What changed in this filing

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Item 1A. Risk Factors

2023-03-03 compared with 2022-03-10 · 79 added, 63 removed, 412 unchanged (26% of the section changed)

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If we do not achieve commercial success with sotagliflozin, our business will suffer and our stock price will likely decline.

• We depend heavily on our ability to obtain positive results from our ongoing Phase 2 clinical trials of LX9211 in diabetic neuropathic pain and post-herpetic neuralgia.

If we fail to successfully complete and obtain positive results from such clinical trials, our business will suffer and our stock price will likely decline.

• Clinical testing of our drug candidates in humans is an inherently risky and time-consuming process that may fail to demonstrate safety and efficacy, which could result in the delay, limitation or prevention of regulatory approval.

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• Our competitors may develop products that impair the value of any products that we or our collaborators may develop.

• We face business disruption and related risks resulting from the outbreak of the novel coronavirus, or COVID-19, including delays in the enrollment of ongoing clinical trials and other operational impacts, each of which could have a material adverse effect on our business.

Risks Related to Our Capital Requirements and Financial Results

• We will need additional capital in the future and, if it is unavailable, we will be forced to delay, reduce or eliminate our research and development programs.

• We do not have sufficient capital to support a full Phase 3 development program for LX9211 in neuropathic pain.

If we are unable to establish a strategic collaboration or other arrangement for that purpose, our capital needs will be substantially higher and we may be unable to obtain financing sufficient to fund Phase 3 development of LX9211 in neuropathic pain on acceptable terms, or at all, or may be required to reduce the scope of any such Phase 3 development program.

• We have a history of net losses, and we expect to continue to incur net losses and may not achieve or maintain profitability.

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If we fail to obtain such regulatory approval, our business will suffer and our stock price will likely decline.

We are preparing a resubmission of our application for regulatory approval to market sotagliflozin in the United States for heart failure after voluntarily withdrawing our initial application to correct a technical issue with the submission.

We cannot offer any assurances that the FDA will accept our resubmission or grant marketing approval for sotagliflozin in heart failure, on acceptable timelines or at all.

Furthermore, regulatory approval in the United States for sotagliflozin in heart failure, even if obtained, may limit the type of patients in which sotagliflozin may be used or otherwise require specific warning or labeling language, any of which may reduce the commercial potential of sotagliflozin in heart failure.

Even if approved, our existing capital resources and commercial infrastructure are insufficient to commercially launch sotagliflozin for heart failure and we may not be successful in obtaining such resources, building such infrastructure or otherwise effectively commercializing sotagliflozin for heart failure.

Should we fail to obtain regulatory approval in the United States, our business and financial condition could be materially harmed and we may be more heavily dependent on the success of our other drug programs.

Our NDA for sotagliflozin in heart failure is currently under review by the FDA and has been assigned a PDUFA target action date of May 27, 2023.

We cannot offer any assurances that the FDA will grant marketing approval for sotagliflozin in heart failure, on acceptable timelines or at all.

Furthermore, regulatory approval in the United States for sotagliflozin, even if obtained, may limit the type of patients in which sotagliflozin may be used or otherwise require specific warning or labeling language, any of which may reduce the commercial potential of sotagliflozin in heart failure.

Should we fail to obtain regulatory approval in the United States or obtain regulatory approval with limits that disadvantage us as compared to competitive products, our business and financial condition could be materially harmed and we may be more heavily dependent on the success of our other drug programs.

If approved, we will depend heavily on the commercial success of sotagliflozin in heart failure.

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If approved, our future sales of sotagliflozin will depend on numerous factors, including:

• the specific indication, warnings and other labeling language approved by the FDA;

• the number of patients suffering from heart failure;

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In addition, if one or more of the factors above negatively affects sotagliflozin sales, our business and financial condition could be materially harmed and we may be more heavily dependent on the success of our other drug programs.

We depend heavily on our ability to obtain positive results from our ongoing Phase 2 clinical trials of LX9211 in diabetic neuropathic pain and post-herpetic neuralgia.

