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See “Part I—Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below.
−Removed: Summary Risk Factors
−Removed: Our business is subject to numerous risks and uncertainties.
−Removed: You should carefully consider these risks and uncertainties when investing in our securities.
−Removed: The principal risks and uncertainties affecting our business include the following:
−Removed: ● We are substantially dependent on our ability to successfully commercialize WAKIX, which is currently our only approved product.
−Removed: If we are unable to successfully commercialize WAKIX, our ability to generate revenue and our financial condition will be adversely affected.
−Removed: ● The commercial adoption of WAKIX and any other product candidates we develop will depend on the degree of their market acceptance.
−Removed: ● We rely on our license agreement with Bioprojet to provide rights to the core intellectual property relating to pitolisant, and any termination or loss of significant rights under the agreement would adversely affect our development and/or commercialization of pitolisant.
−Removed: ● Public health pandemics, including the COVID-19 pandemic, may result in disruptions to our commercialization, clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operating results, cash flows and prospects.
−Removed: ● We have a limited operating history and history of commercializing drugs, which may make it difficult for you to evaluate the success of our business to date and assess our future viability.
−Removed: ● Raising additional funds by issuing securities may cause dilution to existing shareholders, raising additional funds through debt financings may involve restrictive covenants, and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights to our technologies or product candidates.
−Removed: ● We have made and we may be required to make significant payments in the future to Bioprojet under our licensing and collaboration agreements for pitolisant.
−Removed: ● Because a number of companies compete with us, many of which have greater resources than we do, and because we face rapid changes in science in our industry, we cannot be certain that our products will be accepted in the marketplace or capture market share.
−Removed: ● The regulatory approval process of the FDA is costly, lengthy and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for pitolisant in other potential indications for which we may seek to develop pitolisant, our business will be substantially harmed.
−Removed: ● If we fail to obtain and sustain an adequate level of coverage and reimbursement for WAKIX and other product candidates by third-party payors, sales would be adversely affected.
−Removed: ● WAKIX has been approved by the FDA for the treatment of EDS or cataplexy in adult patients with narcolepsy.
−Removed: Regulatory approval is limited by the FDA to the specific indications for which approval has been granted and, unless we seek regulatory approval for additional indications, we will be prohibited from marketing pitolisant for other indications.
−Removed: We may be subject to fines, penalties or injunctions if we are determined to have promoted or be promoting the use of pitolisant for unapproved or “off-label” uses, resulting in damage to our reputation and business.
−Removed: ● If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets.
−Removed: ● If we fail to comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our current and future product candidates.
−Removed: ● Our directors, officers and principal stockholders beneficially own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
−Removed: ● Future sales of our common stock in the public market, including sales by our directors, officers, or significant shareholders, could cause our share price to fall.
Risks Related to Our Business
−Removed: We are substantially dependent on our ability to successfully commercialize WAKIX, which is currently our only approved product.
−Removed: If we are unable to successfully commercialize WAKIX, our ability to generate revenue and our financial condition will be adversely affected.
−Removed: Since our inception, we have invested substantially all of our capital resources on the development, registration and commercialization of WAKIX, which was approved for the treatment of EDS in adult patients with narcolepsy in August 2019 and for the treatment of cataplexy in adult patients with narcolepsy in October 2020.
−Removed: We cannot be certain that WAKIX will be successfully commercialized.
−Removed: Our ability to generate revenue from product sales depends heavily on our success in many areas, including but not limited to:
−Removed: ● successfully commercializing WAKIX, either independently or with marketing service providers;
+Added: We are substantially dependent on the commercial success of our only approved product, WAKIX.
+Added: If we are unable to maintain or increase sales of WAKIX, our ability to generate revenue and our financial condition will be adversely affected.
+Added: Historically, our business has been substantially dependent on WAKIX and our financial results have been significantly influenced by sales of WAKIX, which was approved for the treatment of EDS in adult patients with narcolepsy in August 2019 and for the treatment of cataplexy in adult patients with narcolepsy in October 2020.
+Added: In addition to the risks discussed elsewhere in this section, our ability to generate revenue from sales of WAKIX depends on a number of factors, including, but not limited to:
● the effectiveness of our sales and marketing strategy and operations, and obtaining market acceptance of WAKIX, including garnering market share from existing and future treatment alternatives;
● maintaining compliance with all regulatory requirements applicable to WAKIX and our commercial activities, including the post-marketing requirements and post-marketing commitments required by the FDA;
−Removed: ● obtaining coverage and adequate reimbursement from third-party payors for each of our product candidates;
−Removed: ● the continued acceptability of the safety profile of WAKIX and the occurrence of any unexpected side effects, adverse reactions or misuse, including potential business impact such as the need to withdraw the product (either voluntarily or as mandated by the FDA), loss of support by the advocacy communities or loss of positive corporate reputation resulting in related unfavorable media coverage in these areas;
+Added: ● increased pricing pressure from, changes in policies by, or restrictions on reimbursement imposed by, third-party payors, including our ability to maintain adequate coverage and reimbursement for WAKIX;
+Added: ● the continued acceptability of the safety profile of WAKIX and the occurrence of any unexpected side effects, adverse reactions or misuse, including the potential business impact of withdrawing the product (either voluntarily or as mandated by the FDA), loss of support by the advocacy communities or loss of positive corporate reputation resulting in unfavorable media coverage;
● successfully managing third-party service providers involved in the manufacturing and development of pitolisant;
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● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;
−Removed: ● maintaining, protecting and expanding the portfolio of intellectual property rights, including patents, trade secrets and knowhow;
+Added: ● maintaining, protecting and expanding the portfolio of intellectual property rights, including patents, trade secrets and knowhow, especially in light of potential competition from generic versions of pitolisant;
● attracting, hiring and retaining qualified personnel.
−Removed: In our efforts to market WAKIX for the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, our revenue will be dependent, in part, on the size of the markets in the United States, or in other territories where we may seek and obtain regulatory approval, the number of competitors in such markets, the acceptance of the price of the product in those markets and the ability to obtain reimbursement at any price.
−Removed: If the number of our addressable patients is not as large as we estimate or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products.
−Removed: If we are not able to generate substantial revenue from the sale of approved products, we may never become profitable.
−Removed: The continued commercial adoption of WAKIX and any other product candidates we develop will depend on the degree of their market acceptance.
−Removed: Even with the requisite approvals from the FDA and other regulatory authorities, the continued commercial adoption of WAKIX for the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, and any other indications and product candidates we may develop, will depend on the degree of their acceptance by physicians, patients, third-party payors and others in the medical community.
−Removed: If WAKIX or any other product candidates we develop do not achieve an adequate level of market acceptance, we may not generate significant product revenues or any profits from operations.
+Added: In our efforts to market WAKIX for the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, our revenue is dependent, in part, on the size of the markets in the United States, or in other territories where we may seek and obtain regulatory approval, the number of competitors in such markets, the acceptance of the price of WAKIX in those markets and the ability to obtain reimbursement at any price.
+Added: If the number of our addressable patients is not as large as we estimate or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of WAKIX.
+Added: If we are not able to generate substantial revenue from the sale of WAKIX, we may not remain profitable.
+Added: The continued commercial success of WAKIX and any other product candidates we develop will depend on the degree of their market acceptance.
+Added: Even with the requisite approvals from the FDA and other regulatory authorities, the continued commercial success of WAKIX for the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, and any other indications and product candidates we may develop, will depend on the degree of their acceptance by physicians, patients, third-party payors and others in the medical community.
+Added: If WAKIX or any other product candidates we develop do not achieve an adequate level of market acceptance, we may not generate significant product revenue or any profits from operations.
The degree of market acceptance of WAKIX or any other product candidates we develop, if approved for commercial sale, will depend on a number of factors, some of which are beyond our control, including:
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In such event, Bioprojet may pursue commercialization of such indication for itself in our territory, or it may license the right to commercialize such indication in our territory to third parties, including our competitors.
−Removed: Our license and commercialization agreements also imposes on us obligations relating to exclusivity, territorial rights, development, commercialization, funding, payment, diligence, sublicensing, insurance, intellectual property protection and other matters.
+Added: Our license and commercialization agreements also impose on us obligations relating to exclusivity, territorial rights, development, commercialization, funding, payment, diligence, sublicensing, insurance, intellectual property protection and other matters.
For example, under the 2017 LCA and 2022 LCA, we cannot, directly or indirectly, develop, market, sell, promote or file an NDA with respect to any product that would compete with pitolisant in the field.
If we breach any material obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages to Bioprojet, and Bioprojet may have the right to terminate our license, which would result in us being unable to develop, manufacture and sell pitolisant and would materially adversely affect our business.
