What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-02-28 compared with 2021-02-25 · 134 added, 128 removed, 352 unchanged (43% of the section changed)

1 unchanged sentence

The Company is subject to a number of risks that if realized could affect its business, financial condition, results of operations, cash flows and access to liquidity materially.

The Company’s business is subject to uncertainties and risks including:

RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® face substantial competition for their intended uses in the targeted markets from products discovered, developed, launched and commercialized both by GSK and by other pharmaceutical companies, which could cause the royalties payable to us pursuant to the GSK Agreements to be less than expected, which in turn would harm our business and cause the price of our securities to fall.

9 unchanged sentences

The Partnership Agreement limits our ability to withdraw our invested funds from the Partnership.

● Concentration of ownership by GSK may limit your ability to influence corporate matters.

Risks Related to our Business

Currently, we derive most of our revenues from GSK and our near-term success depends in large part on GSK’s ability to successfully develop and commercialize the products in the respiratory programs partnered with GSK.

Pursuant to the GSK Agreements, GSK is responsible for the development and commercialization of products in the partnered respiratory programs.

2 unchanged sentences

Our near-term success depends in large part upon the performance by GSK of its commercial obligations under the GSK Agreements and the commercial success of RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® .

We have no control over GSK’s marketing and sales efforts, and GSK might not be successful, which would harm our business and cause the price of our securities to fall.

Our quarterly royalty revenues may fluctuate due to a variety of factors, many of which are outside of our control.

7 unchanged sentences

decisions as to the timing of product launches, pricing and discounts;

● reprioritization of GSK’s commercial efforts on other products, including TRELEGY ® ELLIPTA ® or products owned by GSK (such as Advair ® ), which are not partnered with us;

● GSK’s ability to expand the indications for which our partnered products can be marketed;

reprioritization of GSK’s commercial efforts on other products, including TRELEGY ® ELLIPTA ® or products owned by GSK (such as Advair ® ), which are not partnered with us;

GSK’s ability to expand the indications for which our partnered products can be marketed;

a satisfactory efficacy and safety profile as demonstrated in a broad patient population;

5 unchanged sentences

regulatory developments relating to the manufacture or continued use of our partnered products;

● the requirement to conduct additional post-approval studies or trials for our partnered products;

● GSK’s ability to obtain regulatory approval of our partnered products in additional countries;

the requirement to conduct additional post‑approval studies or trials for our partnered products;

GSK’s ability to obtain regulatory approval of our partnered products in additional countries;

the unfavorable outcome of any potential litigation relating to our partnered products;

2 unchanged sentences

When the FDA or other applicable regulatory authorities approve generic products, including but not limited to generic forms of Advair, that compete with RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® or a generic form of RELVAR ® /BREO ® ELLIPTA ® , the royalties payable to us pursuant to the GSK Agreements will be less than anticipated, which in turn would harm our business and the price of our securities could fall.

Once an NDA or marketing authorization application outside the United States is approved, the product covered thereby becomes a “listed drug” that can, in turn, be cited by potential competitors in support of approval of an ANDA in the United States.

Once an NDA or marketing authorization application outside the United States is approved, the product covered thereby becomes a “listed drug”

that can, in turn, be cited by potential competitors in support of approval of an ANDA in the United States.

Agency regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA or other application for generic substitutes in the United States and in nearly every pharmaceutical market around the world.

Numerous companies like Mylan N.V., Hikma/Vectura partnership, Novartis’ Sandoz division and Teva have publicly stated their intentions to bring generic forms of the ICS/LABA drug Advair ® , when certain patents covering the Advair ® delivery device expired in 2016.

In general, these manufactures are required to conduct a restricted number of clinical efficacy, pharmacokinetic and device studies to demonstrate equivalence to Advair, per FDA’s September 2013 draft guidance document.

Numerous companies have brought to market generic forms of the ICS/LABA drug Advair ® since certain patents covering the Advair ® delivery device expired in 2016.

In general, these manufactures are required to conduct a number of clinical efficacy, pharmacokinetic and device studies to demonstrate equivalence to Advair, per FDA’s September 2013 draft guidance document.

These studies are designed to demonstrate that the generic product has the same active ingredient(s), dosage form, strength, exposure and clinical efficacy as the branded product.

4 unchanged sentences

In January 2020, Astra Zeneca launched an authorized generic version of Symbicort.

In December 2020, Hikma/Vectura announced that it received FDA approval and launched its generic version of GSK’s Advair Diskus ® .

In April 2016, the FDA issued draft guidance documents covering Fluticasone Furoate/Vilanterol Trifenatate (FF/VI), the active ingredients used in RELVAR ® /BREO ® ELLIPTA ® .

Accordingly, introduction of generic products that compete against ICS/LABA products, like RELVAR ® /BREO ® ELLIPTA ® , would materially adversely impact our future royalty revenue, profitability and cash flows.

Introduction of generic products that compete against ICS/LABA products, like RELVAR ® /BREO ® ELLIPTA ® , would materially adversely impact our future royalty revenue, profitability and cash flows.

We cannot yet ascertain what impact these generic products and any future approved generic products will have on any sales of RELVAR ® /BREO ® ELLIPTA ® or ANORO ® ELLIPTA ® , or TRELEGY ® ELLIPTA ® , if approved.

Reduced prices and reimbursement rates due to the actions of governments, payors, or competition or other healthcare cost containment initiatives such as restrictions on use, may negatively impact royalties generated under the GSK Agreements.

The continuing efforts of governments, pharmaceutical benefit management organizations (“PBMs”), insurance companies, managed care organizations and other payors of health care costs to contain or reduce costs of health care has adversely affected the price, market access, and total revenues of RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® , and TRELEGY ® ELLIPTA ® and may continue to adversely affect them in the future.

In addition, we have experienced and expect to continue to experience increased competitive activity, which has resulted in lower overall prices for our products.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (together, “PPACA”) and other legislative or regulatory requirements or potential legislative or regulatory actions regarding healthcare and insurance matters, along with the trend toward managed healthcare in the U.S., could adversely influence the purchase of healthcare products and reduce demand and prices for our partnered products.

This could harm GSK’s ability to market our partnered products and significantly reduce future revenues.

For example, when GSK launched RELVAR ® /BREO ® ELLIPTA ® for the treatment of COPD in the U.S.

4 unchanged sentences

We believe that pricing pressures will continue and may increase.

This may make it difficult for GSK to sell our partnered products at a price acceptable to us or GSK or to generate revenues in line with our analysts’ or investors’ expectations, which may cause the price of our securities to fall.

More recently, the former presidential administration and the U.S.

