What changed in this filing

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Item 1A. Risk Factors

2022-03-01 compared with 2021-02-18 · 104 added, 68 removed, 719 unchanged (19% of the section changed)

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Governments have implemented travel restrictions and quarantine policies which may have a material adverse economic effect on our business.

Such restrictions may present challenges in connection with our laboratory business, our ability to

successfully commercialize Rayaldee , our ability to manufacture pharmaceutical products in Ireland, Mexico, Spain, Chile and Israel, and our ability to continue clinical development of our product candidates.

Such restrictions may present challenges in connection with our laboratory business, our ability to successfully commercialize Rayaldee , our ability to manufacture pharmaceutical products in Ireland, Mexico, Spain, Chile and Israel, and our ability to continue clinical development of our product candidates.

Further, if the spread of the coronavirus pandemic continues and our operations are adversely impacted, our ability to meet performance obligations under contracts may be impacted.

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We have had a history of operating losses and may not be able to sustain profitability in the near future.

BioReference’s COVID-19 testing volume has positively impacted our profitability, but we had, until recently, incurred losses since our inception.

BioReference’s COVID-19 testing volume has positively impacted our profitability, but we had, prior to 2020, incurred losses since our inception.

We may not continue to generate substantial revenue from COVID-19 testing as vaccine use is adopted and infection rates decline, unless such decline is offset by significant revenue generation from our other income streams.

We have historically generated only limited revenue from operations and we may not generate substantial revenue from the sale of proprietary pharmaceutical products or certain of our diagnostic products for some time, if at all.

Rayaldee is our only proprietary pharmaceutical product that has been approved for marketing by us to date.

Other than NGENLA (Somatrogon), which has been approved in the EU, Japan, Canada and Australia, Rayaldee is our only pharmaceutical product that has been approved for marketing in the U.S.

or elsewhere.

We continue to incur substantial research and development and general and administrative expenses related to our operations including our pre-clinical development activities and clinical trials.

We may incur losses from our operations in the future and these losses could increase as we continue our research activities and conduct development of, and seek regulatory approvals and clearances for, our product candidates, particularly if we are unable to generate or sustain profits and cash flow from sales of Rayaldee or our operations at BioReference.

or our operations at BioReference.

If we are unable to generate or sustain profits and cash flow from our operations, our product candidates fail in clinical trials or do not gain regulatory approval or clearance, or if our approved products and product candidates do not achieve market acceptance, we may no longer be profitable.

In particular, if we are unable to successfully commercialize Rayaldee , we may never generate substantial revenues from Rayaldee .

In addition, if we are required by the U.S.

Food and Drug Administration (“FDA”), to perform studies in addition to those we currently anticipate, our expenses will increase beyond current expectations and the timing of any potential product approval may be delayed.

In particular, if we are unable to successfully commercialize Rayaldee or NGENLA, we may never generate substantial revenues from Rayaldee or NGENLA.

If we are unable to obtain FDA approval for Somatrogon in the U.S., we will not be able to commercialize Somatrogon in the U.S.

and will therefore not generate revenues from NGENLA in the U.S.

In addition, if we are required by the FDA to perform studies in addition to those we currently anticipate, our expenses will increase beyond current expectations and the timing of any potential product approval may be delayed.

We may require additional funding, which may not be available to us on acceptable terms, or at all.

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Our ability to obtain additional capital may depend on prevailing economic conditions and financial, business and other factors beyond our control, as well as our ability to comply with credit facilities and other loan requirements.

Our line of credit with JPMorgan Chase Bank, N.A.

(“CB”) contains and other agreements that govern our indebtedness may contain restrictive and financial covenants that impose restrictions on us and certain of our subsidiaries, including covenants that require us to maintain specified financial ratios.

We have obtained waivers and/or amended our credit facility with CB from time to time in the past to avoid a default under certain covenants, and our ability to comply with these financial covenants may be adversely affected in the future.

Failure to comply with specified financial covenants and other requirements could result in an event of default under our line of credit with CB and/or other lenders, which, if not cured or waived, could restrict us from utilizing the facility or accelerate any repayment obligations we may have under the facility and which could have a material adverse effect on our financial condition.

The amended and restated credit agreement (the “A&R Credit Agreement”) with JPMorgan Chase Bank, N.A.

