What changed in this filing

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Item 1A. Risk Factors

2025-03-31 compared with 2024-02-16 · 316 added, 289 removed, 682 unchanged (47% of the section changed)

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● the size of the treatable patient population;

● the effectiveness of the sales, managed markets and marketing efforts by us and AbbVie, including our ability to adapt our commercial model and market strategy to the evolving landscape;

● the effectiveness of the sales, managed markets and marketing efforts , including the ability to adapt a commercial model and market strategy to the evolving landscape;

● the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors;

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

● 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;

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● 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 may be unpredictable from quarter-to-quarter.

We are subject to uncertainty relating to pricing and reimbursement policies in the U.S.

which, if not favorable for our products, could hinder or prevent our products’ commercial success.

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.

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.

Our and our partner’s ability to commercialize our products successfully depends in part on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors.

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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.

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 linaclotide 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.

Certain third-party payors also require prior authorization for, or even refuse to provide, reimbursement for our products, and others may do so in the future.

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.

Certain third-party payors also require prior authorization for, or have refused to provide, reimbursement for our products, and others may do so in the future.

Our business would be materially adversely affected if we and our partners are not able to receive approval for reimbursement of our products from third-party payors on a broad, timely or satisfactory basis;

if reimbursement is subject to overly broad or restrictive prior authorization requirements;

or if reimbursement is subject to overly broad or restrictive prior authorization requirements;

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 may materially harm our business and commercialization efforts.

We may 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.

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.

We have experienced and may experience additional pricing pressures in connection with the sale of our current and future products due to the healthcare reforms discussed below and above in Part I, Item 1,under the heading Pricing and Reimbursement , 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.

There has been significant scrutiny of pharmaceutical pricing and the resulting costs of pharmaceutical products that could cause significant operational and reimbursement changes for the pharmaceutical industry.

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

For example, and as discussed further below, the IRA, which could have the effect of reducing the prices we can charge and increasing the discounts we provide 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, or AMP.

We anticipate that our ability to increase prices on our products, including LINZESS, and our revenues, may be adversely affected by legislative and regulatory reforms such as the Medicaid drug rebate program revisions.

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.

We and our linaclotide partners are subject to uncertainty relating to pricing and reimbursement policies outside the U.S., as well as risks relating to the improper importation of linaclotide and sale of counterfeit versions of linaclotide.

If such policies are not favorable, or if linaclotide is improperly imported or is counterfeited, our business and financial results could be adversely affected.

In some foreign countries, particularly Canada, the countries of Europe, Japan and China, the pricing and payment of prescription pharmaceuticals is subject to governmental control.

In these countries, pricing negotiations with governmental authorities can take 6 to 12 months or longer after the receipt of regulatory approval and product launch.

Reimbursement sources are different in each country, and each country may include a combination of distinct potential payors, including private insurance and governmental payors.

Some countries may restrict the range of medicinal products for which their national health insurance systems provide reimbursement and control the prices of medicinal products for human use.

To obtain favorable reimbursement for the indications sought or pricing approval in some countries, we and our partners may be required to conduct a clinical trial that compares the cost and clinical effectiveness of linaclotide to other available therapies.

Further, several countries have implemented government measures to either freeze or reduce pricing of pharmaceutical products.

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.

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.

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.

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).

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

Our revenues may suffer if our partners are unable to successfully and timely conclude reimbursement, price approval or funding processes and market CONSTELLA in key member states of the E.U.

or LINZESS in Japan or China, or if coverage and reimbursement for either CONSTELLA or LINZESS is limited or reduced.

If our partners are not able to obtain or maintain coverage, pricing or reimbursement on acceptable terms or at all, or if such terms change in any countries in its territory, our partners may not be able to, or may decide not to, sell either CONSTELLA or LINZESS in such countries.

We and our partners also face the risk that linaclotide is imported or reimported into markets with relatively higher prices from markets with relatively lower prices, which would result in a decrease of sales and any payments we receive from the affected market.

