10 unchanged sentences
Since our inception, we have incurred significant operating losses.
−Removed: Our ability to generate net revenue sufficient to achieve profitability will depend on the successful further development and commercialization of our OCS products.
−Removed: We generated net revenue of $25.6 million and $23.6 million for the fiscal years ended December 31, 2020 and December 28, 2019, respectively, and incurred net losses of $28.7 million and $33.5 million for these same years.
+Added: Our ability to generate net revenue sufficient to achieve profitability will depend on successful commercialization of our OCS products.
+Added: We generated net revenue of $30.3 million and $25.6 million for the years ended December 31, 2021 and 2020, respectively, and incurred net losses of $44.2 million and $28.7 million for these same years.
As of December 31, 2021, we had an accumulated deficit of $442.4 million.
To date, we have funded our operations primarily with proceeds from sales of equity, borrowings under loan agreements and revenue from clinical trials and commercial sales of our OCS products.
−Removed: Our losses have resulted principally from costs incurred in connection with our research and development, clinical trials, manufacturing and commercialization activities.
+Added: Our losses have resulted principally from costs incurred in connection with our research and development, clinical trials, manufacturing and commercialization activities, including the development of our National OCS Program.
We expect to continue to incur net losses for the foreseeable future as we focus on growing commercial sales of our products in both the U.S.
and select non-U.S.
−Removed: markets, including growing our sales and clinical adoption team, which will pursue increasing commercial sales and clinical adoption of our OCS products;
+Added: markets, including growing our commercial team, which will pursue increasing commercial sales of our OCS products;
scaling our manufacturing operations;
−Removed: continuing research, development and clinical trial efforts;
+Added: continuing research and development for our next generation OCS products;
and seeking regulatory clearance for new products and product enhancements, including new indications, in both the U.S.
and select non-U.S.
−Removed: Further, following the closing of our IPO in May 2019, we have incurred and expect to continue to incur additional costs associated with operating as a public company.
−Removed: As a result, we will need substantial additional funding for expenses related to our operating activities, including selling, general and administrative expenses and research, development and clinical trials expenses.
−Removed: Because of the numerous risks and uncertainties associated with product development and commercialization, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.
−Removed: Although we fund a portion of our operations from net revenue from sales of our OCS products for use in clinical trials and from commercial sales, we expect that we will need to finance our operations through a combination of equity offerings, debt financings and strategic alliances until such time, if ever, that we can generate substantial net revenue sufficient to achieve profitability.
−Removed: We may be unable to raise additional funds or enter into such other agreements or arrangements, when needed, on favorable terms or at all.
−Removed: If we are unable to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the further development and commercialization efforts of one or more of our products, or may be forced to reduce or terminate our operations.
−Removed: We may need to raise additional funding, which might not be available on favorable terms or at all.
−Removed: Raising additional capital may cause dilution to our shareholders.
−Removed: As we continue to pursue and increase commercial sales of our OCS products, we expect our costs and expenses to increase in the future, particularly as we expand our sales and clinical adoption team, scale our manufacturing operation, continue research, development and clinical trial efforts, and seek regulatory clearance for new products and product enhancements, including new indications, both in the United States and in select non-U.S.
The timing and amount of our operating and capital expenditures will depend on many factors, including:
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the costs and expenses of expanding our U.S.
−Removed: sales and marketing infrastructure and our manufacturing operations;
+Added: commercial infrastructure and our manufacturing operations;
the extent to which our OCS products are adopted by the transplant community;
the ability of our customers to obtain adequate reimbursement from third-party payors for procedures performed using the OCS products;
+Added: the costs incurred in our efforts to develop our National OCS Program ;
the degree of success we experience in commercializing our OCS products for additional indications;
4 unchanged sentences
the level of our selling, general and administrative expenses.
+Added: Because of the numerous risks and uncertainties associated with product development and commercialization, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability.
+Added: We may need to raise additional funding, which might not be available on favorable terms or at all.
+Added: Raising additional capital may cause dilution to our shareholders.
+Added: Although we fund a portion of our operations from net revenue from sales of our OCS products, we expect that we will need to finance our operations through a combination of equity offerings, debt financings and strategic alliances until such time, if ever, that we can generate substantial net revenue sufficient to achieve profitability.
+Added: We also may elect to raise additional funds sooner because we believe market conditions are attractive or as a risk mitigation measure.
Additional capital might not be available when we need it, and our actual cash requirements might be greater than anticipated.
If we require additional capital at a time when investment in our industry or in the marketplace in general is limited, we might not be able to raise funding on favorable terms, if at all.
−Removed: If we are not able to obtain financing on terms favorable to us, we may need to cease or reduce development or commercialization activities, sell or license to third parties some or all of our assets or merge with another entity, any of which could result in a loss of all or part of your investment.
−Removed: In addition, if we raise additional funds through the issuance of equity or convertible securities, the issuance of these securities could dilute your percentage ownership in our company.
+Added: If we are not able to obtain financing on terms favorable to us, we may need to significantly delay, scale back or discontinue our development or commercialization activities, sell or license to third parties some or all of our assets or merge with another entity or may be forced to reduce or terminate our operations any of which could result in a loss of all or part of your investment.
+Added: If we raise additional funds through the issuance of equity or convertible securities, the issuance of these securities could dilute your percentage ownership in our company.
Furthermore, newly issued securities may have rights, preferences or privileges senior to those of common shareholders.
2 unchanged sentences
Our existing and any future indebtedness could adversely affect our ability to operate our business.
−Removed: As of December 31, 2020, we had $35.0 million of outstanding long-term debt under our credit agreement with OrbiMed Royalty Opportunities II, LP, or OrbiMed, which we refer to as the Credit Agreement.
+Added: As of December 31, 2021, our outstanding principal balance of long-term debt under our credit agreement with OrbiMed Royalty Opportunities II, LP, or OrbiMed, was $35.0 million, which we refer to as the Credit Agreement.
We could incur additional indebtedness in the future.
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If market rates increase substantially, we will have to pay additional interest on this indebtedness, which would further reduce cash available for our other business needs.
+Added: We may not have sufficient funds, and may be unable to arrange for additional financing, to pay the amounts due under or refinance our indebtedness under the Credit Agreement, which matures in June 2023.
Our obligations under the Credit Agreement are secured by substantially all of our assets and the assets of our wholly-owned subsidiaries.
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entering into sale-leaseback arrangements and engaging in certain other business transactions.
−Removed: In addition, we are required to maintain a minimum liquidity amount of $3.0 million and are required, on an annual basis, to deliver to OrbiMed annual audited financial statements with an unqualified audit opinion from our independent registered public accounting firm.
−Removed: Failure to comply with the covenants in the Credit Agreement, including the minimum liquidity and unqualified audit opinion covenants, could result in the acceleration of our obligations under the Credit Agreement, and, if such acceleration were to occur, it would materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
−Removed: We may not have sufficient funds, and may be unable to arrange for additional financing, to pay the amounts due under our debt arrangements.
−Removed: The obligations under the Credit Agreement are subject to acceleration upon the occurrence of specified events of default, including payment default, change in control, bankruptcy, insolvency, certain defaults under other material debt, certain events with respect to regulatory approvals and a material adverse change in our business, operations or other financial condition.
+Added: In addition, we are required to maintain a minimum liquidity amount of $3.0 million.
+Added: Failure to comply with the covenants in the Credit Agreement, including the minimum liquidity, could result in the acceleration of our obligations under the Credit Agreement, which are also subject to acceleration upon the occurrence of specified events of default, including payment default, change in control, bankruptcy, insolvency, certain defaults under other material debt, certain events with respect to regulatory approvals and a material adverse change in our business, operations or other financial condition.
If an event of default (other than certain events of bankruptcy or insolvency) occurs and is continuing, OrbiMed may declare all or any portion of the outstanding principal amount of the borrowings plus accrued and unpaid interest to be due and payable.
Upon the occurrence of certain events of bankruptcy or insolvency, all of the outstanding principal amount of the borrowings plus accrued and unpaid interest will automatically become due and payable.
+Added: If such acceleration were to occur, it would materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
Our outstanding indebtedness and any future indebtedness, combined with our other financial obligations, could increase our vulnerability to adverse changes in general economic, industry and market conditions, limit our flexibility in planning for, or reacting to, changes in our business and the industry and impose a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
1 unchanged sentence
Our financial results may fluctuate from quarter to quarter, which makes our results difficult to predict and may cause our results to fall short of expectations.
−Removed: Our financial results may fluctuate from quarter to quarter due to a number of factors, including the timing of patient enrollment in and regulatory approvals for our clinical trials, the availability of donor organs for transplantation, which is unpredictable and could impact the volume of transplant procedures performed at transplant centers using the OCS, and foreign currency exchange rates.
−Removed: We expect that revenue from sales will fluctuate significantly from quarter to quarter, and our future quarterly and annual expenses as a percentage of our revenue may be significantly different from those we have recorded in the past.
+Added: Our financial results may fluctuate from quarter to quarter due to a number of factors, including the availability of donor organs for transplantation, which is unpredictable and could impact the volume of transplant procedures performed at transplant centers using the OCS, and foreign currency exchange rates.
+Added: Our revenue from sales may fluctuate significantly from quarter to quarter, and our future quarterly and annual expenses as a percentage of our revenue may be significantly different from those we have recorded in the past.
Our financial results in some quarters may fall below expectations.
Comparing our financial results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance.
−Removed: Because the timing of organ transplant procedures is generally unpredictable, we have not experienced seasonality in our business from quarter to quarter and do not expect to do so in the foreseeable future.
+Added: Because the timing of organ transplant procedures is generally unpredictable, we have not experienced seasonality in our business from quarter to quarter.
Our ability to use our net operating losses and research and development credit carryforwards to offset future taxable income may be subject to limitations.
As of December 31, 2021, we had U.S.
−Removed: federal and state net operating loss, or NOL, carryforwards of $322.0 million and $252.7 million, respectively, which may be available to offset future taxable income and begin to expire in 2021 and 2030, respectively.
+Added: federal and state net operating loss, or NOL, carryforwards of $368.1 million and $304.0, respectively, which may be available to offset future taxable income.
+Added: federal NOL carryforwards began to expire in 2022 and our state NOL carryforwards begin to expire in 2030.
The Company’s federal net operating losses include $156.4 million, which can be carried forward indefinitely.
As of December 31, 2021, we also had U.S.
−Removed: federal and state research and development tax credit carryforwards of $7.6 million and $5.0 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2021 and 2024, respectively.
+Added: federal and state research and development tax credit carryforwards of $8.0 million and $5.3 million, respectively, which may be available to offset future tax liabilities.
+Added: federal research and development tax credit carry forwards began to expire in 2021 and our state research and development tax credit carryforwards begin to expire in 2024.
A material portion of these NOL and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities.
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The transition away from LIBOR may adversely affect our cost to obtain financing.
−Removed: On July 27, 2017, the U.K.
−Removed: Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit London Interbank Offered Rate, or LIBOR, rates after 2021.
+Added: On July 27, 2017, the UK Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit London Interbank Offered Rate, or LIBOR, rates after 2021.
The Financial Conduct Authority and the ICE Benchmark Administration recently announced that LIBOR may continue for legacy contracts until June 2023.
−Removed: While there is no certainty as to what rate or rates may become accepted alternatives to LIBOR, the Alternative Reference Rates Committee, a steering committee comprised of U.S.
−Removed: financial market participants, selected and the Federal Reserve Bank of New York started in May 2018 to publish the Secured Overnight Finance Rate, or SOFR, as an alternative to LIBOR.
+Added: The Alternative Reference Rates Committee, a steering committee comprised of U.S.
+Added: financial market participants, selected and the Federal Reserve Bank of New York has recommended the Secured Overnight Finance Rate, or SOFR, as an alternative to LIBOR.
SOFR is a broad measure of the cost of borrowing cash in the overnight U.S.
treasury repo market.
−Removed: The manner and impact of the transition to SOFR or another alternative rate may materially adversely affect the trading market for LIBOR-based securities, which may result in an increase in borrowing costs under our Credit Agreement.
−Removed: Any replacement for LIBOR may result in an effective increase in the applicable interest rate on our current or future debt obligations, including our Credit Agreement.
