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Risks Related to Our Business Operations
−Removed: We face risks related to health epidemics and other widespread outbreaks of contagious disease, including COVID-19, which has delayed our ability to complete our ongoing clinical trials, disrupted our business operations and may further delay our clinical trials, interrupt our supply chain, disrupt regulatory activities or have other adverse effects on our business and operations.
−Removed: In addition, this pandemic has caused substantial disruption in the financial markets and economies worldwide, which could result in adverse effects on our business and operations.
+Added: We face risks related to health epidemics and other widespread outbreaks of contagious disease, including the COVID-19 pandemic, which has delayed our ability to complete our ongoing clinical trials, disrupted our business operations and may further delay our clinical trials, interrupt our supply chain, disrupt regulatory activities or have other adverse effects on our business and operations.
+Added: In addition, the COVID-19 pandemic has caused substantial disruption in the financial markets and economies worldwide, which could result in adverse effects on our business and operations.
Significant outbreaks of contagious diseases, such as COVID-19 and other adverse public health developments, could have a material impact on our business operations and operating results.
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We have experienced restrictions and delays at our existing clinical sites.
−Removed: For example, in our ongoing Phase 2b/3 PRISM trial, new subject screening and most enrollment was temporarily halted in March 2020 due to COVID-19.
−Removed: After resuming screening and enrollment, multiple sites in the Phase 2b/3 PRISM trial have begun requiring remote monitoring of subject data.
+Added: For example, in our ongoing Phase 2b/3 PRISM trial, new subject screening and most enrollment was temporarily halted in March 2020 due to the COVID-19 pandemic.
+Added: After resuming screening and enrollment, multiple sites in the Phase 2b/3 PRISM trial required some remote monitoring of subject data, although all sites are now allowing in-person monitoring visits.
We also experienced slower recruitment activities in the Phase 2b/3 PRISM trial worldwide through the latter part of 2020 and the beginning of 2021 due to the resurgence of COVID-19.
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While subject screening and enrollment for our Phase 2 CANAL trial resumed at certain clinical trial sites in the fourth quarter of 2020, all sites in the trial paused screening again in December 2020 in response to a shelter-in-place directive from the U.K.
−Removed: This shelter-in-place directive expired in March 2021 and the remaining COVID-19 related restrictions were lifted in July 2021.
+Added: This shelter-in-place directive expired in March 2021 and the remaining COVID-19 pandemic related restrictions were lifted in July 2021.
government may choose to reinstate any and/or all of the restrictions in the future depending on COVID-19 infection rates.
−Removed: Initial screening activity has resumed at certain sites following the lifting of the shelter-in-place directive.
−Removed: However, we expect that some sites may take longer to resume their trial activity as the clinical research related infrastructure was disrupted by COVID-19 and that other sites may cease to participate in the trial entirely.
−Removed: COVID-19 may also adversely affect our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and may result in further disruptions to our clinical trials due to prioritization of hospital and medical resources toward the outbreak, restrictions on travel of patients and healthcare providers, potential unwillingness of subjects to enroll in trials at this time or the inability of subjects to comply with clinical trial protocols if quarantines or travel restrictions impede subject movement or interrupt healthcare services.
−Removed: The response to COVID-19 may also redirect resources of regulators in a way that could adversely impact our ability to progress regulatory approvals and we may face impediments to regulatory meetings and approvals relating to our clinical trials due to measures intended to limit in-person interactions.
−Removed: COVID-19 may also affect employees of third-party contract research organizations located in affected geographies that we rely upon to carry out our clinical trials.
+Added: Screening activity has resumed and is steadily progressing at most sites following the lifting of the shelter-in-place directive.
+Added: However, we expect that some sites may take longer to resume their trial activity as the clinical research related infrastructure was disrupted by the COVID-19 pandemic and that other sites may cease to participate in the trial entirely.
