What changed in this filing

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Item 1A. Risk Factors

2022-11-03 compared with 2022-08-02 · 121 added, 93 removed, 1069 unchanged (17% of the section changed)

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● Our business is currently adversely affected and could be materially and adversely affected in the future by the evolving effects of the COVID-19 pandemic as a result of the current and potential future impacts on our commercialization efforts, supply chain, regulatory, clinical development and corporate development activities and other business operations, in addition to the impact of a global economic slowdown.

● We may not be able to obtain EUA for fostamatinib for the treatment of hospitalized patients with COVID-19, and, even if we do, absent supplemental New Drug Application (NDA) approval for that indication, such EUA would be revoked when the COVID-19 emergency terminates.

● We might not be able to successfully develop or commercialize our product candidates if problems arise in the clinical testing and approval process.

● We may not be able to obtain EUA for fostamatinib for the treatment of hospitalized patients with COVID-19, and, even if we do, absent supplemental NDA approval for that indication, such EUA would be revoked when the COVID-19 emergency terminates.

● We may not be able to successfully develop or commercialize our product candidates if problems arise in the clinical testing and approval process.

There is a high risk that drug discovery and development efforts might not generate successful product candidates.

If the results of our clinical trials do not meet the primary efficacy endpoints, or if the top-line data from the results of our clinical trials may not ultimately meet the requirements for an NDA approval by the FDA, or if the NDA submitted by Forma for olutasidenib to the FDA is not approved, the commercial prospects of our business may be harmed, and our ability to generate product revenues may be delayed or eliminated.

● Even if we, or any of our collaborative partners, are able to continue to commercialize TAVALISSE or any product candidate that we, or they, develop, the product may become subject to unfavorable pricing regulations, third-party payor reimbursement practices or labeling restrictions, all of which may vary from country to country and any of which could harm our business.

● Even if we, or any of our collaborative partners, are able to continue to commercialize TAVALISSE or any product candidate that we, or they, develop, the product may become subject to unfavorable pricing regulations, unfavorable health technology assessments (HTA) assessment, third-party payor reimbursement practices or labeling restrictions, all of which may vary from country to country and any of which could harm our business.

● If we are unable to successfully market and distribute TAVALISSE and retain experienced sales force, our business will be substantially harmed.

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We may need to continue to increase the size of our organization and we may encounter difficulties with managing our growth, which could adversely affect our business and results of operations.

Although we have recently substantially increased the size of our organization, we may need to add additional qualified personnel and resources to support our commercial sales force.

Although we have recently substantially increased the size of our organization particularly in our sales force, we may need to add additional qualified personnel and resources to support our commercial activities.

Our current infrastructure may be inadequate to support our development and commercialization efforts and expected growth.

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We continue to evaluate the workplace for compliance with the local, state and federal guidance and may modify or update at any time to ensure the safety of our employees, contractors and visitors.

Recently, we updated our Plan as we move towards a hybrid schedule, reinstituting more in-person interactions back into our business beginning April 2022.

During the first quarter of 2022, we updated our Plan as we move towards a hybrid schedule, reinstituting more in-person interactions back into our business beginning April 2022.

We endeavor to provide the safest and most effective work environment under the circumstances, but we cannot guarantee that employees who come to the office will not be exposed to COVID-19 while at the office.

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Since the COVID-19 pandemic was declared, we have observed reduced patient-doctor interactions and our representatives have had fewer visits with health care providers, which negatively affected our product sales and may continue to negatively affect our product sales in the future.

Physicians with practices severely impacted by the COVID-19 pandemic, and who currently prescribe TAVALISSE, may eventually decide to close their independent practices and join a larger medical organization with a practice that does not prescribe TAVALISSE.

Physicians with practices severely impacted by the COVID-19 pandemic, and who currently prescribe TAVALISSE, may eventually decide to close their independent practices and

join a larger medical organization with a practice that does not prescribe TAVALISSE.

Additionally, commercial-related activities, such as our marketing programs, speaker bureaus, and market access initiatives have been conducted virtually, delayed or cancelled as a result of the COVID-19 pandemic.

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With respect to clinical development, we have taken, and continue to take, measures to implement remote and virtual approaches, including remote patient monitoring where possible per recent FDA guidance and working with our investigators for appropriate care of these patients in a safe manner consistent with agency guidelines.

We have a number of ongoing clinical trials, including our global Phase 3 clinical studies in wAIHA and COVID.

We have a number of ongoing clinical trials, including our global Phase 3 clinical studies in COVID and IRAK 1/4 inhibitor program.

A number of our clinical trial investigators have paused, postponed or delayed new patient enrollment and restricted site visits of existing patients enrolled.

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On March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding the conduct of clinical trials.

On July 10, 2020, the FDA announced that it is working toward the goal of restarting on-site

inspections it deems to be “mission critical.” On August 19, 2020, the FDA published guidance clarifying how it intends to conduct inspections during the COVID-19 pandemic, including how it plans to determine which inspections are “mission critical.” The FDA published an updated form of this guidance on May 17, 2021.

Additionally, on April 14, 2021, the FDA issued a guidance document in which the FDA described its plans to conduct voluntary remote interactive evaluations of certain drug manufacturing facilities and clinical research sites.

On July 10, 2020, the FDA announced that it is working toward the goal of restarting on-site inspections it deems to be “mission critical.” On August 19, 2020, the FDA published guidance clarifying how it intends to conduct inspections during the COVID-19 pandemic, including how it plans to determine which inspections are “mission critical.” The FDA published an updated form of this guidance on May 17, 2021.

Additionally, on April 14, 2021, the FDA issued a guidance document in which the FDA described its plans to conduct voluntary remote

interactive evaluations of certain drug manufacturing facilities and clinical research sites.