−Removed: Risks Related to Research and Development and Commercialization
+Added: Rates linked to SOFR or associated changes related to the adoption of SOFR may not be as favorable to us as LIBOR and may result in an effective increase in the applicable interest rate on our current or future debt obligations, including our Credit Agreement.
+Added: Risks Related to Product Development and Commercialization
We depend heavily on the success of the OCS and achieving market acceptance.
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We have invested all of our efforts and financial resources in the development of the OCS, educating surgeons, transplant centers, Organ Procurement Organizations and private and public payors of the benefits of the OCS and providing services related to the OCS.
−Removed: While the OCS Lung has received PMA from the FDA for the preservation of donor lungs currently utilized and currently unutilized for double lung transplantation, and our OCS products have received the CE Mark and several other international regulatory approvals for lung, heart and liver for sales outside the United States, we might not be able to commercialize successfully the OCS for the approved indications or obtain approvals for additional indications or in additional jurisdictions on our planned timing or at all.
−Removed: Our ability to generate product revenue and become profitable depends solely on sales of OCS Perfusion Sets and OCS Solutions, which we refer to collectively as disposable sets, and OCS Consoles.
+Added: Although we have received PMAs from the FDA for preservation of donor lungs for the transplantation of DBD and DCD donor organs, for the preservation of donor hearts for the transplantation of DBD donor organs and for the preservation of donor livers from DBD and certain DCD donor organs, we might not successfully commercialize the OCS for these approved indications or obtain approvals for additional indications or in additional jurisdictions on our planned timing or at all.
+Added: Our ability to generate product revenue and become profitable depends primarily on sales of OCS Perfusion Sets and OCS Solutions, which we refer to collectively as disposable sets, and OCS Consoles.
Our assumptions regarding demographic trends, donor organ availability and the use of transplantation as a treatment for end-stage organ failure may prove to be incorrect.
1 unchanged sentence
improvements in post-transplant clinical outcomes, increases in the utilization of donor organs, expansion of the pool of potential donors and reduction in the total cost of care as compared to available alternatives.
−Removed: Data from our ongoing or future clinical trials may not demonstrate that the OCS provides these benefits.
−Removed: Our estimates of the potential pools of donors are only estimates and subject to uncertainty, risk and change.
In addition, the medical community might not consider data collected from our patient registry meaningful or compelling, or the data collected from our patient registry or any clinical or commercial experience could indicate that the OCS is unsafe, which would substantially undermine our commercialization efforts.
Surgeons, transplant centers and private and public payors often are slow to adopt new products, technologies and treatment practices that require additional upfront costs and training.
−Removed: We expect that the cost of the OCS will significantly exceed the cost of cold storage preservation.
+Added: The cost of the OCS significantly exceeds the cost of cold storage preservation.
In addition, surgeons may not be willing to undergo training to use the OCS, may decide the OCS is too complex to adopt without appropriate training and may choose not to use the OCS.
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As a result, demand for the OCS could be materially lower than we expect it to be, which would materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
−Removed: The clinical trial process required to obtain regulatory approvals is lengthy and expensive, with uncertain outcomes.
−Removed: In order to obtain PMA approval for a device, the sponsor must conduct clinical trials, often well-controlled clinical studies, designed to assess the safety and effectiveness of the product.
−Removed: Conducting clinical trials is a complex and expensive process, can take many years and outcomes are inherently uncertain.
−Removed: We incur substantial expense for, and devote significant time to, clinical trials but cannot be certain that the product tested will ever generate revenue sufficient to cover the costs of trials.
−Removed: We may experience significant setbacks in clinical trials, even after earlier clinical trials showed promising results, and failure can occur at any time during the clinical trial process.
−Removed: Any of our products may malfunction or may produce undesirable adverse effects that could cause us or regulatory authorities to interrupt, delay or halt clinical trials.
−Removed: We, the FDA or another regulatory authority may suspend or terminate clinical trials.
−Removed: Successful results in early studies do not assure positive results in subsequent clinical trials.
−Removed: The data we collect from our preclinical studies and clinical trials may not be sufficient to support FDA or other regulatory clearance or approval.
−Removed: Additionally, the FDA may disagree with our interpretation of the data from our studies and trials.
−Removed: The FDA may conclude that the clinical trial design, conduct or results are inadequate to prove safety or effectiveness, and the FDA may require us to undertake expensive and lengthy additional trials, which may delay clearance or approval of products.
−Removed: Clinical trials are necessary to support PMA applications and may be necessary to support PMA supplements for modified versions of our marketed device products.
−Removed: Trials often require enrollment of large numbers of subjects, who may be difficult to identify, recruit and maintain as participants in the clinical trial.
−Removed: We have obtained PMA approval for the OCS Lung for the preservation of donor lungs currently utilized and currently unutilized for transplants in the United States.
−Removed: As a condition of this PMA approval, we are required to conduct two post-market studies.
−Removed: Adverse outcomes in post-approval studies can result in withdrawal of approval of a PMA or restrictions on the approval.
−Removed: We will need to conduct additional clinical studies to support use of the OCS in, and development of OCS products for, new organs, like kidney, and for commercialization of our products in additional foreign jurisdictions.
−Removed: Clinical trials in organ transplant are difficult to design and implement, take substantial time to conduct and are expensive.
−Removed: The results of clinical trials are inherently uncertain.
−Removed: The initiation and completion of any studies may be prevented, delayed or halted for numerous reasons.
−Removed: The following could adversely affect the costs, timing or successful completion of our clinical trials:
−Removed: we have been required and, prior to collecting clinical data in the future to support new PMA applications, will be required again to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials, and the FDA may reject our IDE application and notify us that we may not begin investigational trials;
−Removed: regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;
−Removed: regulators and/or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;
−Removed: we may not reach agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different trial sites;
−Removed: clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
−Removed: the number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;
−Removed: our third-party contractors, including those manufacturing products or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or at all;
−Removed: we might have to suspend or terminate clinical trials for various reasons, including a finding that the subjects are being exposed to unacceptable health risks;
−Removed: we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for re-examination;
−Removed: regulators, IRBs or other reviewing bodies may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements;
−Removed: the cost of clinical trials may be greater than we anticipate;
−Removed: we may be unable to recruit a sufficient number of clinical trial sites;
−Removed: regulators, IRBs or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;
−Removed: approval policies or regulations of FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for approval;
−Removed: our current or future products may have undesirable side effects or other unexpected characteristics.
−Removed: Patient enrollment in clinical trials and completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, patient compliance, competing clinical trials clinicians’ and patients’ perceptions as to the potential advantages of the product being studied in relation to other available products or services, and the ongoing COVID-19 pandemic.
−Removed: For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and effectiveness of a product, or they may be persuaded to participate in contemporaneous clinical trials of a competitor’s product.
−Removed: In addition, patients participating in our clinical trials may drop out before completion of the trial or experience adverse medical events unrelated to our products.
−Removed: Delays in patient enrollment or failure of patients to continue to participate in a clinical trial may delay commencement or completion of the clinical trial, cause an increase in the costs of the clinical trial and delays, or result in the failure of the clinical trial.
−Removed: Clinical trials must be conducted in accordance with the regulations of the FDA and other applicable regulatory authorities’ legal requirements and regulations and are subject to oversight by these governmental agencies and IRBs at the medical institutions where the clinical trials are conducted.
−Removed: In addition, clinical trials must be conducted with supplies of our devices produced under certain requirements of the QSR, and other regulations.
−Removed: Furthermore, we rely on clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance.
−Removed: We depend on transplant centers to conduct our clinical trials in compliance with good clinical practice, or GCP, requirements.
−Removed: To the extent that transplant centers fail to enroll participants for our clinical trials, fail to conduct the study to GCP standards or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays or both.
−Removed: In addition, clinical trials that are conducted in countries outside the United States may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non-U.S.
−Removed: institutions, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care.
−Removed: Failure can occur at any stage of clinical testing.
−Removed: For example, our clinical studies may produce negative or inconclusive results, and, in the future, we may decide, or regulators may require us, to conduct clinical and non-clinical testing in addition to those we have planned.
−Removed: After submission of our PMA applications for OCS Lung and OCS Heart, the FDA requested certain additional clinical analyses, technical information and clarifications as part of the agency’s normal review process.
−Removed: The FDA ultimately approved the PMA for the OCS Lung.
−Removed: While we believe we responded in full to the FDA’s requests with respect to the PMA application for the OCS Heart, including by submitting short and longer-term data from the OCS Heart EXPAND Trial and OCS Heart EXPAND Continued Access Protocol, the FDA could ask us to conduct additional clinical trials or submit additional evidence to support the OCS Heart PMA application, or other PMA applications in the future, if the FDA does not believe the data we have already submitted is sufficient.
−Removed: Our failure to adequately demonstrate the safety and effectiveness of the OCS or any product we may develop in the future would prevent receipt of regulatory clearance or approval and, ultimately, the commercialization of that product or indication for use.
−Removed: Even if our future products are cleared or approved in the United States, commercialization of our products in foreign countries would require approval by regulatory authorities in those countries.
−Removed: Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials.
−Removed: Any of these occurrences could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
We must continue to educate surgeons, transplant centers and private and public payors and demonstrate the merits of the OCS compared with cold storage or new competing technologies.
−Removed: Surgeons, transplant centers and private and public payors may require additional clinical data prior to adopting or maintaining coverage of the OCS.
Directors of transplant programs are key decision-makers in the adoption of novel medical devices used in organ transplantation.
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If program directors, other surgeons and private and public payors do not find our body of published clinical evidence and data compelling or wish to wait for additional studies, they may choose not to use or provide coverage and reimbursement for our products.
−Removed: Currently, universal national healthcare systems do not reimburse transplant centers for the use of the OCS and reimbursement in international markets may require us to undertake additional clinical studies.
−Removed: In addition, the long-term effects of our OCS beyond one to three years following transplantation are not yet known.
+Added: Currently, most universal national healthcare systems outside of the United States do not reimburse transplant centers for the use of the OCS and reimbursement in international markets may require us to undertake additional clinical studies.
+Added: In addition, the long-term effects of our OCS following transplantation are not yet known.
Certain surgeons, transplant centers and private and public payors may prefer to see longer-term safety and efficacy data than we have produced.
We cannot provide assurance that any data that we or others may generate in the future will be consistent with that observed in our existing clinical studies.
−Removed: Our long-term growth depends on our ability to improve the OCS platform, including by expanding into new indications and developing the next generation of our products, and expanding access to the OCS, including through the potential development of a turnkey perfusion service for transplant centers.
+Added: Our long-term growth depends on our ability to expand access to the OCS through our National OCS Program.
+Added: We are developing a National OCS Program, a turnkey solution to provide outsourced organ retrieval and OCS organ management, to provide transplant programs with a more efficient process to procure donor organs with the OCS.
+Added: We believe the National OCS Program will expand access and use of the OCS.
+Added: However, we may not be successful in the continued
+Added: development of our National OCS Program, which will depend on recruiting and retaining qualified surgeons and coordinating with transplant centers and regional O rgan P rocurement O rganizations .
+Added: We may not be able to recruit and retain surgeons and other qualified personnel, including due to demand for their capabilities and competitive compensation offered by other employers.
+Added: In order to recruit and retain such highly qualified employees, we also may need to increase the level, or change the form or composition, of the compensation that we pay to them, which would increase our expenses.
+Added: In addition to our own surgical and clinical personnel, we utilize a network with a limited number of partners for a portion of our organ retrieval, organ preservation and transportation services offered through our National OCS Program.
+Added: If our partners are unable to fulfill their obligations under their contracts, it could harm our operations.
+Added: If any of these relationships are interrupted or terminated, or if one or more partners are unable or unwilling to fulfill their obligations for whatever reasons, National OCS program services to our customers may be interrupted, and business and financial results may be negatively impacted.
+Added: Further, we may not be able to identify or negotiate with additional partners on terms that are commercially reasonable to us.
+Added: In addition, as the National OCS Program expands access to the OCS, transplant surgeons may increasingly rely on information provided to them by our clinical specialists and surgeons.
+Added: We are responsible for the accuracy of information about the OCS that is provided to transplant surgeons who participate in the National OCS Program.
+Added: Our long-term growth depends on our ability to improve the OCS platform, including by expanding into new indications and developing the next generation of our products.
Our business plan contemplates that we will continue to improve the OCS platform, including by expanding into additional organs and developing the next generation of our products.
