What changed in this filing

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Item 1A. Risk Factors

2022-02-18 compared with 2021-02-17 · 140 added, 152 removed, 651 unchanged (31% of the section changed)

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Risks Related to Commercializing LINZESS and Other Product Candidates

We are highly dependent on the commercial success of LINZESS (linaclotide) in the United States, or the U.S., for the foreseeable future;

We are highly dependent on the commercial success of LINZESS (linaclotide) in the U.S.

for the foreseeable future;

we cannot guarantee that we will generate sufficient revenues from LINZESS to cover our expenses.

We and our partner, AbbVie Inc.

(together with its affiliates), or AbbVie, (successor to Allergan plc (together with its affiliates), or Allergan), began selling LINZESS in the U.S.

We and our partner, AbbVie, began selling LINZESS in the U.S.

in December 2012.

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In the linaclotide Phase III IBS-C and CIC trials, 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.

The number and type of patients treated with linaclotide could continue to grow if physicians prescribe linaclotide to more patients and as we and our partners conduct clinical trials, including in new indications, populations or formulations, as well as explore potential combination products, in existing and new territories.

or formulations, as well as explore potential combination products, in existing and new territories.

As patient experience increases and expands, we and others may identify previously unknown side effects, known side effects may be found to be more frequent and/or severe than in the past, and we and others may detect unexpected safety signals for our products or any products perceived to be similar to our products.

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● regulatory approvals for our products may be delayed, denied, restricted or withdrawn;

● we or our partners may decide to, or be required to, change the products’ label or send product warning letters or field alerts to physicians, pharmacists and hospitals;

● we or our partners may decide to, or be required to, change the products’ label or send product warning letters or field alerts to physicians, pharmacists or hospitals;

● reformulation of the products, additional nonclinical or clinical studies, changes in labeling or changes to or re- approvals of manufacturing facilities may be required;

● we or our partners may be precluded from pursuing approval of linaclotide in new territories or from studying additional development opportunities to enhance our products’ clinical profiles, including within new or existing indications, populations and formulations, as well as in potential combination products;

● we or our partners may be precluded from pursuing approval of linaclotide in new territories or from studying additional development opportunities to enhance our products’ clinical profiles, including within new or existing indications, populations or formulations, as well as in potential combination products;

● our or our products’ reputation in the marketplace may suffer;

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In addition, the U.S.

FDA-approved label for LINZESS contains a boxed warning about its use in pediatric patients.

LINZESS is contraindicated in pediatric patients up to six years of age based on nonclinical data from studies in neonatal mice approximately equivalent to human pediatric patients less than two years of age.

There is also a warning advising physicians to avoid the use of LINZESS in pediatric patients six to less than 18 years of age.

This warning is based on data in young juvenile mice and, at the time of approval, the lack of pediatric clinical safety and efficacy data.

FDA-approved label for LINZESS contains a boxed warning describing the risk of serious

dehydration in pediatric patients less than two years of age and a contraindication against its use in these patients.

The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established.

We and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S.

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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, 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, as well as the impacts to healthcare access or administration (including, for example, limitations on medications or procedures deemed “non-essential,” reduced interaction between patients and physicians, and increased unemployment), due to the COVID-19 pandemic may materially harm our business and commercialization efforts.

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.

or procedures deemed “non-essential,” reduced interaction between patients and physicians, and increased unemployment), due to the COVID-19 pandemic may materially harm our business and commercialization efforts.

We expect to experience pricing pressures in connection with the sale of our current and future products due to the healthcare reforms discussed below, as well as the trend toward initiatives aimed at reducing healthcare costs, the increasing influence of managed care, the scrutiny of pharmaceutical pricing, the ongoing debates on reducing government spending and additional legislative proposals.

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For example, the Bipartisan Budget Act of 2018 contained various provisions that affect coverage and reimbursement of drugs, including an increase, which began in 2019, in the discount that manufacturers of Medicare Part D brand name drugs must provide to Medicare Part D beneficiaries during the coverage gap from 50% to 70%.

More recently, the Biden administration has focused on reforms that would address the high cost of drugs.

In response to an

Executive Order from President Biden, the Secretary of Health and Human Services issued a comprehensive plan for

addressing high drug prices that describes a number of legislative approaches and identifies administrative tools to

address the high cost of drugs, such as capping Medicare Part D patients out-of-pocket costs, establishing penalties for

drug prices that increase faster than inflation in Medicare and authorizing the federal government to negotiate prices on

certain, select high cost drugs under Medicare Parts B and D.

Healthcare reform efforts or any future legislation or regulatory actions 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, or at all, which could materially harm our business and financial results.

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CONSTELLA was first launched in certain European countries for the symptomatic treatment of moderate to severe IBS-C in adults in the second quarter of 2013 and our partner, AbbVie, is currently commercializing CONSTELLA in a number of European countries, including the United Kingdom, Italy and Spain.

LINZESS was first launched in Japan for the treatment of IBS-C in adults in the first quarter of 2017, and for the treatment of chronic constipation in adults in the third quarter of 2018, and our partner Astellas is currently commercializing LINZESS in Japan.

In addition, LINZESS was first launched in China for the treatment of IBS-C in adults in November 2019, and

our partner AstraZeneca is currently commercializing LINZESS in China (including Hong Kong and Macau).

LINZESS was first launched in Japan for the treatment of IBS-C in adults in the first quarter of 2017, and for the treatment of chronic

constipation in adults in the third quarter of 2018, and our partner Astellas Pharma, Inc., or Astellas, is currently commercializing LINZESS in Japan.

