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• Our business could be adversely affected by the effects of health pandemics or epidemics, including the COVID-19 pandemic, in regions where we or third parties on which we rely have significant sales and marketing efforts or manufacturing facilities, concentrations of clinical trial sites or other business operations, or materially affect our operations, and at our clinical trial sites, as well as the business or operations of our manufacturers, CROs or other third parties with whom we conduct business.
+Added: • We face intense competition, and if we are unable to compete effectively, the demand for our products may be reduced.
• Because the development of our product candidates is subject to a substantial degree of technological uncertainty, we may not succeed in developing any of our product candidates.
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• Use of our approved products or those of our collaborators could be associated with side effects or adverse events.
−Removed: • We face intense competition, and if we are unable to compete effectively, the demand for our products may be reduced.
+Added: • We have recently increased the size of our organization and will need to continue to increase the size of our organization.
+Added: We may encounter difficulties with managing our growth, which could adversely affect our results of operations.
+Added: • If we are unable to retain and recruit qualified employees or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of INGREZZA, ONGENTYS or any product candidate approved by the FDA.
• We currently have no manufacturing capabilities.
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The loss of these suppliers, or delays or problems in the supply of INGREZZA or ONGENTYS, could materially and adversely affect our ability to successfully commercialize INGREZZA or ONGENTYS.
−Removed: • If we are unable to retain and recruit qualified scientists or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of INGREZZA, ONGENTYS or any product candidate approved by the FDA.
• We license some of our core technologies and drug candidates from third parties.
If we default on any of our obligations under those licenses, or violate the terms of these licenses, we could lose our rights to those technologies and drug candidates or be forced to pay damages.
+Added: • If we are unable to protect our intellectual property, our competitors could develop and market products based on our discoveries, which may reduce demand for our products.
+Added: • Health care reform measures and other recent legislative initiatives could adversely affect our business.
• Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations.
• We have a history of losses and expect to increase our expenses for the foreseeable future, and we may not be able to sustain profitability.
−Removed: • We have recently increased the size of our organization and will need to continue to increase the size of our organization.
−Removed: We may encounter difficulties with managing our growth, which could adversely affect our results of operations.
• Our customers are concentrated and therefore the loss of a significant customer may harm our business.
• If we cannot raise additional funding, we may be unable to complete development of our product candidates or establish commercial and manufacturing capabilities in the future.
−Removed: • Health care reform measures and other recent legislative initiatives could adversely affect our business.
−Removed: • If we are unable to protect our intellectual property, our competitors could develop and market products based on our discoveries, which may reduce demand for our products.
Risks Related to Our Company
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In addition, our business has been and may continue to be adversely affected by the effects of health pandemics or epidemics, including the ongoing COVID-19 pandemic.
−Removed: Most hospitals, community mental health facilities, and other healthcare facilities have implemented policies that limit access of our sales representatives, medical affairs personnel, and patients to such facilities.
−Removed: Due to these closures and our work from home decisions, our field force is currently functioning utilizing digital and telephonic engagement tools and tactics, which may be less effective than our ordinary sales and marketing and medical education programs.
+Added: Some hospitals, community mental health facilities, and other healthcare facilities have implemented policies that limit access of our sales representatives, medical affairs personnel, and patients to such facilities.
+Added: However, we anticipate these policies may change from time to time as communities or regions grapple with local or regional outbreaks.
+Added: In addition, many health care practitioners have adopted telehealth for patient interactions, which may impact the ability of the health care practitioner to diagnose tardive dyskinesia.
+Added: Further, during the COVID-19 pandemic, the use of physician telehealth services increased, fueled in part by an expansion of coverage and reimbursement from government and other payors.
+Added: The limitations that telehealth places on the ability to conduct a thorough physical
+Added: examination may impact the ability of providers to screen for movement disorders, leading potentially fewer patients to be diagnosed and referred for treatment.
The ultimate impact of the COVID-19 pandemic, including any lasting effects on the way we conduct our business, is highly uncertain and subject to change.
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• the cost-effectiveness of the products.
−Removed: If the medical community and patients do not continue to accept our products as being safe, effective, superior and/or cost-effective, we may not generate sufficient revenue.
−Removed: Governmental and third-party payors may impose sales and pharmaceutical pricing controls on our products or limit coverage and/or reimbursement for our products that could limit our product revenues and delay sustained profitability.
−Removed: Our ability to continue to commercialize INGREZZA successfully or to commercialize ONGENTYS, will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available.
−Removed: The continuing efforts of government and third-party payors to contain or reduce the costs of health care and the price of prescription drugs through various means may reduce our potential revenues.
+Added: If the medical community, patients and payors do not continue to accept our products as being safe, effective, superior and/or cost-effective, we may not generate sufficient revenue.
+Added: *Governmental and third-party payors may impose sales and pharmaceutical pricing controls on our products or limit coverage and/or reimbursement for our products or impose policies that could limit our product revenues and delay sustained profitability.
+Added: Our ability to continue to commercialize INGREZZA successfully or to successfully commercialize ONGENTYS, will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available.
+Added: The continuing efforts of government and third-party payors to contain or reduce the costs of health care and the price of prescription drugs through various means may impact our revenues.
These payors’ efforts could decrease the price that we receive for any products we may develop and sell in the future.
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Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available regardless of whether they are approved by the FDA for that particular use.
+Added: Coverage decisions by payors for our competitors' products may also impact coverage for our products.
Government authorities and other third-party payors are developing increasingly sophisticated methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications.
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In addition, communications from government officials regarding health care costs and pharmaceutical pricing could have a negative impact on our stock price, even if such communications do not ultimately impact coverage or reimbursement decisions for our products.
−Removed: There may also be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities.
+Added: There may also be significant delays in obtaining coverage and reimbursement for newly approved drugs or indications, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities.
Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.
−Removed: Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
+Added: Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable
+Added: coverage policies and reimbursement rates may be implemented in the future.
In addition, gene therapy treatments, which we are developing pursuant to our collaboration and license agreement with Voyager, face additional uncertainty related to pricing and reimbursement.
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Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
+Added: Further, during the early months of the COVID-19 pandemic, the use of physician telehealth services rapidly increased, fueled by an unprecedented expansion of coverage and reimbursement across insurers.
+Added: The limitations that telehealth places on the ability to conduct a thorough physical examination may impact the ability of providers to screen for movement disorders, leading potentially fewer patients to be diagnosed and referred for treatment.
*Our business could be adversely affected by the effects of health pandemics or epidemics, including the COVID-19 pandemic, in regions where we or third parties on which we rely have significant sales and marketing efforts or manufacturing facilities, concentrations of clinical trial sites or other business operations, or materially affect our operations, and at our clinical trial sites, as well as the business or operations of our manufacturers, CROs or other third parties with whom we conduct business.
