What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-02-26 compared with 2025-03-31 · 212 added, 210 removed, 788 unchanged (35% of the section changed)

8 unchanged sentences

The commercial success of LINZESS depends on a number of factors, including:

● the effectiveness of LINZESS as a treatment for adult patients with IBS-C, or CIC, and as a treatment for pediatric patients aged 6-17 years-old with FC;

● the effectiveness of LINZESS as a treatment in the approved indications;

● the size of the treatable patient population;

2 unchanged sentences

● the status of government regulation in the life sciences industry, particularly with respect to healthcare reform and drug pricing;

● the adoption of LINZESS by physicians, which depends on whether physicians view it as a safe and effective treatment for adult patients with IBS-C and CIC and pediatric patients ages 6-17 years-old with FC;

● our success in educating and activating adult IBS-C and CIC patients, and children and adolescents ages 6-17 years-old FC patients and their caregivers, to seek physician care for their symptoms;

● the adoption of LINZESS by physicians and other healthcare providers, which depends on whether LINZESS is viewed as a safe and effective treatment in the approved indications;

● our success in educating and activating adult and pediatric patients 7 years of age and older with IBS-C, adult patients with CIC patients, and pediatric patients ages 6-17 years-old with FC and their caregivers, to seek physician care for their symptoms;

● our ability to both secure and maintain adequate reimbursement for, and optimize patient access to, LINZESS and our ability to demonstrate that LINZESS is safer, more efficacious and/or more cost-effective than alternative therapies;

2 unchanged sentences

● the development or commercialization of products or therapies that compete with LINZESS.

Our revenues from the commercialization of LINZESS are subject to these and other factors, and therefore has been and may be unpredictable from quarter-to-quarter and year-to-year.

Our revenues from the commercialization of LINZESS are subject to these and other factors, and therefore our revenues have been and may be unpredictable from quarter-to-quarter and year-to-year.

We are subject to uncertainty relating to pricing and reimbursement policies in the U.S., including recent and future healthcare reform measures, which, if not favorable for our products, could hinder or prevent our products’ commercial success.

2 unchanged sentences

Further, in order to obtain and maintain acceptable reimbursement levels and access for patients at copay levels that are reasonable and customary, we have offered, and expect to continue to face increasing pressure to offer, discounts or rebates from list prices or discounts to third-party payors or other unfavorable pricing modifications.

As an example, effective January 1, 2026, the LINZESS list price has been lowered in response to evolving health care dynamics and to support ongoing patient access.

Due to the decrease in the list price of LINZESS, the inflationary component of statutory required rebates across channels, including Medicaid, has been eliminated.

Obtaining and maintaining favorable reimbursement can be a time consuming and expensive process, and there is no guarantee that we or AbbVie, with respect to LINZESS in the U.S., will be able to negotiate or continue to negotiate pricing terms with third-party payors at levels that are profitable to us, or at all.

3 unchanged sentences

or if reimbursement is not maintained at satisfactory levels or becomes subject to prior authorization.

In addition, our business could be adversely affected if government healthcare programs, private health insurers, including managed care organizations, or other reimbursing bodies or payors limit or reduce the indications for or conditions under which our products may be reimbursed.

Moreover, as discussed further below and above in Part I, Item 1, under the heading Pricing and Reimbursement , changes in insurance coverage or reimbursement levels by governmental authorities, private health insurers and other third-party payors, or in the type of such coverage held by patients may materially harm our business and commercialization efforts.

2 unchanged sentences

There have been a number of federal and state efforts to address drug costs, which generally have focused on increasing transparency around drug costs or limiting drug prices, price increases or other related costs.

Certain of these efforts have resulted in legislative and regulatory reforms.

For example, and as discussed further below and above in Part I, Item 1,under the heading Pricing and Reimbursement , the IRA could have the effect of reducing the net prices for our products and product candidates.

As another example, legislation enacted in 2021 revised the Medicaid drug rebate program in which we and other manufacturers participate so that Medicaid rebates were no longer capped at 100% of the quarterly average manufacturer price effective January 1, 2024.

We anticipate that legislative and regulatory reforms, including the Medicaid drug rebate program revisions, may adversely affect our revenues and our ability to maintain satisfactory net prices on our products, including LINZESS.

Certain of these efforts have resulted in legislative and regulatory reforms, which could have a negative impact on our revenues.

Healthcare reform and other governmental and private payor initiatives may have an adverse effect upon, and could prevent, our products’ or product candidates’ commercial success.

5 unchanged sentences

and expanded government enforcement authority.

Beyond the ACA, there have been ongoing legislative and administrative and other health care reform efforts, which could have an adverse effect on our products’ or product candidates’ commercial success.

Some healthcare reform

efforts affect pricing or payment for drug products or the healthcare industry more generally.

Drug pricing and payment reform was a focus of the former Biden Administration and is likely to continue to be a focus of the current Trump Administration.

For example, federal legislation enacted in 2021 eliminated the statutory cap on Medicaid drug rebate program effective January 1, 2024.

Beyond the ACA, there have been ongoing legislative and administrative and other health care reform efforts, which have had an adverse effect on our products’ or product candidates’ commercial success.

Some healthcare reform efforts affect pricing or payment for drug products or the healthcare industry more generally.

Drug pricing and payment reform was a focus of the former Biden Administration and has continued to be a focus of the current Trump Administration.

Most significantly, in August 2022, President Biden signed the IRA into law.

This statute marks the most significant action by Congress with respect to the pharmaceutical industry since the adoption of the ACA in 2010.

The IRA contains various drug pricing and payment provisions.

Among other provisions, the IRA imposes a yearly cap ($2,100 in 2026) on out-of-pocket prescription drug prices in Medicare Part D.

Additionally, the IRA, through a newly established Manufacturer Discount Program, eliminated, effective January 1, 2025, the size of the discount on brand-name drugs that pharmaceutical manufacturers are required to offer Medicare beneficiaries who are in the Medicare Part D coverage gap, or “donut hole,” by significantly lowering the beneficiary maximum out-of-pocket cost and requiring pharmaceutical manufacturers to provide a 10% discount in the initial coverage phase of the plan and 20% discount in the catastrophic coverage phase of the plan on brand-name drugs.

In addition, the IRA requires Medicare to negotiate prices for certain high-cost drugs and biologicals, including both physician-administered products covered under Medicare Part B benefit and self-administered drugs covered under the Medicare Part D benefit.

Additionally, the IRA, through the Manufacturer Discount Program, eliminated, effective January 1, 2025, the size of the discount on brand-name drugs that pharmaceutical manufacturers are required to offer Medicare beneficiaries who are in the Medicare Part D coverage gap, or “donut hole,” by significantly lowering the beneficiary maximum out-of-pocket cost and requiring pharmaceutical manufacturers to provide a 10% discount in the initial coverage phase of the plan and 20% discount in the catastrophic coverage phase of the plan on brand-name drugs.

In addition, the IRA requires Medicare to negotiate prices for certain high-cost drugs and biologics, including both physician-administered products covered under Medicare Part B benefit and self-administered drugs covered under the Medicare Part D benefit.

CMS annually selects a specified number of negotiation-eligible drugs from those drugs with the highest total Medicare Part B or D expenditures over a preceding 12-month period.

Eligible drugs generally include single-source brand-name drugs or biological products that have been on the market without therapeutically-equivalent generic or biosimilar alternatives for a specified number of years with certain exceptions (e.g., orphan drugs indicated for only one rare disease or condition and drugs with less than $200 million in annual Medicare expenditures).

Drugs and biologics that have been approved for a single rare disease or condition were originally categorically excluded from price negotiation.

With passage of the One Big Beautiful Bill Act in July 2025, Congress extended this exemption to drugs and biologics with multiple orphan drug designations.

CMS will publish the negotiated price, known as the MFP, for each of the selected products.

Manufacturers of selected drugs would be required to offer the drug for Medicare recipients at the MFP.

Manufacturers of selected drugs are required to offer the drug for Medicare recipients at the MFP.

Manufacturers who fail to negotiate or offer the MFP can face significant civil money penalties or excise tax liability on sales of that drug.

In 2024, HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis, and the prices of the selected drugs will become effective on January 1, 2026.

On January 17, 2025, HHS announced the selection of 15 additional drugs, which included LINZESS, covered by Medicare Part D, for the second cycle of price negotiations.

The negotiated price for LINZESS will be effective starting January 1, 2027.

