What changed in this filing

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Item 1. Legal Proceedings

2024-08-01 compared with 2024-05-02 · 49 added, 1 removed, 16 unchanged (76% of the section changed)

8 unchanged sentences

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition, or results of operations.

There are no material changes to the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2023.

Other than the risk factors listed below, there are no material changes to the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2023.

If we are unable to obtain regulatory approval in one or more jurisdictions for any product candidates that we may identify and develop, our business will be substantially harmed.

We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate.

Approval by the FDA and comparable foreign regulatory authorities is lengthy and unpredictable, and depends upon numerous factors, including substantial discretion of the regulatory authorities.

Approval policies, regulations or the type and amount of nonclinical or clinical data necessary to gain approval may change during the course of a product candidate’s development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application.

It is possible that our current product candidates and any other product candidates which we may seek to develop in the future will not ever obtain regulatory approval.

We cannot be certain that any of our product candidates will receive regulatory approval or that if approved, any of our product candidates, will be successfully commercialized.

Obtaining marketing approval is an extensive, lengthy, expensive and inherently uncertain process, and regulatory authorities may delay, limit or deny approval of our product candidates for many reasons, including, but not limited to:

the inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that the applicable product candidate is safe and effective as a treatment for our targeted indications;

the FDA or comparable foreign regulatory authorities may disagree with the design, endpoints or implementation of our clinical trials;

the population studied in the clinical program may not be sufficiently broad or representative to assure safety or efficacy in the full population for which we seek approval;

the FDA or comparable foreign regulatory authorities may require additional preclinical studies or clinical trials beyond those that we currently anticipate;

the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials;

the data collected from clinical trials of product candidates that we may identify and pursue may not be sufficient to support the submission of a new drug application, or NDA, biologics license application, or BLA, or other submission for regulatory approval in the United States or elsewhere;

we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;

the FDA or comparable foreign regulatory authorities may identify deficiencies in the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

and the approval policies or regulations of the FDA or comparable foreign regulatory authorities may change in a manner that renders the clinical trial design or data insufficient for approval.

In addition, even if an NDA, BLA, or other submission for regulatory approval, is filed and accepted for review, the FDA or comparable regulatory authorities may delay their review or approval process or may decline to grant regulatory approval for a variety of reasons.

For example, on December 5, 2023 we submitted an application for approval with the FDA for acoramidis but cannot predict when, or if, we will receive a decision on approval from the FDA.

The lengthy approval process, as well as the unpredictability of the results of clinical trials and evolving regulatory requirements, may result in our failure to obtain regulatory approval to market product candidates that we may pursue in the United States or elsewhere, which would significantly harm our business, prospects, financial condition and results of operations.

Additionally, failure to secure FDA approval for acoramidis will result in our inability to receive a $500.0 million milestone payment pursuant to the Funding Agreement, which would significantly harm our business, prospects, financial condition and results of operations.

We have incurred indebtedness under our convertible senior notes and are party to a financing agreement that contains operating and financial covenants that may restrict our business and financing activities.

In March 2020, we issued the 2027 Notes, pursuant to which we pay interest semiannually in arrears at a rate of 2.50% per year.

The 2027 Notes will mature on March 15, 2027 unless earlier converted or repurchased, at which time we will settle any conversions of the 2027 Notes in cash, shares of our common stock or a combination thereof, at our election.

In January and February 2021, we issued the 2029 Notes, pursuant to which we pay interest semiannually in arrears at a rate of 2.25% per year.

The 2029 Notes will mature on February 1, 2029 unless earlier converted or repurchased, at which time we will settle any conversions of the 2029 Notes in cash, shares of our common stock or a combination thereof, at our election.

Under certain circumstances, the holders of the 2027 Notes and the 2029 Notes, or collectively, the Notes, may require us to repay all or a portion of the principal and interest outstanding under the Notes in cash prior to their respective maturity dates, which could have an adverse effect on our financial results.

In January 2024, we entered into the Financing Agreement, pursuant to which the lenders thereunder agreed to extend a senior secured credit facility to us in an aggregate principal amount of up to $750.0 million, comprised of (i) an initial term loan of $450.0 million, or the Initial Term Loan, and (ii) subject to the satisfaction of certain terms and conditions set forth in the Financing Agreement, one or more incremental term loans in an aggregate principal amount not to exceed $300.0 million.

The Initial Term Loan was funded on January 17, 2024.

We are required to make principal payments of $22.5 million on the outstanding balance of the term loans commencing on June 30, 2027 in quarterly installments in amounts and subject to conditions as set forth in the Financing Agreement, including variable interest rates and additional quarterly installments of $10.0 million if our market capitalization is at any time after January 17, 2024 less than $1.5 billion.

The stated maturity date of the term loans is January 17, 2029, with two springing earlier maturity dates at 91 days prior to the stated maturity dates of the 2027 Notes and the 2029 Notes, respectively, in each case to the extent there is an aggregate outstanding amount of such notes of more than $50 million on such dates.

The Financing Agreement restricts our ability, among other things and subject to certain limited exceptions, to:

sell, transfer or otherwise dispose of any of our business or property;

make material changes to our business;

enter into transactions resulting in significant changes to the voting control of our stock;

make certain changes to our organizational structure;

consolidate or merge with other entities or acquire other entities;

incur additional indebtedness or create encumbrances on our assets;

pay dividends, or make distributions on or repurchase our stock;

enter into transactions with our affiliates;

make payments in respect of subordinated indebtedness or royalty monetization transactions;

make certain investments.

For example, the license agreements that we recently entered into with Bayer Consumer Care AG and Kyowa Kirin Co.

are considered permitted asset sale transactions under the Financing Agreement, which requires us to deposit approximately 75% of the proceeds from such transactions, net of certain permitted costs, into an escrow account to be controlled by the Administrative Agent.

Furthermore, under the Amended Financing Agreement, between June 20, 2024 and through the earlier of the FDA approval date of a first NDA for acoramidis and November 30, 2024, the Company is able to request a release of funds in an aggregate amount not to exceed 50% of the original net cash proceeds received from asset sale transactions.

In addition, we are required to maintain, under the Amended Financing Agreement, a minimum unrestricted qualified cash balance of $70.0 million plus 40% of any cash released by the Company from the escrow account, at all times, and to comply with various operating covenants and default clauses that may restrict our ability to finance our operations, engage in business activities or expand or fully pursue our business strategies.

As of June 30, 2024, the minimum unrestricted qualified cash balance was $78.0 million.

As security for the obligations under the Amended Financing Agreement, we and our subsidiaries that are party to the Amended Financing Agreement as guarantors are required to grant to the Administrative Agent, for the benefit of the lenders and secured parties, a continuing first priority security interest in substantially all of our assets and the assets of our subsidiaries that are party to the Amended Financing Agreement as guarantors (including all equity interests owned or hereafter acquired by us or such subsidiaries), subject to certain exceptions.

A breach of any of these covenants or clauses could result in a default under the Amended Financing Agreement, which could cause all of the outstanding indebtedness under the facility to become immediately due and payable and cause us to incur additional fees related to an early repayment, or result in a material adverse effect on our business, financial condition and operating results.

Unregistered Sales of Equi ty Securities and Use of Proceeds

6 unchanged sentences

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-Q

Item 1. Legal Proceedings