What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2020-08-06 compared with 2020-05-07 · 206 added, 153 removed, 1164 unchanged (24% of the section changed)

14 unchanged sentences

As a result, we are not profitable and have incurred significant losses since our inception in May 2018.

For the three months ended March 31, 2020 and 2019, we reported a net loss of $21.3 million and $6.0 million, respectively.

As of March 31, 2020, we had an accumulated deficit of $91.2 million.

For the three months ended June 30, 2020 and 2019, we reported a net loss of $23.3 million and $13.6 million, respectively.

For the six months ended June 30, 2020 and 2019, we reported a net loss of $44.6 million and $19.5 million, respectively.

As of June 30, 2020, we had an accumulated deficit of $114.5 million.

We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our clinical development of, and seek regulatory approvals for, our product candidates.

3 unchanged sentences

Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of increased expenses, or when, if at all, we will be able to achieve profitability.

Our business has been and could continue to be adversely affected by the evolving and ongoing COVID-19 global pandemic in regions where we or third parties on which we rely have significant manufacturing facilities, concentrations of clinical trial sites or other business operations.

The COVID-19 pandemic could adversely affect our operations, including at our headquarters, which is currently subject to a shelter-in-place order, an order that requires all non-essential businesses to cease in-person operations, and at our clinical trial sites, as w ell as the business or operations of our manufacturers, clinical research organizations (“ CROs ”) or other third parties with whom we conduct business.

Our business could be adversely affected by the effects of the recent and evolving COVID-19 pandemic, which was declared by the World Health Organization as a global pandemic.

The COVID-19 pandemic has resulted in travel and other restrictions in order to reduce the spread of the disease, including a California executive order, San Francisco Bay Area order and several other state and local orders across the country, which, among other things, direct individuals to shelter at their places of residence, direct businesses and governmental agencies to cease non-essential operations at physical locations, prohibit certain non-essential gatherings, and order cessation of non-essential travel.

The San Francisco Bay Area shelter-in-place order will continue until May 31, 2020, unless further extended.

In response to these public health directives and orders, we have implemented work-from-home policies for all of our employees.

The effects of the executive order, the shelter-in-place order and our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course.

Our business has been and could continue to be adversely affected by the COVID-19 pandemic in regions where we or third parties on which we rely have significant manufacturing facilities, concentrations of clinical trial sites or other business operations.

The COVID-19 pandemic could adversely affect our operations, including our workforce , which is currently primarily working remotely and at our clinical trial sites, as well as the business or operations of our manufacturers, clinical research organizations (“ CROs ”) or other third parties with whom we conduct business.

Our business has been and could continue to be adversely affected by the COVID-19 pandemic, which was declared by the World Health Organization as a global pandemic.

In response to the COVID-19 pandemic, we have implemented work-from-home policies for all of our employees.

The effects of the COVID-19 pandemic and our work-from-home policies may negatively impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will depend, in part, on the length and severity of any restrictions and limitations on our ability to conduct our business in the ordinary course.

These and similar, and perhaps more severe, disruptions in our operations could negatively impact our business, operating results and financial condition.

As COVID-19 continues to spread, we may experience ongoing disruptions that could severely impact our business and clinical trials, including:

delays or difficulties in enrolling patients in our ongoing and planned clinical trials;

As COVID-19 continues to spread, we may experience, or continue to experience, ongoing disruptions that could severely impact our business and clinical trials, including:

delays or difficulties in enrolling and retaining patients in our ongoing and planned clinical trials;

delays in receiving approval from local regulatory authorities to initiate our planned clinical trials;

6 unchanged sentences

risk that participants enrolled in our clinical trials will acquire COVID-19 while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events;

refusal of the FDA to accept data from clinical trials in affected geographies.

refusal of the FDA or other regulatory authorities to accept data from clinical trials in affected geographies.

These and other disruptions in our operations and the global economy could negatively impact our business, operating results and financial condition.

6 unchanged sentences

Our ongoing or planned clinical trials may also be impacted by interruptions or delays in the operations of the FDA and comparable foreign regulatory agencies.

Any potential interruptions or delays could adversely affect the anticipated timelines of our upcoming NDA and MAA submissions.

We and our CROs have also made certain adjustments to the operation of our trials in an effort to ensure the monitoring and safety of patients and minimize risks to trial integrity during the pandemic in accordance with the guidance issued by the FDA on March 18, 2020 and updated on April 2, 2020, and may need to make further adjustments in the future.

For example, in our ongoing Phase 2 clinical trials, we have adopted new protocols for patients to have maralixibat shipped to them and for patients to virtually check-in as opposed to attending standard hospital visits.

For example, in our ongoing

clinical trials, we have adopted new protocols to allow for flexibility surrounding patient visit s , including to have drug shipped to them and for patients to virtually check-in as opposed to attending standard hospital visits .

Many of these adjustments are new and untested, may not be effective, and may have unforeseen effects on the progress and completion of this clinical trial and the findings from this clinical trial.

In addition, we may encounter delays in shipping of our study drug.

These events could delay our clinical trials, increase the cost of completing our clinical trials and negatively impact the integrity, reliability or robustness of the data from our clinical trials.

These events c ould delay our clinical trials, increase the cost of completing our clinical trials and negatively impact the integrity, reliability or robustness of the data from our clinical trials.

In addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at our CROs or third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which could disrupt the supply chain for our product candidates.

17 unchanged sentences

Further, even if we make changes to the study design to address these considerations, the FDA or comparable foreign regulatory authorities may not approve our product candidates.

Even if such regulatory authorities agree with the design and implementation of our clinical trials, such regulator y authorities may change their requirements in the future.

In addition, even if the clinical trials are successfully completed, the FDA or foreign regulatory authorities may not interpret the results as we do, and more clinical trials could be required bef ore we submit our product candidates for approval.

Even if such regulatory authorities agree with the d esign and implementation of our clinical trials, such regulatory authorities may change their requirements in the future.

In addition, even if the clinical trials are successfully completed, the FDA or foreign regulatory authorities may not interpret the r esults as we do, and more clinical trials could be required before we submit our product candidates for approval.

