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Item 1A. Risk Factors

2024-02-22 compared with 2023-02-23 · 144 added, 219 removed, 608 unchanged (37% of the section changed)

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Risks Related to Our Portfolio of Commercial Products

Our ability to continue to grow PYLARIFY as a commercial product is dependent on (A) the ability of PMFs to manufacture PYLARIFY to meet product demand, (B) our ability to sell PYLARIFY to customers, (C) our ability to obtain and maintain adequate coding, coverage and payment for PYLARIFY, (D) our ability to maintain PYLARIFY as the leading PSMA PET imaging agent in a competitive environment in which other PSMA PET imaging agents have been approved and additional ones are in development, and (E) our ability to obtain FDA approval for additional PMFs to manufacture PYLARIFY.

The commercial launch of PYLARIFY was complex.

To manufacture PYLARIFY, we assembled and qualified a nationwide network of PMFs with radioisotope-producing cyclotrons that make F 18, which has a 110-minute half-life, so PYLARIFY is

manufactured and distributed rapidly to end-users.

Our ability to continue to grow PYLARIFY as a commercial product is dependent on (A) the ability of PMFs to manufacture PYLARIFY to meet product demand, (B) our ability to promote PYLARIFY to customers, (C) our ability to obtain and maintain adequate coding, coverage and payment for PYLARIFY, (D) our ability to maintain PYLARIFY as the leading PSMA PET imaging agent, including after the potential expiration of TPT Status at the end of 2024 and (E) our ability to clinically and commercially differentiate PYLARIFY from other products.

To manufacture PYLARIFY, we assembled and qualified a nationwide network of PMFs with radioisotope-producing cyclotrons that make F 18, which has a 110-minute half-life, so PYLARIFY is manufactured and distributed rapidly to end-users.

Because each of the PMFs manufacturing these products is deemed by the FDA to be a separate manufacturing site, each has to be separately approved by the FDA.

Although PYLARIFY is broadly available across the U.S., we continue to seek qualification for additional PMFs in 2024 and can give no assurance that the FDA will continue to approve PMFs in accordance with our planned roll-out schedule.

If FDA approval of manufacturing sites is delayed or withdrawn, our future business, results of operations, financial condition and cash flows could be adversely affected.

If FDA approval of manufacturing sites is delayed or withdrawn, our business, results of operations, financial condition and cash flows could be adversely affected.

PYLARIFY is sold in the U.S.

to hospitals, independent imaging centers and government facilities and sales are generated through a PYLARIFY direct sales team as well as a sales team at some of our PMF partners.

to hospitals, independent imaging centers and government facilities and sales are generated through an internal PYLARIFY sales team, as well as a sales team at some of our PMF partners.

We generally do not use group purchasing arrangements to sell PYLARIFY and require each customer to enter into a contract directly with us or our PMFs.

Our ability to continue to successfully grow PYLARIFY depends, in part, on our ability to continue to enter into arrangements directly with the hospitals, independent imaging centers and government facilities that we serve.

Any delay or inability to enter into these arrangements could have an adverse impact on our future business, results of operations, financial condition and cash flows.

Any delay or inability to enter into these arrangements could have an adverse impact on our business, results of operations, financial condition and cash flows.

Obtaining adequate coding, coverage and payment for PYLARIFY is critical, including not only coverage from Medicare, Medicaid and other government payors, as well as private payors, but also appropriate payment levels to adequately cover our customers’ costs of using PYLARIFY in PET/CT imaging procedures.

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TPT Status for PYLARIFY is expected to expire on December 31, 2024.

After TPT Status expires, under current Medicare rules, PYLARIFY, similar to other diagnostic radiopharmaceuticals, would not be separately reimbursed in the hospital outpatient setting but rather would be bundled into the facility payment a hospital receives for a PET/CT imaging procedure, and the facility payment may not always adequately cover the total cost of the procedure.

After TPT Status expires, under current Medicare rules, PYLARIFY would not be separately reimbursed in the hospital outpatient setting but rather would be bundled into the facility payment a hospital receives for a PET/CT imaging procedure, and the facility payment may not always adequately cover the total cost of the procedure.

We can give no assurance that any CMS reimbursement in the hospital outpatient setting that follows the expiration of TPT Status will be adequate to cover the cost of a PYLARIFY PET/CT imaging procedure.

In addition, if other government payors or private payors do not provide adequate reimbursement for the use of PYLARIFY, our future business, results of operations, financial condition and cash flows could be adversely affected.

We plan to continue our advocacy efforts with CMS and private insurers so that PYLARIFY customers will have appropriate and adequate reimbursement following the expiration of pass-through status and we are also supporting trade associations in their efforts to have Congress pass the Facilitating Innovative Nuclear Diagnostics (FIND) Act, which would allow for separate payment for certain diagnostic radiopharmaceuticals, including PYLARIFY, similar to the way Medicare OPPS currently pays for other drugs, biologics, and therapeutic radiopharmaceuticals instead of under the current TPT structure of a separate payment that is limited to three years, however, we can give no assurances that we will be successful in those efforts.

The successful growth of PYLARIFY is also dependent on our ability to maintain PYLARIFY as the leading PSMA PET imaging agent in a competitive environment in which other PSMA PET imaging agents have been approved and additional ones are in development.

PYLARIFY currently competes with two commercially available Ga-68-based PSMA PET imaging agents from Telix Pharmaceuticals Limited and Novartis AG, as well as other non-PSMA PET imaging agents.

We also face potential competition from an F 18 PSMA PET imaging agent for which Bracco is currently seeking FDA approval, which we believe could be granted by the FDA in 2023.

To the extent we lose market share to existing or future competitors (including during any period of time in which our TPT Status has expired but TPT Status for a later-approved competitive product still exists), such loss of market share could have an adverse impact on our future business, results of operations, financial condition and cash flows.

Moreover, because we are still early in the commercialization of PYLARIFY, we can give no assurance as to how clinical practice may evolve or our ultimate market penetration or market share.

In addition, if other government payors or private payors do not provide adequate reimbursement for the use of PYLARIFY, our business, results of operations, financial condition and cash flows could be adversely affected.

We plan to continue our advocacy efforts with CMS and private insurers so that PYLARIFY customers will have appropriate and adequate reimbursement following the expiration of TPT Status and we are also supporting trade associations in their efforts to have Congress pass the Facilitating Innovative Nuclear Diagnostics (FIND) Act, which would allow for separate payment for certain diagnostic radiopharmaceuticals, including PYLARIFY, similar to the way Medicare OPPS currently pays for other drugs, biologics, and therapeutic radiopharmaceuticals instead of under the current TPT structure of a separate payment that is limited to three years, however, we can give no assurances that we will be successful in those efforts or that the availability of TPT Status for other diagnostic radiopharmaceuticals will not impact clinical decision making regarding which product to use, which could have an adverse effect on our business, results of operations, financial condition and cash flows.

The successful growth of PYLARIFY is also dependent on our ability to clinically and commercially differentiate PYLARIFY from other products on the market and to maintain PYLARIFY as the leading PSMA PET imaging agent in a competitive environment in which other PSMA PET imaging agents have been approved.

PYLARIFY currently competes with two commercially available Ga-68-based PSMA PET imaging agents from Telix Pharmaceuticals Limited and Novartis AG and an F 18 PSMA PET imaging agent from Blue Earth, as well as other non-PSMA PET imaging agents.

To the extent we lose market share to existing or future competitors (including during any period of time in which our TPT Status has expired but TPT Status for a later-approved competitive products still exists), such loss of market share could have an adverse impact on our business, results of operations, financial condition and cash flows.

Continued growth and revenue contribution from PYLARIFY will also depend on our ability to differentiate

PYLARIFY in light of the potential loss of TPT Status, including through flexible and dependable access to PYLARIFY nationally, a best in class customer experience and through long-term strategic contracts.

Our success in growing PYLARIFY also depends, in part, on our successfully establishing the use of PYLARIFY for approved indications and potentially for additional indications, including for patient selection for PSMA-targeted therapeutics.

For example, we believe the approval of PLUVICTO for the treatment of adult patients with PSMA-positive mCRPC who have already been treated with other anticancer treatments (androgen receptor pathway inhibition and taxane-based chemotherapy) created a new addressable market for the use of PSMA PET imaging in patient selection for PSMA-targeted therapy that increases the total addressable market in the U.S.

by an additional 30,000 new scans per year for patients with mCRPC.

However, the prescribing information for PLUVICTO specifies that a PSMA-11 based PSMA PET imaging agent be used for patient selection, and PYLARIFY is not a PSMA-11 based imaging agent.

In March 2022, we announced a strategic collaboration with Novartis to include PYLARIFY in prostate cancer trials with PLUVICTO.

While we note that FDA-approved labels for F 18 based and PSMA-11 based PSMA PET imaging agents have generally been treated as a class of drugs, including by the National Comprehensive Cancer Center in its guidelines and the Society for Nuclear Medicine and Molecular Imaging in its appropriate use criteria, we can give no assurances that the Novartis prostate cancer trials using PYLARIFY will be successful, that the PLUVICTO prescribing information will be expanded to incorporate F 18 based PSMA PET imaging agents like PYLARIFY, or how clinical practice may evolve.

To the extent we are unsuccessful in establishing the use of PYLARIFY for approved or new indications, such lack of success could have an adverse impact on our future business, results of operations, financial condition and cash flows.

In addition to the 30,000 new scans per year for patients with mCRPC, we believe the market potential for PSMA PET imaging agents in the U.S.

could also include up to 125,000 scans for patients with intermediate, unfavorable or high/very high risk of suspected metastases of prostate cancer and 195,000 scans for patients with suspected recurrence of prostate cancer.