−Removed: Public health pandemics, including the COVID-19 pandemic, may result in disruptions to our commercialization, clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operating results, cash flows and prospects.
−Removed: A public health epidemic, including COVID-19, poses the risk that we or our employees, contractors, suppliers, distributors and other partners, as well as physicians treating narcolepsy patients, may be prevented from conducting business and patient-care activities for an indefinite period of time, including due to shutdowns and quarantines that may be requested or mandated by governmental authorities.
−Removed: Beginning in March 2020, we had increased reliance on personnel working from home which may negatively impact productivity or disrupt, delay or otherwise adversely impact our business.
−Removed: In addition, remote working could increase our cyber security risk.
−Removed: General protective measures put into place at various governmental levels, including quarantines, travel restrictions and business shutdowns, may also negatively affect our operations.
−Removed: For example, the COVID-19 pandemic affected our ability to access HCPs, and caused fewer patients to visit their HCP, resulting in fewer prescriptions being written.
−Removed: Additionally, the effects of COVID-19 disrupted the supply chain and could disrupt the manufacturing or shipment of WAKIX and of drug substance and finished drug product.
−Removed: For example, we may face supply chain and manufacturing limitations or difficulties as resources are shifted toward vaccine manufacturing and distribution.
−Removed: Any delays or interruptions in the manufacture and supply of WAKIX could result in delays for our planned clinical trials, impair our ability to meet demand for new WAKIX prescriptions and impede our clinical trial recruitment, testing, monitoring, data collection and analysis and other related activities.
−Removed: Any of the foregoing factors could have a material adverse impact on our business, financial condition, operating results, cash flows and prospects.
−Removed: The extent to which COVID-19 or any future pandemics impact our operations and those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, additional or modified government actions, the severity of the pandemic, speed of the spread of a virus, and the actions taken to contain the virus or treat its impact, among others.
We may not be successful in our efforts to identify, in-license or acquire, discover, develop or commercialize additional product candidates, or identify other indications for pitolisant beyond EDS or cataplexy in adult patients with narcolepsy.
−Removed: Although a substantial amount of our effort will focus on the commercialization of WAKIX for the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, we also may seek to identify, in-license or
−Removed: acquire, discover, develop and commercialize additional product candidates in the rare neurological disorders field, and to identify other indications for pitolisant beyond the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy.
+Added: Although a substantial amount of our effort is focused on the commercialization of WAKIX for the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, we also may seek to identify, in-license or acquire, discover, develop and commercialize additional product candidates in the rare neurological disorders field, such as our recent acquisition of Zynerba’s pipeline, and to identify other indications for pitolisant beyond the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy.
We cannot assure you that our efforts to do so will be successful.
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If we enter into such collaborations, we will have limited control over the amount and timing of resources that our collaborators will dedicate to the development or commercialization of our product candidates.
−Removed: Our ability to generate revenues from these arrangements will depend on any future collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.
+Added: Our ability to generate revenue from these arrangements will depend on any future collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.
In addition, any future collaborators may have the right to abandon research or development projects and terminate applicable agreements, including funding obligations, prior to or upon the expiration of the agreed upon terms.
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If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms, or at all.
−Removed: If we fail to enter into relationships or do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates, bring them to market and
−Removed: generate revenue from sales of drugs or continue to develop our technology, and our business may be materially and adversely affected.
−Removed: We expect to rely on third parties to conduct our clinical trials for pitolisant and any future product candidate that we decide to develop.
+Added: If we fail to enter into relationships or do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates, bring them to market and generate revenue from sales of drugs or continue to develop our technology, and our business may be materially and adversely affected.
+Added: We expect to rely on third parties to conduct our clinical trials for pitolisant and other product candidates that we decide to develop.
If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval of or commercialize any potential product candidates on a timely basis or at all.
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In addition, our clinical trials must be conducted with drug products produced under cGMP requirements and may require a large number of patients.
−Removed: Our failure or any failure by these third parties to comply with these regulations, which would delay the regulatory approval or commercialization process.
+Added: Our failure or any failure by these third parties to comply with these regulations, which would delay the regulatory approval or
+Added: commercialization process.
Moreover, our business may be implicated if any of these third parties violates federal or state laws or regulations including fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
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Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.
−Removed: If we experience delays in meeting or fail to meet the regulatory requirements for commercialization of our current or future potential product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be materially impaired.
−Removed: We rely completely on third parties to manufacture and distribute our supply of WAKIX, including certain sole-source suppliers and manufacturers, and intend to rely on third parties to manufacture and distribute any future product candidates.
−Removed: We do not currently have, nor do we plan to acquire, the infrastructure or capability to manufacture or distribute commercial quantities of WAKIX.
−Removed: Our ability to commercially supply WAKIX depends, in part, on the ability of third-party manufacturers to supply and manufacture the raw materials, API and other important components related to the manufacture of WAKIX.
+Added: If we experience delays in meeting or fail to meet the regulatory requirements for commercialization of our current or future potential product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenue will be materially impaired.
+Added: We rely completely on third parties to manufacture and distribute our supply of WAKIX and our product candidates, including certain sole-source suppliers and manufacturers, and intend to rely on third parties to manufacture and distribute any future product candidates.
+Added: We do not currently have, nor do we plan to acquire, the infrastructure or capability to manufacture or distribute commercial quantities of WAKIX or our product candidates.
+Added: Our ability to commercially supply WAKIX and our ability to obtain adequate supplies of our product candidates for clinical studies depends, in part, on the ability of third-party manufacturers to supply and manufacture the raw materials, API and other important components related to the manufacture of WAKIX and our product candidates.
We also rely on third parties to package the finished product.
−Removed: These third-party manufacturers have limited experience manufacturing the raw materials and API for WAKIX to be supplied to patients in the United States.
+Added: These third-party manufacturers have limited experience manufacturing the raw materials and API for WAKIX and our product candidates to be supplied to patients in the United States.
Prior to the approval of WAKIX, we experienced minor issues related to product specifications and other minor delays in supply related to our third-party suppliers and manufacturers.
−Removed: While we continue to work with our third-party suppliers and manufacturers to optimize the manufacturing process for WAKIX and will work to optimize the manufacturing process for any future product candidates, we cannot guarantee that even minor changes in the process will result in products that are safe and, where applicable, effective.
−Removed: If we fail to develop and maintain supply relationships with these third parties, we may be unable to continue to successfully commercialize WAKIX.
+Added: We cannot guarantee that even minor changes in the process will result in products that are safe and, where applicable, effective.
+Added: If we fail to develop and maintain supply relationships with these third parties, we may be unable to continue to successfully commercialize WAKIX and any product candidates that may receive approval.
We rely and will continue to rely on certain third parties as the sole source of the materials they supply or the finished products they manufacture.
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In the event of any of the foregoing, if we do not have an alternative supplier or manufacturer in place, we would be required to expend substantial management time and expense to identify, qualify and transfer technical processes to alternative suppliers or manufacturers.
−Removed: Transferring technology to other sites may require additional processes, technologies and validation studies, which are costly, may take considerable amounts of time, may not be successful and, in most cases, require review and approval by the FDA.
−Removed: Any need to find and qualify new suppliers or manufacturers could significantly delay production of WAKIX, adversely impact our ability to market WAKIX and adversely affect our business.
+Added: Transferring technology to other sites may require additional processes, technologies and validation studies, which are costly, may take considerable amounts of time, may not be successful and, in most cases, require prior review and approval by the FDA.
+Added: Any need to find and qualify new suppliers or manufacturers could significantly delay production of WAKIX, adversely impact our ability to market WAKIX, adversely impact the conduct of our clinical trials and adversely affect our business.
There can be no assurance that replacements would be available to us on a timely basis, on acceptable terms or at all.
−Removed: While we currently maintain a robust supply of raw material inventory and an 18 month supply of finished goods inventory
−Removed: to ensure product availability, any interruption in the supply of a drug substance or other material or in the manufacture of WAKIX could have a material adverse effect on our business, financial condition, operating results and prospects.
+Added: While we currently maintain a robust supply of raw material inventory and an 18 month supply of finished goods inventory to ensure product availability, any interruption in the supply of a drug substance or other material or in the manufacture of WAKIX or our product candidates could have a material adverse effect on our business, financial condition, operating results and prospects.
Additionally, although we are ultimately responsible for ensuring compliance with regulatory requirements such as cGMPs, we are dependent on our contract suppliers and manufacturers for day-to-day compliance with cGMP for production of both drug substances and finished products.