Depending on the share of Medicare spending each year that is attributed to LINZESS or any other product candidate that we develop and whether or not those drugs become eligible for Medicare negotiation, those drugs and our revenue may be adversely impacted by this provision.

It is unclear how the IRA will be implemented.

While there had been some questions about the Trump Administration’s position on this program, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program.

In 2024, HHS published the results of the first Medicare drug price negotiations for 10 selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis, and the prices of the selected drugs became effective on January 1, 2026.

On January 17, 2025, HHS announced the selection of 15 additional drugs,

which included LINZESS, covered by Medicare Part D, for the second cycle of price negotiations, and on November 25, 2025, released the MFP for a 30-day equivalent supply of LINZESS.

The MFP for a 30-day equivalent supply of LINZESS, which will become the new Medicare net price as of January 1, 2027, is set to $136.

On June 6, 2023, Merck & Co.

3 unchanged sentences

HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.

Certain of these cases are now on appeal and the Court of Appeals for the Third Circuit heard oral argument in three of these cases.

Most of these cases are now on appeal and the Court of Appeals for the Third Circuit heard oral argument in certain of these cases.

In May 2025, the Court of Appeals for the Third Circuit rejected a challenge to the Medicare price negotiation program, finding that the program did not violate that company’s due process rights under the Constitution since there is no protected property interest in selling goods to Medicare beneficiaries at a price higher than what the government is willing to pay in reimbursement.

We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

In addition, and as discussed further above in Part I, Item 1, under the heading Pricing and Reimbursement, President Trump has recently taken a number of actions to reduce the costs of pharmaceutical products.

For example, in April 2025, President Trump issued an executive order directing HHS to take steps to reduce the prices of pharmaceutical products, including directing the U.S.

FDA to improve its existing drug importation program to make it easier for states to obtain approval without sacrificing the safety or quality of drug products.

Further, in May 2025, President Trump issued an executive order calling on pharmaceutical manufacturers to voluntarily reduce the prices of medicines in the United States.

The executive order, among other things, directs the Secretary of HHS to communicate most-favored-nation, or MFN, price targets to manufacturers to bring prices in line with comparably developed nations.

The executive order further provides that if such actions do not lower the costs of pharmaceuticals, the Secretary of HHS would pursue other actions, including proposing a rulemaking that imposes MFN pricing in the United States.

Subsequently, HHS indicated that the proposed MFN pricing will apply only to brand products without generic or biosimilar competition and the referenced foreign countries will include only those in which the branded product similarly does not have generic or biosimilar competition.

President Trump has issued letters to 17 pharmaceutical companies demanding that such companies extend MFN pricing to Medicaid patients, guarantee MFN pricing for newly-launched drug products, return increased revenues abroad to American patients and provide for direct purchasing at MFN pricing.

Since that time, nearly all of these pharmaceutical companies have entered into agreements with the Trump administration to provide for lower prices on certain pharmaceuticals.

Healthcare reform efforts have been and may continue to be subject to scrutiny and legal challenge.

3 unchanged sentences

The revisions were challenged in court and, pursuant to court order, the removal was delayed, and recent legislation imposed a moratorium on implementation of the rule until January 2032.

Certain pharmaceutical manufacturers and organizations have filed lawsuits challenging the IRA drug price negotiation program.

Adoption of new healthcare reform legislation at the federal or state level could negatively affect demand for, or pricing of, our products or product candidates if approved for sale.

In addition, other legislative changes have been adopted that could have an adverse effect upon, and could prevent, our products’ or product candidates’ commercial success.

For example, the Budget Control Act of 2011, as amended, or the Budget Control Act, includes provisions intended to reduce the federal deficit, including reductions in Medicare payments to providers through 2032 (except May 1, 2020 to March 31, 2022).

Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs, or any significant taxes or fees imposed as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, or otherwise, could have an adverse impact on our anticipated product revenues.

Additionally, in its 2024 decision in Loper Bright Enterprises v.

Raimondo , the U.S.

Supreme Court overruled the “Chevron doctrine,” which gives deference to regulatory agencies’ statutory interpretations in litigation against federal government agencies, such as the U.S.

FDA, CMS and other federal agencies where the law is ambiguous.

This Supreme Court decision may lead to challenges of long standing decisions and policies of these agencies, which could lead to uncertainties in the industry and disrupt the federal agency’s operations.

In addition to governmental efforts in the U.S., foreign jurisdictions as well as private health insurers and managed care plans are likely to continue challenging manufacturers’ ability to obtain reimbursement, as well as the level of reimbursement, for pharmaceuticals and other healthcare-related products and services.

We are unable to predict what additional legislation, regulations or policies, if any, relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future or what effect such legislation, regulations or policies would have on our business.

Any cost-control initiatives, legislative and administrative or other healthcare system reforms aimed at controlling and reducing healthcare costs, including through measures designed to limit reimbursement, restrict access or impose unfavorable pricing modifications on pharmaceutical products, could impact our and our partners’ ability to obtain or maintain reimbursement for our products at satisfactory levels and could significantly decrease the available coverage and the price we have or might establish for our products and product candidates, which would have an adverse effect on our business and financial results.

significantly decrease the available coverage and the price we have or might establish for our products and product candidates, which would have an adverse effect on our business and financial results.

We must work effectively and collaboratively with AbbVie to market and sell LINZESS in the U.S., and we must adapt our commercial model and market strategy to the evolving landscape for LINZESS to achieve its maximum commercial potential.

We are working closely with AbbVie to execute our joint commercialization plan for LINZESS.

The commercialization plan includes an agreed upon marketing campaign that targets the physicians who see patients who could benefit from LINZESS treatment.

LINZESS’s consumer marketing campaign targets the adult men and women who suffer from IBS-C or CIC.

The commercialization plan includes an agreed upon marketing campaign that targets the physicians and healthcare providers who see patients who could benefit from LINZESS treatment.

LINZESS’s consumer marketing campaign targets appropriate adults and pediatric patients who suffer from IBS-C, CIC or FC per approved indications.

In order to optimize the commercial potential of LINZESS, we and AbbVie must execute upon this commercialization plan effectively and efficiently.

In addition, we and AbbVie must continually assess, modify and adapt our commercialization plan in a coordinated and integrated fashion, including evaluating and adjusting as necessary the level and mix of marketing and promotion efforts, in response to changing business, market or other factors in order to advance the commercial potential of LINZESS.

Further, we and AbbVie must continue to focus the sales and marketing efforts for the brand on educating customers about the relevant data and information for LINZESS in treating adults with IBS-C and CIC, and taking a measured approach to educating and raising awareness on the FC indication for pediatric patients ages 6-17 years-old.

Further, we and AbbVie must continue to focus the sales and marketing efforts for the brand on educating customers about the relevant data and information for LINZESS in treating adults and pediatric patients aged 7 years and older with IBS-C and adult patients with CIC, and taking a measured approach to educating and raising awareness on the FC and IBS-C indications for pediatric patients.

We and AbbVie must ensure a highly targeted and efficient promotional mix combined to continue effectively promoting LINZESS to key healthcare professionals.

If we and AbbVie fail to evolve with the changing commercial landscape successfully and perform these commercial functions in the highest quality manner and in accordance with our joint commercialization plan and related agreements, LINZESS will not achieve its maximum commercial potential and we may suffer financial harm.

Our commercial efforts to further target and engage adult patients with IBS-C or CIC may not effectively increase appropriate patient awareness or patient/physician dialogue and may not increase the revenues that we generate from LINZESS.

Our commercial efforts to further target and engage adult and pediatric patients in the approved indications may not effectively increase appropriate patient awareness or patient/physician dialogue and may not increase the revenues that we generate from LINZESS.

We cannot give any assurance that apraglutide will receive regulatory approval, which is necessary before it can be commercialized.

Upon the closing of the VectivBio Acquisition, we added apraglutide, a next generation, long-acting GLP-2 analog in development for SBS patients who are dependent on PS, to our pipeline.

Apraglutide will require extensive clinical development, management of nonclinical, clinical and manufacturing activities, regulatory approval and adequate manufacturing supply, and if approved, fully integrating apraglutide into our commercial infrastructure to support the appropriate sales, marketing, and market access efforts to generate sales in pursuit of revenue.

In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing PS dependency in adult patients with SBS-IF.

We are also conducting an open-label extension study, STARS Extend, to further assess safety of apraglutide in adult patients with SBS-IF.

Based on these results, we have initiated a rolling NDA submission to the U.S.

