What changed in this filing

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Item 1A. Risk Factors

2022-02-24 compared with 2021-02-25 · 193 added, 142 removed, 551 unchanged (38% of the section changed)

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We have limited operating history, we have incurred significant operating losses since inception and we expect to incur significant operating losses for the foreseeable future.

We may never become profitable or, if achieved, be able to sustain profitability.

We have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future as we continue our clinical trial and development programs for MGL-3196

(resmetirom) and other future product candidates.

We may never become profitable or, if profitability is achieved, we may be unable to sustain profitability.

As of December 31, 2021, we had an accumulated deficit of approximately $667.3 million.

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

Our business depends on the success of MGL-3196

(resmetirom), which is still in clinical development and has not completed a pivotal trial.

Our business depends on the success of resmetirom, which is still in clinical development and has not completed a pivotal trial.

If we are unable to obtain regulatory approval for and successfully commercialize resmetirom, or we experience significant delays in doing so, our business will be materially harmed.

To date, the sole focus of our product development has been resmetirom, a liver-directed selective thyroid hormone receptor beta agonist for potential use in non-alcoholic

steatohepatitis, or NASH, and familial hypercholesterolemia, or FH.

Successful continued development and ultimate regulatory approval of resmetirom for NASH or dyslipidemia is critical to the future success of our business.

The primary focus of our product development since mid- 2018 has been resmetirom, a liver-directed selective thyroid hormone receptor beta agonist for potential use in non-alcoholic

steatohepatitis, or NASH.

Successful continued development and ultimate regulatory approval of resmetirom for NASH is critical to the future success of our business.

We have invested, and will continue to invest, a significant portion of our time and financial resources in the clinical development of resmetirom.

We will need to raise sufficient funds to successfully complete our clinical development program for resmetirom in NASH and dyslipidemia.

We will need to raise sufficient funds to successfully complete our clinical development program for resmetirom in NASH.

The future regulatory and commercial success of resmetirom is subject to a number of risks, including the following:

we may not have sufficient financial and other resources to complete the necessary clinical trials for resmetirom, including, but not limited to, our planned registrational clinical trials to obtain drug approval;

the mechanism of action of resmetirom is complex and we do not know the degree to which it will translate into a therapeutic benefit, if any, in NASH, dyslipidemia or any other indication, and we do not know the degree to which the complex mechanism of action may contribute to long term safety issues or adverse events, if any, when resmetirom is taken for prolonged periods such as in the treatment of NASH, dyslipidemia or any other indication;

we may not be able to obtain adequate evidence from clinical trials of efficacy and safety for resmetirom in NASH, dyslipidemia or any other indication;

the mechanism of action of resmetirom is complex and we do not know the degree to which it will translate into a therapeutic benefit, if any, in NASH or any other indication, and we do not know the degree to which the complex mechanism of action may contribute to long term safety issues or adverse events, if any, when resmetirom is taken for prolonged periods such as in the treatment of NASH or any other indication;

delay or inability to reach agreement with the FDA or comparable foreign regulatory authorities on acceptable clinical trial design;

regulators, IRBs or ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

we may not be able to obtain adequate evidence from clinical trials of efficacy and safety for resmetirom in NASH or any other indication;

we do not know the degree to which resmetirom will be accepted as a therapy by physicians, patients and payors, even if approved;

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the standards implemented by clinical or regulatory agencies may change at any time;

we cannot be certain what efficacy endpoints foreign clinical or regulatory agencies may require in a Phase 3 clinical trial of NASH or dyslipidemia or for approval of our product candidates;

we also cannot be certain if we will be able to gain accelerated approval of any of our product candidates based on surrogate endpoints;

foreign clinical or regulatory agencies will likely require efficacy endpoints for Phase 3 clinical trials for the treatment of NASH or dyslipidemia that differ from the endpoints of our current Phase 2 trials and the results of our Phase 3 clinical trials may not be as favorable as the results we have observed to date in our current trials;

other differences in the design of our planned Phase 3 clinical trials of the treatment of NASH, including the use of a new tablet formulation of resmetirom and the inclusion of patients with more advanced NASH, could cause the results of our Phase 3 trials to be less favorable than the results we observed in our Phase 2 trials in NASH;

if we obtain accelerated approval of a product candidate based on a surrogate endpoint, we will likely be required to conduct a post-approval clinical outcomes trial to confirm the clinical benefit of the product candidate and if the post-approval trial is not successful we may not be able to continue marketing the product;

we cannot be certain what efficacy endpoints clinical or regulatory agencies may require in a Phase 3 clinical trial of NASH or for approval of our product candidates;

we also cannot be certain if we will be able to gain Subpart H approval of any of our product candidates based on surrogate endpoints;

foreign clinical or regulatory agencies may require efficacy and safety endpoints for Phase 3 clinical trials that may not be favorable to us and different from the results we have observed to date in our current trials;

other differences in the design of our ongoing and planned Phase 3 clinical trials of the treatment of NASH, including the use of a new tablet formulation of resmetirom and/or the inclusion of patients with more advanced NASH, could cause the results of our Phase 3 trials to be less favorable than the results we observed in our Phase 2 trials in NASH;

if we obtain Subpart H approval of resmetirom based on a surrogate endpoint, consistent with our ongoing Phase 3 trial, we will be required to conduct a post-approval clinical outcomes trial to confirm the clinical benefit of the product candidate and if the post-approval trial is not successful we may not be able to continue marketing the product;

we cannot be certain of the number and type of clinical trials and non-clinical

studies that FDA or other regulatory agencies will require in order to approve resmetirom or NASH or dyslipidemia;

studies that FDA or other regulatory agencies will require in order to approve resmetirom for NASH;

if approved for NASH, resmetirom will likely compete with the off-label

use of currently marketed products and other therapies in development that may reach approval for NASH prior to resmetirom;

if approved for dyslipidemia, resmetirom will likely compete with currently approved and marketed products and other therapies in development that may reach approval for dyslipidemia prior to resmetirom;

we may not be able to obtain, maintain or enforce our patents and other intellectual property rights.

We could also encounter delays if a clinical trial is placed on clinical hold, suspended or terminated by us, the IRBs of the institutions in which such trials are being conducted, or the FDA, the competent authorities and/or ethics committees of the EU Member States or other regulatory authorities, if a clinical trial is recommended for suspension or termination by the Data Safety Monitoring Board, or DSMB, for such trial, or on account of changes to federal, state, or local laws.