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As a result of the ongoing COVID-19 pandemic, we may experience disruptions that could severely impact our supply chain, ongoing and future clinical trials and commercialization of INGREZZA and ONGENTYS.
−Removed: For example, the COVID-19 pandemic has resulted in increased travel restrictions and the shutdown or delay of business activities in various regions, including San Diego, California, where our headquarters are located.
−Removed: In response to state and local restrictions, we implemented work-from-home policies for all employees except certain key essential members involved in business-critical activities.
−Removed: We have since developed and are implementing plans regarding the opening of our sites to enable our employees to return to work in our corporate offices and the field, which
−Removed: plans take into account applicable public health authority and local government guidelines and which are designed to ensure community and employee safety.
−Removed: The effects of the stay at home 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.
−Removed: In addition, we may face several challenges or disruptions upon a return back to the workplace if and when the COVID-19 pandemic subsides, including re-integration challenges by our employees and distractions to management related to such transition.
+Added: For example, the COVID-19 pandemic has resulted in increased travel restrictions and the shutdown or delay of business activities in various regions.
+Added: In response the COVID-19 pandemic, we implemented a remote work model in early March 2020 for all employees except certain key essential members involved in business-critical activities.
+Added: We have implemented plans to enable our employees to return to work in our corporate offices and the field, which plans take into account applicable public health authority and local government guidelines and which are designed to ensure community and employee safety.
+Added: The effects of our remote work model 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.
+Added: Although the immediate impact of the COVID-19 pandemic has subsided, the effects of the pandemic continue to rapidly evolve and we may face several challenges or disruptions upon a return back to the workplace, including re-integration challenges by our employees and distractions to management related to such transition.
These and similar, and perhaps more severe, disruptions in our operations due to the COVID-19 pandemic could negatively impact our business, operating results and financial condition.
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Similarly, our ability to recruit and retain patients, principal investigators and site staff (who as healthcare providers may have heightened exposure to COVID-19) may be hindered, which would adversely impact our clinical trial operations.
−Removed: For example, due to the impact of the COVID-19 pandemic, we initially paused enrollment of new patients in several of our clinical trials.
−Removed: Since then, we have begun enrolling patients again in the Phase III study of valbenazine for chorea in HD and the Phase IIa pediatric study of crinecerfont in CAH.
However, increases in COVID-19 cases or hospitalizations in the future could cause us to again limit or suspend our patient enrollment and screening activities.
−Removed: The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically.
+Added: The COVID-19 pandemic, which has caused a broad impact globally, may materially affect us economically.
While the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or predict, the pandemic is currently resulting in disruption of global financial markets.
This disruption, if sustained or recurrent, could make it more difficult for us to access capital, which could in the future negatively affect our liquidity.
−Removed: In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock.
−Removed: The global COVID-19 pandemic continues to rapidly evolve.
+Added: In addition, a recession or market correction resulting from the COVID-19 pandemic could materially affect our business and the value of our common stock.
+Added: The effects of the COVID-19 pandemic continues to rapidly evolve.
The ultimate impact of the COVID-19 pandemic or a similar health pandemic or epidemic is highly uncertain and subject to change.
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• new small molecule or other classes of therapeutic agents.
−Removed: Developments by others may render our product candidates or technologies obsolete or noncompetitive.
+Added: Developments by others (including the development of generic equivalents) may render our product candidates or technologies obsolete or noncompetitive.
We are commercializing and performing research on or developing products for the treatment of several disorders including endometriosis, tardive dyskinesia, uterine fibroids, essential tremor, classic congenital adrenal hyperplasia, pain, Parkinson’s disease, Friedreich’s ataxia, and other neurological and endocrine-related diseases and disorders, and there are a number of competitors to our products and product candidates.
−Removed: If one or more of our competitors’ products or programs are successful, the market for our products may be reduced or eliminated.
+Added: If one or more of our competitors’ products or programs are successful, (including the development of generic equivalents) the market for our products may be reduced or eliminated.
• With respect to INGREZZA for tardive dyskinesia, we compete with Teva Pharmaceutical Industries, which received FDA approval for AUSTEDO to treat tardive dyskinesia in August 2017, and several clinical development-stage programs targeting tardive dyskinesia and related movement disorders.
−Removed: Additionally, there are a number of commercially available medicines used to treat tardive dyskinesia off-label, such as Xenazine (tetrabenazine) and
−Removed: generic equivalents, and various antipsychotic medications (e.g., clozapine), anticholinergics, benzodiazepines (off-label), and botulinum toxin.
+Added: Additionally, there are a number of commercially available medicines used to treat tardive dyskinesia off-label, such as Xenazine (tetrabenazine) and generic equivalents, and various antipsychotic medications (e.g., clozapine), anticholinergics, benzodiazepines (off-label), and botulinum toxin.
• In endometriosis, ORILISSA and ORIAHNN each compete with several FDA-approved products for the treatment of endometriosis, uterine fibroids, infertility, and central precocious puberty.
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however, a number of different ASMs are currently used in these patient populations.
−Removed: • The investigational treatment luvadaxistat for the negative symptoms of schizophrenia may in the future compete with off-label antipsychotic and antidepressant medicines, including ciraprazine, clozapine, fluoxetine, citalopram, sertraline, and amisulpride.
−Removed: In addition, there are several development-stage programs being pursued by other companies, including pimavanserin, roluperidone, RO6889450 and sodium benzoate.
−Removed: Currently, there are no-FDA approved treatments specifically indicated for the negative symptoms of schizophrenia.
+Added: • The investigational treatment luvadaxistat for the cognitive impairment associated with schizophrenia, or CIAS, may in the future compete with several development-stage programs being pursued by other companies.
+Added: Currently, there are no FDA approved treatments specifically indicated for CIAS.
• Our investigational treatments for potential use in endocrinology, neurology, and psychiatry, as well as our investigational gene therapies, may in the future compete with numerous approved products and development-stage programs being pursued by several other companies.
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• capital resources;
+Added: • sales and marketing experience;
• research and development resources, including personnel and technology;
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Because the development of our product candidates is subject to a substantial degree of technological uncertainty, we may not succeed in developing any of our product candidates.
−Removed: All of our product candidates are currently in research or clinical development with the exceptions of INGREZZA, which has been approved by the FDA for tardive dyskinesia, ONGENTYS, which has been approved by the FDA for Parkinson’s disease, ORILISSA (partnered with AbbVie), which has been approved by the FDA for the management of moderate to severe endometriosis pain in women, and ORIAHNN (partnered with AbbVie), which has been approved by the FDA for the management of heavy menstrual bleeding associated with uterine fibroids in pre-menopausal women.