FDA for apraglutide for the treatment of adult patients with SBS who are dependent on PS .

We are not permitted to market or promote this product candidate before we receive regulatory approval from the U.S.

Apraglutide, a next generation, long-acting GLP-2 analog in development for SBS patients who are dependent on PS, will require extensive clinical development, management of nonclinical, clinical and manufacturing activities, regulatory approval and adequate manufacturing supply, and if approved, fully integrating apraglutide into our commercial infrastructure to support the appropriate sales, marketing, and market access efforts to generate sales in pursuit of revenue.

We are not permitted to market or promote apraglutide before we receive regulatory approval from the U.S.

FDA, the EMA, or comparable foreign regulatory authorities in the applicable jurisdiction, and we may never receive any such regulatory approval for apraglutide.

3 unchanged sentences

FDA, EMA or comparable foreign regulatory authorities to perform additional or unanticipated clinical trials to obtain regulatory approval.

In the event the U.S.

FDA were to determine that the data from our pivotal Phase III clinical trial, STARS, combined with the data from our open-label extension study, STARS Extend, is insufficient for acceptance of our NDA, or if we need to conduct any other U.S.

FDA-required studies, approval of our any NDA may be delayed or may require us to expend more resources than we have available.

It is also possible that additional studies, if performed and completed, may not be considered sufficient by the U.S.

FDA to approve our NDA.

Any delay in obtaining, or an inability to obtain, any marketing approvals would prevent us from commercializing our product candidates, including apraglutide, generating revenues on such product candidates and achieving and sustaining profitability.

If any of these outcomes occur, we may be forced to abandon our development efforts for our product candidates, which could significantly and materially harm our business.

Even if we do receive such regulatory approval, we may be unable to successfully commercialize apraglutide within any approved indications or develop apraglutide for the treatment of additional indications, which would materially adversely impact our business and prospects.

In April 2025, we announced that in preparation for the NDA submission to the U.S.

FDA for apraglutide, pharmacokinetic analysis indicated that the exposure and dose delivered in the STARS Phase III clinical trial were lower than planned due to dose preparation and administration.

Based on discussions with the U.S.

FDA, it became clear that a confirmatory Phase III clinical trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS.

In the fourth quarter of 2025, we met with the U.S.

FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS-2, of apraglutide.

Site initiations are expected to begin in the second quarter of 2026.

If we are unable to successfully initiate or complete the confirmatory Phase III clinical trial, if the results of this trial are not positive or are only modestly positive, if there are safety concerns or if we determine that the observed safety or efficacy profile would not be competitive in the marketplace, we may be delayed in obtaining regulatory approval for apraglutide or we may not obtain regulatory approval at all.

It is possible that the confirmatory Phase III clinical trial may not be considered sufficient by the U.S.

FDA to approve our NDA, which could further delay a regulatory approval or may require us to expend more resources than we have available.

Any delay in obtaining, or an inability to obtain, any marketing approvals would prevent us from commercializing apraglutide, generating revenues and achieving and sustaining profitability.

If any of these outcomes occur, we may be forced to abandon our development efforts for apraglutide, which could significantly and materially harm our business.

Even if we do receive such regulatory approval, we may be unable to successfully commercialize

apraglutide within any approved indications or develop apraglutide for the treatment of additional indications, which would materially adversely impact our business and prospects.

The regulatory approval processes in the U.S., in the E.U.

8 unchanged sentences

FDA, EMA and other comparable foreign regulatory authorities.

As an example, in December 2024, the U.S.

FDA issued Zealand, which is developing glepaglutide, a long-acting GLP-2 analog, for the potential treatment of SBS for patients who are dependent on PS, a Complete Response Letter concluding that glepaglutide did not meet the full requirements for substantial evidence to establish efficacy and safety and recommended conducting an additional clinical trial to provide further data.

Consequently, Zealand now is expecting to initiate an additional Phase III clinical trial in 2025.

However, in April 2025, we announced that, based on discussions with the U.S.

FDA, a confirmatory Phase III clinical trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS.

In the fourth quarter of 2025, we met with the U.S.

FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS-2, of apraglutide.

Of the large number of drugs in development, only a small percentage successfully complete the U.S.

FDA, EMA or comparable foreign regulatory approval processes and are commercialized.

Accordingly, it is possible that we will never obtain regulatory approval, or that regulatory approval may be substantially delayed, for apraglutide or our other product candidates.

Accordingly, it is possible that we will never obtain regulatory approval, or that regulatory approval may be substantially delayed, for apraglutide.

FDA, EMA or other foreign comparable regulatory authorities may delay, limit, or deny approval of our product candidates, including apraglutide, for many reasons, including the following:

FDA, EMA or other comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials or with our interpretation of data from preclinical studies or clinical

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

● the data collected from our clinical trials may not be sufficient to support the submission of an NDA, MMA, or other submission or to obtain regulatory approval in the U.S., Europe or elsewhere;

● we may need to perform additional or unanticipated clinical trials;

● participants in our clinical trials or individuals using drugs similar to our product candidates may experience serious and unexpected drug-related side effects;

8 unchanged sentences

FDA, EMA and comparable foreign regulatory authorities.

Developing and obtaining regulatory approval for combination products can pose unique challenges because they involve components that are regulated under different types of regulatory requirements and potentially by different U.S.

Developing and obtaining regulatory approval for combination products can pose unique challenges because they involve components that are regulated under different types of

regulatory requirements and potentially by different U.S.

FDA centers or regulatory authorities.

7 unchanged sentences

Our failure to successfully develop and commercialize additional product candidates or approved products would impair our ability to grow and/or adversely affect our business.

As part of our growth strategy, we intend to explore further linaclotide development opportunities as well as to advance the development of our other pipeline programs, such as apraglutide, through internal or external opportunities.

We intend to explore further linaclotide development opportunities as well as to advance the development of our other pipeline programs, such as apraglutide, through internal or external opportunities.

We and AbbVie are exploring development opportunities to enhance the clinical profile of LINZESS by studying linaclotide in new or existing indications, populations and formulations to assess its potential to treat various conditions.

4 unchanged sentences

and Canada, respectively.

Additional clinical pediatric programs in IBS-C and FC are ongoing.

In November 2025, the U.S.

FDA approved LINZESS for the treatment of IBS-C in patients aged 7 years of age and older.

Additional clinical pediatric programs in FC are ongoing.

These development efforts may fail or may not increase the revenues that we generate from LINZESS.

Furthermore, they may result in adverse events, or perceived adverse events, in certain patient populations that are then attributed to the currently approved patient population, which may result in adverse regulatory action at the

FDA or in other countries or harm linaclotide’s reputation in the marketplace, each of which could materially harm our revenues from linaclotide.

The strength of our company’s pipeline will depend in large part on the outcomes of studies and regulatory approvals of assets in our pipeline, such as apraglutide, and any other assets that we may acquire or license from third parties.

Through the VectivBio Acquisition, we added apraglutide to our pipeline.

We are also conducting open-label extension studies to further evaluate the efficacy, safety and tolerability of apraglutide in SBS-IF and to support potential submissions of marketing applications for apraglutide in the U.S., European Union, or E.U., and Japan.

Based on the STARS Phase III clinical trial results and data analyzed from the open-label extension studies, we initiated a rolling NDA submission to the U.S.

FDA for apraglutide for the treatment of adult patients with SBS who are dependent on PS.

We may spend several years and make significant investments in developing any current or future product candidate, and failure may occur at any point.

8 unchanged sentences

A failure of one or more clinical trials can occur at any stage of testing, which may result from a multitude of factors, including, among other things, flaws in study design or implementation, dose selection issues, placebo effects, patient enrollment criteria and failure to demonstrate favorable safety or efficacy traits.

For example, in April 2025, we announced that in preparation for the NDA submission to the U.S.

FDA for apraglutide, pharmacokinetic analysis indicated that the exposure and dose delivered in the STARS Phase III clinical trial were lower than planned due to dose

preparation and administration.

Based on discussions with the U.S.

FDA, it became clear that a confirmatory Phase III clinical trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS.

Results from clinical trials and findings from nonclinical studies could lead to abrupt changes in development activities, including the possible limitation or cessation of development activities associated with a particular product candidate or program.

7 unchanged sentences

Even if we do receive such regulatory approval, we may be unable to successfully commercialize apraglutide or any other product candidate in any approved indications or develop such product candidates for the treatment of additional indications, which would materially adversely impact our business and prospects.