Congress have taken actions in an effort to replace PPACA and related legislation with new healthcare legislation.

This may make it difficult for GSK to sell our partnered products at a price acceptable to us or GSK or to generate revenues in line with our analysts’

or investors’

expectations, which may cause the price of our securities to fall.

More recently, presidential administrations and the U.S.

Congress have taken actions in an effort to modify or replace PPACA and to implement or pass other reforms to the healthcare system, including proposed legislation related to the pricing of pharmaceuticals.

There is uncertainty with respect to any potential changes that may be proposed and what the impact, if any, will be on our business, including the impact on coverage and reimbursement for healthcare items and services covered by plans that were authorized by PPACA.

8 unchanged sentences

If the treatment paradigms were to change further, causing our partnered products to fall out of favor, or if GSK were unable, or did not devote sufficient resources, to maintain or continue increasing RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® sales, our results of operations would likely suffer, and the price of our securities could fall.

If the commercialization of RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® or TRELEGY ® ELLIPTA ® in the countries in which they have received regulatory approval encounters any delays or adverse developments, or perceived delays or adverse developments, or if sales or payor coverage does not meet investors’, analysts’, or our expectations, our business will be harmed, and the price of our securities could fall.

Under our agreements with our collaborative partner GSK, GSK has full responsibility for commercialization of RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® .

1 unchanged sentence

The commercialization of the products in countries where they are already launched and the commercialization launch in new countries are still subject to fluctuating overall pricing levels and uncertain timeframes to obtain payor coverage.

Any delays or adverse developments or perceived additional delays or adverse developments with respect to the commercialization of RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® including if sales or payor coverage does not meet investors’, analysts’, or our expectations, would significantly harm our business and the price of our securities could fall.

We are dependent on GSK for the successful commercialization and development of products under the GSK Agreements.

1 unchanged sentence

GSK is responsible for all clinical and other product development, regulatory, manufacturing and commercialization activities for products developed under the GSK Agreements, including RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® .

Our royalty revenues under the GSK Agreements may not meet our, analysts’, or investors’ expectations, due to a number of important factors.

Our royalty revenues under the GSK Agreements may not meet our, analysts’, or investors’

expectations, due to a number of important factors.

GSK has a substantial respiratory product portfolio in addition to the partnered products that are covered by the GSK Agreements.

5 unchanged sentences

Alternatively, GSK may decide to market TRELEGY ® ELLIPTA ® to eventually compete directly against sales of RELVAR ® /BREO ® ELLIPTA ® .

Following the FDA approval of TRELEGY ® ELLIPTA ® in September 2017, GSK’s diligent efforts obligations regarding commercialization matters now have the objective of focusing on the best interests of patients and maximizing the net value of the overall portfolio of products under the GSK Agreements.

Since GSK’s commercialization efforts following this regulatory approval are guided by a portfolio approach across products in which we have retained our full interest and also products in which we now have only a small portion of our former interest, GSK’s commercialization efforts may have the effect of reducing the overall value of our remaining interests in the GSK Agreements in the future.

If GSK prioritizes TRELEGY ® ELLIPTA ® , we will only be entitled to a 15% economic interest of the royalties paid pursuant to the GSK Agreements with respect to this product.

3 unchanged sentences

The FDA now requires that the product labels for LABA medicines reflect, among other things, that the use of LABAs is contraindicated without the use of an asthma controller medication such as an inhaled corticosteroid, that LABAs should only be used long term in patients whose asthma cannot be adequately controlled on asthma controller medications, and that LABAs should be used for the shortest duration of time required to achieve control of asthma symptoms and discontinued, if possible, once asthma control is achieved.

In addition, in March 2010, the FDA held an Advisory Committee to discuss the design of medical research studies (known as “clinical trial design”) to evaluate serious asthma outcomes (such as hospitalizations, a procedure using a breathing tube known as intubation, or death) with the use of LABAs in the treatment of asthma in adults, adolescents, and children.

Further, in April 2011, the FDA announced that to further evaluate the safety of LABAs, it required the manufacturers of currently marketed LABAs to conduct additional randomized, double blind, controlled clinical trials comparing the addition of LABAs to inhaled corticosteroids versus inhaled corticosteroids alone.

These post-marketing studies have been completed and did not show an increased risk of use of ICS/LABA compared to ICS alone.

These post‑marketing studies have been completed and the FDA stated that treating asthma with LABAs in combination with ICS did not result in significantly more serious asthma-related side effects than treatment with ICS alone.

The FDA subsequently removed the black box warning from the ICS/LABA package inserts.

6 unchanged sentences

Any adverse developments or results or perceived adverse developments or results with respect to the ongoing studies for FF/VI in asthma or COPD, for UMEC/VI in COPD, or any future studies would significantly harm our business and the price of our securities could fall, and if regulatory authorities in those countries in which approval has not yet been granted determine that the ongoing studies for FF/VI in asthma or COPD or the ongoing studies for UMEC/VI for COPD do not demonstrate adequate safety and efficacy, the continued development of FF/VI or UMEC/VI or both could be significantly delayed, they might not be approved by these regulatory authorities, and even if approved they may be subject to restrictive labeling, any of which might harm our business, and the price of our securities could fall.

Although we have announced the completion of, and reported certain top-line data from, the Phase 3 registrational program for FF/VI in COPD and asthma, additional studies of FF/VI are underway or may commence in the future.

Although we have announced the completion of, and reported certain top‑line data from, the Phase 3 registrational program for FF/VI in COPD and asthma, additional studies of FF/VI are underway or may commence in the future.

Any adverse developments or perceived adverse developments with respect to any prior, current or future studies in these programs could significantly harm our business and the price of our securities could fall.

3 unchanged sentences

not every study, nor every dose in every study, in the Phase 3 programs for FF/VI achieved its primary endpoint and regulatory authorities may determine that additional clinical studies are required;

● safety, efficacy or other concerns arising from clinical or non-clinical studies in these programs having to do with the LABA VI, which is a component of FF/VI and UMEC/VI;

safety, efficacy or other concerns arising from clinical or non‑clinical studies in these programs having to do with the LABA VI, which is a component of FF/VI and UMEC/VI;

analysts adjusting their sales forecasts downward from previous projections based on results or interpretations of results of prior, current or future studies;

● safety, efficacy or other concerns arising from clinical or non-clinical studies in these programs;

safety, efficacy or other concerns arising from clinical or non‑clinical studies in these programs;

regulatory authorities determining that the Phase 3 programs in asthma or in COPD raise safety concerns or do not demonstrate adequate efficacy;

4 unchanged sentences

and certain other targeted markets, the products face substantial competition from existing products previously developed and commercialized both by GSK and by other competing pharmaceutical companies and can expect to face additional competition from new products that are discovered, developed and commercialized by the same pharmaceutical companies and other competitors going forward.