(“CB”) governing our revolving credit facility with CB contains, and other agreements that govern our indebtedness may contain restrictive and financial covenants that impose restrictions on us and certain of our subsidiaries, including covenants that require us to maintain specified financial ratios.

We have obtained waivers and/or amended our revolving credit facility with CB from time to time in the past to avoid a default under certain covenants, and our ability to comply with these financial covenants may be adversely affected in the future.

Failure to comply with specified financial covenants and other requirements could result in an event of default under our A&R Credit Agreement and/or other lenders, which, if not cured or waived, could restrict us from utilizing the facility or accelerate any repayment obligations we may have under the facility and which could have a material adverse effect on our financial condition.

Disruptions in the U.S.

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regulatory authorities.

We rely on licensing agreements with Vifor Fresenius Medical Renal Care Pharma Ltd (“VFMCRP”) and Japan Tobacco (“JT”) for the international development and marketing of Rayaldee.

We rely on licensing agreements with Vifor, Nicoya, and international partners for the international development and marketing of Rayaldee.

Failure to maintain these license agreements could prevent us from successfully developing and commercializing Rayaldee worldwide.

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Effective May 5, 2020, we entered into the VFMCRP Amendment, pursuant to which the parties agreed to exclude Mexico, South Korea, the Middle East and all of the countries of Africa from the VFMCRP Territory.

In May 2021, we further amended the VFMCRP Agreement for VFMCRP to assume all the rights to Rayaldee in Japan that had been previously granted to JT.

In addition, the parties agreed to certain amendments to the milestone structure and to reduce minimum royalties payable.

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In October 2017, we entered into a Development and License Agreement (the “JT Agreement”) with JT under which JT was granted the exclusive rights for the development and commercialization of Rayaldee in Japan.

The license grant to JT covers the therapeutic and preventative use of the product for (i) SHPT in non-dialysis and dialysis patients with CKD, (ii) rickets, and (iii) osteomalacia, as well as such additional indications as may be added to the scope of the license subject to the terms of the JT Agreement.

Under the terms of the JT Agreement, we are eligible to receive up to $31 million upon the achievement of certain regulatory and development milestones by JT for Rayaldee in Japan, and $75 million upon the achievement of certain sales based milestones by JT.

We will also receive tiered, double digit royalty payments at rates ranging from low double digits to mid-teens on net sales within Japan.

JT will, at its sole cost and expense, be responsible for performing all development activities necessary to obtain all regulatory approvals for Rayaldee in Japan and for all commercial activities pertaining to Rayaldee in Japan, except for certain preclinical expenses which we have agreed to reimburse JT up to a capped amount.

If JT, for any reason, including but not limited to early termination of the JT Agreement, fails to devote sufficient resources to successfully develop and market Rayaldee in Japan, our ability to earn milestone payments or receive royalty payments would be adversely affected, which could have a material adverse effect on our financial condition and prospects.

Our exclusive worldwide agreement with Pfizer Inc.

is important to our business.

If we do not successfully develop hGH- CTP (somatrogon) and/or Pfizer Inc.

does not successfully commercialize hGH-CTP (somatrogon), our business could be adversely affected.

The JT Agreement was terminated in May 2021.

On June 18, 2021, EirGen and Nicoya entered into the Nicoya Agreement granting Nicoya the exclusive rights for the development and commercialization of (the Nicoya Product in the Nicoya Territory.

The license grant to Nicoya covers the therapeutic and preventative use of the Nicoya Product for SHPT in non-dialysis and hemodialysis chronic kidney disease patients.

EirGen received an initial upfront payment of $5 million and is eligible to receive an additional $5 million upon the

first to occur of (A) a predetermined milestone and (B) the first anniversary of the effective date.

EirGen is also eligible to receive up to an additional aggregate amount of $115 million upon the achievement of certain development, regulatory and sales-based milestones by Nicoya for the Nicoya Product in the Nicoya Territory.

EirGen will also receive tiered, double digit royalty payments at rates in the low double digits on net product sales within the Nicoya Territory and in the Nicoya Field.

Nicoya will, at its sole cost and expense, be responsible for performing all development activities necessary to obtain all regulatory approvals for the Nicoya Product in the Nicoya Territory and for all commercial activities pertaining to the Nicoya Product in the Nicoya Territory.