In addition, LINZESS was first launched in China for the treatment of IBS-C in adults in November 2019, and our partner AstraZeneca AB (together with its affiliates), or AstraZeneca, is currently commercializing LINZESS in China (including Hong Kong and Macau).

The pricing and reimbursement strategy is a key component of our partners’ commercialization plans for CONSTELLA in Europe and LINZESS in Japan and China.

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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.

For example, the increase in virtual customer support and limitations on customer access by our customer-facing employees that was prompted by the COVID-19 pandemic contributed to our decision to make virtual promotion a more permanent component of our overall selling model and may further change our commercial model or the market strategy in the industry.

For example, the decrease in physical access to

customers due to the COVID-19 pandemic prompted us to increase our virtual selling capabilities.

While our in-person selling efforts have returned to near pre-COVID-19 pandemic levels, we plan to maintain a certain level of virtual support as part of our commercial model designed to quickly respond to reduced physical access due to periodic spikes in infection rates, changing market dynamics and customer preference.

Further, we and AbbVie must continue to focus and refine our marketing campaign to ensure a clear and understandable physician-patient dialogue around IBS-C, CIC and the potential for LINZESS as an appropriate therapy.

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however, they are limited in the number of in-person details they are able to conduct due to containment and mitigation measures related to the COVID-19 pandemic.

We monitor the impact of the COVID-19 pandemic in the territories where our customer-facing employees are engaged in in-person work practices, and in some cases, we have paused the in-person work practices as a result of the impact of the COVID-19 pandemic in those territories, and may do so again in the future.

We monitor the impact of the COVID-19 pandemic in the territories where our customer-facing employees are engaged in in-person work practices, and in some cases, we have paused or delayed in-person work practices as a result of the impact of the COVID-19 pandemic in those territories, and may do so again in the

Customer-facing employees who are not providing in-person services continue to support their customers virtually through telephone and web-based technologies.

Headquarters employees are expected to have the option to work remotely through mid-2021.

We may delay, stop or otherwise limit in-person work in the future pending relevant health authority guidance and other safety considerations.

T he virtual support we continue to provide to customers may not be

as effective as in-person efforts, and our in-person efforts may be limited and/or limited in their effectiveness.

Our headquarters have re-opened, but all headquarters employees have the option to work primarily remotely .

We may delay, stop or otherwise limit in-person work in the future pending relevant health authority guidance and additional safety or other considerations.

T he virtual support we continue to provide to customers may not be as effective as in-person efforts, and our in-person efforts may be limited and/or limited in their effectiveness.

If this were to occur, or if we, AbbVie or any of our partners were unable to align on our strategy and development and commercial efforts as a result of the COVID-19 pandemic or otherwise, we may not be able to maintain or increase the revenues that we generate or our business may be otherwise materially harmed.

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FDA for sale in the U.S.

for the treatment of IBS-C, CIC and opioid-induced constipation, and an authorized generic version of AMITIZA became available in the U.S.

in January 2021 and is being commercialized by Endo International plc;

for the treatment of IBS-C, CIC and opioid-induced constipation, an authorized generic version of AMITIZA became available in the U.S.

in January 2021 and is being commercialized by Endo International plc, and we expect additional generic versions of AMITIZA may become available;

Bausch Health’s TRULANCE (plecanatide) is approved by the U.S.

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for the treatment of CIC in adults;

and Alfasigma USA’s ZELNORM (tegaserod) is approved for sale in the U.S.

Alfasigma USA’s ZELNORM (tegaserod) is approved for sale in the U.S.

for treatment of IBS-C in women under the age of 65;

and in November 2021, Ardelyx, Inc., or Ardelyx, announced its plans to launch IBSRELA™ (tenapanor),

Ardelyx’s U.S.

FDA-approved treatment for IBS-C in adults, in the second quarter of 2022.

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

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FDA or foreign regulatory authorities and become commercially available.

For example, although not currently commercially available, the U.S.

FDA approved Ardelyx, Inc.’s IBSRELA™ (tenapanor) for the treatment of IBS-C in adults.

In addition, there are other compounds in late-stage development and other potential competitors that are in earlier stages of development that, if approved, may compete with linaclotide.

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FDA requirements, including those governing the testing, manufacturing, labeling, packaging, storage, advertising, promotion, sale, distribution, recordkeeping and submission of safety and other post-market information.

There is also a boxed warning advising physicians to avoid the use of LINZESS in pediatric patients six to less than 18 years of age.

This warning is based on data in young juvenile mice and, at the time of approval, the lack of pediatric clinical safety and efficacy data.

FDA-approved label for LINZESS contains a boxed warning describing the risk of serious dehydration in pediatric patients less than two years of age and a contraindication against its use in these patients.

The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established.

We and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S.

FDA to understand the safety and efficacy of LINZESS in pediatric patients, and clinical pediatric programs in IBS-C and functional constipation are ongoing.

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

In addition, as the holder of the approved NDA for ZURAMPIC, we are obligated to monitor and report adverse events and any failure of

ZURAMPIC to meet the specifications in the NDA, to submit new or supplemental applications and to obtain U.S.

FDA approval for certain changes, including changes to product labeling and manufacturing processes.

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

These post-approval requirements impose burdens and costs on us.

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Manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the U.S.

FDA and other regulatory authorities for compliance with GMP and other applicable regulations.

FDA and other regulatory authorities for compliance with current good manufacturing practices, or GMP, and other applicable regulations.

If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on that product or the manufacturer, including withdrawal of the product from the market or suspension of manufacturing.

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● may change their approval policies or adopt new regulations.

If any of the foregoing were to occur, our receipt of regulatory approval in the applicable jurisdiction could be delayed or we may never receive approval at all.