For example, sales of generic Advair ® , GSK’s approved medicine for both COPD and asthma, continue to have a negative impact on sales of RELVAR ® /BREO ® ELLIPTA ® .

Many of the pharmaceutical companies competing in respiratory markets are international in scope with substantial financial, technical and personnel resources that permit them to discover, develop, obtain regulatory approval and commercialize new products in a highly efficient and low-cost manner at competitive prices to consumers.

3 unchanged sentences

The ability of RELVAR ® /BREO ® ELLIPTA ® , and ANORO ® ELLIPTA ® to succeed and achieve the anticipated level of sales depends on the commercial and development performance of GSK to achieve and maintain a competitive advantage over other products with the same intended use in the targeted markets.

In addition, following the September 2017 FDA approval of TRELEGY ® ELLIPTA ® , GSK’s diligent efforts obligations regarding commercialization matters has the objective of focusing on the best interests of patients and maximizing the net value of the overall portfolio of products under the GSK Agreements.

GSK also received in April 2018 an expanded label approval for TRELEGY ® ELLIPTA ® , allowing it to be used by U.S.

11 unchanged sentences

The commercial success of RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® may be adversely affected if GSK or the respiratory markets view TRELEGY ® ELLIPTA ® or other combination therapies as more beneficial.

GSK’s diligent efforts obligations regarding commercialization matters have the objective of focusing on the best interests of patients and maximizing the net value of the overall portfolio of products under the GSK Agreements.

We may not be able to utilize all of our net operating loss carryforwards.

1 unchanged sentence

tax attributes that we believe could offset otherwise taxable income in the U.S.

As a part of the overall Spin-Off transaction, the transfer of certain assets by us to Theravance Biopharma and our distribution of Theravance Biopharma ordinary shares resulted in taxable transfers pursuant to applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and Treasury Regulations.

The taxable gain recognized by us attributable to the transfer of certain assets to Theravance Biopharma generally equaled the excess of the fair market value of each asset transferred over our adjusted tax basis in such asset.

Although we did not recognize any gain with respect to the cash we transferred to Theravance Biopharma, we may recognize substantial gain based on the fair market value of the other assets (other than cash) transferred to Theravance Biopharma.

The determination of the fair market value of these assets is subjective and could be subject to adjustments or future challenge by the Internal Revenue Service (“IRS”), which could result in an increase in the amount of gain realized by us as a result of the transfer.

federal income tax resulting from any gain recognized upon the transfer of our assets to Theravance Biopharma (including any increased U.S.

federal income tax that may result from a subsequent determination of higher fair market values for the transferred assets), may be reduced by our net operating loss carryforward.

The net operating loss carryforwards available in any year to offset our net taxable income will be reduced following a more than 50% change in ownership during any period of 36 consecutive months (an “ownership change”) as determined under the Code.

Transactions involving our common stock, even those outside our control, such as purchases or sales by investors, within the testing period could result in an ownership change.

We have conducted an analysis to determine whether an ownership change had occurred since inception through September 30, 2020 and concluded that we had undergone two ownership changes in prior years.

We have conducted an analysis to determine whether an ownership change had occurred since inception through October 31, 2021 and concluded that it is more likely than not that the Company did not experience an ownership change during the testing period.

Subsequent changes in our ownership or sale of our stock could have the effect of limiting the use of our net operating losses in the future.

We have approximately $0.4 billion of net operating loss carryforward as of December 31, 2020.

There may be certain annual limitations for utilization based on the above-described ownership change provisions.

In addition, we may not be able to have sufficient future taxable income prior to their expiration because net operating losses have carryforward periods.

As a result of the passage of the TCJA, corporate tax rates in the United States decreased in 2018, which resulted in the remeasurement of our deferred tax assets at the new statutory rate and a reduction in the value of our deferred tax assets in 2017.

Future changes in federal and state tax laws pertaining to net operating loss carryforwards may also cause limitations or restrictions from us claiming such net operating losses.

11 unchanged sentences

Clinical studies involving product candidates partnered with GSK may reveal that those candidates are ineffective, inferior to existing approved medicines, unacceptably toxic, or that they have other unacceptable side effects.

In addition, the results of preclinical studies do not necessarily predict clinical success, and larger and later-stage clinical studies may not produce the same results as earlier-stage clinical studies.

Frequently, product candidates that have shown promising results in early preclinical or clinical studies have subsequently suffered significant setbacks or failed in later clinical or non-clinical studies.

In addition, clinical and non-clinical studies of potential products often reveal that it is not possible or practical to continue development efforts for these product candidates.

In addition, the results of preclinical studies do not necessarily predict clinical success, and larger and later‑stage clinical studies may not produce the same results as earlier‑stage clinical studies.

In addition, clinical and non‑clinical studies of potential products often reveal that it is not possible or practical to continue development efforts for these product candidates.

If these studies are substantially delayed or fail to prove the safety and effectiveness of product candidates in development partnered with GSK, GSK may not receive regulatory approval for such product candidates and our business and financial condition could be materially harmed and the price of our securities might fall.

Several well-publicized Complete Response letters issued by the FDA and safety-related product withdrawals, suspensions, post-approval labeling revisions to include boxed warnings and changes in approved indications over the last several years, as well as growing public and governmental scrutiny of safety issues, have created a conservative regulatory environment.

Several well‑publicized Complete Response letters issued by the FDA and safety‑related product withdrawals, suspensions, post‑approval labeling revisions to include boxed warnings and changes in approved indications over the last several years, as well as growing public and governmental scrutiny of safety issues, have created a conservative regulatory environment.

The implementation of new laws and regulations and revisions to FDA clinical trial design guidance have increased uncertainty regarding the approvability of a new drug.

Further, there are additional requirements for approval of new drugs, including advisory committee meetings for new chemical entities, and formal risk evaluation and mitigation strategy at the FDA’s discretion.

These laws, regulations, additional requirements and changes in interpretation could cause non-approval or further delays in the FDA’s review and approval of any product candidates in any respiratory program partnered with GSK.

These laws, regulations, additional requirements and changes in interpretation could cause non‑approval or further delays in the FDA’s review and approval of any product candidates in any respiratory program partnered with GSK.

Even if product candidates in any respiratory program partnered with GSK receive regulatory approval, as is the case with RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and TRELEGY ® ELLIPTA ® , commercialization of such products may be adversely affected by regulatory actions and oversight.

1 unchanged sentence

These restrictions make it more difficult to market the approved products.