A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA, competent authorities and/or ethics committees of the EU Member States or other regulatory authorities resulting in the imposition of a clinical hold,

unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

Further, the FDA, EMA or other regulatory authorities may disagree with our clinical trial design and our interpretation of data from clinical trials, or may change the requirements for approval even after they have reviewed and commented on the design for our clinical trials.

Our product development costs will increase if we experience delays in clinical testing or marketing approvals.

We do not know whether any of our clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all.

Significant clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates and may allow our competitors to bring products to market before we do, potentially impairing our ability to successfully commercialize our product candidates and harming our business and results of operations.

Any delays in our clinical development programs may harm our business, financial condition and results of operations significantly.

Of the large number of drugs in development in the pharmaceutical industry, only a small percentage results in the submission of a new drug application, or NDA, to the FDA and even fewer are approved for commercialization.

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In addition, success in early clinical trials does not mean that later clinical trials will be successful, because later-stage clinical trials may be conducted in broader patient populations and involve different study designs.

For instance, our Phase 1 results and our Phase 2 primary endpoint results in NASH may not be predictive of any future Phase 2 results or of results in any Phase 3 clinical trial in NASH.

Furthermore, our future trials will need to demonstrate sufficient safety and efficacy in significantly larger patient populations for approval by regulatory authorities.

For instance, our Phase 1 results and our Phase 2 primary endpoint results in NASH may not be predictive of any future results in any Phase 3 clinical trial in NASH.

Furthermore, our ongoing and future trials will need to demonstrate sufficient safety and efficacy in large patient populations for approval by regulatory authorities.

Companies frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials have shown promising results, and we cannot be certain that we will not face similar setbacks.

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Because resmetirom has not yet received regulatory approval for any indication, it is difficult to predict the time and cost of development and our ability to successfully complete clinical development and obtain the necessary regulatory approvals for commercialization.

Resmetirom has not yet received regulatory approval for the treatment of NASH, dyslipidemia or any other indication, and unexpected problems may arise that could cause us to delay, suspend or terminate our development efforts in any or all indications.

Further, resmetirom has not yet demonstrated efficacy in patients with NASH or dyslipidemia, and the long-term safety consequences of a liver-directed thyroid hormone receptor beta agonist are not known.

Resmetirom has neither received Subpart H or full regulatory approval for the treatment of NASH or any other indication, and unexpected problems may arise that could cause us to delay, suspend or terminate our development efforts in any or all indications.

Further, the long-term safety consequences of a liver-directed thyroid hormone receptor beta agonist are not known.

Regulatory approval of new product candidates such as resmetirom can be more expensive and take longer than approval for candidates for the treatment of more well-understood diseases with previously approved products.

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We cannot predict whether we will encounter problems with any of our completed, ongoing or planned clinical trials that will cause us or any regulatory authority to delay, suspend, or terminate those clinical trials or delay the analysis of data derived from them.

A number of events, including any of the following, could delay or impede completely the completion of our ongoing and planned clinical trials and negatively affect our ability to obtain regulatory approval for, and to market and sell, a particular product candidate:

A number of events, including but are not limited to any of the following, could delay or impede completely the completion of our ongoing and planned clinical trials and negatively affect our ability to obtain regulatory approval for, and to market and sell, a particular product candidate:

conditions imposed on us by the FDA or other regulatory authorities regarding the scope or design of our clinical trials;

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slow enrollment and retention rate of subjects in our clinical trials;

challenges in identifying or recruiting sufficient study sites or investigators for clinical trials;

serious and unexpected drug-related side effects related to the product candidate being tested.

Commercialization of our product candidates may be delayed by the imposition of additional conditions on our clinical trials by the FDA or any other applicable foreign regulatory authority or the requirement of additional supportive studies by the FDA or such foreign regulatory authority.

We do not know whether our clinical trials will begin as planned, will need to be restructured, will enroll an adequate number of patients on time, or will be completed on schedule, if at all.

We do not know whether our ongoing clinical trials will need to be restructured, will enroll an adequate number of patients on time, or will be completed on schedule, if at all, or whether future clinical trials will begin as planned or have similar future challenges.

Delays in the initiation, enrollment or completion of our clinical trials will result in increased development costs for our product candidates, and our financial resources may be insufficient to fund any incremental costs.

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We have no experience in obtaining foreign regulatory approvals.

The time required to obtain approvals outside the United States may differ from that required to obtain FDA approval.

The time required to obtain approvals outside the United States may differ from that

required to obtain FDA approval.

We may not obtain foreign regulatory approvals on a timely basis, if at all.

Approval by the FDA does not guarantee approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other countries or by the FDA.

Failure to comply with these regulatory requirements or obtain required approvals could impair our ability to develop foreign markets for our drug candidates and may have a material adverse effect on our results of operations and financial condition.

We depend on enrollment of patients in our clinical trials for our product candidates.

If we encounter difficulties enrolling patients in our MAESTRO-NASH clinical trial, our clinical development activities could be delayed or otherwise adversely affected.

If we encounter difficulties enrolling patients in our clinical trials, including those arising out of COVID-19,

our clinical development activities could be delayed or otherwise adversely affected.

Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success.

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Our Phase 3 clinical trials have significantly more patients than were enrolled in our Phase 2 trials.

Patient enrollment for MAESTRO-NASH is not complete as of December 31, 2020.

A significant factor in the timing to conduct and complete clinical trials, is affected by many factors, including

the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages and disadvantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.

Although we have satisfied Subpart H patient enrollment for MAESTRO-NASH, clinical enrollment is not complete as of December 31, 2021 and significant additional enrollment will be necessary and will be ongoing for some time.

A significant factor in the timing to conduct and complete clinical trials, is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages and disadvantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.

For instance, we are aware that other companies conducting clinical trials in NASH patients have had delays in recruiting patients for their trials.

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In addition, potential patients for resmetirom may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for our studies.

The FDA typically requires sponsors of lipid-lowering product candidates to conduct drug-drug interaction studies with statins because statins may have increased safety risks when administered together with other drug therapies that affect their pharmacokinetic profile.