Delays in the completion of clinical testing of any of our products or product candidates could result in increased costs and delay or limit our ability to generate revenues.

Delays in the completion of clinical testing of any of our products or product candidates could result in increased costs and could delay or limit our ability to generate revenues.

Delays in the completion of clinical testing could significantly affect our product development costs and timing of data readouts and regulatory submissions and potential approvals.

We do not know whether planned clinical trials will be completed on schedule, if at all.

We do not know whether planned clinical trials, including the confirmatory Phase III clinical trial for apraglutide, will be completed on schedule, if at all.

The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:

13 unchanged sentences

and other international markets, which may or may not be genericized within the coming years.

Additionally, it is possible that another investigational GLP-2 may be approved and launched in advance of the potential approval of apraglutide in the U.S., EMA and Japan.

Additionally, it is possible that other investigational GLP-2 products may be approved and launched in advance of the potential approval of apraglutide in the U.S., EMA and Japan.

Order of market entry and reimbursement decisions could place apraglutide at a competitive disadvantage, possibly deny market exclusivity rights, and/or elevate the need for significant clinical differentiation to support certain pricing decisions.

If these or other factors impact the price we can charge for apraglutide, we may reduce our revenue and results of operations could be affected.

these or other factors impact the price we can charge for apraglutide, we may reduce our revenue and results of operations could be affected.

Similar competitive factors could apply to pricing and reimbursement decisions for our other product candidates, if approved, in the future.

6 unchanged sentences

Additionally, new developments, including the development of other drug technologies and methods of preventing the incidence of disease, occur in the pharmaceutical and medical technology industries at a rapid pace.

These developments may render our products obsolete or noncompetitive.

These developments may render our products obsolete or non-competitive.

Linaclotide competes with certain prescription therapies and OTC products, some of which have attained significant levels of market acceptance.

7 unchanged sentences

Takeda’s MOTEGRITY (prucalopride) is approved by the U.S.

FDA for the treatment of CIC in adults;

FDA for the treatment of CIC in adults and generic versions have been available in the U.S.

since January 2025;

Ardelyx’s IBSRELA™ (tenapanor) is approved by the U.S.

3 unchanged sentences

OTC laxatives such as MiraLAX® and DULCOLAX®, and lactulose, a prescription laxative treatment, are also available for the treatment of constipation.

Additionally, we believe other companies are developing products that could compete with linaclotide, should they be

approved by the U.S.

Additionally, we believe other companies are developing products that could compete with linaclotide, should they be approved by the U.S.

FDA or comparable foreign regulatory authorities and become commercially available.

8 unchanged sentences

Apraglutide, if successfully developed and approved, will compete with companies that are commercializing or developing drugs for SBS, such as Takeda, which currently distributes the GLP-2 analog teduglutide, marketed as GATTEX® (teduglutide) in the U.S.

and REVESTIVE® (teduglutide for injection) in Europe, and Zealand, which is developing glepaglutide, a long-acting GLP-2 analog, for the treatment of SBS for patients who are dependent on PS and is expecting to initiate an additional Phase III clinical trial in 2025.

and REVESTIVE® (teduglutide for injection) in Europe, and Zealand, which is developing glepaglutide, a long-acting GLP-2 analog, for the treatment of SBS for patients who are dependent on PS and initiated an additional Phase III clinical trial in the first quarter of 2026.

Hanmi Pharmaceutical is also developing a GLP-2 analog, to be administered once a month, and which is in a Phase II clinical trial.

Products with other mechanisms of action may emerge as future competition.

Our products or product candidates may cause undesirable side effects or have other properties that could delay or prevent their development, create unpredictable clinical trial results, impact its regulatory approval or limit their commercial potential.

Our products or product candidates may cause undesirable side effects or have other properties that could delay or prevent their development, create unpredictable clinical trial results, impact their regulatory approval or limit their commercial potential.

Undesirable side effects caused by our products or product candidates, including adverse events associated with our product candidates, could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the U.S.

FDA, EMA or other comparable foreign regulatory authorities.

Additionally, with respect to our approved products, as patient experience increases and expands, or if one or more of our product candidates receives marketing approval, we, our partners, or others may later identify previously unknown side effects, known side effects may be found to be more frequent and/or severe than in the past, or detect unexpected safety signals for our products or any products perceived to be similar to our products.

Additionally, with respect to our approved products, as patient experience increases and

expands, or if one or more of our product candidates receives marketing approval, we, our partners, or others may later identify previously unknown side effects, known side effects may be found to be more frequent and/or severe than in the past, or detect unexpected safety signals for our products or any products perceived to be similar to our products.

The foregoing, or the perception of the foregoing, may have the following effects, among others:

13 unchanged sentences

The most commonly reported adverse reaction since linaclotide became commercially available, as well as in the clinical trials for linaclotide in IBS-C and CIC, has been diarrhea.

In the linaclotide Phase III IBS-C and CIC trials in adults, severe diarrhea was reported in 2% or less of the linaclotide-treated patients and its incidence was similar between the IBS-C and CIC populations.

In the linaclotide Phase III FC trial in pediatric patients ages 6-17 years-old, severe diarrhea was reported in one linaclotide-treated patient.

In the linaclotide Phase III IBS-C and CIC clinical trials in adults, severe diarrhea was reported in 2% or less of the linaclotide-treated patients and its incidence was similar between the IBS-C and CIC populations.

In the linaclotide clinical trials in pediatric patients ages 6-17 years-old with FC and pediatric patients ages 7-17 years-old with IBS-C, severe diarrhea was reported in one linaclotide-treated patient in each respective trial.

In addition, the U.S.

4 unchanged sentences

In June 2023, the U.S.

FDA approved LINZESS as a once-daily oral treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only FDA-approved prescription therapy for FC in this patient population.

The safety and effectiveness of LINZESS in patients with FC less than 6 years of age or in patients with IBS-C less than 18 years of age have not been established.

Additional clinical pediatric programs in IBS-C and FC are ongoing.

There can be no assurances, however, whether there may be any significant unknown side effects that could limit the commercial potential of LINZESS in this pediatric population.

FDA approved LINZESS as a once-daily oral treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only U.S.

FDA-approved prescription therapy for FC in this patient population.

In November 2025, the U.S.

FDA approved LINZESS for the treatment of IBS-C in patients aged 7 years of age and older.

This new indication establishes LINZESS as the first and only prescription drug approved for the

treatment of IBS-C in patients 7-17 years old.

Additional clinical pediatric programs in FC are ongoing.

There can be no assurances, however, whether there may be any significant unknown side effects that could limit the commercial potential of LINZESS in these pediatric populations.

Patients treated with apraglutide may experience well-known class-specific adverse events.

The most frequently adverse events in our pivotal Phase III clinical trial, STARS, were abdominal pain, nasopharyngitis, nausea, headache, rash, and fatigue.

The most frequent adverse events in our pivotal Phase III clinical trial, STARS, were nausea, vascular device infection, headache, abdominal pain, fatigue, and nasopharyngitis.

There may be additional mechanistic side effects that are only observed in future clinical trials and/or through real-world experience with patients using our products.

2 unchanged sentences

In August 2012, the U.S.

FDA approved LINZESS as a once-daily treatment for adult men and women suffering from IBS-C or CIC.

Although we and AbbVie completed additional nonclinical studies and clinical trials in adults that were required by the U.S.

FDA approved LINZESS as a once-daily treatment for adults suffering from IBS-C or CIC.

Although we and AbbVie completed additional nonclinical studies and clinical trials in adults and pediatric patients that were required by the U.S.

FDA in connection with the approval of LINZESS, LINZESS remains subject to ongoing U.S.

6 unchanged sentences

In June 2023, the U.S.

FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only FDA-approved prescription therapy for FC in this patient population.

The safety and effectiveness of LINZESS in patients with FC less than 6 years of age or in patients with IBS-C less than 18 years of age have not been established.

Additional clinical pediatric programs in IBS-C and FC are ongoing in support of post-approval requirements.

Our ability to expand the indication or labeling information for LINZESS will depend on, among other things, our successful completion of pediatric clinical programs.

These post-approval requirements impose resource and cost burdens on us.

Failure to effectively, appropriately and timely conduct and complete the required studies relating to our products, monitor and report adverse events and meet our other post-approval commitments would lead to negative regulatory action at the U.S.

FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only U.S.

FDA-approved prescription therapy for FC in this patient population.

In October 2025, the U.S.