If we fail to successfully complete and obtain positive results from such clinical trials, our business will suffer and our stock price will likely decline.

We are conducting a Phase 2 clinical trial of LX9211 in diabetic peripheral neuropathic pain and a second Phase 2 clinical trial of LX9211 in post-herpetic neuralgia.

We cannot offer any assurances or predict with any certainty that such Phase 2 clinical trials will be successfully completed, that positive clinical data will be obtained from such clinical trials or that such clinical trials will demonstrate a competitive commercial profile for LX9211, in any such case on the expected timelines.

Should we fail to obtain positive results from such clinical trials, our business and financial condition could be materially harmed and we may be more heavily dependent on the success of our other drug programs.

Clinical testing of our drug candidates in humans is an inherently risky and time-consuming process that may fail to demonstrate safety and efficacy, which could result in the delay, limitation or prevention of regulatory approval.

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In some cases, we or our collaborators may not be able to complete the trial at all.

Moreover, clinical

trials may not show our drug candidates to be both safe and effective.

Moreover, clinical trials may not show our drug candidates to be both safe and effective.

Thus, the FDA and other regulatory authorities may not approve any drug candidates that we develop for any indication or may limit the approved indications or impose other conditions.

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For example, the FDA could determine that the design of a clinical trial is inadequate to produce reliable results.

Furthermore, prior to approving a new drug, the FDA typically requires that the efficacy of the drug be demonstrated in two double-blind, controlled studies.

Furthermore, prior to approving

a new drug, the FDA typically requires that the efficacy of the drug be demonstrated in two double-blind, controlled studies.

The regulatory process also requires nonclinical testing, and data obtained from nonclinical and clinical activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval.

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• sufficient third-party coverage or reimbursement.

If we are unable to reestablish an effective sales force, marketing infrastructure and distribution capabilities, we will not be able to successfully commercialize any products that we or our collaborators may develop.

If we are unable to establish an effective sales force, marketing infrastructure and distribution capabilities, we will not be able to successfully commercialize any products that we or our collaborators may develop.

In order to successfully commercialize any product that we or our collaborators may develop, we or they must establish or maintain an effective commercialization infrastructure supporting such product, including sales force, marketing organization and distribution capabilities.

We no longer maintained a commercialization infrastructure following our sale of XERMELO (telotristat ethyl) and related assets to TerSera and will need to reestablish such capabilities in order to

commercialize any future products, including sotagliflozin for heart failure.

Factors that may hinder efforts to effectively reestablish, manage and maintain such infrastructure for products that we or our collaborators may develop include:

Factors that may hinder efforts to effectively establish, manage and maintain such infrastructure for products that we or our collaborators may develop include:

• inability to recruit, retain and effectively manage adequate numbers of effective sales and marketing personnel;

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If any of these drug candidates, including sotagliflozin, are approved by the FDA or other regulatory agencies for commercial sale, we or our collaborators will need to manufacture them in larger quantities.

We may not be able to successfully increase the manufacturing capacity, whether in collaboration with third-party manufacturers or on our own, for any approved product in a

timely or economic manner, or at all.

We may not be able to successfully increase the manufacturing capacity, whether in collaboration with third-party manufacturers or on our own, for any approved product in a timely or economic manner, or at all.

Significant scale-up of manufacturing may require additional validation studies, which the FDA must review and approve.

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We and our collaborators are subject to extensive and rigorous ongoing domestic and foreign government regulation of, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing of any products which receive regulatory approvals from the FDA or foreign regulatory authorities.

The failure to comply with these requirements or the identification of safety problems during commercial marketing could lead to the need for product marketing restrictions, product withdrawal or recall or other voluntary or regulatory action, which could delay further marketing until the product is brought into compliance.

marketing until the product is brought into compliance.

The failure to comply with these requirements may also subject us or our collaborators to stringent penalties.

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• state and federal expenditure tracking and reporting laws, which generally require certain types of expenditures in the United States to be tracked and reported.