The global coronavirus pandemic has presented significant challenges in the enrollment and conduct of MAESTRO-NASH.

Screening for MAESTRO-NASH was negatively impacted due to the outbreak of the COVID-19

pandemic, and the resulting governmental quarantine restrictions and shelter-in-place

guidelines that influenced the closing or suspension of many European and U.S.

trial sites and a decline in U.S.

patients seeking screening biopsies.

In addition, because MAESTRO-NASH is focused on specific patient populations with protocol-specified biopsy requirements, our ability to enroll eligible patients was limited and enrollment was slower than we anticipated before the pandemic.

While we believe our COVID-19

mitigation efforts have positioned us to overcome past enrollment challenges, the pace of new enrollment cannot be guaranteed and ultimately will be dependent on our target study patients becoming comfortable initiating protocol-prescribed procedures, including biopsies, during the COVID-19

If the COVID-19

pandemic continues or worsens, our patient recruitment and enrollment efforts may be adversely affected, delayed or interrupted.

In addition, patients may choose to withdraw from our studies or we may choose to (or be required) to pause enrollment and or patient dosing in our trial in order to preserve health resources and protect trial participants, as applicable.

It is unknown whether or how long pauses, delays or disruptions could occur or continue.

Our ability to successfully complete enrollment and study objectives in the midst of the COVID-19

pandemic is subject to circumstances beyond our control and also is subject to the enhanced risks and uncertainties that are described in our other Risk Factors.

In addition, he FDA typically requires sponsors of lipid-lowering product candidates to conduct drug-drug interaction studies with statins because statins may have increased safety risks when administered together with other drug therapies that affect their pharmacokinetic profile.

We have completed two Phase 1 clinical drug interaction studies of resmetirom and statins in 39 normal healthy volunteers, which showed resmetirom to have a favorable safety profile and to be well-tolerated.

We have completed a Phase 2 clinical trial in NASH including patients taking low dose statins.

We have completed a Phase 2 clinical trial in NASH including

patients taking low dose statins.

We have also completed a Phase 2 clinical trial in HeFH including patients taking high dose statins.

In general, drug interactions between resmetirom and statins and any other drug that might result in adverse events could delay development in later clinical trials.

We will be required to identify and enroll a sufficient number of patients for our MAESTRO-NASH clinical trial.

We will be required to identify and enroll a sufficient number of patients for our clinical trials.

We also may encounter difficulties in identifying and enrolling NASH patients with a stage of disease appropriate for our future clinical trials.

We may not be able to initiate or continue clinical trials if we are unable to locate and maintain a sufficient number of eligible patients to participate in the clinical trials required by the FDA or other foreign regulatory agencies.

In addition, the process of finding and diagnosing patients may prove costly.

Our inability to enroll a sufficient number of patients for any of our clinical trials would result in significant delays or may require us to abandon one or more clinical trials.

In addition, the process of finding and diagnosing patients is costly and may prove more costly in the future.

Our inability to enroll a sufficient number of patients for any of our clinical trials could result in significant delays or may require us to abandon one or more clinical trials.

Any product candidate in our current or future clinical trials may cause unacceptable adverse events or side effects or have other properties that may delay or prevent its regulatory approval or commercialization or limit its commercial potential.

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Any of these occurrences may harm our business, financial condition and prospects significantly.

We have received Fast Track Designation from the FDA for resmetirom for NASH;

however, such designation may not actually lead to a faster development or regulatory review or approval process, and the designation may be rescinded if the product candidate no longer meets the qualifying criteria for Fast Track.

In October 2019, FDA granted Fast Track designation to resmetirom for NASH.

Products that have been designated as Fast Track may be eligible for certain action to expedite development and review of the application, including rolling review.

The receipt of Fast Track designation for a product candidate may not result in a faster development process, review or approval compared to products considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA.

In addition, the FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

Our product candidates will remain subject to ongoing regulatory review even if they receive marketing approval, and if we fail to comply with continuing regulations, we could lose these approvals and the sale of any approved commercial products could be suspended.

Even if we receive regulatory approval to market a particular product candidate, the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling, and record keeping related to the product will remain subject to extensive regulatory requirements.

These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP, regulations and GCPs, for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.

In addition, any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.

These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations, and GCPs for any clinical trials that we conduct post-approval, all of which

may result in significant expense and limit our ability to commercialize such products.

As such, we and our contract manufacturers will be subject to periodic review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or other marketing application and previous responses to inspection observations.

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

In addition, any regulatory approvals that we receive for resmetirom may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, and will contain requirements for costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.

The FDA may also require a REMS Program as a condition of approval of our product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

If we fail to comply with the regulatory requirements of the FDA and other applicable domestic and foreign regulatory authorities, or previously unknown problems with any approved product, manufacturer, or manufacturing process are discovered, we could be subject to administrative or judicially imposed sanctions, including:

restrictions on the products, manufacturers, or manufacturing processes;

restrictions on marketing or manufacturing of our products, withdrawal of the product from the market;

holds on clinical trials;

warning letters or untitled letters;

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pandemic, could affect our ability to complete our ongoing clinical trials, disrupt regulatory activities and delay or disrupt commercialization of resmetirom, and may have other adverse effects on our stock price and business operations.

pandemic has caused, and will continue to cause many governments to implement measures to slow the spread of the outbreak through quarantines, travel restrictions, heightened border security, shelter-in

pandemic has caused, and may continue to cause many governments to implement measures to slow the spread of the outbreak of the virus and its multiple variations.

These measures include quarantines, travel restrictions, heightened border security, shelter-in

place guidelines, social distancing restrictions and other measures.

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facilities and production have been suspended;

unemployment has increased;

available personnel has declined;

and demand for certain third-party goods and services, such as medical services and supplies, has spiked.

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However, it has the potential to adversely affect our business, financial condition, results of operations, and prospects.

If we continue to experience delays or difficulties in the enrollment of patients in our MAESTRO-NASH trial, our receipt of necessary regulatory approvals, and the commercialization of resmetirom, could be delayed or prevented.

Our ability to complete our MAESTRO-NASH clinical trial for resmetirom as planned could be disrupted if we are unable to locate and enroll on a timely basis a sufficient number of eligible patients to participate in this trial, as required by the FDA or similar regulatory authorities outside of the United States.