The success of the Nicoya Agreement is dependent in part on, Nicoya’s commitment to the product and our collaboration, as well as the experience of its employees, all of which are beyond our control.

Our exclusive worldwide agreement with Pfizer is important to our business.

If we do not successfully develop Somatrogon (hGH- CTP)and/or Pfizer does not successfully commercialize Somatrogon (hGH-CTP ), our business could be adversely affected.

In December 2014, we entered into a development and commercialization agreement with Pfizer relating to our long-acting hGH- CTP for the treatment of GHD in adults and children (the “Pfizer Agreement”).

Under the Pfizer Agreement, we are eligible to receive up to $275 million upon the achievement of certain regulatory milestones.

Upon the launch of hGH-CTP for Pediatric GHD, we are eligible to receive a regional, tiered gross profit share based upon sales of both hGH-CTP and Pfizer’s Genotropin® (somatropin).

Upon the launch of Somatrogon (hGH-CTP) for pediatric GHD, we are eligible to receive a regional, tiered gross profit share based upon sales of both Somatrogon and Pfizer’s Genotropin® (somatropin).

We are responsible for the development program and are obligated to pay for the development up to an agreed cap, which has been exceeded.

In May 2020, we entered into an Amended and Restated Development and Commercialization License Agreement (the “Restated Agreement”) with Pfizer, effective January 1, 2020, pursuant to which the parties agreed, among other things, to share all costs for Manufacturing Activities, as defined in the Restated Agreement, for developing a licensed product for the three indications included in the Agreement.

In May 2020, we entered into an Amended and Restated Development and Commercialization License Agreement (the “Restated Pfizer Agreement”) with Pfizer, effective January 1, 2020, pursuant to which the parties agreed, among other things, to share all costs for Manufacturing Activities, as defined in the Restated Pfizer Agreement, for developing a licensed product for the three indications included in the Agreement.

While hGH-CTP has been approved in the EU, Japan, Canada and Australia under the name NGENLA, Pfizer received a Complete Response Letter from the FDA in January 2022 in response to the BLA we and Pfizer submitted in 2020.

We and Pfizer are evaluating the FDA’s comments and will work with the agency to determine an appropriate path forward.

In the event that the parties are able to obtain regulatory approvals to market a product covered by the Pfizer Agreement, we will be substantially dependent on Pfizer for the successful commercialization of such product.

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In the event that Pfizer terminates the Agreement or fails to devote sufficient resources to successfully develop and commercialize any product resulting from the collaboration arrangement, our ability to earn milestone payments or receive royalty or profit sharing payments would be adversely affected, which would have a material adverse effect on our financial condition and prospects and the trading prices of our securities.

Our business is substantially dependent on our ability to achieve regulatory approval for the marketing of hGH-CTP (somatrogon) in pediatric and adult patients and the commercial success of this product.

Our business is substantially dependent on our ability to achieve regulatory approval for the marketing of Somatrogon (hGH-CTP) in pediatric and adult patients and the commercial success of this product.

On October 21, 2019, we and Pfizer announced that the global phase 3 trial evaluating hGH-CTP (Somatrogon) dosed once-weekly in pre-pubertal children with GHD met its primary endpoint of non-inferiority to daily Genotropin® (somatropin) for injection, as measured by annual height velocity at 12 months.

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Additional analyses that did not exclude outliers showed mixed results.

There can be no assurance that the FDA will consider the sensitivity analysis or consider the product for approval for adults with GHD.

There can be no assurance that the FDA or regulatory agencies in other countries will consider the sensitivity analysis or consider the product for approval for adults with GHD.

In January 2021, we and Pfizer announced that the FDA had accepted for filing the BLA submission for the pediatric indication which was submitted in October 2020.

In January 2022, Pfizer received a Complete Response Letter with respect to

the pediatric indication.

Pfizer and the Company are evaluating the best path forward for hGH-CTP in the U.S.

but there can be no assurances that we will receive an approval for hGH-CTP for the treatment of pediatric GHD by the FDA.

There can be no assurance that a BLA will be submitted for the adult indication or that we will obtain marketing approval for either the pediatric or adult indication.

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If we are unable to achieve regulatory approval for hGH-CTP to treat pediatric patients or adults with GHD, our business will be significantly adversely impacted, which could have a materially adverse effect on our business, financial condition and results of operations.