−Removed: Facilities used by our contract suppliers and manufacturers to produce the drug substances and materials or finished products for commercial sale must pass inspection and be approved by the FDA and other relevant regulatory authorities.
+Added: Facilities used by our contract suppliers and manufacturers to produce the drug substances and materials or finished products for commercial sale must undergo inspection and be approved by the FDA and other relevant regulatory authorities for the manufacture of our products.
A number of our contract suppliers and manufacturers must comply with cGMP requirements enforced by the FDA through its facilities inspection program and review of submitted technical information.
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This may give rise to difficulties in importing our product into the United States or other countries as a result of, among other things, regulatory agency approval requirements, taxes, tariffs, local import requirements such as import duties or inspections, incomplete or inaccurate import documentation or defective packaging.
−Removed: Any of these factors could adversely impact our ability to effectively commercialize WAKIX.
Because a number of companies compete with us, many of which have greater resources than we do, and because we face rapid changes in science in our industry, we cannot be certain that our products will be accepted in the marketplace or capture market share.
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We may need to increase the size and capabilities of our organization based on business need, and we may experience difficulties in managing our growth.
−Removed: We commenced operations in 2017 and, as of December 31, 2022, had 200 employees.
+Added: We commenced operations in 2017 and, as of December 31, 2023, had approximately 250 employees.
As we advance the development of pitolisant in other indications and commercialize WAKIX as a treatment for EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy, we must continue to grow the size of the organization.
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Any of our employees could leave our employment at any time, with or without notice.
−Removed: Recruiting and retaining qualified operations, finance and accounting, quality and compliance, scientific, clinical, manufacturing and sales and marketing personnel or consultants will also be critical to our success.
+Added: Recruiting and retaining qualified operations, finance and accounting, quality and compliance, scientific, clinical, manufacturing and sales and marketing personnel or consultants is also critical to our success.
We may not be able to attract and retain these personnel on acceptable terms, given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.
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As a result, certain of our employees, officers, directors or consultants may not devote all of their time to our business, and may from time to time serve as employees, officers, directors and consultants of other companies.
+Added: Public health pandemics, including the COVID-19 pandemic, may result in disruptions to our commercialization, clinical trials, manufacturing and other business operations, which could have a material adverse effect on our business, financial condition, operating results, cash flows and prospects.
+Added: A public health epidemic, including COVID-19, poses the risk that we or our employees, contractors, suppliers, distributors and other partners, as well as physicians treating narcolepsy patients, may be prevented from conducting business and patient-care activities for an indefinite period of time, including due to shutdowns and quarantines that may be requested or mandated by governmental authorities.
+Added: Beginning in March 2020, we had increased reliance on personnel working from home which may negatively impact productivity or disrupt, delay or otherwise adversely impact our business.
+Added: In addition, remote working could increase our cyber security risk.
+Added: General protective measures put into place at various governmental levels, including quarantines, travel restrictions and business shutdowns, may also negatively affect our operations.
+Added: For example, the COVID-19 pandemic affected our ability to access HCPs, and caused fewer patients to visit their HCP, resulting in fewer prescriptions being written.
+Added: Additionally, the effects of COVID-19 disrupted the supply chain and could disrupt the manufacturing or shipment of WAKIX and of drug substance and finished drug product.
+Added: For example, we may face supply chain and manufacturing limitations or difficulties as resources are shifted toward vaccine manufacturing and distribution.
+Added: Any delays or interruptions in the manufacture and supply of WAKIX could result in delays for our planned clinical trials, impair our ability to meet demand for new WAKIX prescriptions and impede our clinical trial recruitment, testing, monitoring, data collection and analysis and other related activities.
+Added: Any of the foregoing factors could have a material adverse impact on our business, financial condition, operating results, cash flows and prospects.
+Added: The extent to which COVID-19 or any future pandemics impact our operations and those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, additional or modified government actions, the severity of the pandemic, speed of the spread of a virus, and the actions taken to contain the virus or treat its impact, among others.
We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
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Natural disasters could further disrupt our operations and have a material and adverse effect on our business, financial condition, results of operations and prospects.
−Removed: If a natural disaster, power outage or other event occurred that prevented us from using all or a
−Removed: significant portion of our headquarters, that damaged critical infrastructure, such as our research facilities, the manufacturing facilities of our third-party contract manufacturers or our or their distribution networks, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time.
+Added: If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as our research facilities, the manufacturing facilities of our third-party contract manufacturers or our or their distribution networks, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time.
The disaster recovery and business continuity plans we have in place may prove inadequate in the event of a serious disaster or similar event.
We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which could have a material adverse effect on our business.
−Removed: As part of our risk management policy, we maintain insurance coverage at levels that we believe are appropriate for our business.
+Added: As part of our risk management
+Added: policy, we maintain insurance coverage at levels that we believe are appropriate for our business.
However, in the event of an accident or incident at these facilities, we cannot assure our investors that the amounts of insurance will be sufficient to satisfy any damages and losses.
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Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
+Added: There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
We may also experience security breaches that may remain undetected for an extended period.
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For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
−Removed: Moreover, if a real or perceived security breach affects our systems (or those of our third-party providers or suppliers) or results in the loss of or accidental, unlawful or unauthorized access to, use of, release of or other processing of personally identifiable information or clinical
−Removed: trial data, our reputation could be materially damaged.
+Added: Moreover, if a real or perceived security breach affects our systems (or those of our third-party providers or suppliers) or results in the loss of or accidental, unlawful or unauthorized access to, use of, release of or other processing of personally identifiable information or clinical trial data, our reputation could be materially damaged.
In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to applicable data privacy and security laws.
−Removed: We would also be exposed to a risk of loss, negative publicity, harm to our reputation, governmental investigation and/or enforcement actions, claims or litigation and potential liability, which could materially adversely affect our business, results of operations and financial condition.
+Added: We would also be exposed to a risk of loss, negative publicity, harm to our reputation, governmental investigation and/or enforcement actions, claims or litigation and potential
+Added: liability, which could materially adversely affect our business, results of operations and financial condition.
The global data protection landscape is rapidly evolving, and we may be affected by or subject to new, amended or existing laws and regulations in the future, including as our operations continue to expand or if we begin to operate in foreign jurisdictions.
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federal healthcare programs or healthcare programs in other jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
+Added: A variety of risks associated with operating internationally could materially adversely affect our business.
+Added: We have conducted clinical studies in the Czech Republic, Romania, and Poland in the past, and currently conduct studies in Ireland, Australia, and the United Kingdom.
+Added: We may conduct future clinical studies in other countries as well.
+Added: Doing business internationally involves a number of risks, including but not limited to:
+Added: ● multiple, conflicting and changing laws and regulations, such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
+Added: ● failure by us to obtain and maintain regulatory approvals for the use of our products in various countries;
+Added: ● additional potentially relevant third-party patent rights;
+Added: ● complexities and difficulties in obtaining protection and enforcing our intellectual property;
+Added: ● difficulties in staffing and managing foreign operations;
+Added: ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;
+Added: ● limits in our ability to penetrate international markets;
+Added: ● global macroeconomic conditions, including an increase in inflation rates or interest rates, labor shortages, supply chain shortages, disruptions and instability in the banking industry and other parts of the financial services sector, or other economic, political, or legal uncertainties or adverse developments;
+Added: ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;
+Added: ● terrorism and/or political instability, unrest and wars, such as the conflicts involving Ukraine and Russia or Israel and its surrounding regions, which could delay or disrupt our business, and if such political unrest escalates or spills over to or otherwise impacts additional regions it could heighten many of the other risk factors included in this Item 1A;
+Added: ● natural disasters (including as a result of climate change), which could cause significant damage to the infrastructure upon which our business operations rely, and the timing, nature or severity of which we may be unable to prepare for;
+Added: ● economic instability, outbreak of disease or epidemics such as the COVID-19 pandemic, boycotts, curtailment of trade and other business restrictions;
+Added: ● certain expenses including, among others, expenses for travel, translation and insurance;
+Added: ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S.
+Added: Foreign Corrupt Practices Act, its books and records provisions, or its anti-bribery provisions.
+Added: Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations.
+Added: Failure to keep up with evolving laws, regulations, trends and shareholder expectations relating to environmental, social and governance, or ESG, practices or reporting could adversely impact our reputation, share price and access to and cost of capital or otherwise adversely impact our business .
+Added: Certain institutional investors, investor advocacy groups, investment funds, creditors and other influential financial market participants, as well as governments, regulators, customers, patients, employees and other stakeholders, have become increasingly focused on companies’ ESG practices, including the impact of business on the environment and diversity, equity and inclusion matters.