Only a small number of research and development programs ultimately result in commercially successful drugs.
−Removed: In addition, to date the FDA has
−Removed: granted regulatory approval for only a very limited number of gene therapy products and the clinical development of a gene therapy product may result in unforeseen adverse events.
+Added: In addition, to date the FDA has granted regulatory approval for only a very limited number of gene therapy products and the clinical development of a gene therapy product may result in unforeseen adverse events.
Potential products that appear to be promising at early stages of development may not reach the market for a number of reasons.
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• we may discover that a product candidate may cause harmful side effects or results of required toxicology or other studies may not be acceptable to the FDA;
−Removed: • the results may not replicate the results of earlier, smaller trials;
+Added: • clinical trial results may not replicate the results of earlier, smaller trials;
• the FDA or similar foreign regulatory authorities may require use of new or experimental endpoints that may prove insensitive to treatment effects;
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• the results may not be statistically significant;
−Removed: • patient recruitment and enrollment may be slower or more difficult than expected;
+Added: • clinical site initiation or patient recruitment and enrollment may be slower or more difficult than expected;
• the FDA may not accept the data from any trial or trial site outside of the US;
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These risks and uncertainties impact all of our clinical programs and any of the clinical, regulatory or operational events described above could change our planned clinical and regulatory activities.
−Removed: In addition, due to the impact of the COVID-19 pandemic, we paused enrollment of new patients in several of our clinical trials, and increases in COVID-19 cases or hospitalizations in the future could cause us to further limit or suspend our patient enrollment and screening activities.
+Added: In addition, due to the impact of the COVID-19 pandemic, clinical site initiation and new patient enrollment has been negatively impacted.
Additionally, any of these events described above could result in suspension of a program and/or obviate any filings for necessary regulatory approvals.
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We depend on our current collaborators for the development and commercialization of several of our products and product candidates and may need to enter into future collaborations to develop and commercialize certain of our product candidates.
−Removed: For example, we collaborate with AbbVie for the manufacture and commercialization of two of our commercial products, ORILISSA and ORIAHNN, and for the continued development of elagolix.
+Added: For example, we depend on AbbVie for the manufacture and commercialization of ORILISSA and ORIAHNN and for the continued development of elagolix.
We collaborate with MTPC for the development and commercialization of INGREZZA for movement disorders in Japan and other select Asian markets.
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Our current and future collaborations and licenses could subject us to a number of risks, including:
+Added: • strategic collaborators may sell, transfer or divest assets or programs related to our partnered product or product candidates;
• we may be required to undertake the expenditure of substantial operational, financial and management resources;
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• strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs;
−Removed: • strategic collaborators may sell, transfer or divest assets or programs related to our partnered product or product candidates;
• disagreements or disputes may arise between us and our strategic collaborators that result in delays or in costly litigation or arbitration that diverts management’s attention and consumes resources;
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We may not be able to successfully commercialize ONGENTYS.
−Removed: In April 2020, we received FDA approval for ONGENTYS as an adjunctive therapy to levodopa/DOPA decarboxylase inhibitors in adult Parkinson’s disease patients, and in September 2020, we launched the commercial sale of ONGENTYS with our existing INGREZZA infrastructure.
+Added: In April 2020, we received FDA approval for ONGENTYS as an adjunctive therapy to levodopa/DOPA decarboxylase inhibitors in adult Parkinson’s disease patients, and in September 2020, we launched the commercial sale of ONGENTYS with our existing commercial infrastructure.
The successful commercialization of ONGENTYS is subject to many risks, and there are numerous examples of unsuccessful product launches and failures, including by pharmaceutical companies with more experience and resources than us.
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Furthermore, there can be no assurance that we or our collaborators will resolve any issues related to any product related adverse events to the satisfaction of the FDA or any regulatory agency in a timely manner or ever, which could harm our business, prospects and financial condition.
−Removed: The limited precedent for gene therapy approvals makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for the product candidates we are developing through our collaboration with Voyager.
−Removed: The FDA has limited experience in the review and approval of gene therapy products.
−Removed: The limited precedent for gene therapy approvals makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for the product candidates we are developing through our collaboration with Voyager.
−Removed: Regulatory requirements governing gene therapy products have changed frequently and may continue to change in the future.
−Removed: As a result, the regulatory review process may take longer or cost more than we anticipate, including requirements for additional preclinical studies or clinical trials, and delay or prevent approval and commercialization of our gene therapy product candidates we are developing through our collaboration with Voyager.
−Removed: While the FDA has issued draft guidance for the development of gene therapies and proposed rules that would streamline certain requirements to which gene therapies are currently subject, it remains to be seen as to whether such initiatives will ultimately increase the speed of drug development in gene therapies such as the product candidates we are developing through our collaboration with Voyager.
−Removed: Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be harmed.
−Removed: If our gene therapy products are approved but fail to achieve market acceptance among physicians, patients, hospitals, third-party payors or others in the medical community, we will not be able to generate significant revenue.
+Added: *We have recently increased the size of our organization and will need to continue to increase the size of our organization.
+Added: We may encounter difficulties with managing our growth, which could adversely affect our results of operations.
+Added: At June 30, 2021, we had approximately 884 full-time employees.
+Added: Although we have substantially increased the size of our organization, we may need to add additional qualified personnel and resources, especially now that we have a commercial sales force.
+Added: Our current infrastructure may be inadequate to support our development and commercialization efforts and expected growth.
+Added: Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees, and may take time away from running other aspects of our business, including development and commercialization of our product candidates.
+Added: Our future financial performance and our ability to commercialize INGREZZA, ONGENTYS and any other product candidates that receive regulatory approval will depend, in part, on our ability to manage any future growth effectively.
+Added: particular, as we commercialize INGREZZA and ONGENTYS, we will need to support the training and ongoing activities of our sales force and will likely need to continue to expand the size of our employee base for managerial, operational, financial and other resources.
+Added: To that end, we must be able to successfully:
+Added: • manage our development efforts effectively;
+Added: • integrate additional management, administrative and manufacturing personnel;
+Added: • further develop our marketing and sales organization;
+Added: • maintain sufficient administrative, accounting and management information systems and controls.
+Added: We may not be able to accomplish these tasks or successfully manage our operations and, accordingly, may not achieve our research, development, and commercialization goals.
+Added: Our failure to accomplish any of these goals could harm our financial results and prospects.
+Added: If we are unable to retain and recruit qualified scientists and other employees or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of INGREZZA, ONGENTYS or any product candidate approved by the FDA.
+Added: We are highly dependent on the principal members of our management, commercial and scientific staff.