Japan’s Ministry of Health, Labour and Welfare approved NGENLA (Somatrogon) for the long-term treatment of pediatric patients who have growth failure due to an inadequate secretion of endogenous growth hormone.

In October 2021, Health Canada approved NGENLA for the long-term treatment of pediatric patients who have GHD, and Australia’s Therapeutic Goods Administration (TGA) approved NGENLA for the long-term treatment of pediatric patients with growth disturbance.

NGENLA may fail to be successfully commercialized in these territories which would adversely impact our anticipated milestone payments under the Restated Pfizer Agreement and negatively affect our business, financial condition and results of operations.

Protein therapeutics have the potential to cause an immune or antibody response in patients.

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Immunogenicity testing and analysis for our phase 3 study is ongoing, and we expect that the full results of the study will be submitted for presentation at a future scientific meeting.

The FDA reviews information on immune responses observed during clinical studies and the implications on safety and efficacy and could request additional studies or analysus of hGH-CTP or could decline to approve hGH-CTP for the indications we seek.

The FDA reviews information on immune responses observed during clinical studies and the implications on safety and efficacy and could request additional studies or analyses of hGH-CTP or could decline to approve hGH-CTP for the indications we seek.

Any of these occurrences could have a material adverse impact on our business, results of operation and financial condition.

Consistent with the potentially immunogenic properties of protein and peptide pharmaceuticals, patients treated with NGENLA may develop antibodies to somatrogon.

Antibodies may be transient or persistant and can have no effect or can neutralize the therapeutic effect of the protein.

The detection of antibody formation is highly dependent on the sensitivity and specificity of the assay.

Additionally, the observed incidence of antibody (including neutralizing antibody) positivity in an assay may be influenced by several factors including assay methodology, sample handling, timing of sample collection, concomitant medications, and underlying disease.

For these reasons, comparison of the incidence of antibodies to Somatrogon in the studies described below with the incidence of antibodies in other studies or to other products may be misleading.

Our business is dependent on our ability to develop, launch and generate revenue from our diagnostic products.

Our business is dependent on our ability to successfully commercialize the 4Kscore test and other diagnostic products .

Our business is dependent on our ability to successfully commercialize our diagnostic products .

We are committing significant resources to the development and commercialization of these products, and there is no guarantee that we will be able to successfully commercialize these tests.

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Simultaneously, however, the volume of its core testing business has decreased as a result of COVID-19.

A significant reduction in COVID-19 tests ordered,

specimens submitted by existing clients, or payment rates, without offsetting growth in our core business testing or client base, would impact our ability to successfully maintain the growth our business has experienced and could have a material adverse impact on our ability to generate profits and cash flow from the laboratory operations in the future.

A significant reduction in COVID-19 tests ordered, specimens submitted by existing clients, or payment rates, without offsetting growth in our core business testing or client base,

would impact our ability to successfully maintain the growth our business has experienced and could have a material adverse impact on our ability to generate profits and cash flow from the laboratory operations in the future.

Discontinuation or recalls of existing testing products, failure to develop, or acquire, licenses for new or improved testing technologies or our clients using new technologies to perform their own tests could adversely affect our business.

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Our failure to comply with applicable Medicare, Medicaid and other governmental payor rules could result in our inability to participate in a governmental payor program, our returning funds already paid to us, civil monetary penalties, criminal penalties and/or limitations on the operational function of our laboratory.

If we were unable to receive reimbursement under governmental payor program, a substantial portion of our consolidated revenues would be lost, which would adversely affect our results of operations and financial condition.

If we were unable to receive reimbursement under a governmental payor program, a substantial portion of our consolidated revenues would be lost, which would adversely affect our results of operations and financial condition.

In addition, if a federal government shutdown were to occur for a prolonged period of time, federal government payment obligations, including its obligations under Medicaid and Medicare, may be delayed.

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The loss of the services or support of any of our senior management could delay or prevent the development and commercialization of our products and product candidates.

Business combinations may disrupt our business, distract our management, may not proceed as planned, and may also increase the risk of potential third party claims and litigation.

One aspect of our business strategy calls for acquisitions of businesses and assets that complement or expand our current business and potential disposition of assets and businesses that may no longer help us meet our objectives, which may present greater risks for us than those faced by peer companies that do not consider acquisitions or dispositions as a part of their business strategy.

