currently administered via intramuscular injection (IM) including auto-injectors, such as EpiPen and Auvi-Q, which require patients or their caregivers to inject epinephrine into the patient’s thighs during an emergency allergic reaction.

As a result of this route of administration, many patients and their caregivers are reluctant to use currently available products;

However, AQST-109 would, if approved by the FDA, allow a patient to simply place a dissolvable strip, approximately the size and weight of a postage stamp, under the tongue, providing an appropriate medication where it is needed, when it is needed and in a form preferred by patients.

We completed a first-in-human Phase 1 clinical trial for AQST-109 in Canada.

This Phase 1 randomized, single-ascending dose study was performed in order to assess the safety, tolerability, and pharmacologic profile of AQST-109.

On February 25, 2022, we reported positive topline data from Part 1 of our crossover study of AQST-109, EPIPHAST, a randomized, open-label, three-part adaptive design, crossover study in healthy adult subjects comparing the pharmacokinetics (PK) and pharmacodynamics (PD) of epinephrine delivered via AQST-109 oral film compared to epinephrine IM.

however, Anaphylm would, if approved by the FDA, allow a patient to simply place a dissolvable strip, approximately the size and weight of a postage stamp, under the tongue, providing an appropriate medication where it is needed, when it is needed and in a form preferred by patients.

We completed a first-in-human Phase 1 clinical trial for Anaphylm in Canada.

This Phase 1 randomized, single-ascending dose study was performed in order to assess the safety, tolerability, and pharmacologic profile of Anaphylm.

In February 2022, the FDA cleared our IND allowing for clinical investigation of Anaphylm in the U.S.

The FDA confirmed that the 505(b)(2) approval pathway is acceptable for the development of Anaphylm.

The FDA granted Fast Track designation in March 2022 to Anaphylm for the emergency treatment of allergic reactions, including anaphylaxis.

In February 2022, we reported positive topline data from Part 1 of our crossover study of Anaphylm, EPIPHAST, a randomized, open-label, three-part adaptive design, crossover study in healthy adult subjects comparing the PK and PD of epinephrine delivered via Anaphylm oral film compared to epinephrine IM.

The EPIPHAST study was also conducted in Canada.

In Part 1 of the EPIPHAST study, multiple oral film formulations and dosage strengths of AQST-109 were evaluated.

The lead formulation of AQST-109 has shown clinically meaningful blood concentrations when delivered in two different physical configurations, with a median time to maximum concentration (Tmax) of 13.5 minutes and 22.5 minutes, respectively.

In Part 1 of the EPIPHAST study, multiple oral film formulations and dosage strengths of Anaphylm were evaluated.

The lead formulation of Anaphylm has shown clinically meaningful blood concentrations when delivered in two different physical configurations, with a median time to maximum concentration (Tmax) of 13.5 minutes and 22.5 minutes, respectively.

Part 1 also showed arithmetic mean maximum concentrations (Cmax) of 771 pg/mL and 580 pg/mL for the two configurations, or geometric mean Cmax values of 258pg/mL and 268pg/mL for the two configurations, respectively.

These geometric mean Cmax and median Tmax values are consistent with those previously reported for approved injectable epinephrine devices such as EpiPen.

Under the EPIPHAST study, the healthy volunteers were also exposed to a 0.5mg IM of epinephrine, allowing for a comparison with the PK, safety, and tolerability of the higher end of the approved dosage range of epinephrine, consistent with guidance received from the FDA in a written response to our Investigational New Drug Application (IND) for AQST-109.

The findings show that these two configurations of the selected AQST-109 formulation can deliver clinically meaningful blood concentrations of epinephrine sooner than that observed with the higher dose of epinephrine IM injection, and in line with existing epinephrine autoinjectors.

In addition, dosing with AQST-109 resulted in changes in blood pressure and heart rate that were comparable to epinephrine auto-injectors.

The EPIPHAST trial indicated that treatment was well tolerated, with no serious adverse events, significant medical events, or treatment-related severe adverse events reported.

On February 24, 2022, the FDA cleared our IND, allowing for clinical investigation of AQST-109 in the U.S.

The FDA confirmed that the 505(b)(2) approval pathway is acceptable for the development of AQST-109.

The FDA granted Fast Track designation in March 2022 to AQST-109 for the emergency treatment of allergic reactions, including anaphylaxis.

In April 2022, we reported positive topline results from Part 2 of the EPIPHAST study for AQST-109.

Part 2 is a randomized, crossover design comparing AQST-109 12mg to epinephrine IM 0.3mg.

Under Part I of the EPIPHAST study, the healthy volunteers were also exposed to a 0.5mg IM of epinephrine, allowing for a comparison with the PK, safety, and tolerability of the higher end of the approved dosage range of epinephrine, consistent with guidance received from the FDA in a written response to our IND for Anaphylm The findings show that these two configurations of the selected Anaphylm formulation can deliver clinically meaningful blood concentrations of epinephrine sooner than that observed with the higher dose of epinephrine IM injection, and in line with existing epinephrine auto-injectors.

In addition, dosing with Anaphylm resulted in changes in blood pressure and heart rate that were comparable to epinephrine auto-injectors.

The Part I EPIPHAST study indicated that treatment was well tolerated, with no serious adverse events, significant medical events, or treatment-related severe adverse events reported.

In April 2022, we reported positive topline results from Part 2 of the EPIPHAST study for Anaphylm.

Part 2 is a randomized, crossover design comparing Anaphylm 12mg to epinephrine IM 0.3mg.

Utilizing a replicate crossover design, Part 2 confirmed in a larger population of 24 healthy subjects the key PK and PD measures observed in Part 1 of the EPIPHAST study and the first-in-human PK study.

The median Tmax was observed to be 15 minutes for AQST-109, compared to 50 minutes for the epinephrine IM 0.3mg.

In July 2022, we reported positive topline results from the final two arms of Part 3 of the EPIPHAST study for AQST-109.

The median Tmax was observed to be 15 minutes for Anaphylm, compared to 50 minutes for the epinephrine IM 0.3mg.

In July 2022, we reported positive topline results from the final two arms of Part 3 of the EPIPHAST study for Anaphylm.

The purpose of Part 3 was to continue to study the administration of the film under a variety of conditions to further characterize its PK, PD and safety.