Additionally, we cannot be certain of the duration or extent to which the COVID-19 pandemic may impact operations of regulatory authorities in jurisdictions around the world, and any reduction in resources dedicated to review and approval of products in applicable jurisdictions could delay or otherwise impact approval or other regulatory decisions or actions.

Further, regulatory approval in one jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a

negative effect on the regulatory processes in others.

If any of the foregoing were to occur, our or our partners’ receipt of regulatory approval in the applicable jurisdiction could be delayed or we or our partners may never receive approval at all.

Additionally, we or our partners cannot be certain of the duration or extent to which the COVID-19 pandemic may impact operations of regulatory authorities in jurisdictions around the world, and any reduction in resources dedicated to review and approval of products in applicable jurisdictions could delay or otherwise impact approval or other regulatory decisions or actions.

Further, regulatory approval in one jurisdiction does not ensure regulatory approval in another, but a failure or delay in

obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory processes in others.

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

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

The process of proposing, negotiating and implementing a license or acquisition is lengthy and complex.

For example, in November 2021, we entered into a collaboration and license option agreement with COUR Pharmaceutical Development Company, Inc., or COUR, relating to COUR’s investigational therapy CNP-104, a potential treatment of primary biliary cholangitis, or PBC.

Under this agreement, COUR will conduct an initial clinical trial for CNP-104 in PBC patients, and we have been granted an option to acquire an exclusive license to research, develop, manufacture and commercialize products containing CNP-104 in the U.S.

for the treatment of PBC after reviewing the data from this study.

There is no assurance that we will exercise this option following COUR’s completion of this initial study, or that CNP-104 will be successful for the treatment of PBC.

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.

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The development of product candidates in particular is a highly uncertain process, as we discuss further below.

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

Any product candidate that we in-license or acquire may require additional development efforts prior to commercial sale,

including extensive clinical testing and approval by the U.S.

FDA and applicable 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.

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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.

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 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.

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.

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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.

For example, we and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S.

FDA to understand the safety and efficacy of LINZESS in pediatric patients, and clinical pediatric trials in IBS-C and functional constipation 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 U.S.

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 of assets in our pipeline.

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 of assets in our pipeline, such as IW-3300 for the potential treatment of interstitial cystitis/bladder pain syndrome, and any other assets that we may acquire or license from third parties, including CNP-104 for the treatment of PBC, for which we have been granted an option to acquire an exclusive license to research, develop, manufacture and commercialize, in the U.S., following COUR’s completion of the initial study of CNP-104.

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

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It is possible that none of the product candidates we develop will be approved for commercial sale, which would impair our ability to grow.

We have ongoing or planned nonclinical and clinical trials, including for linaclotide.

We have ongoing or planned nonclinical and clinical trials, including for linaclotide, and our product candidates.

Many companies in the pharmaceutical industry have suffered significant setbacks in clinical trials even after achieving promising results in earlier nonclinical or clinical trials.

For example, in May 2020, we and AbbVie announced that our Phase II trial evaluating MD-7246, a delayed release formulation of linaclotide in adult patients with abdominal pain associated with irritable bowel syndrome with diarrhea, did not meet its primary or key secondary endpoints.

Based on these findings, we and AbbVie have discontinued development of MD-7246.

In addition, in September 2020, we announced that one of our two identical Phase III trials evaluating IW-3718 in refractory GERD did not meet the pre-specified criteria associated with a planned early efficacy assessment.

Following the assessment from an independent data monitoring committee, we unblinded the data and confirmed that IW-3718-302 did not meet the criteria, including the study’s primary endpoint of achieving a statistically significant improvement in heartburn severity.

Based on these findings, we are discontinuing development of IW-3718.

The findings from our completed nonclinical studies may not be replicated in later clinical trials, and our clinical trials may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of regulatory approval.

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

Findings from completed nonclinical studies may not be replicated in later clinical trials, and clinical trials may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of regulatory approval.

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.

Furthermore, our analysis of data obtained from nonclinical and clinical activities is subject to confirmation and interpretation by the U.S.

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establish and maintain development, manufacturing, marketing, sales or distribution relationships on acceptable terms;

that such relationships, if established,

will be successful or on favorable terms;

that such relationships, if established, will be successful or on favorable terms;

or that we will gain market acceptance for such products or product candidates.

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The COVID-19 pandemic has impacted enrollment in our clinical trials and may impact clinical trial enrollment or participation in the future, for example due to suspension of in-person procedures required for enrollment or lower or discontinued patient participation compared to pre-COVID-19 pandemic levels.

Specifically, prior to our decision to discontinue development of IW-3718, the COVID-19 pandemic impacted enrollment in our Phase III clinical trials of IW-3718 for the treatment of refractory GERD.

Clinical trials may also be delayed or discontinued as a result of ambiguous or negative interim results or assessments.

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Each protocol amendment would require institutional review board review and approval, which may adversely impact the costs, timing or successful completion of the associated clinical trials.

If we or our partners terminate or experience delays in the completion of any clinical trials, the

commercial prospects for our products or product candidates may be harmed, and our ability to generate product revenues will be delayed.

If we or our partners terminate or experience delays in the completion of any clinical trials, the commercial prospects for our products or product candidates may be harmed, and our ability to generate product revenues will be delayed.

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval.

Risks Related to Our Dependence on Third Parties

Because we work with partners to develop, manufacture and commercialize linaclotide, we are dependent upon third parties, and our and our partners’ relationships with those third parties, in our and our partners’ efforts to obtain regulatory approval for, and to commercialize, linaclotide, as well as to comply with regulatory and other obligations with respect to linaclotide.