We may not be able to identify attractive acquisition opportunities or, when we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, or at all.

Even if we do identify attractive opportunities, we or the buyer may not be able to complete the acquisition due to financing or other market constraints.

If we acquire an additional business, we could have difficulty integrating its operations, systems, management and other personnel and technology with our own.

There may also be unasserted claims or assessments that we failed or were unable to discover or identify in the course of performing due diligence investigations of target businesses, resulting in a loss of value.

Dispositions may increase our exposure to third parties claims or litigation that may require expenditure of additional resources or negatively affect the successful outcome of the disposition.

Dispositions may also involve continued financial involvement in the divested business, such as through guarantees, indemnities or other financial obligations.

Under these arrangements, performance by the divested businesses or other conditions outside of our control could affect our future financial results.

Moreover, seeking acquisition and divestiture opportunities and evaluating and completing them require significant investment of time and resources, may disrupt the Company’s business and distract management’s attention from day-to-day business operations.

We may fail to realize the anticipated benefits of the sale of GeneDx and we could recognize an impairment charge in the future, depending on Sema4’s stock price when the transaction closes.

In January 2022, Sema4 and OPKO announced they have signed the GeneDx Merger Agreement, pursuant to which Sema4 will acquire GeneDx for an upfront payment of $150 million in cash, together with 80.0 million shares of Sema4 Common Stock, subject to a customary purchase price adjustment mechanism.

Additionally, Sema4 agreed to pay OPKO up to an additional $150.0 million, which may be paid in Sema4 Common Stock, cash or a combination thereof in Sema4’s discretion, subject to GeneDx achieving certain revenue targets for the fiscal years ending December 31, 2022 and 2023.

Based on the closing stock price of Sema4 Common Stock as of January 14, 2022, the total upfront consideration is approximately $473 million, and the total aggregate consideration including potential milestones is approximately $623 million.

If GeneDx is not able to successfully achieve its growth objectives, some of the anticipated benefits of the sale may not be realized fully.

As of December 31, 2021, GeneDx met the held-for-sale accounting criteria and the related assets and liabilities are

classified as held for sale in the consolidated balance sheet.

Depending upon the value Sema4 shares upon closing of the transaction, an impairment charge may be incurred.

If the FDA or other applicable regulatory authorities approve generic products that compete with any of our products or product candidates, the sale of our products or product candidates may be adversely affected.

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Any of our contract manufacturers will be subject to ongoing periodic unannounced inspection by the FDA and other non-U.S.

regulatory authorities to ensure strict

compliance with QSR regulations for devices or cGMPs for drugs, and other applicable government regulations and corresponding standards relating to matters such as testing, quality control, and documentation procedures.

regulatory authorities to ensure strict compliance with QSR regulations for devices or cGMPs for drugs, and other applicable government regulations and corresponding standards relating to matters such as testing, quality control, and documentation procedures.

If our contract manufacturers fail to achieve and maintain high manufacturing standards in compliance with QSR or cGMPs, we may experience manufacturing errors resulting in patient injury or death, product recalls or withdrawals, delays or interruptions of production or failures in product testing or delivery, delay or prevention of filing or approval of marketing applications for our products, cost overruns, or other problems that could seriously harm our business.

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Contract research organizations may also assist us in the collection and analysis of data.

These investigators and contract research organizations are independent contractors and we will not be able to control, other than by contract, the amount of resources, including time, that they devote to products that we develop.

These investigators and contract research organizations are independent

contractors and we will not be able to control, other than by contract, the amount of resources, including time, that they devote to products that we develop.

If independent investigators fail to devote sufficient resources to the development of product candidates or clinical trials, or if their performance is substandard, it will delay the marketing approval or clearance and commercialization of any products that we develop.

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Each third-party payor generally develops payment amounts and coverage policies for their beneficiaries or members that ties to the CPT code established for the laboratory test and the ICD-10 code selected by the ordering or performing physician.

Therefore, coverage and reimbursement may differ by payor even if the same

billing code is reported for claims filing purposes.

Therefore, coverage and reimbursement may differ by payor even if the same billing code is reported for claims filing purposes.

For laboratory tests without a specific billing code, payors often review claims on a claim-by-claim basis and there are increased uncertainties as to coverage and eligibility for reimbursement.