The final two arms were designed to assess the impact of (1) administering the film sublingually two minutes after consuming a peanut butter sandwich and (2) swallowing the film whole immediately with water.

Part 3 study results demonstrated consistent Tmax of 12 minutes with sublingual administration of AQST-109 epinephrine oral film, after consuming a peanut butter sandwich.

Part 3 study also showed positive results with an unexpectedly high level of gastrointestinal absorption after swallowing AQST-109 whole immediately with water that was distinct from the sublingually absorbed profile.

In September 2022, we reported positive topline results from the EPIPHAST II trial for AQST-109.

The EPIPHAST II trial was designed to compare single doses of AQST-109 to EpiPen 0.3mg and epinephrine IM 0.3mg, as well as repeat doses of AQST-109 to repeat doses of epinephrine IM 0.3mg.

Results from the single dose administration showed AQST-109 achieved a significantly faster Tmax (12 minutes), compared to both EpiPen (22.5 minutes) and epinephrine IM 0.3mg (45 minutes).

AQST-109 repeat dosing provided significantly higher drug plasma concentrations, with a Tmax of 8 minutes after administration, and extensive absorption was observed.

The mean Cmax of AQST-109 was 465 pg/mL after one dose and 2,958 pg/mL after two doses.

Part 3 study results demonstrated consistent Tmax of 12 minutes with sublingual administration of Anaphylm epinephrine oral film, after consuming a peanut butter sandwich.

Part 3 study also showed positive results with an unexpectedly high level of gastrointestinal absorption after swallowing Anaphylm whole immediately with water that was distinct from the sublingually absorbed profile.

In September 2022, we reported positive topline results from the EPIPHAST II trial for Anaphylm.

The EPIPHAST II trial was designed to compare single doses of Anaphylm to EpiPen 0.3mg and epinephrine IM 0.3mg, as well as repeat doses of Anaphylm to repeat doses of epinephrine IM 0.3mg.

Results from the single dose administration showed Anaphylm achieved a significantly faster Tmax (12 minutes), compared to both EpiPen (22.5 minutes) and epinephrine IM 0.3mg (45 minutes).

Anaphylm repeat dosing provided significantly higher drug plasma concentrations, with a Tmax of 8 minutes after administration, and extensive absorption was observed.

The mean Cmax of Anaphylm was 465 pg/mL after one dose and 2,958 pg/mL after two doses.

In comparison, the epinephrine IM 0.3mg Cmax was 489 pg/mL after one dose and 911 pg/mL after two doses.

The single dose of EpiPen resulted in a Cmax of 869 pg/mL.

Changes in systolic blood pressure and heart rate were similar after a single dose of AQST-109 when compared to a single dose of EpiPen.

Changes in systolic blood pressure and heart rate were similar after a single dose of Anaphylm when compared to a single dose of EpiPen.

This data, along with the data from the completed EPIPHAST study, was the basis for our second End-of-Phase 2 (EoP2) meeting with the FDA.

We received a positive written feedback from the FDA after our initial EoP2 meeting request to discuss Chemistry, Manufacturing, and Controls (CMC) for AQST-109, which we believe indicates that our approach to characterizing attributes of AQST-109 appears reasonable in the context of a potential future filing.

We received a positive written feedback from the FDA after our initial EoP2 meeting request to discuss Chemistry, Manufacturing, and Controls (CMC) for Anaphylm, which we believe indicates that our approach to characterizing attributes of Anaphylm appears reasonable in the context of a potential future filing.

In late December 2022, we received the final minutes from the EoP2 meeting with the FDA which provided clarity as to the FDA’s expectations regarding key program areas.

We are conducting an additional PK study to aide in the selection of the comparator products to be used in the upcoming pivotal trial in the second half of 2023.

We anticipate conducting the pivotal PK study in the third quarter of 2023, and continue to plan for a potential launch in 2025, if approved by the FDA.

• AQST-108-SF – AQST-108 is composed of the prodrug dipivefrin which is enzymatically cleaved into epinephrine after administration.

In March 2023, we obtained further clarification from the FDA indicating that we should submit our pivotal study protocol for review once it selects its reference listed drugs (RLDs).

We have completed additional studies that have identified the appropriate auto-injector RLDs and continue to work on the optimal administration parameters.

In April 2023, the FDA conditionally accepted the proprietary name Anaphylm as the proposed brand name for Anaphylm.

Final approval of the Anaphylm proprietary name is conditioned on FDA approval of Anaphylm, if any.

In May 2023, we reported positive results from the latest clinical studies evaluating PK and PD performance of Anaphylm.

The time to maximum blood concentration (median Tmax) for Anaphylm was 10 minutes with a range of 5-20 minutes.

Early drug exposure at 10 minutes for Anaphylm was similar to epinephrine manual injection and over 4

times higher than epinephrine manual injector.

PD effects were observed as early as 2 minutes for both Anaphylm and the auto-injectors.

In July 2023 we released topline data from the latest clinical crossover pilot trial, Study AQ109103 (the “103 Study”), for Anaphylm.

The 103 Study demonstrated that Anaphylm, using the expected finalized dosing administration instructions, delivers epinephrine systemically as effectively as either commercially available autoinjectors or the manual intramuscular (IM) injection.

Administration of Anaphylm 12mg resulted in a geometric mean maximum epinephrine concentration (Cmax) of 457 pg/mL and a median time to maximum concentration (Tmax) of 15 minutes after administration.

The partial Area Under the Curve measurement, or pAUC, was bracketed between previously generated manual 0.3mg IM injection and epinephrine 0.3mg autoinjector data at all time points between 10 and 60 minutes, post-dosing.

Importantly, Anaphylm 12mg met the standards of bracketing in the 103 Study for all the critical parameters that we anticipate measuring in the pivotal PK study, including Cmax and pAUC during the critical early time periods, while remaining similar to autoinjectors for Tmax.

The 103 Study also included crossover arms of Anaphylm 12mg with alternate dosing instructions as well as Anaphylm 14mg with the finalized dosing instructions.

In all cases in the 103 Study, the product was considered safe and well-tolerated with no serious adverse events.

We recently received comments from the FDA on the pivotal Phase 3 PK clinical study protocol for Anaphylm we submitted.

