What changed in this filing

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Item 1A. Risk Factors

2024-03-25 compared with 2023-03-03 · 126 added, 116 removed, 375 unchanged (39% of the section changed)

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Risks Related to Our Business and Industry

• We depend heavily on our ability to obtain regulatory approval in the United States for sotagliflozin in heart failure.

• We depend heavily on the commercial success of INPEFA in heart failure.

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

• We depend heavily on our ability to obtain regulatory approval in the United States for sotagliflozin in patients with type 1 diabetes and CKD.

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

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

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 successfully complete and obtain positive results from our PROGRESS Phase 2b clinical trial of LX9211 in DPNP.

If we fail to successfully complete and obtain positive results from the PROGRESS clinical trial on our expected timeline, 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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• 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 may not have sufficient capital to support Phase 3 development of LX9211.

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 on acceptable terms, or at all, and may be required to forego or 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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• Invus, L.P.

and its affiliates own a controlling interest in our outstanding common stock and may have interests which conflict with those of our other stockholders.

and its affiliates own a substantial interest in our outstanding common stock and may have interests which conflict with those of our other stockholders.

• Invus has additional rights under its stockholders’ agreement relating to the membership of our board of directors and under our certificate of incorporation relating to preemptive and consent rights, which provide Invus with substantial influence over significant corporate matters.

Risks Related to Our Business and Industry

We depend heavily on our ability to obtain regulatory approval in the United States for sotagliflozin in heart failure.

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

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.

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

If approved, we expect that a significant portion of our total revenues will be attributable to sales of sotagliflozin for heart failure in the United States, but we cannot be certain that sotagliflozin will be commercially successful.

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;

We depend heavily on the commercial success of INPEFA in heart failure.

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

We expect that a significant portion of our total revenues for the next several years will be attributable to sales of INPEFA for heart failure in the United States, but we cannot be certain that INPEFA will be commercially successful.

Our future sales of INPEFA will depend on numerous factors, including:

• the number of patients suffering from heart failure;

• competition from dapagliflozin, empagliflozin and, to some extent, other classes of drugs used in the treatment of heart failure, such as the combination drug sacubitril/valsartan;

• the safety profile of sotagliflozin, including whether previously unknown side effects or increased incidence or severity of known side effects as compared to those seen during development are identified with the commercial use of sotagliflozin;

• the effectiveness of our commercial strategy for marketing sotagliflozin and our execution of that strategy, including our pricing strategy and the effectiveness of our efforts to obtain and maintain adequate third-party reimbursement;

• the acceptance of sotagliflozin by patients, the medical community and third-party payers;

• our ability to meet the demand for commercial supplies of sotagliflozin and to maintain and successfully monitor commercial manufacturing arrangements for sotagliflozin with third-party manufacturers to ensure they meet our standards and those of the FDA, which extensively regulates and monitors pharmaceutical manufacturing facilities.

While we believe that sotagliflozin, if approved, will have a competitive commercial profile, our current estimates of the revenues that sotagliflozin could generate in future periods may change based upon the above factors, and could prove to be incorrect.

If our revenues, market share or other indicators of market acceptance of sotagliflozin fail to meet the expectations of investors or public market analysts, the market price of our common stock could decline.

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.

• the effectiveness of our commercial strategy for marketing INPEFA and our execution of that strategy, in particular the effectiveness of our efforts to obtain and maintain adequate third-party reimbursement;

• the safety profile of INPEFA, including whether previously unknown side effects or increased incidence or severity of known side effects as compared to those seen during development are identified with the commercial use of INPEFA;

• the acceptance of INPEFA by patients, the medical community and third-party payers;

• our ability to meet the demand for commercial supplies of INPEFA and to maintain and successfully monitor commercial manufacturing arrangements for INPEFA with third-party manufacturers to ensure they meet our standards and those of the FDA, which extensively regulates and monitors pharmaceutical manufacturing facilities.

While we believe that INPEFA has a competitive commercial profile, our current estimates of the revenues that INPEFA could generate in future periods may change based upon the above factors, and could prove to be incorrect.

If our revenues, market share or other indicators of market acceptance of INPEFA fail to meet the expectations of investors or public market analysts, the market price of our common stock could decline.

In addition, if one or more of the factors above negatively affects INPEFA 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 regulatory approval in the United States for sotagliflozin in patients with type 1 diabetes and CKD.

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

We are currently preparing to resubmit our NDA for sotagliflozin as an adjunct to insulin therapy for patients with type 1 diabetes and CKD.