For example, the FDA typically requires results from two well controlled Phase 3 clinical trials to support an NDA submission seeking approval to market a new drug.

Based on interactions with the FDA, we b elieve that the results from a single Phase 3 clinical trial, if successful, would be sufficient to support an NDA submission seeking approval for maralixibat for the treatment of PFIC;

Based on interactions with the FDA, we believe that the results from a single Phase 3 clinical trial, if successful, would be sufficient to support an NDA submission seeking approval for maralixibat for the treatment of PFIC;

however , the FDA may not agree to this approach.

Even if we believe th e results from our Phase 3 clinical trials are positive, the FDA may require us to conduct additional Phase 3 trials before we are able to submit one or more NDAs.

Moreover, based on interactions with the FDA, we believe that clinical data of maralixibat i n PFIC paired with adequate natural history data may be adequate to support an NDA filing for a general PFIC indication rather than the treatment of pruritus associated with PFIC;

however, the FDA has not agreed to this approach but has indicated that effi cacy data of the Phase 3 MARCH clinical trial, if positive, may be adequate to support an NDA submission for the treatment of pruritus associated with nt-PFIC2.

If we are unable to obtain adequate natural history data or the FDA does not view such data as sufficient to support approval for a general PFIC indication, the NDA submission for maralixibat may be limited to the treatment of pruritus associated with nt-PFIC2.

Further, we are also conducting an analysis of our long-term treatment data in PFIC again st a natural history control group in conjunction with the NAPPED Consortium and plan to share these results with regulators.

Regulatory authorities may not view such analysis as sufficient to support approval.

Even if we believe the results from our Phase 3 clinical trials are positive, the FDA may require us to conduct additional Phase 3 trials before we are able to submit one or more NDAs.

Moreover, based on interactio ns with the FDA, we believe that clinical data of maralixibat in PFIC paired with adequate natural history data may be adequate to support an NDA filing for a general PFIC indication rather than the treatment of pruritus associated with PFIC;

however, the FDA has not agreed to this approach but has indicated that efficacy data of the Phase 3 MARCH clinical trial, if positive, may be adequate to support an NDA submission for the treatment of pruritus associated with nt-PFIC2.

If we are unable to obtain adequ ate natural history data or the FDA does not view such data as sufficient to support approval for a general PFIC indication, the NDA submission for maralixibat may be limited to the treatment of pruritus associated with nt-PFIC2.

Further, we have conducted an initial analysis of our long-term treatment data in PFIC against a natural history control group in conjunction with the NAPPED Consortium and have shared these results with regulators.

Based on feedback from regulators we are preparing to submit a mar keting authorization application for the treatment of PFIC2 to the European Medicines Agency (“EMA”), in the fourth quarter of 2020.

Regulatory authorities may not view such initial analysis as sufficient to support approval.

In May 2019, we had an end-of-Phase 2 meeting with the FDA to discuss the adequacy of the current data set of maralixibat to support an NDA submission for the treatment of pruritus associated with ALGS.

5 unchanged sentences

Further, while we do not currently anticipate the global pandemic of COVID-19 to impact these projected timings, the COVID-19 pandemic continues to rapidly evolve and any impacts on these projected timings are highly uncertain and cannot be predicted with confidence.

For example, we have commenced a food effect clinical trial of maralixibat, the completion of which could be impacted by the COVID-19 pandemic if the site closes to new enrollment or experiences a COVID-19 outbreak.

Although we have not experienced any such impacts, a significant delay in our food effect clinical trial may delay the submission of our NDA.

In addition, an NDA must be supported by extensive clinical and preclinical data, as well as extensive information regarding pharmacology and CMC.

The FDA may disagree with our interpretation of such data and information, which may require us to complete additional activities.

As a result, FDA approval of maralixibat for pruritus associated with ALGS may be delayed and we may be required to expend significant additional resources seeking such approval.

Moreover, although we are in the process of discussing our planned ALGS registrational program with the European Medicines Agency, or EMA, we have not reached agreement, and the EMA may not accept our currently proposed ALGS registrational program.

As a result, FDA approval of maralixibat for cholestatic pruritus associated with ALGS may be delayed and we may be required to expend significant additional resources seeking such approval.

Moreover, although we are in the process of discussing our planned ALGS registrational program with the EMA, we have not reached agreement, and the EMA may not accept our currently proposed ALGS registrational program.

To the extent that the results of our clinical trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, approval for our product candidates may be significantly delayed or prevented, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional clinical trials in support of potential approval for our product candidates.

2 unchanged sentences

Patient enrollment, a significant factor in the timing of clinical trials, is generally affected by many factors including, but not limited to, the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages 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.

The COVID-19 pandemic has impacted patient enrollment in our Phase 3 MARC H clinical trial.

In particular, some sites have paused enrollment to focus on, and direct resources to, the COVID-19 pandemic, while at other sites, patients are choosing not to enroll or continue participating in the clinical trial as a result of the pan demic.

The COVID-19 pandemic has impacted patient enrollment in our Phase 3 MARCH clinical trial.

We are unable to predict with confidence the duration of such patient enrollment delays and difficulties.

If patient enrollment is delayed for an extended period of time, our Phase 3 MARCH clinical trial could be delayed or otherwise adversely affec ted.

If patient enrollment is delayed for an extended period of time, our Phase 3 MARCH clinical trial could be further delayed or otherwise adversely affected.

Further, each indication for which we are evaluating maralixibat and volixibat is a rare cholestatic liver disease with limited patient populations from which to draw participants in clinical trials.

1 unchanged sentence

Potential patients may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for our studies.

For example, many patients with PFIC seek liver transplants early and as a result become ineligible for our treatment.

In addition, in PFIC, we are conducting clinical trials in countries that have not yet had maralixibat trials conducted and we have not yet worked with such foreign regulatory authorities.

For example, many patients with PFIC seek l iver transplants early and as a result become ineligible for our treatment.

In addition, in PFIC, we are conducting clinical trials in countries that have not yet had maralixibat trials conducted and we have not yet worked with such foreign regulatory auth orities.

As a result, we could face patient recruitment issues in certain countries where such foreign regulatory authorities are not familiar with maralixibat.

