Item 1A. Risk Factors
Item 1A. Risk Factors
The risk factors described in our 2024 Annual Report are not the only risks we face. Factors we currently do not know, factors that we currently consider immaterial or factors that are not specific to us, such as general economic conditions, may also materially adversely affect our business or our consolidated operating results, financial condition or cash flows. We do not believe that there have been any material changes to the risk factors disclosed in Part I, Item 1A of our 2024 Annual Report, except for the following:
Recent government healthcare reform and other legislative measures could adversely affect our business and results of operations.
As further discussed in the risk factor titled “ Healthcare reform efforts aimed at lowering the price of biopharmaceutical products may impact our ability to maintain sufficient profits ” in Part I, Item 1A of our 2024 Annual Report, in both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes to the health care system that could impact our partners’ ability to sell their products profitably.
In particular, the One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program. Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect our partners’ sales of their products and any other product candidates that they may commercialize.
Further, the current administration is pursuing a two-fold strategy to reduce drug costs in the United States. While it is unclear whether and how the proposals will be implemented, the policies are likely to have a negative impact on the pharmaceutical industry and on our partners’ ability to receive adequate revenues for any product candidate that they commercialize. On the one hand, there have been threats to impose significant tariffs on pharmaceutical manufacturers that do not adopt pricing policies such as most favored nation pricing, which would tie the price for drugs in the United States to the lowest price in a group of other countries. In response, multiple manufacturers have reportedly entered into confidential pricing agreements with the federal government. On the other hand, the current administration is pursuing traditional regulatory pathways to impose drug pricing policies, although proposed regulations have not yet been published. Even regulatory proposals or executive actions that are ultimately deemed unlawful could negatively impact the U.S. pharmaceutical sector and our business.
At the same time, some U.S. states have enacted legislation creating so-called prescription drug affordability boards, and to date one state has used its prescription drug affordability board to impose an upper payment limit. Other states are seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution. Changing reimbursement and pricing actions in various states have negatively affected, and may continue to negatively affect, pharmaceutical products. State legislative measures could limit the price or payment for certain drugs or could complicate the distribution of drugs.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
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Item 4. Mine Safety Disclosures
Not applicable.
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