What changed in this filing

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Item 1A. Risk Factors

2025-02-27 compared with 2024-02-29 · 74 added, 71 removed, 889 unchanged (14% of the section changed)

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While we have reported net income in the years ended December 31, 2024, 2023 and 2022, we cannot assure that we will continue to do so and may not be able to maintain profitability.

We have incurred significant operating losses since our inception.

We have incurred significant cumulative operating losses since our inception.

While we have reported net income in the years ended December 31, 2024, 2023 and 2022, we cannot assure that we will continue to do so and will need to continue to generate significant revenue to sustain operations and successfully commercialize neratinib and develop alisertib.

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Biopharmaceutical development is a highly speculative undertaking and involves a substantial degree of risk.

While we experienced profitability in 2023 and 2022, we may incur operating losses in the future as we continue our efforts to commercialize NERLYNX in existing indications and to develop NERLYNX for additional indications, and as we commence development efforts for alisertib and any other drug candidates we may acquire.

While we experienced profitability in 2024, 2023 and 2022, we may incur operating losses in the future as we continue our efforts to commercialize NERLYNX in existing indications and to develop neratinib for additional indications, and as we commence development efforts for alisertib and any other drug candidates we may acquire.

In 2017, the FDA approved NERLYNX for the extended adjuvant treatment of adult patients with early stage HER2-overexpressed/amplified breast cancer following adjuvant trastuzumab-based therapy.

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In 2018, the EC granted a marketing authorization for NERLYNX in the EU for the extended adjuvant treatment of adult patients with early stage hormone receptor positive HER2-overexpressed/amplified breast cancer and who completed adjuvant trastuzumab-based therapy less than one year ago.

Although we have begun to commercialize NERLYNX in the United States and Europe in these indications, we continue to experience net losses.

Moreover, we are in the early stages of development for alisertib.

W e are also in the early stages of development for alisertib.

The successful development and commercialization of any drug candidate will require us to perform a variety of functions, including:

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influence the nature and volume of publicity relative to our competitors’ products;

obtain regulatory approvals for additional indications for the use of NERLYNX;

obtain regulatory approvals for additional indications for the use of neratinib;

maintain and defend our patent protection and regulatory exclusivity for NERLYNX and to comply with our obligations under, and otherwise maintain, our intellectual property license with Pfizer and our license agreements with third parties.

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the revenue generated by the sale of NERLYNX and any other products that may be approved;

the costs, timing and outcomes of clinical trials and regulatory reviews associated with developing NERLYNX for additional indications, alisertib and our other drug candidates;

the costs, timing and outcomes of clinical trials and regulatory reviews associated with developing neratinib for additional indications, alisertib and our other drug candidates;

the emergence of competing products;

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As of December 31, 2024, the aggregate principal amount outstanding under the notes sold pursuant to the Note Purchase Agreement (collectively, the “Athyrium Notes”) was $66.7 million.

The Athyrium Notes are secured by collateral which consists of our equity interests in our domestic and foreign subsidiaries (including up to 100% of the issued and outstanding equity interests in each of our domestic subsidiaries directly owned by us or the guarantors of the Athyrium Notes) and substantially all of our property.

The Athyrium Notes are secured by collateral which consists of our equity interests in our domestic and foreign subsidiary (including up to 100% of the issued and outstanding equity interests in our subsidiary directly owned by us or the guarantors of the Athyrium Notes) and substantially all of our property.

In addition to voluntary prepayments, we may also be required to make mandatory prepayments under the Athyrium Notes in varying amounts within three (3) business days of the occurrence of certain events, including in the event that we receive proceeds from a voluntary or involuntary disposition and such proceeds are not reinvested in eligible assets within 180 days of the date of such disposition, or in the event that we receive extraordinary receipt cash proceeds and such proceeds are not reinvested in eligible assets within 180 days of the date of such extraordinary receipt.

The Note Purchase Agreement includes affirmative and negative covenants applicable to us and our subsidiaries.

The Note Purchase Agreement includes affirmative and negative covenants applicable to us and our subsidiary.