Additionally, other pharmaceutical companies targeting these same cholestatic liver diseases are recruiting clinical trial patients from these patient populations, which may delay or make it more difficult to fully enroll our clinical trials.

Additionally, other pharmaceutical companies targeting these same cholestatic liver diseases ar e recruiting clinical trial patients from these patient populations, and have expanded access programs available, which may delay or make it more difficult to fully enroll our clinical trials.

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

23 unchanged sentences

Further, as a result of the COVID-19 pandemic, if patients drop out of our clinical trials, miss scheduled doses or follow-up visits or otherwise fail to follow clinical trial protocols, or if our clinical trials are otherwise disputed due to COVID-19 or actions taken to slow its spread, the integrity of data from our clinical trials may be compromised or not accepted by the FDA or other regulatory authorities, which would represent a significant setback for the applicable program.

I n addition, in the second half of 2020, we plan to initiate an expanded access program for maralixibat in ALGS in the United States and Canada.

In addition, in the third quarter of 2020, we plan to initiate an expanded access program for maralixibat in ALGS in the United States and Canada.

Additional safety data generated from the expanded access program could be different from, including less favorable, than the data generated and discussed with the FDA to date, which may delay or prevent regulatory approval of maralixibat.

25 unchanged sentences

a facility manufacturing our product candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP, regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process;

any changes to our manufacturing process, suppliers or formulation that may be neces sary or desired;

any changes to our manufacturing process, suppliers or formulation that may be necessary or desired;

third-party vendors not performing manufacturing and distribution services in a timely manner or to sufficient quality standards;

third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements;

third-party clinical investigators losing the licens es or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements;

third-party contractors not performing data collection or analysis in a timely or accurate manner;

17 unchanged sentences

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

Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the requi red approvals to commercialize our product candidates.

Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commerciali ze our product candidates.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets.

24 unchanged sentences

Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.

The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

The lengthy approval process as well as the unpredictability of future clinical trial results m ay result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

Even if we eventually complete clinical trials and receive approval of an NDA or foreign marketing application for our product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials, and/or the implementation of a REMS, which may be required to ensure safe use of the drug after approval.

23 unchanged sentences

We expect to submit a Marketing Authorization Application (“MAA”) to the EMA for approval for maralixibat and volixibat in the European Union.

As with the FDA, obtaining approval of an MAA from the EMA is a similarly lengthy and expensive process and the EMA has its own procedures for approval for product candidates.

Regulatory authorities in jurisdictions outside of the United States and the European Union also have requirements for approval for product candidates with which we must comply prior to market ing in those jurisdictions.

Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our product candidates i n certain countries.

If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of any of our product candidates will be harmed, which would adversely affect our business, prospects, financial condition and results of operations.

As with the FDA, obtaining approval of an MAA f rom the EMA is a similarly lengthy and expensive process and the EMA has its own procedures for approval for product candidates.

Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and co uld delay or prevent the introduction of our product candidates in certain countries.

If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ab ility to realize the full market potential of any of our product candidates will be harmed, which would adversely affect our business, prospects, financial condition and results of operations.

Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval or result in significant negative consequences following marketing approval, if any.

7 unchanged sentences

Results of our trials could reveal a high and unacceptable severity and prevalence of these or other side effects.

In prior clinical studies of maralixibat, the most commonly reported AEs and SAEs have been those of GI disorders such as diarrhea, abdominal pain and vomiting, and were mostly mild to moderate in severity and transient in nature.

Reported treatment-related SAEs have consisted of abdominal pain, upper abdominal pain, diarrhea, cholangitis, increase in blood bilirubin, increase in international normalized ratio, increase in pancreatitis, elevated ALT, autoimmune hepatitis, hematochezia, pure red cell aplasia, myelodysplastic syndrome and anemia.

In clinical studies of maralixibat, the most commonly reported AEs and SAEs have been those of GI disorders such as diarrhea, abdominal pain and vomiting, and were mostly mild to moderate in severity and transient in nature.

Reported treatment-related SAEs have consisted of abdominal pain, upper abdominal pain, diarrhea, cholangitis, increase in blood bilirubin, increase in international normalized ratio, pancreatitis, elevated ALT, autoimmune hepatitis, hematochezia, pure red cell aplasia, myelodysplastic syndrome and anemia.

The frequency of observed AEs and SAEs has not increased over time.

4 unchanged sentences

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

In addition, in the second half of 2020, we plan to initiate an expanded access program for maralixibat in ALGS in the United States and Canada.

In addition, in the third quarter of 2020, we plan to initiate an expanded access program for maralixibat in ALGS in the United States and Canada.

Patients who receive access to unapproved drugs through compassionate use or expanded access programs have life-threatening illnesses and generally have exhausted all other available therapies.

32 unchanged sentences

government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the g lobal COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most foreign inspections of manufacturing facilities and products through April 2020, and subsequently, on March 18, 2020, the FDA announced its intention to temporaril y postpone routine surveillance inspections of domestic manufacturing facilities.

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutd own occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulator y authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business .

Separately, in response to the global COVID-19 pandemic, on March 10, 2020, th e FDA announced its intention to postpone most foreign inspections of manufacturing facilities and products through April 2020, and subsequently, on March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities.

On July 10, 2020, the FDA announced its intention to restart routine pre-announced surveillance inspections of domestic manufacturing facilities.

Regulatory authorities outside the United States may adopt similar restric tions or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business .

Even if we obtain regulatory approval for our product candidates, our product candidates may not gain market acceptance among physicians, patients, tertiary care centers, transplant centers and others in the medical community.

14 unchanged sentences

In addition, even if any of our product candidates gain acceptance, the markets for the treatment of patients with our target indications for maralixibat may not be as significant as we estimate.

If our product candidates are approved for marketing, and we ar e found to have improperly promoted off-label uses, or if physicians prescribe our products or use our products off-label based on our product communications , we may become subject to prohibitions on the sale or marketing of our products, significant fines , penalties, sanctions, or product liability claims, and our image and reputation within the industry and marketplace could be harmed.