According to the guidance, the FDA intends to request such remote interactive evaluations in situations where an in-person inspection would not be prioritized, deemed mission-critical, or where direct inspection is otherwise limited by travel restrictions, but where the FDA determines that remote evaluation would still be appropriate.

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These risks include, but are not limited to, the inherent difficulty in selecting the right drug and drug target and avoiding unwanted side effects, as well as unanticipated problems relating to product development, testing, enrollment, obtaining regulatory approvals, obtaining and maintaining reimbursement in national markets and positive recommendation from HTA bodies, maintaining regulatory compliance, manufacturing, competition and costs and expenses that may exceed current estimates.

In future clinical

trials, we or our partners may discover additional side effects and/or a higher frequency of side effects than those observed in previously completed clinical trials.

In future clinical trials, we or our partners may discover additional side effects and/or a higher frequency of side effects than those observed in previously completed clinical trials.

The results of preliminary and mid-stage clinical trials do not necessarily predict clinical or commercial success, and larger later-stage clinical trials may fail to confirm the results observed in the previous clinical trials.

Similarly, a clinical trial may show that a product candidate is safe and effective for certain patient populations in a particular indication, but other clinical trials may fail to confirm those results in a subset of that population or in a different patient population, which may limit the potential market for that product candidate.

Similarly, a clinical trial may show that a product candidate is safe and effective

for certain patient populations in a particular indication, but other clinical trials may fail to confirm those results in a subset of that population or in a different patient population, which may limit the potential market for that product candidate.

With respect to our own compounds in development, we have established anticipated timelines with respect to the initiation of clinical trials based on existing knowledge of the compounds.

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In June 2022, we announced top-line efficacy and safety data results of our FORWARD study, and the results of the trial did not demonstrate statistical significance in the primary efficacy endpoint of durable hemoglobin response in the overall study population .

We are conducting an in-depth analysis of the data to better understand differences in patient characteristics and outcomes and expect to discuss these findings with the FDA to determine the path forward in wAIHA.

We conducted an in-depth analysis of these data to better understand differences in patient characteristics and outcomes and submitted these findings to the FDA.

In October 2022, we announced that we received guidance from the FDA’s review of these findings.

Based on this guidance, we do not expect to file a sNDA for this indication at this time.

We will continue to explore our options for the wAIHA program in relation to our complete portfolio of development opportunities.

Further, we have our Phase 3 clinical trial to evaluate safety and efficacy of fostamatinib in hospitalized COVID-19 patients which we launched in November 2020.

In July 2022, we completed the enrollment on this study, and we expect to report top-line results before end of fiscal year 2022.

If the results of our Phase 3 clinical trial in wAIHA do not ultimately meet the requirements for an NDA approval by the FDA, or our Phase 3 clinical trial to further evaluate fostamatinib in hospitalized COVID-19 patients or any of our clinical trials fail to meet the primary efficacy endpoints, the commercial prospects of our business may be harmed, our ability to generate product revenues may be delayed or eliminated or we may be forced to undertake other strategic alternatives that are in our shareholders’ best interests, including cost reduction measures.

In July 2022, we completed the enrollment on this study, and on November 1, 2022, we announced the top-line results of the clinical trial.

The trial approached but did not meet statistical significance in the primary efficacy endpoint.

All prespecified secondary endpoints in the study numerically favored fostamatinib over placebo, including mortality, time to sustained recovery, change in ordinal scale assessment, and number of days in the ICU.

We are evaluating the opportunity and next steps in collaboration with our partner, the US Department of Defense.

If the results of our clinical trials fail to meet the primary efficacy endpoints, or otherwise do not ultimately meet the requirements for an NDA approval by the FDA, the commercial prospects of our business may be harmed, our ability to generate product revenues may be delayed or eliminated or we may be forced to undertake other strategic alternatives that are in our shareholders’ best interests, including cost reduction measures.

If we are unable to obtain adequate financing or engage in a strategic transaction on commercially reasonable terms or at all, we may be required to implement further cost reduction strategies which could significantly impact activities related to our commercial efforts and/or research and development of our future product candidates, and could significantly harm our business, financial condition and results of operations.

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These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, including promoting off-label uses of our products, commission compensation, certain customer incentive programs, certain patient support offerings, and other business arrangements generally.

Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of patient recruitment for clinical trials, creating fraudulent data in our preclinical studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause

serious harm to our reputation.

studies or clinical trials or illegal misappropriation of drug product, which could result in regulatory sanctions and cause serious harm to our reputation.

See “Part I, Item 1, Business – Government Regulation – Healthcare and Privacy Law and Regulation and Healthcare Reform” of our Annual Report on Form 10-K for the year ended December 31, 2021, for more information on the healthcare laws and regulations that may affect our ability to operate.

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Compliance with applicable privacy and information security laws and regulations, as well as regulatory guidance, policies and contractual obligations, is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms to ensure compliance with the new privacy and information security requirements.

If we fail to comply with any such obligations, we may face significant investigations, fines, penalties and claims that could materially and adversely affect our business, financial condition,

results of operations, ability to process personal information and income from certain business initiatives.

If we fail to comply with any such obligations, we may face significant

investigations, fines, penalties and claims that could materially and adversely affect our business, financial condition, results of operations, ability to process personal information and income from certain business initiatives.

In the US, these obligations include various federal, state, and local statutes, rules, and regulations relating to privacy and data security.

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In addition, the EU GDPR confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the EU GDPR.

European data protection laws, including the EU GDPR, generally also prohibit the transfer of personal information from Europe to the US and most other countries that are not recognized as having “adequate” data protection laws unless the parties to the transfer have implemented specific safeguards to protect the transferred personal

protection laws unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information.

One of the primary safeguards allowing US companies to import personal information from Europe has been certification to the EU-US Privacy Shield and Swiss-US Privacy Shield frameworks administered by the US Department of Commerce.