For example, the Physician Payments Sunshine Act, among other things, imposes reporting requirements on certain manufacturers to annually report to CMS information related to payments

and other transfers of value to physicians and certain advanced non-physician health care practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

For example, the Physician Payments Sunshine Act, among other things, imposes reporting requirements on certain manufacturers to annually report to CMS information related to payments and other transfers of value to physicians and certain advanced non-physician health care practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Compliance with such requirements may require investment in infrastructure to ensure that tracking is performed properly, and some of these laws result in the public disclosure of various types of payments and relationships, which could potentially have a negative effect on our business and/or increase enforcement scrutiny of our activities.

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Moreover, complying with any new legislation or regulatory changes could be time-intensive and expensive, resulting in a material adverse effect on our business.

For example, the Inflation Reduction Act imposed significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.

The long-term implications of the Inflation Reduction Act remain uncertain and subject to various factors, including the manner in which the DHHS decides to implement the statute.

A primary trend in the United States and some foreign countries is toward reform and cost containment in the health care industry.

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals that may have the effect of reducing the prices that we are able to charge for products we or our collaborators may develop.

Healthcare reform measures which may be adopted in the future in the United States and foreign

jurisdictions may result in more rigorous coverage criteria and significant downward pressure on the prices drug manufacturers may charge.

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals, such as the Inflation Reduction Act, that may have the effect of reducing the prices that we are able to charge for products we or our collaborators may develop.

Healthcare reform measures which may be adopted in the future in the United States and foreign jurisdictions may result in more rigorous coverage criteria and significant downward pressure on the prices drug manufacturers may charge.

As a result, our revenues and prospects for profitability could be significantly harmed.

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They may also refuse to provide any coverage of uses of approved products for medical indications other than those for which the FDA has granted market approvals.

As a result, significant uncertainty exists as to whether and how much third-party payers will reimburse for newly approved drugs, which in turn will put pressure on the pricing of drugs.

As a result, significant uncertainty exists

as to whether and how much third-party payers will reimburse for newly approved drugs, which in turn will put pressure on the pricing of drugs.

Further, we do not have experience in ensuring approval by applicable third-party payers outside of the United States for coverage and reimbursement of pharmaceutical products.

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Each of those products act through SGLT2, one of the targets of sotagliflozin.

We expect that our principal competition for sotagliflozin for the treatment of heart failure would include such selective SGLT2 inhibitors which have already received or may gain regulatory approval for the treatment of heart failure, as well as other classes of drugs used in the treatment of heart failure, such as the combination drug sacubitril/valsartan, currently marketed for the treatment of heart failure by Novartis, and vericiguat, currently marketed for the treatment of heart failure by Merck, or which may gain regulatory approval for the treatment of heart failure, such as omecamtiv mecarbil, currently being developed for the treatment of heart failure by Cytokinetics.

In addition, there may be drug candidates of which we are not aware at an earlier stage of development that may compete with our drug candidates.

We face business disruption and related risks resulting from the outbreak of the novel coronavirus, or COVID-19, including delays in the enrollment of ongoing clinical trials and other operational impacts, each of which could have a material adverse effect on our business.

Our business has been disrupted and could be materially adversely affected by the COVID-19 pandemic.

In response to the ongoing pandemic and resulting state and local restrictions, we implemented work-from-home policies for all employees except certain key essential members involved in business-critical activities.

The effects of our work-from-home policies may negatively impact productivity, disrupt our business and delay our ongoing research and development efforts, the magnitude of which will depend, in part, on the length and severity of the pandemic and other limitations on our ability to conduct our business in the ordinary course.

Clinical site initiation and patient enrollment may be delayed due to concerns for patient safety and prioritization of healthcare resources toward the COVID-19 pandemic.

Some patients may not be able to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services.

Similarly, our ability to recruit and retain patients, principal investigators and site staff (who as healthcare providers may have heightened exposure to COVID-19) may be hindered, which would adversely impact our clinical trial operations.