In its comments, the FDA indicated that our proposed endpoints, sample size, and statistical analysis are reasonable.

As anticipated, the FDA also reminded is that PK sustainability post-dosing (30–60 minutes) is an important factor and recommended using repeat-dose data to support PK sustainability.

In December 2023, the first patient was dosed in the initial Phase 3 pivotal Pharmacokinetic (PK) clinical study of Anaphylm (epinephrine).

The two-part, Phase 3, single-center, open-label, randomized study is designed to compare the PK and pharmacodynamics (PD) of single and repeat doses of Anaphylm versus single and repeat doses of the epinephrine IM injection and epinephrine autoinjectors (EpiPen® and Auvi-Q®) in healthy adult subjects.

The primary objective is to compare the PK of epinephrine following the single administration of Anaphylm to single administration of epinephrine IM injection in healthy adult subjects.

The secondary objectives include evaluating PK sustainability following repeat administration and evaluating the safety and tolerability following single and repeat administrations versus epinephrine IM injection and epinephrine autoinjectors.

A comprehensive adult and pediatric Human Factors program, an expected and ongoing part of the Anaphylm clinical development program, will also be included in the Anaphylm NDA to support future labeling and the use of the product by intended patients.

• AQST-108 (sublingual film) – AQST-108 is composed of the prodrug dipivefrin which is enzymatically cleaved into epinephrine after administration.

Dipivefrin is currently available outside of the U.S.

for ophthalmic indications.

A sublingual film formulation

delivering systemic epinephrine has been development by Aquestive for the treatment of conditions other than anaphylaxis.

Based on topline results of a recent second Phase 1 PK trial in 28 healthy adult volunteers conducted by Aquestive, AQST-108 was generally well-tolerated, with systemic adverse events observed that are consistent with the known adverse events profile for epinephrine.

Additional indications and delivery methods are currently being explored preclinically.

Upon completion of the preclinical work, we will request a pre-IND meeting for AQST-108 with the FDA and plan to disclose the indication and path forward for development, once we have received feedback from the FDA.

A sublingual film formulation delivering systemic epinephrine has been developed by Aquestive for the treatment of conditions other than anaphylaxis.

Based on topline results of a prior Phase 1 PK trial in 28 healthy adult volunteers conducted by Aquestive, AQST-108 was generally well-tolerated, with systemic adverse events observed that are consistent with the known adverse events profile for epinephrine.

• Adrenaverse - (epinephrine prodrug platform) – Additional indications and delivery methods are currently being explored under our epinephrine prodrug platform, which we have branded as Adrenaverse.

We have completed an initial formulation of an AQST-108 topical product using the Adrenaverse platform and plan on testing this formulation in humans in the coming months.

Based on in-vitro data, we have seen rapid absorption of AQST-108 across porcine skin tissue.

Although epinephrine is a vasoconstrictor and does not penetrate well through the skin, we believe that the Adrenaverse platform may allow for topical absorption, thereby creating the potential treatment for a variety of dermatological condition.

Upon completion of the preclinical and feasibility work relating to this program, we expect to request a pre-IND meeting for Adrenaverse with the FDA and plan to disclose the indication and path forward for development, once we have received feedback from the FDA.

Proprietary CNS Product Candidate

We believe the application of PharmFilm is particularly valuable and relevant to patients suffering from certain CNS disorders to meet patients' unmet medical needs and to solve patients' therapeutic problems.

We believe there remains significant opportunity to develop additional products in the CNS market.

We believe the application of our proprietary PharmFilm ® technology is particularly valuable and relevant to patients suffering from certain CNS disorders to meet patients’ unmet medical needs and to solve patients’ therapeutic problems.

We believe there remains a significant opportunity to develop additional products in the CNS market.

Additionally, our know-how and proprietary position have broad application beyond CNS, and we plan to explore the applications of PharmFilm in other disease areas.

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Aquestive developed Libervant as an alternative to device-dependent rescue therapies currently available to patients with refractory epilepsy, which are a rectal gel and nasal sprays.

In August 2022, the FDA granted tentative approval for Libervant for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e ., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy 12 years of age and older.

In August 2022, the FDA granted tentative approval for Libervant for the acute treatment of intermittent,

stereotypic episodes of frequent seizure activity ( i.e ., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy 12 years of age and older.

The FDA has concluded that Libervant has met all required quality, safety, and efficacy standards for approval.

Due to an existing FDA regulatory grant of orphan drug market exclusivity for Valtoco®, a diazepam nasal spray product sold by another company, Libervant is not yet eligible for marketing in the United States.

As a result of the FDA determination, the FDA cannot give final approval for Libervant until the expiration or inapplicability of the orphan drug market exclusivity, including, for example, by a reversal of the FDA’s decision and determination that Libervant is “clinically superior” to Valtoco.

We are actively engaging the FDA regarding its determination.

We provided the FDA with additional clinical data in September 2022 and were informed that the FDA was reviewing this data.

Furthermore, in October 2022, we provided the FDA with a draft protocol for a head-to-head comparative PK study of Libervant versus the competing product.

We continue to believe that, particularly in the case of our submitted studies on the effect of food on the absorption of diazepam formulations, Libervant has the distinct advantage of being able to be readily administered when needed without regard to food, providing an important benefit to patients.

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.

market access earlier than January 2027, the schedule date for expiration of orphan drug market exclusivity, if this effort is not successful.

Further, there can be no assurance that a competitor will not obtain other FDA market exclusivity that blocks U.S.

market access for Libervant.

More details on this product approval are described in the “Competition” section of this Item I.

Business of this Form 10-K.

In September 2022, we announced the grant of an exclusive license to Atnahs Pharma UK Limited ("Pharmanovia") for Pharmanovia to develop and commercialize Libervant for the treatment of prolonged or acute, convulsive seizures in all ages in certain countries of the European Union, the United Kingdom, Switzerland, Norway and the Middle East and North Africa (the "Territory") during the term of the Pharmanovia licensee.

Pharmanovia will lead the regulatory and commercialization activities for Libervant in the Territory and the Company will serve as the exclusive sole manufacturer and supplier of Libervant in the Territory.