However, we can give no assurance as to how clinical practice may continue to evolve or our ultimate market penetration.

The near-term growth of our business is also dependent on our ability to continue to grow the appropriate use of DEFINITY in suboptimal echocardiograms in the face of competition from other existing echocardiography agents and potential generic competitors.

While we note that FDA-approved labels for F 18-based and PSMA-11 based PSMA PET imaging agents have generally been treated as a class of drugs, including by the National Comprehensive Cancer Center in its guidelines and the Society for Nuclear Medicine and Molecular Imaging in its appropriate use criteria, we can give no assurances that PLUVICTO prescribing information will be expanded to incorporate F 18-based PSMA PET imaging agents like PYLARIFY, or how clinical practice may evolve.

To the extent we are unsuccessful in establishing the use of PYLARIFY for approved or new indications, such lack of success could have an adverse impact on our business, results of operations, financial condition and cash flows.

The growth of our business is also dependent on our ability to continue to grow the appropriate use of DEFINITY in suboptimal echocardiograms.

DEFINITY currently competes with ultrasound enhancing agents produced by GE Healthcare and Bracco Diagnostics, Inc.

(“Bracco”), as well as echocardiography without ultrasound enhancing agents and other non-echocardiography agents.

DEFINITY currently competes with ultrasound enhancing agents produced by GE Healthcare and Bracco, as well as echocardiography without ultrasound enhancing agents and other non-echocardiography agents.

We launched DEFINITY in 2001, and we continue to actively pursue additional patents in connection with DEFINITY and DEFINITY RT, both in the U.S.

and internationally.

for DEFINITY we have six Orange Book-listed method of use patents, one of which expires in 2035 and five of which expire in 2037, as well as additional manufacturing patents that are not Orange Book-listed expiring in 2023 and 2037.

for DEFINITY we have six Orange Book-listed method-of-use patents, one of which expires in 2035 and five of which expire in 2037, as well as additional manufacturing patents that are not Orange Book-listed expiring in 2037.

for DEFINITY RT, we have eight Orange Book-listed patents, including two composition of matter patents that expire in 2035.

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Patent and Trademark Office (“USPTO”) proceedings and appeals process.

In the event a 505(b)(2) applicant does not rely on studies related to the innovator product, the 30-month stay would not apply, but additional clinical studies may be required.

In the event a 505(b)(2) applicant does not rely on studies related to the innovator product, the 30-month stay would not apply, but additional clinical trials may be required.

We can give no assurance that we would have grounds to file a patent infringement suit, that we would obtain the full 30 month stay, that we would be successful on the merits asserting that an Applicant infringes our Orange Book-listed patent, or that we would be successful defending the validity of our Orange Book-listed patent in court or in a USPTO adversarial proceeding.

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As part of our microbubble franchise strategy, (i) we have developed and received FDA approval for DEFINITY RT, a modified formulation of DEFINITY, (ii) we look for other opportunities to expand our microbubble franchise, including new applications beyond echocardiography and ultrasound enhancing agent imaging generally such as our strategic arrangements with Cerevast, CarThera, Insightec, AHN and SonoThera, and (iii) we have constructed a specialized in-house manufacturing facility at our North Billerica campus for purposes of producing DEFINITY and, potentially, other sterile vial products.

If we were to receive such a Notice and to challenge the Applicant, patent litigation is complex and can be protracted and expensive, which could also have a negative effect on our business, results of operations and financial condition.

As part of our microbubble franchise strategy, (i) we have developed and received FDA approval for DEFINITY RT, a modified formulation of DEFINITY, (ii) we look for other opportunities to expand our microbubble franchise, including new applications beyond echocardiography and ultrasound enhancing agent imaging generally such as our strategic arrangements with Cerevast, CarThera, Insightec, AHN and SonoThera, and (iii) we have constructed a specialized in-house manufacturing facility at our North Billerica campus for purposes of producing the formulation of DEFINITY that requires refrigerated storage and, potentially, other sterile vial products.

On February 22, 2022, we received FDA approval of our sNDA, authorizing commercial manufacturing of DEFINITY at our new facility.

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Although we have qualified and continue to qualify additional PMFs, we can give no assurance that the FDA will continue to approve PMFs in accordance with our planned roll-out schedule or that the PMFs will not experience issues with their ability to manufacture and deliver PYLARIFY to our customers.

If FDA approval of manufacturing sites is delayed or withdrawn or our PMF sites experience manufacturing issues, our future business, results of operations, financial condition and cash flows could be adversely affected.

If FDA approval of manufacturing sites is delayed or withdrawn or our PMF sites experience manufacturing issues, our business, results of operations, financial condition and cash flows could be adversely affected.

We rely on JHS as a substantial supplier of DEFINITY, as well as our sole source manufacturer of NEUROLITE, CARDIOLITE and evacuation vials.

We rely on SBL as our sole source manufacturer of DEFINITY RT.

We rely on various other sole source suppliers for some of our key components and raw materials.

Based on our current estimates, we believe that we will have sufficient supply of DEFINITY, NEUROLITE, CARDIOLITE and evacuation vials from JHS (together with DEFINITY from our in-house manufacturing facility), and sufficient supply of saline from our sole manufacturer, to meet expected demand.

However, we can give no assurances that JHS or our other manufacturing partner will be able to manufacture and distribute our products in a high quality and timely manner and in sufficient quantities to allow us to avoid product stock-outs and shortfalls.

In addition to the products described above, for reasons of quality assurance or cost-effectiveness, we purchase certain components and raw materials from sole suppliers (including, for example, the specially designed chemistry synthesis boxes and consumables used in the manufacturing of PYLARIFY, the lipid blend material and perflutren gas used in the manufacturing of DEFINITY and the lead casing for our TechneLite generators).

We rely on Samsung Biologics Co., Ltd.

(“SBL”) as our sole source manufacturer of DEFINITY RT.

In addition, for reasons of quality assurance or cost-effectiveness, we purchase certain components and raw materials from sole suppliers (including, for example, the specially designed chemistry synthesis boxes and consumables used in the manufacturing of PYLARIFY, the lipid blend material and perflutren gas used in the manufacturing of DEFINITY and the lead casing for our TechneLite generators).

Because we do not control the actual production of many of the products we sell and many of the raw materials and components that make up the products we sell, we may be subject to delays caused by interruption in production based on events and conditions outside of our control.

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In addition to our existing manufacturing relationships, we are also pursuing new manufacturing relationships to establish and secure additional or alternative suppliers for our commercial products.

We also constructed a specialized in-house manufacturing facility at our North Billerica, Massachusetts campus for purposes of producing DEFINITY and, potentially, other sterile vial products.

We also constructed a specialized in-house manufacturing facility at our North Billerica, Massachusetts campus for purposes of producing the formulation of DEFINITY that requires refrigerated storage and, potentially, other sterile vial products.

On February 22, 2022, we received FDA approval of our sNDA, authorizing commercial manufacturing of DEFINITY at our new facility.

This project should deliver supply chain redundancy for our current portfolio and the opportunity for margin expansion.

This project provides a certain amount of supply chain redundancy for DEFINITY (other than DEFINITY RT, which is supplied solely by SBL).

However, we cannot assure you that these activities or any of our additional supply activities will be successful or that we will be able to avoid or mitigate interim supply shortages before new sources of product are fully functional and qualified.

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A prolonged disruption of service from one of our three Mo-99 processing sites or one of their main Mo-99-producing reactors could have a substantial negative effect on our business, results of operations, financial condition and cash flows.

To augment our current supply of Mo-99, we entered into a strategic arrangement with SHINE for the future supply of Mo-99.

Under the terms of the supply agreement, entered into in November 2014, SHINE will provide Mo-99 produced using its proprietary LEU-solution technology for use in our TechneLite generators once SHINE’s facility becomes operational and receives all necessary regulatory approvals, which SHINE now estimates will occur in 2024.

The term of this arrangement provides for three years of supply of Mo-99.

However, we cannot assure you that SHINE will be able to produce commercial quantities of Mo-99 for our business, or that SHINE, together with our current suppliers, will be able to deliver a sufficient quantity of Mo-99 to meet our needs.

U.S., Canadian and international governments have encouraged the development of a number of alternative Mo-99 production projects with existing reactors and technologies as well as new technologies.

However, we cannot say when, or if, the Mo-99 produced from these projects will become available.

As a result, there is a limited amount of Mo-99 available which could limit the quantity of TechneLite that we could manufacture, sell and distribute, resulting in a further substantial negative effect on our business, results of operations, financial condition and cash flows.

As a result, there is a limited amount of Mo-99 available which could limit the quantity of TechneLite that we could manufacture, sell and distribute, resulting in a substantial negative effect on our business, results of operations, financial condition and cash flows.

Most of the global suppliers of Mo-99 rely on Framatone-CERCA in France to fabricate uranium targets and in some cases fuel for research reactors from which Mo-99 is produced.

Absent a new supplier, a supply disruption relating to uranium targets or fuel could have a substantial negative effect on our business, results of operations, financial condition and cash flows.

We can give no assurance that Curium will be successful with its commercialization of piflufolastat F 18 in Europe.

We have licensed exclusive rights to Curium to develop and commercialize piflufolastat F 18 in Europe.

Under the terms of the collaboration, Curium is responsible for the development, regulatory approvals and commercialization of piflufolastat F 18 in Europe, and we are entitled to double-digit royalties on net sales of piflufolastat F 18.

In July 2023, Curium announced that the EMA approved piflufolastat F 18 in Europe, under the name PYLCLARI.

We cannot assure that Curium will be successful in commercializing it in Europe.

Any failure or significant delay in Curium’s ability to successfully launch PYLCLARI in Europe may harm our business and delay or prevent us from being able to generate additional future royalty revenue from product sales.