For example, due to the impact of the COVID-19 pandemic, we delayed initiation of our Phase 2 clinical trials of LX9211 and enrollment in such trials have been negatively affected by the pandemic.

In addition, the pandemic could cause significant disruption in the operations of third party manufacturers and research and development organizations upon whom we rely and, as a result, could severely impact our business operations.

These and similar, and perhaps more severe, disruptions in our operations due to the COVID-19 pandemic could negatively impact our business, operating results and financial condition.

The outbreak of the novel coronavirus, or COVID-19, has had an adverse impact on our business operations and clinical trials and it could continue to adversely affect our business in the future.

Our business was disrupted and could continue to be materially adversely affected by the COVID-19 pandemic.

In response to the pandemic and resulting state and local restrictions, we implemented mandatory work-from-home policies for the majority of our employees.

Although the majority of our employees have now returned to the office, the emergence of any new, more virulent SARS-CoV-2 variants could negatively affect the health and availability of our workforce and cause new disruptions to our business operations.

Any such disruptions could negatively impact productivity and delay our ongoing commercialization plans and research and development efforts.

The emergence of new, more infectious and virulent variants may also negatively impact future clinical trials by impeding our ability to effectively recruit and retain patients, principal investigators and site staff due to concerns for patient safety and prioritization of healthcare resources toward the COVID-19 pandemic.

In addition, significant disruption in the operations of third party manufacturers and research and development organizations upon whom we rely may occur and, as a result, our business operations could be severely impacted.

These and similar, and perhaps more severe, disruptions in our operations due to a resurgence of the COVID-19 pandemic could negatively impact our business, operating results and financial condition.

While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, the pandemic has also resulted in disruption of global financial markets and supply chains.

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In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.

The global COVID-19 pandemic continues to rapidly evolve.

The global COVID-19 pandemic continues to evolve.

The ultimate impact of the COVID-19 pandemic or a similar health pandemic or epidemic is highly uncertain and subject to change.

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However, we caution you that we may generate less cash and revenues or incur expenses more rapidly than we currently anticipate.

Our currently planned operations for the next twelve months include the continued nonclinical and clinical development of sotagliflozin, LX9211 and our other drug candidates and preparations for the commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved.

Our currently planned operations for the next twelve months include the commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved, and the continued nonclinical and clinical development of sotagliflozin, LX9211 and our other drug candidates.

Although difficult to accurately predict, the amount of our future capital requirements will be substantial and will depend on many factors, including:

• the success of our commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved;

• the timing, progress and results of our clinical trials of sotagliflozin, LX9211 and our other drug candidates and our ability to obtain necessary regulatory approvals based on such clinical trials, including for sotagliflozin for the treatment of heart failure;

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If we raise additional capital by issuing equity securities, our then-existing stockholders will experience dilution and the terms of any new equity securities may have preferences over our common stock.

The affirmative and restrictive covenants and the pledge of all of our assets as collateral under our existing term loans with Oxford Finance LLC, or the Oxford Term Loans, restrict our ability to raise additional capital by issuing debt securities.

We cannot be certain that additional financing, whether debt or equity, will be available in amounts or on terms acceptable to us, if at all.

We may be unable to raise sufficient additional capital on reasonable terms, and if so, we will be forced to delay, reduce or eliminate our clinical development programs or commercialization efforts or obtain funds, if at all, by entering into financing agreements on unattractive terms.

We do not have sufficient capital to support a full Phase 3 development program for LX9211 in neuropathic pain.

If we are unable to establish a strategic collaboration or other arrangement for that purpose, our capital needs will be substantially higher and we may be unable to obtain financing sufficient to fund Phase 3 development of LX9211 in neuropathic pain on acceptable terms, or at all, and may be required to reduce the scope of any such Phase 3 development program.

Our existing resources are insufficient to support a full Phase 3 development program for LX9211 in neuropathic pain.

Although we seek to collaborate with another pharmaceutical or biotechnology company or strategic partner under terms which would enable reliance on their resources, in whole or in part, and provide additional funding for such Phase 3 development program, we may be unable to successfully enter into any such collaboration or other arrangement on reasonable terms, or at all.