FDA granted us a pediatric exclusivity for studies conducted on linaclotide, and in November 2025, approved LINZESS for the treatment of IBS-C in patients aged 7 years of age and older.

This new indication establishes LINZESS as the first and only prescription drug approved for the treatment of IBS-C in patients 7 years of age and older.

Post-approval requirements impose resource and cost burdens on us.

Failure to monitor and report adverse events and meet our other post-approval commitments would lead to negative regulatory action at the U.S.

FDA, which could include restrictions on the sale of our products or withdrawal of regulatory approval of our products for their currently approved indications and patient populations.

8 unchanged sentences

Many third-party payors and governmental authorities also consider the price for which the same product is being sold in other countries to determine their own pricing and reimbursement strategy, so if linaclotide is priced low or gets limited reimbursement in a particular country, this could result in similarly low pricing and reimbursement in other countries.

If reimbursement for linaclotide is unavailable in any country in which reimbursement is sought, limited in scope or amount, or if pricing is set at or reduced to unsatisfactory levels, our and our partners’ ability to successfully commercialize linaclotide in such country would be impacted negatively.

would be impacted negatively.

Furthermore, if these measures prevent us or any of our partners from selling linaclotide on a profitable basis in a particular country, they could prevent the commercial launch or continued sale of linaclotide in that country.

25 unchanged sentences

If linaclotide is not approved for all indications or patient populations or with the labeling requested, this would limit the uses of linaclotide and have an adverse effect on its commercial potential or require costly post-marketing studies.

Risks Related to Our Growth Strategy

If we are unable to execute on our strategy to in-license or acquire externally developed products or product candidates, or engage in other transactions with value creation potential, our business and prospects would be materially adversely affected.

Our future success is largely dependent on our ability to successfully execute on our growth strategy, which includes in-licensing or otherwise acquiring the rights to externally developed GI or rare diseases products or product candidates or engaging in other transactions with value creation potential.

The success of this strategy depends upon our ability to identify, select and acquire promising assets, platforms or other opportunities.

For example, through the VectivBio Acquisition, we added apraglutide to our pipeline.

There is no assurance that apraglutide will receive regulatory approval.

In addition, the process of proposing, negotiating and implementing a license or acquisition is lengthy and complex and there is no assurance we will be able to enter into similar transactions in the future.

Pursuit of external opportunities is also a highly competitive area and a number of other companies, including some with substantially greater financial, development, marketing and sales resources, may compete with us for license or acquisition opportunities.

We have limited resources to identify and execute the acquisition or in-licensing of third-party products, product candidates, businesses or technologies and integrate them into our current infrastructure.

Moreover, we expect to incur a variety of costs and devote resources to potential acquisitions or in-licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts.

If we are unable to successfully acquire the rights to additional products or product candidates on terms that we find acceptable, or at all, or execute other value creating transactions, we will remain smaller, less diversified and highly dependent on the commercial success of LINZESS and apraglutide, if approved, and our business and prospects would be materially and adversely affected.

In addition, such in-licenses, acquisitions or other transactions may entail numerous operational and financial risks, including:

● development, regulatory and commercialization challenges;

● exposure to unknown liabilities;

● disruption of our business and diversion of our management’s time and attention to develop acquired products, product candidates, businesses or technologies;

● incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions;

● higher than expected acquisition and integration costs;

● difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel;

● increased amortization expenses;

● impairment of relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

● inability to motivate key employees of any acquired businesses.

The development of product candidates in particular is a highly uncertain process.

Any product candidate that we in-license or acquire may require additional development efforts prior to and after commercial sale, including extensive clinical testing and approval by the U.S.

FDA, EMA and other comparable foreign regulatory authorities.

We may also rely on our licensors and collaboration partners to conduct development activities for certain of our product candidates, and while we may have oversight of such development activities, such licensees or collaboration partners may not effectively develop any such product candidates.

All product candidates are prone to risks of failure typical of pharmaceutical product development, including the possibility that a product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities or competitors may develop alternatives that render our potential product candidates obsolete or less attractive.

It is possible that none of the product candidates we may in-license or acquire will be approved for commercial sale or be otherwise commercially viable, which would impair our ability to grow.

Furthermore, we may have little or no insight or control over the development and commercialization of any product that we in-license outside the licensed territory.

If other licensees do not effectively develop or commercialize any such product outside the licensed territory, our reputation or the reputation of any such product may be impacted.

If we are unable to successfully partner with other companies to develop and commercialize products and/or product candidates, our ability to grow would be impaired and our business would be adversely affected.

8 unchanged sentences

Risks Related to the VectivBio Acquisition

We may be unable to successfully integrate the business and personnel of VectivBio, and may not realize the expected benefits and anticipated synergies of such acquisition.

In December 2023, we completed the VectivBio Acquisition.

We may not realize the expected benefits from such acquisition because of integration difficulties or other challenges.

The success of the VectivBio Acquisition will depend, in part, on our ability to realize all or some of the expected benefits from the acquisition and anticipated synergies from integrating its business with our existing business.

The integration process may be complex, costly and time-consuming and we may not ultimately realize the return on our investment.

We may not realize the expected benefits and anticipated synergies of the VectivBio Acquisition.

The success of the VectivBio Acquisition will depend, in part, on our ability to realize all or some of the expected benefits from the acquisition.

Risks we may face in connection with the VectivBio Acquisition include, among others:

● failure to successfully implement our business plans for the combined business, including the development of apraglutide for SBS patients who are dependent on PS;

● failure to successfully develop apraglutide for SBS patients who are dependent on PS;

● failure of the VectivBio Acquisition to further our business strategy as we expected, including the commercialization of apraglutide, if approved, for SBS patients who are dependent on PS;

● unexpected losses of key employees, customers or suppliers, and the complexities associated with integrating personnel from another company;

● unexpected losses of key employees, customers or suppliers;

● unanticipated issues in conforming VectivBio’s standards, processes, procedures and controls with our operations;

1 unchanged sentence

● increasing the scope, geographic diversity and complexity of our operations;

● diversion of management’s attention from other business concerns;

● adverse effects on our or VectivBio’s existing business relationships;

● unanticipated changes in applicable laws and regulations;

3 unchanged sentences

There may be liabilities that we underestimated or did not discover in the course of performing our due diligence investigation.

If we experience difficulties with the integration process or if the business of VectivBio deteriorates, the anticipated benefits, cost savings, growth opportunities and other synergies of the VectivBio Acquisition may not be realized fully or at all, or may take longer to realize than expected.

If any of the above risks occur, our business, financial condition, results of operations and cash flows may be materially and adversely impacted, we may fail to meet the expectations of investors or analysts, and our stock price may decline as a result.

5 unchanged sentences

AbbVie is also responsible for the development, regulatory approval and commercialization of linaclotide in countries worldwide other than Japan and China (including Hong Kong and Macau).

AbbVie is commercializing

LINZESS in Mexico and CONSTELLA in Canada as well as in certain countries including in Europe.

AbbVie is commercializing LINZESS in Mexico and CONSTELLA in Canada as well as in certain countries including in Europe.

Astellas and AstraZeneca are responsible for development and commercialization of LINZESS in Japan and China (including Hong Kong and Macau), respectively.

46 unchanged sentences

In addition, the raw materials necessary to make API for our products and product candidates are acquired from a limited number of sources.

Any delay or disruption in the availability of raw materials or a change in raw material suppliers could result in production disruptions, delays or higher costs with consequent adverse effects on us.

Any delay or disruption in

the availability of raw materials or a change in raw material suppliers could result in production disruptions, delays or higher costs with consequent adverse effects on us.

The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.

4 unchanged sentences

New manufacturers would need to develop and implement the necessary production techniques and processes, which along with their facilities, would need to be inspected and approved by the regulatory authorities in each applicable territory.

manufacturing or distribution problems, we will suffer significant consequences, including product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs.

If our partners or the third-party manufacturers we or our partners engage fail to adhere to applicable GMP or other regulatory requirements, experience delays or disruptions in the availability of raw materials or experience manufacturing or distribution problems, we will suffer significant consequences, including product seizures or recalls, loss of product approval, fines and sanctions, reputational damage, shipment delays, inventory shortages, inventory write-offs and other product-related charges and increased manufacturing costs.

If we experience any of these results, or if maximum or available manufacturing capacities are insufficient to meet demand, our and our partners’ development or commercialization efforts may be materially harmed.