We may not be able to successfully launch PYLARIFY AI as a commercial product.

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• a network or data security incident that allows unauthorized access to our network or data or our customers’ data.

Although we believe that PYLARIFY AI when used with PYLARIFY will provide us an important competitive advantage in a highly competitive PET PSMA diagnostic imaging agent market, we can give no assurances to that effect.

We rely on Bausch to develop and commercialize RELISTOR, exposing us to significant risks.

We rely on Bausch to pursue and complete further development and obtain regulatory approvals for RELISTOR worldwide and to effectively commercialize the product and manage pricing, sales and marketing practices and inventory levels in the distribution channel.

The revenue derived from royalty and milestone payments from our RELISTOR collaboration with Bausch can fluctuate significantly from period to period, and our past revenue is therefore not necessarily indicative of our future revenue.

We are and will be dependent upon Bausch and any other business partners with which we may collaborate in the future to perform and fund development, including clinical testing of RELISTOR, making related regulatory filings and manufacturing and marketing products,

including for new indications and in new formulations, in their respective territories.

Revenue from the sale of RELISTOR depends entirely upon the efforts of Bausch and its sublicensees, which have significant discretion in determining the efforts and resources they apply to sales of RELISTOR.

Bausch may not be effective in obtaining approvals for new indications or formulations, marketing existing or future products or arranging for necessary sublicense or distribution relationships.

Our business relationships with Bausch and other partners may not be scientifically, clinically or commercially successful.

For example, Bausch has a variety of marketed products and its own corporate objectives, which may not be consistent with our best interests, and may change its strategic focus or pursue alternative technologies in a manner that results in reduced or delayed revenue to us.

Bausch may also have commercial and financial interests that are not fully aligned with ours in a given territory or territories, which may make it more difficult for us to fully realize the value of RELISTOR.

We may have future disagreements with Bausch, which has significantly greater financial and managerial resources which it could draw upon in the event of a dispute.

Such disagreements could lead to lengthy and expensive litigation or other dispute-resolution proceedings as well as extensive financial and operational consequences to us and have an adverse effect on our business, results of operations and financial condition.

In addition, independent actions may be taken by Bausch concerning product development, marketing strategies, manufacturing and supply issues, and rights relating to intellectual property.

We are also dependent on Bausch for compliance with regulatory requirements as they apply to RELISTOR.

The RELISTOR commercialization program continues to be subject to risk.

Future developments in the commercialization of RELISTOR may result in Bausch taking independent actions concerning product development, marketing strategies or other matters, including termination of its efforts to develop and commercialize the drug.

Under our license agreement with Bausch, Bausch is responsible for obtaining supplies of RELISTOR, including contracting with contract manufacturing organizations (“CMOs”) for supply of RELISTOR active pharmaceutical ingredient and subcutaneous and oral finished drug product.

These arrangements may not be on terms that are advantageous and will subject us to risks that the counterparties may not perform optimally in terms of quality or reliability.

Bausch’s ability to optimally commercialize either oral or subcutaneous RELISTOR in a given jurisdiction may be impacted by applicable labeling and other regulatory requirements.

If clinical trials indicate, or regulatory bodies are concerned about, actual or possible serious problems with the safety or efficacy of RELISTOR, Bausch may stop or significantly slow further development or commercialization of RELISTOR.

In such an event, we could be faced with either further developing and commercializing the drug on our own or with one or more substitute collaborators, either of which paths would subject us to the development, commercialization, collaboration and/or financing risks.

There has been growing public concern regarding the use of opioid drugs.

Any efforts by the FDA or other governmental authorities to restrict or limit the use of opioids may negatively impact the market for RELISTOR.

In addition, there is a substantial risk that the revenue targets for receiving additional RELISTOR milestone payments will not be met.

As a result, there is no assurance that we will realize the potential revenue represented by future RELISTOR milestone payments.

Any such significant action adverse to the further development and commercialization of RELISTOR could have an adverse impact on our business.

Our AZEDRA commercialization program is subject to significant risk.

Progenics received FDA approval for AZEDRA in July 2018.

Since then, the AZEDRA commercial program has faced numerous challenges, including, among other things:

• decisions by treating physicians and patients to defer treatment and by hospital facilities to limit access for our representatives until COVID-19 infection rates subside;

• challenges in securing I-131 supply and manufacturing patient-ready doses of AZEDRA;

• a small Orphan Drug patient population;

• reluctance by some potential hospital customers to invest in the necessary facility build-out to accommodate the administration of a highly radioactive therapeutic agent (including, among other things, the construction of lead-lined rooms to accommodate inpatients following AZEDRA’s administration);

• the high cost of the drug and reimbursement.

Because of these issues, we can give no assurance that AZEDRA will become a commercial success.

After increased experience administering AZEDRA, clinicians may conclude that the complexity of administration and/or safety concerns with using a highly radioactive therapeutic agent may not justify AZEDRA’s perceived clinical benefits.

AZEDRA’s eligibility for new technology add-on payments (NTAP) under the Medicare Hospital Inpatient Prospective Payment System (IPPS) expired September 30, 2022.

pass-through payment levels impact market acceptance for AZEDRA, the drug may not generate enough revenue to make it economically viable.

In addition, the market may react negatively to the high cost of AZEDRA, which could result in negative publicity and potentially reputational harm to us.

Further, to the extent new Federal restrictions relating to drug pricing are implemented and apply to AZEDRA, the additional pricing pressure could further limit AZEDRA’s economic viability.

If AZEDRA is determined to be challenging to administer, not economically viable or we are unable to successfully commercialize it, our business, results of operations, financial condition and cash flows could be adversely affected.

We may not be able to maintain Orphan Drug exclusivity for AZEDRA and, even if we do, that exclusivity may not prevent the FDA from approving competing products.

Under the Orphan Drug Act, the FDA may designate a product as an Orphan Drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.

AZEDRA currently has the Orphan Drug designation in the United States.

In the United States, Orphan Drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, tax advantages and user-fee waivers.

In addition, if a product that has Orphan Drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to Orphan Drug exclusivity, which means the FDA may not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity.

We may not be able to maintain Orphan Drug exclusivity for AZEDRA.

In addition, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective or if we are unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

Even after an Orphan Drug is approved, the FDA can subsequently approve the same drug with the same active moiety for the same condition if the FDA concludes that the later drug is safer, more effective or makes a major contribution to patient care.

A loss of the Orphan Drug exclusivity for AZEDRA may have an adverse impact on our ability to adequately commercialize AZEDRA.

Our just-in-time manufacturing of radiopharmaceutical products relies on the reliability of our equipment and processes and the timely receipt of radioactive raw materials and the timely shipment of finished goods, and any disruption of our supply or distribution networks could have a negative effect on our business.

At the facility on our North Billerica, Massachusetts campus, we manufacture TechneLite on a highly automated production line.

At the facility on our Somerset, New Jersey site, we manufacture AZEDRA on a hot cell line.

Our just-in-time manufacturing of radiopharmaceutical products relies on the reliability of our equipment and processes, the timely receipt of radioactive raw materials and the timely shipment of finished goods, and any disruption of our supply or distribution networks could have a negative effect on our business.

At the facility on our North Billerica, Massachusetts campus, we manufacture TechneLite on an automated production line.

As with all manufacturing facilities, equipment and infrastructure age and become subject to increasing maintenance and repair.

If we experience an event, including a labor dispute, natural disaster, fire, power outage, machinery breakdown, security problem, failure to meet regulatory requirements, product quality issue, technology transfer issue or other issue, we may be unable to manufacture the relevant products at previous levels or on the forecasted schedule, if at all.

Due to the stringent regulations and requirements of the governing regulatory authorities regarding the manufacture of our products, we may not be able to quickly restart manufacturing at our facilities or establish additional or replacement sources for certain products, components or materials.

In addition, because a number of our radiopharmaceutical products, including PYLARIFY, our TechneLite generators, and AZEDRA, rely on radioisotopes with limited half-lives, we or our partners must manufacture, finish and distribute these products on a just-in-time basis, because the underlying radioisotope is in a constant state of decay.

Due to the stringent regulations and requirements of the

governing regulatory authorities regarding the manufacture of our products, we may not be able to quickly restart manufacturing at our facilities or establish additional or replacement sources for certain products, components or materials.

In addition, because a number of our radiopharmaceutical products, including PYLARIFY and our TechneLite generators rely on radioisotopes with limited half-lives, we or our partners must manufacture, finish and distribute these products on a just-in-time basis, because the underlying radioisotope is in a constant state of decay.

For example, the radioisotope used in PYLARIFY is F 18, which has a 110 minute half-life, requiring that this product be manufactured and distributed within the same day to end-users.

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We also continue to experience significant pricing pressures from our competitors, large customers and group purchasing organizations, and any significant, additional pricing pressures could lead to a reduction in revenue which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

In Canada, we maintain our own direct sales force to generate sales of DEFINITY.

Outside of the U.S.

and Canada, we have no sales force and, consequently, rely on third party distributors, either on a country-by-country basis or on a multi-country, regional basis, to market, sell and distribute our products.

Outside of the U.S., we have no sales force and, consequently, rely on third party distributors, either on a country-by-country basis or on a multi-country, regional basis, to market, sell and distribute our products.

In certain circumstances, distributors may also sell competing products to our own or products for competing diagnostic modalities and may have incentives to shift sales towards those competing products.

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Our principal competitors for our current commercial products and leading clinical development candidates include large, global companies that are more diversified than we are and that have substantial financial, manufacturing, sales and marketing, distribution and other resources:

• For PYLARIFY, our competitors currently include approved imaging agents from Telix Pharmaceuticals Limited and Novartis AG, and may in the future include an F 18 PSMA PET imaging agent that Bracco has in late stage clinical development, which we believe could be approved by the FDA for commercialization later in 2023.