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

Furthermore, regulatory approval in the United States for sotagliflozin, even if obtained, may further limit the types of patients in which sotagliflozin may be used or otherwise require specific

warning or labeling language, such as with respect to the risk of diabetic ketoacidosis, any of which may reduce the commercial potential of sotagliflozin in type 1 diabetes.

We depend heavily on our ability to successfully complete and obtain positive results from our ongoing PROGRESS Phase 2b clinical trial of LX9211 in DPNP.

If we fail to successfully complete and obtain positive results from such clinical trial, or if the progress of such clinical trial is delayed beyond our expected timelines, our business will suffer and our stock price will likely decline.

We are conducting the PROGRESS Phase 2b clinical trial of LX9211 in DPNP.

We cannot offer any assurances or predict with any certainty that the PROGRESS clinical trial will be successfully completed, generate positive clinical data or demonstrate a competitive commercial profile for LX9211, in any such case on our expected timeline.

Should we fail to obtain positive results from the PROGRESS clinical trial, or if the PROGRESS clinical trial is not completed on our expected timeline due to delays in planned patient enrollment or otherwise, our opportunity to establish a strategic collaboration or other arrangement for the further development and commercialization of LX9211 would be negatively affected, 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 addition, we have limited internal resources for making regulatory filings and interacting with regulatory authorities.

Clinical trials are inherently risky and the results from nonclinical testing of a drug candidate that is under development may not be predictive of results that will be obtained in human clinical trials.

Clinical trials are inherently risky and the results from preclinical testing of a drug candidate that is under development may not be predictive of results that will be obtained in human clinical trials.

In addition, the results of early human clinical trials may not be predictive of results that will be obtained in larger-scale, advanced stage clinical trials.

A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after achieving positive results in earlier trials.

Negative or inconclusive results from a nonclinical study or a clinical trial could cause us, our collaborators or the FDA or other equivalent foreign regulatory agencies to terminate a nonclinical study or clinical trial or require that we or our collaborators repeat or modify it.

Negative or inconclusive results from a preclinical study or a clinical trial could cause us, our collaborators or the FDA or other equivalent foreign regulatory agencies to terminate a preclinical study or clinical trial or require that we or our collaborators repeat or modify it.

Furthermore, we, one of our collaborators or a regulatory agency with jurisdiction over the trials may suspend clinical trials at any time if the subjects or patients participating in such trials are being exposed to unacceptable health risks or for other reasons.

Any nonclinical or clinical test may fail to produce results satisfactory to the FDA or foreign regulatory authorities.

Nonclinical and clinical data can be interpreted in different ways, which could delay, limit or prevent regulatory approval.

Any preclinical or clinical test may fail to produce results satisfactory to the FDA or foreign regulatory authorities.

Preclinical and clinical data can be interpreted in different ways, which could delay, limit or prevent regulatory approval.

The FDA or institutional review boards at the medical institutions and healthcare facilities where we or our collaborators sponsor clinical trials may suspend any trial indefinitely if they find deficiencies in the conduct of these trials.

Clinical trials must be conducted in accordance with the FDA’s current Good Clinical Practices.

Clinical trials must be conducted in accordance with the FDA’s cGCP requirements.

The FDA and these institutional review boards have authority to oversee our and our collaborators’ clinical trials, and the FDA may require large numbers of subjects or patients.

In addition, we or our collaborators must manufacture, or contract for the manufacture of, the drug candidates that we use in our clinical trials under the FDA’s current Good Manufacturing Practices.

In addition, we or our collaborators must manufacture, or contract for the manufacture of, the drug candidates that we use in our clinical trials under the FDA’s cGMP requirements.

The rate of completion of clinical trials is dependent, in part, upon the rate of enrollment of patients.

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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.

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.

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 preclinical testing, and data obtained from preclinical and clinical activities are susceptible to varying interpretations, which could delay, limit or prevent regulatory approval.

In addition, delays or rejections may be encountered based upon changes in regulatory policy for product approval during the period of product development and regulatory agency review.

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• sufficient third-party coverage or reimbursement.

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.

If we are unable to maintain 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.

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If we or our collaborators are unable to effectively train our sales forces and equip them with effective materials, including medical and sales literature to help them inform and educate potential customers about the benefits and risks of such products and their proper administration, our and their ability to successfully commercialize such products could be diminished, which could have a material adverse effect on our financial condition, stock price and operations.

If we are unable to maintain adequate coverage and reimbursement from third-party payers for any products that we or our collaborators may develop, our revenues and prospects for profitability will suffer.