+Added: Certain organizations also provide ESG ratings, scores and benchmarking studies that assess companies’ ESG practices.
+Added: Although there are no universal standards for such ratings, scores or benchmarking studies, they are used by some investors to inform their investment and voting decisions.
+Added: It is possible that our future stockholders or organizations that report on, rate or score ESG practices will not be satisfied with our ESG strategy or performance.
+Added: Unfavorable press about or ratings or assessments of our ESG strategies or practices, regardless of whether or not we comply with applicable legal requirements, may lead to negative investor sentiment toward us, which may hinder the Company’s access to capital.
+Added: Our reputation could be damaged if we do not, or are perceived not to, meet stakeholder demand with respect to ESG matters, which could adversely affect our business, financial condition, profitability and cash flows.
+Added: We may be criticized for our lack of ESG initiatives or goals or perceived as not taking sufficient action in connection with any of these matters.
+Added: In turn, we may take certain actions, including the establishment of ESG-related goals or targets, to improve our ESG profile and/or respond to stakeholder demand;
+Added: however, such actions may be costly or be subject to numerous conditions that are outside our control, and we cannot guarantee that we will meet these goals or targets or that such actions will have the desired effect even if met.
+Added: Additionally, we and/or other parties in our value chain are subject to or are expected to be subject to additional climate and other ESG-related obligations arising from legislation and regulation in the United States, the European Union
+Added: and other jurisdictions, including new reporting requirements, even as the availability and quality of the information that may be required to comply with such laws and regulations remains limited.
+Added: We expect for our compliance costs with these laws and regulations to increase in the future, and any failure, or perceived failure, by us to adhere to such laws and regulations, or meet evolving and varied stakeholder expectations and standards, could harm our business, reputation, financial condition, and operating results.
Risks Related to Our Financial Condition and Capital Requirements
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Certain of the milestone payments payable by us under these agreements were paid prior to our commercialization of WAKIX.
−Removed: Upon the Cataplexy Milestone Trigger Date, we became obligated to make the $100.0 million Cataplexy Milestone Payment to Bioprojet under the 2017 LCA, which we paid in January 2021.
−Removed: In October 2020, we made a payment to Bioprojet under the 2017 LCA of $2.0 million to extend the Cataplexy Milestone Payment due date to within 90 days of the Cataplexy Milestone Trigger Date.
−Removed: A final $40.0 million milestone payment was paid to Bioprojet under the 2017 LCA in March 2022 upon the attainment of aggregate net sales of WAKIX in the United States of $500.0 million subsequent to the date of NDA approval by the FDA pursuant to the Bioprojet License Agreement.
−Removed: Harmony paid an initial, non-refundable $30.0 million licensing fee and additional payments of up to $155.0 million are potentially due under the 2022 LCA upon the achievement of certain future development and sales-based milestones.
There can be no assurance that we will have the funds necessary to make such payments in the future, or be able to raise such funds when needed, on terms acceptable to us, or at all.
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Furthermore, if we are forced to raise additional funds to make such payments, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts.
−Removed: Our Blackstone Credit Agreement contains restrictive and financial covenants that may limit our operating flexibility.
−Removed: Our Blackstone Credit Agreement contains certain restrictive covenants that either limit our ability to, or require a mandatory prepayment in the event that, we or our subsidiaries engage in new lines of business, incur additional indebtedness or liens, make certain investments, make certain payments, pay cash dividends, merge with other companies or consummate certain changes of control, make certain acquisitions, transfer or dispose of certain assets, liquidate or dissolve, amend certain material agreements, enter into sale and leaseback transactions, enter into various other specified transactions, or change our name, location, or executive office without notice.
−Removed: We, therefore, may not be able to engage in any of the foregoing transactions unless we obtain the consent of the lenders, or in certain cases Blackstone on their behalf, or prepay the outstanding amount under the Blackstone Credit Agreement.
−Removed: The Blackstone Credit Agreement also contains a financial covenant that requires us to maintain at all times cash and cash equivalents in certain deposit accounts in an amount at least equal to $10.0 million.
−Removed: Our obligations under the Blackstone Credit Agreement are secured by all of our assets, with certain exceptions.
−Removed: We may not be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under the Blackstone Credit Agreement.
−Removed: Furthermore, our future working capital, borrowings or equity financing could be unavailable to repay or refinance the amounts outstanding under the Blackstone Credit Agreement.
−Removed: In the event of a liquidation, the lenders under the facility would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our common stock would receive a portion of any liquidation proceeds only if all of our creditors then existing, including the lenders under the Blackstone Credit Agreement, were first repaid in full.
−Removed: Our failure to comply with the covenants or other terms of the Blackstone Credit Agreement, including as a result of events beyond our control, could result in a default under the Blackstone Credit Agreement that could materially and adversely affect the ongoing viability of our business.
−Removed: Blackstone and the other Lenders may elect to accelerate the repayment of all unpaid principal of the Loans, accrued interest and other amounts owed under the Blackstone Credit Agreement upon consummation of a specified change of control transaction or the occurrence of certain events of default (as specified in the Blackstone Credit Agreement), including, among other things:
−Removed: ● our default in a payment obligation under the Blackstone Credit Agreement;
−Removed: ● our breach of the restrictive covenants or other terms of the Blackstone Credit Agreement;
−Removed: ● our breach of reporting obligations;
+Added: Our TLA Credit Agreement contains restrictive and financial covenants that may limit our operating flexibility.
+Added: Our TLA Credit Agreement (as defined below) contains certain restrictive covenants that either limit our ability to, or require a mandatory prepayment in the event that, we or our subsidiaries engage in new lines of business, incur additional indebtedness or liens, make certain investments, make certain payments, pay cash dividends, merge with other companies or consummate certain changes of control, make certain acquisitions, transfer or dispose of certain assets, liquidate or dissolve, amend certain material agreements, enter into sale and leaseback transactions, enter into various other specified transactions, or change our name, location, or executive office without notice.
+Added: We, therefore, may not be able to engage in any of the foregoing transactions unless we obtain the consent of the lenders, or in certain cases JP Morgan on their behalf, or prepay the outstanding amount under the TLA Credit Agreement.
+Added: Our failure to comply with the covenants or other terms of the TLA Credit Agreement, including as a result of events beyond our control, could result in a default under the TLA Credit Agreement that could materially and adversely affect the ongoing viability of our business.
+Added: JPMorgan Chase Bank, N.A.
+Added: and the other Lenders may elect to accelerate the repayment of all unpaid principal of the Loans, accrued interest and other amounts owed under the TLA Credit Agreement upon consummation of a specified
+Added: change of control transaction or the occurrence of certain events of default (as specified in the TLA Credit Agreement), including, among other things:
+Added: ● our default in a payment obligation under the TLA Credit Agreement;
+Added: ● our breach of the covenants or other terms of the TLA Credit Agreement;
● our failure to properly maintain the collateral;
−Removed: ● the termination or materially adverse amendment of a permit or authorization related to one of our products that is not revoked within 90 days;
−Removed: ● a specified change of control transaction occurring under the License Agreement;
−Removed: ● with respect to WAKIX or another material product, a governmental authority (i) asserting that such product lacks a material authorization, which assertion is not withdrawn or resolved within 90 days or (ii) taking certain regulatory actions resulting in a discontinuance, withdrawal or delay of such product which would reasonably be expected to last for more than 90 days;
−Removed: ● a recall that would reasonably be expected to result in a material adverse effect;
−Removed: ● our entry into a settlement agreement with a government authority resulting in liability greater than $2.0 million;
−Removed: ● our material breach under or the early termination of one of our key intellectual property licensing or supply chain agreements;
+Added: ● the occurrence of a specified change of control transaction occurring;
+Added: ● one or more judgments resulting in liability greater than $20.0 million;
● certain specified insolvency and bankruptcy-related events.
−Removed: Subject to any applicable cure period set forth in the Blackstone Credit Agreement, all amounts outstanding with respect to the Loans (principal and accrued interest), as well as any applicable prepayment premiums or interest “make-whole” payments, would become due and payable, and upon the occurrence of a payment event of default and following acceleration of the Loans, all past due obligations shall bear interest at a default interest rate that is 2.00% higher than the otherwise applicable rate.
+Added: Subject to any applicable cure period set forth in the TLA Credit Agreement, all amounts outstanding with respect to the Loans (principal and accrued interest), as well as any applicable prepayment premiums or interest “make-whole” payments, would become due and payable.
Our assets or cash flow may not be sufficient to fully repay our obligations under the Loans if the obligations thereunder are accelerated upon any events of default.