+Added: 19 pandemic may also adversely affect our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and may result in further disruptions to our clinical trials due to prioritization of hospital and medical resources toward the outbreak, restrictions on travel of patients and healthcare providers, potential unwillingness of subjects to enroll in trials at this time or the inability of subjects to comply with clinical trial protocols if quarantines or travel restrictions impede subject movement or interrupt healthcare services.
+Added: The response to the COVID-19 pandemic may also redirect resources of regulators in a way that could adversely impact our ability to progress regulatory approvals and we may face impediments to regulatory meetings and approvals relating to our clinical trials due to measures intended to limit in-person interactions.
+Added: The COVID-19 pandemic may also affect employees of third-party contract research organizations located in affected geographies that we rely upon to carry out our clinical trials.
The spread of COVID-19 or another infectious disease, could also negatively affect the operations at our third-party suppliers, which could result in delays or disruptions in the supply of drug product used in our clinical trials.
In addition, we have taken temporary precautionary measures intended to help minimize the risk of the virus to our employees, including allowing employees to work remotely part of the week and suspending non-essential travel worldwide for our employees, each of which could negatively affect our business.
−Removed: We cannot presently predict the scope and severity of the disruptions we may experience or continue to experience as a result of COVID-19.
+Added: We cannot presently predict the scope and severity of the disruptions we may experience or continue to experience as a result of the COVID-19 pandemic.
If we or any of the third parties with whom we engage experience business disruptions, our ability to conduct our business in the manner and on the timelines presently planned could be materially and negatively affected.
−Removed: Additionally, the pandemic has already caused significant disruptions in the financial markets and may continue to cause such disruptions, which could impact our
−Removed: ability to raise additional funds and has also impacted and may continue to impact, the volatility of our stock price and trading in our stock.
+Added: Additionally, the pandemic has already caused significant disruptions in the financial markets and may continue to cause such disruptions, which could impact our ability to raise additional funds and has also impacted, and may continue to impact, the volatility of our stock price and trading in our stock.
Risks Related to Our Financial Position and Need for Additional Capital
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We expect to continue to incur significant and increasing net losses for at least the next several years.
−Removed: Our net losses were $18.2 million and $32.8 million for the six months ended June 30, 2021 and for the year ended December 31, 2020, respectively.
−Removed: As of June 30, 2021, we had an accumulated deficit of $165.1 million.
+Added: Our net losses were $25.4 million and $32.8 million for the nine months ended September 30, 2021 and for the year ended December 31, 2020, respectively.
+Added: As of September 30, 2021, we had an accumulated deficit of $172.4 million.
We have not generated any revenues from product sales, have not completed the development of any product candidate and may never have a product candidate approved for commercialization.
−Removed: We have financed our operations to date primarily through private placements of our convertible preferred stock and convertible notes prior to our IPO, borrowings under our prior term loan facility, proceeds from our IPO and concurrent private placement completed in May 2019, sales of our common stock pursuant to the ATM Sales Agreement and the SVB Term Loan.
+Added: We have financed our operations to date primarily through private placements of our convertible preferred stock and convertible notes prior to our IPO, borrowings under our prior term loan facility, proceeds from our IPO and concurrent private placement completed in May 2019, sales of our common stock pursuant to the ATM Sales Agreement, the SVB Term Loan and proceeds from the October 2021 Private Placements.
We have devoted substantially all of our financial resources and efforts to the clinical development of our product candidate Haduvio and related activities.
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continue to develop and conduct clinical trials of Haduvio, including our ongoing Phase 2b/3 PRISM trial and our ongoing Phase 2 CANAL trial;
−Removed: significantly increase the number of subjects in the Phase 2b/3 PRISM trial to a total of 360 subjects based on the SSRE analysis;
complete other development work required for the filing of a NDA with the FDA and the filing of a MAA with the EMA for Haduvio for the treatment of pruritus associated with prurigo nodularis, including completing our Phase 2b/3 PRISM trial and at least one additional Phase 3 clinical trial in this indication;
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add equipment and physical infrastructure to support our development program for Haduvio and for any future product candidates.
−Removed: In addition, we may incur additional expenses as a result of COVID-19 and resulting clinical trial delays and interruptions.