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Following that decision, the Swiss Federal Data Protection and Information Commissioner (FDPIC) took a similar view and considered that data transfers based on the Swiss-US Privacy Shield framework are no longer lawful (despite the fact that Schrems II is not directly applicable in Switzerland (unless the Swiss based company is subject to the EU GDPR) and the Swiss-US Privacy Shield has not been officially invalidated).

Further, the European Commission recently published new EU SCCs, which place onerous obligations on the contracting parties.

Further, the European Commission published new EU SCCs in June 2022, which place onerous obligations on the contracting parties.

At present, there are few, if any, viable alternatives to the SCCs.

Recently, a new Trans-Atlantic Data Privacy Framework was announced as a successor to the invalidated Privacy Shield.

Once approved and implemented, the agreement could facilitate the transatlantic flow of personal data and provide an alternative data transfer mechanism (in addition to EU SCCs and Binding Corporate Rules) for companies transferring personal data from the EU to the US.

However, the agreement in principle will depend on the implementation of several commitments from the US, and so it is unclear when the new framework will be available.

However, on October 7, 2022, the US President introduced an Executive Order to facilitate a new Trans-Atlantic Data Privacy Framework which will act as a successor to the invalidated Privacy Shield.

If approved by the European Commission and implemented, the agreement will facilitate the transatlantic flow of personal data and provide an alternative data transfer mechanism (in addition to EU SCCs and Binding Corporate Rules) for companies transferring personal data from the EU to the US.

However, before parties rely on the new framework, there are still legislative and regulatory steps that must be undertaken both in the US and in the EU.

As such, any transfers by us or our third-party vendors, collaborators or others of personal information from Europe to the US or elsewhere may not comply with European data protection laws, may increase our exposure to European data protection laws’ heightened sanctions for cross-border data transfer restrictions may restrict our clinical trial activities in Europe and may limit our ability to collaborate with CROs, service providers, contractors and other companies subject to European data protection laws.

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It should also be noted that the UK Government published its own form of EU SCCs, known as the International Data Transfer Agreement (IDTA) and International Data Transfer Addendum (UK Addendum) to the new EU SCCs.

The UK Information Commissioner’s Office (ICO) is also expected to shortly publish its version of the transfer impact assessment and revised guidance on international transfers.

The UK Information Commissioner’s Office (ICO) may also publish its version of the transfer impact assessment and revised guidance on international transfers, though it is unclear when this may take place.

In terms of international data transfers between the UK and US, it is understood that the UK and the US are negotiating an adequacy agreement.

Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, with strict requirements and limitations for processing personal information, which could increase the cost and complexity of delivering our services and operating our business.

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Although we endeavor to comply with our published policies and other documentation, we may at times fail to do so or may be perceived to have failed to do so.

Moreover, despite our efforts, we may not be successful in achieving compliance if our employees, collaborators, contractors, service providers or vendors fail to act in accordance with our published policies and documentation.

Such failures can subject us to potential foreign, local, state and federal action if they are found to be deceptive, unfair, or

misrepresentative of our actual practices.

despite our efforts, we may not be successful in achieving compliance if our employees, collaborators, contractors, service providers or vendors fail to act in accordance with our published policies and documentation.

Such failures can subject us to potential foreign, local, state and federal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.

Moreover, trial participants or research subjects about whom we or our partners obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information or exercise their right to do so under applicable privacy legislation.

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In addition, certain state and federal enforcement authorities have pursued investigations and settlements and members of Congress have initiated inquiries about manufacturer-sponsored patient support programs, including, for example, manufacturer-sponsored patient assistance programs, co-payment assistance programs, and manufacturer contributions to independent charitable patient assistance programs.

Further, numerous organizations, including pharmaceutical manufacturers, have been subject to ongoing litigation, enforcement activities and settlements related to their patient support programs and certain of these organizations have entered into, or have otherwise agreed to, significant civil settlements with applicable enforcement authorities.

Moreover, the Department of Health and Human Services, Office of the Inspector General recently published an advisory opinion (OIG Ad Op.

22-19) that, while binding only on the requestor of the opinion, reflects the government’s continued scrutiny of manufacturer financial contributions to patient assistance programs conducted through third parties, including charitable organizations.

Numerous organizations, including pharmaceutical manufacturers, have been subject to ongoing litigation, enforcement activities and settlements related to their patient support programs and certain of these organizations have entered into, or have otherwise agreed to, significant civil settlements with applicable enforcement authorities.

It is possible that future legislation may be proposed that would establish requirements or restrictions with respect to these programs and/or support that would affect pharmaceutical manufacturers.

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This process is known as a paragraph IV challenge.

Upon notice of a paragraph IV

challenge, a patent owner has 45 days to bring a patent infringement suit in federal district court against the company seeking ANDA approval of a product covered by one of the owner’s patents.

Upon notice of a paragraph IV challenge, a patent owner has 45 days to bring a patent infringement suit in federal district court against the company seeking ANDA approval of a product covered by one of the owner’s patents.

If this type of suit is commenced, the FDCA provides a 30-month stay on the FDA’s approval of the competitor’s application.

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Annora’s notice letter does not provide a Paragraph IV certification against our other patents listed in the Orange Book.

On July 25, 2022, we filed a lawsuit in the US District Court for the District of New Jersey against Annora and its subsidiaries Hetero Labs Ltd., and Hetero USA, Inc., for infringement of our US patents identified in Annora’s Paragraph IV certification.

These patents are listed in the FDA’s Orange Book and cover TAVALISSE.

On July 25, 2022, we filed a lawsuit in the US District Court for the District of New Jersey against Annora and its affiliates, Hetero Labs Ltd., and Hetero USA, Inc., for infringement of our US patents identified in Annora’s Paragraph IV certification.

On September 21, 2022, Annora and its affiliates answered and counterclaimed for declaratory judgment of non-infringement and invalidity of the ’458, ’122, ’492, ’648, and ’504 patents.