−Removed: Further, if we are unable to repay, refinance or restructure our obligations under the Loans, the Administrative Agent on behalf of the Lenders could proceed to protect and enforce their rights under the Blackstone Credit Agreement and other loan documents by exercising such remedies (including foreclosure on the assets securing our obligations under the Blackstone Credit Agreement and the other loan documents) as are available to the Administrative Agent and the Lenders and in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in the Blackstone Credit Agreement or other loan documents or in aid of the exercise of any power granted in the Blackstone Credit Agreement or other loan documents.
+Added: Further, if we are unable to repay, refinance or restructure our obligations under the Loans, the Administrative Agent on behalf of the Lenders could proceed to protect and enforce their rights under the TLA Credit Agreement and other loan documents by exercising such remedies (including foreclosure on the assets securing our obligations under the TLA Credit Agreement and the other loan documents) as are available to the Administrative Agent and the Lenders and in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in the TLA Credit Agreement or other loan documents or in aid of the exercise of any power granted in the TLA Credit Agreement or other loan documents.
Such repayment could have a material adverse effect on our business, operating results and financial condition.
+Added: Our obligations under the TLA Credit Agreement are secured by all of our assets, with certain exceptions.
+Added: We may not be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under the TLA Credit Agreement.
+Added: Furthermore, our future working capital, borrowings or equity financing could be unavailable to repay or refinance the amounts outstanding under the TLA Credit Agreement.
+Added: In the event of a liquidation, the lenders under the facility would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our common stock would receive a portion of any liquidation proceeds only if all of our creditors then existing, including the lenders under the TLA Credit Agreement, were first repaid in full.
We have never paid dividends on our common stock, and we do not intend to pay dividends for the foreseeable future.
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Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
−Removed: Furthermore, our Blackstone Credit Agreement contains negative covenants that limit our ability to pay dividends.
Raising additional funds by issuing securities may cause dilution to existing shareholders, raising additional funds through debt financings may involve restrictive covenants, and raising funds through lending and licensing arrangements may restrict our operations or require us to relinquish proprietary rights to our technologies or product candidates.
To the extent that we raise additional capital by issuing equity securities, our existing shareholders’ ownership may experience substantial dilution, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights of a common shareholder.
−Removed: Additionally, any agreements for future debt or preferred equity financings, if available, may involve covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, which could adversely affect our ability to conduct our business.
+Added: Additionally, any agreements for future debt or preferred equity financings, if available, may involve covenants limiting or restricting our ability to take specific actions, such as incurring
+Added: additional debt, making capital expenditures or declaring dividends, which could adversely affect our ability to conduct our business.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.
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Our ability to utilize our net operating loss carryforwards may be limited.
−Removed: As of December 31, 2022, we have utilized all of our U.S.
−Removed: federal net operating loss carryforwards and we had state net operating loss carryforwards of approximately $95.2 million.
−Removed: Utilization of the state net operating loss carryforwards may be subject to a substantial limitation due to state provisions.
+Added: As of December 31, 2023, we had U.S.
+Added: federal net operating loss carryforwards of $179.4 million and we had state net operating loss carryforwards of approximately $137.3 million.
+Added: Utilization of the federal and state net operating loss carryforwards may be subject to a substantial limitation due to federal and state provisions.
If we have experienced an ownership change at any time since our incorporation, we may be subject to limitations on our ability to utilize our existing net operating loss carryforwards to offset taxable income.
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Risks Related to Development, Regulatory Approval and Commercialization
−Removed: The regulatory approval process of the FDA is costly, lengthy and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for pitolisant in other potential indications for which we may seek to develop pitolisant, our business will be substantially harmed.
+Added: The regulatory approval process of the FDA is costly, lengthy and inherently unpredictable, and our business may be substantially harmed if we experience insufficient results in the course of our clinical development or are ultimately unable to obtain regulatory approval for any of our ongoing development programs in other potential indications.
Although the commercialization of WAKIX is our primary focus, as part of our longer-term growth strategy, we plan to evaluate pitolisant in other indications and develop other product candidates.
The research, testing, manufacturing, labeling, approval, selling, import, export, pricing and reimbursement marketing and distribution of drug products are subject to extensive regulation by the FDA and other regulatory agencies in the United States.
−Removed: Although we have obtained regulatory approval for WAKIX in the United States for the treatment of EDS or cataplexy in adult patients with narcolepsy, it is possible that we may not obtain regulatory approval for pitolisant for other indications, or for any other product candidates we may
−Removed: seek to develop in the future.
−Removed: We received a Complete Response Letter for pitolisant for the treatment of cataplexy in adult patients with narcolepsy, and therefore the FDA did not approve WAKIX for this indication during the initial NDA review.
−Removed: Subsequently, in June 2020, we received a general advice letter from the FDA stating that the FDA had re-analyzed data from the HARMONY 1 trial that we submitted in the NDA in support of the adult cataplexy indication for WAKIX.
−Removed: As a result, the FDA recommended we submit a complete response resubmission in pursuit of the adult cataplexy indication for WAKIX.
−Removed: Following such resubmission, we received acknowledgement from the FDA that it considers the resubmission to be a complete Class 1 response to its August 14, 2019 action letter, and the user fee goal date, or decision date, was October 13, 2020.
−Removed: On October 13, 2020 we received regulatory approval for WAKIX for the treatment of cataplexy in adult patients with narcolepsy.
−Removed: Nevertheless, obtaining regulatory approval of an NDA can be a lengthy, expensive and uncertain process.
−Removed: The FDA can delay, limit or deny approval of a drug candidate for many reasons or require us to conduct additional preclinical or clinical testing, including, but not limited to, the following:
+Added: Although we have obtained regulatory approval for WAKIX in the United States for the treatment of EDS or cataplexy in adult patients with narcolepsy, it is possible that we may not obtain regulatory approval for pitolisant for other indications, or for any other product candidates we may seek to develop in the future.
+Added: The FDA or comparable regulatory authorities can delay, limit or deny approval of a drug candidate for many reasons or require us to conduct additional preclinical or clinical testing, including, but not limited to, the following:
● a drug candidate may not be deemed safe or effective, or the clinical and other benefits may be deemed to not outweigh the candidate’s risks;
−Removed: ● the FDA might not approve our trial design and analysis plan;
−Removed: ● the FDA may not find the data from nonclinical and clinical studies and trials sufficient or may disagree with our interpretation of data from nonclinical or clinical studies;
+Added: ● regulatory authorities may disagree with the design or execution of our clinical trials plan;
+Added: ● the population studied in clinical trials may not be sufficiently broad or representative to assure safety in the full population for which we seek approval;
+Added: ● we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
+Added: ● regulatory authorities may not find the data from nonclinical and clinical studies and trials sufficient or may disagree with our interpretation of data from nonclinical or clinical studies;
● serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates, or other products containing the active ingredient in our product candidates;
−Removed: ● clinical inspection(s) by the FDA or other regulatory authorities may result in unacceptable findings that could negatively impact approval of pitolisant;
−Removed: ● the FDA might not accept or deem acceptable a third-party manufacturers’ processes or facilities;
−Removed: ● the FDA may change its approval policies or adopt new regulations.
+Added: ● regulatory authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates;
+Added: ● clinical trial site inspection(s) by the FDA or other regulatory authorities may result in unacceptable findings that could negatively impact approval of pitolisant;
+Added: ● regulatory authorities might not accept or deem acceptable a third-party manufacturers’ processes or facilities;
+Added: ● regulatory authorities may change their approval policies or adopt new regulations.
Prior to obtaining approval to commercialize a drug candidate in the United States, we or our collaborators must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA, that such drug candidates are safe and effective for their intended uses.
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The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.
−Removed: This could result in a delay in approval, or rejection, of our marketing applications by the FDA or
−Removed: comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.
+Added: This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.
If we fail to obtain and sustain an adequate level of coverage and reimbursement for WAKIX and other product candidates by third-party payors, sales would be adversely affected.
Successful sales of WAKIX and any other product candidates that may receive regulatory approval depend on the availability of coverage and adequate reimbursement from third-party payors.
−Removed: Patients who are prescribed medications for the treatment of their conditions generally rely on third- party payors to reimburse all or part of the costs associated with their prescription drugs.
+Added: Patients who are prescribed medications for
+Added: the treatment of their conditions generally rely on third- party payors to reimburse all or part of the costs associated with their prescription drugs.
There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved drugs.
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Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.
−Removed: In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average manufacture price and best
+Added: In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average manufacture price and best price.
Penalties may apply in some cases when such metrics are not submitted accurately and timely.
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In addition, there may be significant delays in obtaining such coverage and reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory authorities.
