What changed in this filing

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Item 1A. Risk Factors

2022-11-02 compared with 2022-08-02 · 74 added, 100 removed, 990 unchanged (15% of the section changed)

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In addition, the impact of the ongoing COVID-19 pandemic has resulted in delays in processing reauthorizations and modifications to program benefits by insurers, making it difficult for patients to obtain or maintain favorable coverage decisions for our products.

Furthermore, we cannot predict to what extent the COVID-19 pandemic, depending on its scale and duration, may disrupt global healthcare systems and access to our products or result in a widespread loss of individual health insurance coverage due to unemployment or trends in employee attrition, a shift from commercial payor coverage to government payor coverage, or an increase in demand for patient assistance and/or free drug programs, any of which would adversely affect access to our products and our net sales.

Furthermore, we cannot predict to what extent the COVID-19 pandemic, depending on its scale and duration, an economic recession, changes in fiscal policy or general increase in unemployment rates may disrupt global healthcare systems and access to our products or result in a widespread loss of individual health insurance coverage due to unemployment or trends in employee attrition, a shift from commercial payor coverage to government payor coverage, or an increase in demand for patient assistance and/or free drug programs, any of which would adversely affect access to our products and our net sales.

In some foreign countries, particularly Canada and the countries of Europe, Latin America and Asia Pacific, the pricing of prescription pharmaceuticals is subject to strict governmental control.

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There are, and may continue to be, judicial challenges to those efforts.

Additionally, in August 2022, the Inflation Reduction Act of 2022 was passed by the U.S.

Congress which, among other things, includes policies that are designed to have a direct impact on drug prices and reduce drug spending by the federal government, which will take effect in 2023.

This legislation contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.

Department of Health and Human Services that would require manufacturers to charge a negotiated “maximum fair price”

for certain selected drugs covered by Medicare or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on Part D drugs.

Legislative, administrative, and private payor efforts to control drug costs span a range of proposals, including drug price negotiation, Medicare Part D redesign, drug price inflation rebates, international mechanisms, generic drug promotion and anticompetitive behavior, manufacturer reporting, and reforms that could impact therapies utilizing the accelerated approval pathway.

We cannot predict the ultimate content, timing or effect of any changes to the Affordable Care Act or other federal and state healthcare policy reform efforts including those aimed at drug pricing.

We cannot predict the ultimate content, timing or effect of any changes to the Affordable Care Act, the Inflation Reduction Act, or other federal and state healthcare policy reform efforts including those aimed at drug pricing.

There is no assurance that federal or state health care reform will not adversely affect our future business and financial results, and we cannot predict how future federal or state legislative, judicial or administrative changes relating to healthcare policy will affect our business.

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and in Israel, and VYONDYS 53 and AMONDYS 45 were approved for marketing in the U.S., we may not receive approval to commercialize these products in additional countries.

In November 2016, we submitted a MAA for eteplirsen to the EMA and the application was validated in December 2016.

In November 2016, we submitted a MAA for eteplirsen to the European Medicines Agency (the "EMA") and the application was validated in December 2016.

As we announced on June 1, 2018, the CHMP of the EMA adopted a negative opinion for eteplirsen.

In September 2018, the CHMP of the EMA confirmed its negative opinion for eteplirsen, and the EC adopted the CHMP opinion in December 2018.

In September 2018, the CHMP of the EMA confirmed its negative opinion for eteplirsen, and the European Commission adopted the CHMP opinion in December 2018.

In order to market any product in a country outside of the U.S., we must comply with numerous and varying regulatory requirements for approval in those countries regarding demonstration of evidence of the product’s safety and efficacy and governing, among other things, labeling, distribution, advertising, and promotion, as well as pricing and reimbursement of the product.

Obtaining marketing approval in a country outside of the U.S.

marketing approval in a country outside of the U.S.

is an extensive, lengthy, expensive and uncertain process, and the regulatory authority may reject an application or delay, limit or deny approval of any of our products for many reasons, including:

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If this option is exercised, Roche will have sole control over and decision-making authority with respect to the commercialization of such products outside the U.S.

We cannot predict whether historical revenues from eteplirsen, golodirsen and casimersen through our EAP outside the U.S.

will continue or whether we will be able to continue to distribute eteplirsen, golodirsen and casimersen through our EAP.