Additionally, third parties may illegally produce, distribute and/or sell counterfeit or otherwise unfit or adulterated versions of linaclotide.

In either case, we and our partners may not be able to detect or, if detected, prevent or prohibit the sale of such products, which could result in dangerous health consequences for patients, loss of confidence in us, our partners and our products, and adverse regulatory or legal consequences.

Any of the foregoing or other consequences could adversely impact our reputation, financial results and business.

We cannot give any assurance that apraglutide will be successful in clinical trials, and if successful, will receive regulatory approval, which is necessary before it can be commercialized.

Upon the closing of the VectivBio Acquisition, we added apraglutide, VectivBio’s lead investigational asset, a next generation, long-acting GLP-2 analog in development for the treatment of patients with SBS-IF and aGvHD, to our pipeline.

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

We have not yet completed a pivotal trial for this product candidate.

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.

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.

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.

government and individual states have been aggressively pursuing healthcare reform designed to impact delivery of, and/or payment for, healthcare, which includes initiatives intended to reduce the cost of healthcare.

For example, in March 2010, the U.S.

Congress enacted the PPACA, as modified by the Health Care and Education Reconciliation Act, or the ACA, which, among other things, expanded healthcare coverage through Medicaid expansion and the implementation of the individual health insurance mandate;

included changes to the coverage and reimbursement of drug products under government healthcare programs;

imposed an annual fee on manufacturers of branded drugs;

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.

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 ($2,000 in 2025) 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.

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).

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 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.

On June 6, 2023, Merck & Co.

filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.

Subsequently, a number of other parties, including the U.S.

Chamber of Commerce, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.

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.

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

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

For example, with respect to the ACA, tax reform legislation was enacted that eliminated the tax penalty established for individuals who do not maintain mandated health insurance coverage beginning in 2019 and, in 2021, the U.S.

Supreme Court dismissed the latest judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

As another example, revisions to regulations under 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.

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.

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.

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.

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.

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.

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To obtain regulatory approvals for apraglutide, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the U.S.

FDA, EMA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.

However, we cannot be certain that apraglutide will be successful in clinical trials.

Further, results from clinical trials can be interpreted in different ways, and apraglutide may not receive regulatory approval even if we believe it is successful in clinical trials.

FDA, EMA or comparable foreign regulatory authorities, that such product candidate is safe and effective for its intended uses.

We may be required by the U.S.

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.

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

and in other foreign jurisdictions are lengthy, time consuming and inherently unpredictable.

and in other foreign jurisdictions are onerous, lengthy, time consuming, expensive and inherently unpredictable.

If we are ultimately unable to obtain regulatory approval for apraglutide or our other product candidates, our business will be harmed.

The time required to obtain regulatory approval from the U.S.

FDA, EMA and other comparable regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors.

The time required to complete drug development and to obtain regulatory approval from the U.S.

FDA, EMA and other comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors.

In addition, regulatory approval policies, regulations, or the type and amount of clinical data necessary to gain regulatory approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the regulatory approval of or may result in the decision not to approve apraglutide or other product candidates.

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Even if we believe the nonclinical or clinical data for our product candidates are sufficient to support approval, such data may not be considered sufficient to support approval by the U.S.

FDA, EMA and other comparable regulatory authorities.

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.

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

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

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

FDA, EMA or other 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 trials;

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.

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:

● 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 a NDA, MMA, or other submission or to obtain regulatory approval in the U.S., Europe or elsewhere;

● 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;

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

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FDA, EMA or other comparable foreign regulatory authorities that a product candidate’s risk-to-benefit ratio for its proposed indications is acceptable;

FDA, EMA or the applicable foreign regulatory authority may disagree regarding the formulation, labeling and/or the specifications of a product candidate;

FDA, EMA or other comparable foreign regulatory authorities may fail to approve the

manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

FDA, EMA or other comparable foreign regulatory authorities may disagree regarding the formulation, labeling and/or the specifications of a product candidate;

FDA, EMA or other comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

● the regulatory approval policies or regulations of the U.S.