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receive adequate coverage and reimbursement for procedures performed with our products;
−Removed: develop an effective sales and marketing effort.
−Removed: We also are developing a turnkey perfusion service that would facilitate organ retrieval and transportation to transplant centers, which we believe would expand access and use of the OCS.
−Removed: We may not be successful in the development of such a service, which will depend on recruiting and retaining qualified surgeons and coordinating with regional organ procurement organizations.
+Added: develop an effective commercialization effort.
If we are not successful in expanding our indications and developing the next generation of our products, our ability to increase our revenue may be impaired, which could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: We have limited experience in directly marketing and selling our products, and if we are unable to successfully expand our sales infrastructure and adequately address our customers’ needs, it could negatively impact sales and market acceptance of our products and we may never generate sufficient revenue to achieve or sustain profitability.
+Added: We have limited experience in directly marketing and selling our products in the United States.
+Added: Our operating results are dependent upon our sales and marketing efforts.
+Added: If we fail to adequately promote and market our products, our sales may not grow or could significantly decrease.
+Added: We believe it is necessary to utilize a sales force that incorporates a specialized group consisting of sales representatives and clinical specialists who have experience with products to support our customers’ needs.
+Added: Competition for sales representatives and marketing employees is intense and we may be unable to attract and retain sufficient personnel to
+Added: maintain an effective sales and marketing force.
+Added: If we are unable to adequately address our customers’ needs, it could negatively impact sales and market acceptance of our products, and we may not generate sufficient revenue to achieve or sustain profitability.
+Added: Our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled surgeons, sales representatives and clinical specialists, and ensuring our sales program offerings satisfy the needs of our customers.
+Added: New hires require training and take time to achieve full productivity.
+Added: If we fail to train new hires adequately, if we experience high turnover in our sales force in the future, or if our sales program offerings do not satisfy the needs of our customers, new hires may not become as productive as may be necessary to maintain or increase our sales.
We depend on a limited number of customers for a significant portion of our net revenue and the loss of, or a significant shortfall in demand from, these customers could have a material adverse effect on our financial condition and operating results.
We generate a significant amount of our net revenue from a limited number of customers.
−Removed: For the fiscal year ended December 31, 2020, Massachusetts General Hospital accounted for 14% of our net revenue and Duke University accounted for 10% of our net revenue.
+Added: For the year ended December 31, 2021, Duke University accounted for 11% of our net revenue.
We expect that sales to relatively few customers will continue to account for a significant percentage of our net revenue in future periods.
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Our suppliers could discontinue the manufacturing or supply of these components at any time.
−Removed: We do not carry a significant inventory of these components.
+Added: We do not carry a significant inventory of some of these components.
Our suppliers may not be able to meet our demand for their products, either because of acts of nature, the nature of our agreements with those manufacturers or our relative importance to them as a customer, and our manufacturers may decide in the future to discontinue or reduce the level of business they conduct with us.
+Added: In addition, if these suppliers are unable to deliver components to us, whether due to a labor shortage, slow down or stoppage, or for any other reason, we would be required to seek alternative suppliers.
We might not be able to identify and qualify additional or replacement suppliers for any of these components quickly or at all or without incurring significant additional costs.
We cannot guarantee that we will be able to establish alternative relationships on similar terms, without delay or at all.
+Added: We also may choose to establish our own manufacturing process of certain components and we may not be successful in doing so.
+Added: For example, we will need to seek FDA approval for any component design we choose to manufacture, which may not be granted in a reasonable time, or at all.
+Added: In addition, the components we design may not be successful or may not provide a functional or economic benefit compared to similar components manufactured by third parties.
+Added: If we choose to establish our own manufacturing process of components of the OCS, we may be required to procure additional raw materials for such processes, which may not be available.
We may also face regulatory delays or be required to seek additional regulatory clearances or approvals if we experience any delay or deficiency in the quality of products obtained from suppliers or if we have to replace our suppliers.
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Establishing additional or replacement suppliers for any of these materials or components, if required, or any supply interruption from our suppliers, could limit our ability to manufacture our products, result in production delays and increased costs and adversely affect our ability to deliver products to our customers on a timely basis.
−Removed: Our inability to obtain sufficient quantities of components for the OCS also could adversely affect clinical development of the OCS.
+Added: Our inability to obtain sufficient quantities of components for the OCS also could adversely affect development of the next generation of the OCS.
If we are not able to identify alternate sources of supply for the components, we might have to modify our product to use substitute components, which could lead to additional regulatory obligations that could impact our marketing ability, cause delays in shipments, increase design and manufacturing costs and increase prices for our products.
Any such modified product might not be as effective as the predecessor product or might not gain market acceptance.
−Removed: This could lead to customer dissatisfaction and damage to our reputation and could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: This could lead to customer
+Added: dissatisfaction and damage to our reputation and could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory.
+Added: We seek to maintain sufficient levels of inventory in order to protect ourselves from supply interruptions, but keep limited components, sub-assemblies, materials and finished products on hand.
+Added: To ensure adequate inventory supply and manage our operations with our suppliers, we forecast anticipated materials requirements and demand for our products in order to predict inventory needs and then place orders with our suppliers based on these predictions.
+Added: Our ability to accurately forecast demand for our products could be negatively affected by many factors, including the rate of transplantations, product recalls, failure to accurately manage our commercial strategy, product introductions by competitors, an increase or decrease in customer demand for our products, our failure to accurately forecast customer acceptance of new products, changes to hospital capacity, staffing, procedure and protocol changes, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions.
+Added: Inventory levels in excess of customer demand may result in a portion of our inventory becoming obsolete or expiring, as well as inventory write-downs or write-offs.
+Added: Conversely, if we underestimate customer demand for our products or our own requirements for components, subassemblies and materials, our manufacturing partners and suppliers may not be able to deliver components, sub-assemblies and materials to meet our requirements and our manufacturing may be affected by the impact of COVID-19 on our suppliers, which could result in inadequate inventory levels or interruptions, delays or cancellations of deliveries to our customers, any of which would damage our reputation, customer relationships and business.
+Added: In addition, several components, sub-assemblies and materials incorporated into our products require lengthy order lead times, and additional supplies or materials may not be available when required on terms that are acceptable to us or our manufacturing partners, or at all, and our manufacturing partners and suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, any of which could have an adverse effect on our ability to meet customer demand for our products and our results of operations.
We will need to increase our manufacturing capacity in the future and may encounter problems at our manufacturing facility or otherwise.
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In addition, regardless of the level of insurance coverage, damage to our facilities or any disruption that impedes our ability to manufacture the OCS in a timely manner could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
−Removed: Risks Related to Our Business and Industry
+Added: We may not be able to achieve or maintain satisfactory pricing and margins for our products.
+Added: Manufacturers of medical devices have a history of price competition, and we can give no assurance that we will be able to achieve satisfactory prices for our products or maintain prices at the levels we have historically achieved.
+Added: Any decline in the amount that payors reimburse our customers for OCS Products could make it difficult for customers to continue using, or to adopt, our products and could create additional pricing pressure for us.
+Added: If we are forced to lower the price we charge for our products, our gross margins will decrease, which will adversely affect our ability to invest in and grow our business.
+Added: If we are unable to maintain our prices, or if our costs increase and we are unable to offset such increase with an increase in our prices, our margins could erode.
+Added: We will continue to be subject to significant pricing pressure, which could harm our business and results of operations.
+Added: Price increases of the components used to manufacture our products and supply shortages could adversely affect our business and operating results.
+Added: The supply of raw materials to our component parts suppliers could be interrupted for a variety of reasons, including availability and pricing.
+Added: We have experienced supply chain disruptions related to the COVID-19 pandemic, and continued disruptions to the supply chain could adversely affect our ability to meet commitments to customers.
+Added: Significant price increases could adversely affect our results of operations and operating margins.
+Added: In particular, inflation, changes in trade policies, the imposition of duties and tariffs and public health crises (such as the COVID-19 pandemic) could adversely impact the price or availability of raw materials and the components of our products.
+Added: We may not be able to pass along increased component part prices to customers in the form of price increases or our ability to do so could be delayed.
+Added: Consequently, our results of operations and financial condition may be adversely affected.
Our failure to compete effectively will harm our business and operating results.
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Their products or technologies could make the OCS obsolete or noncompetitive.
−Removed: Other companies may also obtain FDA or other regulatory approval or clearance for their products sooner than we may obtain approval or clearance for the OCS.
Many of these providers of alternative products, procedures and therapies have greater name recognition, significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and clearances and marketing and selling products than we do.
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Our failure to compete effectively will harm our business and operating results.
+Added: The clinical trial process required to obtain future regulatory approvals is lengthy and expensive, with uncertain outcomes.
+Added: Clinical trials are necessary to support PMA applications and may be necessary to support future PMA supplements for modified versions of our marketed device products.
+Added: Conducting clinical trials is a complex and expensive process, can take many years and outcomes are inherently uncertain.
+Added: For the development of the next generation of OCS products, we may incur substantial expense for, and devote significant time to, clinical trials but cannot be certain that the product tested will ever generate revenue sufficient to cover the costs of trials.
+Added: We may experience significant setbacks in clinical trials, even after earlier clinical trials showed promising results, and failure can occur at any time during the clinical trial process.
+Added: Any of our products may malfunction or may produce undesirable adverse effects that could cause us or regulatory authorities to interrupt, delay or halt clinical trials.
+Added: We, the FDA or another regulatory authority may suspend or terminate clinical trials.
+Added: Successful results in early studies do not assure positive results in subsequent clinical trials.
+Added: The data we collect from our preclinical studies and clinical trials may not be sufficient to support FDA or other regulatory clearance or approval.
+Added: Additionally, the FDA may disagree with our interpretation of the data from our studies and trials.
+Added: The FDA may conclude that the clinical trial design, conduct or results are inadequate to prove safety or effectiveness, and the FDA may require us to undertake expensive and lengthy additional trials, which may delay clearance or approval of products.
+Added: Clinical trials often require enrollment of large numbers of subjects, who may be difficult to identify, recruit and maintain as participants in the clinical trial.
+Added: As a condition to our PMA approvals, we are required to conduct post-market studies.
+Added: Adverse outcomes in post-approval studies can result in withdrawal of approval of a PMA or restrictions on the approval.
+Added: We will need to conduct additional clinical studies to support use of the OCS in, and development of OCS products for, new organs, like kidney, and potentially for commercialization of our products in additional foreign jurisdictions.
+Added: Clinical trials in organ transplant are difficult to design and implement, take substantial time to conduct and are expensive.
+Added: The results of clinical trials are inherently uncertain.
+Added: The initiation and completion of any studies may be prevented, delayed or halted for numerous reasons.
+Added: The following could adversely affect the costs, timing or successful completion of any clinical trial:
+Added: we have been required and, prior to collecting clinical data in the future to support new PMA applications, may be required again to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials, and the FDA may reject our IDE application and notify us that we may not begin investigational trials;
+Added: regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;
+Added: regulators and/or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;
+Added: we may not reach agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different trial sites;
+Added: clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
+Added: the number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;
+Added: our third-party contractors, including those manufacturing products, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or at all;
+Added: we might have to suspend or terminate clinical trials for various reasons, including a finding that the subjects are being exposed to unacceptable health risks;
+Added: we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for re-examination;
+Added: regulators, IRBs or other reviewing bodies may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements;
+Added: the cost of clinical trials may be greater than we anticipate;
+Added: we may be unable to recruit a sufficient number of clinical trial sites;
+Added: regulators, IRBs or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;
+Added: approval policies or regulations of FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for approval;
+Added: our current or future products may have undesirable side effects or other unexpected characteristics.
+Added: Failure can occur at any stage of clinical testing.
+Added: For example, our clinical studies may produce negative or inconclusive results, and, in the future, we may decide, or regulators may require us, to conduct clinical and non-clinical testing in addition to those we have planned.
+Added: After submission of our PMA applications for OCS Lung and OCS Heart, the FDA requested certain additional clinical analyses, technical information and clarifications as part of the agency’s normal review process.
+Added: The FDA ultimately approved both PMAs.
+Added: The FDA could ask us to conduct additional clinical trials or submit additional evidence to support PMA applications in the future.
+Added: Our failure to adequately demonstrate the safety and effectiveness of any product we may develop in the future would prevent receipt of regulatory clearance or approval and, ultimately, the commercialization of that product or indication for use.