Historical revenues from eteplirsen, golodirsen and casimersen through our EAP outside the U.S.

may not continue and we may not be able to continue to distribute eteplirsen, golodirsen and casimersen through our EAP.

We established a global EAP for eteplirsen, golodirsen and casimersen in some countries where these products currently have not been approved.

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Even if a healthcare provider is interested in obtaining access to our products for its patient through the EAP, the patient will not be able to obtain access to our products if funding for the drug is not secured.

Any failure to maintain revenues from sales of eteplirsen, golodirsen or casimersen through our EAP and/or to generate revenues from commercial sales of these products exceeding historical sales through our EAP could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Our business and financial results have not yet been adversely affected by Russia's invasion of Ukraine.

As our revenue from countries outside of the United States increases, our access to patients in that region through our EAP and our ability to generate revenue from commercial sales of our products in Russia or Ukraine may be adversely affected.

The United States and other nations have raised the possibility of sanctions on companies that do business with Russia or its allies, including Belarus.

We also may be

adversely impacted by sanctions imposed on third parties with which we do business, such as third party distributors and service providers of our EAP.

Any failure to maintain revenues from sales of eteplirsen, golodirsen or casimersen through our EAP and/or to generate revenues from commercial sales of these products exceeding historical sales due to issues under our EAP or due to global instability, like Russia's invasion of Ukraine, could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Failure to obtain or maintain regulatory exclusivity for our products could result in our inability to protect our products from competition and our business may be adversely impacted.

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(ii) gene therapies, such as Pfizer, Solid Biosciences (in partnership with Ultragenyx), Regenxbio and Bristol-Myers Squibb;

(iii) gene editing, including CRISPR/Cas 9 approaches, such as Vertex Pharmaceuticals, CRISPR Therapeutics, Editas Medicine, Beam Therapeutics Inc.

(iii) gene editing, including CRISPR/Cas 9 approaches, such as Myogene Bio, Vertex Pharmaceuticals, CRISPR Therapeutics, Editas Medicine, Beam Therapeutics Inc.

(in partnership with Pfizer) and Precision Biosciences (in partnership with Eli Lilly);

(iv) other disease modifying approaches, such as PTC Therapeutics, which has a small molecule candidate, ataluren, that targets nonsense mutations;

and (v) other approaches that may be palliative in nature or potentially complementary with our products and product candidates and that are or were once being developed by Santhera, Catabasis, Fibrogen, ReveraGen, Capricor Therapeutics (in partnership with Nippon Shinyaku), BioPhytis, Mallinckrodt, Antisense Therapeutics, Italfarmaco and Edgewise Therapeutics.

Although BioMarin announced on May 31, 2016 its intent to discontinue clinical and regulatory development of drisapersen as well as its other clinical stage candidates, BMN 044, BMN 045 and BMN 053, then-currently in Phase 2 studies for distinct forms of Duchenne, it further announced in 2021 its plans to submit an IND for BMN-351, an oligonucleotide therapy.

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In addition, we are aware of many pharmaceutical and biotechnology companies that are actively engaged in research and development using platform technologies that may be viewed as competing with ours including those companies mentioned immediately above, as well as other companies including, but not limited to Alnylam Pharmaceuticals, Inc., Tekmira Pharmaceuticals Corp., Deciphera Pharmaceuticals, Ionis Pharmaceuticals, Inc., Roche Innovation Center Copenhagen (formerly Santaris Pharma A/S), Takeda, Biogen, Moderna Therapeutics, Stoke Therapeutics, Fulcrum Therapeutics, Synthena AG, DTx Pharma, PYC Therapeutics, and Sanofi.

disease space, including, but not limited to, Astellas Pharma, Biogen Inc., Arrowhead Pharmaceuticals, Ionis, Alexion Pharmaceuticals, Inc., Sanofi, Takeda, Eli Lilly, Alnylam Pharmaceuticals, Inc., Moderna Therapeutics, Inc., Akashi, Catabasis, Capricor Therapeutics, Oxford University, Vertex Pharmaceuticals, and Editas Medicine.