15 unchanged sentences

on our own, and we chose to do so, we would need to enhance each of these functional aspects, as well as develop others, to replace the capabilities that AbbVie was previously providing to the collaboration.

Any such transition might result in a period of reduced efficiency or performance by our operations and commercialization teams, which could adversely affect our ability to commercialize LINZESS.

Any such transition might result in a

period of reduced efficiency or performance by our operations and commercialization teams, which could adversely affect our ability to commercialize LINZESS.

We do not have certain operational capabilities outside of the U.S.

2 unchanged sentences

In any of these situations, the development and commercialization of linaclotide could be negatively impacted.

We rely on third parties to conduct our clinical trials.

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 continue the development of our product candidates, obtain regulatory approval for or commercialize our product candidates and our business could be harmed.

We have relied upon and plan to continue to rely upon third-party CROs to execute our ongoing clinical trial programs, including an anticipated confirmatory Phase III clinical trial for apraglutide.

We control only certain aspects of the CROs’ activities.

Nevertheless, we are responsible for ensuring that each of our studies and trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on the CROs does not relieve us of our regulatory responsibilities.

We, our CROs and other vendors are required to comply with GMP, good clinical practices, and good laboratory practices, which are regulations and guidelines enforced by the U.S.

FDA, the competent authorities of the individual EEA countries and comparable foreign regulatory authorities for our current product candidate in clinical development.

Regulatory authorities enforce these regulations through periodic inspections of study sponsors, principal investigators, study sites and other contractors.

If we or any of our CROs or vendors fail to comply with applicable regulations, the data generated in our clinical trials may be deemed unreliable and the U.S.

FDA, EMA, or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

There are no guarantees that, upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with the relevant regulations.

If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms.

In addition, our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether they devote sufficient time and resources to our clinical programs.

If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements, or for other reasons, our clinical trials may be extended or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.

CROs may also generate higher costs than anticipated.

Switching or adding additional CROs involves additional cost and requires management time and focus.

In addition, there is a natural transition period when a new CRO commences work.

As a result of switching CROs, delays may occur, which could impact our ability to meet our desired clinical development timelines.

Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges in their implementation of our clinical studies or that these challenges will not have an adverse impact on our business, results of operations and prospects.

Risks Related to Regulatory, Legal and Compliance Matters

1 unchanged sentence

The use of our product candidates in clinical trials and the sale of our approved products, including the sale of linaclotide, expose us to product liability claims.

If we do not successfully defend ourselves against product liability

claims, we could incur substantial liabilities.

If we do not successfully defend ourselves against product liability claims, we could incur substantial liabilities.

In addition, regardless of merit or eventual outcome, product liability claims may result in:

32 unchanged sentences

and in foreign jurisdictions in which we operate.

These laws and regulations may constrain our business and/or financial arrangements.

These laws and

regulations may constrain our business and/or financial arrangements.

Within the U.S., federal laws and regulations include:

14 unchanged sentences

Certain state and local laws require the registration of pharmaceutical sales representatives.

Additionally, some

individual states have begun establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits.

Additionally, some individual states have begun establishing Prescription Drug Affordability Boards (or similar entities) to review high-cost drugs and, in some cases, set upper payment limits.

Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation.

Additionally, in its 2024 decision in Loper Bright Enterprises v.

Raimondo , the U.S.

Supreme Court overruled the “Chevron doctrine,” which gives deference to regulatory agencies’ statutory interpretations in litigation against

federal government agencies, such as the U.S.

FDA, CMS and other federal agencies where the law is ambiguous.

Outside the U.S., our activities may be subject to healthcare laws.

34 unchanged sentences

The GDPR, United Kingdom’s GDPR and FADP also increase the scrutiny applied to transfers of personal data from the EEA, UK, and Switzerland, respectively (including from clinical trial sites in the EEA) to countries that are considered by the European Commission, United Kingdom or Switzerland, respectively, to lack an adequate level of data protection, such as the U.S.

In July 2020 the Court of Justice of the E.U.

(CJEU) invalidated the E.U.-U.S.

Privacy Shield Framework, under which personal data could be transferred from the EEA to U.S.

entities that had self-certified under the Privacy Shield scheme.

The framework has been replaced by the E.U.-U.S.

Data Privacy Framework for which the European Commission adopted an adequacy decision in July 2023.

While we do not currently rely upon this framework, we expect there to be legal challenges to this framework in the future, which could draw into question the legitimacy of other cross-border transfer mechanism, including the standard contractual clauses on which we rely to transfer personal data from the EEA to the U.S.

and other jurisdictions.

In July 2023, the European Commission adopted an adequacy decision for the EU-U.S.

Data Privacy Framework, which permits U.S.

companies who self-certify under the framework to rely on it as a valid data transfer mechanism for data transfers from the E.U.

There is currently one pending litigation against the EU-U.S.

Data Privacy Framework before the Court of Justice of the E.U.

and we expect there to be additional legal challenges in the future.

If these challenges are successful, they may not only impact the EU-U.S.

Data Privacy Framework, but also further limit the viability of the so-called standard contractual clauses and other data transfer mechanisms.

The uncertainty around this issue has the potential to impact our business.

As supervisory authorities issue further guidance on personal data export mechanisms or where the standard contractual clauses cannot be used, we could incur additional compliance costs, complaints, and/or regulatory investigations and, if we are unable to otherwise transfer personal data among jurisdictions in which we operate, our services and geographical location or segregation of our relevant systems and operations could be affected.

2 unchanged sentences

the California Privacy Law also imposes certain obligations and limitations on companies regarding the collection, use, selling or sharing (as defined in the California Privacy Law) of personal information collected from or about California consumers.

Other states have passed comprehensive privacy laws specifically regulating health information that may affect our business.

For example, Washington state recently passed the My Health My Data Act to which we are subject, which regulates the collection and sharing of health information, and provides a right of action for violation of the statute.

Other states have passed or may pass comprehensive privacy laws or laws specifically regulating health information that may affect our business.

For example, Washington state passed the My Health My Data Act to which we are subject, which regulates the collection and sharing of health information, and provides a right of action for violation of the statute.

The compliance obligations imposed by the GDPR, United Kingdom’s GDPR, FADP, the California Privacy Law, Washington’s My Health My Data Act, and other applicable privacy laws, have required us to revise our operations.

32 unchanged sentences

related to LINZESS, including a LINZESS composition of matter and methods of use patent (U.S.

Patent 7,304,036) expiring in 2026.

Patent 7,304,036), which in October 2025 received pediatric exclusivity, and consequently will now expire in 2027.

Additional U.S.

5 unchanged sentences

To this end, we have exclusively licensed 59 patents and 3 pending patent applications in the U.S., E.U., Japan, China and other jurisdictions protecting apraglutide.

We also own one U.S.

granted patent and one granted Japanese patent as well as approximately 38 pending patent applications worldwide that cover apraglutide, including ultrapure compositions, methods of manufacture and methods of use in various diseases.

We also own two U.S.

granted patents, one granted European patent and two granted Japanese patents as well as approximately 40 pending patent applications worldwide that cover apraglutide, including ultrapure compositions, methods of manufacture and methods of use in various diseases.

Although none of these issued patents currently is subject to a patent reexamination or review, we cannot guarantee that they will not be subject to reexamination or review by the USPTO in the future.

7 unchanged sentences

Depending on the impact of these decisions and other actions by the U.S.

Congress, the federal courts, the USPTO, and their foreign counterparts, the laws and regulations governing patents may change, or their interpretation or implementation may change, in unpredictable ways that could impact, potentially adversely, our ability to obtain new patents or to enforce and defend patents that we have already obtained or that we might obtain in the

For example, such changes may increase the costs and complexity associated with obtaining, enforcing or defending our patents, including in ANDA litigation.

23 unchanged sentences

● redesigning our products so they do not infringe, which may not be possible or may require substantial monetary expenditures and time.

If we fail to comply with our obligations or have disagreements over contract interpretation in agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationship with our licensor, the scope of our intellectual property or technology rights could be narrowed and we could lose license rights that are important to our business.

Licensing of intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues.

relationship with our licensor, the scope of our intellectual property or technology rights could be narrowed and we could lose license rights that are important to our business.

Licensing intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues.

Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:

16 unchanged sentences

Apraglutide is among the assets that are subject to licensing agreements with third parties.

For example, we are a party to an amended and restated intellectual property license agreement with Ferring pursuant to which we have exclusive rights to apraglutide including an issued composition of matter and method of use patent in the U.S.

in lead indications, or the Ferring Agreement.