If our product candidates are approved for marketing, and we are found to have improperly promoted off-label uses, or if physicians prescribe our products or use our products off-label based on our product communications , we may become subject to prohibitions on the sale or marketing of our products, significant fines, penalties, sanctions, or product liability claims, and our image and reputation within the industry and marketplace could be harmed.

The FDA and comparable foreign authorities strictly regulate the marketing and promotional claims that are made about pharmaceutical products, such as our product candidates, if approved.

61 unchanged sentences

It is unclear how such litigation and other efforts to repeal and replace the Affordable Care Act will impact the Affordable Care Act and our business.

In addition, other legislative changes have been proposed and adopted since the Affordable C are Act was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subseque nt legislative amendments to the statute, including the Bipartisan Budget Act of 2018, will remain in effect through 20 30 unless additional Congressional action is taken.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signe d into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2020 and extended the sequester b y one year, through 2030.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

In ad dition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to provid ers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the Bipartisan Budget Act of 2018, will remain in effect through 20 30 unless additional Congressional action is taken .

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Med icare sequester from May 1, 2020 through December 31, 2020 and extended the sequester by one year, through 2030.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to sever al providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs.

3 unchanged sentences

Additionally, on May 11, 2018, President Trump previously laid out his administration’s “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers.

Department of Health and Human Services has solicited feedback on some of these measures and has implemented others under its existing authority.

Department of Health and Human Services (“HHS”) has solicited feedback on some of these measures and has implemented others under its existing authority.

For example, in May 2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020.

This final rule codified CMS’s policy change that was effective January 1, 2019.

On July 24, 2020, President Trump announced four executive orders related to prescription drug pricing that attempt to implement several of the Administration’s proposals, including a policy that would tie Medicare Part B drug prices to international drug prices;

one that directs HHS to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada;

one that directs HHS to finalize the rulemaking process on modifying the anti-kickback law safe harbors for discounts for plans, pharmacies, and pharmaceutical benefit managers;

and one that reduces costs of insulin and epipens to patients of federally qualified health centers.

Although some of these and other proposals may require additional authorization to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs.

9 unchanged sentences

We currently have no marketing and sales organization and have no experience in marketing products.

If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product cand idates, we may not be able to generate product revenues.

If we are unable to estab lish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to generate product revenues.

We currently do not have a commercial organization for the marketing, sales and distribution of pharmaceutical products.

26 unchanged sentences

These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

If we fail to develop and commercialize additional produc t candidates, we may be unable to grow our business.

If we fail to develop and commercialize additional product candidates, we may be unable to grow our business.

Although we currently have no specific plans to do so, we may seek to develop and commercialize product candidates in addition to maralixibat and volixibat.

7 unchanged sentences

If we fail to develop our current and any future product candidates for additional indications, our commercial opportunity will be limited.

One of our strategies is to pursue clinical development of maralixibat in additional cholestatic disease conditions such as BA, post-liver transplant cholestasis, benign recurrent intrahepatic cholestasis and drug-induced cholestasis.

In addition, we plan to develop volixibat for the treatment of PSC and ICP.

One of our strategies is to pursue clinical development of maralixibat in additional cholestatic disease conditions such as BA, benign recurrent intrahepatic cholestasis and drug-induced cholestasis.

In addition, we plan to develop volixibat for the treatment of cholestatic liver diseases, including PSC and ICP.

The pediatric cholestatic liver diseases we are targeting are all rare diseases and, as a result, the market size for the treatment of patients with ALGS and PFIC is limited.

18 unchanged sentences

In addition, there are product candidates in development for some of these indications.

We are aware of two other companies pursuing clinical development of therapies that red uce sBA levels via the ASBT pathway.

We are awa re of two other companies pursuing clinical development of therapies that reduce sBA levels via the ASBT pathway.

GlaxoSmithKline plc and Albireo have ASBTis in clinical development for cholestatic liver diseases.

We are aware that Albireo has completed enrollment of a Phase 3 trial for PFIC1 and PFIC2 patients for odevixibat, and has an extension study enrolling PFIC patients.

Albireo has announced plans to pursue development in BA, ALGS and other cholestatic liver diseases .

We are aware that Albireo has completed en rollment of a Phase 3 trial for PFIC1 and PFIC2 patients for odevixibat, and has an extension study and an expanded access program enrolling PFIC patients.

Albireo has also announced the initiation of a study of odevixibat in BA and its plans to pursue development in ALGS and other cholestatic liver diseases .

We are aware that GlaxoSmithKline plc is conducting a Phase 2 trial of its ASBTi in PBC patients.

We are als o aware that Intercept is exploring BA as an indication for obeticholic acid.

We are also aware that Intercept is exploring BA as an indication for obeticholic acid.

Further, we may compete with companies that are developing gene therapy for the treatment of PFIC.

1 unchanged sentence

We are not aware of FDA approved therapeutics for the treatment of PSC or ICP.

We are aware of several agents in clinical development for the treatment of PSC, including Allergan plc’s cenicriviroc, DURECT Corporation’s DUR928, Gilead Sciences Inc.’s GS-9674, HighTide Biopharmaceutical Inc.’s HTD1801, Intercept’s Ocaliva, or obeticholic acid and NGM Biopharmaceuticals Inc.’s NGM282.

Furthermore, one of our own products, if approved, may be used off-l abel in the market for another of our products, if approved, adversely affecting the sales of such product.

We are aware of several agents in clinical development for the treatment of PSC, including Abbvie’s cenicriviroc, Cymabay’s seladelpar, DURECT Corporation’s DUR928, Gilead Sciences Inc.’s GS-9674, HighTide Bio pharmaceutical Inc.’s HTD1801, Immunic Therapeutics’ IMU-838, Intercept’s Ocaliva, or obeticholic acid , NGM Biopharmaceuticals Inc.’s NGM282 and Pliant Therapeutics’ PLN-74809 .

Furthermore, one of our own products, if approved, may be used off-label in the market for another of our products, if approved, adversely affecting the sales of such product.

Even though we have obtained orphan drug designation for maralixibat in PFIC and ALGS, we may not be able to obtain or maintain the benefits associated with orphan drug status, including market exclusivity.