In such event, our capital needs will be substantially higher and we will be reliant on obtaining financing in support of any such Phase 3 development program from alternative sources.

We cannot be certain that such financing will be available in amounts or on terms acceptable to us, if at all.

If we are unable to secure such financing, we may be required to reduce the scope of any such Phase 3 development program.

We have a history of net losses, and we expect to continue to incur net losses and may not achieve or maintain profitability.

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As o f December 31, 2022, we had an accumulated deficit of $1.6 billion.

Because of the numerous risks and uncertainties associated with successfully developing and commercializing drug products, we are unable to predict the extent of any future losses or whether or when we will become profitable, if at all.

the numerous risks and uncertainties associated with successfully developing and commercializing drug products, we are unable to predict the extent of any future losses or whether or when we will become profitable, if at all.

The size of our net losses will depend, in part, on the rate of decline or growth in our revenues and on the amount of our expenses.

We expect to continue to incur significant expenses over the next several years as we expect to make significant investments in the continued nonclinical and clinical development of sotagliflozin, LX9211 and our other drug candidates, and in the commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved.

We expect to continue to incur significant expenses over the next several years as we expect to make significant investments in the commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved, and the continued nonclinical and clinical development of sotagliflozin, LX9211 and our other drug candidates.

We have derived a substantial portion of our revenues from strategic collaborations and other research and development collaborations and technology licenses.

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Because of these and other factors, our operating results have fluctuated in the past and are likely to do so in the future, and we do not believe that period-to-period comparisons of our operating results are a good indication of our future performance.

We expect to spend significant amounts to fund our planned nonclinical and clinical development of sotagliflozin, LX9211 and our other drug candidates and our planned commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved.

We expect to spend significant amounts to fund our planned commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved, and nonclinical and clinical development of sotagliflozin, LX9211 and our other drug candidates.

As a result, we will need to generate substantial additional revenues to achieve profitability in future periods.

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A number of factors, many of which we cannot control, could subject our operating results to volatility, including:

• the success of our commercial launch of sotagliflozin in the United States for the treatment of heart failure, if approved;

• the success of our ongoing nonclinical and clinical development efforts and our ability to obtain regulatory approval of our drug candidates as a result of such efforts, including for sotagliflozin for the treatment of heart failure;

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Due to the likelihood of fluctuations in our revenues and expenses, we believe that period-to-period comparisons of our operating results are not a good indication of our future performance.

We have substantial indebtedness that may limit cash flow available to invest in the ongoing needs of our business.

We have incurred $48.9 milli on of indebtedness.

Although the affirmative and restrictive covenants and the pledge of substantially all of our assets as collateral under the Oxford Term Loans restrict our ability to obtain additional debt financing, we could in the future incur additional indebtedness beyond such amount.

Our substantial debt combined with our other financial obligations and contractual commitments could have significant adverse consequences, including:

• requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt, which will reduce the amounts available to fund working capital, capital expenditures, product commercialization and development efforts and other general corporate purposes;

• increasing our vulnerability to adverse changes in general economic, industry and market conditions;

• limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete;

• placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.

We intend to satisfy our current and future debt service obligations with our existing cash and cash equivalents and marketable securities and funds from external sources.

However, we may not have sufficient funds or may be unable to arrange for additional financing to pay the amounts due under our existing debt.

Funds from external sources may not be available on acceptable terms, if at all.

In addition, a failure to comply with the covenants under our existing debt instruments could result in an event of default under those instruments.

In the event of an acceleration of amounts due under our debt instruments as a result of an event of default, including upon the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, properties, assets or condition or a failure to pay any amount due, we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness or to make any accelerated payments, and the lenders could seek to enforce their security interests in the collateral securing such indebtedness.

If we do not effectively manage our affirmative and restrictive covenants under the Oxford Term Loans, our financial condition and results of operations could be adversely affected.