The global coronavirus pandemic has presented significant challenges in the conduct of MAESTRO-NASH enrollment in 2020 and the first quarter of 2021.

Screening for MAESTRO-NASH was negatively impacted due to the outbreak of the COVID-19

pandemic, and the resulting governmental quarantine restrictions and shelter-in-place

guidelines that influenced the closing or suspension of many European and U.S.

trial sites and a decline in U.S.

patients seeking screening biopsies.

In addition, because MAESTRO-NASH is focused on specific patient populations with protocol-specified biopsy requirements, our ability to enroll eligible patients has been limited and enrollment was slower than we anticipated before the pandemic.

In the face of these challenges, we have taken steps to mitigate the delay in MAESTRO-NASH enrollment by arranging biopsy and MRI services at non-hospital

facilities near many of our site locations, increasing the number of clinical sites and enrolling patients with existing biopsies, including patients from NASH trials which were discontinued and/or in which the drug was inactive in NASH.

We believe these mitigation efforts have positioned us to accelerate enrollment growth going forward, but the pace of new enrollment ultimately will be dependent on our target study patients becoming comfortable initiating the protocol-prescribed biopsies during the COVID-19

External factors that would help accelerate MAESTRO-NASH enrollment include new or emerging developments such as:

declines in the number of new reported COVID-19

actual (or perceived) reduced risks associated with potential surges in cases or COVID-19

variant developments in the U.S.

the easing of COVID-19

governmental restrictions;

the increased ability of widely-recognized effective therapeutics, therapeutic combinations or vaccines to combat COVID-19;

and a sustained return to pre-COVID-19

daily routines, including routine on-site

work and school schedules and medical procedure scheduling in the U.S.

If the COVID-19

pandemic continues or worsens, patient recruitment and enrollment in our MAESTRO-NASH trial may be adversely affected, delayed or interrupted.

In addition, patients may choose to withdraw from our studies or we may choose to or be further required to pause enrollment and or patient dosing in our trial in order to preserve health resources and protect trial participants.

It is unknown whether or how long pauses, delays or disruptions could occur or continue.

Our ability to successfully complete MAESTRO-NASH enrollment and study objectives in the midst of the COVID-19

pandemic is subject to circumstances beyond our control and is subject to the enhanced risks and uncertainties that are described in our Risk Factors.

As we evolve from a company that is primarily involved in clinical development to a company that is also involved in commercialization, we may encounter difficulties in expanding our operations successfully.

As we advance our product candidates through clinical trials, we will need to expand our development, regulatory, manufacturing, and marketing and sales capabilities and may need to further contract with third parties to provide these capabilities.

parties to provide these capabilities.

As our operations expand, we likely will need to manage additional relationships with such third parties, as well as additional collaborators, distributors, marketers and suppliers.

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The legislation established Medicare Part D, which expanded Medicare coverage for outpatient prescription drug purchases by the elderly but provided authority for limiting the number of drugs that will be covered in any therapeutic class.

The MMA also introduced a new reimbursement methodology based on average sales prices for physician-administered drugs.

The United States and several foreign jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.

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We expect to experience pricing pressures in connection with the sale of any products that we develop due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative proposals.

In March 2010, the Patient Protection and Affordable Care Act, or ACA, became law in the United States.

The goal of ACA is to reduce the cost of healthcare and substantially change the way healthcare is financed by both government and private insurers.

In March 2010, the Patient Protection and Affordable Care Act, as amended, (the ACA) became law in the United States.

The goal of the ACA is to reduce the cost of healthcare and substantially change the way healthcare is financed by both government and private insurers.

While we cannot predict what impact on federal reimbursement policies this legislation will have in general or on our business specifically, the ACA may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price we may charge for, any products we develop that receives regulatory approval.

We also cannot predict the impact of ACA on us as many of the ACA reforms require the promulgation of detailed regulations implementing the statutory provisions, which have not yet been fully implemented.

Additional legislative changes to and regulatory changes under the ACA remain possible, but the nature and extent of such potential additional changes are uncertain at this time.

We expect that the ACA, its implementation, efforts to

repeal or replace, or invalidate the ACA, or portions thereof, and other healthcare reform measures that may be adopted in the future, could have a material adverse effect on our industry generally and on our ability to maintain or increase sales of existing products or to successfully commercialize product candidates, if approved.

If any product liability lawsuits are successfully brought against us or any of our collaborative partners, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

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This lack of insurance means that we may not receive adequate compensation for the loss of the services of these individuals.

We currently have no marketing, sales or distribution infrastructure with respect to our product candidates.

If we are unable to develop our sales, marketing and distribution capabilities on our own or through collaborations with marketing partners, we will not be successful in commercializing our product candidates.

We currently have no marketing, sales or distribution capabilities and have limited sales or marketing experience within our organization.

If our product candidate, resmetirom, is approved, we intend either to establish a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize resmetirom, or to outsource this function to a third party.

We currently do not have significant marketing, sales or distribution infrastructure with respect to our product candidates.

If we are unable to fully develop our sales, marketing and distribution capabilities on our own or through collaborations with marketing partners, we will not be successful in commercializing our product candidates.

We currently do not have significant marketing, sales or distribution capabilities and have limited sales or marketing experience within our organization.

If our lead product candidate, resmetirom, is approved, we intend to establish a sales and marketing organization with technical expertise and supporting distribution capabilities to commercialize resmetirom in the United States, and to license or outsource this function to a third party or third parties outside of the United States.

Either of these options would be expensive and time-consuming.

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In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy.

Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country.

Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and

regulatory approval in one country does not mean that regulatory approval will be obtained in any other country.

Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods.

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If we or our partners fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, our target market will be reduced and our ability to realize the full market potential of our products will be harmed.

If we do not obtain protection under the Hatch-Waxman Amendments and similar foreign legislation by extending the term of patents covering each of our product candidates, our business may be materially harmed.

If we do not obtain protection under the Hatch-Waxman Act and similar foreign legislation by extending the term of patents covering each of our product candidates, our business may be materially harmed.

Depending upon the timing, duration and conditions of FDA marketing approval of our product candidates, one or more of our United States patents may be eligible for limited patent term extension under Hatch-Waxman Amendments.

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Moreover, the length of the extension could be less than we request.