3 unchanged sentences

In September 2013, the FDA granted orphan drug status to maralixibat for the treatment of patients with PFIC and ALGS in the United States.

We also received orphan drug status for maralixibat for PFIC and ALGS in the European Union in January 2014.

We also received orphan drug status for maralixibat for PFIC and ALGS in the European Union.

Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug may be entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for the same drug for that time period.

11 unchanged sentences

Even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the candidate from competition because different drugs can be approved for the same condition before the expiration of the orphan drug exclusivity period.

Although we have received a breakthrough therapy designation for maralixibat, this may n ot lead to a faster development, regulatory review or approval process, and it does not increase the likelihood that maralixibat will receive marketing approval in the United States.

Although we have received a breakthrough therapy designation for maralixibat, this may not lead to a fas ter development, regulatory review or approval process, and it does not increase the likelihood that maralixibat will receive marketing approval in the United States.

We have received a breakthrough therapy designation for maralixibat for the treatment of PFIC2 and for the treatment of pruritus associated with ALGS in patients one year of age and older.

49 unchanged sentences

Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

To induce valuable employees to remain at our company, in ad dition to salary and cash incentives, we have provided stock options that vest over time.

The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at any t ime be insufficient to counteract more lucrative offers from other companies.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock options that vest over time.

The value to employees of stock options that vest over time may be significantly affected by movements in our stock price that are beyond our control and may at an y time be insufficient to counteract more lucrative offers from other companies.

Despite our efforts to retain valuable employees, members of our management, scientific and development teams may terminate their employment with us on short notice.

Although we have offer letters with our key employees, these offer letters provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.

We do not maintain “key man” insurance policies on the live s of these individuals or the lives of any of our other employees.

Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level, and senior managers as well as junior, mid-level, and senior scientific and medical personnel.

We do not maintain “key man” insurance policies on the l ives of these individuals or the lives of any of our other employees.

Many of the other biotechnology and pharmaceutical companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles and a longer history in the industry than we do.

3 unchanged sentences

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of March 31, 2020, we had 41 employees, all of whom are full-time.

As of June 30, 2020, we had 54 full and part-time employees.

As our development and commercialization plans and strategies develop, we expect to need additional development, managerial, operational, financial, sales, marketing and other personnel.

10 unchanged sentences

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.

Our computer systems, or those used by our CROs or other contractors or consultants, may fail or suffer security breaches and other disruptions, including the theft of our intellectual property.

Our computer systems, or those used by our CROs or other contractors or consultants, may fail or suffer security breaches and other d isruptions, including the theft of our intellectual property.

Despite the implementation of security measures, our computer systems and those of our current and future CROs and other contractors and consultants are vulnerable to damage from computer viruses and unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.

24 unchanged sentences

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.

Our relationships with customers, physicians and third-party payors may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws and other healthcare law s and regulations.

If we or our employees, independent contractors, consultants, commercial partners or vendors violate these laws, we could face substantial penalties.

41 unchanged sentences

In addition to the foregoing, a breach of the GDPR or other applicable privacy and data protection laws and regulations could result in regulatory investigations, reputational damage, orders to cease/change our use of data, enforcement notices, or potential civil claims including class action type litigation.

In addition, Californ ia recently enacted the California Consumer Privacy Act (“CCPA”), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling certain personal data of consumers or households.

The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal in formation, and provide consumers with additional causes of action.

To comply with the GDPR restrictions on transfer of personal data out of Europe, we have relied on the Standard Contractual Clauses for personal data transfers approved by the European Commission.

However, a July 2020 decision of the European Union’s

highe st court called into question whether the Standard Contractual Clauses can lawfully be used for transfers of personal data from the European Union to the United States and most other non-EU countries.

Authorities in the United Kingdom and Switzerland may s imilarly question the viability of the Standard Contractual Clauses as a mechanism for the lawful transfer of personal data from those countries to the United States or other countries outside of Europe.

If we are unable to implement safeguards necessary t o ensure that our transfers of personal data from and within Europe are lawful, we will face increased exposure to regulatory actions, substantial fines and injunctions against processing personal data from Europe.

In addition, we may be required to increa se our data processing capabilities in Europe at significant expense.

Inability to import personal data from Europe may also restrict our clinical trials activities in France and elsewhere in the region and limit our ability to collaborate with contract re search organizations, service providers, contractors and other companies subject to European data protection laws.

Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of operating our business.

In addition, California recently enacted the California Consumer Privacy Act (“CCPA”), which creates new individual privacy rights for California consumers (as defined in the law) and places increased privacy and security obligations on entities handling certain personal data of consumers or households.

The CCPA requires covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.

The CCPA became effective January 1, 2020, and the California Attorney General may bring enforcement actions for violations beginning July 1, 2020.

4 unchanged sentences

Pursuant to the formal withdrawal arrangements agreed between the UK and the European Union, the UK will be subject to a transition period until December 31, 2020 (“Transition Period”), during which European Union rules will continue to apply.

During the Transition Period, the negotiations between the UK and the European Union are expected to continue in relation to the customs and trading relationship between the UK and the European Union following the expiry of the Transition Period.

Due to the current COVID-19 pandemic, negotiations between the UK and the European Union that were scheduled for March and April were either being postponed or occurring in a reduced forum via video conference.

There is, therefore, an increased likelihood that the Transition Period may need to be extended beyond December 31, 2020 (although it remains the position of the UK government that it will not be extended).

During the Transition Period, the negotiations between the UK and the European Union have continued in relation to the customs and trading relationship between the UK and the European Union following the expiry of the Transition Period.

Under the formal withdrawal arrangements between the UK and the European Union, the parties had until June 30, 2020 to agree to extend the Transition Period, if required.

No such extension was agreed prior to such date.

No agreement has yet been reached between the UK and the European Union and it may be the case that no formal customs and trading agreement will be reached prior to the expiry of the Transition Period on December 31, 2020.

Since a significant proportion of the regulatory framework in the UK applicable to our business and our product candidates is derived from European Union directives and regulations, Brexit, following the Transition Period, could materially impact the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the UK or the European Union.