Additionally, several companies and institutions have entered into collaborations or other agreements for the development of product candidates, including mRNA, gene therapy and gene editing (CRIPSR and AAV, among others) and small molecule therapies that are potential competitors for therapies being developed in the muscular dystrophy, neuromuscular and rare disease space, including, but not limited to, Astellas Pharma, Biogen Inc., Arrowhead Pharmaceuticals, Ionis, Alexion Pharmaceuticals, Inc., Sanofi, Takeda, Eli Lilly, Alnylam Pharmaceuticals, Inc., Moderna Therapeutics, Inc., Akashi, Catabasis, Capricor Therapeutics, Oxford University, Vertex Pharmaceuticals, and Editas Medicine.

If any of our competitors are successful in obtaining regulatory approval for any of their product candidates, it may limit our ability to enter into the market, gain market share or maintain market share in the Duchenne space or other diseases targeted by our platform technologies, products and product candidate pipeline.

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We have entered into multiple collaborations, including with Roche, Nationwide, Duke University, Genethon, StrideBio, University of Florida, Genevant Sciences, Dyno Therapeutics, Selecta Biosciences, GenEdit and Hansa Biopharma.

We may not realize the anticipated benefits of such collaborations, and the anticipated benefits of any future collaborations or strategic relationships, each of which involves numerous risks, including:

realize the anticipated benefits of such collaborations, and the anticipated benefits of any future collaborations or strategic relationships, each of which involves numerous risks, including:

collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration;

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Roche’s development and commercialization activities in the territories where it is the lead party may adversely impact our own efforts in the U.S.

Failure by Roche to meet its obligations under the collaboration agreement, to apply sufficient efforts at developing and commercializing collaboration products, or to comply with applicable legal or regulatory requirements, may materially adversely affect our business and our results of operations.

and our results of operations.

In addition, to the extent we rely on Roche to commercialize any products upon obtaining regulatory approval, we may receive less revenues than if we commercialized these products ourselves, which could materially harm our prospects.

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We may not be able to initiate or continue clinical trials if we cannot enroll the required eligible patients per protocol to participate in the clinical trials required by the FDA or the EMA or other regulatory agencies.

Our ability to successfully initiate,

enroll and complete a clinical trial in any foreign country is subject to numerous risks unique to conducting business in foreign countries, including:

Our ability to successfully initiate, enroll and complete a clinical trial in any foreign country is subject to numerous risks unique to conducting business in foreign countries, including:

difficulty in establishing or managing relationships with contract research organizations (“CROs”) and physicians;

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In addition, the impact of COVID-19 has caused disruptions and may cause delays in some of our clinical trials, and delays of reviews and approvals by the FDA and other health authorities.

The recent responses to COVID-19 by healthcare providers and

regulatory agencies could delay the commencement of clinical trials, site initiation, protocol compliance, the completion of clinical trials, including the completion of post-marketing requirements and commitments, slow down enrollment, and make the ongoing collection of data for patients enrolled in studies more difficult or intermittent.

The recent responses to COVID-19 by healthcare providers and regulatory agencies could delay the commencement of clinical trials, site initiation, protocol compliance, the completion of clinical trials, including the completion of post-marketing requirements and commitments, slow down enrollment, and make the ongoing collection of data for patients enrolled in studies more difficult or intermittent.

Results from pre-clinical and early‑stage clinical trials may not be indicative of safety or efficacy in late‑stage clinical trials, and pre-clinical and clinical trials may fail to demonstrate acceptable levels of safety, efficacy, and quality of our product candidates, which could prevent or significantly delay their regulatory approval.

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Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community.

In particular, our success will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product candidates, prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.

In particular, our success will depend upon physicians who specialize in the

treatment of genetic diseases targeted by our product candidates, prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.

In addition, ethical, social and legal concerns about gene therapy, genetic testing and genetic research could result in additional regulations or prohibiting the processes we may use.

Federal and state agencies, congressional committees and foreign governments have expressed their intentions to further regulate biotechnology.

More restrictive regulations or claims that our product

candidates are unsafe or pose a hazard could prevent us from commercializing any products.

More restrictive regulations or claims that our product candidates are unsafe or pose a hazard could prevent us from commercializing any products.

New government requirements may be established that could delay or prevent regulatory approval of our product candidates under development.