We filed an answer to Annora’s counterclaims on October 12, 2022.

We intend to vigorously enforce and defend our intellectual property related to TAVALISSE.

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These events could harm our business and results of operations and cause our stock price to decline.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the US, we could be subject to additional reimbursement requirements, fines, sanctions and exposure under other laws which could have an adverse effect on our business, results of operations and financial condition.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the US, we could be subject to additional rebate or discount requirements, fines, sanctions and exposure under other laws which could have an adverse effect on our business, results of operations and financial condition.

We participate in the Medicaid Drug Rebate Program, as administered by the Centers for Medicare and Medicaid Services (CMS), the 340B Drug Pricing Program, and other federal and state government drug pricing programs in the US, and we may participate in additional government pricing programs in the future.

These programs generally require us to pay rebates or otherwise provide discounts to government payers in connection with drugs that are dispensed to beneficiaries/recipients of these programs.

In some cases, such as with the Medicaid Drug Rebate Program, the rebates are based on pricing metrics that we report on a monthly and quarterly basis to the government agencies that administer the programs.

In some cases, such as with the Medicaid Drug Rebate

Program, the rebates are based on pricing metrics that we report on a monthly and quarterly basis to the government agencies that administer the programs.

Pricing requirements and rebate/discount calculations are complex, vary among products and programs, and are often subject to interpretation by governmental or regulatory agencies and the courts.

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● the availability of third-party coverage and adequate reimbursement and the willingness of patients to pay out-of-pocket in the absence of such coverage and adequate reimbursement.

Efforts to educate the physicians, patients, healthcare payors and others in the medical community on the benefits of our product candidates may require significant resources and may not be successful.

Efforts to educate the physicians, patients, healthcare payors and others in the medical community on the

benefits of our product candidates may require significant resources and may not be successful.

If any of our product candidates are approved, if at all, but do not achieve an adequate level of acceptance, we may not generate significant product revenue and we may not become profitable on a sustained basis.

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We may seek another collaborator or licensee in the future for further clinical development and commercialization of fostamatinib, as well as our other clinical programs, which we may not be able to obtain on commercially reasonable terms or at all.

We believe that our existing capital resources will be sufficient to support our current and projected funding requirements, including the continued commercial launch of TAVALISSE in the US, through at least the next 12 months.

We believe that our existing capital resources will be sufficient to support our current and projected funding requirements, including the continued commercialization of TAVALISSE in the US as well as the potential commercial launch of olutasidenib, through at least the next 12 months.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

Because of the numerous risks and uncertainties associated with commercial launch,

the development of our product candidates and other research and development activities, we are unable to estimate with certainty our future product revenues, our revenues from our current and future collaborative partners, the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials and other research and development activities.

Because of the numerous risks and uncertainties associated with commercial launch, the development of our product candidates and other research and development activities, we are unable to estimate with certainty our future product revenues, our revenues from our current and future collaborative partners, the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical trials and other research and development activities.

We will continue to need additional capital and the amount of future capital needed will depend largely on the success of our commercial launch of TAVALISSE and the success of our internally developed programs as they proceed in later and more expensive clinical trials, including any additional clinical trials that we may decide to conduct with respect to fostamatinib.

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The Credit Agreement also contains a number of other affirmative and restrictive covenants.

See “Note 9 – Debt” and “Note 12 – Subsequent Events” to our “Notes to Condensed Financial Statements” contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details of the Credit Agreement.

See “Note 9 – Debt” to our “Notes to Condensed Financial Statements” contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional details of the Credit Agreement.

These and other terms in the Credit Agreement have to be monitored closely for compliance and could restrict our ability to grow our business or enter into transactions that we believe would be beneficial to our business.

Our business may not generate cash flow from operations in the future sufficient to service our debt and support our growth strategies.

If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as restructuring our debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.

If we are unable to generate such

cash flow, we may be required to adopt one or more alternatives, such as restructuring our debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.

Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.

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The Credit Agreement provides for a $60.0 million term loan credit facility.

At the Closing Date, $10.0 million was funded (Tranche 1), in May 2020, an additional $10.0 million was funded (Tranche 2), and in February 2022, an additional $10.0 million was funded (Tranche 3).

On July 27, 2022, we entered into the Third Amendment to our Credit Agreement with MidCap and at the closing of the Third Amendment, additional $10.0 million was funded.

Following the amendment, to date, the Credit Agreement gives us the ability to access the following available credit facilities, an additional $20.0 million term aggregate principal amount of term loan facility subject to the satisfaction of applicable funding conditions which include minimum net revenue and compliance with financial covenants set forth in the Credit Agreement.

At the Closing Date, $10.0 million was funded (Tranche 1), in May 2020, an additional $10.0 million was funded (Tranche 2), in February 2022, an additional $10.0 million was funded (Tranche 3), and in July 2022, an additional $10.0 million was funded (Tranche 4).

To date, the Credit Agreement gives us the ability to access the following available credit facilities, an additional $20.0 million term aggregate principal amount of term loan facility subject to the satisfaction of applicable funding conditions which include minimum net revenue and compliance with financial covenants set forth in the Credit Agreement.

If we are unable to satisfy these or other required conditions, we would not be able to draw down the remaining tranches of financing and may not be able to obtain alternative financing on commercially reasonable terms or at all, which could adversely impact our business.

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Our future funding requirements will depend upon many factors, many of which are beyond our control, including, but not limited to:

● the costs to commercialize fostamatinib for the treatment of ITP in the US, or any other future product candidates, if any such candidate receives regulatory approval for commercial sale;

● the costs to commercialize fostamatinib for the treatment of ITP in the US, or any other future product

candidates, if any such candidate receives regulatory approval for commercial sale;

● the progress and success of our clinical trials and preclinical activities (including studies and manufacture of materials) of our product candidates conducted by us;

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Our success as a company is uncertain due to our history of operating losses and the uncertainty of any future profitability.*

For the six months ended June 30, 2022, we recognized loss from operations of $39.2 million primarily due to higher operating and non-operating expenses, partly offset by our net product sales and collaboration revenues.