+Added: Even if our future products are cleared or approved in the United States, commercialization of our products in foreign countries would require marketing authorization from regulatory authorities in those countries.
+Added: Authorization approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials.
+Added: Any of these occurrences could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: Risks Related to Our Operations and Business
Failure to maintain an ethical and inclusive corporate culture, or damage to our reputation, could have a material adverse effect on our business.
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Our ability to attract and retain a high-quality workforce depends upon our commitment to a diverse and inclusive environment, along with our perceived trustworthiness and ethics.
−Removed: Allegations of misconduct by employees, particularly leaders, erode trust and confidence and cause reputational damage.
−Removed: Negative public opinion can result from actual or alleged conduct by the Company or those currently or formerly associated with the Company.
Issues can arise in any number of circumstances, including employment-related offenses such as workplace harassment and discrimination, regulatory noncompliance, and failure to properly use and protect data and systems, as well as from actions taken by regulators or others in response to such conduct.
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security breaches and data corruption.
−Removed: Federal, state and international laws and regulations, such as the General Data Protection Regulation (EU) 2016/679 (GDPR), can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties and significant legal liability, if our information technology security efforts fail.
−Removed: In addition, our software systems include cloud-based applications that are hosted by third-party service providers with security and information technology systems subject to similar risks.
The failure of either our or our service providers’ information technology could disrupt our entire operation or result in decreased sales, increased overhead costs and product shortages, all of which could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: In addition, our software systems include cloud-based applications that are hosted by third-party service providers with security and information technology systems subject to similar risks.
+Added: As the cyber-threat landscape evolves, attacks are growing in frequency, sophistication and intensity, and are becoming increasingly difficult to detect.
+Added: New and expanding threats to our information systems, including computer viruses, ransomware and phishing attacks and more sophisticated and targeted cyber-related attacks, as well as cybersecurity failures resulting from human error and technological errors, pose a risk to the security of our systems and the systems of our customers, business partners and suppliers, as well the confidentiality, availability and integrity of the data we process.
+Added: In addition, there are numerous and evolving risks to cybersecurity, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error.
+Added: We also have access to sensitive, confidential or personal data or information that is subject to privacy and security laws, regulations or customer-imposed controls.
+Added: Despite our implementation of controls to protect our systems and sensitive, confidential or personal data or information, we may be vulnerable to material security breaches, theft, misplaced, lost or corrupted data, employee errors and/or malfeasance (including misappropriation by departing employees) that could potentially lead to the compromising of sensitive, confidential or personal data or information.
+Added: While we attempt to mitigate these risks by employing a number of measures, including employee training and maintenance of protective systems, such measures may not prove adequate to prevent cyberattacks, and we remain potentially vulnerable to additional known or unknown threats.
+Added: The impact from such threats could be material.
+Added: A significant cybersecurity incident could result in a range of potentially material negative consequences for us, including lost revenue;
+Added: unauthorized access to, disclosure, modification, misuse, loss or destruction of company systems or data;
+Added: theft of sensitive, regulated or confidential data, such as personal identifying information or our intellectual property;
+Added: the loss of functionality of critical systems through ransomware, denial of service or other attacks;
+Added: business delays, service or system disruptions, damage to equipment and injury to persons or property, and increased insurance premiums.
+Added: The costs and operational consequences of defending against, preparing for, responding to and remediating an incident may be substantial.
+Added: Further, we could be exposed to litigation, regulatory enforcement or other legal action as a result of an incident, carrying the potential for damages, fines, sanctions or other penalties, as well injunctive relief requiring costly compliance measures.
+Added: A cybersecurity incident could also impact our brand, harm our reputation and adversely impact our relationship with our customers, employees and stockholders.
Economic, political and other risks associated with foreign operations could adversely affect our international sales and our results of operations.
Because we market the OCS in countries in Europe, Asia-Pacific, Central Asia and Canada and plan to market it in other international markets, we are subject to risks associated with doing business internationally.
−Removed: During the fiscal years ended December 31, 2020 and December 28, 2019, 25% and 31%, respectively, of our net revenue was generated from customers located outside of the United States.
−Removed: Even if we are successful in commercializing the OCS in the United States, we anticipate that international sales will represent a meaningful portion of our total sales.
+Added: During the years ended December 31, 2021 and 2020, 28% and 25%, respectively, of our net revenue was generated from customers located outside of the United States.
+Added: We anticipate that international sales will continue to represent a meaningful portion of our total sales.
In addition, some of our employees and suppliers are located outside of the United States.
Accordingly, our results of operations could be harmed by a variety of factors, including:
−Removed: changes in a country’s or region’s political or economic conditions, including any potential impact resulting from the U.K.’s exit from the European Union;
+Added: changes in a country’s or region’s political or economic conditions, including any potential impact resulting from the UK ’s exit from the European Union;
longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions;
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political, social, and economic instability abroad, terrorist attacks, and security concerns in general;
−Removed: the burdens of complying with a wide variety of foreign laws and different legal standards, such as anti-bribery laws, including the FCPA, and U.K.
−Removed: Bribery Act of 2010, or the Bribery Act, data privacy requirements, labor laws and anti-competition regulations;
+Added: the burdens of complying with a wide variety of foreign laws and different legal standards, such as anti-bribery laws, including the FCPA, and UK Bribery Act of 2010, or the Bribery Act, data privacy requirements, labor laws and anti-competition regulations;
differing protection of intellectual property;
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Our growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of the OCS for transplants involving additional indications or other organs, such as kidney.
−Removed: Our intended development of a turnkey perfusion service for transplant centers may also require additional capital expenditures or divert attention of our management away from development and commercialization of our OCS products.
+Added: Our National OCS Program, a turnkey solution to provide outsourced organ retrieval and OCS organ management, may also require additional capital expenditures.
If we are unable to effectively manage our growth, our expenses may increase more than expected, our revenue could grow more slowly than expected and we might not be able to achieve our research and development and commercialization goals, which in turn could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: If we pursue acquisitions, such acquisitions may expose us to additional risks.
+Added: We may review acquisition and strategic investment opportunities to expand our current product offerings, increase the size and geographic scope of our operations or otherwise offer growth and operating efficiency opportunities.
+Added: There can be no assurance that we will be able to identify suitable candidates or consummate these transactions on favorable terms.
+Added: If required, the financing for these transactions could result in an increase in our indebtedness, dilute the interests of our shareholders or both.
+Added: The purchase price for some acquisitions may include additional amounts to be paid in cash in the future, a portion of which may be contingent on the achievement of certain future operating results of the acquired business.
+Added: If the performance of any such acquired business exceeds such operating results, then we may incur additional charges and be required to pay additional amounts.
+Added: Our failure to successfully complete the integration of any acquired business or to achieve the long-term plan for such business, as well as any other adverse consequences associated with our acquisition and investment activities, could have an adverse effect on our business.
+Added: Any acquisition may also disrupt our ongoing business, divert resources, increase our expenses, and distract our management from our ongoing operations.
The outbreak of the novel strain of coronavirus (COVID-19) impacts our business, financial condition, operating results, cash flows and prospects.
−Removed: The COVID-19 pandemic, including efforts to contain the spread of the coronavirus, has impacted, and may continue to impact, our business, financial condition, operating results and cash flows.
−Removed: Impacts to our business as a result of COVID-19 include the temporary disruption of transplant procedures at many of the organ transplant centers who purchase OCS products;
+Added: The COVID-19 pandemic, including efforts to contain the spread of the coronavirus, has impacted, and may continue to impact, our business, financial condition, operating results and cash flows, including as a result of the impact of new variants.
+Added: Impacts to our business as a result of COVID-19 have included the temporary disruption of transplant procedures at many of the organ transplant centers who purchase OCS products;
+Added: customer delays or reductions in customer capital expenditures and operating budgets and the related impact on our product sales;
disruptions to our manufacturing operations and supply chain caused by facility closures, reductions in operating hours, staggered shifts and other social distancing efforts;
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decreased productivity and unavailability of materials or components;
−Removed: restrictions on or delays of our clinical trials and studies;
delays of reviews and approvals by the FDA and other health authorities;
+Added: delays in our clinical trial enrollment;
limitations on our employees’ and customers’ ability to travel;
−Removed: and delays in product installations, trainings or shipments to and from affected countries and within the United States.
−Removed: Since April 2020, we have taken several steps to protect the health and safety of our employees, to establish a process to support the continuous supply of our OCS products at transplant centers globally and to maintain financial flexibility.
−Removed: These actions include reducing near-term expenses, such as reducing non-essential discretionary expenses.
−Removed: We also deferred a portion of executive and employee compensation from April 2020 through August 31, 2020.
−Removed: Additionally, 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 have restricted access to our facilities to personnel and third parties who must perform critical activities that must be completed on-site, limited the number of such personnel that can be present at our facilities at any one time, and requested that most of our personnel work remotely.
−Removed: Also, our sales and clinical adoption team has been restricted from visiting many transplant centers in person.
−Removed: In addition, we temporarily reduced the manufacturing and distribution of our OCS products at our facility in Andover, Massachusetts.
−Removed: Starting in May 2020, we resumed manufacturing and distribution operations to pre-COVID levels.
−Removed: In the event that governmental authorities were to further modify current restrictions, our employees conducting manufacturing activities may not be able to access our manufacturing facilities, and our core activities may be significantly limited or curtailed, possibly for an extended period of time.
−Removed: We also may be faced with limitations in employee resources that would otherwise be focused on our commercial, manufacturing or clinical activities, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.
−Removed: 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 potential spread of COVID-19 in such settings.
−Removed: These actions significantly delay the provision of other medical care such as organ transplantation and reduce the number of transplant procedures that are performed, which negatively impacts our revenue and clinical trial activities.
−Removed: These measures and challenges may continue for the duration of the COVID-19 pandemic, which is highly uncertain, and may significantly reduce our revenue and cash flows while the pandemic continues.
−Removed: We have observed recovery in the frequency of transplant procedures, but not yet at the same activity level as prior to the disruption of business and economic activities resulting from COVID-19.
−Removed: In addition, while the number of transplant procedures performed has declined during the COVID-19 pandemic, organ transplantations are non-elective, life-saving procedures and we believe that the need for these procedures will persist.
−Removed: However, as interventions to contain the spread of the virus are lifted or reduced, new COVID-19 outbreaks may result in new or heightened restrictions, which could again cause disruptions to our customers’ operations and adversely impact organ transplant procedures.
−Removed: OCS product sales have been negatively impacted by the COVID-19 pandemic since the first quarter of 2020 and we anticipate OCS product sales will continue to be impacted in 2021;
−Removed: however, the length and extent of the pandemic, its consequences, and containment efforts will determine the future impact on our operations and financial condition.
−Removed: An adverse impact on the volume and availability of transplant procedures impacts our clinical trials and enrollment in our post-approval studies, and the COVID-19 pandemic has impacted operations at the FDA and other health authorities, resulting in delays of reviews and approvals, including with respect to our OCS Heart PMA application, and may affect other potential PMA applications.
+Added: and delays in product installations, trainings or shipments to and from other affected countries and within the United States.
+Added: In the event that governmental authorities introduce new restrictions, our employees conducting manufacturing activities may not be able to access our manufacturing facilities, and our core activities may be significantly limited or curtailed, possibly for an extended period of time.
+Added: We also may face limitations in employee resources that would otherwise be focused on our commercial, manufacturing or clinical activities, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.
+Added: 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.
+Added: These actions significantly delay the provision of other medical care such as organ transplantation and reduce the number of transplant procedures that are performed, which negatively impacts our revenue and cash flows.
+Added: These measures and challenges may continue for the duration of the COVID-19 pandemic.
The COVID-19 pandemic has also impacted, and may continue to impact, our third party suppliers, including through the effects of facility closures, reductions in operating hours, staggered shifts and other social distancing efforts, labor shortages, decreased productivity and unavailability of materials or components.
−Removed: While we maintain an inventory of finished products and raw materials used in our OCS products, a prolonged pandemic could lead to shortages in the raw materials necessary to manufacture our products.
−Removed: The extent to which COVID-19 impacts our operations and those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the pandemic, additional or modified government actions , new information which may emerge concerning the severity and incidence of COVID-19, actions to contain the virus or treat its impact, periodic spikes in infection rates, new strains of the virus that cause outbreaks of COVID-19, and the broad availability of effective vaccines .