+Added: The loss of any of these people could impede the achievement of our objectives, including the successful commercialization of INGREZZA, ONGENTYS or any product candidate approved by the FDA.
+Added: Furthermore, recruiting and retaining qualified scientific personnel to perform research and development work in the future, along with personnel with experience marketing and selling pharmaceutical products, is critical to our success.
+Added: We may be unable to attract and retain personnel on acceptable terms given the competition among biotechnology, pharmaceutical and health care companies, universities and non-profit research institutions for experienced scientists and individuals with experience marketing and selling pharmaceutical products.
+Added: We may face particular retention challenges in light of the recent rapid growth in our personnel and infrastructure and the perceived impact of those changes upon our corporate culture.
+Added: In addition, we rely on a significant number of consultants to assist us in formulating our research and development strategy and our commercialization strategy.
+Added: Our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.
We currently have no manufacturing capabilities.
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We have limited experience in manufacturing products for commercial purposes and do not currently have any manufacturing facilities.
−Removed: Establishing internal commercial manufacturing capabilities would require significant time and resources, and we may not be able to timely or successfully
−Removed: establish such capabilities.
+Added: Establishing internal commercial manufacturing capabilities would require significant time and resources, and we may not be able to timely or successfully establish such capabilities.
Consequently, we depend on, and will continue to depend on, several contract manufacturers for all production of products for development and commercial purposes, including INGREZZA and ONGENTYS.
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If there are delays in qualifying new suppliers or facilities or a new supplier is unable to meet FDA or a similar international regulatory body’s requirements for approval, there could be a shortage of INGREZZA, which could materially and adversely affect our ability to successfully commercialize INGREZZA.
−Removed: If BIAL is unable or refuses to supply us with ONGENTYS drug product for any reason, or does
−Removed: not meet FDA or international regulators’ requirements for approval, we have limited opportunity to qualify a new supplier.
+Added: If BIAL is unable or refuses to supply us with ONGENTYS drug product for any reason, or does not meet FDA or international regulators’ requirements for approval, we have limited opportunity to qualify a new supplier.
This could materially and adversely affect our ability to successfully commercialize ONGENTYS.
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The investigators are not our employees, and we cannot control the amount or timing of resources that they devote to our programs.
−Removed: If our independent investigators fail to devote sufficient time and resources to our drug development programs, or if their performance is substandard, or not in compliance with Good Clinical Practices, it may delay or prevent the approval of our FDA applications and our introduction of new drugs.
+Added: If our independent investigators fail to devote sufficient time and resources to our drug development programs, or if their performance is substandard, or not in compliance with Good Clinical Practices, it may delay or prevent the approval of our regulatory applications and our introduction of new treatments.
The CROs we contract with for execution of our clinical trials play a significant role in the conduct of the trials and the subsequent collection and analysis of data.
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The occurrence of any of these events may adversely affect our business, prospects and ability to achieve or sustain profitability on a sustained basis.
−Removed: Gene therapy treatments, which we are developing pursuant to our collaboration and license agreement with Voyager, may be perceived as unsafe or may result in unforeseen adverse events.
−Removed: Negative public opinion and increased regulatory scrutiny of gene therapy may adversely affect our ability to initiate or continue clinical development or obtain regulatory approvals for gene therapy product candidates or the commercialization of gene therapy products.
−Removed: Gene therapy remains a novel technology, with few gene therapy products approved to date in the US.
−Removed: Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community.
−Removed: Even if we are able to successfully complete clinical development of a gene therapy product and obtain commercial approval, the success of our collaboration with Voyager will depend upon physicians who specialize in the treatment of genetic diseases targeted by gene therapy product candidates, prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.
−Removed: More restrictive government regulations, negative public opinion related to gene therapy products, or safety issues identified in our clinical trials may delay or impair the development and commercialization of our gene therapy product candidates or demand for any gene therapy products we develop.
−Removed: If we are unable to retain and recruit qualified scientists or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of INGREZZA, ONGENTYS or any product candidate approved by the FDA.
−Removed: We are highly dependent on the principal members of our management and scientific staff.
−Removed: The loss of any of these people could impede the achievement of our objectives, including the successful commercialization of INGREZZA, ONGENTYS or any product candidate approved by the FDA.
−Removed: Furthermore, recruiting and retaining qualified scientific personnel to perform research and development work in the future, along with personnel with experience marketing and selling pharmaceutical products, is critical to our success.
−Removed: We may be unable to attract and retain personnel on acceptable terms given the competition among biotechnology, pharmaceutical and health care companies, universities and non-profit research institutions for experienced scientists and individuals with experience marketing and selling pharmaceutical products.
−Removed: We may face particular retention challenges in light of the recent rapid growth in our personnel and infrastructure and the perceived impact of those changes upon our corporate culture.
−Removed: In addition, we rely on a significant number of consultants to assist us in formulating our research and development strategy and our commercialization strategy.
−Removed: Our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.
If the market opportunities for our products and product candidates are smaller than we believe they are, our revenues may be adversely affected, and our business may suffer.
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If we were to default on our obligations under any of our licenses, we could lose some or all of our rights to develop, market and sell products covered by these licenses.
−Removed: For example, BIAL may terminate our license agreement, pursuant to which we have rights to commercialize ONGENTYS, if we fail to use commercially reasonable efforts to comply with specified obligations under the license agreement, or if we otherwise breach the license agreement.
+Added: For example, BIAL may terminate our license agreement, pursuant to which we have rights to commercialize ONGENTYS, if we fail to use commercially reasonable efforts to comply
+Added: with specified obligations under the license agreement, or if we otherwise breach the license agreement.
In addition, several of our collaboration and license agreements allow our licensors to terminate such agreements if we challenge the validity or enforceability of certain intellectual property rights or if we commit a material breach in whole or in part of the agreement and do not cure such breach within the agreed upon cure period.
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We also face the risk that our licensors could, for a number of reasons, lose patent protection or lose their rights to the technologies we have licensed, thereby impairing or extinguishing our rights under our licenses with them.
+Added: *The conditional conversion feature of the 2024 Notes, if triggered, may adversely affect our financial condition, operating results, or liquidity.
+Added: In the event the conditional conversion feature of the 2024 Notes is triggered, holders of 2024 Notes will be entitled to convert their 2024 Notes at any time during specified periods at their option.
+Added: If one or more of the holders of the 2024 Notes elects to convert their notes, unless we satisfy our conversion obligation by delivering only shares of our common stock, we would be required to settle all or a portion of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
+Added: The conditional convertibility of the 2024 Notes will be monitored at each quarterly reporting date and analyzed dependent upon market prices of our common stock during the prescribed measurement periods.