Because we work with partners to develop, manufacture and commercialize linaclotide, we and our partners are dependent upon third parties, and our and our partners’ relationships with those third parties, in our and our partners’ efforts to obtain regulatory approval for, and to commercialize, linaclotide, as well as to comply with regulatory and other obligations with respect to linaclotide.

AbbVie played a significant role in the conduct of the clinical trials for linaclotide and in the subsequent collection and analysis of data, and AbbVie holds the new drug application, or NDA, for LINZESS.

continues to play a significant role in the conduct of our pediatric program for linaclotide.

In addition, we are commercializing LINZESS in the U.S.

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In addition, adverse event reporting requires significant coordination with our partners and third parties.

We are the holder of the global safety database for linaclotide responsible for coordinating the safety surveillance and adverse event reporting efforts worldwide with respect to linaclotide, and each of Astellas, AstraZeneca and AbbVie is responsible for reporting adverse event information from its territory to us.

An AstraZeneca partner is the holder of the global safety database for lesinurad and is responsible for coordinating the safety surveillance and adverse event reporting efforts worldwide with respect to lesinurad.

If we or AstraZeneca’s partner fails to perform such activities and maintain each safety database or if such parties do not report adverse events related to such products, or fail to do so in a timely manner, we may not receive the information that we or our partners are required to report to the U.S.

We are the holder of the global safety database for linaclotide responsible for coordinating the safety surveillance and adverse event reporting efforts worldwide with respect to linaclotide;

each of Astellas, AstraZeneca and AbbVie is responsible for reporting adverse event information from its territory to us.

If we fail to perform such activities and maintain the global safety database for linaclotide or if our partners do not report adverse events related to linaclotide, or fail to do so in a timely manner, we may not receive the information that we or our partners are required to report to the U.S.

FDA or a foreign regulatory authority regarding such products.

Furthermore, we or such parties may fail to adequately monitor, identify or investigate adverse events, or to report adverse events to the U.S.

Furthermore, we or our partners may fail to adequately monitor,

identify or investigate adverse events, or to report adverse events to the U.S.

FDA or foreign regulatory authority accurately and within the prescribed timeframe.

If we or such parties are unsuccessful in any of the foregoing due to poor process, execution, systems, oversight, communication, adjudication or otherwise, then we may suffer any number of consequences, including the imposition of additional restrictions on the use of such products, removal of such products from the market, criminal prosecution, the imposition of civil monetary penalties, seizure of such products, or delay in approval of future products.

If we or our partners are unsuccessful in any of the foregoing due to poor process, execution, systems, oversight, communication, adjudication or otherwise, then we may suffer any number of consequences, including the imposition of additional restrictions on the use of linaclotide, removal of linaclotide from the market, criminal prosecution, the imposition of civil monetary penalties, seizure of such products, or delay in approval of future products.

We rely entirely on contract manufacturers, our partners and other third parties to manufacture linaclotide and our other product candidates and distribute linaclotide.

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We and/or our partners have commercial supply agreements with independent third parties to manufacture linaclotide API.

Each of our partners and the third-party manufacturers we or our partners engage must comply with current good manufacturing practices, or GMP, and other stringent regulatory requirements enforced by the U.S.

Each of our partners and the third-party manufacturers we or our partners engage must comply with GMP and other stringent regulatory requirements enforced by the U.S.

FDA and foreign regulatory authorities in other jurisdictions.

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and the other countries where it is approved, and develop, launch and commercialize linaclotide in other parts of the world, the drug’s success becomes more dependent on us maintaining highly collaborative and well aligned partnerships.

In May 2020, AbbVie announced the completion of its acquisition of Allergan.

In May 2020, AbbVie announced the completion of its acquisition of Allergan plc.

Our collaboration, now with AbbVie, for the development and commercialization of linaclotide in North America, and our license, now to AbbVie, to develop and commercialize linaclotide in all countries worldwide other than China (including Hong Kong and Macau) and Japan, remain in effect.

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

If AbbVie, Astellas Pharma, Inc., or Astellas, or AstraZeneca AB (together with its affiliates), or AstraZeneca, was subject to a change of control that allowed us to continue linaclotide’s development or commercialization anywhere outside of the U.S.

If AbbVie, Astellas or AstraZeneca was subject to a change of control that allowed us to continue linaclotide’s development or commercialization anywhere outside of the U.S.

on our own, and we chose to do so rather than establishing a relationship with a new partner, we would need to build operational capabilities in the relevant territory.

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We face potential product liability exposure, and, if claims brought against us are successful, we could incur substantial liabilities.

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

If we do not successfully defend ourselves against

product liability claims, we could incur substantial liabilities.

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.

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

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In addition, the GDPR and the CCPA impose substantial fines and other regulatory penalties for breaches of data protection requirements, and they confer a private right of action on data subjects (in the case of the GDPR) and consumers (in the case of the CCPA) and their representatives for breaches of certain data protection requirements.

Moreover, we will be subject to the California Privacy Rights Act, which will impose additional obligations on companies processing personal

information of California residents beyond those found in the CCPA.

We expect to be subject to additional privacy laws at both the U.S.

state level and abroad as many jurisdictions have either recently passed data privacy legislation or are considering enacting such legislation.

Achieving and sustaining compliance with applicable international, federal and state privacy, security, fraud and reporting laws may prove time-consuming and costly.

If our operations are found to be in violation of any of the laws described above or any other laws, rules or regulations that apply to us, we will be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations.

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defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business, as well as damage our business or reputation.