Licensed Commercial Products and Product Candidates

Our portfolio also includes products and product candidates that we have licensed, or will seek to license, or for which we have licensed our intellectual property for commercialization.

Due to an existing FDA regulatory grant of orphan drug market exclusivity for Valtoco®, a diazepam nasal spray product sold by another company for use in patients 12 years of age and older, the FDA has determined that Libervant is not yet eligible for marketing in the United States.

As a result of this determination, the FDA cannot give final approval for Libervant until the expiration of the orphan drug market exclusivity in January 2027.

In June 2023, we filed an NDA for Libervant for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e.

, seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two and five years of age.

The FDA accepted the filing for review and assigned a PDUFA goal date of April 28, 2024.

Diastat ® (diazepam) rectal gel is the only treatment currently available to this age group of patients for this indication.

There is no assurance that, if the pediatric NDA for Libervant is approved by the FDA, it will overcome the orphan drug exclusivity granted by the FDA for Valtoco and be granted U.S.

market access for this patient age group.

Further, there can be no assurance that another company will not obtain other FDA market exclusivity that blocks U.S.

market access for Libervant for any age group in this patient population.

See “Licensed Commercial Products and Product Candidates and Other Products – Libervant” for a discussion of the licensing arrangement for this product candidate.

Licensed Commercial Products and Product Candidates and Other Products

Our portfolio also includes other products and product candidates that we have licensed, or will seek to license, or for which we have licensed our intellectual property for commercialization.

In the years ended December 31, 2023 and 2022, our licensed product portfolio generated $50.6 million and $47.7 million in revenue to Aquestive, respectively.

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We are the sole and exclusive supplier and manufacturer of Suboxone and have produced over 2.7 billion doses of Suboxone since its launch in 2010.

As of December 31, 2022, Suboxone retains approximately 34% film market share as generic film-based products have penetrated this market.

As of December 31, 2023, Suboxone branded products retain approximately 31% film market share as generic film-based products have penetrated this market.

We have filed patent infringement lawsuits against certain companies relating to generic film-based products for buprenorphine-naloxone.

More details regarding these lawsuits are described in Part II Item 8.

Financial Statements and Supplementary Data, Note 20, Contingencies .

• Exservan ® – an oral film formulation of riluzole, has been developed by the Company for the treatment of amyotrophic lateral sclerosis (ALS).

Financial Statements and Supplementary Data, Note 22, Contingencies , contained herein.

• Exservan ® – an oral film formulation of riluzole, has been developed by Aquestive for the treatment of ALS.

We believe that Exservan can bring meaningful assistance to patients who are diagnosed with ALS and face difficulties swallowing traditional forms of medication.

Exservan was approved by the FDA on November 22, 2019.

During the fourth quarter of 2019, we announced the grant of a license to Zambon S.p.A.

("Zambon") for the development and commercialization of Exservan in the European Union (EU) for the treatment of ALS.

During the fourth quarter of 2019, we announced the grant of a license to Zambon for the development and commercialization of Exservan in the for the treatment of ALS.

Zambon is a multinational pharmaceutical company with a focus on the CNS therapeutic area.

Under the terms of the license agreement with Zambon, an upfront payment was

paid to Aquestive for the development and commercialization rights of Exservan in the EU, and Aquestive will be paid development and sales milestone payments and low double-digit royalties on net sales of the product in the EU.

Zambon is responsible for the regulatory approval and marketing of Exservan in the countries where Zambon seeks to market the product, and Aquestive will be responsible for the development and manufacture of the product.

During the fourth quarter of 2022, Aquestive received a $0.5 million milestone payment upon in connection with the receipt of regulatory approval for Exservan pursuant to the terms of the license agreement with Zambon.

In January 2021, we announced that the Company granted an exclusive license to Mitsubishi Tanabe Pharma Holdings America, Inc.

("MTHA") for the commercialization in the United States of Exservan.

Under the terms of the license agreement with Zambon, an upfront payment was paid to Aquestive for the development and commercialization rights of Exservan in the EU, and Aquestive will be paid development and sales milestone payments and low double-digit royalties on net sales of the product in the EU, marketed as Emylif by Zambon.

Zambon is responsible for the regulatory approval and marketing of Exservan in the countries where Zambon seeks to market the product, and Aquestive is responsible for the development and manufacture of the product.

During the fourth quarter of 2022, Aquestive received a $0.5 million milestone payment in connection with the receipt of regulatory approval for Exservan pursuant to the terms of the license agreement with Zambon.

During the second quarter of 2023, Aquestive received a $0.5 million milestone payment in connection with the first commercial sale in the first country in the licensed territory for Exservan pursuant to the terms of the license agreement with Zambon.

In January 2021, we announced that we granted an exclusive license to MTHA for the commercialization in the United States of Exservan.

MTHA is a multinational pharmaceutical company with a focus on patients with ALS.

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Exservan may potentially fulfill a critical need for ALS patients, given it can be administered safely and easily, twice daily, without water.

In March 2022, we announced the grant of an exclusive license to Haisco Pharmaceutical Group Co., Ltd.

("Haisco") for Haisco to develop and commercialize Exservan for the treatment of ALS in China.

In March 2022, we announced the grant of an exclusive license to Haisco for them to develop and commercialize Exservan for the treatment of ALS in China.

Haisco is a China-based public pharmaceutical company.

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Aquestive will serve as the exclusive sole manufacturer and supplier for Exservan in China.

Under the the terms of license agreement with Haisco, as amended, Aquestive received a $7.0 million upfront cash payment, and will receive regulatory milestone payments, double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China.

Under the terms of license agreement with Haisco, as amended, Aquestive received a $7.0 million upfront payment in September 2022, and will receive regulatory milestone

payments, double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China.

• KYNMOBI ® – a sublingual film formulation of apomorphine, which is a dopamine agonist, was developed to treat episodic off-periods in Parkinson’s disease.

We licensed our intellectual property to Cynapsus Therapeutics, Inc., a company that was acquired by Sunovion Pharmaceuticals Inc., or Sunovion, for the commercialization of KYNMOBI under an Agreement dated April 1, 2016, as amended (the "Sunovion License Agreement").

We licensed our intellectual property to Cynapsus Therapeutics, Inc., a company that was acquired by Sunovion for the commercialization of KYNMOBI under an Agreement dated April 1, 2016, as amended by the Sunovion License Agreement.