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Our strategy depends on our ability to rapidly identify and seek patent protection for our discoveries.

In addition, we will rely on third-party collaborators to file patent applications relating to proprietary technology that we develop jointly during certain collaborations.

In addition, we will rely on third-party collaborators to file patent applications relating to proprietary technology that we develop jointly during

certain collaborations.

The process of obtaining patent protection is expensive and time-consuming.

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We or our licensors may not successfully prosecute the patent applications which are licensed to us.

Even if patents issue in respect of these patent applications, we or our licensors may fail to maintain these patents or may determine not to pursue litigation against other companies that are infringing these patents.

Even if patents

issue in respect of these patent applications, we or our licensors may fail to maintain these patents or may determine not to pursue litigation against other companies that are infringing these patents.

Without protection for the intellectual property we have licensed, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business, results of operations and financial condition.

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Intellectual property litigation, regardless of outcome, is expensive and time-consuming, could divert management’s attention from our business and have a material negative effect on our business, operating results or financial condition.

If there is a successful claim of infringement against us, we may be required to pay substantial damages (including treble damages if we were to be found to have willfully infringed a third party’s patent) to the party claiming infringement, develop non-infringing technology, stop selling our tests or using technology that contains the allegedly infringing intellectual property or enter into royalty or license agreements that may not be available on acceptable or commercially practical terms, if at all.

If there is a successful claim of infringement against us, we may be

required to pay substantial damages (including treble damages if we were to be found to have willfully infringed a third party’s patent) to the party claiming infringement, develop non-infringing technology, stop selling our tests or using technology that contains the allegedly infringing intellectual property or enter into royalty or license agreements that may not be available on acceptable or commercially practical terms, if at all.

Our failure to develop non-infringing technologies or license the proprietary rights on a timely basis could harm our business.

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The health care industry is subject to substantial federal and state government regulation and audit.

Additionally, as previously disclosed and further explained in Legal Proceedings, we are subject to pending legal proceedings with respect to alleged violations of securities laws, specifically, the class action lawsuits for which we await a final order approving the settlement terms.

From time to time, we may receive inquiries, document requests, Civil Investigative Demands (“CIDs”) or subpoenas from the Department of Justice, the Office of Inspector General and Office for Civil Rights (“OCR”) of the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, various payors and fiscal intermediaries, and other state and federal regulators regarding investigations, audits and reviews.

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In general, we are not permitted to market our product candidates in the U.S.

until we receive approval of a Biologics License Application (BLA), an approval of a NDA, a clearance letter under the premarket notification process, or 510(k) process, or an approval of a PMA from the FDA.

until we receive approval of a BLA, an approval of an NDA, a clearance letter under the premarket notification process, or 510(k) process, or an approval of a PMA from the FDA.

To date, we have only submitted one NDA which was approved in June 2016, and one BLA which was approved for filing in January 2021.

We have received FDA approval of the PMA for our Sangia Total PSA Test using the Claros Analyzer, a novel diagnostic instrument system to provide rapid, high performance blood test results in the point-of-care setting, in January 2019 but we have not received marketing approval or clearance for any of our other diagnostic product candidates, Obtaining approval of a NDA or PMA can be a lengthy, expensive, and uncertain process.

With respect to medical devices, while the FDA reviews and clears a premarket

notification in as little as three months, there is no guarantee that our products will qualify for this more expeditious regulatory process, which is reserved for Class I and II devices, nor is there any assurance that even if a device is reviewed under the 510(k) process that the FDA will review it expeditiously or determine that the device is substantially equivalent to a lawfully marketed non-PMA device.

We have received FDA approval of the PMA for our Sangia Total PSA Test using the Claros Analyzer, a novel diagnostic instrument system to provide rapid, high performance blood test results in the point-of-care setting, in January 2019 and, in December 2021, for our 4Kscore test for use in men age 45 and older who have not had a prior prostate biopsy or are biopsy negative and have an age-specific abnormal total PSA and/or abnormal digital rectal exam, but we have not received marketing approval or clearance for any of our other diagnostic product candidates.

In response to the BLA we submitted for Somatrogon Pfizer received a Complete Response Letter, which we and Pfizer are reviewing to determine the best path forward for Somatrogon.

Obtaining approval of a NDA or PMA can be a lengthy, expensive, and uncertain process.