−Removed: Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, sale and distribution expenses.
+Added: Moreover, eligibility for coverage and reimbursement does not imply that a product will be
+Added: paid for in all cases or at a rate that covers our costs, including research, development, intellectual property, manufacture, sale and distribution expenses.
Interim reimbursement levels for new products, if applicable, may also not be sufficient to cover our costs and may not be made permanent.
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Further, the adoption and implementation of any future governmental cost containment or other health reform initiative may result in additional downward pressure on the price that we may receive for WAKIX.
−Removed: These cost-control initiatives could decrease the price we have established for WAKIX, which could result in product revenues being lower than anticipated.
+Added: These cost-control initiatives could decrease the price we have established for WAKIX, which could result in product revenue being lower than anticipated.
The pricing, coverage and reimbursement of WAKIX must be adequate to support a commercial infrastructure.
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● the delay, prevention or withdrawal of approvals by regulatory authorities;
−Removed: ● the requirement of additional warnings on the prescribing label;
+Added: ● the requirement to suspend marketing of a product or withdraw it from the marketplace;
+Added: ● the requirement of additional warnings on the prescribing label or limitations on product access;
+Added: ● requirements to conduct costly post-marketing studies;
+Added: ● requirements to change the manner in which a product is administered;
● the requirement of a REMS plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use;
● designation as a controlled substance by the DEA;
+Added: ● a product may become less competitive
+Added: ● fines, injunctions or civil and criminal penalties;
● litigation and the potential to be held liable for harm caused to patients;
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Any of these events could prevent us from achieving or maintaining market acceptance of pitolisant and could significantly harm our business, results of operations, financial condition and prospects.
−Removed: We have never commercialized a product candidate prior to WAKIX and we may lack the necessary expertise, personnel and resources to successfully commercialize WAKIX or any other potential product candidates that receive regulatory approval on our own or together with collaborators.
−Removed: WAKIX is our first commercialized product.
−Removed: Prior to this, our operations had been limited to organizing and staffing our company, business planning, raising capital, acquiring the rights to our product candidates and undertaking preclinical studies and clinical trials of our product candidates.
−Removed: We currently have no in-house manufacturing, distribution or supply capabilities.
−Removed: To achieve commercial success of WAKIX or any other product candidate, if approved, we will have to develop our own manufacturing, distribution and supply capabilities or outsource these activities to a third party.
−Removed: We are early in our commercialization efforts.
−Removed: Factors that may affect our ability to commercialize our product candidates on our own include recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our product candidates and other unforeseen costs associated with creating an independent sales and marketing organization.
−Removed: Developing a sales and marketing organization requires significant investment, is time-consuming and could delay the launch of our product candidates.
−Removed: We may not be able to build an effective sales and marketing organization in the United States or other key global markets.
−Removed: If we are unable to build our own distribution and marketing capabilities or to find suitable partners for the commercialization of our product candidates, we may have difficulties generating revenue from them.
If the FDA or comparable foreign regulatory authorities approve generic versions of any of our products that receive marketing approval, or such authorities do not grant our products appropriate periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected.
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We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including:
+Added: ● we may be unable to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;
● regulators, IRBs or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;
+Added: ● the FDA or comparable foreign regulatory authorities may not agree as to the design or implementation of our clinical trials;
● we may not reach agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
+Added: ● we may be unable to identify, recruit and train suitable clinical investigators;
● the number of subjects or patients required for clinical trials of pitolisant in additional indications or any other product candidate may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;
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● we may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to resubmit to an IRB and regulatory authorities for re-examination;
−Removed: ● regulators, IRBs or other reviewing bodies may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, or the supply or quality of pitolisant or any other product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;
+Added: ● regulators, IRBs or other reviewing bodies may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies;
+Added: ● the supply or quality of pitolisant or any other product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;
● the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.
−Removed: Regulators, IRBs of the institutions in which clinical trials are being conducted or data monitoring committees may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
+Added: Regulators, IRBs of the institutions in which clinical trials are being conducted or data monitoring committees may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects,
+Added: failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
Negative or inconclusive results from our ongoing clinical trials of pitolisant for the treatment of narcolepsy, or any other clinical trial or preclinical studies in animals that we conduct, could mandate repeated or additional clinical trials and could result in changes to or delays in clinical trials in other indications.
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Problems related to predecessors could result in increased costs and delays in the development of pitolisant for additional indications, which could adversely affect our ability to generate any future revenue from sales of pitolisant, if approved for additional indications.
+Added: A Fast Track Designation from the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive regulatory approval.
+Added: During the development of certain of our product candidates, we received Fast Track Designation from the FDA and we may also seek further designations for some or all of our other product candidates.
+Added: The Fast Track program is intended to expedite or facilitate the process for reviewing new product candidates that meet certain criteria.
+Added: Specifically, drugs are eligible for Fast Track designation if they are intended, alone or in combination with one or more drugs or biologics, to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.
+Added: Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied.
+Added: The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once an NDA is submitted, the application may be eligible for priority review.
+Added: An NDA submitted for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the application.
+Added: The FDA has broad discretion whether or not to grant this designation.
+Added: Even if we believe a particular product candidate is eligible for this designation, we cannot assure you that the FDA would decide to grant it.
+Added: Even if we do receive Fast Track Designation for any of our product candidates, such product candidates may not experience a faster development process, review or approval compared to conventional FDA procedures.
+Added: The FDA may also withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.
+Added: Furthermore, such a designation does not increase the likelihood that ZYN002 or any other product candidate that may be granted Fast Track designation will receive regulatory approval in the U.S.
+Added: Many product candidates that have received Fast Track Designation have ultimately failed to obtain approval.
Interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
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Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
−Removed: Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.
+Added: Adverse differences between “topline,” preliminary or interim data and final data could significantly harm our business prospects.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our business in general.
In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular drug, product candidate or our business.
−Removed: If the interim, “topline” or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain
−Removed: approval for and commercialize our product candidates, our business, operating results, prospects or financial condition may be harmed.
+Added: If the interim, “topline” or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our product candidates, our business, operating results, prospects or financial condition may be harmed.
Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control.
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In addition, we expect to rely on CROs and clinical trial sites to ensure proper and timely conduct of our future clinical trials, and, while we intend to enter into agreements governing their services, we will be limited in our ability to compel their actual performance.
−Removed: Even though the FDA granted orphan drug designation to pitolisant for the treatment of narcolepsy, we may not be able to obtain or maintain orphan drug marketing exclusivity for this product candidate or any other product candidates.
+Added: Even if we receive orphan drug designation for our product candidates, we may not be able to maintain the benefits associated with orphan drug designation, including marketing exclusivity, which may cause our product revenue to be reduced.
Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient populations as orphan drugs.
−Removed: Under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States.
−Removed: Pitolisant was granted orphan drug designation for the treatment of narcolepsy in 2010.
−Removed: Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug for the same indication for that time period.
−Removed: Under the FDA’s regulations, the FDA will deny orphan drug exclusivity to a designated drug upon approval if the FDA has already approved another drug with the same active ingredient for the same indication, unless the drug is demonstrated to be clinically superior to the previously approved drug.
−Removed: The applicable exclusivity period is seven years in the United States.
−Removed: Orphan drug exclusivity in the United States may be unavailable where the indication for which the product candidate is approved is broader than the orphan-designated indication, or is otherwise different from the orphan-designated indication.
−Removed: For example, the FDA granted orphan drug designation for pitolisant for the treatment of narcolepsy.
+Added: Under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States, where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United States.
+Added: For example, the FDA granted orphan drug designation to pitolisant for the treatment of narcolepsy in 2010, and for the treatment of IH in 2023.
+Added: In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding for clinical trial costs, tax advantages and user-fee waivers.
+Added: In addition, generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for the disease or condition for which it has such designation, the drug is entitled to a seven-year period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug for the same disease or condition for that time period.
+Added: Under the FDA’s regulations, the FDA will deny orphan drug exclusivity to a designated drug upon approval if the FDA has already approved another drug with the same active ingredient for the same indication, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.
+Added: In connection with WAKIX’s approvals, we received orphan drug exclusivities for the treatment of excessive daytime sleepiness in adult patients with narcolepsy, and for the treatment of cataplexy in adult patients with narcolepsy.
+Added: Orphan drug exclusivity in the United States may be unavailable where the indication for which the product candidate is approved is broader than the orphan-designated indication or is otherwise different from the orphan-designated disease or condition.
Even if we obtain orphan drug exclusivity for a drug candidate, that exclusivity may not effectively protect the candidate from competition.