KYNMOBI was approved by the FDA on May 21, 2020 and commercially launched by Sunovion in September 2020.

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").

On November 3, 2020, we entered into the Monetization Agreement with MAM Pangolin Royalty, LLC, an affiliate of Marathon.

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.

In June 2023, Sunovion announced that it has voluntarily withdrawn KYNMOBI from the U.S.

and Canadian markets, therefore, we likely will not receive any of the additional contingent payments under the Monetization agreement.

• Zuplenz ® – an oral soluble film formulation of ondansetron, a 5-HT antagonist, was developed for the treatment of nausea and vomiting associated with chemotherapy and post-operative recovery.

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We licensed commercial rights for Zuplenz to Hypera in Brazil (which Hypera markets as Ondif).

Hypera received approval to market Zuplenz in Brazil from the Brazilian regulatory authority (ANVISA) on February 21, 2022.

We licensed commercial rights for Zuplenz to Fortovia Therapeutics Inc.

(previously Midatech Pharma PLC, "Fortovia") in the United States, Canada, and China.

Hypera received approval to market Zuplenz in Brazil from ANVISA on February 21, 2022.

We received a $0.9 million milestone payment in connection with this transaction.

We licensed commercial rights for Zuplenz to Fortovia (previously Midatech Pharma PLC) in the United States, Canada, and China.

Fortovia launched Zuplenz in the United States in 2015.

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On January 29, 2021, the Bankruptcy Court approved an agreement pursuant to which the license and supply agreement between Aquestive and Fortovia was terminated, and all rights to commercialize Zuplenz returned to us, effective January 30, 2021.

• Azstarys TM – an FDA-approved, once-daily product for the treatment of attention deficit hyperactivity disorder (ADHD) in patients age six years or older.

• Azstarys TM – an FDA-approved, once-daily product for the treatment of ADHD in patients age six years or older.

AZSTARYS consists of serdexmethylphenidate, a prodrug of d-methylphenidate (d-MPH), co-formulated with immediate release d-MPH.

In March 2012, the Company entered into an agreement with Zevra Therapeutics, Inc.

(formerly KemPharm, Inc.) (“Zevra”), to terminate a Collaboration and License Agreement entered into by the Company and Zevra in April 2011.

Under this termination arrangement, the Company has the right to participate in any and all value that Zevra may derive from the commercialization or any other monetization of KP-415 and KP-484 compounds or their derivatives.

In March 2012, we entered into an agreement with Zevra to terminate a Collaboration and License Agreement entered into by Aquestive and Zevra in April 2011.

Under this termination arrangement, we have the right to participate in any and all value that Zevra may derive from the commercialization or any other monetization of KP-415 and KP-484 compounds or their derivatives.

Among these monetization transactions are those related to any business combinations involving Zevra and collaborations, royalty arrangements, or other transactions from which Zevra may realize value from these compounds, including the product Azstarys.

On March 2, 2021, Zevra announced FDA approval of Azstarys for the treatment of ADHD.

For the year ended December 31, 2021, the Company received payment of $2.0 million under this arrangement, which was included in License and royalty revenues.

• Libervant™ - a buccal film formulation of diazepam tentatively approved by the FDA for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e ., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy 12 years of age and older.

The Company entered into a License and Supply Agreement with Atnahs Pharma UK Limited, a company registered in England and Wales ("Pharmanovia"), effective as of September 26, 2022 (the "Pharmanovia Agreement"), pursuant to which the Company granted Pharmanovia an exclusive license to certain of the Company's intellectual property to develop and commercialize Libervant for the treatment of prolonged or acute, convulsive seizures in all ages in certain countries of the European Union, the United Kingdom, Switzerland, Norway and the Middle East and North Africa (the "Territory") during the term of the Pharmanovia Agreement.

Under the Pharmanovia Agreement, Pharmanovia will lead the regulatory and commercialization activities for Libervant in the Territory and the Company will serve as the exclusive sole manufacturer and supplier of Libervant in the Territory.

During the year ended December 31, 2023, we recorded $1.5 million as milestone revenues for Zevra.

• Libervant TM - a buccal film formulation of diazepam tentatively approved by the FDA for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e ., seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy 12 years of age and older.

We entered into the Pharmanovia Agreement with Pharmanovia, effective as of September 26, 2022, pursuant to which we granted Pharmanovia an exclusive license to certain of our intellectual property to develop and commercialize Libervant for the treatment of prolonged or acute, convulsive seizures in all ages in certain countries of the Territory during the term of the Pharmanovia Agreement.

Under the Pharmanovia Agreement, Pharmanovia will lead the regulatory and commercialization activities for Libervant in the Territory and we will serve as the exclusive sole manufacturer and supplier of Libervant in the Territory.

We received $3.5 million upon agreement execution.

Effective March 27, 2023, we amended the Pharmanovia Agreement to expand the scope of the licensed territory for Libervant to cover the rest of the world, excluding the U.S., Canada and China.

Pharmanovia will be responsible for seeking appropriate regulatory approval in the expanded territories.

Pursuant to the terms of the Pharmanovia Amendment, we received a non-refundable payment of $2.0 million from Pharmanovia on execution of the Pharmanovia Amendment.

• Sympazan ® – an oral soluble film formulation of clobazam used for the treatment of seizures associated with a rare, intractable form of epilepsy known as Lennox-Gastaut syndrome, or LGS, in patients aged two years of age or older, was approved by the FDA on November 1, 2018.

We commercially launched Sympazan in December 2018.

On October 26, 2022, the Company entered into a License Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio Holdings, Inc.

(“Assertio”), a specialty pharmaceutical company offering differentiated products to patients, pursuant to which the Company granted an exclusive, worldwide license of its intellectual property for Sympazan to Assertio during the term of that agreement.

The Company is the exclusive sole manufacturer and supplier of Sympazan for Assertio.

On October 26, 2022, we entered into a License Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio, a specialty pharmaceutical company offering differentiated products to patients, pursuant to which we granted an exclusive, worldwide license of its intellectual property for Sympazan to Assertio during the term of that agreement for an upfront payment of $9.0 million.