+Added: In addition, we may incur additional expenses as a result of the COVID-19 pandemic and resulting clinical trial delays and interruptions.
Our ability to become and remain profitable depends on our ability to generate revenue.
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If we are unable to obtain such funding and continue as a going concern, we might have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our Condensed Consolidated Financial Statements .
−Removed: Our lack of cash resources and our conclusion that we may be unable to continue as a going concern may materially adversely affect our share price and our ability to raise new capital or to enter into critical contractual relationships with third parties.
+Added: Our lack of cash resources and our conclusion that we may be
+Added: unable to continue as a going concern may materially adversely affect our share price and our ability to raise new capital or to enter into critical contractual relationships with third parties.
We will need substantial additional funding and if we are unable to raise sufficient capital when needed on acceptable terms or at all, we could be forced to delay, reduce or abandon our product development programs or commercialization efforts.
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We have consumed substantial amounts of cash since our inception.
−Removed: For example, in the six months ended June 30, 2021 and the year ended December 31, 2020, we used net cash of $15.5 million and $29.0 million, respectively, in our operating activities, substantially all of which related to development activities for Haduvio.
−Removed: As of June 30, 2021, our cash and cash equivalents were $36.4 million.
−Removed: We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to develop and conduct clinical trials of Haduvio, including our ongoing Phase 2b/3 PRISM trial and the additional Phase 3 clinical trial we believe we will need to conduct for Haduvio for the
−Removed: treatment of pruritus associated with prurigo nodularis and our other ongoing clinical trials, acquire or in-license rights to other potential product candidates or technologies and seek regulatory and marketing approvals for Haduvio or any future product candidate that successfully completes clinical trials, if any.
−Removed: In addition, we may incur additional expenses as a result of COVID-19 and resulting clinical trial delays and interruptions.
+Added: For example, in the nine months ended September 30, 2021 and the year ended December 31, 2020, we used net cash of $22.7 million and $29.0 million, respectively, in our operating activities, substantially all of which related to development activities for Haduvio.
+Added: As of September 30, 2021, our cash and cash equivalents were $29.3 million and in October 2021 we received approximately $14.8 million in gross proceeds from our October 2021 Private Placements.
+Added: We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to develop and conduct clinical trials of Haduvio, including our ongoing Phase 2b/3 PRISM trial and the additional Phase 3 clinical trial we believe we will need to conduct for Haduvio for the treatment of pruritus associated with prurigo nodularis and our other ongoing clinical trials, acquire or in-license rights to other potential product candidates or technologies and seek regulatory and marketing approvals for Haduvio or any future product candidate that successfully completes clinical trials, if any.
+Added: In addition, we may incur additional expenses as a result of the COVID-19 pandemic and resulting clinical trial delays and interruptions.
In addition, if we obtain marketing approval for Haduvio or any future product candidate, we may incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
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ourselves by developing a focused, specialty sales, marketing and distribution organization.
−Removed: Furthermore, we expect to incur significant costs associated with operating as a public company.
+Added: Furthermore, we expect to continue to incur significant costs associated with operating as a public company.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
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Our existing cash and cash equivalents will not be sufficient to complete development of Haduvio for the treatment of pruritus associated with prurigo nodularis or for any other condition or of any future product candidate.
−Removed: Other than our right to cause Lincoln Park to purchase shares of our common stock under the LPC Purchase Agreement, which is subject to certain limitations and conditions, w e do not have any committed external source of funds.
+Added: We do not have any committed external source of funds.
Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources to achieve our business objectives.
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Our failure to raise capital, as and when needed, would have a negative impact on our financial condition and our ability to pursue our business strategy.
−Removed: We believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements into the second quarter of 2022, without giving effect to the rights of SVB under the SVB Loan Agreement if we fail to achieve any of the Milestone Conditions or to the impact of any equity financing that we may conduct to satisfy the equity raise requirements of the SVB Loan Agreement.
