What changed in this filing

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Item 1A. Risk Factors

2025-03-07 compared with 2024-03-25 · 78 added, 95 removed, 406 unchanged (30% of the section changed)

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Risks Related to Our Business and Industry

• 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.

• 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.

• We depend heavily on our ability to successfully complete the ongoing research and development of our drug programs.

If we fail to successfully complete and gain positive results from such research and development efforts, 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 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 may not have sufficient capital to support Phase 3 development of pilavapadin in DPNP and do not have sufficient capital to support Phase 3 development of pilavapadin 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 pilavapadin 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.

Risks Related to Our Relationships with Third Parties

• We depend on our ability to establish collaborations with pharmaceutical and biotechnology companies for the development and commercialization of our other drug candidates.

If we are unable to establish such collaborations, or if pharmaceutical products are not successfully and timely developed and commercialized under such collaborations, our opportunities to generate revenues from our other drug candidates will be greatly reduced.

• We depend on our ability to establish collabora tions or other arrangements with phar maceutical and biotechnology companies for the development and commercialization of our drug candidates.

If we are unable to establish such collaborations or arrangements, or if pharmaceutical products are not successfully and timely developed and commercialized under such collaborations or arrangements, our opportunities to generate revenues from milestones and royalties or our other drug candidates will be greatly reduced .

Risks Related to Our Intellectual Property

• If we are unable to adequately protect our intellectual property, third parties may be able to use our products and technologies, which could adversely affect our ability to compete in the market.

Risks Related to Our Employees and Facilities

Risks Related to Our Employees and F acilities

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

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Risks Related to Our Business and Industry

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 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.

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.

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.

We depend heavily on our ability to successfully complete the ongoing research and development of our drug programs.

If we fail to successfully complete and gain positive results from such research and development efforts, our business will suffer and our stock price will likely decline.

We are developing pilavapadin for neuropathic pain, LX9851 for obesity and cardiometabolic disorders and sotagliflozin for HCM and conducting research and development of compounds from a number of additional drug programs.

We cannot offer any assurances or predict with any certainty that our ongoing research and development efforts, including our IND-enabling studies for LX9851 and SONATA-HCM Phase 3 clinical trial of sotagliflozin in HCM, will be successfully completed, generate positive data or demonstrate competitive clinical or commercial profiles, in any case on our expected timelines.

Should we fail to obtain positive results from any ongoing research and development efforts, or if any such efforts are not completed on our expected timelines, the likelihood of gaining regulatory approval for the impacted drug program would be reduced, our opportunity to establish a strategic collaboration or other arrangement for the further research, development and commercialization of the impacted drug program 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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• sufficient third-party coverage or reimbursement.

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.

If we are unable to establish an effectiv e sales force, m arketing 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.

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

We no longer maintain a significant commercial infrastructure following our restructuring and reduction of commercial operations for INPEFA and would need to reestablish sales capabilities in order to effectively commercialize any future products.

Factors that may hinder efforts to effectively reestablish, 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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Third-party payers are challenging the prices charged for medical products and services, and many third-party payers limit reimbursement for newly approved health care products.

In particular, third-party payers may limit the indications for which they will reimburse patients who use any products that we or our collaborators may develop.

In particular, third-party payers may limit the indications for which they will reimburse patients who use any

products that we or our collaborators may develop.

Cost-control initiatives could decrease prices we or our collaborators might establish for products that may be developed, which would result in lower product revenues to us.

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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.

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The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of drug candidates.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability.

slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability.

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

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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.

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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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.

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

Any 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 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.

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

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.

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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.

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.

severely impacted.

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.

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These effects could have a material impact on our operations.

Changes in government trade policies could disrupt our supply chain or increase the costs of our clinical and commercial supply, negatively impacting our ability to conduct our clinical and commercial operations, price our commercial product competitively and conduct clinical development in a cost effective manner.

We rely on third party drug product contract manufacturers in Canada and China who then manufacture, package and label finished commercial supply of INPEFA and clinical supply of our drug candidates.

Recent changes in U.S.

foreign trade policies, including changes to trade regulations, proposed tariffs or other import or export restrictions with countries such as Canada, Mexico and China, could disrupt our supply chains and jeopardize the commercial availability of INPEFA and our conduct of planned clinical development activities for our drug candidates.

Such trade dynamics could also increase our costs for raw materials or products that we source internationally, which would negatively impact our business margins and financial results.

We cannot predict what other changes to trade policy, if any, will be made by the current or a future administration or Congress, including whether existing tariff policies will be maintained or modified.

Risks Related to Our Capital Requirements and Financial Results

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If additional capital is not available on reasonable terms, we will be forced to obtain funds, if at all, by entering into financing agreements on unattractive terms.

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

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).

As of December 31, 2024, we had $238.0 million in cash, cash equivalents and short-term investments.

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 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.

Our currently planned operations for the next twelve months include the continued research and development of pilavapadin , LX9851, sotagliflozin and our other drug candidates and the continued limited commercialization of INPEFA for the treatment of heart failure.

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 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;

• the timing, progress and results of our research and development efforts for pilavapadin, LX9851, sotagliflozin 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 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 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.

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.

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 may not have sufficient capital to support Phase 3 development of pilavapadin in DPNP and do not have sufficient capital to support Phase 3 development of pilavapadin 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 pilavapadin 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 pilavapadin in DPNP and will be insufficient to support Phase 3 development of pilavapadin 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.