With respect to medical devices, while the FDA reviews and clears a premarket notification in as little as three months, there is no guarantee that our products will qualify for this more expeditious regulatory process, which is reserved for Class I and II devices, nor is there any assurance that even if a device is reviewed under the 510(k) process that the FDA will review it expeditiously or determine that the device is substantially equivalent to a lawfully marketed non-PMA device.

If the FDA fails to make this finding, then we cannot market the device.

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Marketing, labeling, packaging, adverse event reporting, storage, advertising, and promotion for our approved products will be subject to extensive regulatory requirements.

unsupported claims or an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties.

We train our marketing and sales force against promoting our products for uses outside of the cleared or approved indications for use, known as “off-label uses.” If the FDA determines that our promotional materials or training constitute promotion of unsupported claims or an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, and the curtailment of our operations.

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If we fail to comply with existing or future applicable laws and regulations, we could suffer civil or criminal penalties, including the loss of our licenses to operate our laboratories and our ability to participate in federal and state healthcare programs.

Different interpretations and enforcement policies of existing statutes and regulations applicable to our business could subject our current practices to allegations of impropriety or illegality, or could require us to make significant changes to

our operations.

Under the FCA, whistleblower or qui tam provisions allow a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery.

Under the False Claims Act (“FCA”), whistleblower or qui tam provisions allow a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery.

In recent years, the number of suits brought by private individuals has increased dramatically and we may be subject to such suits.

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If we do not comply with existing or new laws and regulations related to protecting privacy and security of personal or health information, we could be subject to monetary fines, civil penalties, or criminal sanctions.

We may also be required to comply with the data privacy and security laws of other countries in which we operate or from which we receives data transfers, including the General Data Protection Regulation (GDPR), which affects our European operations and possibly our laboratory and clinical development operations.

We may also be required to comply with the data privacy and security laws of other countries in which we operate or from which we receive data transfers, including the General Data Protection Regulation (GDPR), which affects our European operations and possibly our laboratory and clinical development operations.

The GDPR, which is wide-ranging in scope, governs the collection and use of personal data in the European Union and imposes operational requirements for companies that receive or process personal data of residents of the European Union that are different than those currently in place in the European Union.

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We are also subject to the Federal Hazardous Materials Transportation Law, 49 U.S.C.

5101 et seq., and the Hazardous Materials Regulations (“HMR”), 49 CFR

parts 171-180.

5101 et seq., and the Hazardous Materials Regulations (“HMR”), 49 CFR parts 171-180.

The federal government has classified hazardous medical waste as hazardous materials for the purpose of regulation.

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Submission of claims in violation of certain statutory or regulatory requirements can result in penalties, including substantial civil money penalties for each item or service billed to Medicare in violation of the legal requirement, and exclusion from participation in Medicare and Medicaid.

Government authorities may also assert that violations of laws and regulations related to submission or causing the submission of claims violate the federal False Claims Act (“FCA”) or other laws related to fraud and abuse, including submission of claims for services that were not medically necessary.

Government authorities may also assert that violations of laws and regulations related to submission or causing the submission of claims violate the FCA or other laws related to fraud and abuse, including submission of claims for services that were not medically necessary.

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Third party payors are increasingly challenging established prices, and new products that are more expensive than existing treatments may have difficulty finding ready acceptance unless there is a clear therapeutic benefit.

On April 1, 2014, the Protecting Access to Medicare Act of 2014 (“PAMA”) was enacted into law.

On April 1, 2014, the PAMA was enacted into law.

Under PAMA, Medicare payment for clinical diagnostic laboratory tests is established by calculating a weighted mean of private payor rates.

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Most significantly, on March 23, 2010, President Obama signed into law both the Affordable Care Act and the reconciliation law known as Health Care and Education Affordability Reconciliation Act (the “Reconciliation Act”) and, combined we refer to both Acts as the “2010 Health Care Reform Legislation.” The constitutionality of the 2010 Health Care Reform Legislation was confirmed on June 28, 2012 by the Supreme Court of the U.

However, there are legal challenges to 2010 Health Care Reform Legislation pending before the Supreme Court and we cannot ascertain the outcome of those challenges and how any such challenge might affect the Company.

It is uncertain whether any efforts to amend the Affordable Care Act will be successful or enacted into law, and if enacted, what the impact might be on our business.