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Examples of such requests or requirements could include, but are not limited to, conducting additional or redesigned trials and procedures (e.g., additional safety data, patient muscle biopsies, dystrophin analyses and the use of assays), repeating or completing additional analysis of our data, or providing additional supportive data.

In addition, in the U.S., an FDA advisory committee or regulators may disagree with our data analysis, interpretations and conclusions at any point in the approval process, which could negatively impact the approval of our NDA or BLA or result in a decision by the Company not to proceed with an NDA or BLA submission for a product candidate based on feedback from regulators.

In addition, in the U.S., an FDA advisory committee or regulators may disagree with our data analysis, interpretations and

conclusions at any point in the approval process, which could negatively impact the approval of our NDA or BLA or result in a decision by the Company not to proceed with an NDA or BLA submission for a product candidate based on feedback from regulators.

We may not have the resources required to meet regulatory requirements and successfully navigate what is generally a lengthy, expensive and extensive approval process for commercialization of drug product candidates.

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Within the CBER, the review of gene therapy and related products is consolidated in the Office of Cellular, Tissue and Gene Therapies, and the FDA has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews.

The CBER works closely with the National Institutes of Health (the “NIH”).

The CBER works closely with the

National Institutes of Health (the “NIH”).

The FDA and the NIH have published guidance documents with respect to the development and submission of gene therapy protocols.

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These final guidance documents pertain to the development of gene therapies for the treatment of specific disease categories, including rare diseases, and to manufacturing and long-term follow up issues relevant to gene therapy, among other topics.

The FDA also issued a new guidance document in September 2021 describing the FDA’s approach for determining whether two gene therapy products were the same or different for the purpose of assessing orphan

drug exclusivity.

In addition, the FDA can put an IND on hold if the information in an IND is not sufficient to assess the risks in pediatric patients.

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A RMAT designation is designed to accelerate approval for regenerative advanced therapies such as our gene therapy product candidates.

Priority review designation is intended to speed the FDA marketing application review timeframe for drugs that treat a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

Priority review designation is intended to speed the FDA marketing application review timeframe for drugs that treat a serious condition and, if approved, would provide a

significant improvement in safety or effectiveness.

PRIME is a scheme provided by the EMA to enhance support for the development of medicines that target an unmet medical need.

For drugs and biologics that have been designated as fast track products or breakthrough therapies, or granted access to the PRIME scheme, interaction and communication between the regulatory agency and the sponsor of the trial can help to identify the most efficient path for clinical development.

Sponsors of drugs with fast track products or breakthrough therapies may also be able to submit marketing applications on a rolling basis, meaning that the FDA may review portions of a marketing application before the sponsor submits the complete application to the FDA, if the sponsor pays the user fee upon submission of the first portion of the

marketing application.

For products that receive a priority review designation, the FDA's marketing application review goal is shortened to six months, as opposed to ten months under standard review.

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In addition, the process for adding new manufacturing capacity is lengthy and often causes delays in development efforts.

Any interruption of the development or operation of those facilities due to, among other reasons, events such as the ongoing COVID-19 pandemic, order delays for equipment or materials, equipment malfunctions, quality control and quality assurance issues, regulatory delays and possible negative effects of such delays on supply chains and expected timelines for product availability, production yield issues, shortages of qualified personnel, discontinuation of a facility or business or failure or damage to a facility by natural disasters, such as earthquakes or fires, could result in the cancellation of shipments, loss of product in the manufacturing process or a shortfall in supply of our products, product candidates or materials.

Any interruption of the development or operation of those facilities due to, among other reasons, order delays for equipment or materials, equipment malfunctions, quality control and quality assurance issues, regulatory delays and possible negative effects of such delays on supply chains and expected timelines for product availability, production yield issues, shortages of qualified personnel, discontinuation of a facility or business or failure or damage to a facility by natural disasters, such as earthquakes or fires, could result in the cancellation of shipments, loss of product in the manufacturing process or a shortfall in supply of our products, product candidates or materials.

If these third parties cease providing quality manufacturing and related services to us, and we are not able to engage appropriate replacements in a timely manner, our ability to manufacture our products or product candidates in sufficient quality and quantity required for our planned commercial, pre-clinical and clinical or EAPs, our various product research, development and commercialization efforts would be adversely affected.

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The operations at one of our partner sites could also be disturbed by man-made or natural disasters or public health pandemics or epidemics or other business interrupts.