In addition, the University of California, San Francisco and the University of California, Los Angeles have approved NDAs for a Ga-68 PSMA-11 injection for PSMA PET imaging, which we believe will primarily be used within their hospital systems.

• For PYLARIFY, our competitors currently include approved imaging agents from Telix Pharmaceuticals Limited, Novartis AG, and Blue Earth, a subsidiary of Bracco.

• For DEFINITY, our competitors currently include GE Healthcare and Bracco.

• For a number of our radiopharmaceutical commercial products, our competitors currently include Curium, GE Healthcare, Bracco and Jubilant Life Sciences, an affiliate of JHS and Jubilant Radiopharma, as well as other competitors, including NorthStar Medical Radioisotopes, LLC and potentially BWXT Medical Ltd.

• For RELISTOR, our principal competitors include RedHill Biopharma Inc., in collaboration with AstraZeneca PLC;

Cubist Pharmaceuticals, a subsidiary of Merck & Co., Inc.;

Mallinckrodt plc, in collaboration with Takeda Pharmaceutical Company Limited;

and BioDelivery Sciences International, Inc.;

together with other prescription, as well as over-the-counter, laxatives used as first line therapy for OIC.

• For AZEDRA, there are currently no FDA approved anticancer treatments in the U.S.

for malignant, recurrent, and/or unresectable pheochromocytoma and paraganglioma, our competitors include developers of anticancer treatments currently used, but not specifically FDA approved for treatment of malignant, recurrent, and/or unresectable pheochromocytoma and paraganglioma.

• For PNT2002 and 1095, our principal competitors in the field of radiopharmaceutical therapeutics for mCRPC may include Novartis AG;

• For PNT2002 and 1095, our principal competitors may include Novartis AG;

Telix Pharmaceuticals Limited;

Curium and Bayer HealthCare Pharmaceuticals Inc., each of which have product candidates in development.

and Curium, each of which has commercialized products or product candidates in advanced clinical stage of development.

• For PNT2003, our principal competitor may include Novartis AG;

• For flurpiridaz, our principal competitors may include rubidium generators from Bracco and Jubilant Radiopharma.

We cannot anticipate the actions of our current or future competitors in the same or competing diagnostic modalities, such as significant price reductions on products that are comparable to our own, development of new products that are more cost-effective or have superior performance than our current products or the introduction of generic versions after our proprietary products lose their patent protection.

ITM Radiopharma;

and RayzeBio (under agreement to be acquired by Bristoll Meyers Squibb), each of which has commercialized products or product candidates in advanced clinical stage of development.

• For MK-6240, our principal competitors may include Eli Lilly and Company and Life Molecular Imaging, each of which has commercialized products or product candidates in advanced clinical stage of development.

• For LNTH-1363S, our principal competitors may include Sofie Bioscience;

GE Healthcare;

and Novartis AG, each of which has product candidates in clinical stage of development.

We cannot anticipate the actions of our current or future competitors in the same or competing modalities, such as significant price reductions on products that are competitive with our own, development of new products that are more cost-effective or have superior performance than our current products or potential future products or the introduction of generic versions after our proprietary products lose their patent protection.

In addition, distributors of our products could attempt to shift end-users to competing diagnostic modalities and products, or bundle the sale of a portfolio of products, in either case to the detriment of our specific products.

Our current or future products could be rendered obsolete or uneconomical as a result of these activities.

Further, the radiopharmaceutical industry continues to evolve strategically, with several market participants either recently sold or for sale.

Further, the radiopharmaceutical industry continues to evolve strategically, with several market participants recently sold.

In addition, the supply-demand dynamics of the industry are complex because of large market positions of some participants, legacy businesses, government subsidies (in particular, relating to the manufacture of radioisotopes), and group purchasing arrangements.

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In April 2021, after reviewing certain adverse events that occurred in patients with a prior history of allergic reactions to polyethylene glycol (“PEG”), an inactive excipient in both DEFINITY and Lumason, the FDA and the marketing authorization holders of these products agreed to an additional contraindication for use of these products, including advising clinicians to assess patients for prior PEG hypersensitivity before administering these products.

In June 2023, after reviewing adverse events that occurred in patients with history of sickle cell disease, we agreed with the FDA to amend the label to advise clinicians that if a patient with sickle cell disease experiences acute pain episodes following DEFINITY administration, use of DEFINITY in that patient should be discontinued.

If additional safety issues arise (not only with DEFINITY but also potentially with Optison and Lumason), this may result in unfavorable changes in labeling or result in restrictions on the approval of our product, including removal of the product from the market.

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In addition, demand for new products may be limited unless we obtain favorable reimbursement (including coding, coverage and payment) from governmental and private third party payors at the time of the product’s introduction, which will depend, in part, on our ability to demonstrate that a new agent has a positive impact on clinical outcomes.

Third party payors continually review their coverage policies for existing and new products and procedures and can deny coverage for procedures that include the use of our products or revise payment policies such that payments do not adequately cover the cost of our products.

Third-party payors continually review their coverage policies for existing and new products and procedures and can deny coverage for products or procedures that include the use of our products or revise payment policies such that payments do not adequately cover the cost of our products.

Even if third-party payors make coverage and reimbursement available, that reimbursement may not be adequate or these payors’ reimbursement policies may have an adverse effect on our business, results of operations, financial condition and cash flows.

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TPT Status for PYLARIFY is expected to expire December 31, 2024.

The Company can give no assurance that any CMS reimbursement in the hospital outpatient setting that follows the expiration of TPT Status will be adequate to cover a PYLARIFY PET/CT imaging procedure.

In 2023 rulemaking for the 2024 payment calendar year, CMS recognized the challenges of patient access to diagnostic radiopharmaceuticals and requested feedback on various payment alternatives that could provide separate reimbursement for these items, but the agency did not adopt any of these proposals in the final rule, while stating that it would continue to evaluate this issue in subsequent rulemaking.

We can give no assurance that any CMS reimbursement in the hospital outpatient setting that follows the expiration of TPT Status will be adequate to cover a PYLARIFY PET/CT imaging procedure or that the availability of TPT Status for other diagnostic radiopharmaceuticals will not impact clinical decision making regarding which product to use, which could have an adverse effect on our business, results of operations, financial condition and cash flows.

Over the past several years, Medicare has implemented numerous changes to payment policies for imaging procedures in both the hospital setting and non-hospital settings (which include physician offices and freestanding imaging facilities).

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Within the hospital outpatient setting, CMS payment policy is such that the use of many of our products are not separately payable by Medicare, although certain new drug products are eligible for separate (incremental) payment for the first three years after approval.

Although Medicare generally does not provide separate payment to hospitals for the use of diagnostic radiopharmaceuticals administered in an outpatient setting, since 2013, CMS has had a policy to make a nominal additional payment ($10) to hospitals that utilize products with non-HEU, meaning the product is 95% derived from non-HEU sources.

This payment policy continues in 2023.

Although some of our TechneLite generators are manufactured using non-HEU, not all of our TechneLite generators currently meet CMS’s definition of non-HEU, and therefore this payment is not available for doses produced by the latter category of TechneLite generators used by our customers.

Changes to the Medicare hospital outpatient prospective payment system payment rates, including reductions implemented for certain hospital outpatient sites, could influence the decisions by hospital outpatient physicians to perform procedures that involve our products.

We also believe that all these changes and their resulting pressures may incrementally reduce the overall number of diagnostic medical imaging procedures performed.

We also believe that all of these changes and their resulting pressures may incrementally reduce the overall number of diagnostic medical imaging procedures performed.

These changes overall could slow the acceptance and introduction of next-generation imaging equipment into the marketplace, which, in turn, could adversely impact the future market adoption of certain of our imaging agents already in the market or currently in development.

We expect that there will continue to be proposals to reduce or limit Medicare and Medicaid payment for diagnostic services.

We also expect increased regulation and oversight of advanced diagnostic testing in which our products are used.

We expect that there will continue to be proposals to reduce or limit Medicare and Medicaid payment for diagnostic services, which could impact our current or potential future diagnostic and other types of products and have a material adverse effect on our business, results of operations, financial condition and cash flows.

We also expect increased regulation and oversight of advanced diagnostic testing in which our products are used, although the timing of such regulation is uncertain after a recent pause by CMS.

Under section 218(b) of the Protecting Access to Medicare Act, beginning January 1, 2020, a professional who is ordering advanced diagnostic imaging services (which include MRI, CT, nuclear medicine (including PET) and other advanced diagnostic imaging services that the Secretary of HHS may specify, but not currently including echocardiography) must consult a qualified clinical decision support mechanism, as identified by HHS, to determine whether the ordered service adheres to specified appropriate use criteria (“AUC”) developed or endorsed by CMS-qualified “provider led entities”.

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Denial of claims for failure to include AUC consultation information on the claim form was set to begin on January 1, 2022, but was not implemented by CMS.

In the CY 2022 Physician Fee Schedule Final Rule, CMS delayed the start of these claims denials until the later of January 1, 2023, or the January 1st that follows the declared end of the Public Health Emergency for COVID–19.

In 2022, CMS published on its website that it was unable to forecast when the payment penalty phase would begin, and CMS did not address the AUC delay in the CY 2023 Physician Fee Schedule Final Rule.

To the extent that these types of changes have the effect of reducing the aggregate number of diagnostic medical imaging procedures performed in the U.S., our business, results of operations, financial condition and cash flows would be adversely affected.