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Also, under the 2010 Health Care Reform Legislation, the U.S.

Department of Health and Human Services, or HHS,

requires suppliers, such as us, to adopt, as a condition of Medicare participation, compliance programs that meet a core set of requirements.

Department of Health and Human Services, or HHS, requires suppliers, such as us, to adopt, as a condition of Medicare participation, compliance programs that meet a core set of requirements.

While we have adopted U.S.

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To the extent that transactions of these subsidiaries are settled in their local currencies, a devaluation of those currencies versus the U.S.

dollar could reduce the contribution from these

subsidiaries to our consolidated results of operations as reported in U.S.

dollar could reduce the contribution from these subsidiaries to our consolidated results of operations as reported in U.S.

For financial reporting purposes, such depreciation will negatively affect our reported results of operations since earnings denominated in foreign currencies would be converted to U.S.

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We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practice Act (“FCPA”) and other laws that prohibit U.S.

We are subject to the FCPA and other laws that prohibit U.S.

companies or their agents and employees from providing anything of value to a foreign official or political party for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity or obtain any unfair advantage.

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Our international business may also be impacted by changes in foreign national policies and priorities, which may be influenced by changes in the environment, geopolitical uncertainties, government budgets, and economic and political factors more generally, any of which could impact funding for programs or delay purchasing decisions or customer payments.

We also could be affected by the legal, regulatory and economic impacts of Britain’s exit from the European Union, the impact of which is not known at this time.

The occurrence and impact of these

factors is difficult to predict, but one or more of them could have a material adverse effect on our financial position, results of operations and/or cash flows.

The occurrence and impact of these factors is difficult to predict, but one or more of them could have a material adverse effect on our financial position, results of operations and/or cash flows.

RISKS RELATED TO ACQUISITIONS AND INVESTMENTS

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At December 31, 2021, we have goodwill and other intangible assets of $1.4 billion.

Goodwill is tested at least annually for impairment or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

Goodwill is tested at least annually for impairment or when events or

changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

Examples of qualitative factors include our share price, our financial performance compared to budgets, long-term financial plans, macroeconomic, industry and market conditions as well as the substantial excess of fair value over the carrying value of net assets from the annual impairment test previously performed.

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A significant write down of goodwill and/or other intangible assets would have a material adverse effect on our reported results of operations and net worth and the trading price of our securities.

We submitted the initial BLA with the FDA for approval of Somatrogon (hGH-CTP) in the U.S.

and Pfizer received a Complete Response Letter in January 2022.

Pfizer and OPKO are evaluating the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon in the United States.

If we are unable to successfully commercialize Somatrogon in the U.S., or changes in projections and assumptions negatively impact our forecast of net cash flows, we may be exposed to a material impairment charge related to the IPR&D for Somatrogon.

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

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Directors, executive officers, principal stockholders and affiliated entities own a substantial amount of our capital stock, and they may make decisions that you do not consider to be in the best interests of our stockholders.

As of January 31, 2021, our directors, executive officers, principal stockholders and affiliated entities beneficially owned, in the aggregate, approximately 41.3% of our outstanding voting securities.

Phillip Frost, M.D., our Chairman and CEO, is

deemed to beneficially own, in the aggregate, approximately 34.2% of our Common Stock as of January 31, 2021.

As of February 15, 2022, our directors, executive officers, principal stockholders and affiliated entities beneficially owned, in the aggregate, approximately 40% of our outstanding voting securities.

Phillip Frost, M.D., our Chairman and CEO, is deemed to beneficially own, in the aggregate, approximately 33.9% of our Common Stock as of February 15, 2022.

As a result, Dr.

Frost, acting with other members of management, would have the ability to significantly impact the election of our Board of Directors, the adoption or amendment of provisions in our Certificate of Incorporation, the approval of mergers and other significant corporate transactions and the outcome of issues requiring approval by our stockholders.

This concentration of ownership may also have the effect of delaying or preventing a change in control of our company that may be favored by other stockholders.

This concentration of

ownership may also have the effect of delaying or preventing a change in control of our company that may be favored by other stockholders.

This could prevent transactions in which holders of our securities might otherwise recover a premium for their securities over current market prices.

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

What changed 10-K

Item 1A. Risk Factors