For example, a significant outbreak of COVID-19 at one of our partner sites could lead to delays in the manufacturing of our products and product candidates.

For example, a significant outbreak of COVID-19 at one of our partner sites

could lead to delays in the manufacturing of our products and product candidates.

In addition, the need to prioritize rated orders issued by the Federal Emergency Management Agency pursuant to the U.S.

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A manufacturing authorization also must be obtained from the appropriate EU regulatory authorities and may be required by other foreign regulatory authorities.

The timeframe required to obtain such approval or

authorization is uncertain.

The timeframe required to obtain such approval or authorization is uncertain.

In order to obtain approval, we need to demonstrate that all of our processes, methods and equipment are compliant with cGMP, and perform extensive audits of vendors, contract laboratories and suppliers.

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Additionally, we may need additional processes, technologies and validation studies, which could be costly and which we may not be able to develop or acquire from third parties.

Failure to secure the intellectual property rights required for the manufacturing process needed for large-scale clinical trials or the continued development of our product candidates could cause significant delays in our business plans or otherwise negatively impact the continued development of our product candidates.

Failure to secure the intellectual property rights required for the manufacturing process needed for

large-scale clinical trials or the continued development of our product candidates could cause significant delays in our business plans or otherwise negatively impact the continued development of our product candidates.

Products intended for use in gene therapies are novel, complex and difficult to manufacture.

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We currently have development, manufacturing and testing agreements with third parties to manufacture supplies of our gene therapy product candidates.

Several factors could cause production interruptions, including equipment malfunctions, facility

contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of suppliers.

Several factors could cause production interruptions, including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of suppliers.

The physical and chemical properties of biologics such as ours generally cannot be fully characterized.

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No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date in the U.S.

and tests used for determining the patentability of patent claims in all

technologies are in flux.

and tests used for determining the patentability of patent claims in all technologies are in flux.

The USPTO and patent offices in other jurisdictions have often required that patent applications directed to pharmaceutical and/or biotechnology-related inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby limiting the scope of protection against competitive challenges.

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An adverse determination in a judicial or administrative proceeding or a failure to obtain necessary licenses could prevent us from developing, manufacturing or selling our products.

Furthermore, payments under any licenses that we are able to obtain would reduce our profits derived from our

Furthermore, payments under any licenses that we are able to obtain would reduce our profits derived from our products.

Any of these circumstances could result in financial, business or reputational harm to us or could cause a decline or volatility in our stock price.

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While our compliance program is intended to detect and prevent potential non-compliance, we cannot be certain that compliance will be assured.

If our operations are found to be in violation of any of the laws described above or any other laws, rules or regulations that apply to us, we will be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations.

If our operations are found to be in violation

of any of the laws described above or any other laws, rules or regulations that apply to us, we will be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations.

Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our ability to operate our business and our financial results.

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The COVID-19 pandemic has presented a substantial public health and economic challenge around the world.

The rapid spread of COVID-19 has led to the implementation of various responses, including government-imposed quarantines, shelter-in-place mandates, sweeping restrictions on travel, mandatory shutdowns for non-essential businesses, requirements regarding social distancing, and other public health safety measures, as well as reported adverse impacts on healthcare resources, facilities and providers across the United States and in other countries.

The rapid spread of COVID-19 led to the implementation of various responses, including government-imposed quarantines, shelter-in-place mandates, sweeping restrictions on travel, mandatory shutdowns for non-essential businesses, requirements regarding social distancing, and other public health safety measures, as well as reported adverse impacts on healthcare resources, facilities and providers across the United States and in other countries.

In response to the pandemic, healthcare providers have, and may need to further, reallocate resources, such as physicians, staff, hospital beds, and intensive care unit facilities, as they prioritize limited resources and personnel capacity to focus on the treatment of patients with COVID-19 and implement limitations on access to hospitals and other medical institutions due to concerns about the spread of COVID-19 in such settings.

These responses may be extended by the duration of the outbreak, periodic spikes in infection rates due to new strains of the virus Omicron or otherwise, local outbreaks of the virus, the broad availability of effective vaccines, new information that will emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact.

These responses may be extended by the duration of the outbreak, periodic spikes in infection rates due to new strains of the virus or otherwise, local outbreaks of the virus, new information that will emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact.