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In addition, the FDA can subsequently approve products with the same active moiety for the same condition if the FDA concludes that the later drug is safer, more effective, or makes a major contribution to patient care.
−Removed: There have been legal challenges to aspects of the FDA’s regulations and policies concerning the exclusivity provisions of the Orphan Drug Act, and future challenges could lead to changes that affect the protections afforded our product candidates in ways that are difficult to predict.
−Removed: On August 3, 2017, Congress passed the FDA Reauthorization Act of 2017 (“FDARA”).
−Removed: FDARA, among other things, codified the FDA’s pre-existing regulatory interpretation, to require that a drug sponsor demonstrate the clinical
−Removed: superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease or condition in order to receive orphan drug exclusivity.
−Removed: The FDA may further reevaluate the Orphan Drug Act and its regulations and policies.
−Removed: We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business.
−Removed: Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.
+Added: Orphan drug designation neither shortens the development or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
We are subject to ongoing regulatory obligations and continued regulatory review with respect to WAKIX, which will result in significant additional expense.
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We could also be asked to conduct post marketing clinical studies to verify the safety and efficacy of future product candidates in general or in specific patient subsets.
−Removed: For example, as a part of the regulatory approval for WAKIX for the treatment of EDS in adult patients with narcolepsy, we are required to conduct post-marketing studies in women exposed to pitolisant in pregnancy, including a registry-based observational cohort study to assess maternal, fetal, and infant outcomes of women exposed to pitolisant during pregnancy, and another study of a different design such as a case control study or a retrospective cohort study using electronic medical record data, and a lactation study.
−Removed: We will also be required to report certain adverse events and production problems, if any, to the FDA, and to comply with requirements concerning advertising and promotion for WAKIX.
+Added: For example, as a part of the regulatory approval for WAKIX for the treatment of EDS in adult
+Added: patients with narcolepsy, we are required to conduct post-marketing studies in women exposed to pitolisant in pregnancy, including a registry-based observational cohort study to assess maternal, fetal, and infant outcomes of women exposed to pitolisant during pregnancy, and another study of a different design such as a case control study or a retrospective cohort study using electronic medical record data, and a lactation study.
+Added: We are also required to report certain adverse events and production problems, if any, to the FDA, and to comply with requirements concerning advertising and promotion for WAKIX.
Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label.
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● limit or suspend regulatory approval;
−Removed: ● suspend any of our ongoing clinical trials;
−Removed: ● refuse to approve pending applications or supplements to approved applications submitted by us;
+Added: ● place clinical holds on any of our proposed or ongoing clinical trials;
+Added: ● refuse to approve pending applications or supplements to approved applications;
● impose restrictions on our operations, including closing our contract manufacturers’ facilities, on the manufacturing of our products, or on the labeling or marketing of our products;
−Removed: ● seize or detain products or require a product recall or withdrawal of the products from the market.
+Added: ● seize or detain products, refuse to import or export products, or require or request a product recall or withdrawal of the products from the market.
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity.
−Removed: Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenues from WAKIX or future product candidates.
+Added: Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from WAKIX or future product candidates.
If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.
−Removed: Additionally, if we are unable to generate revenues from the sale of WAKIX or future product candidates, our potential for achieving profitability will be diminished and the capital necessary to fund our operations will be increased.
The regulatory requirements and policies may change, and additional government regulations may be enacted for which we may also be required to comply.
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If we or any future collaboration partner are not able to maintain regulatory compliance, we or such collaboration partner, as applicable, may face government enforcement action and our business will suffer.
−Removed: We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
−Removed: The policies of the FDA and of other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.
−Removed: For example, the results of the 2020 U.S.
−Removed: Presidential election may affect our business and industry.
−Removed: Namely, the Trump administration took several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications.
−Removed: It is difficult to predict whether or how these executive actions will be implemented, or whether they will be rescinded or replaced under the Biden Administration.
−Removed: The policies and priorities of the Biden Administration are unknown and may materially impact the regulatory framework governing our products.
−Removed: If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.
−Removed: Non-compliance by us or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population can also result in significant financial penalties.
−Removed: Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers will be subject to applicable healthcare regulatory laws, which could expose us to penalties.
+Added: Our business operations and current and future relationships with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers are subject to applicable healthcare regulatory laws, which could expose us to penalties.
Our business operations and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors, patient organizations and customers, may expose us to broadly applicable federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights.
−Removed: These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute our product candidates, if approved.
+Added: These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market,
+Added: sell and distribute our product candidates, if approved.
The laws that affect our current and future operations include, but are not limited to:
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● state law equivalents of each of the above federal laws, such as state anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, and may be broader in scope than their federal equivalents;
−Removed: ● federal transparency requirements detailing interactions with and payments to healthcare providers, such as the federal reporting requirements under the Physician Payments Sunshine Act, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the HHS information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care professionals starting January 1, 2022, and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members.
+Added: ● federal transparency requirements detailing interactions with and payments to healthcare providers, such as the federal reporting requirements under the Physician Payments Sunshine Act, which requires, among other things, certain manufacturers of drugs, devices, biologics and medical supplies reimbursed under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the HHS
+Added: information related to payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care professionals (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, and certified nurse midwives), and teaching hospitals and physician ownership and investment interests, including such ownership and investment interests held by a physician’s immediate family members.
Failure to submit required information may result in civil monetary penalties;
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The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the applicable regulatory agencies or the courts, and their provisions are open to a variety of interpretations.
−Removed: Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
+Added: Actual or perceived failure to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations, and financial condition.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal data, such as information that we may collect in connection with clinical trials in the U.S.
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The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future.
−Removed: Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.
+Added: Any failure or perceived failure by us to comply with federal, state or foreign laws or regulation, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties
+Added: and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.
Certain states have also adopted comparable privacy and security laws and regulations, some of which may be more stringent than HIPAA.
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It will also create a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
−Removed: majority of the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
+Added: The majority of the provisions went into effect on January 1, 2023, and additional compliance investment and potential business process changes may be required.
In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
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In Europe, the GDPR went into effect in May 2018 and imposes strict requirements for processing the personal data of individuals within the EEA.
−Removed: Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
+Added: Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenue of the noncompliant company, whichever is greater.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain.
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In July 2020, the Court of Justice of the European Union (“CJEU”) invalidated the Privacy Shield for purposes of international transfers and imposed further restrictions on the use of standard contractual clauses (“SCCs”).
−Removed: The European Commission issued revised SCCs on June 4, 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board.
+Added: The European Commission issued revised SCCs in June 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board.
The revised SCCs must be used for relevant new data transfers from September 27, 2021;
−Removed: existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022.
+Added: standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022.
The new SCCs apply only to the transfer of personal data outside of the EEA and not the UK;
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The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.
−Removed: The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, and it is
−Removed: unclear how United Kingdom data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term.
+Added: The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, and it is unclear how United Kingdom data protection laws and regulations will develop in the medium to longer term, and how data transfers to and from the United Kingdom will be regulated in the long term.
The European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from EU member states to the United Kingdom without additional safeguards.
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Though state-controlled substances laws often mirror federal law, because the states are separate jurisdictions, they may separately schedule drugs as well.
−Removed: While some states automatically schedule a drug when the DEA does so, in other states there must be rulemaking or a legislative action.
+Added: states automatically schedule a drug when the DEA does so, in other states there must be rulemaking or a legislative action.
State scheduling may delay commercial sale of any controlled substance drug product for which we obtain federal regulatory approval and adverse scheduling could impair the commercial attractiveness of such product.
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● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
−Removed: ● establishment of a Center for Medicare Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending;
+Added: ● establishment of a Center for Medicare and Medicaid Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending;
● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
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Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
−Removed: For example, in August 2011, the Budget Control Act of 2011, among other things, led to aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through December 31, 2022, unless additional Congressional action is taken.
+Added: For example, in August 2011, the Budget Control Act of 2011, among other things, led to aggregate reductions to Medicare payments to providers, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken.
Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers, and increased the statute of limitations period in which the government may recover overpayments to providers from three to five years.
−Removed: The “Inflation Reduction Act of 2022”, signed into law on August 16, 2022, included several provisions to reduce drug spending by the federal government and reduce out-of-pocket costs for patients on Medicare.
+Added: The Inflation Reduction Act of 2022, or IRA, which was signed into law on August 16, 2022, included several provisions to reduce drug spending by the federal government and reduce out-of-pocket costs for patients on Medicare.
This legislation requires that the federal government negotiate prices for some drugs covered under Medicare Part B and Part D with the highest total spending, beginning in 2026.
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Eligibility for the Medicare Part D Low-Income Subsidy Program was also expanded under the legislation, and it further delayed the implementation of the Trump Administration’s drug rebate rule to 2027.