Additionally, in November 2022, we received a $6.0 million milestone payment upon its receipt of a notice of allowance from the United States Patent and Trademark Office of its patent application

16/561,573, and payment of the related allowance fee.

We are the exclusive sole manufacturer and supplier of Sympazan for Assertio and will receive manufacturing fees from Assertio for the product through the expiration of such supply agreement.

We are the exclusive sole manufacturer and supplier of Sympazan for Assertio.

Market Overview

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However, we believe that the inability to administer complex molecules via oral administration has limited the development of treatments that have the potential to provide significant patient benefit.

We designed AQST-109, a “first of its kind” oral sublingual film formulation delivering systemic epinephrine, as a rescue medicine for the treatment of anaphylaxis, using Aquestive’s proprietary PharmFilm® technologies, to improve patient compliance and lower the total cost of care.

We designed Anaphylm, a “first of its kind” oral sublingual film formulation delivering systemic epinephrine, as a rescue medicine for the treatment of anaphylaxis, using Aquestive’s proprietary PharmFilm technologies, to improve patient compliance and lower the total cost of care.

We believe there is a significant market opportunity for a non-injectable, easier to administer product with a fast onset of action.

A product with this profile could enable patients to conveniently and rapidly self-administer a reliable and accurate dose of epinephrine during an anaphylactic reaction, which we believe will improve patient compliance.

Subject to our achieving regulatory approval of this product candidate, which we cannot assure, we believe AQST-109 has the potential to reduce the treatment burden currently associated with intramuscular injections and may lower costs to the healthcare system associated with anaphylaxis, due to inaccurate or untimely dosing.

Subject to our achieving regulatory approval of this product candidate, which we cannot assure, we believe Anaphylm has the potential to reduce the treatment burden currently associated with intramuscular injections and may lower costs to the healthcare system associated with anaphylaxis, due to inaccurate or untimely dosing.

Epilepsy is a chronic CNS disorder characterized by recurrent seizure activity.

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Diazepam has historically been marketed as a product administered rectally and more recently, a nasal spray product was introduced to the market.

Rectal administration of this drug

presents a particular challenge for patients.

Rectal administration of this drug presents a particular challenge for patients.

We developed our product candidate Libervant as an alternative to the device-dependent rescue therapies currently available to patients with refractory epilepsy.

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This expansion allows us to support our existing and possible future business collaborations more broadly.

With the GMP facilities in Indiana, we will continue to explore possible additional manufacturing capabilities in 2023.

With the cGMP facilities in Indiana, we will continue to explore possible additional manufacturing capabilities in 2023.

We will also continue to consider our anticipated facilities and infrastructure needs as our product development grows.

We have produced over 1.0 billion doses in the last five years.

As a company, our research and development laboratories are registered with the DEA for Schedule II-V drugs.

We are subject to various regulatory requirements, such as the regulations of the FDA, the DEA, the EU and other foreign health authorities such as the TGA.

W e are required to register our facilities and adhere to current Good Manufacturing Practices (cGMP) standards.

The cGMP manufacturing operations in Indiana are registered with the DEA for Schedule II - V.

We are subject to various regulatory requirements, such as the regulations of the FDA, the DEA, the EU, ANVISA and other foreign health authorities such as the TGA.

W e are required to register our facilities and adhere to cGMP standards.

These standards require manufacturers to follow elaborate design, testing, control, documentation and other quality assurance procedures throughout the entire manufacturing process.

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We purchase our raw materials, including active pharmaceutical ingredients, from qualified, approved vendors both domestically and internationally.

While we typically source raw materials from the lowest cost provider whenever possible, we continue to pursue a multi-supplier strategy for critical raw materials, where available or appropriate.

Whenever possible, we continue to pursue a multi-supplier strategy for critical raw materials, where available or appropriate.

Our product packaging foil is supplied by a single manufacturer.

Such manufacturer utilizes multiple manufacturing facilities for production of our packaging foil.

We may enter into more formal supply agreements in the future as production volumes increase and are more predictive.

Subject to the supervision of our internal clinical development staff, we use third-party contract research organizations, or CROs, to administer and conduct many aspects of our planned clinical trials including monitoring and managing data, and we will rely upon such CROs, as well as medical institutions, clinical investigators and consultants, to conduct our trials in accordance with our clinical protocols.

We may continue to enter into more formal supply agreements in the future as production volumes increase and are more predictive.

Subject to the supervision of our internal clinical operations, we use third-party CROs to administer and conduct many aspects of our planned clinical trials including monitoring and managing data, and we will rely upon such CROs, as well as medical institutions, clinical investigators and consultants, to conduct our trials in accordance with our clinical protocols.

We intend for such CROs to play a significant role in the subsequent collection and analysis of data from such trials.

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This orphan drug exclusivity approval prevents 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.

, safer, more effective, or providing a major contribution to patient care) within the meaning of FDA regulations and guidance.

, safer, more effective, or providing a

major contribution to patient care) within the meaning of FDA regulations and guidance.

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 single 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.

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Due to an existing FDA regulatory grant of orphan drug market exclusivity for our competitor’s diazepam nasal spray product discussed above, Libervant is not yet eligible for marketing in the United States.

As a result of the FDA determination, the FDA cannot give final approval for Libervant until the expiration or inapplicability of the orphan drug market exclusivity.

We are actively engaging the FDA regarding its determination.

We provided the FDA with additional clinical data in September 2022 and were informed that the FDA was reviewing this data.

Furthermore, in October 2022, we provided the FDA with a draft protocol for a head-to-head comparative PK study of Libervant versus the competing product.

As a result of the FDA determination, the FDA cannot give final approval for Libervant until the expiration of the orphan drug market exclusivity.

market access.

Further, there can be no assurance that a competitor will not obtain other FDA market exclusivity that blocks U.S.

market access for Libervant.

In September 2023, the FDA accepted Aquestive's NDA for Libervant (diazepam) Buccal Film for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e.

, seizure clusters, acute repetitive seizures) in patients between two and five years of age.

Diastat (diazepam) Rectal Gel is the only FDA approved treatment currently available to this patient population for this indication.

The NDA for Libervant was assigned a PDUFA target action date of April 28, 2024.

There is no assurance that, if the pediatric NDA for Libervant is approved by the FDA, it will overcome the orphan drug exclusivity granted by the FDA for Valtoco and be granted U.S.

market access for this patient age group.