+Added: In the event that we have the election to redeem the 2024 Notes or the holders of the 2024 Notes have the election to convert the 2024 Notes at any time during the prescribed measurement period, the 2024 Notes would then be considered a current obligation and classified as such.
+Added: We are not aware of any events or market conditions that would allow us to redeem the 2024 Notes or the holders of the 2024 Notes to convert the 2024 Notes for the quarterly period ended June 30, 2021, or as of the date of this report.
*Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations.
1 unchanged sentence
In November 2020, we entered into separate, privately negotiated transactions with certain holders of the 2024 Notes to repurchase $136.2 million aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $186.9 million in cash.
−Removed: At March 31, 2021, $381.2 million aggregate principal amount of the 2024 Notes remained outstanding.
+Added: At June 30, 2021, $381.2 million aggregate principal amount of the 2024 Notes remained outstanding.
We may also incur additional indebtedness to meet future financing needs.
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If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.
−Removed: *The conditional conversion feature of the 2024 Notes, if triggered, may adversely affect our financial condition, operating results, or liquidity.
−Removed: In the event the conditional conversion feature of the 2024 Notes is triggered, holders of 2024 Notes will be entitled to convert their 2024 Notes at any time during specified periods at their option.
−Removed: If one or more of the holders of the 2024 Notes elects to convert their notes, unless we satisfy our conversion obligation by delivering only shares of our common stock, we would be required to settle all or a portion of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
−Removed: The conditional convertibility of the 2024 Notes will be monitored at each quarterly reporting date and analyzed dependent upon market prices of our common stock during the prescribed measurement periods.
We have a history of losses and expect to increase our expenses for the foreseeable future, and we may not be able to sustain profitability.
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• commercialize ONGENTYS for Parkinson’s disease;
−Removed: • seek regulatory approvals for our product candidates;
+Added: • seek regulatory approvals for our product candidates or for additional indications for our current products;
• develop, formulate, manufacture and commercialize our product candidates;
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Our failure to maintain or increase profitability on a sustained basis could negatively impact the market price of our common stock.
−Removed: *We have recently increased the size of our organization and will need to continue to increase the size of our organization.
−Removed: We may encounter difficulties with managing our growth, which could adversely affect our results of operations.
−Removed: At March 31, 2021, we had approximately 865 full-time employees.
−Removed: Although we have substantially increased the size of our organization, we may need to add additional qualified personnel and resources, especially now that we have a commercial sales force.
−Removed: Our current infrastructure may be inadequate to support our development and commercialization efforts and expected growth.
−Removed: Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees, and may take time away from running other aspects of our business, including development and commercialization of our product candidates.
−Removed: Our future financial performance and our ability to commercialize INGREZZA, ONGENTYS and any other product candidates that receive regulatory approval will depend, in part, on our ability to manage any future growth effectively.
−Removed: In particular, as we commercialize INGREZZA and ONGENTYS, we will need to support the training and ongoing activities of our sales force and will likely need to continue to expand the size of our employee base for managerial, operational, financial and other resources.
−Removed: To that end, we must be able to successfully:
−Removed: • manage our development efforts effectively;
−Removed: • integrate additional management, administrative and manufacturing personnel;
−Removed: • further develop our marketing and sales organization;
−Removed: • maintain sufficient administrative, accounting and management information systems and controls.
−Removed: We may not be able to accomplish these tasks or successfully manage our operations and, accordingly, may not achieve our research, development, and commercialization goals.
−Removed: Our failure to accomplish any of these goals could harm our financial results and prospects.
+Added: The limited precedent for gene therapy approvals makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for the product candidates we are developing through our collaboration with Voyager.
+Added: The FDA has limited experience in the review and approval of gene therapy products.
+Added: The limited precedent for gene therapy approvals makes it difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for the product candidates we are developing through our collaboration with Voyager.
+Added: Regulatory requirements governing gene therapy products have changed frequently and may continue to change in the future.
+Added: As a result, the regulatory review process may take longer or cost more than we anticipate, including requirements for additional preclinical studies or clinical trials, and delay or prevent approval and commercialization of our gene therapy product candidates we are developing through our collaboration with Voyager.
+Added: While the FDA has issued draft guidance for the development of gene therapies and proposed rules that would streamline certain requirements to which gene therapies are currently subject, it remains to be seen as to whether such initiatives will ultimately increase the speed of drug development in gene therapies such as the product candidates we are developing through our collaboration with Voyager.
+Added: Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue, and our business, financial condition, results of operations and prospects would be harmed.
+Added: If our gene therapy products are approved but fail to achieve market acceptance among physicians, patients, hospitals, third-party payors or others in the medical community, we will not be able to generate significant revenue.
+Added: Gene therapy treatments, which we are developing pursuant to our collaboration and license agreement with Voyager, may be perceived as unsafe or may result in unforeseen adverse events.
+Added: Negative public opinion and increased regulatory scrutiny of gene therapy may adversely affect our ability to initiate or continue clinical development or obtain regulatory approvals for gene therapy product candidates or the commercialization of gene therapy products.
+Added: Gene therapy remains a novel technology, with few gene therapy products approved to date in the US.
+Added: Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community.
+Added: Even if we are able to successfully complete clinical development of a gene therapy product and obtain commercial approval, the success of our collaboration with Voyager will depend upon physicians who specialize in the treatment of genetic diseases targeted by gene therapy product candidates, prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.
+Added: More restrictive government regulations, negative public opinion related to gene therapy products, or safety issues identified in our clinical trials may delay or impair the development and commercialization of our gene therapy product candidates or demand for any gene therapy products we develop.
We may be subject to claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
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Thus, small declines in revenue could disproportionately affect financial results in a quarter.
−Removed: While we were profitable for the quarter ended March 31, 2021, our future operating results and profitability may fluctuate from period to period, and even if we become profitable on a quarterly or annual basis, we may not be able to sustain or increase our profitability.
−Removed: Moreover, as our company and our market capitalization have grown, our
−Removed: financial performance has become increasingly subject to quarterly and annual comparisons with the expectations of securities analysts or investors.
+Added: While we were profitable for the quarter ended June 30, 2021, our future operating results and profitability may fluctuate from period to period, and even if we become profitable on a quarterly or annual basis, we may not be able to sustain or increase our profitability.
+Added: Moreover, as our company and our market capitalization have grown, our financial performance has become increasingly subject to quarterly and annual comparisons with the expectations of securities analysts or investors.
The failure of our financial results to meet these expectations, either in a single quarterly or annual period over a sustained period time, could cause our stock price to decline.
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In addition, on December 31, 2020, we determined, based on our facts and circumstances, that it was more likely than not that a substantial portion of our deferred tax assets would be realized and, as a result, substantially all of our valuation allowance against our deferred tax assets was released.