These actions have and may continue to negatively impact commercialization, clinical trials, manufacturing and other business operations, including:

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In some cases, at home infusions have been delayed due to outbreaks of COVID-19 among trained personnel and staffing shortages.

The impact of COVID-19 may also result in delays in processing reauthorizations and modifications to program benefits by insurers, making it

difficult for patients to obtain or maintain favorable coverage decisions for our products.

The impact of COVID-19 may also result in delays in processing reauthorizations and modifications to program benefits by insurers, making it difficult for patients to obtain or maintain favorable coverage decisions for our products.

In addition, the increase in unemployment due to the pandemic has resulted in decreased insurance coverage for many individuals.

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Defense Production Act could impact the manufacturing, supply chain and distribution of our products and product candidates.

On March 13, 2020, to protect the health of our employees and their families, and our communities, and in accordance with direction from state and local government authorities, we instituted mandatory work-from-home for all employees and contingent workers other than those who are facility-dependent.

With increased availability of vaccines and public health guidelines evolving to reflect their availability, we reopened our offices to employees who are not facility-dependent and will continue to monitor and make adjustments in response to the public health environment, together with local, state and federal guidance regarding workplace protective measures, including travel restrictions, quarantines, and business shutdowns.

If there is an increase in COVID-19 infection rates or new outbreaks, our operations may be adversely impacted.

Remote working increases our vulnerability to cyber security breaches.

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lowest percentage ownership during the testing period, which is generally three years.

An ownership change could limit our ability to utilize our net operating loss and tax credit carryforwards for taxable years including or following such “ownership change.”

change could limit our ability to utilize our net operating loss and tax credit carryforwards for taxable years including or following such “ownership change.”

Limitations imposed on the ability to use net operating losses and tax credits to offset future taxable income could require us to pay U.S.

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Turnover rates of key employees has varied substantially in recent years.

Over the last two years, we have had several executive management changes.

Over the last few years, we have had several executive management changes.

Leadership transitions can be inherently difficult to manage and may cause uncertainty or a disruption to our business or may increase the likelihood of turnover in other key officers and employees.

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We have incurred operating losses since our inception and we may not achieve or sustain profitability.

We incurred an operating loss of $298.0 million for the six months ended June 30, 2022.

Our accumulated deficit was $3.5 billion as of June 30, 2022.

We incurred an operating loss of $429.4 million for the nine months ended September 30, 2022.

Our accumulated deficit was $3.8 billion as of September 30, 2022.

Although we currently have three commercially approved products in the U.S., we believe that it will take us some time to attain profitability and positive cash flow from operations.

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Broad market and industry factors may seriously affect the market price of a company’s stock, including ours, regardless of actual operating performance.

For example, the trading prices of biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic, which continues to rapidly evolve.

For example, the trading prices of biopharmaceutical companies have been highly volatile as a result of the COVID-19 pandemic, inflation and increased interest rates and overall market volatility.

In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies.

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Currently, our Amended and Restated Certificate of Incorporation authorizes the issuance of up to 198.0 million shares of common stock.

As of June 30, 2022, there were approximately 87.5 million shares of common stock outstanding and outstanding awards to purchase 11.1 million shares of common stock under various incentive stock plans.

Additionally, as of June 30, 2022, there were approximately 4.8 million shares of common stock available for future issuance under our 2018 Equity Incentive Plan, approximately 0.2 million shares of common stock available for issuance under our Amended and Restated 2013 Employee Stock Purchase Plan, and approximately 1.1 million shares of common stock available for issuance under our 2014 Employment Commencement Incentive Plan.

As of September 30, 2022, there were approximately 87.8 million shares of common stock outstanding and outstanding awards to purchase 11.0 million shares of common stock under various incentive stock plans.

Additionally, as of September 30, 2022, there were approximately 5.0 million shares of common stock available for future issuance under our 2018 Equity Incentive Plan, approximately 0.2 million shares of common stock available for issuance under our Amended and Restated 2013 Employee Stock Purchase Plan, and approximately 1.0 million shares of common stock available for issuance under our 2014 Employment Commencement Incentive Plan.