In the CY 2024 Physician Fee Schedule Final Rule, CMS determined that it was not feasible to fully operationalize the AUC program consistent with the statute within the required time frame.

Accordingly, the agency finalized an indefinite pause to the AUC program and the recission of the regulations promulgated thus far to implement the AUC program.

While it is unclear when CMS will resume implementation of the AUC program, to the extent that these types of changes have the effect of reducing the aggregate number of diagnostic medical imaging procedures performed in the U.S., our business, results of operations, financial condition and cash flows would be adversely affected.

Medicare coverage of PET radiopharmaceuticals has been the subject of a large number of National Coverage Determinations (“NCDs”) by CMS since 2000.

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Subsequently, the Medicare Access and CHIP Reauthorization Act of 2015 significantly revised the methodology for updating the Medicare physician fee schedule.

And more recently, Congress enacted legislation in 2017 that effectively eliminated the Healthcare Reform Act’s “individual mandate” beginning in 2019.

In 2017, Congress enacted legislation that effectively eliminated the Healthcare Reform Act’s “individual mandate” beginning in 2019.

Congress continues to consider other healthcare reform legislation.

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Rates paid by some private third-party payors are based, in part, on established physician, clinic and hospital charges and are generally higher than Medicare payment rates.

Reductions in the amount of reimbursement paid for diagnostic medical imaging procedures and changes in the mix of our patients between non-governmental payors and government sponsored healthcare programs and among different types of non-government payor sources, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Reductions in the amount of reimbursement paid for diagnostic medical imaging procedures, including the elimination of any additional payment such as TPT Status, and changes in the mix of our patients between non-governmental payors and government sponsored healthcare programs and among different types of non-government payor sources, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The full impact on our business of healthcare reforms and other new laws, or changes in existing laws, is uncertain.

Nor is it clear whether additional legislative changes will be adopted or how those changes would affect our industry in general or our ability to successfully commercialize our products or develop new products.

Our business and industry are subject to complex and costly regulations.

If government regulations are interpreted or enforced in a manner adverse to us or our business, we may be subject to enforcement actions, penalties, exclusion and other material limitations on our operations.

Both before and after the approval of our products and agents in development, we, our products, development agents, operations, facilities, suppliers, distributors, contract manufacturers, contract research organizations and contract testing laboratories are subject to extensive and, in certain circumstances, expanding regulation by federal, state and local government agencies in the U.S.

Both before and after the approval of our products in development, we, our products, development products, operations, facilities, suppliers, distributors, contract manufacturers, contract research organizations and contract testing laboratories are subject to extensive and, in certain circumstances, expanding regulation by federal, state and local government agencies in the U.S.

as well as non-U.S.

and transnational laws and regulations, with regulations differing from country to country, including, among other things, anti-trust and competition laws and regulations, and the General Data Protection Regulation in the European Union.

and transnational laws and regulations, with regulations differing from country to country and even state to state, including, among other things, anti-trust and competition laws and regulations, and data privacy laws and regulations such as the General Data Protection Regulation in the European Union and the CCPA and the CPRA.

In the U.S., the FDA regulates, among other things, the pre-clinical testing, clinical trials, manufacturing, safety, efficacy, potency, labeling, storage, record keeping, quality systems, advertising, promotion, sale, distribution, and import and export of drug products.

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Violation of any of these regulatory schemes, individually or collectively, could disrupt our business and have a material adverse effect on our business, results of operations, financial condition and cash flows.

law, for example, we are required to report certain adverse events and production problems, if any, to the FDA.

law, for example, we are required to report certain adverse events and production problems, if any, to the FDA or other federal or state regulators.

We also have similar adverse event and production reporting obligations outside of the U.S., including to the EMA and MHRA.

Additionally, we must comply with requirements concerning advertising and promotion for our products, including the prohibition on the promotion of our products for indications that have not been approved by the FDA or a so-called “off-label use” or promotion that is inconsistent with the approved labeling.

Additionally, we must comply with requirements concerning advertising and promotion for our products, including the prohibition on the promotion of our products for indications for which they have not been approved by the FDA or a so-called “off-label use” or promotion that is inconsistent with the approved labeling.

If the FDA determines that our promotional materials constitute unlawful promotion, it could request that we modify our promotional materials or subject us to regulatory or enforcement actions.

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Accordingly, we and others with whom we work must expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

If in the future issues arise at a third party manufacturer, the FDA could take regulatory action which could limit or suspend the ability of that third party to manufacture our products or have any additional products approved at the relevant facility for manufacture until the issues are resolved and remediated.

If in the future issues arise at our own manufacturing facility or at a third-party manufacturer, the FDA could take regulatory action which could limit or suspend the ability to manufacture our products or have any additional products approved at the relevant facility for manufacture until the issues are resolved and remediated.

Such a limitation or suspension could have a material adverse effect on our business, results of operations, financial condition and cash flows.

We are also subject to laws and regulations that govern financial and other arrangements between pharmaceutical manufacturers and healthcare providers, including federal and state anti-kickback statutes, federal and state false claims laws and regulations, federal and state “sunshine” laws and regulations and other fraud and abuse laws and regulations.

We must offer discounted pricing or rebates on purchases of pharmaceutical products under various federal and state healthcare programs, such as the Medicaid drug rebate program, the “federal ceiling price” drug pricing program, the 340B drug pricing program and the Medicare Part D Program.

We must offer discounted pricing or rebates on purchases of pharmaceutical products under various federal and state healthcare programs, such as the Medicaid drug rebate program, the 340B drug pricing program and the Medicare Part D Program.

We must also report specific prices to government agencies under healthcare programs, such as the Medicaid drug rebate program and Medicare Part B.

Our Medicaid Drug Rebate agreements require us to report certain price information to the federal government.

Determination of the rebate amount that we pay to state Medicaid programs for our products, of prices charged to government and certain private payors for our products, or of amounts paid for our products under government healthcare programs, depends upon information reported by us to the government.

Determination of

the rebate amount that we pay to state Medicaid programs for our products, of prices charged to government and certain private payors for our products, or of amounts paid for our products under government healthcare programs, depends upon information reported by us to the government.

If we provide customers or government officials with inaccurate information about the products’ pricing or eligibility for coverage, or the products fail to satisfy coverage requirements, we could be terminated from the rebate program, be excluded from participation in government healthcare programs, or be subject to potential liability under the False Claims Act or other laws and regulations.

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In connection with the launch and continued growth of PYLARIFY, we hired additional employees to assist us with the commercialization of PYLARIFY, including in sales, marketing, reimbursement, quality and medical affairs.

Although we were successful in hiring and onboarding those employees and we have not had any material difficulty in the past in hiring or retaining qualified personnel, if we are unable to retain our existing personnel, or attract and train additional qualified personnel, either because of competition in our industry for these personnel, prolonged remote working conditions due to the COVID-19 pandemic, or insufficient financial resources, then our growth may be limited and it could have a material adverse effect on our business.

The COVID-19 pandemic had, and could continue to have, a material impact on our business, results of operation and financial condition, operating results, cash flows and prospects.

The global COVID-19 pandemic had, and could still have, a future negative impact on our business, particularly if there are additional resurgences as a result of new variants of the virus that further increase its communicability or its impact on certain populations, geographic regions and the healthcare system, including elective procedures and hospital access.

In addition, our business has been impacted by hospital staffing challenges and a decline in the volume of certain procedures and treatments using our products.

In connection with the COVID-19 pandemic, the following risks could have a material effect on our business, financial condition, results of operations and prospects:

• The delay or cancellation by hospitals and clinics of the procedures in which our products are used as a result of their COVID-19 response efforts and the duration of such effects, thereby reducing sales of our products for an unknown period of time;

• The inability or unwillingness of some patients to visit hospitals or clinics in order to undergo procedures in which our products are used, thereby reducing sales of our products for an unknown period of time;

• The inability of some patients to pay for procedures and/or the co-pay associated with those procedures in which our products are used due to job loss or lack of insurance, thereby reducing sales of our products for an unknown period of time;

• The inability of our distributors, radiopharmacy customers, PET manufacturing partners, hospitals, clinics and other customers to conduct their normal operations, including supplying or conducting procedures in which our products are used, because of their COVID-19 response efforts, or the reduced capacity or productivity of their employees and contractors as a result of possible illness, quarantine or other inability to work, thereby reducing sales of our products for an unknown period of time;

• The inability of global suppliers of raw materials or components used in the manufacture of our products, or contract manufacturers of our products, to supply and/or transport those raw materials, components and products to us in a timely and cost effective manner due to shutdowns, interruptions or delays, limiting and potentially precluding the production of our finished products, impacting our ability to supply customers, reducing our sales, increasing our costs of goods sold, and reducing our absorption of overhead;

• The reduced capacity or productivity of our complex, on-campus operations as a result of possible illness, quarantine or other inability of our employees and contractors to work, despite all of the preventative measures we continue to undertake to protect the health and safety of our workforce;

• The illiquidity or insolvency of our distributors or customers, or their inability to pay our invoices in full or in a timely manner, due to the reduction in their revenues caused by the cancellation or delay of procedures and other factors, which could potentially reduce our cash flow, reduce our liquidity and increase our bad debt reserves;

• A portion of our raw materials or finished product inventory may expire due to reduced demand for our drugs;

• Delays in our ability, and the ability of our contract research organizations and development partners to conduct, enroll and complete clinical development programs;

• Delays of regulatory reviews and approvals, including with respect to our product candidates and manufacturing facilities, by the FDA or other health or regulatory authorities;

• Decreased sales of those of our products that are promotionally sensitive, like DEFINITY and AZEDRA, due to the reduction of in-person sales and marketing activities and training caused by travel restrictions, quarantines, other similar social distancing measures and more restrictive hospital access policies;

• A reduction in revenue with continued incurrence of high fixed costs relating to our already-existing, complex and expensive radiopharmaceutical manufacturing facility could adversely affect our cash flows, liquidity and ability to comply with the financial covenants in our 2022 Facility;

• The increased reliance on our personnel working from home, which may negatively impact employee engagement, loyalty and productivity, or disrupt, delay or otherwise adversely impact our business, including through the increased employee resignations and retirements;

• The instability in worldwide economies, financial markets, social institutions, labor markets and the healthcare systems as a result of the COVID-19 pandemic, which could result in an economic downturn that could adversely impact our business, results of operations and financial condition, as well as that of our suppliers, distributors, customers or other business partners;

• A recurrence of the COVID-19 pandemic, or the development and spread of new strains of COVID-19 after social distancing and other similar measures have been relaxed.