For example, at the joint meeting of the Pulmonary-Allergy Drugs Advisory Committee and Drug Safety and Risk Management Advisory Committee of the FDA regarding the sNDA for BREO ® ELLIPTA ® as a treatment for asthma, the advisory committee recommended that a large LABA safety trial with BREO ® ELLIPTA ® should be required in adults and in 12-17 year old’s, similar to the ongoing LABA safety trials being conducted as an FDA Post-Marketing Requirement by each of the manufacturers of LABA containing asthma treatments.

For example, at the joint meeting of the Pulmonary‑Allergy Drugs Advisory Committee and Drug Safety and Risk Management Advisory Committee of the FDA regarding the sNDA for BREO ® ELLIPTA ® as a treatment for asthma, the advisory committee recommended that a large LABA safety trial with BREO ® ELLIPTA ® should be required in adults and in children ages 12‑17, similar to the ongoing LABA safety trials being conducted as an FDA Post‑Marketing Requirement by each of the manufacturers of LABA containing asthma treatments.

The FDA did not concur with the recommendation.

A pediatric program including patients 5-17 years of age is currently ongoing.

A pediatric program including patients 5‑17 years of age is currently ongoing.

In addition, the manufacturing, labeling, packaging, adverse event reporting, advertising, promotion and recordkeeping for the approved product remain subject to extensive and ongoing regulatory requirements.

If we or GSK become aware of previously unknown problems with an approved product in the U.S.

or overseas or at contract manufacturers’ facilities, a regulatory authority may impose restrictions on the product, the contract manufacturers or on GSK, including requiring it to reformulate the product, conduct additional clinical studies, change the labeling of the product, withdraw the product from the market or require the contract manufacturer to implement changes to its facilities.

or overseas or at contract manufacturers’

facilities, a regulatory authority may impose restrictions on the product, the contract manufacturers or on GSK, including requiring it to reformulate the product, conduct additional clinical studies, change the labeling of the product, withdraw the product from the market or require the contract manufacturer to implement changes to its facilities.

GSK is also subject to regulation by regional, national, state and local agencies, including the Department of Justice, the Federal Trade Commission, the Office of Inspector General of the U.S.

Department of Health and Human Services and other regulatory bodies, as well as governmental authorities in those foreign countries in which any of the product candidates in any respiratory program partnered with GSK are approved for commercialization.

The Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal and state statutes and regulations govern to varying degrees the research, development, manufacturing and commercial activities relating to prescription pharmaceutical products, including non-clinical and clinical testing, approval, production, labeling, sale, distribution, import, export, post-market surveillance, advertising, dissemination of information and promotion.

Any failure to maintain regulatory approval would limit GSK’s ability to commercialize the product candidates in any respiratory program partnered with GSK, which could materially and adversely affect our business and financial condition, and which may cause the price of our securities to fall.

The Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal and state statutes and regulations govern to varying degrees the research, development, manufacturing and commercial activities relating to prescription pharmaceutical products, including non‑clinical and clinical testing, approval, production, labeling, sale, distribution, import, export, post‑market surveillance, advertising, dissemination of information and promotion.

Acquisitions or strategic investments we have made or may make could turn out to be unsuccessful.

7 unchanged sentences

Any failure by us to effectively limit such risks as we implement our acquisitions or strategic investments could have a material adverse effect on our business, financial condition or results of operations and may negatively impact our net income and cause the price of our securities to fall.

For instance, on February 1, 2022, we submitted to Entasis Therapeutics Holdings, Inc.

ETTX) ("Entasis") a non-binding proposal to acquire all of the outstanding stock of Entasis not owned by us for all cash consideration.

The proposal is non-binding and is subject to a number of conditions, including the receipt of requisite board and shareholder approvals, confirmatory diligence and negotiation and execution of a definitive merger agreement.

There can be no assurance that a definitive agreement with respect to the transaction will be executed or, if executed, whether the transaction will be consummated.

There is also no certainty as to the timetable for execution of a definitive agreement, if any.

Any failure by us to complete this acquisition on a timely basis, or at all, or to realize the benefits that we expect as a result of the acquisition, could have an adverse effect on our business.

We have a significant amount of debt including our convertible subordinated notes and convertible senior notes that are senior in capital structure and cash flow, respectively, to our common stockholders.

Satisfying the obligations relating to our debt could adversely affect our liquidity or the amount or timing of potential distributions to our stockholders.

As of December 31, 2020, we had $433.5 million in total debt outstanding, comprised primarily of $241.0 million in principal that remains outstanding under our convertible subordinated notes due 2023 (the “2023 Notes”) and $192.5 million in principal outstanding under our convertible senior notes due 2025 (the “2025 Notes”) (the 2023 Notes and 2025 Notes hereinafter, the “Notes”).

As of December 31, 2021, we had $433.5 million in total debt outstanding, comprised primarily of $241.0 million in principal that remains outstanding under our convertible subordinated notes due 2023 (the “2023 Notes”) and $192.5 million in principal outstanding under our convertible senior notes due 2025 (the “2025 Notes”) (the 2023 Notes and 2025 Notes hereinafter, the “Notes”).

The Notes are unsecured debt and are not redeemable by us prior to the maturity date.

13 unchanged sentences

If we fail to retain our qualified personnel or to replace them when they leave, our ability to manage our business may be impaired, which may cause the price of our securities to fall.

We rely and will continue to rely on outsourcing arrangements for many of our activities, including financial reporting, accounting, IT and human resources.

As of December 31, 2020, we had only five employees and, as a result, we rely, and expect to continue to rely, on outsourcing arrangements for a significant portion of our activities, including financial reporting, accounting, IT and human resources, as well as for certain of our functions as a public company.

We rely and will continue to rely on outsourcing arrangements for many of our activities, including financial reporting, accounting, IT, human resources, strategic investment evaluation, business acquisition and integration.

As of December 31, 2021, we had only five employees and, as a result, we rely, and expect to continue to rely, on outsourcing arrangements for a significant portion of our activities, including financial reporting, accounting, IT, human resources, strategic investment evaluation, business acquisition and integration, as well as for certain of our functions as a public company.

We may have limited control over these third parties, and we cannot guarantee that they will perform their obligations in an effective and timely manner.

As we continue to develop our business, including through strategic acquisitions and investments, our mix of assets and our sources of income may require that we register with the SEC as an “investment company” in accordance with the Investment Company Act of 1940.

We are not currently, nor do we currently intend to become, registered as an investment company under the 40 Act.

in accordance with the Investment Company Act of 1940.

We are not currently, nor do we currently intend to become, registered as an investment company under the Investment Company Act of 1940 ("the 40 Act").