−Removed: Therefore, beginning in 2021, we commenced recording income tax expense at
−Removed: an estimated tax rate that will likely approximate statutory tax rates, which could result in a significant reduction in our net income and net income per share.
+Added: Therefore, beginning in 2021, we commenced recording income tax expense at an estimated tax rate that will likely approximate statutory tax rates, which could result in a significant reduction in our net income and net income per share.
*The price of our common stock is volatile.
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*Our customers are concentrated and therefore the loss of a significant customer may harm our business.
−Removed: We have entered into agreements for the distribution of INGREZZA with a limited number of specialty pharmacy providers and a specialty distributor, and all of our product sales are to these customers.
−Removed: Two of these customers represented approximately 86% of our product revenue for the year ended December 31, 2020 and a significant majority of our accounts receivable balance at December 31, 2020.
−Removed: If any of these significant customers becomes subject to bankruptcy, is unable to
−Removed: pay us for our products or is acquired by a company that wants to terminate the relationship with us, or if we otherwise lose any of these significant customers, our revenue, results of operations and cash flows would be adversely affected.
+Added: We have entered into agreements for the distribution of INGREZZA with a limited number of specialty pharmacy providers and a specialty distributor, and all of our product sales of INGREZZA are to these customers.
+Added: Two of these customers represented approximately 85% of our total product revenue for the six months ended June 30, 2021 and a significant majority of our accounts receivable balance at June 30, 2021.
+Added: If any of these significant customers becomes subject to bankruptcy, is unable to pay us for our products or is acquired by a company that wants to terminate the relationship with us, or if we otherwise lose any of these significant customers, our revenue, results of operations and cash flows would be adversely affected.
Even if we replace the loss of a significant customer, we cannot predict with certainty that such transition would not result in a decline in our revenue, results of operations and cash flows.
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• competing technological and market developments;
−Removed: • the establishment of additional strategic alliances;
• developments related to any future litigation;
• the cost of commercialization activities and arrangements, including manufacturing of our product candidates;
−Removed: • the cost of product in-licensing and any possible acquisitions.
+Added: • the cost of any strategic alliances, collaborations, product in-licensing or acquisitions.
We intend to seek additional funding through strategic alliances and may seek additional funding through public or private sales of our securities, including equity securities.
1 unchanged sentence
In November 2020, we entered into separate, privately negotiated transactions with certain holders of the 2024 Notes to repurchase $136.2 million aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $186.9 million in cash.
−Removed: At March 31, 2021, $381.2 million aggregate principal amount of the 2024 Notes remained outstanding.
+Added: At June 30, 2021, $381.2 million aggregate principal amount of the 2024 Notes remained outstanding.
Additional equity or debt financing might not be available on reasonable terms, if at all.
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We are committed to maintaining high standards of corporate governance and public disclosure.
−Removed: As a result, our efforts to comply with evolving laws, regulations and standards
−Removed: have resulted in, and are likely to continue to result in, increased selling, general and administrative expenses and management time related to compliance activities.
+Added: As a result, our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased selling, general and administrative expenses and management time related to compliance activities.
If we fail to comply with these laws, regulations and standards, our reputation may be harmed, and we might be subject to sanctions or investigation by regulatory authorities, such as the SEC.
6 unchanged sentences
Risks Related to Our Industry
+Added: If we are unable to protect our intellectual property, our competitors could develop and market products based on our discoveries, which may reduce demand for our products .
+Added: Our success will depend on our ability to, among other things:
+Added: • obtain patent protection for our products;
+Added: • preserve our trade secrets;
+Added: • prevent third parties from infringing upon our proprietary rights;
+Added: • operate without infringing upon the proprietary rights of others, both in the US and internationally.
+Added: Because of the substantial length of time and expense associated with bringing new products through the development and regulatory approval processes in order to reach the marketplace, the pharmaceutical industry places considerable importance on obtaining patent and trade secret protection for new technologies, products and processes.
+Added: Accordingly, we intend to seek patent protection for our proprietary technology and compounds.
+Added: However, we face the risk that we may not obtain any of these patents and that the breadth of claims we obtain, if any, may not provide adequate protection of our proprietary technology or compounds.
+Added: We also rely upon unpatented trade secrets and improvements, unpatented know-how and continuing technological innovation to develop and maintain our competitive position, which we seek to protect, in part, through confidentiality agreements with our commercial collaborators, employees and consultants.
+Added: We also have invention or patent assignment
+Added: agreements with our employees and some, but not all, of our commercial collaborators and consultants.
+Added: However, if our employees, commercial collaborators or consultants breach these agreements, we may not have adequate remedies for any such breach, and our trade secrets may otherwise become known or independently discovered by our competitors.
+Added: In addition, although we own a number of patents, the issuance of a patent is not conclusive as to its validity or enforceability, and third parties may challenge the validity or enforceability of our patents.
+Added: We cannot assure you how much protection, if any, will be given to our patents if we attempt to enforce them and they are challenged in court or in other proceedings.
+Added: It is possible that a competitor may successfully challenge our patents or that challenges will result in limitations of their coverage.
+Added: Moreover, competitors may infringe our patents or successfully avoid them through design innovation.
+Added: In addition, potential competitors have in the past and may in the future file an ANDA with the FDA seeking approval to market a generic version of our products before the expiration of the patents covering our products.
+Added: To prevent infringement or unauthorized use, we have in the past and may in the future need to file infringement claims, which are expensive and time-consuming.
+Added: For example, we are currently engaged in various intellectual property litigation matters against potential competitors related to INGREZZA.
+Added: For a more detailed description of these matters, see Note 10 to the condensed consolidated financial statements included in this report.
+Added: In addition, in an infringement proceeding a court may decide that a patent of ours or a patent of a competitor of ours is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover its technology.
+Added: Interference proceedings declared by the US Patent and Trademark Office may be necessary to determine the priority of inventions with respect to our patent applications or those of our licensors.
+Added: Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and be a distraction to management.
+Added: We cannot assure you that we will be able to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the US.
*Health care reform measures and other recent legislative initiatives could adversely affect our business.
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The US Supreme Court is currently reviewing the constitutionality of the ACA.
−Removed: Although it is unknown when a decision will be made, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began February 15, 2021 and will remain open through August 15, 2021.
+Added: Although it is unknown when a decision will be made, on January 28, 2021, June 17, 2021 the U.S.
+Added: Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
+Added: Thus, the ACA will remain in effect in its current form.
+Added: Further, prior to the U.S.
+Added: Supreme Court ruling, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, which began February 15, 2021 and will remain open through August 15, 2021.
The executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.
Further, on February 10, 2021, the Biden administration withdrew the federal government’s support for overturning the ACA.
−Removed: It is unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the ACA.
+Added: It is possible that the ACA will be subject to judicial or Congressional challenges in the future.
+Added: It is unclear how any such challenges the Supreme Court ruling, other such litigation, and the healthcare reform measures of the Biden administration will impact the ACA.
Other legislative changes have been proposed and adopted since the ACA was enacted.
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Also, there has been heightened governmental scrutiny recently over pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics.
−Removed: Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
+Added: Such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review
+Added: the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.
1 unchanged sentence
As a result, the FDA released a final rule on September 24, 2020, effective November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada.
−Removed: Further, on November 20, 2020, the US Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under
−Removed: Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
+Added: Further, on November 20, 2020, the US Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023.
3 unchanged sentences
On December 28, 2020, the US District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.
+Added: On January 13, 2021, in a separate lawsuit brought by industry groups in the U.S.
+Added: District of Maryland, the government defendants entered a joint motion to stay litigation on the condition that the government would not appeal the preliminary injunction granted in the U.S.
+Added: District Court for the Northern District of California and that performance for any final regulation stemming from the MFN Model interim final rule shall not commence earlier than 60 days after publication of that regulation in the Federal Register.
It is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.
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• the federal civil and criminal false claims laws, including the federal civil False Claims Act, and Civil Monetary Penalties Laws, which impose criminal and civil penalties against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
−Removed: • HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
+Added: • the Health Insurance Portability and Accountability Act, or HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, which also imposes obligations, including mandatory contractual terms, on covered entities, including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates and their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
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In addition, our management’s attention could be diverted to handle any such alleged violations.
−Removed: If the FDA or any
−Removed: other governmental agency initiates an enforcement action against us, or if we are the subject of a qui tam suit brought by a private plaintiff on behalf of the government, and it is determined that we violated prohibitions relating to the promotion of products for unapproved uses, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations.
+Added: If the FDA or any other governmental agency initiates an enforcement action against us, or if we are the subject of a qui tam suit brought by a private plaintiff on behalf of the government, and it is determined that we violated prohibitions relating to the promotion of products for unapproved uses, we could be subject to substantial civil or criminal fines or damage awards and other sanctions such as consent decrees and corporate integrity agreements pursuant to which our activities would be subject to ongoing scrutiny and monitoring to ensure compliance with applicable laws and regulations.
Any such fines, awards or other sanctions would have an adverse effect on our revenue, business, financial prospects, and reputation.
−Removed: If we are unable to protect our intellectual property, our competitors could develop and market products based on our discoveries, which may reduce demand for our products.
−Removed: Our success will depend on our ability to, among other things:
−Removed: • obtain patent protection for our products;
−Removed: • preserve our trade secrets;
−Removed: • prevent third parties from infringing upon our proprietary rights;
−Removed: • operate without infringing upon the proprietary rights of others, both in the US and internationally.
−Removed: Because of the substantial length of time and expense associated with bringing new products through the development and regulatory approval processes in order to reach the marketplace, the pharmaceutical industry places considerable importance on obtaining patent and trade secret protection for new technologies, products and processes.
−Removed: Accordingly, we intend to seek patent protection for our proprietary technology and compounds.
−Removed: However, we face the risk that we may not obtain any of these patents and that the breadth of claims we obtain, if any, may not provide adequate protection of our proprietary technology or compounds.
−Removed: We also rely upon unpatented trade secrets and improvements, unpatented know-how and continuing technological innovation to develop and maintain our competitive position, which we seek to protect, in part, through confidentiality agreements with our commercial collaborators, employees and consultants.
−Removed: We also have invention or patent assignment agreements with our employees and some, but not all, of our commercial collaborators and consultants.
−Removed: However, if our employees, commercial collaborators or consultants breach these agreements, we may not have adequate remedies for any such breach, and our trade secrets may otherwise become known or independently discovered by our competitors.
−Removed: In addition, although we own a number of patents, the issuance of a patent is not conclusive as to its validity or enforceability, and third parties may challenge the validity or enforceability of our patents.
−Removed: We cannot assure you how much protection, if any, will be given to our patents if we attempt to enforce them and they are challenged in court or in other proceedings.
−Removed: It is possible that a competitor may successfully challenge our patents or that challenges will result in limitations of their coverage.
−Removed: Moreover, competitors may infringe our patents or successfully avoid them through design innovation.
−Removed: To prevent infringement or unauthorized use, we may need to file infringement claims, which are expensive and time-consuming.
−Removed: In addition, in an infringement proceeding a court may decide that a patent of ours is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover its technology.
−Removed: Interference proceedings declared by the US Patent and Trademark Office may be necessary to determine the priority of inventions with respect to our patent applications or those of our licensors.
−Removed: Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and be a distraction to management.
−Removed: We cannot assure you that we will be able to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the US.
+Added: Cyber security breaches and other disruptions could compromise our information, including the theft of our intellectual property, and could expose us to liability, which would cause our business and reputation to suffer.
+Added: We are increasingly dependent on information technology systems and infrastructure, including mobile technologies, to operate our business.
+Added: In the ordinary course of our business, we collect and store confidential and sensitive electronic information on our networks and in our data centers.
+Added: This information includes, among other things, our intellectual property and proprietary information, the confidential information of our collaborators and licensees, and the personally identifiable information of our employees.
+Added: It is important to our operations and business strategy that this electronic information remains secure and is perceived to be secure.
+Added: The size and complexity of our information technology systems, and those of third-party vendors with whom we contract, and the volume of data we retain, make such systems potentially vulnerable to breakdown, malicious intrusion, security breaches and other cyber-attacks.
+Added: Additionally, natural disasters, public health pandemics or epidemics (including, for example, the COVID-19 pandemic), terrorism, war and telecommunication and electrical failures may result in damage to or the interruption or impairment of key business processes, or the loss or corruption of confidential information, including intellectual property, proprietary business information and personal information.
+Added: Information security risks have significantly increased in recent years in part due to the proliferation of new technologies and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign private parties and state actors.
+Added: A security breach or privacy violation that leads to disclosure or modification of or prevents access to personally identifiable information or other protected information could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue.
+Added: Similarly, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
+Added: Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy.
+Added: If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information.
+Added: In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.
+Added: Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property.
+Added: As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
+Added: While we have implemented security measures to protect our data security and information technology systems, such measures may not
+Added: prevent such events.
+Added: Significant disruptions of our information technology systems or breaches of data security could have a material adverse effect on our business, financial condition and results of operations.
If we fail to obtain or maintain orphan drug designation or other regulatory exclusivity for some of our product candidates, our competitive position would be harmed.