Our obligations under the Oxford Term Loans are secured by a first lien security interest in substantially all of our assets.

In addition, the Oxford Term Loans require that we comply with certain affirmative and restrictive covenants, including a financial covenant relating to net sales of sotagliflozin following regulatory approval and additional covenants restricting dispositions, fundamental changes in our business, mergers or acquisitions, indebtedness, encumbrances, distributions, investments, transactions with affiliates and subordinated debt, any of which could restrict our business and operations, particularly our ability to respond to changes in our business or to take specified actions to take advantage of certain business opportunities that may be presented to us.

Our failure to comply with any of these covenants could result in a default under the Oxford Term Loans, which could permit the lenders to declare all or part of any outstanding borrowings to be immediately due and payable.

If we are unable to repay those amounts, the lenders could enforce the security interest granted to them to secure that debt, which would seriously harm our business.

Risks Related to Our Relationships with Third Parties

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Future revenues from our existing and future collaborations depend upon the achievement of milestones and payment of royalties we earn from any future products developed under those arrangements.

If our relationship terminates with any collaborator, as occurred with our collaboration with Sanofi, our reputation in the business and scientific community may suffer and revenues will be negatively impacted to the extent such losses are not offset by additional collaborations or strategic alliances.

If milestones are not achieved or our

collaborators are unable to successfully develop and commercialize products from which milestones and royalties are payable, we will not earn the revenues contemplated by those arrangements.

If our relationship terminates with any collaborator, our reputation in the business and scientific community may suffer and revenues will be negatively impacted to the extent such losses are not offset by additional collaborations or strategic alliances.

If milestones are not achieved or our collaborators are unable to successfully develop and commercialize products from which milestones and royalties are payable, we will not earn the revenues contemplated by those arrangements.

We have limited or no control over the resources that any third party may devote to the development and commercialization of products under our collaborations.

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The patent positions of biotechnology and pharmaceutical companies, including our patent position, are generally uncertain and involve complex legal and factual questions.

We will be able to protect our intellectual property rights from unauthorized use by third parties only to the extent that our products and technologies are covered by valid and enforceable patents or other intellectual property rights, or are effectively maintained as trade secrets or otherwise protected from disclosure by non-disclosure agreements.

able to protect our intellectual property rights from unauthorized use by third parties only to the extent that our products and technologies are covered by valid and enforceable patents or other intellectual property rights, or are effectively maintained as trade secrets or otherwise protected from disclosure by non-disclosure agreements.

We will continue to apply for patents covering our products and technologies as, where and when we deem appropriate.

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We have taken security measures to protect our proprietary information and trade secrets, but these measures may not provide adequate protection.

While we seek to protect our proprietary information by entering into confidentiality agreements with employees, collaborators and consultants, we cannot assure you that our proprietary information will not be disclosed, or that we can

meaningfully protect our trade secrets.

In addition, our competitors may independently develop or duplicate substantially equivalent proprietary information or may otherwise gain access to or misappropriate our trade secrets.

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It is often difficult to anticipate or immediately detect such incidents and the damage caused by such incidents, particularly for cyber incidents such as advanced persistent threats.

These data breaches and any unauthorized access or disclosure of our information or intellectual property could compromise

our intellectual property and expose sensitive business information.

These data breaches and any unauthorized access or disclosure of our information or intellectual property could compromise our intellectual property and expose sensitive business information.

A data security breach could also lead to public exposure of personal information of our clinical trial patients, customers and others.

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Our network security and data recovery measures and those of our vendors may not be able to detect or prevent every attempted breach and may not permit us to respond effectively to every breach.

These incidents could also subject us to liability, expose us to significant expense and cause significant harm to our reputation and business.

These incidents could also subject us to liability, expose us to significant expense and cause

significant harm to our reputation and business.

Reputational harm resulting from a significant cyber incident may cause unquantifiable damage to our established goodwill.

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If we are unable to manage our growth, our business, financial condition, results of operations and prospects may be adversely affected.

We may experience growth in the number of our employees and in the scope of our operations.