The affirmative covenants include, but are not limited to, requirements to (i) maintain our legal existence and take all reasonable actions to maintain our rights, privileges and authorizations (including renewal of permits or licenses) necessary to conduct our business and maintain our intellectual property, (ii) deliver certain financial statements, certificates and other information to Athyrium on a regular basis, (iii) maintain adequate insurance coverage with respect to the properties and business and (iv) cause all of our deposit accounts (other than certain “excluded accounts”) to be subject to Deposit Account Control Agreements.

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We cannot predict with any certainty that any NDA or supplemental NDA (or similar foreign applications) to market alisertib or our other drug candidates will be approved by the FDA or foreign regulatory authorities.

We are not permitted to market NERLYNX for other indications or alisertib or any of our other drug candidates in the United States until we receive approval of an NDA from the FDA or until we receive a MA from the EC in the EU, as applicable, for such indications, or, in any foreign countries, until requisite approval from such countries.

Approval of NERLYNX by the FDA or the EC for any particular indication does not ensure that another foreign jurisdiction will also approve NERLYNX for such indication, nor does it ensure that NERLYNX will be approved by the FDA or the EC for any other indications.

We are not permitted to market neratinib for other indications or alisertib or any of our other drug candidates in the United States until we receive approval of an NDA from the FDA or until we receive an MA from the EC in the EU, as applicable, for such indications, or, in any foreign countries, until requisite approval from such countries.

Approval of neratinib by the FDA or the EC for any particular indication does not ensure that another foreign jurisdiction will also approve neratinib for such indication, nor does it ensure that neratinib will be approved by the FDA or the EC for any other indications.

Similarly, approval of alisertib by the FDA or the EC would not ensure that another jurisdiction will also approve alisertib.

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For instance, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.

The European Commission’s proposal for revision of several legislative instruments related to medicinal products (revising the eligibility for expedited pathways, etc.) was published on April 26, 2023.

The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023.

The proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not expected before early 2026.

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Additionally, NERLYNX, alisertib and our other drug candidates, if approved, could be subject to labeling and other restrictions and market withdrawal and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products.

The FDA’s approval for NERLYNX and any regulatory approvals that we receive for alisertib or our other drug candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase IV clinical trials, and surveillance to monitor the safety and efficacy of the drug candidate.

The FDA’s approval for NERLYNX and any regulatory approvals that we receive for alisertib or our other drug candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including clinical trials, and surveillance to monitor the safety and efficacy of the drug candidate.

In addition, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements.

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In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies, such as the European Medicines Agency (“EMA”) following its relocation to Amsterdam and resulting staff changes, may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

For example, over the last several years, the U.S.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

For example, in recent years, the U.S.

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

Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.

Even though the FDA resumed standard inspection operations and any resurgence of the virus or emergence of new variants may lead to further inspectional or administrative delays.

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

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Although NERLYNX has been approved by the FDA for two limited indications, alisertib and our other drug candidates are in development as well, all of which will require extensive clinical testing before we can submit any NDA or similar foreign entities for regulatory approval.

We have no prior experience developing alisertib and may face significant difficulties during our development of alisertib.

We may face significant difficulties during our development of alisertib.

Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.

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

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

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

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For instance, the regulatory landscape related to clinical trials in the EU recently evolved.

The EU CTR which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.

The CTR which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.

While the EU Clinical Trials Directive required a separate CTA to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.

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Once the CTA is approved, clinical study development may proceed.

The CTR foresees a three-year transition period.

The extent to which ongoing and new clinical trials will be governed by the CTR varies.

Clinical trials for which an application was submitted (i) prior to January 31, 2022 under the EU Clinical Trials Directive, or (ii) between January 31, 2022 and January 31, 2023 and for which the sponsor has opted for the application of the EU Clinical Trials Directive remain governed by said Directive until January 31, 2025.

After this date, all clinical trials (including those which are ongoing) will become subject to the provisions of the CTR.

The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR.

Compliance with the CTR requirements by us and our third-party service providers, such as CROs, may impact our developments plans.

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The accelerated approval pathway may be used in cases in which the advantage of a new drug over available therapy may not be a direct therapeutic advantage but is a clinically important improvement from a patient and public health perspective.

If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional confirmatory studies to verity and describe the drug’s clinical benefit.