If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product may not extend beyond the current patent expiration dates and our competitors may obtain approval to market competing products sooner.

If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product may not extend beyond the current patent expiration dates and competitors may obtain approval to market competing products sooner.

As a result, our revenue could be potentially materially reduced.

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We have not obtained orphan designation for any product candidates to date, although we believe some of the potential indications of our product candidates could qualify for orphan drug designation and the related benefits if approved for such indications and we may file for orphan drug designation with respect to such indications.

Even if we obtain such designations, we may not be the first to obtain regulatory approval of a product candidate for the orphan-designated indication due to the uncertainties associated with developing pharmaceutical products.

pharmaceutical products.

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

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At such time, if ever, as we or any of our partners market any of our future approved products, it is possible that some of our business activities and/or our partners could be subject to challenge under one or more of these laws.

Federal false claims, false statements and civil monetary penalties laws prohibit, among others, any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a false claim paid.

The federal healthcare program Anti-Kickback Statute prohibits, among other things,

knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.

Federal false claims, false statements and civil monetary penalties laws prohibit, among others, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim to the federal government, or knowingly concealing or knowing and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government.

The federal healthcare program Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.

This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers, on the one hand, and prescribers, purchasers and formulary managers, on the other.

Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.

In addition, we and/or our partners may be subject to patient data privacy and security regulation, including the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, which impose specified requirements relating to the privacy, security and transmission of individually identifiable health information.

There are other federal and state anti-fraud and abuse laws and regulations, as well as laws that require reporting of payments to certain health care professionals and adoption of certain compliance program requirements, that will govern our operations if and when we begin commercializing our products.

In addition, we and/or our partners may be subject to patient data privacy and security regulation, including the Health Insurance Portability and Accountability Act of 1996, and its implementing regulations (“HIPAA”), which impose specified requirements relating to the privacy, security and transmission of protected health information.

Most states also have statutes or regulations similar to these federal laws, which may apply to items such as pharmaceutical products and services reimbursed by private insurers.

We and/or our partners may be subject to administrative, civil and criminal sanctions for violations of any of these federal and state laws.

Pharmaceutical and other healthcare companies have been prosecuted under these laws for a variety of promotional and marketing activities, such as:

Pharmaceutical

and other healthcare companies have been sued or found to have violated these laws for a variety of promotional and marketing and other activities, such as:

providing free trips, free goods, sham consulting fees and grants and other monetary benefits to prescribers;

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engaging in off-label

and submitting inflated best price information to the Medicaid Rebate Program to reduce liability for Medicaid rebates.

and knowingly submitting false pricing information to the federal government, knowingly misrepresenting that information, or failing to timely submit that information.

Pharmaceutical companies may further be found liable for civil monetary penalties for knowing and intentionally overcharging covered entities under the 340B Drug Pricing Program.

Ensuring that our internal operations and future business arrangements with third parties comply with applicable healthcare laws and regulations will involve substantial costs.

It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including (depending on the applicable law) criminal and significant civil monetary penalties, damages, fines, imprisonment, exclusion from participation in government programs, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing

product approvals, private ‘‘qui tam’’ actions brought by individual whistleblowers in the name of the government or refusal to allow us to enter into supply contracts, including government contracts, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

If the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with good clinical practices and related regulatory requirements, we may be unable to obtain regulatory approval for or commercialize our product candidates.

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Nonetheless, we are responsible for confirming that each of our clinical trials is conducted in accordance with FDA requirements and our general investigational plan and protocol.

The FDA requires us and our third-party service providers to comply with regulations and standards, commonly referred to as good clinical practices, or GCP, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate, and that the trial participants are adequately protected.

The FDA requires us and our third-party service providers to comply with GCP for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate, and that the trial participants are adequately protected.

Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements.

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We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of our product candidates, and we lack the resources and the capabilities to do so.

As a result, we currently rely, and expect to rely for the foreseeable future, on third-party manufacturers to supply our product candidates.

As a result, we currently rely, and

expect to rely on third-party manufacturers to supply our product candidates.

Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured our product candidates or products ourselves.

For example, if we do not maintain our key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities, which could delay or impair our ability to obtain regulatory approval for our products and substantially increase our costs or deplete profit

margins, if any.

If we do find replacement manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other foreign regulatory authorities.

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In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyberattacks and other related breaches.

Any failure or perceived failure by us or any third-party collaborators, service providers, contractors or consultants to comply with our privacy, confidentiality, data security or similar obligations to third parties, or any data security incidents or other security breaches that result in the unauthorized access, release or transfer of sensitive information, including personally identifiable information, may result in governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us, could cause third parties to lose trust in us or could result in claims by third parties asserting that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.

trust in us or could result in claims by third parties asserting that we have breached our privacy, confidentiality, data security or similar obligations, any of which could have a material adverse effect on our reputation, business, financial condition or results of operations.

Moreover, data security incidents and other security breaches can be difficult to detect, and any delay in identifying them may lead to increased harm.

While we have implemented data security measures intended to protect our information technology systems and infrastructure, there can be no assurance that such measures will successfully prevent service interruptions or data security incidents.

Failure to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, and could negatively affect our operating results and business.

We may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.

HIPAA imposes privacy and security obligations on covered entity health care providers, health plans, and health care clearinghouses, as well as their “business associates” – certain persons or covered entities that create, receive, maintain, or transmit protected health information in connection with providing a specified service or performing a function on behalf of a covered entity.

We could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly use or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

To the extent we collect California resident personal information, we may also be subject to the CCPA.

The CCPA, which became effective on January 1, 2020, created new transparency requirements and granted California residents several new rights with regard to their personal information.

In addition, in November 2020, California voters approved the California Privacy Rights Act (“CPRA”) ballot initiative which introduced significant amendments to the CCPA and established and funded a dedicated California privacy regulator, the California Privacy Protection Agency (“CPPA”).

The amendments introduced by the CPRA go into effect on January 1, 2023, and new implementing regulations are expected to be introduced by the CPPA.

Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or statutory or actual damages.

In addition, California residents have the right to bring a private right of action in connection with certain types of incidents.

These claims may result in significant liability and damages.

Similarly, there are a number of legislative proposals in the United States, at both the federal and state level, that could impose new obligations or limitations in the area of consumer protection.