−Removed: In particular, the speed of the continued spread of COVID-19 globally, and the magnitude of interventions to contain the spread of the virus, such as government-imposed quarantines, including shelter-in-place mandates, sweeping restrictions on travel, mandatory shutdowns for non-essential businesses, requirements regarding social distancing, and other public safety measures, will determine the impact of the pandemic on our business, financial condition, operating results, cash flows and prospects.
−Removed: If we experience a prolonged disruption in our manufacturing, supply chains, clinical trial or commercial operations, or if demand for our products is significantly reduced as a result of the COVID-19 pandemic, we would expect to experience a material adverse impact on our business, financial condition, results of operations and prospects.
−Removed: Additionally, the extent and duration of the impact of the COVID-19 pandemic on our stock price and on those of other companies in our industry is highly uncertain and may make us look less attractive to investors and, as a result, there may be a less active trading market for our common stock, our stock price may be more volatile, and our ability to raise capital could be impaired, which could in the future negatively affect our liquidity and financial position.
+Added: While we maintain an inventory of finished products and raw materials used in our OCS products, a further prolonged pandemic could lead to shortages in the raw materials necessary to manufacture our products.
+Added: The extent to which COVID-19 impacts operations of our third-party
+Added: partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence.
+Added: If we experience a prolonged disruption in our manufacturing, supply chains, or commercial operations, we would expect to experience a material adverse impact on our business, financial condition, results of operations and prospects.
Risks Related to Our Intellectual Property
−Removed: If we fail to maintain our license to patents covering the OCS, we will lose the right to manufacture, market and sell the OCS and our business would be harmed.
−Removed: Our business depends, in part, on our license from the VA, that covers the OCS.
−Removed: We have a license under certain patent rights relevant to our right to manufacture, market and sell the OCS, including the OCS Perfusion Sets and OCS Solutions specific to the lung, heart, liver and kidney for use in the OCS, pursuant to a license agreement with the VA.
−Removed: For more information, see “Item 1.
−Removed: Business—Intellectual Property—Department of Veterans Affairs License” in this Annual Report on Form 10-K.
−Removed: Our license agreement requires us, among other things, to pay royalties, determined as a percentage of our net sales of products covered by the licensed patents.
−Removed: If we fail to make these payments or otherwise fail to comply with the terms of our license agreement, the VA would have the right to terminate our license, in which case we would lose our right to manufacture, market and sell products covered by the licensed patents, which would materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
−Removed: The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the agreement.
−Removed: If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our license agreement with the VA or any other licensing arrangements on acceptable terms, or are insufficient to provide us the necessary rights to use the intellectual property, we may be unable to successfully develop and commercialize the OCS or other affected products.
−Removed: If we or our licensors fail to adequately protect our licensed intellectual property, our ability to commercialize our products could suffer.
−Removed: Any disputes with our licensor or any termination of the licenses on which we depend could have a material adverse effect on our business, financial condition, results of operations and prospects.
If we infringe or are alleged to infringe the intellectual property rights of third parties or are otherwise subject to litigation or other proceedings regarding our intellectual property rights, our business or competitive position could be adversely affected.
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In addition to infringement claims against us, we may become a party to other types of patent litigation and other proceedings, including post-grant proceedings declared by the United States Patent and Trademark Office, or USPTO, and opposition proceedings in the European Patent Office, regarding intellectual property rights with respect to the OCS.
−Removed: For example, we may be subject to a third-party preissuance submission of prior art to the USPTO, or become involved in post-grant review procedures, oppositions, derivations, reexaminations, inter partes review or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others.
+Added: example, we may be subject to a third-party preissuance submission of prior art to the USPTO, or become involved in post-grant review procedures, oppositions, derivations, reexaminations, inter partes review or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others.
An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.
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All but one of the issued United States patents under the VA license expired in 2017 and the issued international patents expired in 2018.
−Removed: With respect to the unexpired, issued U.S.
−Removed: patent licensed from the VA, we have been granted an interim patent term extension until September 23, 2021 and we have requested an extension until May 2022.
−Removed: However, the length of the patent term extension is currently being determined by the United States Patent and Trademark Office (USPTO) based on input from the FDA.
−Removed: On February 8, 2021, the FDA provided to the USPTO and determined the regulatory review period for the OCS Lung System.
−Removed: Under the FDA’s analysis, the patent term extension would be until November 6, 2021.
+Added: However, we have requested patent term extension for one U.S.
+Added: patent covered by the VA license agreement, U.S.
+Added: We have been granted an interim patent term extension until November 6, 2021.
+Added: We have not received final approval of the patent extension beyond the interim patent already requested.
+Added: The maximum extensions granted would be through May 2022;
+Added: however, the length of the patent term extension will be determined by the United States Patent and Trademark Office, or USPTO, based on input from the FDA.
+Added: On February 8, 2021, the FDA provided to the USPTO a determined regulatory review period for the OCS Lung.
+Added: Under the FDA’s analysis, the patent term extension of the ’082 patent would be until November 6, 2021.
+Added: We have not received communication from the USPTO, but expect that the USPTO’s patent term extension for the ‘082 patent will maintain the November 6, 2021 expiration date.
With respect to the patents and patent applications that we own, any patents that have or may issue from our currently issued or pending patent applications would be expected to expire between 2025 and 2036, assuming all required fees are paid.
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If we are unable to obtain patent term extension or restoration or the term of any such extension is less than we request, the period during which we can enforce our patent rights for the applicable product will be shortened and our competitors may obtain approval of competing products following our patent expiration.
−Removed: As a result, our ability to generate revenues could be materially adversely affected.
+Added: As a result, our ability to generate revenue could be materially adversely affected.
Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.
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In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.
−Removed: We also have agreements with our employees, consultants and third parties that obligate them to assign inventions made in the course of their work for us to us, however these agreements may not be self-executing, not all employees or consultants may enter into such agreements, or employees or consultants may breach or violate the terms of these agreements, and we may not have adequate remedies for any such breach or violation.
+Added: We also have agreements with our employees, consultants and third parties that obligate them to assign inventions made in the course of their work for us to us, however
+Added: these agreements may not be self-executing, not all employees or consultants may enter into such agreements, or employees or consultants may breach or violate the terms of these agreements, and we may not have adequate remedies for any such breach or violation.
If any of our intellectual property or confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, the value of the OCS and our business and competitive position could be harmed.
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Risks Related to Government Regulation
−Removed: If we fail to adequately respond to the FDA follow-up inquiries or to obtain or maintain necessary FDA approval for each use of the OCS, or if such approval is delayed, we will not be able to commercially sell and market the OCS.
+Added: If we fail to maintain necessary FDA approval for the OCS, or obtain necessary FDA approval for future uses of the OCS, we will not be able to commercially sell and market the OCS.
The OCS products are medical devices subject to extensive regulation in the United States by the FDA and other federal, state and local authorities.
The FDA regulates the design, development, testing, manufacturing, labeling, selling, promoting, distributing, importing, exporting and shipping of the OCS.
−Removed: We have obtained PMA approval for the OCS Lung for both the preservation of donor lungs currently utilized for transplantation and donor lungs that are currently unutilized for transplantation, but the OCS has not yet attained PMA approval for preservation of heart and liver donor organs.
−Removed: In the United States, before we can market the OCS products for each organ, we must first receive PMA approval from the FDA.
−Removed: This process can be expensive and lengthy and entail significant costs.
−Removed: The process of obtaining PMA approval requires significant clinical trial data.
−Removed: It generally takes one year, or even longer, from the time the PMA application is submitted to the FDA until an FDA action date.
−Removed: Despite the time, effort and cost involved in this process, the FDA might not approve the OCS products for use in preservation or transplantation or of donor hearts, livers, or other organs.
−Removed: Furthermore, unforeseen requirements or delays in obtaining clearances or approvals from the FDA for any future products could result in unexpected and significant costs for us and consume management’s time and other resources.
+Added: As of September 2021, we have obtained a PMA for each of the OCS Lung, OCS Liver and OCS Heart.
+Added: Unforeseen requirements or delays in obtaining clearances or approvals from the FDA for any future indications of the OCS or future products could result in unexpected and significant costs for us and consume management’s time and other resources.
The COVID-19 pandemic may result in delayed review and approval timelines.
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The duration and severity of the COVID-19 pandemic is unpredictable and difficult to assess.
−Removed: Moreover, the FDA could ask us to supplement our submissions, collect additional non-clinical data, conduct additional clinical trials or engage in other costly and time-consuming actions, or it could simply deny our PMA application or, if we were to seek any 510(k) clearance for a product, issue a not substantially equivalent determination for a 510(k) device.
−Removed: For example, in 2015, we voluntarily withdrew our original PMA application for the OCS Heart in an effort to expand our data to include OCS Heart EXPAND Trial results as well as to supplement our OCS Heart PROCEED II Trial results with long-term follow-up data that was not collected as part of the original trial protocol.
−Removed: In addition, even if we obtain PMA approval, the approval could be withdrawn or other restrictions imposed if post- market data demonstrate safety issues or inadequate performance.
+Added: PMA approval could be withdrawn or other restrictions imposed if post- market data demonstrate safety issues or inadequate performance.
For 510(k) cleared devices, the FDA can use its enforcement authorities to require removal of a device from the market in case of safety issues.
−Removed: We are currently investigating the safety and effectiveness of the OCS in multiple IDE investigations.
−Removed: Specifically, we completed enrollment in the OCS Liver PROTECT Trial under an IDE and received IDE approval for and are enrolling patients in the OCS Liver PROTECT CAP Trial .
−Removed: We also received IDE approval for a study of the use of the OCS Liver for certain donor livers that are donated after circulatory death that have extended warm ischemia time or older donor age.
−Removed: In addition, we completed the OCS Heart EXPAND Trial under an IDE and received IDE approval for the OCS Heart EXPAND CAP Trial.
−Removed: We also completed enrollment in the OCS Heart DCD trial for donor hearts that are donated after circulatory death under an IDE and received IDE approval for the OCS Heart DCD CAP Trial.
−Removed: As is typical to the PMA review process, during the course of its initial PMA review and in most cases within 90 calendar days of the company’s PMA filing date, the FDA communicates issues that it has identified and views as deficiencies through a substantive interaction, which in most cases is a letter.
−Removed: That letter is technically referred to as a “major deficiency letter,” and it provides the applicant with an opportunity to address the FDA’s questions.
−Removed: After completing its review of a PMA application, the FDA will take one of the following actions:
−Removed: an approval, an approvable letter, a not approvable letter, or, in rare instances, a denial.
−Removed: We have received a “major deficiency letter” for each PMA application that we have submitted to the FDA, and we believe our responses have been thorough and comprehensive, including most recently with respect to the OCS Liver.
−Removed: The FDA will convene an advisory committee of experts from outside the FDA to review and evaluate our OCS Heart PMA currently under review and to provide recommendations to the FDA as to the safety, effectiveness, risk and benefit of the device.
−Removed: It is not uncommon for the FDA to seek advice from an outside expert panel when considering an application for a novel technology.
−Removed: The FDA ultimately decides whether to approve or disapprove the PMA application and may or may not follow the advisory committee’s recommendation, even if favorable.
−Removed: Notwithstanding a favorable recommendation, the FDA could determine that the data from our clinical trials does not support PMA approval or the claims we wish to make, or the FDA could require us to gather significant additional clinical data or conduct additional non-clinical testing.
−Removed: The FDA had scheduled the advisory committee meeting regarding our OCS Heart PMA application for the second quarter of 2020.
−Removed: However, due to the COVID-19 pandemic, the FDA postponed the advisory committee meeting to October 2020, and in September 2020, the FDA further postponed the advisory committee meeting to allow the FDA to review additional, already collected, short and longer-term data from the OCS Heart EXPAND Trial and OCS Heart EXPAND CAP Trial.
−Removed: The FDA advisory committee panel is expected to be held on April 6, 2021.
−Removed: The approval process involving the OCS for each organ is subject to many of the same risks and uncertainties.
−Removed: If we are not able to obtain the necessary regulatory approvals for the OCS, or approvals or clearances for future products on a timely basis or at all, our financial condition and results of operations would suffer, possibly materially, and our business might fail.
−Removed: Even if the FDA grants PMA approval for the OCS Heart and OCS Liver for preservation of donor hearts and livers for transplantation, respectively, the claims approved by the FDA may be significantly narrower than those we are seeking.