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and other jurisdictions may significantly change in a manner rendering our clinical data insufficient for approval.

In addition, apraglutide may be also regulated as a drug and device combination product by the U.S.

In addition, apraglutide may also be regulated as a drug and device combination product by the U.S.

FDA, EMA and comparable foreign regulatory authorities.

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FDA, EMA or comparable regulatory authorities may disagree and require that we obtain a separate marketing authorization or certification for the device component, which could further delay or prevent regulatory approval of apraglutide.

This lengthy regulatory approval process, as well as the unpredictability of the results of clinical trials, may result in our failure to obtain regulatory approval to potentially market apraglutide or our other product candidates, which would significantly harm our business, results of operations, 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 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.

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

● obtaining regulatory authorization to commence a clinical trial;

● reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● manufacturing sufficient quantities of a product candidate for use in clinical trials;

● obtaining institutional review board or ethics committee approval to conduct a clinical trial at a prospective site;

● recruiting and enrolling patients to participate in clinical trials for a variety of reasons, including competition from other clinical trial programs for the treatment of similar conditions;

● maintaining patients who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack of efficacy or personal issues, or who are lost to further follow-up.

Additionally, changes in regulatory requirements and guidance may occur, and we may need or otherwise determine to amend clinical trial protocols to reflect these changes.

Each protocol amendment would require institutional review board or ethics committee 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.

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.

This lengthy drug development and regulatory approval process, as well as the unpredictability of the results of clinical trials, may result in our failure to obtain regulatory approval to potentially market apraglutide or our other product candidates, which would significantly harm our business, results of operations, and prospects.

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 through internal or external opportunities.

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 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.

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In June 2023, the U.S.

FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC.

FDA approved LINZESS, and in September 2024, Health Canada approved CONSTELLA, as once-daily treatments for pediatric patients ages 6-17 years-old with FC, in the U.S.

and Canada, respectively.

Additional clinical pediatric programs in IBS-C and 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 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, such as apraglutide, CNP-104, IW-3300, and any other assets that we may acquire or license from third parties.

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 conducting a Phase III clinical trial, STARS, to assess the safety and efficacy of apraglutide in adult patients with SBS-IF, and expect to report topline results in March 2024.

In October 2023, we presented positive final data from the STARS Nutrition Phase II study of apraglutide in patients with SBS-IF and colon-in-continuity.

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.

We are also conducting a Phase II exploratory study, STARGAZE, to evaluate apraglutide in patients with steroid-refractory gastrointestinal aGvHD, and expect data in the first quarter of 2024.

Through the COUR Collaboration Agreement, we and COUR are developing CNP-104 for the treatment of PBC.

COUR is currently conducting a clinical study to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with topline data expected in the third quarter of 2024.

We are also advancing IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, such as IC/BPS, and endometriosis.

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.

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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, apraglutide, and our other 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.

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.

We have ongoing or planned nonclinical studies and clinical trials for linaclotide and apraglutide.

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

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

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.

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.

We cannot be certain that apraglutide or our other product candidates will be successful in clinical trials.

We cannot be certain that linaclotide or apraglutide will be successful in ongoing, planned or future clinical trials.

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

FDA, EMA and other applicable regulatory authorities, which could delay, limit or prevent regulatory approval.

FDA, EMA or other regulatory authorities also may require additional clinical trials, which may be costly or delay, limit, prevent or otherwise impact regulatory submission or approval.

FDA, EMA or other regulatory authorities may also require additional clinical trials, which may be costly or delay, limit, prevent or otherwise impact regulatory submission or approval.

Satisfaction of U.S.

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We cannot give any assurance that apraglutide or our other product candidates will receive regulatory approval.

Even if we do receive such regulatory approval, we may be unable to successfully commercialize apraglutide or our other product candidates in any approved

indications or develop such product candidates for the treatment of additional indications, which would materially adversely impact our business and prospects.

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.