For a discussion of our potential risks and uncertainties, see the information in Part I, "Part I, Item 1A.
−Removed: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.
−Removed: Other than the risk factors set forth below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.
−Removed: We have limited experience as a commercial company and the sales, marketing, and distribution of ZORYVE or any future approved products may be unsuccessful or less successful than anticipated.
−Removed: We recently received approval of our NDA of ZORYVE and we have initiated a commercial launch of ZORYVE in the United States.
−Removed: As a company, we have no prior experience commercializing a drug.
−Removed: The success of our commercialization efforts is difficult to predict and subject to the effective execution of our business plan, including, among others, the continued development of our internal sales, marketing, and distribution capabilities and our ability to navigate the significant expenses and risks involved with the development and management of such capabilities.
−Removed: For example, our commercial launch may not develop as planned or anticipated, which may require us to, among others, adjust or amend our business plan and incur significant expenses.
−Removed: Further, given our lack of experience commercializing products, we do not have a track record of successfully executing a commercial launch.
−Removed: If we are unsuccessful in accomplishing our objectives and executing on our business plan, or if our commercialization efforts do not develop as planned, we may not be able to successfully commercialize ZORYVE and any future approved products, we may require significant additional capital and financial resources, we may not become profitable, and we may not be able to compete against more established companies in our industry.
−Removed: As we have not yet commenced commercial sales of ZORYVE and we continue to develop a pipeline of drug products through clinical trials, our capital requirements are difficult to predict and may change.
−Removed: We may need additional financing in the future and may be unable to obtain additional financing on terms favorable to us or at all.
−Removed: We expect to expend substantial resources for the foreseeable future in connection with our commercialization efforts, the development of our current product candidates, the maintenance and expansion of our business operations and capabilities and the development or acquisition of additional product candidates.
−Removed: These expenditures will include costs associated with marketing and selling any products approved for sale, including ZORYVE, conducting non-clinical studies and clinical trials, obtaining regulatory approvals, and securing manufacturing and supply of product candidates.
−Removed: Our operating expenses and capital requirements are difficult to predict and are affected by, and are subject to assumptions regarding, among others, the success of our commercialization efforts involving ZORYVE, market acceptance of ZORYVE, competing products, our ability to successfully execute on our business plan, and our internal projections and estimates of costs and execution timing.
−Removed: Our plans and capital requirements may change as a result of many factors, including factors currently unknown to us.
−Removed: If our capital resources are insufficient to satisfy our requirements, we may need to fund our operations through the sale of our equity securities, accessing or incurring additional debt, entering into licensing or collaboration agreements with partners, grants, or other sources of financing.
−Removed: Such financing may result in dilution to stockholders, imposition of burdensome debt covenants and repayment obligations, or other restrictions that may affect our business.
−Removed: There can be no assurance that sufficient funds will be available to us at all or on attractive terms when needed from these sources.
−Removed: If we are unable to obtain additional funding from these or other sources when needed, it may be necessary to significantly reduce our current rate of spending through, among other things, reductions in staff and delaying, scaling back, or stopping certain research and development programs.
−Removed: Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose.
+Added: Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
+Added: Other than the risk factor set forth below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.
+Added: Recently enacted healthcare reform measures may increase the difficulty and cost for us to successfully commercialize ZORYVE or our product candidates, if approved, and could affect the prices we may obtain.
+Added: The cost of prescription pharmaceuticals in the U.S.
+Added: has long been the subject of considerable discussion in Congress and among policymakers.
+Added: Recently, there have been several Congressional inquiries, as well as legislative and regulatory initiatives and executive orders designed to, among other things, bring more transparency to product pricing and reform government program reimbursement methodologies for drug products.
+Added: Most significantly, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.
+Added: This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010.
+Added: Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;
+Added: imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);
+Added: and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
+Added: The IRA permits the Secretary of the Department of Health and Human Services to implement many of these provisions through guidance, as opposed to regulation, for the initial years.
+Added: For that and other reasons, it is currently unclear how the IRA will be effectuated, and while the impact of the IRA on the pharmaceutical industry and our business cannot yet be fully determined, it may be significant.
+Added: Further, members of Congress and the Biden Administration have indicated they will continue to pursue further legislative or administrative measures to control prescription drug costs, although the likelihood of such measures being adopted remains uncertain.
+Added: Individual states in the U.S.
+Added: have also enacted legislation and implementing regulations designed to control pharmaceutical product pricing, and additional states may do so.
+Added: We cannot predict with certainty what impact any federal or state health reform measures will have on us, but such changes could impose new or more stringent regulatory requirements on our activities, affect the prices we may obtain, increase our discount and rebate liability, or result in reduced reimbursement for ZORYVE or our product candidates, if approved, any of which could adversely affect our business, results of operations, and financial condition.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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