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.

We have incurred aggregate net losses since our inception, including an aggregate net loss of $366.8 million for the three years ended December 31, 2023.

As o f December 31, 2023, we had an accumulated deficit of $1.8 billion.

We have incurred aggregate net losses since our inception, including an aggregate net loss of approximately $479.5 million for the three-year period ended December 31, 2024.

As o f December 31, 2024, we had an accumulated deficit of approximately $2.0 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 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 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 expect to continue to incur significant expenses over the next several years including the continued research and development of pilavapadin, LX9851, sotagliflozin 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 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.

We have spent and expect to continue spending significant amounts to fund our continued research and development of pilavapadin, LX9851, sotagliflozin 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 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;

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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 $99.5 million of indebtedness.

As of December 31, 2024, w e have incurred approximately $100.3 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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Risks Related to Our Relationships with Third Parties

We depend on our ability to establish collaborations with pharmaceutical and biotechnology companies for the development and commercialization of our other drug candidates.

We depend on our ability to establish collabora tions or other arrangements with phar maceutical and biotechnology companies for the development and commercialization of our drug candidates.

We have derived a substantial majority of our revenues to date from collaborative arrangements with other pharmaceutical and biotechnology companies for the research, development and commercialization of our drug candidates and other research and development collaborations and technology licenses.

For example, we have entered into an exclusive license agreement with Viatris for the development and commercialization of sotagliflozin in all markets outside of the United States and Europe.

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, 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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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.

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.

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Many countries, including certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties (for example, if the patent owner has failed to “work” the invention in that country or the third party has patented improvements).

In addition, many countries limit the enforceability of patents against government agencies or government contractors.

In addition, many countries limit the enforceability of patents

against government agencies or government contractors.

In these countries, the patent owner may have limited remedies, which could materially diminish the value of the patent.

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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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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.

In some cases, patents have issued, and may issue in the future, from these applications.

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.

We are aware that other companies and institutions are developing products that act on the same drug targets upon which some of our drug candidates act, have conducted research on many of the same targets that we have identified and have filed patent applications potentially covering drugs that act on those targets.

In some cases, patents have issued, and may issue in the future, from those applications.

In addition, many companies and institutions have patent portfolios directed to commonly used 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 research and development activities or from manufacturing and marketing therapeutic products that allegedly infringe their patent rights.

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In the ordinary course of our business, we collect, maintain and transmit sensitive data on our networks and systems, including our intellectual property and proprietary or confidential business information (such as research data and personal information) and confidential information with respect to our customers, clinical trial patients and our business partners.

We have also outsourced significant elements of our information technology infrastructure and, as a result, third parties may or could have access to our confidential information and personal data.

We have outsourced significant elements of our information technology infrastructure and, as a result, third parties may or could have access to our confidential information and personal data.

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

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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 insurance coverage may not be sufficient to prevent or recover from cyberattacks, including coverage of applicable resulting losses arising from the incident.

Further, each foreign jurisdiction and U.S.

Each foreign jurisdiction and U.S.

state in which we operate may have laws governing how we must respond to a cyber incident that results in the unauthorized access, disclosure, or loss of personal information.

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Risks Related to Our Employees and Facilities

If we are unable to manage our growth, 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.

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

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

If we experience it again, it 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.

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.

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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 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.

Retaining and, where advisable, recruiting qualified personnel will be critical to the advancement of our research and development efforts for pilavapadin, LX9851, sotagliflozin and our other drug candidates.

Competition is intense for experienced 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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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;

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

• 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, LX9851 and our other drug candidates;

• the announcement of new products by our competitors;

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If one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline.

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.

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.

If we are unable to meet Nasdaq continued listing requirements, including minimum trading price, Nasdaq may take action to delist our common stock.

Our common stock trades on The Nasdaq Global Select Market, which has qualitative and quantitative listing criteria, including a requirement to maintain a minimum bid price of $1 per share.

On January 3, 2025, we received a letter from Nasdaq’s listing qualifications staff indicating that we no longer meet such minimum bid price requirement.

In accordance with Nasdaq rules, we have been provided a period of 180 calendar days, or until July 2, 2025, in which to regain compliance by ensuring the closing bid price of our common stock is at least $1 per share for a minimum of ten consecutive business days during such 180-day period.

In the event that we do not regain compliance within such 180-day period, we may be eligible to seek an additional compliance period of 180 calendar days if we meet the continued listing requirement for market value of publicly held shares and all other Nasdaq initial listing standards, with the exception of the bid price requirement, and provide written notice to Nasdaq of our intent to cure the deficiency during this second compliance period, by effecting a reverse stock split, if necessary.

However, if it appears to the Nasdaq staff that we will not be able to cure the deficiency, or if we are otherwise not eligible, Nasdaq will provide us notice that our common stock will be subject to delisting.

Although we are monitoring the closing bid price of our common stock and considering our available options in the event that the closing bid price of our common stock remains below $1 per share, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or otherwise maintain compliance with the other Nasdaq listing requirements.

A delisting of our common stock would likely negatively impact us and our shareholders by reducing the liquidity and market price of our common stock and potentially reducing the number of investors willing to hold or acquire our common stock.

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