We are primarily engaged, and hold ourselves as being primarily engaged, in the royalty management business and not primarily engaged in the business of investing, reinvesting or trading in securities.

In addition, we monitor our mix of assets to ensure that we do not otherwise meet the definition of an investment company.

Accordingly, we are not subject to the provisions of the 40 Act, such as compliance with the 40 Act’s registration and reporting requirements, capital structure requirements, affiliate transaction restrictions, conflict of interest rules, requirements for disinterested directors, and other substantive provisions.

A company will generally be deemed to be an “investment company” for purposes of the Investment Company act of 1940 or the “40 Act” if:

A company will generally be deemed to be an “investment company”

for purposes of the 40 Act if:

it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities;

1 unchanged sentence

government securities and cash items) on an unconsolidated basis.

If the Company were to inadvertently meet the definition of an “investment company” and be required to register with the SEC under the 40 Act, the restrictions imposed by the 40 Act would likely require changes in the way we do business and add significant administrative burdens to our operations.

If the Company were to inadvertently meet the definition of an “investment company”

and be required to register with the SEC under the 40 Act, the restrictions imposed by the 40 Act would likely require changes in the way we do business and add significant administrative burdens to our operations.

In order to ensure that we do not fall within the 40 Act, we may need to take various actions which we might otherwise not pursue.

These actions may include restructuring the Company and/or modifying our mix of assets and sources of income.

The rules and interpretations of the SEC, the SEC staff, and the courts relating to the definition of an “investment company” under the 40 Act are highly complex in numerous respects.

While we currently intend to conduct our operations so that we will not be deemed an investment company, we can give no assurances that we will not (i) determine it to be in the Company’s and our stockholders’ interest to register as an “investment company,” and/or (ii) meet the definition of an “investment company” and be required to register with the SEC under the 40 Act.

The rules and interpretations of the SEC, the SEC staff, and the courts relating to the definition of an “investment company”

under the 40 Act are highly complex in numerous respects.

interest to register as an “investment company,”

and/or (ii) meet the definition of an “investment company”

and be required to register with the SEC under the 40 Act.

Prolonged economic uncertainties or downturns, as well as unstable market, credit and financial conditions, may exacerbate certain risks affecting our business and have serious adverse consequences on our business.

7 unchanged sentences

In addition, federal and state health authorities may reduce Medicare and Medicaid reimbursements, and private insurers may increase their scrutiny of claims.

A reduction in the availability or extent of reimbursement could negatively affect our or our partners’ product sales and revenue.

A reduction in the availability or extent of reimbursement could negatively affect our or our partners’

product sales and revenue.

In addition, we rely on third parties for several important aspects of our business.

During challenging and uncertain economic times and in tight credit markets, there may be a disruption or delay in the performance of our third-party contractors, suppliers or partners.

During challenging and uncertain economic times and in tight credit markets, there may be a disruption or delay in the performance of our third‑party contractors, suppliers or partners.

If such third parties are unable to satisfy their commitments to us, our business and results of operations would be adversely affected.

Risks Related to our Alliance with GSK

Because all our current revenues and near-term projected revenues are derived from products under the GSK Agreements, disputes with GSK could harm our business and cause the price of our securities to fall.

All of our current and near-term projected revenues are derived from products under the GSK Agreements.

Because all our current revenues and near-term projected revenues have historically been derived from products under the GSK Agreements, disputes with GSK could harm our business and cause the price of our securities to fall.

Historically, all of our current and near-term projected revenues have been derived from products under the GSK Agreements.

We expect royalties from such products will likely continue to comprise a substantial majority of our revenues in the future.

Any action or inaction by either GSK or us that results in a material dispute, allegation of breach, litigation, arbitration, or significant disagreement between the parties may be interpreted negatively by the market or by our investors, could harm our business and cause the price of our securities to fall.

Examples of these kinds of issues include but are not limited to non-performance of contractual obligations and allegations of non-performance, disagreements over the relative marketing and sales efforts for our partnered products and other GSK respiratory products, disputes over public statements, and similar matters.

In addition, while we obtained GSK’s consent to the Spin-Off as structured, GSK could decide to challenge various aspects of our post-Spin-Off operation of TRC, the limited liability company jointly owned by us and Theravance Biopharma, as violating or allowing it to terminate the GSK Agreements.

Examples of these kinds of issues include but are not limited to non‑performance of contractual obligations and allegations of non‑performance, disagreements over the relative marketing and sales efforts for our partnered products and other GSK respiratory products, disputes over public statements, and similar matters.

In addition, while we obtained GSK’s consent to the Spin‑Off as structured, GSK could decide to challenge various aspects of our post‑Spin‑Off operation of TRC, the limited liability company jointly owned by us and Theravance Biopharma, as violating or allowing it to terminate the GSK Agreements.

Although we believe our operation of TRC fully complies with the GSK Agreements and applicable law, there can be no assurance that we would prevail against any such claims by GSK.

1 unchanged sentence

In addition, any market or investor uncertainty about the respiratory programs partnered with GSK or the enforceability of the GSK Agreements could result in significant reduction in the market price of our securities and in other material harm to our business.

Because GSK is a strategic partner as well as a significant stockholder, it may take actions that in certain cases are materially harmful to our business or to our other stockholders.

Although GSK beneficially owns approximately 31.6% of our outstanding common stock as of December 31, 2020, it is also a strategic partner with rights and obligations under the GSK Agreements that cause its interests to differ from our interests and those of our other stockholders.

Because GSK is a strategic partner, it may take actions that in certain cases are materially harmful to our business or to our stockholders.

GSK is a strategic partner with rights and obligations under the GSK Agreements that cause its interests to differ from our interests and those of our stockholders.

In particular, GSK has a substantial respiratory product portfolio in addition to the partnered products that are covered by the GSK Agreements.

GSK may make respiratory product portfolio decisions or statements about its portfolio which may be, or may be perceived to be, harmful to the respiratory products partnered with us.

For example, GSK could promote its non-GSK/Innoviva respiratory products or a partnered product for which we are entitled to receive a lower percentage of royalties, delay or terminate the development or commercialization of the respiratory programs covered by the GSK Agreements, or take other actions, such as making public statements, that have a negative effect on our stock price.

In this regard and by way of example, sales of Advair ® , GSK’s approved medicine for both COPD and asthma, continue to be significantly greater than sales of RELVAR ® /BREO ® ELLIPTA ® , and GSK has indicated publicly that it intends to continue commercializing Advair ® .