If we are unable to establish adequate coverage and reimbursement from third-party payers for any products that we or our collaborators may develop, our revenues and prospects for profitability will suffer.

Our ability to successfully commercialize any products that we or our collaborators may develop is highly dependent on the extent to which coverage and reimbursement for such products are available from third-party payers, including governmental payers, such as Medicare and Medicaid, and private health insurers, including managed care organizations and group purchasing organizations.

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We may not be able to manufacture products that we or our collaborators may develop in commercial quantities, which would impair our ability to commercialize such products.

Our drug candidates have been manufactured in relatively small quantities for nonclinical and clinical trials.

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.

Our drug candidates other than INPEFA have been manufactured in relatively small quantities for preclinical and clinical trials.

If any of these drug candidates 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.

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Pharmaceutical products typically require precise, high-quality manufacturing.

The failure to achieve and maintain these high manufacturing standards, including the incidence of manufacturing errors, could result in patient injury or death, product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously hurt our business.

The failure to achieve and maintain these high manufacturing standards, including the incidence of manufacturing errors, could result in patient injury or death,

product recalls or withdrawals, delays or failures in product testing or delivery, cost overruns or other problems that could seriously hurt our business.

We and our collaborators are subject to extensive and rigorous ongoing regulation relating to any products that we or our collaborators may develop.

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.

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

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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, 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.

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.

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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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In addition, significant delays in the development of our drug candidates could allow our competitors to bring products to market before us, which would impair our or our collaborators’ ability to commercialize our drug candidates.

Any products that we or our collaborators develop will compete in highly competitive markets.

INPEFA competes and any additional products that we or our collaborators develop will compete in highly competitive markets.

Further, our competitors may be more effective at using their technologies to develop commercial products.

Many of the organizations competing with us have greater capital resources, larger research and development staff and facilities, more experience in obtaining regulatory approvals and more extensive product manufacturing and marketing capabilities.

As a result, our competitors may be able to more easily develop products that would render any products that we or our collaborators develop obsolete and noncompetitive.

For example, dapagliflozin and empagliflozin are currently being marketed by AstraZeneca and through an alliance between Boehringer Ingelheim and Eli Lilly, respectively, for the treatment of heart failure and certain other indications.

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.

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.

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.

As a result, our competitors may be able to more easily develop and commercialize products that would render INPEFA and any other products that we or our collaborators develop obsolete and noncompetitive.

For example, dapagliflozin and empagliflozin were being marketed by AstraZeneca and through an alliance between Boehringer Ingelheim and Eli Lilly, respectively, for the treatment of heart failure and certain other indications for a lengthy period in advance of INPEFA’s approval.

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

Our principal competition for INPEFA for the treatment of heart failure includes 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.

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

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

Our business was disrupted and adversely affected by the COVID-19 pandemic.

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 of INPEFA and research and development efforts with respect to our drug candidates.

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.

This disruption, if sustained or recurrent, could make it more difficult for us to access capital, which could in the future negatively affect our liquidity, and effectively manage the clinical and commercial supply of our products.

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 evolve.

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

We do not yet know the full extent of potential delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole.

These and similar, and perhaps more severe, disruptions in our operations due to the emergence of a novel coronavirus could negatively impact our business, operating results and financial condition.

The pandemic also resulted in the disruption of global financial markets and supply chains.

Any disruption could make it more difficult for us to access capital, which could in the future negatively affect our liquidity, and effectively manage the clinical and commercial supply of our products.

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

The ultimate impact of a health pandemic or epidemic is highly uncertain and subject to change.

These effects could have a material impact on our operations.

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As of December 31, 2023, we had $170.0 million in cash, cash equivalents and investments.

We anticipate that our existing capital resources and the cash and revenues we expect to derive from collaborations and other sources will enable us to fund our currently planned operations for at least the next 12 months from the date of this report.

In March 2024, we entered into an agreement with certain accredited investors in a private placement of convertible preferred stock in which we received net proceeds of approximately $242 million (please refer to Note 13 of the Notes to Consolidated Financial Statements for further details).

We anticipate that our existing capital resources and revenues will enable us to fund our currently planned operations for at least the next 12 months from the date of this report.

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 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.