For example, we are a party to an amended and restated exclusive license agreement, dated as of December 6, 2016, as amended, by and between GlyPharma Therapeutic Inc.

(as predecessor to VectivBio AG) and Ferring, or the Ferring Agreement, pursuant to which we have exclusive rights to apraglutide including an issued composition of matter and method of use patent in the U.S.

in lead indications.

The Ferring Agreement imposes, and other current or future license agreements may impose, various diligence, milestone payment, royalty, and other obligations on us.

1 unchanged sentence

If we fail to comply with our obligations under the Ferring Agreement, or we are subject to a bankruptcy, we may be required to make certain payments to Ferring, we may lose the exclusivity of our license, or Ferring may have the right to terminate the license.

If the Ferring Agreement is terminated, we could lose intellectual property rights that are important to our business, be liable for damages to the licensor or be prevented from developing and

commercializing our apraglutide.

Termination of the agreement or reduction or elimination of our rights under the agreement may also result in us being required to negotiate a new or reinstated agreement with less favorable terms, and it is possible that we may be unable to obtain any such additional license at a reasonable cost or on reasonable terms and will be unable to develop and commercialize apraglutide.

If the Ferring Agreement is terminated, we could lose intellectual property rights that are important to our business, be liable for damages to the licensor or be prevented from developing and commercializing our apraglutide.

will be unable to develop and commercialize apraglutide.

These or similar risks may apply to other license agreements, including future license agreements.

If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize apraglutide.

On October 2, 2025, Ferring filed a complaint against our wholly-owned subsidiary, VectivBio AG, for trade secret misappropriation and correction of patent inventorship and ownership in the U.S.

District Court in the Eastern District of Texas, alleging that VectivBio AG misappropriated Ferring’s technology for its own benefit and improperly filed patent applications claiming that technology without reference to Ferring’s inventorship and ownership interests.

On December 18, 2025, we, VectivBio AG and Ferring entered into a third amendment to the Ferring Agreement and a settlement agreement and release pursuant to which VectivBio AG and Ferring have settled all claims between the parties arising out of Ferring’s complaint.

A dismissal of Ferring’s complaint with prejudice was entered in the U.S.

District Court in the Eastern District of Texas on December 19, 2025.

In some cases, patent prosecution of our licensed technology is controlled solely by the licensor.

21 unchanged sentences

FDA or EMA can subsequently approve the same drug with the same active moiety for the same condition if the U.S.

FDA or EMA concludes that the later drug is safer, more effective, or makes a major contribution to patient care.

FDA or EMA concludes that the later drug is safer, more effective, or makes a

major contribution to patient care.

Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

26 unchanged sentences

Interference or derivation proceedings brought by the USPTO may be necessary to determine the priority of inventions with respect to the patents relating to our products and our product candidates and patent applications or those of our partners.

An unfavorable outcome could require us to cease using the technology or to attempt to license rights to it from the prevailing party.

An unfavorable outcome could require us to cease using the technology or to attempt to license rights to

it from the prevailing party.

Our business could be harmed if a prevailing party does not offer us a license on terms that are acceptable to us.

Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distraction of our management and other employees.

In addition, we may not be able to prevent, alone or with

our partners, misappropriation of our proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the U.S.

In addition, we may not be able to prevent, alone or with our partners, misappropriation of our proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the U.S.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, as well as the potential for public announcements of the results of hearings, motions or other interim proceeding or developments, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

2 unchanged sentences

In recent years, we have focused primarily on developing, manufacturing and commercializing linaclotide, as well as developing our other product candidates.

For example, in June 2023, we acquired VectivBio and added apraglutide, a next generation long-acting GLP-2 analog, in development for the treatment of patients with SBS who are dependent on PS, to our pipeline.

We have financed our business to date primarily through the issuance of equity, our collaboration and license arrangements, and debt issuances, including our $200.0 million aggregate principal amount of Convertible Senior Notes, bearing an interest of 1.50% and due in 2026, or the Convertible Senior Notes, and our $550.0 million secured revolving credit facility, or the Revolving Credit Facility.

For example, in June 2023, we acquired VectivBio and added apraglutide to our pipeline.

We have financed our business to date primarily through the issuance of equity, our collaboration and license arrangements, and debt issuances, including our $200.0 million aggregate principal amount of Convertible Senior Notes, bearing an interest of 1.50% and due in June 2026, or the Convertible Senior Notes, and our $550.0 million secured revolving credit facility, or the Revolving Credit Facility.

We currently derive a significant portion of our revenue from our LINZESS collaboration with AbbVie for the U.S.

2 unchanged sentences

Our collaborative arrangements revenue outside of the U.S.

has and may continue to fluctuate as a result of the timing and amount of royalties from sales of linaclotide in the markets in which it is currently approved, or any other markets where linaclotide receives approval, as well as clinical and commercial milestones received and recognized under our current and future strategic partnerships outside of the U.S.

has and may continue to fluctuate as a result of the timing and amount of sales of linaclotide in the markets in which it is currently approved, or any other markets where linaclotide receives approval, as well as clinical and commercial milestones received and recognized under our current and future strategic partnerships outside of the U.S.

For the year ended December 31, 2023, we incurred a net loss in connection with the VectivBio Acquisition.

2 unchanged sentences

We cannot be certain that sales of our products, and the revenue from our other commercial activities, will not fall short of our projections or be delayed.

Further, we expect to continue to incur substantial expenses in connection with our efforts to commercialize linaclotide and, if approved, apraglutide, research and develop our product candidates, and access externally developed products or product candidates.

Further, we expect to continue to incur substantial expenses in connection with our efforts to commercialize linaclotide and research, develop, and commercialize our product candidates, including apraglutide, and access externally developed products or product candidates.

Because of the numerous risks and uncertainties associated with developing and commercializing pharmaceutical products, as well as those related to our expectations for our products and our other activities, we are unable to predict the extent of any future losses.

9 unchanged sentences

● the regulatory approval of linaclotide within new indications, populations and formulations, as well as the associated development and commercial milestones and royalties;

● the regulatory approvals of apraglutide;

● the rate of progress, the cost of our clinical trials and the other costs associated with our development programs, including our clinical trial of apraglutide in adult patients with SBS-IF, post-approval nonclinical and clinical studies of linaclotide in pediatrics and our investment to enhance the clinical profile of LINZESS within IBS-C and CIC, as well as to study linaclotide in additional indications, populations and formulations to assess its potential to treat various conditions;

● the rate of progress, the cost of our clinical trials and the other costs associated with our development programs, including our planned confirmatory Phase III clinical trial of apraglutide in adult patients with SBS-IF, post-approval nonclinical and clinical studies of linaclotide in pediatrics and our investment to enhance the clinical profile of LINZESS, as well as to study linaclotide in additional indications, populations and formulations to assess its potential to treat various conditions;

● the regulatory approval of apraglutide;

● the costs and timing of in-licensing additional products or product candidates or acquiring other complementary companies or assets;

17 unchanged sentences

In May 2023, we entered into the Revolving Credit Facility, which includes a $10.0 million letter of credit subfacility.

In June 2023, we

borrowed $400.0 million to fund a portion of the consideration paid to purchase VectivBio’s outstanding ordinary shares in connection with the VectivBio Acquisition.

In June 2023, we borrowed $400.0 million to fund a portion of the consideration paid to purchase VectivBio’s outstanding ordinary shares in connection with the VectivBio Acquisition.

As of December 31, 2025, the outstanding principal balance on the Revolving Credit Facility was $385.0 million.

The agreement governing the Revolving Credit Facility, or the Revolving Credit Agreement, as amended in September 2024, contains certain covenants applicable to us and certain of our subsidiaries that may, under certain circumstances, impose significant operating and financial restrictions on us, including, without limitation, limitations on additional indebtedness, liens, various fundamental changes, dividends and distributions, investments (including acquisitions), transactions with affiliates, asset sales, prepayment of junior financing, changes in business and other limitations customary in senior secured credit facilities.

44 unchanged sentences

● general economic, industry, and market conditions;

● the impact of public health emergencies, including containment or mitigation measures, or natural disasters.

● the impact of public health emergencies, geopolitical events or natural disasters.

If our operating results fall below the expectations of investors or securities analysts for any of the foregoing reasons or otherwise, the price of our Class A Common Stock could decline substantially.