These laws and regulations are evolving and may impose limitations on our business activities.

The obligations to comply with new privacy laws may require us, among other things, to update our notices and develop new processes internally and with our third-party collaborators, service providers, contractors or consultants to facilitate consumer rights requests, and such laws may impose restrictions on our processing of personal information that may impact the way we operate our business.

We may be subject to fines, penalties, or private actions in the event of non-compliance

with such laws.

The CCPA, the CPRA or other domestic privacy and data protection laws and regulations may increase our compliance costs and potential liability.

European data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.

Outside the United States, our clinical trial programs and operations implicate international data protection laws, including the EU General Data Protection Regulation 2016/679 (“GDPR”).

The GDPR increases our responsibility and liability in relation to the processing of personal data of individuals located in the EU.

The GDPR, together with the national legislation of the EU member states governing the processing of personal data, impose strict obligations and restrictions on the ability to collect, analyze and transfer personal data, including health data and samples from clinical trials and adverse event reporting.

In particular, these obligations and restrictions concern the consent of the individuals to whom the personal data relates, the information provided to the individuals, the sharing of personal data with third parties, the transfer of personal data out of the EU,

security breach notifications, security and confidentiality of the personal data and imposition of substantial potential fines for violations of the data protection obligations.

Specifically regarding the transfer of personal data outside of the EU, while there are legal mechanisms available to lawfully transfer personal data outside of the EU, including to the United States, there are certain unsettled legal issues regarding such data transfers, the resolution of which may adversely affect our ability to transfer personal data or otherwise may cause us to incur significant costs to come into compliance with applicable data transfer impact assessments and implementation of legal data transfer mechanisms.

On July 16, 2020, the European Court of Justice ruled the EU-US

Privacy Shield to be an invalid data transfer mechanism and confirmed that the Model Clauses remain valid, and in June 2021, the European Commission published updated versions of the Model Clauses, which must be incorporated into new and existing agreements within prescribed timeframes in order to continue to lawfully transfer personal data outside of the EU.

Data protection authorities from the different EU member states, as well as in the United Kingdom and Switzerland, have promulgated national privacy laws that impose additional requirements, which add to the complexity of processing and transferring EU personal data, with the United Kingdom and Switzerland following the EU with the publication of new Model Clauses to be incorporated in all applicable contracts within a specified timeframe in order to legitimize data transfers from those jurisdictions.

Our ability to continue to transfer personal data outside of the EU, United Kingdom, or Switzerland may become significantly more expensive and may subject us to increased scrutiny and liability under the GDPR or similar local laws, and we may experience operating disruptions if we are unable to conduct these transfers in the future.

Risks Relating to Our Intellectual Property

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relating to resmetirom in exchange for consideration consisting of an upfront payment, milestone payments tied to the achievement of product development and regulatory milestones, and royalty payments based on net sales of products containing resmetirom or another licensed product, subject to certain reductions.

We must use commercially reasonable efforts to conduct clinical and commercial development programs for products containing resmetirom.

determine that it is not reasonable to continue clinical trials or other development of resmetirom, we may elect to cease further development and Roche may terminate the license.

If we determine not to pursue the development or commercialization of resmetirom in certain jurisdictions, including the United States, Roche may terminate the license for such territories.

The Roche Agreement will expire, unless earlier terminated pursuant to other provisions thereof, on the last to occur of (i) the expiration of the last valid claim of a licensed patent covering the manufacture, use or sale of products containing resmetirom, or (ii) ten years after the first sale of a product containing resmetirom.

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This failure to properly protect the intellectual property rights relating to our product candidates could have a material adverse effect on our financial condition and results of operations.

Composition-of-matter

patents on the biological or chemical active pharmaceutical ingredients are generally considered to offer the strongest protection of intellectual property and provide the broadest scope of patent protection for pharmaceutical products, as such patents provide protection without regard to any method of use or any method of manufacturing.

While we have licensed rights to issued composition-of-matter

patents in the United States and other jurisdictions for resmetirom, we cannot be certain that the claims in issued composition-of-matter

patents will not be found invalid or unenforceable if challenged.

While we have licensed rights to issued patents in the United States and other jurisdictions for resmetirom, we cannot be certain that the claims in issued patents will not be found invalid or unenforceable if challenged.

We cannot be certain that the claims in owned and licensed patent applications covering our product candidates will be considered patentable by the United States Patent and Trademark Office, or USPTO, and valid by courts in the United States or by the patent offices and courts in foreign jurisdictions.

Even if we owned and licensed patent applications covering our product candidates, the patents may not be enforced against competitors.

For example, a formulation patent will not be enforced against those making and marketing a product that has the same

active pharmaceutical ingredient in a different formulation that is not claimed in the formulation patent.

For example, a formulation patent may not be enforced against those making and marketing a product that has the same active pharmaceutical ingredient in a different formulation that is not claimed in the formulation patent.

Method-of-use

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patents, the practice is common and such infringement is difficult to prevent or prosecute.

Our licensed composition-of-matter

patent licensed from Roche for resmetirom is expected to expire in the United States in 2026.

patents and pending patent applications that cover our particular solid form, dosage, method of manufacturing, and uses of resmetirom to treat various indications are expected to expire in 2033.

Our exclusively-owned pending patent applications that cover companion diagnostics, various solid forms of resmetirom, and method of manufacturing, if issued, are expected to expire between 2037 and 2042.

While patent term adjustments or patent term extensions could result in later expiration dates for each of these patents, there can be no assurances that we will receive any patent adjustments or patent term extensions.

Our composition-of-matter

patent licensed from Roche relating to resmetirom is scheduled to expire in the United States in 2026.

patents and pending patent applications that cover our particular solid form, dosage, method of manufacturing, and uses of resmetirom to treat various indications are scheduled to expire in 2033.

Our exclusively-owned pending patent applications that cover companion diagnostics, various solid forms of resmetirom, combination therapy, method of use, and method of manufacturing, if issued, are expected to expire between 2037 and 2042.

Our exclusively-owned pending patent application that covers other THR beta analogs and uses thereof, if issued, is expected to expire in 2043.

While patent term adjustments or patent term extensions could result in later expiration dates for each of these patents, there can be no assurances that we will

receive any patent adjustments or patent term extensions.