+Added: We believe that our existing cash and cash equivalents, including the proceeds from our October 2021 Private Placements, will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2022, without giving effect to the rights of SVB under the SVB Loan Agreement if we fail to achieve either of the Milestone Conditions or fail to maintain at least $20.0 million in unrestricted and unencumbered cash in our accounts with SVB at any time prior to the satisfaction of the Milestone Conditions.
If we fail to achieve any of the Milestone Conditions and SVB cash collateralizes the amounts then owed to SVB under the SVB Loan Agreement or uses such amounts to prepay the SVB Term Loan, the period for which we will be able to fund our operating expenses and capital expenditure requirements will be significantly shorter.
We have based our estimates as to how long we expect we will be able to fund our operations on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect, in which case we would be required to obtain additional financing.
−Removed: We are required under the SVB Loan Agreement to raise in an equity financing of at least $15 million in net proceeds by October 31, 2021.
However, such a financing may not be available to us on acceptable terms, on a timely basis or at all.
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the scope, progress, timing, costs and results of clinical trials of Haduvio for the treatment of pruritus associated with prurigo nodularis, as well as the scope, progress, timing, costs and results of clinical trials of Haduvio for other serious neurologically mediated conditions, including our ongoing Phase 2 CANAL trial, as well as any future product candidates;
−Removed: the impacts of COVID-19 on the scope, progress, timing, costs and results of our ongoing and planned clinical trials of Haduvio;
+Added: the impacts of the COVID-19 pandemic on the scope, progress, timing, costs and results of our ongoing and planned clinical trials of Haduvio;
the number and characteristics of indications for which we seek to develop Haduvio or any future product candidates and their respective development requirements;
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The SVB Loan Agreement also includes customary affirmative and negative covenants, including a requirement to maintain our bank accounts with SVB or bank accounts that are subject to SVB’s control and limitations on transferring all or any part of our business or property, changing our business, liquidating or dissolving, permitting a change in control, adding new offices or business locations, changing jurisdiction of organization, organizational structure or legal name, merging with or acquiring another entity, incurring additional indebtedness, creating any lien on our property, paying dividends or redeeming stock, entering into material transactions with an affiliate or making payments on subordinated debt.
−Removed: Additionally, under the Loan Amendment, if we fail to receive positive data in our Phase 2b/3 PRISM trial or to meet certain equity raise requirements, including raising at least $15.0 million in net proceeds from the sale of equity securities during the period from June 1, 2021 through October 31, 2021 and raising by June 30, 2022 sufficient additional net proceeds from the sale of equity securities to finance our planned second Phase 3 clinical trial of Haduvio for prurigo nodularis and our ongoing operations or the Milestone Conditions, we will be required to deposit unrestricted and unencumbered cash equal to 100% of the principal amount of the SVB Term Loan then outstanding in a cash collateral account with SVB, which can be used by SVB to prepay the SVB Term Loan at any time.
+Added: Additionally, under the Loan Amendment, if we fail to achieve the Milestone Conditions, we will be required to deposit unrestricted and unencumbered cash equal to 100% of the principal amount of the SVB Term Loan then outstanding in a cash collateral account with SVB, which can be used by SVB to prepay the SVB Term Loan at any time.
In addition, if we fail to maintain at least $20.0 million in unrestricted and unencumbered cash in our accounts with SVB at any time prior to the satisfaction of all the Milestone Conditions, we will be required to cash collateralize all outstanding amounts owed to SVB under the SVB Loan Agreement.
+Added: We were also required under the Loan Amendment to raise at least $15.0 million in net proceeds from the sale of equity securities
+Added: from June 1, 2021 through October 31, 2021 , which requirement was met through a combination of equity issuances under our ATM Sales Agreement and the proceeds from our October 2021 P rivate P lacements.
Our debt combined with our other financial obligations and contractual commitments could have significant adverse consequences, including:
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We expect our expenses to increase substantially in connection with our planned operations, particularly as we conduct our ongoing Phase 2b/3 PRISM trial and our other ongoing clinical trials as well as the additional Phase 3 clinical trial we believe we will need to conduct for Haduvio for the treatment of pruritus associated with prurigo nodularis and develop Haduvio for the treatment of other serious neurologically mediated conditions.