Moreover, achieving and sustaining compliance with applicable federal and state privacy, security, fraud and reporting laws may prove costly.

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.

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We face uncertainties because there have been, and may be additional, federal legislative and administrative efforts to repeal, substantially modify or invalidate some or all of the provisions of the ACA.

Such efforts may lead to fewer Americans having more comprehensive health insurance compliant with the ACA, even in the absence of a legislative repeal.

Such efforts may lead to fewer Americans having more comprehensive health insurance compliant with the ACA, even in the absence of legislative repeal.

For example, tax reform legislation was enacted at the end of 2017 that eliminated the tax penalty for individuals who do not maintain sufficient health insurance coverage beginning in 2019.

The ACA has also been subject to judicial challenge.

The case Texas v.

Azar, which challenges the constitutionality of the ACA, including provisions that are unrelated to healthcare reform but were enacted as part of the ACA, was argued before the Supreme Court in November 2020.

Pending resolution of the litigation, all of the ACA but the individual mandate to buy health insurance remains in effect.

Additional healthcare reform efforts have sought to address certain issues related to the COVID-19 pandemic, including an expansion of telehealth coverage under Medicare and accelerated or advanced Medicare payments to healthcare providers.

In addition, in 2020 and 2021, the U.S.

Department of Health and Human Services issued various rules that affect pricing or payment for prescription drug products.

For example, effective in 2022, revisions to the federal anti-kickback statute would remove protection for traditional Medicare Part D discounts offered by pharmaceutical manufacturers to pharmacy benefit managers and health plans.

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

For example, courts have temporarily enjoined a new “most favored nation” payment model for select drugs covered under Medicare Part B that was to take effect on January 1, 2021 and would limit

payment based on international drug price.

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

We cannot predict, however, the ultimate content, timing or effect of any healthcare reform legislation or action, or its impact on us, and healthcare reform could increase compliance costs and may adversely affect our future business and financial results.

Beyond the ACA, other health care reform efforts are ongoing.

Some healthcare reform efforts have sought to address certain issues related to the COVID-19 pandemic, including an expansion of telehealth coverage under Medicare, accelerated or advanced Medicare payments to healthcare providers and payments to providers for COVID-19-related expenses and lost revenues.

Other reform efforts affect pricing or payment for prescription drug products, including the increase in

discount that manufacturers of Medicare Part D brand name drugs must provide to Medicare Part D beneficiaries during the coverage gap from 50% to 70%.

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

For example, in November 2020, the Centers for Medicare & Medicaid Services, or CMS, issued an interim final rule implementing a new “most favored nation” payment model for select drugs covered under Medicare Part B.

The rule was challenged and became subject a nationwide preliminary injunction, and ultimately rescinded by CMS.

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.

More broadly, 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 2030 (except May 1, 2020 to March 31, 2021).

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 2030 (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.

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Risks Related to the Separation of Cyclerion

We may incur operational difficulties or be exposed to claims and liabilities as a result of the separation of Cyclerion.

We may be exposed to claims and liabilities as a result of the separation of Cyclerion.

On April 1, 2019, we distributed all of the outstanding shares of Cyclerion Therapeutics, Inc., or Cyclerion, common stock to Ironwood stockholders in connection with the separation of our soluble guanylate cyclase business, or the Separation.

In connection with the distribution, we entered into a separation agreement and various other agreements (including a tax matters agreement, an employee matters agreement, transition services agreements, an intellectual property license agreement and a development agreement).

These agreements govern the separation and distribution and the relationship between us and Cyclerion going forward, including with respect to potential tax-related losses associated with the separation and distribution.

In addition, the development agreement provides for the performance of services by Cyclerion for our benefit for a period of time.

If Cyclerion is unable to satisfy its obligations under these agreements, we could incur losses or operational challenges or difficulties and may not have sufficient resources available for such services.

These arrangements could also lead to disputes over rights to certain shared property and over the allocation of costs for products and operations.

In connection with the distribution, we entered into a separation agreement and various other agreements, including a tax matters agreement and an employee matters agreement.

These agreements governed the separation and distribution as well as the relationship between us and Cyclerion, including with respect to potential tax-related losses associated with the separation and distribution.

The separation agreement provides for indemnification obligations designed to make Cyclerion financially responsible for many liabilities that may exist relating to its business activities, whether incurred prior to or after the distribution, including any pending or future litigation, but we cannot guarantee that Cyclerion will be able to satisfy its indemnification obligations.

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federal income tax purposes, we would recognize taxable gain with respect to Cyclerion’s distributed common stock and our stockholders who received shares of Cyclerion common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.

We may not achieve some or all of the anticipated benefits of the Separation, which may adversely affect our business .

We may not be able to achieve the full strategic, financial or other benefits expected to result from the Separation, or such benefits may be delayed or not occur at all.

If we fail to achieve some or all of the expected benefits of the Separation, or if such benefits are delayed, our business, financial condition, results of operations and the value of our stock could be adversely impacted.

The combined value of the common stock of the two publicly traded companies may not be equal to or greater than what the value of our Class A Common Stock would have been had the Separation not occurred.

In addition, we are smaller and less diversified, with a narrower business focus, than we were before the Separation and therefore may be more vulnerable to changing market conditions.

Risks Related to Intellectual Property

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Additional U.S.

patents related to LINZESS include multiple patents relating to our commercial, room temperature stable formulations of the 72 mcg, 145 mcg and 290 mcg

doses of linaclotide and methods of using these formulations, the latest of which expires in the early 2030s, as well as other patents covering processes for making LINZESS, formulations thereof, and molecules related to LINZESS.

patents related to LINZESS include multiple patents relating to our commercial, room temperature stable formulations of the 72 mcg, 145 mcg and 290 mcg doses of linaclotide and methods of using these formulations, the latest of which expires in the early 2030s, as well as other patents covering processes for making LINZESS, formulations thereof, and molecules related to LINZESS.