+Added: If we are not able to maintain the necessary regulatory approvals for the OCS, or obtain the necessary regulatory approvals or clearances for future products on a timely basis or at all, our financial condition and results of operations would suffer, possibly materially, and our business might fail.
If we fail to maintain the CE Mark in the European Union, Northern Ireland and the UKCA mark (as applicable) in Great Britain, we will not be able to commercially sell and market the OCS in the EU.
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These CE Marks are valid for five years, so they will expire in September 2022.
−Removed: In order to be able to continue to use the CE Mark in the same manner after May 2021, we will have to meet the conditions set out in the transitional provisions in the Medical Devices Regulation (Regulation 2017/745) (MDR), and the in vitro Diagnostic Medical Device Regulations (2017/746) (IVDR).
−Removed: In Great Britain (England, Wales and Scotland), the devices will be required to conform to the UK MDR 2002 in order to be registered with the Medicines and Healthcare Products Regulatory Agency (MHRA).
−Removed: Unlike Great Britain, the Medical Device Regulations (2017/745) and the in vitro Diagnostic Medical Device Regulations (2017/746) will apply in Northern Ireland from 26 May 2021, and 26 May 2022 respectively, in line with the EU’s implementation timeline.
−Removed: The MHRA will remain the competent Authority for medical devices in Northern Ireland.
−Removed: Before expiry of these certificates, we will need to apply for their re-certification under the new Medical Devices Regulation.
−Removed: We might not be able to continue to use the CE Mark for any current use of the OCS.
−Removed: we are not able to obtain re-certification of our products for their current use;
+Added: In order to be able to continue to use the CE Mark in the same manner during the transitional period, we will have to meet the conditions set out in the transitional provisions in the MDR.
+Added: Post-Brexit the MDR applies in Northern Ireland in accordance with the Northern Irish Protocol but does not apply in Great Britain (England, Wales and Scotland).
+Added: The UK Medical Devices Regulations 2002 provided a transitional period under which the UK will recognize EU CE marks until June 30, 2023.
+Added: To be placed on the market in Great Britain after this date, medical devices must have undergone a conformity assessment in accordance with the UK Medical Devices Regulations 2002 and have the UKCA mark affixed.
+Added: However, even devices that benefit from the transition period must still comply with the other requirements of the UK Medical Devices Regulations;
+Added: for example, there are broader registration requirements with the Medicines and Healthcare Products Regulatory Agency, or the MHRA, and if the manufacturer is located outside the UK, a UK Responsible Person must be appointed.
+Added: To continue to place products on the market in the European Union and United Kingdom after expiry of our existing notified body certificate, we will need to apply for their re-certification under the new MDR.
+Added: We might not be able to continue to place the devices on the market in the European Union and/or United Kingdom for any current use of the OCS.
+Added: we are not able to obtain re-certification of our products for their current use under the MDR and/or obtain cortication under the UK Medical Devices Regulations when required;
we are not able to do so in time before the certificates expire;
our technical files for our products do not meet the new (and more stringent) requirements under the Medical Devices Regulation;
−Removed: any variation in the uses for which the CE Mark has been affixed to the OCS requires us to perform further research or to modify the technical documentation required to affix the CE mark, our revenues and operating results could be adversely affected and our reputation could be harmed.
+Added: any variation in the uses for which the CE Mark has been affixed to the OCS requires us to perform further research or to modify the technical documentation required to affix the CE mark, our revenue and operating results could be adversely affected and our reputation could be harmed.
If we fail to obtain and maintain regulatory approval in foreign jurisdictions, our market opportunities will be limited.
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For example, if, as a result of manufacturing error, the efficacy of our products does not meet the standards claimed in the accompanying instructions for use, regulatory authorities could prevent our products from being placed on the market in the European Union, Northern Ireland and Great Britain.
−Removed: Additionally, we have appointed a U.K.
−Removed: responsible person and will register with the Medicines and Healthcare Products Regulatory Agency in the U.K.
−Removed: Failure to do so may mean that we will be unable to lawfully sell our products in the U.K.
+Added: Additionally, we have appointed a UK responsible person and have registered with the Medicines and Healthcare Products Regulatory Agency in the UK.
If transplant centers and hospitals cannot obtain adequate reimbursement or funding from governments or third-party payors for purchases of the OCS and additional disposable sets and for costs associated with procedures that use the OCS, our prospects for generating revenue and achieving profitability will suffer materially.
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Hospitals or surgeons in countries or regions where separate additional reimbursement or funding for the OCS is not available may determine that the benefits of the OCS do not or will not outweigh the cost of the OCS.
+Added: Alternatively, we may be required to enter into risk sharing arrangements with payers.
Adoption of our products in the European Union may be hindered if they impede our customer’s compliance with the requirements of Directive 2010/53/EU (formerly Directive 2010/45/EU), and the Quality and Safety of Organs Intended for Transplantation Regulations 2012 (Statutory Instrument (SI) 2012 No.
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Even where reimbursement or funding is available, in some foreign countries, particularly in the European Union, the pricing of medical devices is subject to governmental control.
−Removed: In these countries, reimbursement and pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
−Removed: For example, some foreign reimbursement systems provide for limited payments in a given period and, therefore, result in extended payment periods, which could hinder adoption of the OCS for use in transplantation, limiting sales.
+Added: In these countries, reimbursement and pricing negotiations with governmental authorities can take considerable time after the CE marking of a product.
+Added: For example, some foreign reimbursement systems provide for limited payments in a given period and, therefore, result in extended payment periods, which could hinder
+Added: adoption of the OCS for use in transplantation, limiting sales.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, it may not be profitable to sell our products in certain foreign countries, which could negatively affect the long-term growth of our business.
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For example, we might need to conduct additional clinical trials and provide additional technical information to the appropriate notified body before the CE Mark can be affixed to the changed product.
+Added: Additionally, devices that are relying on a notified body certificate under the Medical Devices Directive under the MDR transition period will no longer benefit from the transition period if significant changes are made to the design and/or intended purpose of the device.
+Added: If we make such changes we would need to CE Mark the devices under the MDR in order to continue to place them on the market in the European Union and/or United Kingdom.
Even after approval for the OCS, we are subject to continuing regulation by regulatory authorities and entities in the United States and other countries, and if we fail to comply with any of these regulations, our business could suffer.
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Any corrective action, whether voluntary or involuntary, as well as potentially defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business, and may harm our reputation and financial results.
−Removed: We are currently required to comply with strict post-marketing obligations that accompany the affixing of the CE Mark to medical devices in the European Union.
−Removed: These include the obligation to report incidents which meet the criteria for reporting to provide periodic summary and trend reports.
−Removed: Authorities in the European Union also closely monitor the marketing programs implemented by device companies.
−Removed: The obligations that companies must fulfill concerning premarketing approval of promotional material vary among member states of the European Union.
−Removed: A failure to comply with our obligations in marketing and promoting the OCS in the European Union could harm our business and results of operations.
−Removed: For our currently marketed OCS Lung, as part of the conditions of approval, we must complete three PMA post-approval studies:
−Removed: the OCS Lung INSPIRE Continuation PAS, which is a two-arm observational study intended to evaluate long-term outcomes of the OCS Lung INSPIRE Trial patients, the OCS Lung EXPAND Continuation PAS, which is a single arm study intended to evaluate long-term outcomes of the OCS Lung EXPAND Trial patients, and our OCS Lung Thoracic Organ Perfusion PAS Registry, or TOP Registry, which is a prospective, single-arm, multi-center, observational study designed to evaluate short- and long-term safety and effectiveness of the OCS Lung for both donor lungs currently utilized and unutilized for transplantation.
+Added: For our currently marketed OCS Lung, OCS Heart and OCS Liver, as part of the conditions of approval, we must complete PMA post-approval studies.
+Added: For example, three post-approval studies must be competed for OCS Lung including, the OCS Lung INSPIRE Continuation PAS, which is a two-arm observational study intended to evaluate long-term outcomes of the OCS Lung INSPIRE Trial patients, the OCS Lung EXPAND Continuation PAS, which is a single arm study intended to evaluate long-term outcomes of the OCS Lung EXPAND Trial patients, and our OCS Lung Thoracic Organ Perfusion PAS Registry, or TOP Registry, which is a prospective, single-arm, multi-center, observational study designed to evaluate short- and long-term safety and effectiveness of the OCS Lung for both donor lungs currently utilized and unutilized for transplantation.
The OCS Lung INSPIRE Continuation PAS, the OCS Lung EXPAND Continuation PAS and the TOP Registry entail submission of regular reports to the FDA.
Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.
+Added: We also are required to comply with strict post-marketing obligations that accompany the affixing of the CE Mark to medical devices in the European Union.
+Added: These include the obligation to report incidents which meet the criteria for reporting, and to provide periodic safety update reports and trend reports.
+Added: Additionally, national competent authorities in the European Union also closely monitor the marketing programs implemented by device companies.
+Added: The obligations that companies must fulfill concerning premarketing approval of promotional material vary among member states of the European Union.
+Added: failure to comply with our obligations in marketing and promoting the OCS in the European Union could harm our business and results of operations.
In addition, certain changes and other events with respect to regulatory approvals may cause an event of default under our Credit Agreement, including the initiation of a regulatory enforcement action or issuance of a warning letter with respect to the Company or any of its products or manufacturing facilities that causes the discontinuance of marketing or withdrawal of any products or causes delay in manufacturing.
Management’s Discussion and Analysis -Long-Term Debt,” in this Annual Report on Form 10-K.
−Removed: If we fail to comply with the FDA’s QSR, or FDA or EU requirements that pertain to clinical trials or investigations, the FDA or the competent EU authority could take various enforcement actions, including halting our manufacturing operations, and our business would suffer.
+Added: If we fail to comply with the FDA’s QSR, or FDA or EU requirements that pertain to clinical trials or investigations, the FDA or the relevant EU competent authority could take various enforcement actions, including halting our manufacturing operations, and our business would suffer.
In the United States, as a manufacturer of a medical device, we are required to demonstrate and maintain compliance with the FDA’s QSR.
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Outside the United States, our products and operations are also often required to comply with standards set by industrial standards bodies, such as the International Organization for Standardization.
+Added: For example, in the European Union the MDR includes detailed requirements for clinical investigations, which are in line with the international standard ISO 14155:2011 on good clinical practical, or GCP.
Foreign regulatory bodies may evaluate our products or the testing that our products undergo against these standards.
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We have voluntarily recalled certain OCS products from customer sites in the past and may need to take similar actions in the future, which may result in notices to regulatory agencies in other jurisdictions .
−Removed: For example, most recently, in July 2018, we implemented a correction to the OCS Heart and Liver Consoles to address a loss of connection between the OCS Console and Perfusion Sets that was caused by incomplete cleaning, and in March 2018, after identifying out-of-specification plastic components used in the manufacturing of the OCS Lung Console, we recalled the affected units from customer sites and replaced them with known, good product, and we made required notifications to the FDA and foreign regulatory agencies.
Internationally, the approaches to product defects will vary.
A product may be recalled in one country but not in others.
−Removed: However, within the European Union, competent authorities are known to communicate with each other, therefore a recall in one EU member state may lead to recalls in the rest of the European Union.
+Added: However, within the European Union, competent authorities are required without delay to take corrective action against a device (including withdrawal/recall of a device) and notify other national competent authorities, the European Commission and notified bodies (as applicable) of any devices that present an unacceptable risk to the health or safety of patients, users or other persons, or other aspects of the protection of public health.
+Added: Other non-compliance with the MDR may also lead to corrective action being taken and notifications being sent if the non-compliance is not rectified within a given time period (as determined by the competent authority).
+Added: Therefore a recall in one EU member state may lead to recalls in the rest of the European Union.
We may not be able to obtain or maintain regulatory qualifications outside the United States, which could harm our business.
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Foreign regulatory authorities may not clear or approve our product for the same uses cleared or approved by the FDA.
−Removed: Although we have been able to affix the CE Mark to the OCS Lung, OCS Heart and OCS
−Removed: Liver in the European Union, we may not be able to maintain such CE Marking, including as a result of the need to re-certify our products, under the new Medical Devices Regulation and the Medical Devices Regulations 20 02 (UK MDR 2002) in Great Britain .