+Added: Accordingly, we will be required to obtain further funding through public or private equity offerings, debt financings, collaborations and licensing arrangements or other sources to fund these expenses and to satisfy the requirements under the SVB Loan Agreement, including the requirement to raise substantial additional capital by June 30, 2022.
To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, your ownership interest may be diluted, and the terms of these securities could include liquidation or other preferences and anti-dilution protections that could adversely affect your rights as a common stockholder.
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Nalbuphine is currently not commercially available in an oral dosage form, such as Haduvio.
−Removed: While we believe that nalbuphine’s dual mechanism of action, which targets both the central and peripheral nervous systems, makes Haduvio a promising potential therapy for the treatment of chronic pruritus and other serious neurologically mediated conditions and that Haduvio has the potential to be safe and well-tolerated, nalbuphine has not been approved in any indications other than pain.
+Added: While we believe that nalbuphine’s dual mechanism of action, which targets both the central and peripheral nervous
+Added: systems, makes Haduvio a promising potential therapy for the treatment of chronic pruritus and other serious neurologically mediated conditions and that Haduvio has the potential to be safe and well-tolerated, nalbuphine has not been approved in any indications other than pain.
Additionally, Haduvio has not been approved in any indication, including the treatment of pruritus associated with prurigo nodularis, the lead indication for which we are pursuing clinical development of Haduvio.
No therapies have been approved in the U.S.
−Removed: or Europe for the treatment of moderate to severe pruritus and we can provide no assurance that either Haduvio or any other future product candidate that we may seek to develop for this indication or for any other serious neurologically mediated condition
−Removed: will be effective or safe, obtain regulatory approval or be commercially successful.
+Added: or Europe for the treatment of moderate to severe pruritus and we can provide no assurance that either Haduvio or any other future product candidate that we may seek to develop for this indication or for any other serious neurologically mediated condition will be effective or safe, obtain regulatory approval or be commercially successful.
Clinical drug development involves a lengthy and expensive process with an uncertain outcome.
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the number of subjects required for clinical trials may be larger than we anticipate, such as with the increase of the target number of enrolled subjects for our Phase 2b/3 PRISM trial from 240 to 360 subjects as a result of the SSRE analysis;
−Removed: subject enrollment in these clinical trials may be slower than we anticipate, whether as a result of COVID-19 or otherwise or participants may discontinue their participation in these clinical trials at a higher rate than we anticipate, as we experienced in our Phase 2 clinical trial of Haduvio for the treatment of pruritus associated with prurigo nodularis;
+Added: subject enrollment in these clinical trials may be slower than we anticipate, whether as a result of the COVID-19 pandemic or otherwise, or participants may discontinue their participation in these clinical trials at a higher rate than we anticipate, as we experienced in our Phase 2 clinical trial of Haduvio for the treatment of pruritus associated with prurigo nodularis;
the cost of planned clinical trials may be greater than we anticipate, as we have experienced in our Phase 2b/3 PRISM trial as we added additional sites, increased the target number of enrolled subjects as a result of the SSRE analysis, enrollment has taken longer than expected and we have used and expect to continue to use additional incentive strategies to address site activation and enrollment;
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the FDA or comparable foreign regulatory authorities may refuse to accept for substantive review any NDA, MAA or other comparable foreign regulatory application that we submit for a product candidate or may conclude after review of our data that our application is insufficient to obtain marketing approval of a product candidate.
−Removed: In addition to the above, the continued spread of COVID-19 globally could adversely affect our clinical trial operations worldwide, including our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography and result in further delays in our clinical trials due to prioritization of hospital and medical resources toward the outbreak, restrictions in travel, potential unwillingness of patients to enroll in trials at this time or the inability of patients to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.
−Removed: Furthermore, the response to COVID-19 may redirect resources of regulators in a way that would adversely impact our ability to progress regulatory approvals.