For the nine months ended September 30, 2022, we recognized loss from operations of $57.6 million primarily due to higher operating and non-operating expenses, partly offset by our net product sales and collaboration revenues.

We have historically incurred losses from operations each year since we were incorporated in June 1996 other than in fiscal year 2010, due in large part to the significant research and development expenditures required to identify and validate new product candidates and pursue our development efforts, and the costs of our ongoing commercial efforts for TAVALISSE.

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If our future drug candidates fail or do not gain regulatory approval, or if our drugs do not achieve sustainable market acceptance, we may not be profitable.

As of June 30, 2022, we had an accumulated deficit of approximately $1.4 billion.

As of September 30, 2022, we had an accumulated deficit of approximately $1.4 billion.

The extent of our future losses or profitability, if any, especially due to the ongoing COVID-19 pandemic, is highly uncertain.

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While our existing collaborative agreements typically provide that we retain milestone payments, royalty rights and/or revenue sharing with respect to drugs developed from certain compounds or derivative compounds, any such payments or royalty rights may be at reduced rates, and disputes may arise over the application of payment provisions or derivative payment provisions to such drugs, and we may not be successful in such disputes.

For example, in September 2018,

BerGenBio served us with a notice of arbitration seeking declaratory relief related to the interpretation of provisions under our June 2011 license agreement, particularly as they relate to the rights and obligations of the parties in the event of the license or sale of a product in the program by BerGenBio and/or the sale of BerGenBio to a third party.

For example, in September 2018, BerGenBio served us with a notice of arbitration seeking declaratory relief related to the interpretation of provisions under our June 2011 license agreement, particularly as they relate to the rights and obligations of the parties in the event of the license or sale of a product in the program by BerGenBio and/or the sale of BerGenBio to a third party.

The arbitration panel dismissed four of the six declarations sought by BerGenBio, and we thereafter consented to one of the remaining declarations requested by BerGenBio.

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For example, in June 2022, we received a notice letter from Annora advising that it has filed an ANDA with the FDA for a generic version of TAVALISSE and asserting that certain patents related to TAVALISSE that are listed in the Orange Book will not be infringed by Annora’s proposed product, are invalid and/or are unenforceable.

In July 2022, we filed a lawsuit in the US District Court for the District of New Jersey against Annora for infringement of those US patents.

In July 2022, we filed a lawsuit in the US District Court for the District of New Jersey against Annora and its subsidiaries for infringement of those US patents.

In September 2022, Annora and its subsidiaries answered and counterclaimed for declaratory judgment of non-infringement and invalidity of those patents.

We intend to vigorously enforce and defend our intellectual property rights related to TAVALISSE.

Should Annora or any other third parties receive FDA approval of an ANDA for a generic version of fostamatinib or a 505(b)(2) NDA with respect to fostamatinib, and if our patents covering fostamatinib were held to be invalid (or if such competing generic versions of fostamatinib were found to not infringe our patents), then they could introduce generic versions of fostamatinib or other such 505(b)(2) products before our patents expire, and the resulting competition would negatively affect our business, financial condition and results of operations.

Please also see the risk factor entitled, “If manufacturers obtain approval for generic versions of TAVALISSE, or of products with which we compete, our business may be harmed.”

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● we will develop additional proprietary technologies that are patentable;

● we will obtain a supplemental protection certificate that will extend the protection afforded by the patent to the product with a marketing authorization;

● the patents of others will not have a negative effect on our ability to do business.

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We believe that there may be significant litigation in the industry regarding patent and other intellectual property rights, and we do not know if our collaborators or we would be successful in any such litigation.

Any legal action against our collaborators or us claiming damages or seeking to enjoin commercial activities relating to the affected products, our methods or processes could:

Any legal action against our collaborators or us claiming damages or seeking to enjoin

commercial activities relating to the affected products, our methods or processes could:

● require our collaborators or us to obtain a license to continue to use, manufacture or market the affected products, methods or processes, which may not be available on commercially reasonable terms, if at all;

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85, the Company’s California NOL carryforwards are suspended for tax years 2020, 2021, and 2022, but the period to use these carryovers was extended.

Further, the Tax Act requires the taxpayers to capitalize Research

and Experimental (R&E) expenditures under Section 174 of the Internal Revenue Code, as amended (Code), effective for taxable years beginning after December 31, 2021, which will reduce our NOLs beginning in 2022.

Further, the Tax Act requires the taxpayers to capitalize Research and Experimental (R&E) expenditures under Section 174 of the Internal Revenue Code, as amended (Code), effective for taxable years beginning after December 31, 2021, which will reduce our NOLs beginning in 2022.

R&E expenditures attributable to US-based research must be amortized over a period of 5 years and R&E expenditures attributable to research conducted outside of the US must be amortized over a period of 15 years.

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Although we have completed studies to provide reasonable assurance that an ownership change limitation would not apply, we cannot be certain that a taxing authority would reach the same conclusion.

If, after a review or audit, an ownership change limitation were to apply, utilization of our domestic NOLs and tax credit carryforwards could be limited in future periods and a portion of the carryforwards could expire before being available to reduce future income tax liabilities.

If, after a review or audit, an ownership change limitation were to apply,

utilization of our domestic NOLs and tax credit carryforwards could be limited in future periods and a portion of the carryforwards could expire before being available to reduce future income tax liabilities.

Moreover, our ability to utilize our NOLs is conditioned upon us achieving profitability and generating US federal taxable income.

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Our business requires us to generate meaningful revenue from royalties and licensing agreements.

To date, we have not received any revenue from royalties for the commercial sale of drugs, and we do not know when we will receive any such revenue, if at all.