For example, GSK could promote its non‑GSK/Innoviva respiratory products or a partnered product for which we are entitled to receive a lower percentage of royalties, delay or terminate the development or commercialization of the respiratory programs covered by the GSK Agreements, or take other actions, such as making public statements, that have a negative effect on our stock price.

Also, given the potential future royalty payments which GSK may be obligated to pay under the GSK Agreements, GSK may seek to acquire us in order to reduce those payment obligations.

The timing of when GSK may seek to acquire us could potentially be when it possesses information regarding the status of drug programs covered by the GSK Agreements that has not been publicly disclosed and is not otherwise known to us.

As a result of these differing interests, GSK may take actions that it believes are in its best interest but which might not be in our best interest or the best interest of our other stockholders.

In addition, following the FDA regulatory approval of TRELEGY ® ELLIPTA ® in September 2017, GSK’s diligent efforts obligations as to commercialization matters under the GSK Agreements has had the objective of focusing on the best interests of patients and maximizing the net value of the overall portfolio of products under the GSK Agreements.

Since GSK’s commercialization efforts following this regulatory approval have been guided by a portfolio approach across products in which we have retained our full interest and also products in which we now have only a portion of our former interest, GSK’s commercialization efforts may have the effect of reducing the overall value of our remaining interests in the products covered by the GSK Agreements in the future.

In addition, following the expiration of our governance agreement with GSK in September 2015, GSK is no longer subject to the restrictions thereunder regarding the voting of the shares of our common stock owned by it.

GSK’s diligent efforts obligations as to commercialization matters under the GSK Agreements have had the objective of focusing on the best interests of patients and maximizing the net value of the overall portfolio of products under the GSK Agreements, which may be harmful to both our business and our stockholders.

Following the FDA approval of TRELEGY ® ELLIPTA ® in September 2017, GSK’s diligent efforts obligations as to commercialization matters under the GSK Agreements have had the objective of focusing on the best interests of patients and maximizing the net value of the overall portfolio of products under the GSK Agreements.

As a result of these differing interests, GSK may take actions that it believes are in its best interest but which might not be in our best interest or the best interest of our stockholders.

As such, GSK may prioritize TRELEGY ® ELLIPTA ® , and if GSK and the respiratory market in general view this triple combination therapy as significantly more beneficial than existing therapies, including RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® , this may be harmful to our business, operations and stock price.

1 unchanged sentence

GSK has also indicated to us that it believes its consent may be required before we can engage in certain royalty monetization transactions with third parties, which may inhibit our ability to engage in these transactions.

In the course of our discussions with GSK concerning the Spin-Off of Theravance Biopharma, GSK indicated to us that it believes that its consent may be required before we can engage in certain transactions designed to monetize the future value of royalties that may be payable to us from GSK under the GSK Agreements.

In the course of our discussions with GSK concerning the Spin‑Off of Theravance Biopharma, GSK indicated to us that it believes that its consent may be required before we can engage in certain transactions designed to monetize the future value of royalties that may be payable to us from GSK under the GSK Agreements.

GSK has informed us that it believes that there may be certain covenants included in these types of transactions that might violate certain provisions of the GSK Agreements.

Although we believe that we can structure royalty monetization transactions in a manner that fully complies with the requirements of the GSK Agreements without GSK’s consent, a third party in a proposed monetization transaction may nonetheless insist that we obtain GSK’s consent for the transaction or restructure the transaction on less favorable terms.

We have obtained GSK’s agreement that (i) we may grant certain pre-agreed covenants in connection with monetization of our interests in RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and vilanterol monotherapy and portions of our interests in TRC, and (ii) it will not unreasonably withhold its consent to our requests to grant other covenants, provided among other conditions, that in each case, the covenants are not granted in favor of a pharmaceutical or biotechnology company with a product either being developed or commercialized for the treatment of respiratory disease.

If we seek GSK’s consent to grant covenants other than pre-agreed covenants, we may not be able to obtain GSK’s consent on reasonable terms, or at all.

If we proceed with a royalty monetization transaction that is not otherwise covered by the GSK Agreement without GSK’s consent, GSK could request that its consent be obtained or seek to enjoin or otherwise challenge the transaction as violating or allowing it to terminate the GSK Agreements.

Regardless of the merit of any claims by GSK, we would incur significant cost and diversion of resources in defending against GSK’s claims or asserting our own claims and GSK may seek concessions from us in order to provide its consent.

We have obtained GSK’s agreement that (i) we may grant certain pre‑agreed covenants in connection with monetization of our interests in RELVAR ® /BREO ® ELLIPTA ® , ANORO ® ELLIPTA ® and vilanterol monotherapy and portions of our interests in TRC, and (ii) it will not unreasonably withhold its consent to our requests to grant other covenants, provided among other conditions, that in each case, the covenants are not granted in favor of a pharmaceutical or biotechnology company with a product either being developed or commercialized for the treatment of respiratory disease.

If we seek GSK’s consent to grant covenants other than pre‑agreed covenants, we may not be able to obtain GSK’s consent on reasonable terms, or at all.

Any uncertainty about whether or when we could engage in a royalty monetization transaction, the potential impact on the enforceability of the GSK Agreements or the loss of potential royalties from the respiratory programs partnered with GSK, could impair our ability to pursue a return of capital strategy for our stockholders ahead of our receipt of significant royalties from GSK, result in significant reduction in the market price of our securities and cause other material harm to our business.

GSK’s ownership of a significant percentage of our stock and its ability to acquire additional shares of our stock may create conflicts of interest, and may inhibit our management’s ability to continue to operate our business in the manner in which it is currently being operated.

As of December 31, 2020, GSK beneficially owned approximately 31.6% of our outstanding common stock.

As such, GSK could have substantial influence in the election of our directors, delay or prevent a transaction in which stockholders might receive a premium over the prevailing market price for their shares and have significant control over certain changes in our business.

The procedures previously governing and restricting GSK offers to our stockholders to acquire outstanding voting stock and the restrictions regarding the voting of shares of our common stock owned by it terminated upon the expiration of the governance agreement in September 2015.

Further, pursuant to our Certificate of Incorporation, we renounce our interest in and waive any claim that a corporate or business opportunity taken by GSK constitutes a corporate opportunity of ours unless such corporate or business opportunity is expressly offered to one of our directors who is a director, officer or employee of GSK, primarily in his or her capacity as one of our directors.

GSK’s significant ownership position may deter or prevent efforts by other companies to acquire us, which could prevent our stockholders from realizing a control premium.

As of December 31, 2020, GSK beneficially owned approximately 31.6% of our outstanding common stock.