The extent to which the COVID-19 pandemic impacts our business and our results of operations and financial condition will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge in connection with the severity of the virus, the ability to treat and ultimately prevent it with vaccines, its potential recurrence or transformation into new or more contagious or virulent strains, and further actions that federal, state, local, or foreign governments may take to contain its impact.

Although we were successful in hiring and onboarding those employees and we have not had any material difficulty in the past in hiring or retaining qualified personnel, if we are unable to retain our existing personnel, or attract and train additional qualified personnel, either because of competition in our industry for these personnel or insufficient financial resources, then our growth may be limited and it could have a material adverse effect on our business.

If we lose the services of our key personnel, our business could be adversely affected.

Our success is substantially dependent upon the performance, contributions and expertise of our chief executive officer, executive leadership and senior management team.

Mary Anne Heino, our Chief Executive Officer and President, and other members of our executive leadership and senior management team play a significant role in formulating and executing on our long-term strategy, generating business and overseeing operations.

We have an employment agreement with Ms.

Heino and a limited number of other individuals on our executive leadership team, although we cannot prevent them from terminating their employment with us.

Mary Anne Heino, our Chief Executive Officer, and other members of our executive leadership and senior management team play a significant role in formulating and executing on our long-term strategy, generating business and overseeing operations.

We have employment agreements with Ms.

Heino, Brian Markison, who will succeed Ms.

Heino as Chief Executive Officer effective March 1, 2024, and a limited number of other individuals on our executive leadership

team, although we cannot prevent them from terminating their employment with us.

We do not maintain key person life insurance policies on any of our executive officers.

While we have experienced some turnover on our executive leadership team, we have generally been able to fill positions by either promoting existing employees or attracting new, qualified individuals to lead key functional areas.

For example, on January 23, 2024, we announced that effective March 1, 2024, Brian Markison, our current Chair of the Board, will become our Chief Executive Officer, and Mary Anne Heino, our current Chief Executive Officer, will retire and become the Chair of the Board.

Our inability to retain our existing executive leadership and senior management team, maintain an appropriate internal succession program or attract and retain additional qualified personnel could have a material adverse effect on our business.

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The healthcare industry is characterized by continuous technological development resulting in changing customer preferences and requirements.

The success of new product development depends on many factors, including our ability to fund development of new agents or new indications for existing agents, anticipate and satisfy customer needs, obtain timely regulatory approval based on performance of our agents in development versus their clinical study comparators, develop and manufacture products in a cost-effective and timely manner, maintain advantageous positions with respect to intellectual property and differentiate our products from our competitors.

The success of new product development depends on many factors, including our ability to fund development of new products or new indications for existing products, anticipate and satisfy customer needs, obtain timely regulatory approval based on performance of our products in development versus their clinical trial comparators, develop and manufacture products in a cost-effective and timely manner, maintain advantageous positions with respect to intellectual property and differentiate our products from our competitors.

To compete successfully in the marketplace, we must make substantial investments in new product development, whether internally or externally through licensing or acquisitions.

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• Market acceptance of our products;

• Our ability to obtain adequate coding, coverage and payment.

• Our ability to obtain adequate coding, coverage and payment, including the availability of TPT Status.

The field of diagnostic medical imaging is dynamic, with new products, including equipment, software and products, continually being developed and existing products continually being refined.

Our own diagnostic imaging agents compete not only with other similarly administered imaging agents but also with imaging agents employed in different and often competing diagnostic modalities, and in the case of DEFINITY, echocardiography procedures without ultrasound enhancing agents.

New hardware, software or agents in a given diagnostic modality may be developed that provide benefits superior to the then-dominant hardware, software and agents in that modality, resulting in commercial displacement of the agents.

Similarly, changing perceptions about comparative efficacy and safety including, among other things, comparative radiation exposure, as well as changing availability of supply may favor one agent over another or one modality over another.

New hardware, software or products in a given diagnostic modality may be developed that provide benefits superior to the then-dominant hardware, software and products in that modality, resulting in commercial displacement of the products.

Similarly, changing perceptions about comparative efficacy and safety including, among other things, comparative radiation exposure, as well as changing availability of supply or the availability of additional payments for new devices such as TPT Status, may favor one product over another or one modality over another.

In addition, new or revised appropriate use criteria developed by professional societies, to assist physicians and other health care providers in making appropriate imaging decisions for specific clinical conditions, can and have reduced the frequency of and demand for certain imaging modalities and imaging agents.

To the extent there is technological obsolescence in any of our products that we manufacture, resulting in lower unit sales or decreased unit sales prices, we will have increased unit overhead allocable to the remaining market share, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Similar risks could apply to therapeutic products, including products we are developing.

Our future growth may depend on our ability to identify and acquire or in-license additional products, businesses or technologies, and if we do not successfully do so, or otherwise fail to integrate any new products, lines of business or technologies into our operations, we may have limited growth opportunities and it could result in significant impairment charges or other adverse financial consequences.

Even after giving effect to the POINT License Agreements (as defined below), we are continuing to seek to acquire or in-license products, businesses or technologies that we believe are a strategic fit with our business strategy.

We seek to acquire or in-license products, businesses or technologies that we believe are a strategic fit with our business strategy.

Future acquisitions or in-licenses, however, may entail numerous operational and financial risks, including:

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Finally, if we devote resources to potential acquisitions or in-licensing opportunities that are never completed, or if we fail to realize the anticipated benefits of those efforts, we could incur significant impairment charges or other adverse financial consequences.

Challenges with product quality or product performance, including defects, caused by us or our suppliers could result in a decrease in customers and revenues, unexpected expenses and loss of market share.

Challenges with product quality or product performance, including defects, caused by us or our manufacturers or suppliers could result in a decrease in customers and revenues, unexpected expenses and loss of market share.

The manufacture of our products is highly exacting and complex and must meet stringent quality requirements, due in part to strict regulatory requirements, including the FDA’s cGMPs.

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Additionally, manufacturing flaws, component failures, design defects, off-label uses or inadequate disclosure of product-related information could result in an unsafe condition or the injury or death of a patient.

Those events could lead to a recall of, or issuance of a safety alert relating to, our products.

Those events could lead to a recall of, or issuance of a safety alert relating to, our products or could harm our reputation and our ability to market our products in the future.

We also may undertake voluntarily to recall products or temporarily shut down production lines based on internal safety and quality monitoring and testing data.

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We store low level radioactive waste at our facility and dispose of the materials in accordance with applicable laws and regulations.

A majority of our low level radioactive waste is held to

decay until materials are no longer considered radioactive.

A majority of our low level radioactive waste is held to decay until materials are no longer considered radioactive.

Although we believe we have complied in all material respects with all applicable environmental, health and safety laws and regulations, we cannot assure you that we have been or will be in compliance with all such laws at all times.

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If we are unable to protect our intellectual property, our competitors could develop and market products with features similar to our products, and demand for our products may decline.

Our commercial success will depend in part on obtaining and maintaining patent and trade secret protection of our commercial products and technologies and agents in development as well as successfully enforcing and defending these patents and trade secrets against third parties and their challenges, both in the U.S.

Our commercial success will depend in part on obtaining and maintaining patent and trade secret protection of our commercial products and technologies and products in development as well as successfully enforcing and defending these patents and trade secrets against third parties and their challenges, both in the U.S.

and in foreign countries.

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• The patents of others may have an adverse effect on our business;

• The cost to defend our patents may be significant and may result in litigation which could be costly and time consuming.

Moreover, the issuance of a patent is not conclusive as to its validity or enforceability.

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Such opposition proceedings are increasingly common in the EU and are costly to defend.

For example, we received notices of opposition to three European patents relating to RELISTOR.

Pursuant to the RELISTOR license agreement between us and Bausch, Bausch has the first right to enforce the intellectual property rights at issue and is responsible for the costs of such enforcement.

At the same time, we may incur substantial further costs in supporting the effort to uphold the validity of patents or to prevent infringement.

Patent disputes are frequent, costly and can preclude, delay or increase the cost of commercialization of products.

Progenics has previously been and is currently involved in patent litigation, and we expect to be subject to patent litigation in the future.

We may be subject to claims that we have infringed, misappropriated or otherwise violated the patent or other intellectual property rights of a third party.

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While the validity of these issued patents, the patentability of pending patent applications and the applicability of any of them to our products and programs are uncertain, if asserted against us, any related patent or other intellectual property rights could adversely affect our ability to commercialize our products.

We may be subject to litigation over infringement claims regarding the products we manufacture or distribute.

We may be subject to litigation over infringement claims regarding the products we manufacture or distribute or intend to manufacture or distribute.

For example, on January 26, 2024, we were sued in the United States District Court for the District of Delaware by Advanced Accelerator Applications USA, Inc.

and Advanced Accelerator Applications SA, each a Novartis entity, for patent infringement in response to the filing of our ANDA for PNT2003 and Paragraph IV certification, consistent with the process established by the Hatch-Waxman Act.