Further, there can be no assurance that another company will not obtain other FDA market exclusivity that blocks U.S.

market access for Libervant for any age group in this patient population.

Material Agreements

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Certain of our patents and patent applications, if granted, will be published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an abbreviated new drug application, or ANDA, or a 505(b)(2) NDA.

Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an ANDA or a 505(b)(2) NDA.

If any of these potential generic competitors claim that their product will not infringe our listed patents, or that such patents are invalid, then they must send notice to us once the ANDA or 505(b)(2) NDA has been accepted for filing by the FDA.

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The process required by the FDA before a new drug may be marketed in the United States generally involves:

• completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s current good laboratory practice, or GLP, regulations;

• submission to the FDA of an Investigational New Drug, or IND, application for human clinical testing which must become effective before human clinical trials may begin in the United States;

• approval by an independent institutional review board, or IRB, at each clinical trial site before each trial may be initiated;

• completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP regulations;

• submission to the FDA of an IND, application for human clinical testing which must become effective before human clinical trials may begin in the United States;

• approval by an independent IRB at each clinical trial site before each trial may be initiated;

• performance of adequate and well-controlled human clinical trials in accordance with current good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each intended use;

• submission to the FDA of a New Drug Application, or NDA;

• satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current good manufacturing, or cGMP, regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

• submission to the FDA of an NDA;

• satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

• satisfactory completion of a potential review by an FDA advisory committee, if applicable;

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Preclinical tests include laboratory evaluation of product chemistry, formulation and toxicity, as well as animal studies to assess the characteristics and potential safety and efficacy of the product.

The conduct of the preclinical tests must comply with federal regulations and requirements, including current Good Laboratory Practices (GLPs).

The conduct of the preclinical tests must comply with federal regulations and requirements, including current GLP.

The results of preclinical testing are submitted to the FDA as part of an IND application along with other information, including information about product chemistry, manufacturing and controls and a proposed clinical trial protocol.

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A separate submission to an existing IND application must also be made for each successive clinical trial conducted during product development.

Further, an independent institutional review board, or IRB, covering each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and informed consent information for subjects before the trial commences at that site and it must monitor the study until completed.

Further, an independent IRB, covering each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and informed consent information for subjects before the trial commences at that site and it must monitor the study until completed.

The FDA, the IRB, or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk or for failure to comply with the IRB’s requirements, or may impose other conditions.

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FDA approval of the NDA is required before marketing of the product may begin in the United States.

The NDA must include the results of all preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls.

The NDA must include the results of all

preclinical, clinical and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture and controls.

Under federal law, the submission of most NDAs is subject to a substantial application user fee, and applicant under an approved NDA is also subject to an annual program fee for each prescription drug product, which beginning in Fiscal Year 2018 replaced the product and establishment fees.

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Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

Under the Prescription Drug User Fee Act, or PDUFA, the FDA has agreed to certain performance goals in the review of NDAs through a two-tiered classification system, Standard Review and Priority Review.

Under PDUFA, the FDA has agreed to certain performance goals in the review of NDAs through a two-tiered classification system, Standard Review and Priority Review.

Priority Review designation is given to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.

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An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

As a condition of NDA approval, the FDA may require a REMS, or Risk Evaluation and Mitigation Strategy, to help ensure that the benefits of the drug outweigh the potential risks.

As a condition of NDA approval, the FDA may require a REMS to help ensure that the benefits of the drug outweigh the potential risks.

If the FDA determines a REMS is necessary during review of the application, the drug sponsor must agree to the REMS plan at the time of approval.

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Drug manufacturers and certain of their subcontractors are required to register their establishments with FDA and obtain licenses from certain state agencies.

Registration with the FDA subjects entities to periodic unannounced inspections by FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs or other applicable laws, such as adverse event recordkeeping and reporting.

Registration with the FDA subjects entities to periodic unannounced inspections by FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs

or other applicable laws, such as adverse event recordkeeping and reporting.

Accordingly, manufacturers must continue to expend time, money, and training and compliance efforts in the areas of production and quality control to maintain compliance with cGMPs or other applicable laws, such as adverse event recordkeeping and reporting requirements.

Regulatory authorities may require remediation, withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems or new concerns are subsequently discovered.

In addition, other regulatory action, including, among other things, warning letters, the seizure of products,

injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, civil penalties, and criminal prosecution may be pursued.

In addition, other regulatory action, including, among other things, warning letters, the seizure of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, civil penalties, and criminal prosecution may be pursued.

In addition, any distribution of prescription drug products must comply with the U.S.

Prescription Drug Marketing Act, or PDMA, a part of the FDCA.

In addition, Title II of the Federal Drug Quality and Security Act of 2013, known as the Drug Supply Chain Security Act or the DSCSA, has imposed new “track and trace” requirements on the distribution of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain.

In addition, Title II of the Federal Drug Quality and Security Act of 2013, known as the DSCSA has imposed new “track and trace” requirements on the distribution of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain.

These requirements are being phased in over a ten-year period.

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This last certification is known as a paragraph IV certification.

A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers.

A notice of the paragraph IV certification must be provided to each owner of the

patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA or 505(b)(2) application refers.

The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent.

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In addition, our activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law.

For example, pharmaceutical companies have been found liable under the Federal False Claims Act in

connection with their off-label promotion of drugs.

For example, pharmaceutical companies have been found liable under the Federal False Claims Act in connection with their off-label promotion of drugs.

Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus mandatory civil penalties of between $10,000 and $25,000 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and, although the Federal False Claims Act is a civil statute, conduct that results in a False Claims Act violation may also implicate various federal criminal statutes.

In addition, private individuals can bring actions under the Federal False Claims Act and certain states have enacted laws modeled after the Federal False Claims Act.

In addition to the privacy and security requirements of the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (which we refer to collectively as HIPAA), HIPAA also expanded and created several additional federal crimes, including healthcare fraud and false statements relating to healthcare matters.

HIPAA also expanded and created several additional federal crimes, including healthcare fraud and false statements relating to healthcare matters.

The healthcare fraud statute prohibits, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third-party payors.