To date, we have not recognized material amount of revenue from royalties for the commercial sale of drugs, and we do not know when we will be able to generate such meaningful revenue in the future.

Securities class action lawsuits or other litigation could result in substantial damages and may divert management’s time and attention from our business.

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If our competitors develop technologies that are more effective than ours, our commercial opportunity will be reduced or eliminated.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant

technological change.

Many of the drugs that we are attempting to discover will be competing with existing therapies.

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The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our common stock:

● the progress and success of our clinical trials and preclinical activities (including studies and manufacture

of materials) of our product candidates conducted by us;

● the progress and success of our clinical trials and preclinical activities (including studies and manufacture of materials) of our product candidates conducted by us;

● our ability to continue to sell TAVALISSE in the US;

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Further, should the UK diverge from the EU from a regulatory perspective in relation to medicinal products, tariffs could be put into place in the future.

We could therefore, both now and in the future, face significant additional expenses (when compared to the position prior to the end of the Transition Period) to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business.

We could therefore, both now and in the future, face significant additional expenses

(when compared to the position prior to the end of the Transition Period) to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business.

Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us.

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We do not know if we will be able to maintain such consulting agreements or that such scientific advisors will not enter into consulting arrangements with competing pharmaceutical or biotechnology companies, any of which may have a detrimental impact on our research objectives and could have an adverse effect on our business, financial condition and results of operations.

While we have a strong compliance effort in place to ensure we are complying with all requirements of law, our consulting or advisory contracts with our scientific consultants and advisors may be scrutinized under the Anti-Kickback Statute, the UK Bribery Act 2010, and other similar national legislation, which prohibits, among other things, companies from offering or paying anything of value as remuneration for ordering, purchasing, or recommending the ordering or purchasing of pharmaceutical and biological products that may be paid for, in whole or in part, by Medicare, Medicaid, or another federal healthcare program.

While we have a strong compliance effort in place to ensure we are complying with all requirements of law, our consulting or advisory contracts with our scientific consultants and advisors may be scrutinized under the Anti-Kickback Statute, the UK Bribery Act 2010, and other similar national and state-level legislation, which prohibit, among other things, companies from offering or paying anything of value as remuneration for ordering, purchasing, or recommending the ordering or purchasing of pharmaceutical and biological products that may be paid for, in whole or in part, by Medicare, Medicaid, or another federal healthcare program.

Although there are several statutory exceptions and regulatory safe harbors that may protect these arrangements from prosecution or regulatory sanctions, our consulting and advising contracts may be subject to scrutiny if they do not fit squarely within an available exception or safe harbor.

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The implementation of the rule has been delayed by ongoing litigation and a Congress-passed moratorium on implementation before January 1, 2026.

The rule also creates a new safe harbor manufacturer for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between PBMs and manufacturers, the implementation of which have also been delayed until January 1, 2026.

The rule would create a new safe harbor for manufacturer price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between PBMs and manufacturers, the implementation of which have also been delayed until January 1, 2026.

Most recently, on June 16, 2022, the Federal Trade Commission issued a policy statement stating its intension to increase enforcement scrutiny of “exclusionary rebates” to PBMs and other intermediaries that “foreclose competition.”

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More recently, the temporary suspension of the 2% reduction in Medicare payments to providers that was instituted in the wake of the COVID-19 pandemic expired on July 1, 2022, with the 2% reduction set to remain in effect until 2031 unless additional Congressional action is taken.

Most recently, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which, among other reforms, allows Medicare to:

beginning in 2026, establish a “maximum fair price” for certain pharmaceutical and biological products covered under Medicare Parts B and D;

beginning in 2023, penalize drug companies that raise prices for products covered under Medicare Parts B and D faster than inflation;

and beginning in 2025 impose new discounts obligations on pharmaceutical and biological manufacturers for products covered under Medicare Part D.

The Biden administration has also taken executive action to address drug pricing and other healthcare policy changes .

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In response to the Executive Order, on September 9, 2021, HHS issued a Comprehensive Plan for Addressing High Drug Prices that identified potential legislative policies and administrative tools that Congress and the agency can pursue in order to make drug prices more affordable and equitable, improve and promote competition throughout the prescription drug industry, and foster scientific innovation.

Most recently, on May 10, 2022, the Biden Administration announced a plan to combat inflation that included a call to Congress to lower prescription drug costs and health premiums by allowing Medicare to negotiate drug prices, penalizing drug companies that raise prices faster than inflation, and making other needed reforms to lower drug prices.

Congress has also continued to conduct inquiries into the prescription drug industry’s pricing practices.

Furthermore, the increased emphasis on managed healthcare in the US and on country and regional pricing and reimbursement controls in the EU and the UK will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our sales and results of operations.

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however, we determined the trial would be sufficiently powered with 280 patients to potentially provide a clinically meaningful result and determine the efficacy and safety of fostamatinib in hospitalized COVID-19 patients.

We expect to report top-line results in fourth quarter of 2022 and if the data is positive, file an EUA with the FDA.

On November 1, 2022, we announced the top-line results of the clinical trial.

The trial approached but did not meet statistical significance in the primary efficacy endpoint.

We are evaluating the opportunity and next steps in collaboration with our partner, the US Department of Defense.

Section 564 of the FDCA allows the FDA to authorize the shipment of drugs, biological products, or medical devices that either lack required approval, licensure, or clearance (unapproved products), or are approved but are to be used for unapproved ways to diagnose, treat, or prevent serious diseases or conditions in the event of an emergency declaration by the HHS Secretary.

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We lack the capability to manufacture compounds for clinical development, and we rely on and intend to continue relying on third parties for commercial supply, manufacturing and distribution if any of our product candidates which receive regulatory approval and we may be unable to obtain required material or product in a timely manner, at an acceptable cost or at a quality level required to receive regulatory approval.