This type of litigation can be costly and time consuming and could divert management’s attention and resources, generate significant expenses, damage payments (potentially including treble damages) or restrictions or prohibitions on our use of our technology, which could adversely affect our business, results of operations, financial condition and cash flows.

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Our business is subject to international economic, political and other risks that could negatively affect our results of operations or financial position.

For the year ended December 31, 2022, we derived approximately 3.6% of our revenues and sourced approximately 17.5% of our costs of goods sold outside of the fifty United States.

For the year ended December 31, 2023, we derived approximately 2.6% of our revenues and sourced approximately 11.2% of our costs of goods sold outside of the United States.

Accordingly, our business is subject to risks associated with doing business internationally, including:

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trade sanctions against Iran and those countries and entities doing business with Iran, which could adversely impact international isotope production and, indirectly, our global supply chain;

• Potential global disruptions in air transport due to COVID-19, which could adversely affect our international supply chains for radioisotopes and DEFINITY RT as well as international distribution channels for our commercial products;

• Potential global disruptions in air transport, which could adversely affect our international supply chains for radioisotopes and DEFINITY RT as well as international distribution channels for our commercial products;

• Entering into, renewing or enforcing commercial agreements with international governments or provincial authorities or entities directly or indirectly owned or controlled by such governments or authorities, such as our Belgian, Australian and South African isotope suppliers, IRE, ANSTO and NTP, and our Chinese development and commercialization partner, Double-Crane;

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A disruption in our computer networks, including those related to cybersecurity, could adversely affect our operations or financial position.

We believe that our cybersecurity program is designed to effectively mitigate the risks of material cybersecurity incidents.

However, our management does not expect that our cybersecurity program will prevent or detect all occurrences of cybersecurity incidents, material or otherwise, and there is potential risk that certain cybersecurity breaches may go undetected for a period of time.

The design of our cybersecurity program is based, in part, upon certain assumptions about the likelihood of future incidents, and there can be no assurance that any design will prevent or detect all cybersecurity breaches.

Over time, certain aspects of cybersecurity programs may become inadequate because of changes in technology, sophistication of cybersecurity attacks, emerging threats or other conditions, or the degree of compliance with our policies and procedures may deteriorate.

We rely on our computer networks and systems, some of which are managed by third parties, to manage and store electronic information (including sensitive data such as confidential business information, personally identifiable data and personal health information), and to manage or support a variety of critical business processes and activities.

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Any such security breach may compromise information stored on our networks and may result in significant data losses or theft of sensitive or proprietary information.

A cybersecurity breach could hurt our reputation by adversely affecting the perception of customers and potential customers of the security of their orders and personal information, as well as the perception of our manufacturing partners of the security of their proprietary information.

A cybersecurity breach could hurt our reputation by adversely affecting the perception of customers and potential customers about the security of their orders and personal information, as well as the perception of our manufacturing partners of the security of their proprietary information.

In addition, a cybersecurity attack could result in other negative consequences, including disruption of our internal operations, increased cybersecurity protection costs, lost revenue, regulatory actions or litigation.

Any disruption of internal operations could also have a material adverse impact on our results of operations, financial condition and cash flows.

To date, we have not experienced any material cybersecurity attacks.

To date, we have not experienced any known material cybersecurity attacks.

We may be limited in our ability to utilize, or may not be able to utilize, net operating loss carryforwards to reduce our future tax liability.

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From time to time we are involved in legal proceedings and disputes and may be involved in litigation in the future.

For example, on January 26, 2024, we were sued in the United States District Court for the District of Delaware by Advanced Accelerator Applications USA, Inc.

and Advanced Accelerator Applications SA, each a Novartis entity, for patent infringement in response to the

filing of our ANDA for PNT2003 and Paragraph IV certification, consistent with the process established by the Hatch-Waxman Act.

These proceedings are complex and extended and occupy the resources of our management and employees.

These proceedings are also costly to prosecute and defend and may involve substantial awards or damages payable by us if not found in our favor.

Legal proceedings are also costly to prosecute and defend and may involve substantial awards or damages payable by us if not found in our favor.

We may also be required to pay substantial amounts or grant certain rights on unfavorable terms in order to settle such proceedings.

Defending against or settling such claims and any unfavorable legal decisions, settlements or orders could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common stock to decline.

Defending against or settling legal proceedings and any unfavorable legal decisions, settlements or orders could have a material adverse effect on our business, financial condition and results of operations and could cause the market value of our common stock to decline.

In particular, the pharmaceutical and medical device industries historically have generated substantial litigation concerning the manufacture, use and sale of products, and we expect this litigation activity to continue.

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In addition, in the U.S., it has become increasingly common for patent infringement actions to prompt claims that antitrust laws have been violated during the prosecution of the patent or during litigation involving the defense of that patent.

Such claims by direct

and indirect purchasers and other payors are typically filed as class actions.

Such claims by direct and indirect purchasers and other payors are typically filed as class actions.

The relief sought may include treble damages and restitution claims.

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Even if the licensed products are suitable for commercialization in a timely manner, we may not achieve the expected revenues from the sale of such products, and our revenue, ability to achieve profitability and return on investment may be adversely affected.

In addition, we are dependent on POINT to fund and complete its Phase 3 clinical trial, with respect to PNT2002, and to facilitate completion of its ongoing study, with respect to PNT2003.

We are also dependent on POINT to develop commercial product capacity and manufacture clinical and commercial supply for both PNT2002 and PNT2003.

With respect to PNT2002, on December 18, 2023, we announced positive topline results from SPLASH, the Phase 3 registrational trial for PNT2002.

Although the topline results indicated that the SPLASH trial met its primary endpoint, at the time of our topline analysis, interim OS results were immature.

We expect additional, follow-up data in 2024 prior to the potential submission of an NDA;

however, we can give no assurance that, as additional data become available, such data will not be materially different from the topline data we previously published, or that such data will support an NDA filing, FDA approval, or successful commercialization of PNT2002.

In addition, we are dependent on POINT to develop commercial product capacity and manufacture clinical and commercial supply for both PNT2002 and PNT2003, as well as supply for our EAP for PNT2002.

Disagreements with the counterparty in the POINT License Agreements over proprietary rights, contract interpretation or the preferred course of product research, development or marketing, might cause delays in performance of the POINT License Agreements or termination of the POINT License Agreements, or might result in litigation or arbitration, which could be time-consuming and expensive.

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Any of the foregoing risks could materially and adversely affect our business, results of operations and prospects and the trading price of our common stock.

We may not, or may take longer to, realize the expected benefits and opportunities related to, the Cerveau Acquisition.

On February 6, 2023, we announced that we acquired Cerveau.

Cerveau holds the rights under a license agreement to develop and commercialize MK-6240, an investigational second-generation F 18-labeled PET imaging agent that targets Tau tangles in Alzheimer’s disease.

MK-6240 is currently being used in more than 90 active clinical trials for several Alzheimer’s disease therapeutic candidates being developed.

While we believe that MK-6240, as a Tau imaging agent, has the potential to play an important role in patient staging, selection, and monitoring for future treatments and could be a surrogate endpoint for treatment efficacy, we can give no assurance that we will be successful with continued development, regulatory approval and commercialization of the product candidate or that disagreements with the counterparty to our license agreement for MK-6240 or the Selling Stockholders will not arise over proprietary rights, contract interpretation or the preferred course of product research, development or marketing that might cause delays or termination of the license agreement, or might result in litigation or arbitration, which could be time-consuming and expensive.

The process of developing new drugs and obtaining regulatory approval is complex, time-consuming and costly, and the outcome is not certain.

We currently have clinical development programs in the U.S., including those related to PNT2002 and PNT2003, and are exploring additional lifecycle management opportunities for some of our current products.

We currently have clinical development programs in the U.S., including those related to PNT2002, PNT2003, MK-6240 and LNTH-1363S, and are exploring additional lifecycle management opportunities for some of our current products, including PYLARIFY.

We also have a number of strategic partnerships relating to obtaining additional indications for existing commercial products or regulatory approval for clinical development candidates.

To obtain regulatory approval for these agents in the indications being pursued, we must conduct extensive human tests, which are referred to as clinical trials, as well as meet other rigorous regulatory requirements, as further described in Part I, Item 1.

To obtain regulatory approval for these products in the indications being pursued, we must conduct extensive human tests, which are referred to as clinical trials, as well as meet other rigorous regulatory requirements, as further described in Part I, Item 1.

“Business—Regulatory Matters.” Satisfaction of all regulatory requirements typically takes many years and requires the expenditure of substantial resources.

A number of other factors may cause significant delays in the completion of our clinical trials, including unexpected delays in the initiation of clinical sites, slower than projected enrollment, competition with ongoing clinical trials and scheduling conflicts with participating clinicians, regulatory requirements, limits on manufacturing capacity and failure of an agent to meet required standards for administration to humans.

In addition, it may take longer than we project to achieve study endpoints and complete data analysis for a clinical trial or we may decide to slow down the enrollment in a trial in order to conserve financial resources.

A number of other factors may cause significant delays in the completion of our clinical trials, including unexpected delays in the initiation of clinical sites, slower than projected enrollment, competition with ongoing clinical trials and scheduling conflicts with participating clinicians, regulatory requirements, limits on manufacturing capacity and failure of an investigational product to meet required standards for administration to humans.

Our products in development are also subject to the risks of failure inherent in drug development, drug testing and regulatory approval.

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Sometimes, products that have shown promising results in early clinical trials have subsequently suffered significant setbacks in later clinical trials.

Agents in later stage clinical trials may fail to show desired safety and efficacy traits, despite having progressed through initial clinical testing.