33 unchanged sentences

We are subject to U.S.

and certain foreign export and import controls, sanctions, embargoes, ant i-corruption laws and anti-money laundering laws and regulations.

and certain foreign export and import controls, sanctio ns, embargoes, anti-corruption laws and anti-money laundering laws and regulations.

Compliance with these legal standards could impair our ability to compete in domestic and international markets.

We can face criminal liability and other serious consequences for violations, which can harm our business.

We can face criminal liability and other serious consequenc es for violations, which can harm our business.

We are subject to export control and import laws and regulations, including the U.S.

31 unchanged sentences

Moreover, our business may be implicated if any of our CROs violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

Our CROs are not our employees and, except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and non-clinical programs.

These CROs may also have relationships with other commercial entities, including our competitors, for whom the y may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf.

If our CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated an d we may not be able to complete development of, obtain regulatory approval for or successfully commercialize our product candidates.

As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs coul d increase and our ability to generate revenues could be delayed.

Our CROs are not our employees and, except for remedies available to us under our agreeme nts with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and non-clinical programs.

These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf.

If our CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval for or successfully commercialize our product candidates.

As a result, our financial results and the commercial prospects for our product candidates would be harmed, o ur costs could increase and our ability to generate revenues could be delayed.

Switching or adding CROs involves substantial cost and requires extensive management time and focus.

6 unchanged sentences

Instead, we rely on contract manufacturers for such production.

In particular, we rely on a number of different manufacturers to obtain our supply of maralixibat to support our clinical trial program, including different manufacturers for adult and pediatric formulations of maralixibat.

We do not currently have any long-term agreement with a manufacturer to produce raw materials, active pharmaceutical ingredients (“APIs”) and the finished products of our product candidates or the associated packaging and administration syringes used in our current product format.

In particular, we rely on a number of different manufacturers to obtain our supply of maralixibat and volixibat to support our clinical trial programs.

We will need to identify and qualify a third-party manufacturer prior to commercialization of our product candidates, and we intend to enter into agreements for commercial production with third-party suppliers.

7 unchanged sentences

If the FDA or any other applicable regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, or if our suppliers or contract manufacturers decide they no longer want to supply or manufacture for us, we may need to find alternative manufacturing facilities, in which case we might not be able to identify manufacturers for clinical or commercial supply on acceptable terms, or at all, which would significantly impact our ability to develop, obtain regulatory approval for or market maralixibat and volixibat.

In addition, the manufacture of pharmaceutical products is complex and requires significant expertise and capital investment, including the development of a dvanced manufacturing techniques and process controls.

In addition, the manufacture of pharmaceutical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.

Manufacturers of pharmaceutical products often encounter difficulties in production, particularly in scaling up and validating initial production and absence of contamination.

These problems include di fficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulatio ns.

These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qu alified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.

Furthermore, if contaminants are discovered in our supply of maralixibat or volixibat or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

An y stability or other issues relating to the manufacture of our product candidates may occur in the future.

In addition, quarantines, shelter-in-place and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at our third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which could disrupt the supply cha in for our product candidates.

Further , our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.

If our manufacturers were to encounter any of these difficu lties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidate to patients in clinical trials would be jeopardized.

Any delay or interruption in the supply of clinical trial supplies could delay the comp letion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.

Any stability or other issues relating to the manufacture of our product candidates may occur in the future.

In addition, quarantines, shelter-in-place and si milar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to COVID-19 or other infectious diseases could impact personnel at our third-party manufacturing facilit ies upon which we rely, or the availability or cost of materials, which could disrupt the supply chain for our product candidates.

Further , our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disp utes or unstable political environments.

If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidate to patients in clinical trials would be jeopardized.

Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to com mence new clinical trials at additional expense or terminate clinical trials completely.

If we or our third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages.

6 unchanged sentences

Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition or results of operations.

The actions of distributors and specialty pharmacies could affect our ability to sell or market products profitably.

Fluctuations in buying or distribution patterns by such distributors and specialty pharmacies could adversely affect our revenues, financial condition, or results of operations.

If maralixibat is approved, we intend to rely on one or more specialty pharmacies or distributors for a considerable portion of product sales.

The failure of one or more of these parties could adversely affect our revenues, financial condition or results of operations.

Our revenues, financial condition or results of operations may also be affected by fluctuations in buying or distribution patterns of one or more of these parties.

These fluctuations may also result from seasonality, pricing, wholesaler inventory objectives, or other factors, including the effects of the COVID-19 pandemic.

Risks Related to Our Financial Position and Capital Requirements

7 unchanged sentences

We will require additional capital for the further development and commercialization of our product candidates and may need to raise additional funds sooner if we choose to expand more rapidly than we presently anticipate.

In addition, in the second half of 2020, we plan to initiate an expanded access program for maralixibat in ALGS in the United States and Canada, which requires additional resources and costs to support.

Additional funding may not be avail able on acceptable terms, or at all.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity an d credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.

In addition, in the third quarter of 2020, we

plan to initiate an expanded access program for maralixibat in ALG S in the United States and Canada, which requires additional resources and costs to support.

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

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.

If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.

If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of maralixiba t or volixibat or other research and development initiatives.

We also could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be avail able or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of maralixibat or volixibat or other research and development initiatives.

We also could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.

44 unchanged sentences

The patent prosecution process is also expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

It is also possible that we will fail to identify p atentable aspects of our research and development output before it is too late to obtain patent protection.

Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and developm ent output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a pat ent application is filed, thereby jeopardizing our ability to seek patent protection.

It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Although we enter into non-disclosure and confidentiality agreements with parties who have access to patentable aspects of our research and develo pment output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants, advisors and other third parties, any of these parties may breach such agreements and disclose such output before a p atent application is filed, thereby jeopardizing our ability to seek patent protection.

We may also rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or feasible.

However, trade secrets are d ifficult to protect.

However, trade secrets are difficult to protect.

Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors.

Enf orcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable.

In addition, courts outside the United States are sometimes less willing to protect trade secrets.

E nforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable.

In addition, courts outside the United States are sometimes less willing to protect trade secret s.

Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

19 unchanged sentences

The strength of patents in the biotechnology and pharmaceutical fields involves complex legal and scientific questions and can be uncertain.