We currently do not have the manufacturing capabilities or experience necessary to produce TAVALISSE or any product candidates for clinical trials, including fostamatinib in wAIHA, COVID-19, our IRAK inhibitor program and our RIPK1 inhibitor program.

We currently do not have the manufacturing capabilities or experience necessary to produce TAVALISSE or any product candidates for clinical trials, including fostamatinib in our ongoing clinical trials for certain indications, and for olutasidenib.

We currently use one manufacturer of fostamatinib.

We do not currently have, nor do

we plan to acquire the infrastructure or capability to supply, manufacture or distribute preclinical, clinical or commercial quantities of drug substances or products.

We do not currently have, nor do we plan to acquire the infrastructure or capability to supply, manufacture or distribute preclinical, clinical or commercial quantities of drug substances or products.

For each clinical trial of our unpartnered product candidates, we rely on third-party manufacturers for the active pharmaceutical ingredients, as well as various manufacturers to manufacture starting components, excipients and formulated drug products.

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Our third-party manufacturers could terminate or decline to renew our manufacturing arrangements based on their own business priorities, at a time that is costly or inconvenient for us.

If we are unable to contract for the production of materials in sufficient quantity and of sufficient quality on acceptable terms, our planned clinical trials may be significantly delayed.

If we are unable to contract for the production of

materials in sufficient quantity and of sufficient quality on acceptable terms, our planned clinical trials may be significantly delayed.

Manufacturing delays could postpone the filing of our IND applications and/or the initiation or completion of clinical trials that we have currently planned or may plan in the future.

Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA, the Drug Enforcement Administration, the European Medicines Agency, national competent authorities in the EU and UK and other federal and state government and regulatory agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.

We do not have control over third-party manufacturers’

compliance with these regulations and standards and they may not be able to comply.

We do not have control over third-party manufacturers’ compliance with these regulations and standards and they may not be able to comply.

Switching manufacturers may be difficult because the number of potential manufacturers is limited.

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The FDA, the EMA and other comparable international regulatory agencies may condition approval of our product candidates on the completion of such post-marketing clinical studies.

These post-marketing studies may suggest that a product causes undesirable side effects or may present a risk to the patient.

These post-marketing studies may suggest that a

product causes undesirable side effects or may present a risk to the patient.

Additionally, the FDA may require Risk Evaluation and Mitigation Strategies (REMS) to help ensure that the benefits of the drug outweigh its risks.

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In addition, delays or rejections may be encountered based upon additional government regulation from future legislation or administrative action or changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.

injunction, adverse publicity, as well as other regulatory action against our potential products or us.

Failure to comply with applicable FDA or other applicable regulatory requirements may result in criminal prosecution, civil penalties, recall or seizure of products, total or partial suspension of production or injunction, adverse publicity, as well as other regulatory action against our potential products or us.

Additionally, we have limited experience in conducting and managing the clinical trials necessary to obtain regulatory approval.

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Apart from our internal discovery efforts, our strategy to expand our development pipeline is also dependent on our ability to successfully identify and acquire or in-license relevant product candidates.

In July 2022, we entered into a license and transition services agreement with Forma for an exclusive license to develop, manufacture and commercialize olutasidenib, Forma’s proprietary inhibitor of mIDH1, for any uses worldwide, including for the treatment of R/R AML and other malignancies.

Forma has submitted an NDA for olutasidenib to the FDA with action date for the FDA to complete its review under the PDUFA on February 15, 2023.

If approved, olutasidenib has the opportunity to be our second commercial product and is highly synergistic with our existing hematology-oncology focused commercial infrastructure.

Forma has submitted an NDA for olutasidenib to the FDA and the PDUFA action date is February 15, 2023.

If approved, olutasidenib has the opportunity to be our second commercial product and is highly synergistic with our existing hematology-oncology focused commercial and medical affairs infrastructure.

The in-licensing and acquisition of product candidates is a highly competitive area, and many other companies are pursuing the same or similar product candidates to those that we may consider attractive.

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If we are unable to develop suitable product candidates through internal discovery efforts, whether due to the impacts of the ongoing COVID-19 pandemic or otherwise, or if we are unable to successfully obtain rights to additional suitable product candidates, our business and prospects for growth could suffer.

Even if we succeed in our efforts to obtain rights to suitable product candidates, the competitive business environment may result in higher acquisition or licensing costs, and our investment in these potential products will remain subject to the inherent risks associated with the development and commercialization of new medicines.

associated with the development and commercialization of new medicines.

In certain circumstances, we may also be reliant on the licensor for the continued development of the in-licensed technology and their efforts to safeguard their underlying intellectual property.

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Furthermore, we could assume unknown or contingent liabilities or incur unanticipated expenses.

Any acquisitions or

investments made by us also could result in our spending significant amounts, issuing dilutive securities, assuming or incurring significant debt obligations and contingent liabilities, incurring large one-time expenses and acquiring intangible assets that could result in significant future amortization expense and significant write-offs, any of which could harm our operating results.

Any acquisitions or investments made by us also could result in our spending significant amounts, issuing dilutive securities, assuming or incurring significant debt obligations and contingent liabilities, incurring large one-time expenses and acquiring intangible assets that could result in significant future amortization expense and significant write-offs, any of which could harm our operating results.

We have obtained orphan drug designation from the FDA for fostamatinib for the treatment of ITP and wAIHA, but we may not be able to obtain or maintain orphan drug designation or exclusivity for fostamatinib for the treatment of ITP, wAIHA or our other product candidates, or we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.*

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● pricing and the availability of coverage and adequate reimbursement by third-party payors and government authorities;

● a positive HTA assessment concluding that the product is cost-effective and the HTA bodies issuing a positive recommendation for the use of the product as a first or second line of treatment for the granted therapeutic indication;

● the prevalence and severity of adverse side effects;

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decreasing the portion of costs payers will cover, ceasing to provide full payment for certain products depending on outcomes or not covering certain products at all.