Products in later stage clinical trials may fail to show desired safety and efficacy traits, despite having progressed through initial clinical testing.

In addition, the data collected from clinical trials of our products in development may not be sufficient to support regulatory approval, or regulators could interpret the data differently and less favorably than we do.

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Depending on the regulatory pathway selected for drug approval, such as by filing an ANDA or Section 505(b)(2) NDA that requires sending notice to the innovator of a drug, regulatory approval may also be delayed by litigation brought under the Hatch-Waxman Act.

For example, on January 26, 2024, we were sued in the United States District Court for the District of Delaware by Advanced Accelerator Applications USA, Inc.

The approval process may also be delayed by changes in government regulation, future legislation or administrative action or changes in regulatory policy that occur prior to or during regulatory review.

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The FDA review process can take many years to complete, and approval is never guaranteed.

If a product is approved, the FDA may limit the indications for which the product may be marketed, require extensive warnings on the product labeling, impose restricted distribution programs, require expedited reporting of certain adverse events, or require costly ongoing requirements for post-marketing clinical studies and surveillance or other risk management measures to monitor the safety or efficacy of the product.

If a product is approved, the FDA may limit the indications for which the product may be marketed, require extensive warnings on the product labeling, impose restricted distribution programs, require expedited reporting of certain adverse events, or require costly ongoing requirements for post-marketing clinical trials and surveillance or other risk management measures to monitor the safety or efficacy of the product.

In some instances, products in development may also be approved by filing an ANDA or Section 505(b)(2) NDA with the FDA (as further described in Part I, Item 1.

“Business—Regulatory Matters—Hatch-Waxman Act.”);

provided, however, that seeking regulatory approval under such pathways may subject the product candidate to delays caused by litigation brought by an innovator of similar drugs under the Hatch-Waxman Act.

Markets outside of the U.S.

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Approvals might not be granted on a timely basis, if at all.

We can give no assurance that Curium will be successful with approval and commercialization of piflufolastat F 18 in Europe.

We have licensed exclusive rights to Curium to develop and commercialize piflufolastat F 18 in Europe.

In June 2022, Curium announced that it had submitted its marketing authorization application to the EMA seeking approval for piflufolastat F 18 in Europe.

We cannot assure that the EMA will approve piflufolastat F 18 in Europe or that Curium will be successful in commercializing it in Europe.

Any failure or significant delay in receiving regulatory approval for the sale of piflufolastat F 18 in Europe may harm our business and delay or prevent us from being able to generate additional future royalty revenue from product sales.

We can give no assurance that GE Healthcare will be successful with the further clinical development of flurpiridaz.

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The findings, shared at an American Society of Nuclear Cardiology conference, also demonstrated that cardiac PET imaging with flurpiridaz had higher diagnostic efficacy and image quality in patients with suspected CAD, compared with SPECT MPI, the predominant procedure currently used in nuclear cardiology.

Notwithstanding these findings, we cannot assure that any of the data generated in either our or GE Healthcare’s sponsored Phase 3 study will be sufficient to support an NDA approval, that GE Healthcare will only have to conduct the one additional Phase 3 clinical study prior to filing an NDA, or that flurpiridaz will

ever be approved as a PET MPI imaging agent by the FDA.

Any failure or significant delay in completing additional clinical trials for flurpiridaz or in receiving regulatory approval for the sale of flurpiridaz may harm our business and delay or prevent us from being able to generate additional future royalty revenue from product sales.

Notwithstanding these findings, we cannot assure that any of the data generated in either our or GE Healthcare’s sponsored Phase 3 study will be sufficient to support an NDA approval or that flurpiridaz will ever be approved as a PET MPI imaging agent by the FDA.

While GE Healthcare recently announced that it had filed an NDA with the FDA for flurpiridaz, any failure or significant delay in receiving regulatory approval for the sale of flurpiridaz may harm our business and delay or prevent us from being able to generate additional future royalty revenue from product sales.

Even if clinical development candidates receive regulatory approval, we can give no assurance that they can be successfully commercialized.

Even if our clinical development candidates proceed through their clinical trials and ultimately receive regulatory approval, there is no guarantee that an approved product can be manufactured in commercial quantities at a reasonable cost or that such a product will be successfully marketed or distributed.

For example, the manufacturing, marketing and distribution of a radiopharmaceutical like flurpiridaz will require the creation of a field-based network of specialized PET manufacturing facilities, or PMFs, with radioisotope-producing cyclotrons, similar to what we created for PYLARIFY, and will need to be manufactured and distributed rapidly to end-users.

For example, the manufacturing, marketing and distribution of a radiopharmaceutical like flurpiridaz and MK-6240 will require the creation of a field-based network of specialized PET manufacturing facilities, or PMFs, with radioisotope-producing cyclotrons, similar to what we created for PYLARIFY, and will need to be manufactured and distributed rapidly to end-users.

In addition, obtaining adequate coding, coverage and payment at appropriate payment levels for any clinical development candidate will be critical, including not only coverage from Medicare, Medicaid, and other government payors, but also from private payors.

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In connection with our ongoing development activities, we currently depend, and expect to continue to depend, on numerous collaborators.

For example, in addition to our collaboration with Curium on piflufolastat F 18 in Europe, GE Healthcare on flurpiridaz and POINT on PNT2002 and PNT2003, we have other collaborations to develop and commercialize products.

For example, in addition to our collaboration with Curium on PYLCLARI in Europe, GE Healthcare on flurpiridaz and POINT on PNT2002 and PNT2003, we have other collaborations to develop and commercialize products.

In addition, certain clinical trials for our product candidates may be conducted by government-sponsored agencies, and consequently will be dependent on governmental participation and funding.

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If we fail to achieve milestone requirements or to satisfy other conditions, we may lose those rights under those license agreements, and our business, results of operations and financial condition could be adversely affected.

Many of our products or product candidates incorporate rights licensed by third parties -- for example, we license patent rights on PYLARIFY from JHU and on PNT2002 and PNT2003 from POINT.

Many of our products or product candidates incorporate rights licensed by third parties -- for example, we license patent rights on PYLARIFY, PNT2002, PNT2003, MK-6240, LNTH-1363S and NM-01.

We could lose the rights to develop or commercialize these products and product candidates if the related license agreement is terminated due to a breach by us or otherwise.

In addition, we are required to make substantial cash payments, achieve milestones and satisfy other conditions, including filing for and obtaining marketing approvals and introducing products, to maintain rights under our license agreements.

Due to the nature of these agreements and the uncertainties of development, we may not be able to achieve milestones or satisfy conditions to which we have contractually committed, and as a result may be unable to maintain our rights under these licenses.

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On December 8, 2022, we issued $575.0 million in aggregate principal amount of 2.625% Convertible Senior Notes due 2027 (the “Notes”), which included $75.0 million in aggregate principal amount of Notes sold pursuant to the full exercise of the initial purchasers’ option to purchase additional Notes.

The Notes were issued under an indenture, dated as of December 8, 2022 (the

“Indenture”), among Holdings, LMI, and U.S.

The Notes were issued under an indenture, dated as of December 8, 2022 (the “Indenture”), among Holdings, LMI, and U.S.

Bank Trust Company, National Association (“U.S.

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Repurchases by us of our common stock may affect the value of our common stock.

In December 2022, our Board of Directors authorized the repurchase of up to $150.0 million in aggregate amount of our common stock under certain circumstances.

We used approximately $75.0 million of the net proceeds from Notes to repurchase shares of our common stock from purchasers of Notes in privately negotiated transactions effected with or through one of the initial purchasers or its affiliate.

The purchase price per share of the common stock repurchased in such transactions was equal to the closing sale price per share of our common stock on December 5, 2022, which was $56.01 per share.

In December 2022, our Board authorized the repurchase of up to $150.0 million in aggregate amount of our common stock under certain circumstances.

We used approximately $75.0 million of the net proceeds from the Notes to repurchase shares of our common stock from purchasers of Notes in privately negotiated transactions effected with or through one of the initial purchasers or its affiliate.

The purchase price per share of the common stock repurchased in such transactions was equal to the closing sale price per share of our

common stock on December 5, 2022, which was $56.01 per share.

Following this initial repurchase, we may from time to time repurchase additional shares of our common stock.

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We have indebtedness which may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs.

As of December 31, 2022, we had approximately $575.0 million of total principal indebtedness remaining under the Notes and availability of $350.0 million under our five-year revolving credit facility (the “2022 Revolving Facility”).

As of December 31, 2023, we had approximately $575.0 million of total principal indebtedness remaining under the Notes and availability of $350.0 million under our five-year 2022 Revolving Facility.

Our indebtedness and any future indebtedness we incur could:

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If we or our subsidiaries incur additional debt, the risks that we and they now face as a result of our leverage could intensify.

In addition, the 2022 Revolving Facility will not prevent us from incurring obligations that do not constitute indebtedness under the agreements.

In addition, the 2022 Revolving Facility will not prevent us from incurring obligations that do not constitute indebtedness under that agreement.

Our 2022 Revolving Facility contains restrictions that will limit our flexibility in operating our business.

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These provisions may also discourage bids for our common stock at a premium over market price or adversely affect the market price of, and the voting and other rights of the holders of, our common stock.

These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by our board of directors.

In addition, we are incorporated in

Delaware and subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit large stockholders from consummating a merger with, or acquisition of, us.

These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by our Board.

In addition, we are incorporated in Delaware and subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit large stockholders from consummating a merger with, or acquisition of, us.

These provisions may deter an acquisition of us that might otherwise be attractive to stockholders.

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In either case, and in other cases, our obligations under the Notes and the Indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of our common stock may view as favorable.

Unresolved Staff Comments

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