If granted, accelerated approval is usually contingent on the sponsor’s agreement to conduct, in a diligent manner, additional confirmatory studies to verify and describe the drug’s clinical benefit.

If such post-approval studies fail to confirm the drug’s clinical benefit or are not completed in a timely manner, the FDA may withdraw its approval of the drug on an expedited basis.

In addition, in December 2022, President Biden signed an omnibus appropriations bill to fund the U.S.

In addition, in December 2022, former President Biden signed an omnibus appropriations bill to fund the U.S.

government through fiscal year 2023.

Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA new statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.

Included in the omnibus bill is the Food and Drug Omnibus Reform Act of 2022, which among other things, provided FDA statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.

Under these provisions, the FDA may require a sponsor of a product seeking accelerated approval to have a confirmatory trial underway prior to such approval being granted.

Prior to seeking accelerated approval for any of our drug candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval.

There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA for accelerated approval or any other form of expedited development, review or approval.

There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA, or NDA supplement, for accelerated approval or any other form of expedited development, review or approval.

Furthermore, if we decide to submit an application for accelerated approval for our drug candidates, there can be no assurance that such application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all.

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NERLYNX was approved by the FDA in 2017.

We had total revenue for NERL YNX of $ 253.2 million, $ 228.0 million and $ 235.6 million for the years ended December 31, 2021, 2022 and 2023, respectively.

We had total revenue for N ERLYNX of $ 230.5 million, $ 235.6 million and $ 228.0 million for the years ended December 31, 2024, 2023 and 2022, respective ly.

We cannot assure you that the sales of NERLYNX will continue at these levels or grow.

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Outside the United States, we seek to enter into exclusive sub-license agreements with third parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved.

As of December 31, 2023, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in more th an 20 count ries outside the United States, including the EU, Australia, Canada, and Hong Kong.

As of December 31, 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in more th an 40 count ries outside the United States, including the EU, Australia, Canada, and Hong Kong.

We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America, the Middle East and Africa.

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Royalty revenue obtained pursuant to these sub-license agreements was 15% , 14% and 12% of total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

We have very little control over these third-parties and any of our existing or future licensees may fail to devote the necessary resources and attention to obtain regulatory approval, where needed, and to market and distribute NERLYNX effectively.

We h ave very little control over these third-parties and any of our existing or future licensees may fail to devote the necessary resources and attention to obtain regulatory approval, where needed, and to market and distribute NERLYNX effectively.

If these licensees are unsuccessful in receiving regulatory approvals or in commercializing NERLYNX, our business, results of operations and financial condition will be materially adversely affected.

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We have completed the post-marketing commitments related to the FDA approval, and the post-marketing studies related to the EC approval are ongoing.

If we fail to comply with all of our post-marketing commitments, or if the results of the post-marketing studies, or any other ongoing clinical studies of NERLYNX, are negative, the FDA or the EC could decide to withdraw its respective approval, add warnings or narrow the approved indication in the product label.

If we fail to comply with all of our post-marketing commitments, or if the results of the post-marketing studies, or any other ongoing clinical studies of neratinib, are negative, the FDA or the EC could decide to withdraw its respective approval, add warnings or narrow the approved indication in the product label.

Regulatory approval for any approved product is limited by the FDA and foreign regulatory authorities to those specific indications and conditions for which clinical safety and efficacy have been demonstrated as set forth on the product label.

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The NCCN designated NERLYNX in combination with capecitabine as a category 2A treatment option and NERLYNX in combination with paclitaxel as a category 2B treatment option.

Use, as designated for breast cancer patients with brain metastases, is outside the FDA approved indication for NERLYNX and considered investigational, and we do not market or promote NERLYNX for these uses.

In addition, in December 2024, we announced that NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines®) for Cervical Cancer were updated to include an addition involving neratinib.

The updated NCCN Practice Guidelines for Cervical Cancer include neratinib monotherapy for use as second-line or subsequent therapy for recurrent or metastatic disease as an option for patients with HER2-mutated tumors with a designation of Category 2A.

The NCCN Guidelines Category of Preference is designated as “useful in certain circumstances” as a treatment option for patients with HER2-mutated tumors.