We may issue additional shares to grant equity awards to our employees, officers, directors and consultants under our 2018 Equity Incentive Plan, our 2013 Employee Stock Purchase Plan or our 2014 Employment Commencement Incentive Plan.

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Sales of a substantial number of our common stock in the public market, including sales by members of our management or board of directors, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity or equity-related securities.

Risks Related to Our Credit Agreement and Convertible Senior Notes

Our indebtedness resulting from our credit agreement could adversely affect our financial condition or restrict our future operations.

On December 13, 2019, we entered into a loan agreement (the “Credit Agreement”) with BioPharma Credit PLC, as the collateral agent and a lender (“BioPharma”), and BioPharma Credit Investments V (Master) LP, as a lender (together with BioPharma in its capacity as a lender, and each of their respective successors and assigns at any time party to the Credit Agreement, the “Lenders”

and each a “Lender”) that provides for a senior secured term loan facility (the “Loan Facility”) of up to $500.0 million to be funded in two tranches:

(i) a Tranche A Loan in an aggregate principal amount of $250.0 million (the “Tranche A Loan”), which was funded on December 20, 2019;

and (ii) a Tranche B Loan in an aggregate principal amount of up to $250.0 million (the “Tranche B Loan”, and together with the Tranche A Loan, the “Term Loans”).

We drew the $250.0 million Tranche A Loan in full on December 20, 2019.

On September 24, 2020, we entered into a first amendment to loan agreement (the “Amendment”) which amends the Credit Agreement.

The Amendment increases the aggregate principal amount of the Tranche B Loan under the Loan Facility from $250.0 million to $300.0 million.

On November 2, 2020, we drew the $300.0 million Tranche B Loan.

In addition, the Amendment extends the maturity date for the Tranche B Loan to December 31, 2024 and increases the funding fee payable to each Lender providing a portion of the Tranche B Loan on the date the Tranche B Loan is funded by 120 basis points to 2.95%.

All obligations under the Credit Agreement are secured pursuant to the terms of a security agreement and subject to certain exceptions, by security interests in certain collateral (collectively, the “Collateral”), which includes the following:

(1) any and all U.S.

intellectual property owned by, and rights to U.S.

intellectual property licensed to, us relating to any pharmaceutical composition in which eteplirsen or golodirsen is indicated to be administered for use in the treatment of Duchenne in patients who have a confirmed mutation of the dystrophin gene that is amenable to exon 51 or 53 skipping, respectively, or for any other use approved by the FDA (the “Loan Products”), (2) 100% of the equity interests directly held by us in certain wholly owned domestic subsidiaries and 65% of the equity interests in certain other wholly owned domestic subsidiaries, and (3) all of our personal property, including, without limitation, cash held in all our deposit accounts.

intellectual property related to the Loan Products and intellectual property unrelated in any way to the Loan Products anywhere are not part of the Collateral.

The Credit Agreement contains negative covenants that, among other things and subject to certain exceptions, restrict our ability to:

sell or dispose of assets, including certain intellectual property;

amend, modify or waive certain material agreements or organizational documents;

consolidate or merge;

incur additional indebtedness;

incur additional liens on the Collateral;

pay dividends or make any distribution or payment on or redeem, retire or purchase any equity interests;

make payments of certain subordinated indebtedness.

The Credit Agreement requires us to have consolidated liquidity of at least $100.0 million as of the last day of each month.

Additionally, the Credit Agreement contains certain representations and warranties, affirmative covenants and provisions relating to events of default, which include, but are not limited to, the following:

(i) nonpayment of principal, interest and other amounts;

(ii) failure to comply with covenants;

(iii) the occurrence of a material adverse change in (A) our ability to fulfill the payment or performance obligations under the Credit Agreement and related documents or (B) the binding nature of the Credit Agreement and related documents;

(iv) the rendering of judgments or orders or the acceleration or payment default by us in respect of other indebtedness in excess of $10.0 million;

and (v) certain insolvency and ERISA events.

A change of control triggers a mandatory prepayment of the Term Loans, and we may not have sufficient funds or the ability to raise the funds necessary to prepay them.

Servicing our Credit Agreement and 1.50% notes due 2024 (the “Notes”) requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.

Risks Related to Our Convertible Senior Notes

Servicing our 1.50% notes due 2024 (the “2024 Notes”) and 1.25% notes due 2027 (the "2027 Notes", and together with the 2024 Notes, the "Notes") requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.