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 U.S.

Patent and Trademark Office, or the USPTO, in the future.

In addition, we have several pending patent applications in the U.S.

We believe in the strength of our LINZESS patent portfolio and that we have sufficient freedom to operate;

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patent statutes.

These changes permit third parties to challenge our patents more easily and create uncertainty with respect to the interpretation and practice of U.S.

These changes permit third parties to challenge our patents more easily and create uncertainty

with respect to the interpretation and practice of U.S.

Moreover, the U.S.

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Additionally, our trade secrets could otherwise become known or be independently discovered by our competitors.

In addition, the laws of certain foreign countries do not protect proprietary rights to the same extent or in the same manner as the U.S., and, therefore, we may encounter problems in protecting and defending our intellectual property in certain foreign jurisdictions.

In addition, the laws of certain foreign countries do not protect proprietary rights to the same extent or in the same manner as the U.S., and, therefore, we or our partners may encounter problems in protecting and defending our intellectual property in certain foreign jurisdictions.

If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in such litigation could have a material adverse effect on our business.

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In addition, in an infringement or invalidity proceeding, a court or patent administrative body may determine that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

Generic drug manufacturers were first able to file ANDAs for generic versions of LINZESS in August 2016, but we may not become aware of these filings for several months after any such submission due to procedures specified under applicable U.S.

FDA regulations.

Generic drug manufacturers were first able to file ANDAs for generic versions of LINZESS in August 2016.

When filing an ANDA for one of our products, a generic drug manufacturer may choose to challenge one or more of the patents that cover such product and seek to commercialize generic versions of one or more LINZESS doses.

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FDA-approved drug LINZESS.

In the past, we have filed patent infringement lawsuits against five companies making such ANDA filings, and we have entered into settlement agreements dismissing the lawsuits with each company that has made ANDA filings.

We filed patent infringement lawsuits against five companies making such ANDA filings and subsequently entered into settlement agreements with each of these filers.

Frequently, innovators receive multiple ANDA filings.

Consequently, we expect to receive additional notice letters regarding ANDAs submitted to the U.S.

FDA, and may receive amendments to those notice letters.

Consequently, we may receive additional notice letters regarding ANDAs submitted to the U.S.

FDA (and we may receive amendments to those notice letters), but we may not become aware of these filings for several months after any such submission due to procedures specified under applicable U.S.

FDA regulations.

After evaluation, we have in the past filed, and may, in the future, file patent infringement lawsuits or take other action against companies making ANDA filings.

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Prior to the year ended December 31, 2019, we incurred net losses in each year since our inception in 1998.

As of December 31, 2020, we had an accumulated deficit of approximately $1.5 billion.

As of December 31, 2021, we had an accumulated deficit of $937.6 million.

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, particularly in light of the negative financial impact that the COVID-19 pandemic may have on our business in the future.

Further, we expect to continue to incur substantial expenses in connection with our efforts to commercialize linaclotide and research and develop our product candidates.

Further, we expect to continue to incur substantial expenses in connection with our efforts to commercialize linaclotide, research and develop our product candidates, 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.

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We have previously raised funds to finance our operations through capital raising activities, including the sale of shares of our Class A Common Stock in public offerings and convertible and other debt issuances.

However, marketing and selling primary care drugs, purchasing commercial quantities of pharmaceutical products, developing product candidates, conducting clinical trials and accessing externally developed products are expensive and uncertain.

Circumstances, our strategic imperatives, or opportunities to create or acquire new programs, as well as maturities, redemptions or repurchases of our outstanding debt securities, could require us to, or we may choose to, seek to raise additional funds.

However, marketing and selling gastrointestinal drugs, purchasing commercial quantities of pharmaceutical products, developing product candidates, conducting clinical trials and accessing externally developed products or product candidates are expensive and uncertain.

to, seek to raise additional funds.

The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

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● the timing of any regulatory approvals of our product candidates;

● whether the holders of our Convertible Senior Notes hold the notes to maturity without conversion into our Class A Common Stock and whether we are required to repurchase any of our Convertible Senior Notes prior to maturity upon a fundamental change, as defined in each of the indentures governing the Convertible Senior Notes;

● whether the holders of our Convertible Senior Notes hold the notes to maturity without conversion into our Class A Common Stock or cash and whether we are required to repurchase any of our Convertible Senior Notes prior to maturity upon a fundamental change, as defined in each of the indentures governing the Convertible Senior Notes;

● whether we seek to redeem, repurchase or retire all or part of our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise.

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Our ability to pay principal of and interest on our outstanding debt securities will depend in part on the receipt of payments from AbbVie under our collaboration agreement for North America.

In June 2015, we issued approximately $335.7 million aggregate principal amount of our 2022 Convertible Notes bearing an annual interest rate of 2.25%.

In August 2019, we issued $200.0 million aggregate principal amount of our 2024 Convertible Notes bearing an annual interest rate of 0.75% and $200.0 million aggregate principal amount of

our 2026 Convertible Notes bearing an annual interest rate of 1.50%, and we used a portion of the proceeds from this offering to repurchase $215.0 million aggregate principal amount of the 2022 Convertible Notes.

In June 2015, we issued $335.7 million aggregate principal amount of our 2022 Convertible Notes bearing an annual interest rate of 2.25%.