The patent application process and patent maintenance and enforcement are subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future development partners will be successful in protecting our product candidates by obtaining and defending patents.

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others may design around our owned and licensed patent claims to produce competitive products which fall outside of the scope of the patents;

others may identify prior art or other bases which could invalidate our or licensor(s)’ patents;

others may identify prior art or other bases which could invalidate our or our licensor(s)’ patents;

our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where us and our licensor(s) do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets;

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Moreover, third parties may come upon this or similar information lawfully and independently.

We would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.

We would have no right to prevent them, or those to whom they communicate it, from using that technology or information to

compete with us.

Further, intellectual property rights have limitations and do not necessarily address all potential threats to our competitive position.

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cause development delays;

prevent us from commercializing resmetirom for NASH or dyslipidemia or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law;

prevent us from commercializing resmetirom for NASH or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law;

require us to develop non-infringing

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We cannot predict whether we would prevail in any such actions or that any license required under any of these patents would be made available on commercially acceptable terms, if at all.

In addition, we cannot be sure that we could redesign our product candidate or processes to avoid infringement, if necessary.

In addition, we cannot be sure that

we could redesign our product candidate or processes to avoid infringement, if necessary.

Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing resmetirom or our other product candidates, which could harm our business, financial condition and operating results.

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Because we rely on third parties to research and develop and to manufacture our product candidates, we must, at times, share trade secrets with them.

We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if

applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third party contractors and consultants prior to beginning research or disclosing proprietary information.

We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third party contractors and consultants prior to beginning research or disclosing proprietary information.

These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets.

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In the future we may also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development or similar agreements.

Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third party collaborators.

Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties,

independent development or publication of information by any of our third party collaborators.

A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.

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We may not be able to protect our intellectual property rights throughout the world.

While we have licensed from Roche issued composition-of-matter

patents directed at resmetirom in the United States and other countries, filing, prosecuting and defending patents on resmetirom in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.

While we have licensed from Roche issued patents directed at resmetirom in the United States and other countries, filing, prosecuting and defending patents on resmetirom in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States.

In addition, the laws of some foreign countries may not protect intellectual property rights to the same extent as federal and state laws in the United States.

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If we fail to obtain the capital necessary to fund all of our planned operations, we may be unable to successfully develop and commercialize resmetirom and other future product candidates.

Although we believe that our existing cash and cash equivalents will be sufficient to fund our current operations through at least the next 12 months, we may require additional working capital in order to complete the remaining clinical development for resmetirom and our other product candidates through potential regulatory approval and through potential commercialization of these product candidates.

We expect our spending levels to increase in connection with our clinical trials of resmetirom as well as other corporate activities.

Although we believe that our existing cash and cash equivalents will be sufficient to fund our current operations through at least the next 12 months, we will require additional working capital in the next twelve-

months and on a long-term basis in order to complete the remaining clinical development primarily for resmetirom and potentially for other product candidates through potential regulatory approval and through potential commercialization of these product candidates.

We expect our spending levels overall to increase in connection with our clinical trials of resmetirom as well as other corporate activities.

The amount and timing of any expenditure needed to implement our development and commercialization programs will depend on numerous factors, including:

the type, number, scope, progress, expansion costs, results of and timing of our future clinical trials or the need for additional clinical trials of resmetirom for NASH and dyslipidemia or any of our other product candidates which we are pursuing or may choose to pursue in the future;

the type, number, scope, progress, expansion costs, results of and timing of our future clinical trials and projected product label or the need for additional clinical trials of resmetirom for NASH and dyslipidemia or any of our other product candidates which we are pursuing or may choose to pursue in the future;

the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;

the costs and timing of obtaining regulatory approval for resmetirom for NASH and dyslipidemia and any of our other product candidates;

the costs and timing of obtaining or maintaining manufacturing for resmetirom for NASH and dyslipidemia and any of our other product candidates, including commercial manufacturing if any product candidate is approved;

the costs and timing of obtaining regulatory approval for resmetirom for NASH and any of our other potential product candidates;

the costs and timing of obtaining or maintaining manufacturing for resmetirom for NASH and any of our other product candidates, including commercial manufacturing if any product candidate is approved;

the costs and timing of establishing sales, marketing and reimbursement capabilities and enhanced internal controls over financial reporting;

the terms and timing of establishing and maintaining collaborations, license agreements and other partnerships;

the terms and timing of establishing and maintaining collaborations, license agreements and other partnerships, including for ex-US resmetirom opportunities;

costs associated with any new product candidates that we may develop, in-license

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Our existing capital resources may not be sufficient to enable us to fund the completion of all planned clinical trials and commercialization objectives for our product candidates.

As a result, we may need to raise substantial additional funds in the future.

These and other circumstances may cause to delay certain research activities and related clinical expenses, but such delays will not alter our need to raise additional funding.

As a result, we will need to raise substantial additional funds in the future.

We have not sold any products, and we do not expect to sell or derive revenue from any product sales for the foreseeable future.

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Additional funding may not be available to us on acceptable terms or at all.

In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders.

In addition, the issuance of additional shares by us, or the possibility of such issuance, may cause the market price of our shares to decline.

If we are unable to obtain additional funding on a timely basis, we may be unable to complete planned clinical trials for resmetirom for NASH and dyslipidemia and any of our other product candidates, and we may be required to significantly curtail some or all of our activities.

In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders or have a potential restrictive effect on how we operate our business.

In addition, market perception that we need to issue additional shares, the issuance of additional shares by us, or the possibility of such issuance, may cause the market price of our shares to decline.

If we are unable to obtain additional funding on a timely basis, we may need to delay certain aspects of, or be unable to complete, planned clinical trials for resmetirom for NASH and our other product candidates, and we may be required to significantly curtail some or all of our activities.

We also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to our product candidates or otherwise agree to terms unfavorable to us.

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Our net operating losses have been fully offset by a valuation allowance due to uncertainties surrounding our ability to realize these tax benefits.

Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three year period), the corporation’s ability to use its pre-change

Under Section 382 of the Internal Revenue Code of 1986, as amended, if

a corporation undergoes an “ownership change” (generally defined as a greater than 50% change (by value) in its equity ownership over a three year period), the corporation’s ability to use its pre-change

net operating loss carryforwards and other pre-change

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Historically, the market price of our common stock has fluctuated over a wide range, and it is likely that the price of our common stock will continue to be volatile in the future.