Use, as designated for breast cancer patients with brain metastases and in Cervical Cancer, is outside the FDA approved indication for NERLYNX and considered investigational, and we do not market or promote NERLYNX for these uses.

Regulatory authorities in the United States and outside the United States generally do not regulate the behavior of physicians in their choice of treatments.

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In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

In March 2010, the ACA became law in the United States.

In March 2010, the Affordable Care Act ( “ ACA ” ) became law in the U nited States.

The ACA substantially changed the way healthcare is financed by both governmental and private insurers and significantly affects the pharmaceutical industry.

Among the provisions of the ACA, of greatest importance to the pharmaceutical industry are the following:

an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;

an increase of the rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected and not generally distributed through the retail channel;

a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;

extension of manufacturers’ Medicaid rebate liability to covered outpatient drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals, which began in April 2010, and by adding new eligibility categories for certain individuals with income at or below 133% of the Federal Poverty Level beginning in 2014, thereby potentially increasing manufacturers’ Medicaid rebate liability;

increase in the number of entities eligible for discounts under the 340B program;

a new requirement to annually report drug samples that manufacturers and distributors provide to physicians;

a licensure framework for follow-on biologic products;

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

Among other provisions, the ACA included an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents and a new formula that increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.

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Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Thus, the ACA will remain in effect in its current form.

In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted.

For example, the Budget Control Act of 2011, among other things, led to reductions to Medicare payments of providers which, will remain in effect through 2032.

For example, the Budget Control Act of 2011, among other things, led to reductions to Medicare payments to providers that will remain in effect through 2032.

On January 2, 2013, the American Taxpayer Relief Act of 2012, among other things, also reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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The rebate was previously capped at 100% of a drug’s average manufacturer price,

Most significantly, in August 2022, President Biden signed the Inflation Reduction Act of 2022, or the IRA, into law.

Most significantly, in August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law.

This statute marks the most significant action by Congress with respect to the pharmaceutical industry since adoption of the ACA in 2010.

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

redesigns the Medicare Part D benefit (beginning in 2024);

and replaces the Part D coverage gap discount program with a new manufacturer discount program (beginning in 2025).

Centers for Medicare & Medicaid Services (“CMS”) has published the negotiated prices for the initial 10 drugs, which will first be effective in 2026, and has published the list of the subsequent 15 drugs that will be subject to negotiation.

The IRA permits the Secretary of the Department of Health and Human Services (“HHS”) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations.

HHS has issued and will continue to issue guidance implementing the IRA, although the Medicare drug price negotiation program is currently subject to legal challenges.

While the impact of the IRA on our business and the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges.

The impact of the IRA on us and the pharmaceutical industry cannot yet be fully determined but is likely to be significant.

Under the IRA manufacturer discount program that replaced the coverage gap discount program as of January 1, 2025, manufacturers must give a 10 percent discount on Part D drugs in the initial coverage phase, and a 20 percent discount on Part D drugs in the so-called “catastrophic phase” (the phase after the patient incurs costs above the initial phase out-of-pocket threshold, which will be $2,000 beginning in 2025).

The IRA allows the 10 and 20 percent discounts to be phased in over time for certain drugs for “specified manufacturers.” In April 2024, CMS informed us that we are deemed a specified small manufacturer and the discount will be phased in over several years and will increase over time.

We are continuing to evaluate the potential impact of this status on our future revenues.

NERLYNX is reimbursed under Medicare Part D, and the reimbursement amount will be impacted by the 10 and 20 percent discounts under the IRA’s new discounting program (as noted above).

We anticipate that these increased discounts will impact NERLYNX revenues over time, while also having an industry-wide impact on the patient out-of-pocket costs of Part D drugs.

The impact on NERLYNX revenues could be offset because the IRA’s redesign of certain Part D components, some of which went into effect in 2024, resulted in an increase in the number of patients able to afford this therapy.

The amount of the offset, if any, is inherently uncertain and difficult to predict.

The IRA manufacturer discount program also increases financial obligations of Part D prescription drug plans with respect to beneficiaries in the catastrophic coverage phase.