+Added: On August 29, 2023, the Secretary of Health and Human Services, or HHS, announced the list of the first ten drugs that will be subject to price negotiations, although the drug price negotiation program is currently subject to legal challenges.
+Added: For that and other reasons, it is currently unclear how the IRA will be effectuated, or the impact of the IRA on our business.
Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.
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Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor programs, and review the relationship between pricing and manufacturer patient programs.
−Removed: While any proposed measures will require authorization through additional legislation to become effective, the probability of their success is uncertain, particularly in light of the new Presidential administration.
+Added: While any proposed measures will require authorization through additional legislation to become effective, the probability of their success is uncertain.
Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
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The delivery of healthcare in the European Union, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than European Union, law and policy.
−Removed: National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of
−Removed: products in that context.
+Added: National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context.
In general, however, the healthcare budgetary constraints in most European Union member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers.
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We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action in the United States, the European Union or any other jurisdiction.
−Removed: If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, our current or any future product candidates we may develop may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.
+Added: If we or any third parties we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, we may be subject to enforcement action and we may not achieve or sustain profitability.
If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs that we participate in, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
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The 340B program requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs.
−Removed: These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients.
+Added: These 340B covered entities include a
+Added: variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients.
The ACA expanded the list of covered entities to include certain free-standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, but exempts “orphan drugs” from the ceiling price requirements for these covered entities.
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In addition, legislation may be introduced that, if passed, would further expand the 340B program to additional covered entities or would require participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.
−Removed: In order to be eligible to have our products that we successfully commercialize paid for with federal funds under the Medicaid program and purchased by certain federal agencies and grantees, we also have to participate in the U.S.
+Added: To be eligible to have our products that we successfully commercialize paid for with federal funds under the Medicaid program and purchased by certain federal agencies and grantees, we have to participate in the U.S.
Department of Veterans Affairs (“VA”), Federal Supply Schedule (“FSS”) pricing program.
−Removed: As part of this program, we are obligated to make our products available for procurement on an FSS contract under which we must comply with standard
−Removed: government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price (“FCP”) to four federal agencies (VA, U.S.
+Added: As part of this program, we are obligated to make our products available for procurement on an FSS contract under which we must comply with standard government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price (“FCP”) to four federal agencies (VA, U.S.
Department of Defense (“DOD”), Public Health Service, and U.S.
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Disruptions at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
−Removed: The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes, and other events that may otherwise affect the FDA’s ability to perform routine functions.
−Removed: Average review times at the agency have fluctuated in recent years as a result.
−Removed: In addition, government funding of other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
−Removed: Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, in recent years, including in 2018 and 2019, the U.S.
−Removed: government shut down several times and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities.
−Removed: Separately, in response to the COVID-19 pandemic, on March 10, 2020 the FDA announced its intention to postpone most inspections of foreign manufacturing facilities, and on March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding the conduct of clinical trials.
−Removed: Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system.
−Removed: The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities.
−Removed: Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.
−Removed: If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
−Removed: Further, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
+Added: The ability of the FDA and foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or foreign regulatory authorities’ ability to perform routine functions.
+Added: Average review times at the FDA and foreign regulatory authorities have fluctuated in recent years as a result.
+Added: In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
+Added: Disruptions at the FDA and other agencies may also slow the time necessary for new [drugs, and biologics] or modifications to approved [drugs and biologics] to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
+Added: For example, over the last several years, the U.S.
+Added: government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
+Added: Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections at domestic and foreign manufacturing facilities at various points.
+Added: Even though the FDA has since resumed standard inspection operations, the FDA has continued to monitor and implement changes to its inspectional activities, and any resurgence of the virus may lead to other inspectional or administrative delays.
+Added: If a prolonged government shutdown occurs, or if global health concerns hinder or prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
We will need to obtain FDA approval of any proposed product names, and any failure or delay associated with such approval may adversely affect our business.
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The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our licensed patents may be challenged in the courts or patent offices in the United States.
−Removed: Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.
+Added: Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part,
+Added: which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.
Moreover, patents have a limited lifespan.
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Without patent protection for our current or future product candidates, we may be open to competition from generic versions of such products.
−Removed: Given the amount of time
−Removed: required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
+Added: Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
As a result, our licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
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(2) the patents listed in the Orange Book have expired;
−Removed: (3) the listed patents have not expired, but will expire on a particular date and
−Removed: approval is sought after patent expiration;
+Added: (3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent expiration;
or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of the third party’s generic drug.
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Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy.
−Removed: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our
−Removed: confidential information could be compromised by disclosure during this type of litigation.
+Added: Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.
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Moreover, any such litigation or the threat thereof may adversely affect our reputation, our ability to form strategic alliances or sublicense our rights to collaborators, engage with scientific advisors or hire employees or consultants, each of which would have an adverse effect on our business, results of operations and financial condition.
−Removed: In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
−Removed: Our and their assignment agreements may not be self- executing or may be breached, and we may be forced to bring claims against
−Removed: third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.
+Added: In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in
+Added: executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
+Added: Our and their assignment agreements may not be self- executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.
If we or our licensors fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.
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Risks Related to Ownership of our Common Stock
−Removed: Our directors, officers and principal stockholders beneficially own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
+Added: Our directors, officers and principal stockholders beneficially own a significant percentage of our stock and are able to exert significant control over matters subject to stockholder approval.
As of December 31, 2023, our directors, officers, five percent or greater stockholders, and their respective affiliates beneficially owned in the aggregate approximately 64% of our outstanding voting stock.
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If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.
−Removed: The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business.
+Added: The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us or our business.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
−Removed: Moreover, if our operating results do not meet the expectations of the investor community, one or more of the analysts who cover our company may change their recommendations regarding our company, and our stock price could decline.
+Added: Moreover, if our operating results do not meet the expectations of the investor community, one
+Added: or more of the analysts who cover our company may change their recommendations regarding our company, and our stock price could decline.
Our quarterly operating results may fluctuate significantly.
−Removed: We expect our operating results to be subject to quarterly fluctuations.
−Removed: Our net income and other operating results will be affected by numerous factors, including:
+Added: Our operating results are subject to quarterly fluctuations.
+Added: Our net income and other operating results are affected by numerous factors, including:
● variations in the level of expenses related to our development programs;
2 unchanged sentences
● regulatory developments affecting pitolisant;
−Removed: ● our execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements;
+Added: ● execution of any collaborative, licensing or similar arrangements, and the timing of payments we may make or receive under these arrangements;
● the achievement and timing of milestone payments under our existing collaboration and license agreements;
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Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.
−Removed: Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that could delay or prevent a change in control of our company.
+Added: Our amended and restated certificate of incorporation (the “Certificate of Incorporation”) and our amended and restated bylaws (the “Bylaws”) contain provisions that could delay or prevent a change in control of the Company.
These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions.
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● providing that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;
−Removed: ● prohibiting the adoption, amendment or repeal of our amended and restated bylaws or the repeal of the provisions of our amended and restated certificate of incorporation regarding the election and removal of
−Removed: directors without the required approval of at least 66.67% of the shares entitled to vote at an election of directors;
+Added: ● prohibiting the adoption, amendment or repeal of our Bylaws or Certificate of Incorporation regarding the election and removal of directors without the required approval of at least 66.67% of the shares entitled to vote at an election of directors;
● prohibiting stockholder action by written consent;
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Under Section 203 of the DGCL, a corporation may not, in general, engage in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approved the transaction.
−Removed: These and other provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and under Delaware law could discourage potential takeover attempts, reduce the price investors might be willing to pay in the future for shares of our common stock and result in the market price of our common stock being lower than it would be without these provisions.
−Removed: Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
−Removed: Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:
+Added: These and other provisions in our Certificate of Incorporation, Bylaws and under Delaware law could discourage potential takeover attempts, reduce the price investors are willing to pay for shares of our common stock and result in the market price of our common stock being lower than it would be without these provisions.
+Added: Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
+Added: Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:
● any derivative action or proceeding brought on our behalf;
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Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
−Removed: Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.
+Added: Our Certificate of Incorporation and Bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.
In addition, as permitted by Section 145 of the DGCL, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and officers provide that:
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● we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees and agents.
−Removed: Unresolved Staff Comments.
−Removed: We do not own any real property.
−Removed: Our corporate headquarters are located in Plymouth Meeting, Pennsylvania.
−Removed: In December 2020, we leased additional office space at this same location, which increased our footprint to approximately 28,638 square feet of space pursuant to a lease that expires in 2024.
−Removed: We believe that our facilities are suitable to meet our current needs.
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.