This growth places significant demands on our management, operational and financial resources, and our current and planned personnel, systems, procedures and controls may not be adequate to support our growth.

To effectively manage our potential growth, we must continue to improve existing, and implement new, operational and financial systems, procedures and controls and must expand, train and manage our growing employee base, and there can be no assurance that we will effectively manage our growth without experiencing operating inefficiencies or control deficiencies.

We may need to increase our medical, clinical, commercial and other personnel, and recruiting and retaining qualified individuals is difficult.

We expect substantial growth in the number of our employees and in the scope of our operations as a result of our planned commercial launch of sotagliflozin in the Untied States for heart failure, if approved.

This growth would place significant demands on our management, operational and financial resources, and our current and planned personnel, systems, procedures and controls may not be adequate to support our growth.

To effectively manage our expected growth, we must continue to improve existing, and implement new, operational and financial systems, procedures and controls and must expand, train and manage our growing employee base, and there can be no assurance that we will effectively manage our growth without experiencing operating inefficiencies or control deficiencies.

We will need to increase our commercial, medical, clinical, and other personnel, and recruiting and retaining qualified individuals is difficult.

If we are unable to manage our growth effectively, or are unsuccessful in recruiting qualified personnel when advisable, our business, financial condition, results of operations and prospects may be adversely affected.

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Retaining and, where advisable, recruiting qualified commercial, medical and clinical personnel will be critical to commercially launching sotagliflozin for heart failure, if approved, and advancing our nonclinical and clinical development programs for sotagliflozin, LX9211 and our other drug candidates.

Competition is intense for experienced commercial, medical and clinical personnel, and we may be unable to retain

or recruit such personnel with the expertise or experience necessary to allow us to successfully develop and commercialize our products.

Competition is intense for experienced commercial, medical and clinical personnel, and we may be unable to retain or recruit such personnel with the expertise or experience necessary to allow us to successfully develop and commercialize our products.

Further, all of our employees are employed “at will” and, therefore, may leave our employment at any time.

Our facilities are located near coastal zones, and the occurrence of a hurricane or other disaster could damage our facilities and equipment, which could harm our operations.

Our facilities are located in The Woodlands, Texas and Basking Ridge, New Jersey, and therefore our facilities are vulnerable to damage from hurricanes.

Our facilities are located in The Woodlands, Texas and Bridgewater, New Jersey, and therefore our facilities are vulnerable to damage from hurricanes.

We are also vulnerable to damage from other types of disasters, including fire, floods, power loss, communications failures, terrorism and similar events and any insurance we may maintain may not be adequate to cover our losses.

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See “Part I, Item 1.

Business – Government Regulation – Environmental Matters” for more discussion on these and other environmental matters.

Business – Government Regulation – Environmental and Worker Safety Matters” for more discussion on these and other environmental matters.

Compliance with environmental laws and regulations may be expensive, and current or future environmental regulations may impair our research, development and production efforts.

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Invus-designated directors currently serve as one of the three members of each of the compensation committee and the corporate governance committee of our board of directors, and no Invus-designated directors currently serve on the audit committee of our board of directors.

Our second amended and restated certificate of incorporation also grants holders of 20% or more of our issued and outstanding common stock customary preemptive rights and consent rights prior to us taking any of the following actions:

Our fifth amended and restated certificate of incorporation also grants holders of 20% or more of our issued and outstanding common stock customary preemptive rights and consent rights prior to us taking any of the following actions:

(1) creating or issuing any new class or series of shares of capital stock (or securities convertible into or exercisable for shares of capital stock) having rights, preferences or privileges senior to or on parity with the common stock, (2) subject to certain exceptions, repurchasing, retiring, redeeming or otherwise acquiring any equity securities (or securities convertible into or exchangeable for equity securities) or any subsidiary and (3) adopting, or proposing to adopt, or maintaining any shareholders’ rights plan, “poison pill” or other similar plan or agreement, unless such stockholder is exempt from such plan or agreement.

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

What changed 10-K

Item 1A. Risk Factors