This may incentivize Part D prescription drug plans to seek greater price concessions from us in order to include NERLYNX on their formularies.

The cost of prescription pharmaceuticals in the United States has also been the subject of considerable discussion.

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Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states.

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

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On December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment (“HTA”) amending Directive 2011/24/EU, was adopted.

While the Regulation entered into force in January 2022, it will only begin to apply from January 2025 onwards, with preparatory and implementation-related steps to take place in the interim.

Once applicable, it will have a phased implementation depending on the concerned products.

The Regulation entered into force in January 2022 and has been applicable since January 2025, with phased implementation based on the type of product, i.e.

oncology and advanced therapy medicinal products as of 2025, orphan medicinal products as of 2028, and all other medicinal products by 2030.

This Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.

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similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to Centers for Medicare & Medicaid Services (“CMS”), information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (nurse practitioners, certified nurse anesthetists, physician assistants, clinical nurse specialists, anesthesiology assistants and certified nurse midwives), and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (manufacturers are required to submit reports to CMS by the 90 th day of each calendar year);

the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS, information related to payments or other “transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (nurse practitioners, certified nurse anesthetists, physician assistants, clinical nurse specialists, anesthesiology assistants and certified nurse midwives), and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by the physicians described above and their immediate family members and payments or other “transfers of value” to such physician owners (manufacturers are required to submit reports to CMS by the 90 th day of each calendar year);

analogous state equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including commercial insurers;

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As a condition of having federal funds being made available for our covered outpatient drugs under Medicaid and Medicare Part B, we have enrolled in the MDRP, which requires us to pay a rebate to state Medicaid programs for each unit of our covered outpatient drugs dispensed to a Medicaid beneficiary and paid for by a state Medicaid program.

Medicaid drug rebates are based on pricing data that we must report on a monthly and quarterly basis to the U.S.

Centers for Medicare & Medicaid Services (“CMS”), the federal agency that administers the MDRP and Medicare programs.

Medicaid drug rebates are based on pricing data that we must report on a monthly and quarterly basis to the CMS, the federal agency that administers the MDRP and Medicare programs.

For the MDRP, these data include the average manufacturer price (“AMP”) for each drug and, in the case of our innovator products, the best price.

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HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs.

HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

HRSA has also finalized a revised regulation implementing an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.

In order to be eligible to have drug products paid for with federal funds under Medicaid and Medicare Part B and purchased by certain federal agencies and grantees, we also must participate in the U.S.

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As a result, we are entirely dependent on these parties to achieve regulatory approval of NERLYNX for marketing in these countries and for the commercialization of NERLYNX, if approved.

For the years ended December 31, 2023 and 2022, royalty revenue from these sub-licensees was $32.5 million and $28.0 million, respectively, and represented 14% and 12% of total revenue, respectively.

For the years ended December 31, 2024, 2023 and 2022, royalty revenue f rom these sub-licensees was $35.3 million, $32.5 million and $28.0 million, respectively, and represented 15% , 14% and 12% of total revenue, respectively.

The timing and amount of any milestone and royalty payments we may receive under these agreements, as well as the commercial success of NERLYNX in those regions outside of the United States, will depend on, among other things, the efforts, allocation of resources and successful commercialization of NERLYNX by the licensees.

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If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for our drug candidates.

We depend upon independent investigators and collaborators, such as CROs, universities and medical institutions, to conduct our pre-clinical studies and clinical trials, including those involving NERLYNX (for additional indications) and alisertib, under agreements with us.

These collaborators are not our employees, and we cannot control the amount or timing of resources that they devote to our programs.

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Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.

For example, the California Consumer Privacy Act of 2018 (“CCPA”) went into effect on January 1, 2020.

The CCPA creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal information.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and risks associated with data breach litigation.

Further, the California Privacy Rights Act (“CPRA”) generally went into effect on January 1, 2023 and significantly amends the CCPA.

It imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt outs for certain uses of sensitive data.

It also created a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.

For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act (collectively, the CCPA) requires covered businesses that process the personal information of California residents to, among other things:

(i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;

(ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information;

and (iii) enter into specific contractual provisions with service providers that process California residents` personal information on the business’s behalf.