+Added: Although we have been able to affix the CE Mark to the OCS Lung, OCS Heart and OCS Liver in the European Union, we may not be able to maintain such CE Marking, including as a result of the need to re-certify our products, under the new Medical Devices Regulation and the Medical Devices Regulations 2002 (UK MDR 2002) in Great Britain.
Our notified body in the Netherlands, BSI, could determine either itself or at the request of a competent authority that our OCS products do not meet the regulatory requirements for CE marking, which would result in withdrawal of the certificates that allow the CE marking required to market the OCS products in the European Union.
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Foreign regulatory agencies periodically inspect manufacturing facilities both in the United States and abroad.
−Removed: Our most recent inspection by our EU Notified Body was in January 2021, which resulted in one minor observation.
−Removed: While we are implementing corrective and preventive action to address the observation, this previous observation may not be closed out.
−Removed: Additionally, we may fail to pass future inspections of our facility by applicable regulatory authorities or entities both in the United States and in other countries.
+Added: While we implement corrective and preventive action related to any inspection observations, we may fail to pass future inspections of our facility by applicable regulatory authorities or entities both in the United States and in other countries.
Delays in receiving necessary qualifications, clearances or approvals to market our product outside the United States, or the failure to receive those qualifications, clearances or approvals, or to comply with other foreign regulatory requirements, could limit or prevent us from marketing our products or enhancements in international markets.
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Moreover, transplantations are complex and inherently risky medical procedures.
−Removed: For example, most recipients of heart transplants experience one or more serious adverse events during their transplant and post-operative care, including in some cases, death.
−Removed: In our OCS Lung INSPIRE Trial of donor lungs, 24% of patients experienced serious lung graft related adverse events and in our OCS Heart PROCEED II Trial of donor hearts, 13% of patients experienced serious heart graft related adverse events.
Many of the patients currently on a waiting list for a lung, heart or liver transplant already are very sick, with some of them receiving intensive care.
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Thus, we may incur substantial liability if the OCS fails to perform as expected and, as a result of this failure, patients do not receive the intended transplants or receive transplants that are not successful.
−Removed: Additionally, if the number of adverse events experienced by patients in clinical trials of the OCS is greater than expected, our clinical trials could be delayed or terminated by us or regulatory authorities.
−Removed: In our OCS Lung INSPIRE Trial of currently utilized donor lungs, 5.3% of patients died within 30 days of transplant, and in our OCS Heart PROCEED II Trial of currently utilized donor hearts, 6% of patients died within 30 days of transplant.
−Removed: Additionally, in a post-hoc observational analysis of all-cause mortality at 60 months post-transplantation for OCS Heart PROCEED II Trial patients, overall deaths were higher in the OCS group compared to the standard of care group.
−Removed: Although death is an anticipated adverse event of the organ transplant population, if the rate of deaths or other serious adverse events using the OCS is greater than expected using conventional transplant procedures, the study could be delayed or halted, which could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
+Added: Although death is an anticipated adverse event of the organ transplant population, if the rate of deaths or other serious adverse events using the OCS is greater than expected using conventional transplant procedures, transplant surgeons may cease using the OCS as often or at all, which could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.
Because the OCS represents a novel approach to organ transplantation, a patient or transplant center may choose to name us as a party to a lawsuit relating to the use of the OCS in connection with a planned or completed transplant procedure regardless of whether the OCS caused or contributed to a serious adverse event or death of a patient.
Any claim, whether or not we are ultimately successful, could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us.
−Removed: Currently, we maintain product liability insurance covering damages of up to $10 million per occurrence for both the human clinical and commercial use of our product.
−Removed: We also maintain local insurance policies in Belgium, Germany, Australia and the U.K.
−Removed: with coverage ranging from €2.5 million to €10.0 million per occurrence as required by the applicable country.
+Added: Currently, we maintain global product liability insurance covering damages of up to $10 million per occurrence for both the human clinical and commercial use of our product.
+Added: We also maintain local insurance policies as required.
Our current insurance coverage might not be sufficient to cover future claims and is subject to deductibles.
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Improper marketing or promotion of our products or misuse or off-label use of the OCS may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which could be costly to our business.
−Removed: Certain OCS products have been approved by regulatory authorities in the United States, European Union and other jurisdictions for specific indications, and our promotional materials and training methods must comply with regulatory requirements in the countries where they are sold.
−Removed: We train our sales and clinical adoption team to not promote the OCS for uses outside of the approved indications for use, known as “off-label uses.” We cannot, however, prevent a surgeon from using the OCS off-label, when in the surgeon’s independent professional medical judgment he or she deems it appropriate.
+Added: Our OCS products have been approved for marketing in the United States, European Union and other jurisdictions for specific indications, and our promotional materials and training methods must comply with regulatory requirements in the countries where they are sold.
+Added: We train our commercial team to not promote the OCS for uses outside of the approved indications for use/intended purpose, known as “off-label uses.” We cannot, however, prevent a surgeon from using the OCS off-label, when in the surgeon’s independent professional medical judgment he or she deems it appropriate.
There may be increased risk of injury to patients if surgeons attempt to use the OCS off-label.
−Removed: Furthermore, the use of the OCS for indications other than those approved by the FDA or approved by any foreign regulatory body may not effectively treat such conditions, which could harm our reputation in the marketplace among surgeons and patients.
+Added: Furthermore, the use of the OCS for indications other than those approved by the FDA/ by any foreign regulatory body or for which they are CE marked may not effectively treat such conditions, which could harm our reputation in the marketplace among surgeons and patients.
If the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of an off-label use, or that the materials or training are false or misleading, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter, which is used for violations that do not necessitate a warning letter, injunction, seizure, civil fine or criminal penalties.
−Removed: It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
+Added: In the EU the MDR expressly prohibits misleading claims in the form of off-label promotion and the MDR grants enforcement powers to national competent authorities.
+Added: It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws or consumer protection laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties,
+Added: including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
In addition, surgeons may misuse the OCS or use improper techniques if they are not adequately trained, potentially leading to unsatisfactory patient outcomes, patient injuries, negative publicity and an increased risk of product liability.
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Congress that could significantly change the statutory provisions governing the regulation of medical devices.
−Removed: In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products.
+Added: In addition, FDA regulations and guidance may be revised or reinterpreted by the FDA in ways that may significantly affect our business and our products.
Any new statutes, regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products or make it more difficult to obtain approval for, manufacture, market or distribute our products.
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or additional record keeping.
−Removed: The European Parliament passed the MDR, which repeals and replaces the European Union Medical Devices Directive and the Active Implantable Medical Devices Directive, which will become effective in May 202 1.
−Removed: The EU MDR and EU IVDR will fully apply in the EU Member States from May 26, 2021 and May 26, 2022 .
−Removed: Unlike directives, which must be implemented into the national laws of the European Economic Area, or EEA, member states, regulations would be directly applicable, (i.e., without the need for adoption of EEA member state laws implementing them) in all EEA member states and are intended to eliminate current differences in the regulation of medical devices among EEA member states.
−Removed: T he provisions contained within the EU MDR and EU IVDR will not be transposed into law in Great Britain and will not be implemented in Great Britain.
−Removed: Medical Devices in Great Britain are governed under the UK Medical Dev ice Regulations 2002.
−Removed: Under the terms of the Northern Ireland Protocol, the rules for placing medical devices on the Northern Ireland market differ from those applicable to Great Britain (England, Wales and Scotland).
−Removed: T he EU MDR and EU IVDR will apply in Northern Ireland from May 26, 2021 and May 26, 2022 , respectively .
−Removed: The MDR, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation.
−Removed: The regulations, among other things:
−Removed: strengthen the rules on placing devices on the market and reinforce surveillance once they are available;
−Removed: establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market;
−Removed: improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;
−Removed: set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the European Union;
−Removed: strengthen rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
−Removed: Our products may be affected by these rules, which may mean longer or more burdensome assessment of our products.
−Removed: These modifications may have an effect on the way we conduct our business in the EEA.
−Removed: We recognize that our products will have to be re-certified under the MDR and we are in the process of updating internal procedures to ensure compliance with the new MDR and have added international regulatory personnel to assist with the transition.
−Removed: In addition, there are significant concerns associated with whether EU Notified Bodies will be able to re-certify all devices in their care in time.
−Removed: If we do not manage to re-certify our products under this regulation or cannot rely on the transitional provisions, we may have to take our products off the EU market until this is the case.
+Added: In the EU, Regulation (EU) 2017/745, or the MDR, which repealed and replaced the Medical Devices Directive (93/42/EEC) with effect from May, 26 2021.
+Added: Although the MDR now applies so all new devices placed on the market must be CE marked under it, under the transition period granted by the MDR, certificates issued by notified bodies for medical devices under the Medical Devices Directive before May 26, 2021 remain valid until the period indicated on the certificate, subject to all certificates becoming void on May 27, 2024.
+Added: Post-Brexit the MDR applies in Northern Ireland in accordance with the Northern Irish Protocol but does not apply in Great Britain (England, Wales and Scotland).
+Added: The UK Medical Devices Regulations 2002 provided a transitional period under which the UK will recognize EU CE marks until June 30, 2023.
+Added: To be placed on the market in Great Britain after this date, medical devices must have undergone a conformity assessment in accordance with the UK Medical Devices Regulations 2002 and have the UKCA mark affixed.
+Added: We recognize that our products will have to be re-certified under the MDR by September 2022 (as they currently benefit from the MDR transition period) and we are actively working with our notified body to meet the MDR requirements.
+Added: However, if we do not manage to re-certify our products under this regulation or can no longer rely on the transitional provisions (e.g., if a substantial change is made to the design or intended purpose), we may have to take our products off the EU market until this is the case.
+Added: We also recognize that our products will need to be certified and have a UKCA mark affixed to be placed on the market in Great Britain from July 1, 2023.
+Added: However, in 2021 the MHRA ran a consultation on the future regulation of medical devices in the UK.
+Added: This might lead to substantial changes in the regulatory framework/requirements imposed on medical devices.
+Added: This could slow our ability to obtain the necessary certification and we may have to take our product off the market in Great Britain until we could obtain a UKCA mark.
We are subject to certain federal, state and foreign fraud and abuse laws, health information privacy and security laws and transparency laws, which, if violated, could subject us to substantial penalties.
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The extra-territorial effect of those laws affects our sales and marketing strategy, since in many countries healthcare professionals are officers of the state.
−Removed: This is particularly important in the context of bribery offences, which in the U.K.
−Removed: and in the United States include the offence of bribing a foreign public official.
+Added: This is particularly important in the context of bribery offences, which in the UK and in the United States include the offence of bribing a foreign public official.
Failure by our sales staff to comply with those laws may result in criminal and civil penalties and damage our reputation;
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In addition, the Bribery Act prohibits both domestic and international bribery, as well as bribery across both private and public sectors.
−Removed: The substantive offences of offering or receiving a bribe will be committed by an individual where either the bribery takes place in the U.K, or the person paying or receiving the bribe has a close connection with the U.K.
−Removed: An organization which is either incorporated in or carries on part of its business in the U.K will be liable under the Bribery Act if a person associated with the organization (being persons performing services for it) pays a bribe anywhere in the world intending to obtain or retain business for the organization .
+Added: The substantive offences of offering or receiving a bribe will be committed by an individual where either the bribery takes place in the U.K, or the person paying or receiving the bribe has a close connection with the UK An organization which is either incorporated in or carries on part of its business in the U.K will be liable under the Bribery Act if a person associated with the organization (being persons performing services for it) pays a bribe anywhere in the world intending to obtain or retain business for the organization .
This is a strict liability offense with the only defenses available being that the organization implemented “adequate procedures” to prevent bribery or it was reasonable for it to not have such procedures in place.
−Removed: Under these laws and regulations, as well as other anti-corruption laws, anti-money laundering laws, export control laws, customs laws, sanctions laws and other laws governing our operations, various government agencies may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance programs, which may increase compliance costs, and may subject us to fines, penalties and other sanctions.
+Added: Under these laws and regulations, as well as other anti-corruption laws, anti-money laundering laws, export control laws, customs laws, sanctions laws and other laws governing our operations, various government agencies may require export licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries or with sanctioned persons or entities and modifications to compliance
+Added: programs, which may increase compliance costs, and may subject us to fines, penalties and other sanctions.
A violation of these laws or regulations would negatively affect our business, financial condition and results of operations.