Our currently planned operations for the next twelve months include the continued commercialization of INPEFA for the treatment of heart failure, preparations for the potential commercial launch of sotagliflozin for patients with type 1 diabetes and CKD and the continued research and development of sotagliflozin, LX9211, LX9851 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;

• the success of our commercialization of INPEFA for the treatment of heart failure;

• the success of our commercial launch of sotagliflozin for patients with type 1 diabetes and CKD, if approved;

• the timing, progress and results of our research and development efforts for sotagliflozin, LX9211, LX9851 and our other drug candidates and our ability to obtain necessary regulatory approvals based on clinical trials of those drug candidates;

• our success in establishing new collaborations and licenses;

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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.

We may not have sufficient capital to support Phase 3 development of LX9211 in DPNP and do not have sufficient capital to support Phase 3 development of LX9211 in neuropathic pain broadly.

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 on acceptable terms, or at all, and may be required to forego or reduce the scope of any such Phase 3 development program.

Our existing resources may be insufficient to support Phase 3 development of LX9211 in DPNP and will be insufficient to support Phase 3 development of LX9211 in neuropathic pain broadly.

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 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 forego or 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, 2023, we had an accumulated deficit of $1.8 billion.

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.

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 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 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 expect to continue to incur significant expenses over the next several years as we expect to continue making significant investments in the commercialization of INPEFA for the treatment of heart failure, preparations for the potential commercial launch of sotagliflozin for patients with type 1 diabetes and CKD and the continued research and development of sotagliflozin, LX9211, LX9851 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 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.

We have spent and expect to continue spending significant amounts to fund our commercialization of INPEFA for the treatment of heart failure, preparations for our potential commercial launch of sotagliflozin for patients with type 1 diabetes and CKD and our continued research and development of sotagliflozin, LX9211, LX9851 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;

• the timing and amount of expenses incurred with respect to our nonclinical and clinical development and commercialization efforts;

• the success of our commercialization of INPEFA for the treatment of heart failure;

• the success of our ongoing research and development efforts and our ability to obtain regulatory approval of our drug candidates as a result of such efforts;

• the timing and amount of expenses incurred with respect to our research, development and commercialization efforts;

• our success in establishing new collaborations and technology licenses and the timing and financial terms of such arrangements;

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Because of these and other factors, including the risks and uncertainties described in this section, our operating results have fluctuated in the past and are likely to do so in the future.

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.

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.

We have incurred $99.5 million 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.

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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.

In addition, the Oxford Term Loans require that we comply with certain affirmative and restrictive covenants, including financial covenants relating to net sales of INPEFA and minimum cash balance requirements 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.

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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.

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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Any of these events could harm our product development efforts.

We rely on third parties to carry out our nonclinical studies and clinical trials, which may harm or delay our research and development efforts.

We rely on clinical research organizations and other third-party contractors to carry out many of our drug development activities, including the performance of nonclinical laboratory and animal tests under the FDA’s current Good Laboratory Practices regulations and the conduct of clinical trials of our drug candidates in accordance with protocols we establish.

We rely on third parties to carry out our preclinical studies and clinical trials, which may harm or delay our research and development efforts.

We rely on clinical research organizations and other third-party contractors to carry out many of our drug development activities, including the performance of preclinical laboratory and animal tests under the FDA’s current Good Laboratory Practices regulations and the conduct of clinical trials of our drug candidates in accordance with protocols we establish.

If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, our drug development activities may be delayed, suspended or terminated.

Such a failure by these third parties could significantly impair our ability to develop and commercialize the affected drug candidates.

We lack the capability to manufacture materials for nonclinical studies and clinical trials and commercial supplies for any products which gain regulatory approval.

Our reliance on third parties to manufacture our drug candidates may harm or delay our research, development and commercialization efforts.

We currently do not have the manufacturing capabilities or experience necessary to produce materials for nonclinical studies or clinical trials or commercial supplies for any products which gain regulatory approval and intend in the future to continue to rely on collaborators and third-party contractors to produce such materials.

We will rely on selected manufacturers to deliver materials on a timely basis and to comply with applicable regulatory requirements, including the current Good Manufacturing Practices of the FDA, which relate to manufacturing and quality control activities.

We lack the capability to manufacture commercial supplies of INPEFA and any other products which gain regulatory approval and other materials for our research and development activities relating to our drug candidates.

Our reliance on third parties to manufacture our drugs and drug candidates may harm or delay our research, development and commercialization efforts.

We currently do not have the manufacturing capabilities or experience necessary to produce commercial supplies of INPEFA and any other products which gain regulatory approval and other materials for our research and development activities relating to our drug candidates and intend in the future to continue to rely on collaborators and third-party contractors to produce such materials.