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In the EU, orphan exclusivity may be reduced to six years if the drug no longer satisfies the original designation criteria or can be lost altogether if the marketing authorization holder consents to a second orphan drug application or cannot supply enough drug, or when a second applicant demonstrates its drug is “clinically superior” to the original orphan drug.
−Removed: not be successful obtaining orphan drug designations for any indications and, even if we succeed, such orphan drug designations may fail to result in or maintain orphan drug exclusivity upon approval, which would harm our competitive position.
+Added: We may not be successful obtaining orphan drug designations for any indications and, even if we succeed, such orphan drug designations may fail to result in or maintain orphan drug exclusivity upon approval, which would harm our competitive position.
The technologies we use in our research as well as the drug targets we select may infringe the patents or violate the proprietary rights of third parties.
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Ultimately, we may be unable to commercialize some of our potential products or may have to cease some of our business operations as a result of patent infringement claims, which could severely harm our business.
+Added: *Our business operations may subject us to disputes, claims and lawsuits, which may be costly and time-consuming and could materially and adversely impact our financial position and results of operations.
+Added: From time to time, we may become involved in disputes, claims and lawsuits relating to our business operations.
+Added: In particular, we may face claims related to the safety of our products, intellectual property matters, employment matters, tax matters, commercial disputes, competition, sales and marketing practices, environmental matters, personal injury, insurance coverage and acquisition or divestiture-related matters.
+Added: Any dispute, claim or lawsuit may divert management’s attention away from our business, we may incur significant expenses in addressing or defending any dispute, claim or lawsuit, and we may be required to pay damage awards or settlements or become subject to equitable remedies that could adversely affect our operations and financial results.
+Added: For example, we are currently engaged in various intellectual property litigation matters against potential competitors related to INGREZZA.
+Added: For a more detailed description of these matters, see Note 10 to the condensed consolidated financial statements included in this report.
+Added: Litigation related to these disputes may be costly and time-consuming and could materially and adversely impact our financial position and results of operations if resolved against us.
+Added: In addition, the uncertainty associated with litigation could lead to increased volatility in our stock price.
Our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
We are exposed to the risk of employee fraud or other misconduct.
−Removed: Misconduct by employees and independent contractors, such as principal investigators, consultants, commercial partners and vendors, or by employees of our commercial partners could include failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse laws, to report financial information or data accurately, to maintain the confidentiality of our trade secrets or the trade secrets of our commercial partners, or to disclose unauthorized activities to us.
+Added: Misconduct by employees and independent contractors, such as principal investigators, consultants, commercial partners and vendors, or by employees of our commercial partners could include failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse laws, to report financial information or data accurately, to maintain the confidentiality of our trade secrets or the trade secrets of our
+Added: commercial partners, or to disclose unauthorized activities to us.
In particular, sales, marketing and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices.
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If an accident occurs, a court may hold us liable for any resulting damages, which may harm our results of operations and cause us to use a substantial portion of our cash reserves, which would force us to seek additional financing.
−Removed: Cyber security breaches and other disruptions could compromise our information, including the theft of our intellectual property, and could expose us to liability, which would cause our business and reputation to suffer.
−Removed: We are increasingly dependent on information technology systems and infrastructure, including mobile technologies, to operate our business.
−Removed: In the ordinary course of our business, we collect and store confidential and sensitive electronic information on our networks and in our data centers.
−Removed: This information includes, among other things, our intellectual property and proprietary information, the confidential information of our collaborators and licensees, and the personally identifiable information of our employees.
−Removed: It is important to our operations and business strategy that this electronic information remains secure and is perceived to be secure.
−Removed: The size and complexity of our information technology systems, and those of third-party vendors with whom we contract, and the volume of data we retain, make such systems potentially vulnerable to breakdown, malicious intrusion, security breaches and other cyber-attacks.
−Removed: Additionally, natural disasters, public health pandemics or epidemics (including, for example, the COVID-19 pandemic), terrorism, war and telecommunication and electrical failures may result in damage to or the interruption or impairment of key business processes, or the loss or corruption of confidential information, including intellectual property, proprietary business information and personal information.
−Removed: Information security risks have significantly increased in recent years in part due to the proliferation of new technologies and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign private parties and state actors.
−Removed: A security breach or privacy violation that leads to disclosure or modification of or prevents access to personally identifiable information or other protected information could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to liability under laws and regulations that protect personal data, resulting in increased costs or loss of revenue.
−Removed: Similarly, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.
−Removed: Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy.
−Removed: If we are unable to prevent such security breaches or privacy violations or implement satisfactory remedial measures, our operations could be disrupted, and we may suffer loss of reputation, financial loss and other regulatory penalties because of lost or misappropriated information.
−Removed: In addition, these breaches and other inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type described above.
−Removed: Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property.
−Removed: As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
−Removed: While we have implemented security measures to protect our data security and information technology systems, such measures may not prevent such events.
−Removed: Significant disruptions of our information technology systems or breaches of data security could have a material adverse effect on our business, financial condition and results of operations.
Compliance with evolving US and global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could have a material adverse effect on our business, financial condition or results of operations.
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For example, the CCPA requires covered companies to provide additional disclosures to California consumers, and provides such consumers with new rights, such as the ability to opt out of certain disclosures of personal information.
−Removed: The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.
+Added: The CCPA provides for civil penalties for violations, as
+Added: well as a private right of action for data breaches that is expected to increase data breach litigation.
The CCPA may increase our compliance costs and potential liability.
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Bylaws, as amended
+Added: Incorporated by reference to Exhibit 3.2 of the Company's Quarterly Report on Form 10-Q filed on May 5, 2021
4.1 Description:
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31.1 Description:
−Removed: Collaboration Agreement dated June 15, 2010, by and between Abbott International Luxembourg S.a.r.l.
−Removed: and the Company as amended on August 31, 2011
−Removed: 10.2* Description:
−Removed: First Amendment to Collaboration and License Agreement Dated August 31, 2011 between the Company and Abbott International Luxembourg S.a.r.l.
−Removed: 10.3* Description:
−Removed: Collaboration and License Agreement dated March 31, 2015 between Mitsubishi Tanabe Pharma Corporation and the Company
−Removed: 10.4* Description:
−Removed: License Agreement dated February 9, 2017 between BIAL- Portela & CA, S.A.
−Removed: and the Company
−Removed: 31.1 Description:
Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
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______________
−Removed: * Certain information in this exhibit is omitted because it is both not material and is the type that the registrant treats as private or confidential.
* These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C.
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NEUROCRINE BIOSCIENCES, INC.
+Added: August 3, 2021
/s/ Matthew C.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.