In August 2019, we issued $200.0 million aggregate principal amount of our 2024 Convertible Notes bearing an annual interest rate of 0.75% and $200.0 million aggregate principal amount of our 2026 Convertible Notes bearing an annual interest rate of 1.50%, and we used a portion of the proceeds from this offering to repurchase $215.0 million aggregate principal amount of the 2022 Convertible Notes.

Semi-annual payments on our 2022 Convertible Notes began on December 15, 2015 and semi-annual payments on each of our 2024 Convertible Notes and 2026 Convertible Notes began on December 15, 2019.

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If the cash flows derived from the net quarterly payments that we receive from AbbVie under the collaboration agreement for North America are insufficient on any particular payment date to fund the interest payment on our outstanding indebtedness, at a minimum, we will be obligated to pay the amounts of such shortfall out of our general funds.

The determination of whether AbbVie will be obligated to make a net quarterly payment to us in respect of a particular quarterly period is a function of the revenue generated by LINZESS in the U.S.

The determination of whether AbbVie will be obligated to make a net quarterly payment to us in respect of a particular quarterly period is a function of the

revenue generated by LINZESS in the U.S.

as well as the development, manufacturing and commercialization expenses incurred by each of us and AbbVie under the collaboration agreement for North America.

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Our indebtedness could adversely affect our financial condition or restrict our future operations.

As of December 31, 2020, we had total indebtedness of approximately $520.7 million and available cash and cash equivalents of approximately $362.6 million.

As of December 31, 2021, we had total indebtedness of $520.7 million and available cash and cash equivalents of $620.1 million.

Our indebtedness, combined with our other financial obligations and contractual commitments, could have important consequences on our business, including:

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In addition, while none of the indentures governing our Convertible Senior Notes includes covenants restricting the operation of our business except in certain limited circumstances, in the event of a default under any of the Convertible Senior Notes, the applicable noteholders or the trustee under the indenture governing the applicable Convertible Senior Notes may accelerate our payment obligations under such Convertible Senior Notes, which could have a material adverse effect on our business, financial condition and results of operations.

Class A Common Stock listed on The Nasdaq Global or Global Select Market or The New York Stock Exchange), subject to the terms of each of the indenture governing the Convertible Senior Notes.

We are also required to offer to repurchase the Convertible Senior Notes upon the occurrence of a fundamental change, which could include, among other things, any acquisition of our company (other than an acquisition in which at least 90% of the consideration is Class A Common Stock listed on The Nasdaq Global or Global Select Market or The New York Stock Exchange), subject to the terms of each of the indenture governing the Convertible Senior Notes.

The repurchase price must be paid in cash, and this obligation may have the effect of discouraging, delaying or preventing an acquisition of our company that would otherwise be beneficial to our security holders.

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● addition or termination of clinical trials;

● any impact on taxes or changes in tax rules;

● regulatory developments affecting our products and product candidates;

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Furthermore, any quarterly or annual fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially.

There can be no assurance that we will repurchase shares of our Class A Common Stock or that we will repurchase shares of our Class A Common Stock at favorable prices.

Our board of directors has authorized a share repurchase program of up to $150.0 million to repurchase shares of our Class A Common Stock.

The amount and timing of share repurchases are subject to market conditions, stock price and other factors, including compliance with all respective laws and our applicable agreements.

The amount, timing and execution of our repurchases of our Class A Common Stock will depend upon, among other factors, our cash balances and potential future capital requirements for strategic transactions, our results of operations, our financial condition, tax laws, and other factors that we may deem relevant.

A reduction in repurchases under, or the completion of, our share repurchase program could have a negative effect on our stock price.

We can also provide no assurance that we will repurchase shares of our Class A Common Stock at favorable prices, if at all.

Our ability to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments is limited by provisions of the Internal Revenue Code, and it is possible that our net operating loss and tax credit carryforwards may expire before we generate sufficient taxable income to use such carryforwards, or that certain transactions or a combination of certain transactions may result in material additional limitations on our ability to use our net operating loss and tax credit carryforwards.

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Public health emergencies, epidemics, or pandemics, such as the COVID-19 pandemic, impact our business.

In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China.

On March 11, 2020, the World Health Organization declared a global pandemic and recommended containment and mitigation measures worldwide.

On March 13, 2020, former U.S.

President Donald Trump announced a national emergency relating to the pandemic.

Government authorities in the U.S.

have recommended or imposed various containment and mitigation measures on large portions of the population, and similar measures have also been taken in many other countries around the world.

Both the outbreak of COVID-19 and the containment and mitigation efforts have a serious adverse impact on the U.S.

economy and the economies of other countries around the world, the severity and duration of which are uncertain.

Government stabilization efforts will only partially mitigate the consequences.

The COVID-19 pandemic has impacted, and is expected to continue to impact, our business and operations in a number of ways and there are significant uncertainties surrounding the extent and duration of such impacts.

Factors that will influence the impact on our business and operations include the duration and extent of the outbreak, the duration and extent of imposed or recommended containment and mitigation measures, and the general economic consequences of the pandemic.

Factors that will influence the impact on our business and operations include the duration and extent of the outbreak, the duration and extent of imposed or recommended containment and mitigation measures, periodic spikes in infection rates, new strains or variants of the virus that cause outbreaks of COVID-19, the broad availability of effective vaccines, the rate of

vaccinations, and vaccine mandates and the general economic consequences of the pandemic.

Addressing the impacts of the COVID-19 pandemic has, and likely will for an extended period, required significant time and has diverted the attention of our management, other employees and our board of directors.