We will rely on selected manufacturers to deliver materials on a timely basis and to comply with applicable regulatory requirements, including the cGMP regulations of the FDA, which relate to manufacturing and quality control activities.

These manufacturers may not be able to produce material on a timely basis or manufacture material at the quality level or in the quantity required to meet our development and commercialization timelines and applicable regulatory requirements.

In addition, there are a limited number of manufacturers that operate under the FDA’s current Good Manufacturing Practices and that are capable of producing such materials, and we may experience difficulty finding manufacturers with adequate capacity for our needs.

In addition, there are a limited number of manufacturers that operate under the FDA’s cGMP regulations and that are capable of producing such materials, and we may experience difficulty finding manufacturers with adequate capacity for our needs.

If we are unable to contract for the production of sufficient quantity and quality of materials on acceptable terms, our product development or commercialization efforts may be delayed.

Moreover, noncompliance with the FDA’s current Good Manufacturing Practices can result in, among other things, fines, injunctions, civil and criminal penalties, product recalls or seizures, suspension of production, failure to obtain marketing approval and withdrawal, suspension or revocation of marketing approvals.

Moreover, noncompliance with the FDA’s cGMP regulations can result in, among other things, fines, injunctions, civil and criminal penalties, product recalls or seizures, suspension of production, failure to obtain marketing approval and withdrawal, suspension or revocation of marketing approvals.

Risks Related to Our Intellectual Property

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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.

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 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.

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.

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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Such challenges can be expensive and may adversely affect our ability to maintain the goodwill gained in connection with a particular trademark.

We may be involved in patent litigation and other disputes regarding intellectual property rights and may require licenses from third parties for our planned nonclinical and clinical development and commercialization activities.

We may be involved in patent litigation and other disputes regarding intellectual property rights and may require licenses from third parties for our planned research, development and commercialization activities.

We may not prevail in any such litigation or other dispute or be able to obtain required licenses.

Our products and those of our collaborators, as well as our nonclinical and clinical development efforts, may give rise to claims that they infringe or misappropriate the patents or other intellectual property rights of others.

Our products and those of our collaborators, as well as our research and development efforts, may give rise to claims that they infringe or misappropriate the patents or other intellectual property rights of others.

We are aware that other companies and institutions are developing products acting through the same drug targets through which some of our drug candidates currently in clinical development act, have conducted research on many of the same targets that we have identified and have filed patent applications potentially covering drug targets that we have identified and certain therapeutic products addressing such targets.

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In addition, many companies and institutions have well-established patent portfolios directed to common techniques, methods and means of developing, producing and manufacturing pharmaceutical products.

These or other companies or institutions could bring legal actions against us or our collaborators for damages or to stop us or our collaborators from engaging in certain nonclinical or clinical development activities or from manufacturing and marketing therapeutic products that allegedly infringe their patent rights.

These or other companies or institutions could bring legal actions against us or our collaborators for damages or to stop us or our collaborators from engaging in certain research and development activities or from manufacturing and marketing therapeutic products that allegedly infringe their patent rights.

If any of these actions are successful, in addition to our potential liability for damages, these entities may require us or our collaborators to obtain a license in order to continue engaging in the infringing activities or to manufacture or market the infringing therapeutic products or may force us to terminate such activities or manufacturing and marketing efforts.

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The secure maintenance of this information is critical to our business and reputation.

We believe that companies have been increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access and unintentional breaches.

Companies have been increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access and unintentional breaches.

These threats can come from a variety of sources, ranging in sophistication from an individual hacker to a state-sponsored attack and motive (including corporate espionage).

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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 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.

We have experienced and may continue to experience substantial growth in the number of our employees and in the scope of our operations.

This growth will likely 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 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 have increased 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 or retaining qualified personnel when advisable, our business, financial condition, results of operations and prospects may be adversely affected.

The loss of key personnel or the inability to attract and retain additional personnel could impair our ability to operate and expand our operations.

We are highly dependent upon the principal members of our management, as well as medical and clinical staff, the loss of whose services might adversely impact the achievement of our objectives.

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.

Retaining and, where advisable, recruiting qualified commercial, medical and clinical personnel will be critical to the commercialization of INPEFA for heart failure, the potential commercial launch of sotagliflozin for patients with type 1 diabetes and CKD and the advancement of our research and development efforts for sotagliflozin, LX9211, LX9851 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.

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

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Our business has a substantial risk of product liability and we face potential product liability exposure far in excess of our limited insurance coverage.