The patent applications that we own or in-license may fail to result in issued patents with claims that c over maralixibat or volixibat in the United States or in foreign countries.

Even if such patents do successfully issue, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.

The patent applications that we own or in-license may fail to result in issued patents with claims that cover maralixibat or volixibat in the United States or in foreign countries.

Even if such patents do successfully issue, third parties may challenge the validity, enforceability or scope thereof, which may resul t in such patents being narrowed, invalidated or held unenforceable.

Any successful opposition to our patents could deprive us of exclusive rights necessary for the successful commercialization of maralixibat or volixibat.

Furthermore, even if they are unchallenged, our patents may not adequately prot ect our intellectual property, provide exclusivity for maralixibat or volixibat or prevent others from designing around our claims.

If the breadth or strength of protection provided by the patents we hold with respect to maralixibat or volixibat is threate ned, it could dissuade companies from collaborating with us to develop, or threaten our ability to commercialize, maralixibat or volixibat.

Furthermore, even if they are unc hallenged, our patents may not adequately protect our intellectual property, provide exclusivity for maralixibat or volixibat or prevent others from designing around our claims.

If the breadth or strength of protection provided by the patents we hold with respect to maralixibat or volixibat is threatened, it could dissuade companies from collaborating with us to develop, or threaten our ability to commercialize, maralixibat or volixibat.

Further, if we encounter delays in our development efforts, including our clinical trials, the period of time during which we could market maralixibat or volixibat under patent protection would be reduced.

22 unchanged sentences

Moreover, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

In addition to the protection afforded by p atents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product can didates and drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidates and drug discovery and development processes that involve proprietary know-how, information or technology that is not covered by pate nts.

However, trade secrets can be difficult to protect.

We require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology, such as third parties involved in the manufacture of our product candidates, such as maralixibat and volixibat, and third parties involved in our clinical trials to enter into confidentiality agreements.

We cannot be certain that all such agreements have been duly executed, that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.

Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business.

A dditionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret.

For example, the FDA, as part of its Transparency Initiative, is currently c onsidering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure polic ies may change in the future, if at all.

If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we may not be able to establish or maintain a competitive advantage in our market, which could materially a dversely affect our business, operating results and financial condition.

We cannot be certain that all such agreements have been duly executed, that our trade secrets and othe r confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.

Misappropriation or unauthorized disclosure o f our trade secrets could impair our competitive position and may have a material adverse effect on our business.

Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret.

For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be tra de secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.

If we are unable to prevent unauthorized material disclosure of our intellectual property to third p arties, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.

We currently rely on method-of-use and formulation patents to protect maralixibat and composition-of-matter and method-of-use patents to protect volixibat.

We currently own patent applications in the United States, Europe and other countries covering the methods of treating cholestasis using ASBTis, including maralixibat and volixibat, with limited systemic exposure.

We also own patent applications in Europe, and other countries covering the pediatric formulations of such ASBTis.

We currently own patent applications in the United States, Europe and other countries covering the methods of treating cholestatic liver diseases using ASBTis, including maralixibat and volixibat, with limited systemic exposure.

We also own patent applications in Europe, and other countries covering compositions of such ASBTis and/or their use in treating pediatric cholestatic liver diseases.

A patent based on any of these patent applications may never be issued.

12 unchanged sentences

Changes in U.S.

patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

patent law could diminish the value of patents in general, thereby impairing our ability to protect our produ ct candidates.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly on obtaining and enforcing patents.

31 unchanged sentences

Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could los e license rights that are important to our business.

We are a party to a number of license agreements under which we are granted intellectual property rights that are important to our business.

20 unchanged sentences

Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

We may not be successful in obtaining or ma intaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.

We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-lic enses.

Presently we have intellectual property rights, through licenses from third parties including Shire, Pfizer, Satiogen and Sanofi, related to our product candidates.

28 unchanged sentences

If we are unable to successfully obtain rights to required third-party intellectual property rights on commercially reasonable terms, our ability to commercialize our products, and our business, financial condition and prospects for growth could suffer.

Third-pa rty claims alleging intellectual property infringement may prevent or delay our drug discovery and development efforts.

Third-party claims alleging intellectual property infringement may prevent or delay our drug discovery and development ef forts.

Our success depends in part on our avoiding infringement of the patents and proprietary rights of third parties.

27 unchanged sentences

require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.

If we are sued for patent infringement, we would need to demonstrate that our products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do either.

Proving invalidity is diffi cult.

If we are sued for patent infringement, we would need to demonstrate that our products or m ethods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid, and we may not be able to do either.

Proving invalidity is difficult.

For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

Even if we are successful in these proceedings, we may incur substantial cost s and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.

Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.

If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, defend an infringement action or challenge the validity of the patents in court.

1 unchanged sentence

We may not have sufficient resources to bring these actions to a successful conclusion.

In addition, if we do not obtain a li cense, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.

In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our product candidates.

We do not always conduct independent reviews of pending patent applications of and patents issued to third parties.

22 unchanged sentences

In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

If a third party prevails in a patent infringement lawsuit against us, we may have to stop making and selling the infringing product, pay substantial damages, including treble damages and attorneys’ fees if we are found to be willfully infringing a third party’s patents, obtain one or more licenses from th ird parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

If a third party prevails in a patent infringement lawsuit against us, we may have to stop making and selling the infringing product, pay substantial damages, including treble damages and attorneys’ fees if we are found to be willfully infringing a third party’s patents, o btain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms.

6 unchanged sentences

Many of these consultants, and many of our employees, were previously employed at, or may have previously provided or may be currently providing consulting services to, other pharmaceutical companies including our competitors or potential competitors.

We may become subject to claims that we, our employees or a consultant inadvertently or otherwise used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients.

We may become subject to claims that we, our employees or consultants inadvertently or otherwise used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients.

Litigation may be necessary to defend against these claims.

21 unchanged sentences

In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring our product candidates to market.

Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses and could distract o ur technical and management personnel from their normal responsibilities.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive the se results to be negative, it could have a substantial adverse effect on the price of our common stock.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any fu ture sales, marketing or distribution activities.

Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities anal ysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for de velopment activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.

Some of our competitors may be able to sustain the costs of such l itigation or proceedings more effectively than we can because of their greater financial resources.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the market place.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

24 unchanged sentences

Even though we use commonly accepted security measures, the criteria for protection of trade secrets can vary among different jurisdictions.

Enforcing a claim that a party ille gally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.

In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.

Moreover, third parties may still obtain this information or may come upon this or similar information independently, and we would have no right to prevent them from using that technology or information to compete with us.

Trade secrets will over time be disseminate d within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic to industry scientific positions.

Though our agreements with third parties typic ally restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights.

If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

Bec ause from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our services, we must, at times, share trade secrets with them.

Despite employing the contractual and other securit y precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreemen ts.

If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position would be harmed.

If we do not apply for patent protection prior to such publicatio n or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.

In addition, some courts inside and outside the United S tates are less willing or unwilling to protect trade secrets.

Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel skilled in the art from company to company or academic to indus try scientific positions.

Though our agreements with third parties typically restrict the ability of our advisors, employees, collaborators, licensors, suppliers, third-party contractors and consultants to publish data potentially relating to our trade sec rets, our agreements may contain certain limited publication rights.

If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or inform ation to compete with us, which could harm our competitive position.

Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our services, we must, at times, share trad e secrets with them.

Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the techn ology of others, or are disclosed or used in violation of these agreements.

If any of these events occurs or if we otherwise lose protection for our trade secrets, the value of this information may be greatly reduced and our competitive position would be h armed.

If we do not apply for patent protection prior to such publication or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect ou r trade secret information may be jeopardized.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

33 unchanged sentences

The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.

For example, the closing price of our common stock since its trading began on July 18, 2019 and to May 6, 2020 has ranged from a low of $6.84 to a high of $25.90.

For example, the closing price of our common stock since its trading began on July 18, 2019 and to August 5, 2020 has ranged from a low of $6.84 to a high of $25.90.

In addition to the factors discussed in this “Risk Factors” section, these factors include:

37 unchanged sentences

This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results or financial condition.

We do not intend to pay dividends on our common stock so any returns will be limited to the value o f our stock.

We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.

We have never declared or paid any cash dividend on our common stock.

20 unchanged sentences

We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

If we fail to maintain proper and effective internal controls, our ability to produce accu rate financial statements on a timely basis could be impaired.

If we fail to maintain proper and effective internal controls, ou r ability to produce accurate financial statements on a timely basis could be impaired.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of Nasdaq.

27 unchanged sentences

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

As of March 31, 2020, there were 25,033,736 shares of our common stock outstanding, excluding 356,251 shares subject to repurchase, as described in the notes to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

As of June 30, 2020, there were 25,071,337 shares of our common stock outstanding, excluding 322,853 shares subject to repurchase, as described in the notes to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act of 1933, as amended (“Securities Act”).

14 unchanged sentences

Unless our board of directors elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.

Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities.

Our business could be negat ively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities.

Stockholders may, from time to time, engage in proxy solicitations or advance stockholder proposals, or otherwise attempt to effect changes and assert influence on our board of directors and management.

19 unchanged sentences

the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law , which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.

These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated b ylaws could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer or prox y contest involving our company.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corpora te Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.

These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and rest ated bylaws could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer o r proxy contest involving our company.

These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire.

Any delay or preven tion of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that, unless we c onsent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

(i) any derivative action or proceeding brought on our behalf;

4 unchanged sentences

and (vi) any action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.

provided these provisions of our amended and restated certificate of incorporation and amended and restated bylaws apply to suits brought to enforce a duty or liability created by the Securities Act, but stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations thereunder;

and provided these provisions of our amended and restated certificate of incorporation and amended and restated bylaws do not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

In addition, our amended and restated certificate of incorporation and amended and restated bylaws provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, unless we consent in writing to the selection of an alternative forum.

These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.

Accordingly, both state and federal courts have jurisdiction to entertain such claims.

To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.

In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation.

This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may discourage these types of lawsuits.

If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.

If securities or industry analysts publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

2 unchanged sentences

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

Unre gistered Sales of Equi ty Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

Use of Proceeds

We commenced our IPO pursuant to the registration statement on Form S-1 (File No.

333-232251) that was declared effective on July 17, 2019 and registered an aggregate of 5,750,000 shares of our common stock.

On July 17, 2019, we sold 5,000,000 shares of our common stock at a public offering price of $15.00 per share for an aggregate gross proceeds of $75.0 million.

On July 22, 2019, we completed our IPO.

Citigroup Global Markets Inc., Evercore Group L.L.C.

and Guggenheim Securities LLC served as joint book-running managers.

Raymond James & Associates, Inc.

served as lead manager.

Roth Capital Partners, LLC served as co-manager.

The underwriting discounts and commissions for our IPO totaled approximately $5.3 million.

We incurred additional costs of approximately $2.5 million in offering expenses, which when added to the underwriting discounts and commissions paid by us, amounts to total fees and costs of approximately $7.8 million.

Thus, net offering proceeds to us, after deducting underwriting discounts, commissions and offering expenses, were $67.2 million.

No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning ten percent or more of any class of our equity securities or to any other affiliates.

Upon receipt, the net proceeds from our IPO were held in cash and cash equivalents and investments.

Through June 30, 2020, we have not used any of the net proceeds from our initial public offering.

We are investing these funds in a combination of short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S.

We expect to use the net proceeds from our initial public offering as described under “Use of Proceeds” in our prospectus dated July 17, 2019 that forms a part of our Registration Statement on Form S-1 (File No.

333-232251), as filed with the SEC pursuant to Rule 424(b) under the Securities Act on July 18, 2019.

We cannot predict with certainty all of the particular uses for the net proceeds from our IPO, or the amounts that we will actually spend on the uses set forth above.

The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including our ability to access additional financing, the relative success and cost of our clinical trials.

As a result, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds from our IPO.

Defaults Upon Senior Securities.

Not applicable.

Mine Safety Disclosures.

Not applicable.

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-Q

Item 1A. Risk Factors