7 unchanged sentences

Generally, if an ownership change occurs, the yearly taxable income limitation on the use of net operating loss and tax credit carryforwards and certain built-in losses is equal to the product of the applicable long-term tax exempt rate and the value of the company’s stock immediately before the ownership change.

Certain future equity offerings or strategic transactions, if any, could potentially result in a 50% or greater change of control.

If we do not generate sufficient taxable income prior to the expiration, if any, of the applicable carryforwards or if the carryforwards are subject to the limitations described above, we may be unable to offset our taxable income with losses, or our tax liability with credits, before such losses and credits expire and therefore would incur larger federal or state income tax liability.

We have completed several financings since our inception which may have resulted in a change in control as defined by Section 382, or could result in a change in control in the future.

Certain future equity offerings or strategic transactions, if any, could potentially result in a 50% or greater ownership change.

state income tax liability.

We have completed several financings since our inception which may have resulted in an “ownership change,” as defined by Section 382, or could result in an ownership change in the future.

Our ability to use foreign tax loss carryforwards acquired in the VectivBio Acquisition may be limited.

2 unchanged sentences

However, if not utilized, the tax loss carryforwards, under Swiss laws, expire seven years after the tax year in which they were incurred.

Due to our current limited income in Switzerland, there is a high risk that the tax loss carryforwards will expire

in part or in their entirety and will not be used to offset future taxable income.

Due to our current limited income in Switzerland, there is a high risk that the tax loss carryforwards will expire in part or in their entirety and will not be used to offset future taxable income.

Any limitations in our ability to use tax loss carryforwards to offset taxable income could adversely affect our financial condition.

1 unchanged sentence

federal income tax purposes, we and our stockholders could be subject to significant tax liabilities.

The distribution of the shares of Cyclerion common stock in connection with the Separation, together with certain related transactions, is intended to qualify for tax-free treatment to us and our stockholders for U.S.

The distribution of the shares of Cyclerion common stock in connection with the separation of our soluble guanylate cycle business, and certain other assets and liabilities, into Cyclerion, or the Separation, on April 1, 2019, together with certain related transactions, is intended to qualify for tax-free treatment to us and our stockholders for U.S.

federal income tax purposes.

16 unchanged sentences

If we are not able to attract, motivate and retain necessary personnel to accomplish our business objectives, we will experience constraints that will significantly impede the achievement of our objectives.

We are highly dependent on the drug research, development, regulatory, commercial, financial and other expertise of our management, particularly Thomas McCourt, our chief executive officer;

Gregory Martini, our senior vice president, chief financial officer;

John Minardo, our senior vice president, chief legal officer and secretary;

and Michael Shetzline, our senior vice president, chief medical officer and head of research and drug development.

We are highly dependent on the drug research, development, regulatory, commercial, financial and other expertise of our senior management team.

Transitions in our senior management team or other key employees, or the unavailability of any such persons for any reason, can be inherently difficult to manage and may disrupt our operations or business or otherwise harm our business, for example, due to the diversion of our board and management’s time and attention and a decline in employee morale.

In addition to the competition for personnel, the Boston area in particular is characterized by a high cost of living.

In addition to the competition for personnel, the Boston area in particular is

characterized by a high cost of living.

As such, we could have difficulty attracting experienced personnel to our company and may be required to expend significant financial resources in our employee recruitment efforts, which may or may not be successful.

We also have scientific and clinical advisors who assist us in formulating our product development, clinical strategies and our global supply chain plans, as well as sales and marketing advisors who have assisted us in our commercialization strategy and brand plan for our products.

These advisors are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us, or may

have arrangements with other companies to assist in the development and commercialization of products that may compete with ours.

These advisors are not our employees and may have commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us, or may have arrangements with other companies to assist in the development and commercialization of products that may compete with ours.

Security breaches and other disruptions to our information technology structure could compromise our information, disrupt our business and expose us to liability, which would cause our business and reputation to suffer.

18 unchanged sentences

● Stockholders must provide advance notice to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting.

These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect such acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

These provisions may discourage or

deter a potential acquirer from conducting a solicitation of proxies to elect such acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

● Our stockholders may not act by written consent.

5 unchanged sentences

These and other provisions in our certificate of incorporation and our bylaws and in the Delaware General Corporation Law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors.

We have identified material weaknesses in our internal control over financial reporting.

If we are not able to remediate these material weaknesses, or if we identify additional material weaknesses in the future, it could have an adverse effect on our business and financial results, and our ability to meet our reporting obligations could be negatively affected, each of which could negatively affect the trading price of our Class A Common Stock.

In connection with the audit of our consolidated financial statements for the year ended December 31, 2024, we and our independent registered public accounting firm have identified material weaknesses in our internal control over financial reporting and we determined that our internal control over financial reporting was not effective as of December 31, 2024.

If we identify a material weakness in our internal control over financial reporting, it could have an adverse effect on our business and financial results, and our ability to meet our reporting obligations could be negatively affected, each of which could negatively affect the trading price of our Class A Common Stock.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Accordingly, a material weakness increases the risk that the financial information we report contains material errors.

For further discussion of the material weaknesses we have identified and our remediation plan, see Part II, Item 9A, under the heading “Controls and Procedures” in this Annual Report on Form 10-K.

While we have designed and are implementing a remediation plan to remediate these material weaknesses, we cannot assure that the measures we have taken to date, together with any measures we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid the identification of additional material weaknesses in the future.

If the steps we take do not remediate the material weaknesses in a timely manner, there could continue to be a reasonable possibility that these control deficiencies or others could result in a material misstatement of our annual or interim financial statements that would not be prevented or detected on a timely basis.

If we are not able to remediate these material weaknesses in a timely manner or otherwise comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, our ability to record, process, summarize and report financial information accurately and within applicable time periods may be adversely affected.

If we are not able to remediate these material weaknesses in a timely manner, investors could lose confidence in the reliability of our financial statements, which could lead to a decline in our stock price.

In addition, our conclusion that we have material weaknesses could give rise to increased scrutiny, review, audit and investigation over our accounting controls and procedures.

We regularly review and update our internal controls, disclosure controls and procedures, and corporate governance policies.

10 unchanged sentences

Such adjustments could have an adverse effect on our financial results, which could lead to a decline in our Class A Common Stock price.

If in the future we cannot conclude that we have effective internal control over our financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified opinion regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could lead to a decline in our stock price.

If we cannot conclude that we have effective internal control over our financial reporting, or if our independent registered public accounting firm is unable to provide an unqualified opinion regarding the effectiveness of our internal control over financial reporting, investors could lose confidence in the reliability of our financial statements, which could lead to a decline in our stock price.

Failure to comply with reporting requirements could also subject us to sanctions and/or investigations by the SEC, The Nasdaq Stock Market or other regulatory authorities.

In connection with the audit of our consolidated financial statements for the year ended December 31, 2024, we and our independent registered public accounting firm identified material weaknesses in our internal control over financial reporting and we determined that our internal control over financial reporting was not effective as of December

We remediated the material weaknesses during the year ended December 31, 2025 and concluded that our internal control over financial reporting was effective as of December 31, 2025.

For further discussion of those material weaknesses and our remediation efforts, see Part II, Item 9A, under the heading “Controls and Procedures” in this Annual Report on Form 10-K.

We expect that the price of our Class A Common Stock will fluctuate substantially.

5 unchanged sentences

● announcements of the introduction of new products by us or our competitors;

● announcements concerning product development, including clinical trial results or timelines, or intellectual property rights of us or others;

● announcements concerning product development, including clinical trial results or timelines or regulatory interactions, or intellectual property rights of us or others;

● actual and anticipated fluctuations in our quarterly and annual operating results;

6 unchanged sentences

● general economic, industry, and market conditions;

● the impact of public health epidemics, including containment or mitigation measures, or natural disasters.

● the impact of public health epidemics, geopolitical events or natural disasters.

Our business could be negatively affected as a result of a proxy contest or certain other stockholder actions.

3 unchanged sentences

The realization of any of the risks described in these “Risk Factors” could have a dramatic and material adverse impact on the market price of our Class A Common Stock.

In addition, class action litigation has often been instituted

against companies whose securities have experienced periods of volatility.

Any such litigation brought against us could result in substantial costs and a diversion of management attention, which could hurt our business, operating results and financial condition.

In addition, class action litigation has often been instituted against companies whose securities have experienced periods of volatility.

Any such litigation brought against us could

result in substantial costs and a diversion of management attention, which could hurt our business, operating results and financial condition.

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