If payers implement any of the foregoing with respect to our products, it would have an adverse impact on our revenue and results of operations.

implement any of the foregoing with respect to our products, it would have an adverse impact on our revenue and results of operations.

If coverage is not available, or reimbursement is limited, we, or any of our collaborative partners, may not be able to successfully commercialize TAVALISSE or any of our product candidates in some jurisdictions.

Even if coverage is provided, the approved reimbursement amount may not be at a rate that covers our costs, including research,

development, manufacture, sale and distribution.

Even if coverage is provided, the approved reimbursement amount may not be at a rate that covers our costs, including research, development, manufacture, sale and distribution.

In the US, no uniform policy of coverage and reimbursement for products exists among third-party payors;

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In some countries, the proposed pricing for a drug must be approved before it may be lawfully marketed ).

In addition, authorities in some countries impose additional obligations, such as health technology assessments (HTAs), which assess the performance of a drug in comparison with its cost.

In addition, authorities in some countries impose additional obligations, such as HTAs, which assess the performance of a drug in comparison with its cost.

The outcome of HTA assessments is judged on a national basis and some payers may not reimburse the use of our products or may reduce the rate of reimbursement for our products and as a result, revenue from such products may decrease.

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As a result, we will be required to expend significant time and resources to maintain a sales force that is credible and compliant with applicable laws in marketing TAVALISSE for patients with chronic ITP who have had an insufficient response to a previous treatment.

In addition, we must continually train our sales force to ensure that an appropriate and compliant message about TAVALISSE is being delivered.

If we are unable to effectively train our sales force and equip them with compliant and effective materials, including medical and sales literature to help them appropriately inform and educate health care providers regarding the potential benefits and proper administration of TAVALISSE, our efforts to successfully commercialize TAVALISSE could be put in jeopardy, which would negatively impact our ability to

generate product revenues.

In addition, we must continually train our sales force to ensure that an appropriate and compliant message

about TAVALISSE is being delivered.

We have established our distribution, sales, marketing and market access capabilities, all of which will be necessary to successfully commercialize TAVALISSE.

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If they are unable to perform effectively or if they do not provide efficient distribution of the medicine to patients, our business may be harmed.

In addition, we actively participate in medical conferences and exhibits, such as the American Society of Clinical Oncology (ASCO) and American Society of Hematology (ASH) Annual Meeting & Exposition that are significant opportunities for us to educate physicians and key opinion leaders about TAVALISSE.

In addition, we actively participate in medical conferences and exhibits, such as the ASCO and ASH Annual Meeting & Exposition that are significant opportunities for us to educate physicians and key opinion leaders about TAVALISSE.

ASCO was held in Chicago, Illinois as well as virtually in June 2022, and ASH is scheduled to take place in New Orleans, Louisiana as well as virtually in December 2022, However, it is uncertain if in the future other key conferences will be held live, virtually, postponed or cancelled.

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Varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent regulatory approval of fostamatinib for any individual, additional indications.

Due to the ongoing COVID-19 pandemic, it is also possible that we could experience delays in the timing of our interactions with regulatory authorities due to absenteeism by governmental employees or the diversion of regulatory authority efforts and attention to approval of other therapeutics or other activities related to COVID-19 or other public health emergencies, which could delay or limit our ability to make planned regulatory submissions or develop and commercialize our product candidates on anticipated timelines.

For example, in June 2022, we announced that the top-line results from our Phase 3 study in wAIHA did not demonstrate statistical significance in the primary efficacy endpoint of durable hemoglobin response in the overall study population.

While we conducted an in-depth analysis of these data to better understand differences in patient characteristics and outcomes and submitted these findings to the FDA, in October 2022, we announced that we received guidance from the FDA’s of these findings.

Based on this guidance, we do not expect to file an sNDA for wAIHA at this time.

Due to the ongoing COVID-19 pandemic, it is also possible that we could experience delays in the timing of

our interactions with regulatory authorities due to absenteeism by governmental employees or the diversion of regulatory authority efforts and attention to approval of other therapeutics or other activities related to COVID-19 or other public health emergencies, which could delay or limit our ability to make planned regulatory submissions or develop and commercialize our product candidates on anticipated timelines.

In addition, delays or rejections may be encountered based upon changes in regulatory policy for product approval during the period of product development and regulatory agency review, which may cause delays in the approval or rejection of an application for fostamatinib or for our other product candidates.

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● limit who may call a special meeting of stockholders;

● prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a

meeting of our stockholders;

● prohibit stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;

● establish advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholder meetings;

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● provide that the authorized number of directors may be changed only by a resolution of our board of directors.

In addition, Section 203 of the Delaware General Corporation Law, which imposes certain restrictions relating to transactions with major stockholders, may discourage, delay or prevent a third party from acquiring us.

In addition, Section 203 of the Delaware General Corporation Law (DGCL), which imposes certain restrictions relating to transactions with major stockholders, may discourage, delay or prevent a third party from acquiring us.

Our bylaws designate a state or federal court located within the State of Delaware as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our current or former directors, officers, stockholders, or other employees.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of us under Delaware law, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or other employee of the Company to us or our stockholders, (iii) any action asserting a claim against us or any of our directors, officers, or other employees arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation and bylaws (as either may be amended from time to time), (iv) any action asserting a claim against us governed by the internal affairs doctrine, or (v) any other action asserting an “internal corporate claim,” as defined under Section 115 of the DGCL.

The forgoing provisions do not apply to any claims arising under the Securities Act and, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any action asserting a claim arising under the Securities Act.

These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our current or former directors, officers, or other employees, which may discourage lawsuits with respect to such claims.

There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings.

It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find the choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

Increasing use of social media could give rise to liability and may harm our business.

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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-Q

Item 1A. Risk Factors