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In addition, HIPAA, and its implementing regulations impose certain obligations on entities subject to the law, such as health plans and most healthcare providers, and their business associates who provide certain services involving the use or disclosure of HIPAA protected health information on their behalf, with respect to the privacy and security of such protected health information.

Further, most states have enacted laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts in certain circumstances, such as specific disease states.

Further, most states have enacted laws governing the privacy and security of health information in certain

circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts in certain circumstances, such as specific disease states.

Compliance with such laws and regulations requires substantial resources.

While we no longer engage in the commercial sale of any proprietary drug products, because of the breadth of these various fraud and abuse laws, it is possible that some of our business activities in the past could be subject to challenge under one or more of such laws.

While we no longer engage in the commercial sale of any proprietary drug products, we may engage in the commercial sale of proprietary products in the future.

In addition, because of the breadth of these various fraud and abuse laws, it is possible that some of our business activities in the past could be subject to challenge under one or more of such laws.

Such a challenge could have material adverse effects on our business, financial condition and results of operations.

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Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively, the PPACA, substantially changed the way healthcare is financed by both governmental and private insurers and significantly impacted the pharmaceutical industry.

Changes that may affect our business include those governing enrollment in federal healthcare programs, reimbursement changes, benefits for patients within a coverage gap in the Medicare Part D prescription drug program, or commonly known as the donut hole in which manufacturers must agree to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, effective as of 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, rules regarding prescription drug benefits under the health insurance exchanges, changes to the Medicaid Drug Rebate program, expansion of the Public Health Service’s 340B drug pricing discount program, or 340B program, fraud and abuse, and enforcement.

In the United States, PPACA substantially changed the way healthcare is financed by both governmental and private insurers and significantly impacted the pharmaceutical industry.

Changes that may affect our business include those governing enrollment in federal healthcare programs, reimbursement changes, benefits for patients within a coverage gap in the Medicare Part D prescription drug program, or commonly known as the donut hole in which manufacturers must agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, rules regarding prescription drug benefits under the health insurance exchanges, changes to the Medicaid Drug Rebate program, expansion of the Public Health Service’s 340B drug pricing discount program, or 340B program, fraud and abuse, and enforcement.

These changes impacted existing government healthcare programs and are resulting in the development of new programs, including Medicare payment for performance initiatives and improvements to the physician quality reporting system and feedback program.

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(1) eliminate protection under an Anti-Kickback Statute safe harbor for certain retrospective price reductions provided by drug manufacturers to sponsors of Medicare Part D plans or pharmacy benefit managers that are not applied at the point-of-sale, which may be delayed until 2032 by the recent Consolidated Appropriations Act ;

(2) allow the importation of certain drugs from other countries through individual waivers, permit the re-importation of insulin products, and prioritize

finalization of FDA’s December 2019 proposed rule to permit the importation of drugs from Canada;

(2) allow the importation of certain drugs from other countries through individual waivers, permit the re-importation of insulin products, and prioritize finalization of FDA’s December 2019 proposed rule to permit the importation of drugs from Canada;

(3) ensure that payment by the Medicare program for certain Medicare Part B drugs is not higher than the payment by other comparable countries (depending on whether pharmaceutical manufacturers agree to other measures);

and (4) allow certain low-income individuals receiving insulin and epinephrine purchased by a Federally Qualified Health Center, or FQHC, as part of the 340B drug program to purchase those drugs at the discounted price paid by the FQHC.

and (4) allow certain low-income individuals receiving insulin and epinephrine purchased by a FQHC, as part of the 340B drug program to purchase those drugs at the discounted price paid by the FQHC.

On October 1, 2020, the FDA issued its final rule allowing importation of certain prescription drugs from Canada.

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While some proposed measures will require authorization through additional legislation to become effective, Congress has indicated that they will continue to pursue new legislative and/or administrative measures to control drug costs, including price or patient reimbursement constraints, discounts, restrictions on certain access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

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.

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).

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 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).

It is difficult at this time to predict whether additional executive or legislative initiatives may be proposed related to drug pricing.

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We believe that our colleagues are an essential element of our strategy and critical to our continued success.

Our corporate values – safety, compliance, collaboration, integrity and high performance are built on the foundation that the colleagues we hire, the steps we use to engage them and the way we treat one another promote the creativity, innovation and productivity that spurs the Company’s success.

Supporting that philosophy, our management team is responsible for ensuring that our policies and procedures reflect and reinforce the Company’s desired corporate culture including policies and procedures related to risk management, ethics and compliance.

Supporting that philosophy, our management team is responsible for ensuring that our policies and procedures reflect and reinforce our desired corporate culture including policies and procedures related to risk management, ethics and compliance.

We engage advisors to ensure that we design, plan and execute competitive compensation strategies and benefit programs to help us attract and retain a diverse workforce with the appropriate skills and talent that drive the organization’s success.

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Available Information

We file with or submit to the SEC our annual, quarterly, periodic and current reports, proxy statements and other information meeting the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

We file with or submit to the SEC our annual, quarterly, periodic and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act.

We make available, free of charge, on our website our proxy statement, annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports and other publicly filed information available as soon as reasonable practicable after we electronically file such material with, or furnish it to the SEC.

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Our annual, quarterly, periodic and current reports, proxy statements and other public filings are also available free of charge on the EDGAR Database on the SEC’s Internet website at www.sec.gov.

Business Update Regarding COVID-19

The extent to which COVID-19 impacts our business, operations, clinical trials, regulatory approval process, capital, financial and monetization markets, financial results and financial condition, and those of our suppliers, distributors, customers and other third parties necessary to our business including those involved in the regulatory approval process, will depend on future developments, which are highly uncertain and cannot be predicted with certainty or clarity, including the duration and continuing severity of the outbreak, resurgence of the outbreak, continued or additional government actions to contain COVID-19, efficacy of vaccines, and new information that will emerge concerning the short-term and long-term impact of COVID-19.

To date, we have been able to continue to manufacture and supply our products and currently do not anticipate any significant interruption in supply, although we continue to monitor this situation closely and there is no assurance that disruptions or delay will not occur as a result of COVID-19.

We are also monitoring demand for our products, which could be negatively impacted during the COVID-19 pandemic, as well as the financial condition of our customers and licensees.

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

What changed 10-K

Item 1. Business