In 2017, we issued $570.0 million aggregate principal amount of Notes, pursuant to that certain indenture, dated as of November 14, 2019, between us, as issuer, and U.S.

Bank National Association, as trustee.

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Credit Agreement and the Notes, depends on our future performance, which is subject to many factors, including, economic, financial, competitive and other, beyond our control.

In September 2022, we issued $1,150.0 million aggregate principal amount of 2027 Notes, pursuant to that certain indenture dated as of September 16, 2022, between us as issuer, and U.S.

Bank National Association, as trustee, including $20.0 million of 2027 Notes issued to the Michael A.

Chambers Living Trust in a private placement.

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Notes, depends on our future performance, which is subject to many factors, including, economic, financial, competitive and other, beyond our control.

We do not expect our business to be able to generate cash flow from operations in the foreseeable future, sufficient to service our debt and make necessary capital expenditures and we may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.

Our ability to refinance the term loan under the Credit Agreement, which matures in 2023, and the Notes, which are non-callable and mature in 2024, will depend on the capital markets and our financial condition at such time.

Our ability to refinance the 2024 Notes, which are non-callable and mature in 2024, and the 2027 Notes, which mature in 2027, will depend on the capital markets and our financial condition at such times.

We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations, and limit our flexibility in planning for and reacting to changes in our business.

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General Risks

Unfavorable global economic conditions could harm our business, financial condition or results of operations.

Our results of operations could be harmed by general conditions in the global economy and in the global financial markets.

A severe or prolonged economic downturn, including the impact of increased interest rates and inflation, could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could strain our manufacturers, possibly resulting in manufacturing disruption, or cause delays in payments for our services by third-party payors or our future collaborators.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could harm our business.

We may be subject to product liability claims and our insurance may not be adequate to cover damages.

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Failure to comply with domestic or foreign laws could result in various adverse consequences, including:

possible delay in approval or refusal to approve a product, recalls, seizures or withdrawal of an approved product from the market, disruption in the supply or availability of our products or suspension of export or import privileges, the imposition of civil or criminal sanctions, the prosecution of executives overseeing our international operations and damage to our reputation.

sanctions, the prosecution of executives overseeing our international operations and damage to our reputation.

Any significant impairment of our ability to sell products outside of the U.S.

could adversely impact our business and financial results.

Unfavorable global economic conditions could harm our business, financial condition or results of operations.

Our results of operations could be harmed by general conditions in the global economy and in the global financial markets.

A severe or prolonged economic downturn could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could harm our business.

Moreover, the COVID-19 pandemic is impacting the global economy, and the U.S.

economy in particular, with the potential for any economic downturn to be severe and prolonged.

A severe or prolonged economic downturn as a result of the COVID-19 pandemic could result in a variety of risks to our business, including disruptions in the financial markets, which could adversely impact our ability to raise additional capital when needed or on acceptable terms, if at all.

We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cyber security incidents, could harm our ability to operate our business effectively.

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The European Union’s GDPR, which greatly increases the jurisdictional reach of European Union law and became effective in May 2018, adds a broad array of requirements for handling personal data including the public disclosure of significant data breaches, and imposes substantial penalties for non-compliance of up to the greater of €20 million or 4% of global annual revenue for the preceding financial year.

Our efforts to comply with GDPR and other privacy and data protection laws imposes significant costs and challenges that are

likely to increase over time, and we are exposed to substantial penalties or litigation related to violations of existing or future data privacy laws and regulations.

Our efforts to comply with GDPR and other privacy and data protection laws imposes significant costs and challenges that are likely to increase over time, and we are exposed to substantial penalties or litigation related to violations of existing or future data privacy laws and regulations.

Additionally, the CCPA, which became effective January 1, 2020, substantially expands privacy obligations of many businesses.

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For example, patients may use social media channels to comment on the effectiveness of a product or to report an alleged adverse event.

When such disclosures occur, there is a risk that we fail to monitor and comply with applicable adverse event reporting obligations or we may not be able to defend ourselves or the public's legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our product and/or product candidates.

There is also a risk of inappropriate disclosure of sensitive information or negative or inaccurate posts or comments about us on any social networking website.

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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