We may be held liable if any product that we or our collaborators develop or commercialize, or any product that is made with the use or incorporation of any of our technologies, causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing or sale.

Regardless of merit or eventual outcome, product liability claims could result in decreased demand for our products and product candidates, injury to our reputation, withdrawal of patients from our clinical trials, product recall, substantial monetary awards to third parties and the inability to commercialize any products that we may develop.

We may be held liable if INPEFA or any other product that we or our collaborators develop or commercialize, or any other product that is made with the use or incorporation of any of our technologies, causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing or sale.

Regardless of merit or eventual outcome, product liability claims could result in decreased demand for INPEFA or our other products and product candidates, injury to our reputation, withdrawal of patients from our clinical trials, product recall, substantial monetary awards to third parties and the inability to commercialize any products that we may develop.

These claims might be made directly by consumers, health care providers, pharmaceutical companies or others selling or testing our products.

We have obtained limited product liability insurance coverage for our clinical trials.

We have obtained limited product liability insurance coverage for our commercialization of INPEFA and clinical trials of our drug candidates.

However, our insurance may not reimburse us or may not be sufficient to reimburse us for expenses or losses we may suffer.

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Risks Related to Our Common Stock

and its affiliates own a controlling interest in our outstanding common stock and may have interests which conflict with those of our other stockholders.

and its affiliates, which we collectively refer to as Invus, currently own approximately 50.5% of the outstanding shares of our common stock and are thereby able to control the election and removal of our directors and determine our corporate and management policies, including potential mergers or acquisitions, asset sales, the amendment of our articles of incorporation or bylaws and other significant corporate transactions.

and its affiliates own a substantial interest in our outstanding common stock and may have interests which conflict with those of our other stockholders.

and its affiliates, which we collectively refer to as Invus, currently own approximately 50% of the outstanding shares of our common stock and are thereby able to exert substantial control over the election and removal of our directors and determination of our corporate and management policies, including potential mergers or acquisitions, asset sales, the amendment of our articles of incorporation or bylaws and other significant corporate transactions.

This concentration of ownership may delay or deter possible changes in control of our company, which may reduce the value of an investment in our common stock.

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Under its stockholders’ agreement, Invus has the right to designate a number of directors equal to the percentage of all the outstanding shares of our common stock owned by Invus and its affiliates, rounded up to the nearest whole number of directors.

Invus has designated three of the nine current members of our board of directors.

Invus has designated three of the eight current members of our board of directors.

While Invus has not presently exercised its director designation rights in full, it may exercise them at any time in the future in its sole discretion.

To facilitate the exercise of such rights, we have agreed, upon written request from Invus, to take all necessary steps in accordance with our obligations under the stockholders’ agreement to (1) increase the number of directors to the number specified by Invus (which number shall be no greater than reasonably necessary for the exercise of Invus’ director designation rights under the stockholders’ agreement) and (2) cause the appointment to the newly created directorships of directors so designated by Invus pursuant to its rights under the stockholders’ agreement.

To facilitate the exercise of such rights, we have agreed, upon written request from Invus, to take all necessary steps in accordance with our obligations under the stockholders’ agreement to (a) increase the number of directors to the number specified by Invus (which number shall be no greater than reasonably necessary for the exercise of Invus’ director designation rights under the stockholders’ agreement) and (b) cause the appointment to the newly created directorships of directors so designated by Invus pursuant to its rights under the stockholders’ agreement.

Invus also has the right to require proportionate representation of Invus-appointed directors on the audit, compensation and corporate governance committees of our board of directors, subject to certain restrictions.

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 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.

Our 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:

(a) 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, (b) 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 (c) 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.

Invus currently has such preemptive and consent rights as a result of its ownership position in our issued and outstanding common stock.

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The trading price of our common stock has been highly volatile, and we believe the trading price of our common stock will remain highly volatile and may fluctuate substantially due to factors such as the following, many of which we cannot control:

• the commercial success of INPEFA and the revenues we generate from sales of INPEFA;

• results or delays in our or our collaborators’ clinical trials;

• the announcement of FDA approval or non-approval, or delays in the FDA review process, of our or our collaborators’ drug candidates or those of our competitors or actions taken by regulatory agencies with respect to our, our collaborators’ or our competitors’ clinical trials;

• actions taken by regulatory agencies with respect to sotagliflozin, LX9211 and our other drug candidates;

• actions taken by regulatory agencies with respect to sotagliflozin, LX9211, LX9851 and our other drug candidates;

• the announcement of new products by our competitors;

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If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our stock price and trading volume to decline.

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