As a result of GSK’s significant ownership, other companies may be less inclined to pursue an acquisition of us and therefore we may not have the opportunity to be acquired in a transaction that stockholders might otherwise deem favorable, including transactions in which our stockholders might realize a substantial premium for their shares.

GSK could sell or transfer a substantial number of shares of our common stock, which could depress the price of our securities or result in a change in control of our company.

GSK is not subject to any contractual restrictions with us on its ability to sell or transfer our common stock on the open market, in privately negotiated transactions or otherwise, and these sales or transfers could create substantial declines in the price of our securities or, if these sales or transfers were made to a single buyer or group of buyers, could contribute to a transfer of control of our company to a third party.

Sales by GSK of a substantial number of shares, or the expectation of such sales, could cause a significant reduction in the market price of our common stock.

Risks Related to Legal and Regulatory Uncertainty

11 unchanged sentences

Patent and Trademark Office or other comparable agencies throughout the world, the commercialization of these products could be delayed, limited or prevented.

Any challenge to the intellectual property protection of a late-stage development asset or approved product arising from any respiratory program partnered with GSK could harm our business and cause the price of our securities to fall.

Any challenge to the intellectual property protection of a late‑stage development asset or approved product arising from any respiratory program partnered with GSK could harm our business and cause the price of our securities to fall.

Our commercial success depends in part on products in any respiratory program partnered with GSK not infringing the patents and proprietary rights of third parties.

Third parties may assert that these products are using their proprietary rights without authorization.

In addition, third parties may obtain patents in the future and claim that use of GSK’s technologies infringes upon these patents.

Furthermore, parties making claims against GSK may obtain injunctive or other equitable relief, which could effectively block GSK’s ability to further develop or commercialize one or more of the product candidates or products in any respiratory program partnered with GSK.

In addition, third parties may obtain patents in the future and claim that use of GSK’s technologies infringes upon these patents.

In the event of a successful claim of infringement against GSK, it may have to pay substantial damages, obtain one or more licenses from third parties or pay royalties.

21 unchanged sentences

While we expect that our revenues will continue to be primarily derived from our royalty management business, as a result of this investment, we may derive a material portion of our income from assets managed by Sarissa Capital.

The investment strategy of Sarissa Capital will focus on a concentrated portfolio of “long” positions in publicly or privately traded securities (debt or equity) and derivatives of, and other financial instruments related to, each of the foregoing, specifically in the areas of healthcare, pharmaceuticals and biotechnology.

The investment strategy of Sarissa Capital will focus on a concentrated portfolio of “long”

positions in publicly or privately traded securities (debt or equity) and derivatives of, and other financial instruments related to, each of the foregoing, specifically in the areas of healthcare, pharmaceuticals and biotechnology.

The risks associated with this investment strategy may be substantially greater than the risks associated with traditional fixed-income investment strategies or other low-yield strategies.

We have limited rights to remove the general partner of the Partnership and do not have any right to participate in the management of the Partnership or the investment activity of Sarissa Capital.

We are solely dependent on Sarissa Capital’s management of our investment in the Partnership.

We cannot provide assurance that Sarissa Capital will be successful in meeting our investment objectives.

Unexpected market volatility or losses in the Partnership’s securities portfolio could significantly and negatively affect our investment in the Partnership and therefore our investment results, financial condition or results of operations.

Additionally, in May 2021, Strategic Partners received a distribution of $110.0 million from the Partnership to provide funding to us for a strategic repurchase of shares held by GSK.

Pursuant to the letter agreement entered into between Strategic Partners, the Partnership and Sarissa Capital Fund GP LP on May 20, 2021, Strategic Partners agreed to make additional capital contributions to the Partnership in an aggregate amount equal to the amount of the May 2021 distribution prior to March 31, 2022.

Any such capital contribution will reduce the amount of available capital which may impact our ability to execute our strategy in the short term.

The Partnership Agreement limits our ability to withdraw our invested funds from the Partnership.

Under the terms of the Partnership Agreement, subject to limited exceptions, we are not entitled to withdraw our funds invested in the Partnership until expiration of a “lock-up” period.

Under the terms of the Partnership Agreement, subject to limited exceptions, we are not entitled to withdraw our funds invested in the Partnership until expiration of a “lock-up”

Following the expiration of the lock-up period, we are able to make annual withdrawals subject to 25% gating provision such that we would receive our entire account in the Partnership over four fiscal quarters.

Therefore, we are limited in our ability to obtain liquidity with respect to those funds and are further subjects to market fluctuations with respect thereto, particularly given the expected concentrated nature of the Partnership’s portfolio.

Sarissa Capital intends to continue to manage other third party capital and is not required to dedicate any minimum amount of time to the Partnership.

6 unchanged sentences

Between January 1, 2021 and December 31, 2021, the high and low sales prices of our common stock as reported on The Nasdaq Global Select Market varied between $10.92 and $18.97 per share.

The stock market in general and the market for biotechnology and biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the companies’ operating performance, in particular during the last several years.

The stock market in general and the market for biotechnology and biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the companies’

operating performance, in particular during the last several years.

The following factors, in addition to the other risk factors described in this section, may also have a significant impact on the market price of our securities:

1 unchanged sentence

any positive developments or results or perceived positive developments or results with respect to the commercialization of TRELEGY ® ELLIPTA ® with GSK, including, if GSK and the respiratory market in general view this triple combination therapy as significantly more beneficial than existing therapies, including RELVAR ® /BREO ® ELLIPTA ® and ANORO ® ELLIPTA ® ;

● any adverse developments or perceived adverse developments in the field of LABAs, including any change in FDA (or comparable foreign regulatory authority) policy or guidance (such as the pronouncement in February 2010 warning that LABAs should not be used alone in the treatment of asthma and related labeling requirements, the impact of the March 2010 FDA Advisory Committee discussing LABA clinical trial design to evaluate serious asthma outcomes or the FDA’s April 2011 announcement that manufacturers of currently marketed LABAs conduct additional clinical studies comparing the addition of LABAs to inhaled corticosteroids versus inhaled corticosteroids alone);

any adverse developments or perceived adverse developments in the field of LABAs, including any change in FDA (or comparable foreign regulatory authority) policy or guidance (such as the pronouncement in February 2010 warning that LABAs should not be used alone in the treatment of asthma and related labeling requirements, the impact of the March 2010 FDA Advisory Committee discussing LABA clinical trial design to evaluate serious asthma outcomes or the FDA’s April 2011 announcement that manufacturers of currently marketed LABAs conduct additional clinical studies comparing the addition of LABAs to inhaled corticosteroids versus inhaled corticosteroids alone);

GSK reprioritizing its development or commercial efforts on other products, including TRELEGY ® ELLIPTA ® or products owned by GSK (such as Advair ® ) but that are not partnered with us;

8 unchanged sentences

regulatory developments in the U.S.

and foreign countries, including recent tax reform and the possibility that the current presidential administration and the U.S.