The increase in virtual customer support and limitations on customer access by our customer-facing employees that was prompted by the COVID-19 pandemic contributed to our decision to make virtual promotion a more permanent component of our overall selling model and may further change our commercial model or the market strategy in the industry.

Should we be unable to evolve with any changes in the commercial landscape, we may be unable to maintain or grow our revenues from the commercialization of LINZESS or successfully commercialize future products.

The decrease in physical access to customers due to the COVID-19 pandemic prompted us to increase our virtual selling capabilities.

While our in-person selling efforts have returned to near pre-COVID-19 pandemic levels, we plan to maintain a certain level of virtual support as part of our commercial model designated to quickly respond to reduced physical access due to periodic spikes in infection rates, changing market dynamics and customer preference.

Should we be unable to evolve with any further changes in the commercial landscape, we may be unable to maintain or grow our revenues from the commercialization of LINZESS or successfully commercialize future products.

In addition, changes in insurance coverage or reimbursement levels by governmental authorities, private health insurers and other third-party payors, or changes in the type of such coverage held by patients (including changes from commercial insurance to Medicaid) or the loss of coverage by some patients, due to the impacts of the COVID-19 pandemic (including the related increase in unemployment in the U.S.) may negatively impact our revenue from LINZESS.

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Customer-facing employees who are not providing in-person services continue to support their customers virtually through telephone and web-based technologies.

Headquarters employees are expected to have the option to work remotely through mid-2021.

Our headquarters have re-opened, but all headquarters employees have the option to work primarily remotely .

We may delay, stop or otherwise limit in-person work in the future pending relevant health authority guidance and additional safety or other considerations.

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In addition, the COVID-19 pandemic has impacted enrollment in our clinical trials, and may impact clinical trial enrollment or participation in the future, for example due to suspension of in-person procedures required for enrollment or lower or discontinued patient participation compared to pre-COVID-19 pandemic levels.

Specifically, prior to our decision to discontinue development of IW-3718, the COVID-19 pandemic impacted enrollment in our Phase III clinical trials of IW-3718 for the treatment of refractory gastroesophageal reflex disease, or refractory GERD.

In addition, the progression of our pipeline could be impacted should any of our key vendors, including clinical research organizations, or CROs, and other clinical vendors, be unable to provide timely or sufficient services due to the impact of the COVID-19 pandemic.

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Capital markets in the U.S.

and around the world have also been negatively impacted, which may harm our business, including our ability to obtain future financing.

and around the world may be negatively impacted and can potentially harm our business, including our ability to obtain future financing.

The COVID-19 pandemic, including containment and mitigation measures, has impacted our business and operations, and could have a material adverse impact on our financial condition and results of operations in the future, including for an extended period of time.

We may not be able to manage our business effectively if we lose any of our current management team or if we are unable to attract, motivate and retain key personnel.

We may not be able to attract, motivate or retain qualified management and scientific, clinical, operations and commercial personnel due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses, particularly in the greater-Boston area.

other businesses, particularly in the greater-Boston area.

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 Mark Mallon, our chief executive officer;

Gina Consylman, our senior vice president, chief financial officer, and treasurer;

McCourt, our president;

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

On February 4, 2021, Mr.

Mallon notified us that he is resigning his position as chief executive officer and a member of our company’s board of directors, in each case effective March 12, 2021.

Effective upon Mr.

Mallon’s departure, Mr.

McCourt will serve as our interim chief executive officer while the Board conducts a candidate search for Mr.

Mallon’s permanent successor.

This and any additional transitions in our senior management team or other key employees, or the unavailability of any such persons for any reason (including due to the COVID-19 pandemic), 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.

Further, if we are unable to attract a qualified candidate to become our permanent chief executive officer in a timely manner, our business and prospects may be adversely affected.

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

McCourt, our chief executive officer;

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

Jason Rickard, our senior vice president, chief operating officer;

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

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.

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Any such interruptions, losses or breaches would substantially impair our ability to operate our business and would compromise our, or our partners, vendors and other third-party providers, networks and the information stored there could be accessed, publicly disclosed, lost or stolen.

Any such access, disclosure or other loss of information could result

in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, negatively impact our financial condition and damage our reputation, any of which could adversely affect our business.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, negatively impact our financial condition and damage our reputation, any of which could adversely affect our business.

While we maintain cyber liability insurance, this insurance may not be sufficient to cover the financial or other losses that may result from an interruption or breach of our (or our partners’, vendors’ and third-party providers’) systems.

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These provisions include the following:

● Our board of directors is currently divided into three classes serving staggered terms, such that not all members of the board are elected at one time.

This staggered board structure prevents stockholders from replacing the entire board at a single stockholders’ meeting.

At our 2019 annual meeting of stockholders, our stockholders approved an amendment to our certificate of incorporation to declassify our board of directors to allow our stockholders to vote on the election of the entire board of directors on an annual basis, rather than on a staggered basis.

This declassification is being phased in such that, once completed in 2022, stockholders will have the opportunity to replace the entire board at a single stockholders’ meeting and at each annual stockholders’ meeting thereafter.

● While our board of directors is currently divided into three classes serving staggered terms, at our 2019 annual meeting of stockholders, our stockholders approved an amendment to our certificate of incorporation to declassify our board of directors to allow our stockholders to vote on the election of the entire board of directors on an annual basis, rather than on a staggered basis.

This declassification has been phased in, and beginning at our 2022 annual meeting of stockholders, stockholders will have the opportunity to replace the entire board at a single stockholders’ meeting and at each annual stockholders’ meeting thereafter.

As required by Delaware law, the amendment to our certificate of incorporation also reflects that, once the board of directors is declassified, stockholders may remove directors with or without cause.

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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