The closing price of our common stock has ranged from $60.13 to $133.70 per share during the period from January 1, 2020 to December 31, 2020.

The closing price of our common stock has ranged from $55.89 to $137.5 per share during the period from January 1, 2021 to January 31, 2022.

The market price of our common stock could be impacted due to a variety of factors, including:

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and GameStop Corp.

in the first quarter of 2021, and which in any case generally would be beyond our control);

in 2021, and which in any case generally would be beyond our control);

the outbreak of war or hostilities;

NASH therapeutic company developments and/or FDA developments, regardless of whether occurring generally and/or specifically as to our clinical trials and development programs;

industry-wide events;

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the progress and results of our clinical trials;

public concern as to the safety and efficacy of products developed by us or others or public safety generally (whether due to the COVID pandemic or otherwise);

public or regulatory concern as to the safety and efficacy of NASH products developed by us or others or public safety generally;

In addition, due to one or more of the foregoing factors in one or more future quarters, our results of operations may fall below the expectations of securities analysts and investors.

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We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time.

In November 2020 we established a new “at-the-market”

(“ATM”) program in the amount of $200 million under which we may, from time to time, issue and sell shares of our common stock to or through a sales agent up to established limits.

In June 2021 we established a new “at-the-market”

(“ATM”) program in the amount of $200 million.

As of December 31, 2021, $159.2 million remained reserved and available for sale under this ATM program.

We may, from time to time, issue and sell shares of our common stock under this ATM program to or through a sales agent up to established limits.

To the extent we raise additional capital by issuing equity securities, through the ATM program or otherwise, our stockholders may experience substantial dilution.

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Please see Note 6 within the Consolidated Financial Statements of this Annual Report on Form 10-K

for sales of our common stock under the ATM program.

for more details regarding potential sales of our common stock under the ATM program.

We expect that significant additional capital will be needed in the future to continue our planned operations.

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We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time.

If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales.

If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted from a beneficial ownership standpoint and value may be diluted by subsequent sales.

Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

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As of December 31, 2021, there were a number of investors or investor groups that held a significant beneficial ownership interest in our common stock, including:

2,733,100 shares of our common stock (the “Bay City Affiliate Holdings”) beneficially owned by Dr.

2,037,140 shares of our outstanding common stock (the “Bay City Affiliate Holdings”) beneficially owned by Dr.

Fred Craves, our Lead Director, which includes 1,511,782 shares beneficially owned by Bay City Capital LLC (“Bay City”);

1,251,619 shares of our outstanding common stock beneficially owned by Drs.

Paul Friedman and Becky Taub (the “Friedman/Taub Holdings”), our Chairman and Chief Executive Officer and President of R&D and Chief Medical Officer, respectively;

1,969,797 shares of outstanding Series A Convertible Preferred stock, a common stock equivalent with no voting rights, that is convertible into shares of Common Stock on a 1-for-1

basis only to the extent that after giving effect to such conversion the holders thereof and their affiliates and any persons who are members of a Section 13(d) group with the holders or their affiliates would beneficially own (in the aggregate, for purposes of Rule 13d-3

under the Exchange Act) no more than 4.99% of the outstanding Common Stock (the “Beneficial Ownership Limitation”);

under the Exchange Act) no more than 4.99% of the outstanding Common Stock (the “Beneficial Ownership

Limitation”);

and 2,301,574 shares of our common stock issuable upon the exercise of outstanding stock options under our 2015 Stock Plan, as amended (the “Common Shares Underlying Our Stock Options”).

The Bay City Affiliate Holdings represent approximately 17.6% of our outstanding common stock as of December 31, 2020, and are capable of being sold directly (including by Bay City or its affiliated funds) or indirectly (following any future distribution to Bay City from affiliated funds or by Bay City to its partners), and any material sale of such shares could significantly reduce the market price of our common stock and impair our ability to raise adequate capital.

The Bay City Affiliate Holdings and the Friedman/Taub Holdings collectively represent approximately 19.22% of our outstanding common stock as of December 31, 2021, and are capable of being sold directly (including by Bay City or its affiliated funds) or indirectly (following any future distribution to Bay City from affiliated funds, to Bay City fund limited partners, or by Bay City to its partners), and any material sale of such shares could significantly reduce the market price of our common stock and impair our ability to raise adequate capital.

As of December 31, 2021, the 1,969,797 Common Shares Underlying Our Preferred Stock (disregarding the Beneficial Ownership Limitation and assuming the full conversion of all currently outstanding preferred shares) owned by entities affiliated with Baker Bros.

Advisors LP and 1,499,213 additional shares of common stock directly owned by entities affiliated with Baker Bros.

Advisors LP collectively represented 19.9% of our common stock on an as converted, fully-converted basis (the “Baker Bros.

Advisors LP collectively represented beneficial ownership of approximately 19.9% of our common stock on an as converted basis (the “Baker Bros.

Fully Converted Interest”).

In addition, we have six institutional investors who have filed Schedule 13Gs (or amendments) reflecting collective beneficial ownership, as of December 31, 2020, of approximately 43% of our outstanding common stock (“Our Other Shares Beneficially Owned by Institutional Investors”).

Sales of a substantial number of shares of our common stock by one or more of the investors of groups listed above (such as the Common Shares Underlying Our Stock Options, the Bay City Affiliate Holdings, the Baker Bros.

Fully Converted Interest or Our Other Shares Beneficially Owned by Institutional Investors) or other equity-related securities in the public markets, could depress the market price of our common stock.

In addition, we have six institutional investors who have filed Schedule 13Gs (or amendments thereto) reflecting collective beneficial ownership, as of December 31, 2021, of approximately 34.8% of our outstanding common stock (“Our Other Shares Beneficially Owned by Institutional Investors”).

Fully Converted Interest, the Common Shares Underlying Our Stock Options, or Our Other Shares Beneficially Owned by Institutional Investors) or other equity-related securities in the public markets, could depress the market price of our common stock.

If there are significant sales or short sales of our stock, the price decline that could result from this activity may cause the share price to decline further, which, in turn, may cause long holders of the common stock to sell their shares, thereby contributing to sales of common stock in the market.

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

What changed 10-K

Item 1A. Risk Factors