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State privacy and cybersecurity laws vary and, in some cases, can impose more restrictive requirements than U.S.
+Added: For example, the CCPA affords California residents expanded privacy rights and protections, including civil penalties for violations and statutory damages under a private right of action for data security breaches.
+Added: These protections will be expanded by CPRA, which will be operational in most key respects on January 1, 2023.
+Added: Similar legislative proposals have passed or are being advanced in other states.
Where state laws are more protective, we must comply with the stricter provisions.
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Even if we are not determined to have violated applicable data laws, government investigations into these issues can be expensive and lengthy and generate adverse publicity, which could harm our business, financial condition, results of operations or prospects.
−Removed: The European Union also has laws and regulations dealing with the collection, use and processing of personal data concerning individuals who are located in the European Union, which are often more restrictive than those in the United States.
−Removed: We are subject to the requirements of the GDPR because we are processing personal data in the European Union or offering goods to, or monitoring the behavior of, individuals who are located in the European Union.
−Removed: The GDPR implements more stringent administrative requirements for controllers and processors of personal data, including, for example, shortened timelines for data breach notifications, limitations on retention of information, increased requirements pertaining to health data and pseudonymized (i.e., key-coded) data, additional obligations when we contract with service providers, and more robust rights for individuals over their personal data.
+Added: The EEA and the UK, as well as other international jurisdictions, also have laws and regulations dealing with the collection, use and processing of personal data concerning individuals who are located there.
+Added: Those laws are often more restrictive than those in the United States.
+Added: For example, we are subject to the requirements of the GDPR, which imposes more stringent administrative requirements for controllers and processors of personal data, including, for example, shortened timelines for data breach notifications, limitations on retention of information, increased requirements pertaining to health data and pseudonymized (i.e., key-coded) data, additional obligations when we contract with service providers, and more robust rights for individuals over their personal data.
The GDPR provides that EU member states may make their own further laws and regulations, including laws and regulations limiting the processing of genetic, biometric or health data, which could limit our ability to use and share personal data or cause our costs to increase, and harm our business and financial condition.
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The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing focus on privacy and data protection issues with the potential to affect our business.
−Removed: For example, in July 2020, the Court of Justice of the European Union invalidated the U.S.-EU Privacy Shield Framework, which has led to increased scrutiny of data transfers from the EEA to the United States generally and may increase our costs of compliance with data privacy legislation.
−Removed: We rely on a mixture of mechanisms to transfer personal data from our EU business to the United States.
+Added: For example, in July 2020, the Court of Justice of the European Union invalidated the U.S.-EU Privacy Shield Framework, which has led to increased scrutiny of data transfers from the EEA and the UK to the United States generally and may increase our costs of compliance with data privacy legislation.
+Added: We rely on a mixture of mechanisms to transfer personal data from our European business to the United States.
We are also subject to the laws of each EU member state implementing any EU directive applicable to our processing activities, including Directing 2002/58/EC.
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healthcare system, could harm our business, financial condition and results of operations.
+Added: We operate in a highly-regulated industry.
+Added: and state governments continue to propose and pass legislation or take administrative action that may affect the availability and cost of healthcare.
+Added: Healthcare reform initiatives could harm our business, financial condition and results of operations.
In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs.
−Removed: For example, the Affordable Care Act, which was enacted in 2010:
+Added: For example, the Affordable Care Act, which was enacted in 2010, substantially revised the coverage, delivery and payment of health care services.
+Added: For example, the Affordable Care Act:
established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research;
implemented payment system reforms, including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models;
−Removed: expanded the eligibility criteria for Medicaid programs.
−Removed: We do not yet know the full impact that the Affordable Care Act, and more recent measures impacting the healthcare system, will have on our business.
−Removed: The taxes imposed by the Affordable Care Act may result in decreased profits to us, lower reimbursement by payors to hospitals and transplant centers, and/or reduced medical procedure volumes, all of which may have a material adverse effect on our business, financial condition and results of operations.
−Removed: Under the former Trump Administration, there were ongoing efforts to repeal, modify, or invalidate provisions of the Affordable Care Act.
−Removed: For example, federal legislation repealed penalties for not complying with the individual mandate to carry health insurance.
−Removed: Additionally, the Affordable Care Act has been subject to judicial challenge.
−Removed: The case Texas v.
−Removed: Azar, which challenges the constitutionality of the Affordable Care Act was argued before the Supreme Court in November 2020.
−Removed: Pending resolution of the litigation, all of the Affordable Care Act but the individual mandate to buy health insurance remains in effect.
−Removed: The repeal of all or a portion of the Affordable Care Act could result in lower numbers of insured individuals, reduced coverage for insured individuals and adversely affect our business.
−Removed: In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
−Removed: The Budget Control Act of 2011, as amended, for example, reduced Medicare payments to providers by 2% per fiscal year, and will remain in effect through 2030 (except for the period from May 1, 2020 to March 31, 2021), when no reduction occurred) unless additional Congressional action is taken.
−Removed: The American Taxpayer Relief Act of 2012 also reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
−Removed: The Medicare Access and CHIP Reauthorization Act of 2015, or MACRA, repealed the formula by which Medicare made annual payment adjustments to physicians and replaced the former formula with fixed annual updates and a new system of incentive payments that are based on various performance measures and physicians’ participation in alternative payment models such as accountable care organizations, which took effect in 2019.
−Removed: It is unclear what effect new quality and payment programs, such as MACRA, may have on our business, financial condition, results of operations or cash flows.
−Removed: We expect additional state and federal healthcare policies and reform measures to be adopted in the future, including following in the wake of the transition from the Trump administration to the Biden administration, any of which could limit reimbursement for healthcare products and services or otherwise result in reduced demand for the OCS or additional pricing pressure and have a material adverse effect on our industry generally and on our customers.
−Removed: Any changes of, or uncertainty with respect to, future reimbursement to hospitals and transplant centers could affect demand for the OCS, which in turn could have a material adverse effect on our business, financial condition and results of operations.
+Added: expanded health care coverage through Medicaid expansion and the implementation of the so-called “individual mandate” for health insurance coverage.
+Added: Since its enactment, there have been and likely will be judicial, administrative, executive, and legislative challenges to certain aspects of the Affordable Care Act.
+Added: For example, tax reform legislation was enacted at the end of 2017 that eliminates the tax penalty for individuals who do not maintain sufficient health insurance coverage beginning in 2019 (the so-called “individual mandate”).
+Added: More recently, on June 17, 2021, the U.S.
+Added: Supreme Court dismissed the latest judicial challenge to the Affordable Care Act brought by several states without specifically ruling on the constitutionality of the Affordable Care Act.
+Added: Changes resulting from any successful challenges or other future modifications have a material impact on our business.
+Added: Beyond the Affordable Care Act, there have been and will likely continue to be ongoing healthcare reform efforts.
+Added: These reform efforts have and may continue to focus on coverage and payment for organ procurement and transplant.
+Added: For example, the Centers for Medicare & Medicaid Services issued regulations in 2020 and 2021 that revised Medicare conditions of participation for organ procurement organizations as well as organ acquisition payment policies for organ procurement organizations, transplant centers and donor hospitals.
+Added: We expect additional state and federal healthcare policies and reform measures to be adopted in the future, any of which could limit coverage or reimbursement for healthcare products and services or otherwise result in reduced demand for the OCS or additional pricing pressure and have a material adverse effect on our industry generally and on our customers.
+Added: Any changes of, or uncertainty with respect to, coverage or reimbursement of services provided by organ procurement organizations, transplant centers or hospitals could affect demand for the OCS, which in turn could have a material adverse effect on our business, financial condition and results of operations.
+Added: In addition, other broader legislative changes have been adopted that could have an adverse effect upon, and could prevent, our products’ commercial success.
+Added: The Budget Control Act of 2011, as amended, or the Budget Control Act, includes provisions intended to reduce the federal deficit, including reductions in Medicare payments to providers through
+Added: 2030 (except May 1, 2020 to March 31, 2022).
+Added: Any significant spending reductions affecting Medicare, Medicaid, or other publicly funded or subsidized health programs, or any significant taxes or fees imposed as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, or otherwise, could have an adverse impact on our anticipated product revenue.
Our business activities involve the use of hazardous materials, which require compliance with environmental and occupational safety laws regulating the use of such materials.
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The market price of our common stock has been and may continue to be volatile and could subject us to securities class action litigation.
−Removed: Since the shares were sold in our IPO in May 2019 at a price of $16.00 per share and through March 9, 2021, the price per share of our common stock has ranged from as low as $10.10 to as high as $44.12.
+Added: Over the last twelve months, the price per share of our common stock has ranged from as low as $17.20 to as high as $49.50.
Some of the factors that may cause the market price of our common stock to fluctuate include:
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actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts;
−Removed: results of clinical trials relating to the OCS or competing products;
+Added: results of post-approval studies or clinical trials relating to next generation products for the OCS or competing products;
failure or discontinuation of any of our product development and research programs;
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brought derivatively on our behalf, asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders, asserting a claim arising pursuant to any provision of the Massachusetts Business Corporation Act or asserting a claim governed by the internal affairs doctrine, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
−Removed: In addition, our restated articles of organization provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions.
+Added: In addition, our restated articles of organization provide that any person or entity purchasing or
+Added: otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions.
This provision will not apply to actions arising under the Exchange Act, or the Securities Act of 1933, as amended, or the Securities Act.
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If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to accurately report our financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in our company.
−Removed: Although we are required to annually assess our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act and disclose changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting on a quarterly basis, as an emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the date we are no longer an emerging growth company.
−Removed: At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operated.
−Removed: To comply with the requirements of being a public company, we have undertaken certain actions, such as implementing new internal controls and procedures and hiring additional accounting staff.
−Removed: We may also need to undertake certain other actions in the future, including the hiring of internal audit staff or additional accounting staff.
−Removed: Testing and maintaining internal controls can divert our management’s attention from other matters that are important to the operation of our business.
−Removed: In addition, when evaluating our internal controls over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404.
−Removed: If we identify any material weaknesses in our internal controls over financial reporting or we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal controls over financial reporting is effective, or if our independent registered public accounting firm expresses an adverse opinion as to the effectiveness of our internal controls over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports.
+Added: Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended, our management is required to report on, and our independent registered public accounting firm is required to attest to, the effectiveness of our internal control over financial reporting.
+Added: This assessment includes disclosure of any material weakness identified by our management in our internal control over financial reporting.
+Added: In addition, we are required to comply with the SEC’s rules implementing Section 302 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our quarterly and annual reports, and we are required to disclose significant changes made in our internal controls and procedures on a quarterly basis.
+Added: If we identify a material weakness in our internal control over financial reporting, we may not be able to remediate the material weakness identified in a timely manner or maintain all of the controls necessary to remain in compliance with our reporting obligations.
+Added: If we identify any material weaknesses in our internal controls over financial reporting or we are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting in future periods, investors may lose confidence in the accuracy and completeness of our financial reports.
As a result, the market price of our common stock could be materially adversely affected.
−Removed: We are an “emerging growth company” and “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
−Removed: We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company until the last day of our fiscal year following the fifth anniversary of our IPO, subject to specified conditions.
−Removed: We would cease to be an emerging growth company prior to such date if we have more than $1.07 billion in annual revenue, we have more than $700 million in market value of our stock held by non-affiliates or we issue more than $1 billion of non-convertible debt securities over a three-year period.
−Removed: For so long as we remain an emerging growth company, we are permitted, and intend, to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies.
−Removed: These exemptions include reduced disclosure obligations regarding executive compensation and no requirements to hold non-binding advisory votes on executive compensation and golden parachute payments, to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and to comply with certain requirements of Auditing Standard 3101 relating to providing a supplement to the auditor’s report regarding critical audit matters.
−Removed: We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions.
−Removed: If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
−Removed: In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.
−Removed: This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
−Removed: We have elected to avail ourselves of this exemption, and the reported results of operations contained in our financial statements may not be directly comparable to those of other public companies.
−Removed: Accordingly, we will incur additional costs in connection with complying with the accounting standards applicable to public companies at such time or times as they become applicable to us.
−Removed: We are also a “smaller reporting company,” as defined under Regulation S-K.
−Removed: We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of the last business day of our second fiscal quarter.
−Removed: If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
−Removed: Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations.
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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.