Further, Washington State enacted a broadly applicable law to protect the privacy of personal health information known as the “My Health My Data Act,” which generally requires affirmative consent for the collection, use, or sharing of any “consumer health data.” Consumer health data is defined to include personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health status;

consumer health data also includes information that is derived or extrapolated from non-health information, such as algorithms and machine learning.

Other states, including Connecticut and Nevada, have also passed consumer health data laws, and given the increased focus on the use of health data by entities that are not subject to HIPAA, additional states are expected to pass consumer health privacy laws.

Additional compliance investment and potential business process changes may also be required.

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Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.

On October 7, 2022, President Biden signed an Executive Order on ‘Enhancing Safeguards for United States Intelligence Activities’ which introduced new redress mechanisms and binding safeguards to add ress the concerns raised by the CJEU in relation to data transfers from the EEA to the United States and which formed the basis of the new EU-US Data Privacy Framework (“DPF”), as released on December 13, 2022.

The European Commission adopted its Adequacy Decision in relation to the DPF on July 10, 2023, rendering the DPF effective as a GDPR transfer mechanism to U.S.

Case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses – a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis The European Commission adopted its Adequacy Decision in relation to the DPF on July 10, 2023, rendering the DPF effective as a GDPR transfer mechanism to U.S.

entities self-certified under the DPF.

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As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames.

Further, since January 1, 2021, companies have to comply with the GDPR and also the UK data protection regime, which imposes separate but similar obligations to those under the GDPR.

Further, since January 1, 2021, companies must comply with the GDPR and also the UK data protection regime, which imposes separate but similar obligations to those under the GDPR.

The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.

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We may be adversely affected by the current economic environment.

Our ability to attract and retain collaborators or customers, invest in and grow our business and meet our financial obligations depends on our operating and financial performance, which, in turn, is subject to numerous factors, including the prevailing economic conditions and financial, business and other factors beyond our control, such as the rate of unemployment, the number of uninsured persons in the United States and inflationary pressures.

We cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business.

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Failure to effectively manage our growth through acquisition or in-licensing transactions could adversely affect our growth prospects, business, results of operations, financial condition, and cash flow.

In addition, we may spend significant amounts, issue dilutive securities, assume or incur significant debt obligations, incur large one-time expenses and acquire intangible assets or goodwill in connection with acquisitions and in-licensing transactions that could result in significant future amortization expense and write-offs.

In addition, we may spend significant amounts of funds, issue dilutive securities, assume or incur significant debt obligations, incur large one-time expenses and acquire intangible assets or goodwill in connection with acquisitions and in-licensing transactions that could result in significant future amortization expense and write-offs.

Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.

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To date, we have been involved in litigation in the United States against the one ANDA applicant that submitted a Paragraph IV certification directed to our patents (Sandoz), and also in China against parties that filed applications and/or received approval for generic versions of NERLYNX.

In order to eliminate the burden, expense, distraction and uncertainties of litigation, we entered a settlement and license agreement in 2022 that would permit Sandoz to begin selling a generic version of neratinib in the United States on or around December 8, 2030.

In order to eliminate the burden, expense, distraction and uncertaintie s of litigation, we entered a settlement and license agreement in 2022 that would permit Sandoz to begin selling a generic version of neratinib in the United States on or around December 8, 2030.

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

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For these reasons, in the event we experience a change of control, we may not be able to utilize a material portion of the NOLs and research and development credit carryforwards, even if we attain profitability.

Additionally, valuation allowances needed for deferred tax assets that we estimate are more likely than not to be unusable, based on available evidence at the time the estimate is made.

For the year ended December 31, 2024, we released $7.1 million of our valuation allowance related to deferred tax assets, and recorded a valuation allowance of $343.5 million as of December 31, 2024.

See Note 12–Income Taxes in the notes to the financial statements included in this Annual Report for further information.

The recording of any future increase in or release of all or any portion of our valuation allowance could have a material impact on our reported results and could cause fluctuations in our quarterly and annual results of operations.

Moreover, potential changes in the tax law or in our projections could impact our assessment and valuation allowance estimates, which could have a material adverse effect on our business, financial condition and results of operations.

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