Congress may replace PPACA and related legislation with new healthcare legislation;

and foreign countries, including recent tax reform and the possibility that future presidential administrations and the U.S.

Congress may seek to modify or replace PPACA and to implement or pass other reforms to the healthcare system, including proposed related legislation related to the pricing of pharmaceuticals with new healthcare legislation;

economic and other external factors beyond our control;

● sales of stock by us or by our stockholders, including sales by certain of our employees and directors whether or not pursuant to selling plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended;

● relative illiquidity in the public market for our common stock (our four largest stockholders other than GSK collectively owned approximately 31.0% of our outstanding common stock as of December 31, 2020 based on our review of publicly available filings);

● potential sales or purchases of our common stock by GSK.

sales of stock by us or by our stockholders, including sales by certain of our employees and directors whether or not pursuant to selling plans under Rule 10b5‑1 of the Securities Exchange Act of 1934, as amended;

relative illiquidity in the public market for our common stock (our five largest stockholders collectively owned approximately 43.7% of our outstanding common stock as of December 31, 2021 based on our review of publicly available filings).

We may be unable to or elect not to return capital to our stockholders.

8 unchanged sentences

A reduction, suspension or change in our capital return programs could have a negative effect on our stock price.

Concentration of ownership by GSK may limit your ability to influence corporate matters.

As of December 31, 2020, GSK beneficially owned approximately 31.6% of our outstanding common stock and our directors, executive officers and investors affiliated with these individuals beneficially owned approximately 0.3% of our outstanding common stock.

Based on our review of publicly available filings as of December 31, 2020, our four largest stockholders other than GSK and investors affiliated with our executive officers and directors collectively owned approximately 31.3% of our outstanding common stock.

These stockholders could control the outcome of actions taken by us that require stockholder approval, including a transaction in which stockholders might receive a premium over the prevailing market price for their shares.

Anti-takeover provisions in our charter and bylaws and in Delaware law could prevent or delay a change in control of our company.

Anti‑takeover provisions in our charter and bylaws and in Delaware law could prevent or delay a change in control of our company.

Provisions of our Certificate of Incorporation and Bylaws may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

10 unchanged sentences

Cybersecurity attacks in particular are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, misappropriation of our confidential, or otherwise protected, information and corruption of data.

Additionally, California recently enacted legislation that has been dubbed the first “GDPR-like” law in the United States.

Known as the California Consumer Privacy Act (“CCPA”), it creates new individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.

Additionally, California recently enacted legislation that has been dubbed the first “GDPR-like”

law in the United States.

Having gone into effect January 1, 2020, the CCPA requires covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches.

3 unchanged sentences

The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal control over financial reporting and disclosure controls and procedures.

Under the SEC’s current rules, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.

Our independent registered public accounting firm is also required to report on our internal control over financial reporting.

Our testing and our independent registered public accounting firm’s testing may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses and render our internal control over financial reporting ineffective.

We have and expect to continue to incur substantial accounting and auditing expense and to expend significant management time in complying with the requirements of Section 404.

4 unchanged sentences

Our interpretations, estimates and judgments are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for the preparation of our financial statements.

generally accepted accounting principles (“GAAP”) presentation is subject to interpretation by the SEC, the Financial Accounting Standards Board and various other bodies formed to interpret and create appropriate accounting principles and guidance.

In the event that one of these bodies disagrees with our accounting recognition, measurement or disclosure or any of our accounting interpretations, estimates or assumptions, it may have a significant effect on our reported results and may retroactively affect previously reported results.

13 unchanged sentences

These agreements may also significantly increase our operating expenses.

If one or more legal matters were resolved against us or an indemnified third party in a reporting period for amounts in excess of management’s expectations, our consolidated financial statements for that reporting period could be materially adversely affected.

Further, such an outcome could result in significant compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against us that could materially adversely affect our financial condition and operating results.

1 unchanged sentence

Failure to comply with the U.S.

Foreign Corrupt Practices Act, or “FCPA”, as well as the anti-bribery laws of the nations in which we conduct business, could subject us to penalties and other adverse consequences.

We are subject to the FCPA, which generally prohibits U.S.

8 unchanged sentences

The TCJA, among other things, includes changes to U.S.

federal tax rates, imposes significant additional limitations on the deductibility of interest, allows for the expensing of capital expenditures, puts into effect the migration from a “worldwide” system of taxation to a territorial system and modifies or repeals many business deductions and credits.

federal tax rates, imposes significant additional limitations on the deductibility of interest, allows for the expensing of capital expenditures, puts into effect the migration from a “worldwide”

system of taxation to a territorial system and modifies or repeals many business deductions and credits.

The TCJA is a complex revision to the U.S.

federal income tax laws with disparate and, in some cases, countervailing impacts on different categories of taxpayers and industries, and will require subsequent rulemaking and interpretation in a number of areas.

The long-term impact of the TCJA on the overall economy, the industries in which we operate and our and our partners business cannot be reliably predicted at this early stage of the new law’s implementation.

The long-term impact of the TCJA on the overall economy, the industries in which we operate and our partners business cannot be reliably predicted at this early stage of the new law’s implementation.

There can be no assurance that the TCJA will not negatively impact our operating results, financial condition, and future business operations.

The estimated impact of the TCJA is based on our management’s current knowledge and assumptions, following consultation with our tax advisors, and recognized impacts could be materially different from current estimates based on our actual results and our further analysis of the new law.

The impact of the TCJA on holders of common stock is uncertain and could be materially adverse.

2 unchanged sentences

The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, could adversely affect our business, results of operations and financial condition.

The outbreak of the novel coronavirus (“COVID-19”) has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption of financial markets.

At this time, based on the information available to us, we cannot accurately predict the extent of the impact, if any, of the COVID-19 pandemic on our royalty revenues derived from GSK upon which we significantly rely, or on the operations of our equity and other investments.

The Company is closely monitoring developments related to the COVID-19 pandemic to assess its impact on the Company’s business.

It is possible that an extended period of global supply chain and economic disruption could materially affect our results of operations and financial condition.

The Company is closely monitoring developments related to the COVID-19 pandemic to assess its impact on the Company’s business.

It is possible that an extended period of global supply chain and economic disruption resulting from the COVID-19 pandemic could materially affect our results of operations and financial condition.

UNRESOLVED STAFF COMMENTS

2 unchanged sentences

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

What changed 10-K

Item 1A. Risk Factors