+Added: In addition to the above, the continued spread of COVID-19 globally could adversely affect our clinical trial operations worldwide, including our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography.
+Added: The COVID-19 pandemic could also result in further delays in our clinical trials due to prioritization of hospital and medical resources toward the outbreak, restrictions in travel, potential unwillingness of patients to enroll in trials at this time or the inability of patients to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.
+Added: Furthermore, the response to the COVID-19 pandemic may redirect resources of regulators in a way that would adversely impact our ability to progress regulatory approvals.
In addition, we may face impediments to regulatory meetings and approvals relating to our clinical trials due to measures intended to limit in-person interactions.
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For example, our Phase 2 clinical trial of Haduvio for the treatment of pruritus associated with prurigo nodularis failed to meet its primary endpoint and the number of subjects who discontinued treatment prior to the end of the trial had a substantial impact on the results.
−Removed: Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of Haduvio or any future product candidate that is greater than the actual positive effect, if any.
+Added: Conversely, as a result of the same factors, our clinical trials may indicate an apparent positive effect of Haduvio or any future
+Added: product candidate that is greater than the actual positive effect, if any.
Similarly, in our clinical trials we may fail to detect toxicity of or intolerability caused by, Haduvio or any future product candidate or mistakenly believe that Haduvio or any future product candidate is toxic or not well tolerated when that is not the case after the clinical evaluation is completed.
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Patient enrollment is a significant factor in the timing of our clinical trials and is affected by many factors, including:
−Removed: the impact of COVID-19;
the size and nature of the eligible patient population;
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clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications under investigation;
+Added: the impact of the COVID-19 pandemic.
In particular, the successful completion of our clinical development program for Haduvio for the treatment of pruritus associated with prurigo nodularis is dependent upon our ability to enroll a sufficient number of subjects with this severe condition.
We have experienced delays and difficulties in the enrollment of subjects in our clinical trials, including our Phase 2b/3 PRISM trial and our Phase 2 CANAL trial, which have delayed the completion of our trials.
−Removed: We have taken actions to increase enrollment, including increasing the number of clinical sites, expanding our clinical trials into additional countries, providing sites with additional trial management staff and closing underperforming sites.
+Added: We have taken actions to increase enrollment, including increasing the number of clinical sites, providing sites with additional trial management staff and closing underperforming sites.
However, these actions may not be successful.
−Removed: In addition, as a result of COVID-19, clinical sites for our Phase 2b/3 PRISM trial temporarily halted new subject screening and most subject enrollment.
−Removed: After resuming screening and enrollment, multiple sites in the Phase 2b/3 PRISM trial have begun requiring remote monitoring of subject data.
−Removed: In addition, the clinical sites in our ongoing Phase 2 CANAL trial temporarily suspended enrollment and treatment of subjects in the trial due to the vulnerability of IPF patients to COVID-19 and we amended the protocol for the trial to reduce the number of in-person subject visits and procedures.
+Added: In addition, as a result of the COVID-19 pandemic, clinical sites for our Phase 2b/3 PRISM trial temporarily halted new subject screening and most subject enrollment and the clinical sites in our ongoing Phase 2 CANAL trial temporarily suspended enrollment and treatment of subjects in the trial due to the vulnerability of IPF patients to COVID-19 and we amended the protocol for the trial to reduce the number of in-person subject visits and procedures.
While subject screening and enrollment for our Phase 2 CANAL trial resumed at certain clinical trial sites in the fourth quarter of 2020, all sites in the trial paused screening again in December 2020 in response to a shelter-in-place directive from the U.K.
−Removed: This shelter-in-place directive expired in March 2021 and other COVID-19 related restrictions were lifted in July 2021.
−Removed: government may choose to reinstate any and/or all of the restrictions in the future depending on COVID-19 rates.
−Removed: Initial screening activity has resumed at certain sites following the lifting of the shelter-in-place directive.
−Removed: However, we expect that some sites may take longer to resume their trial activity as the clinical research related infrastructure was disrupted by COVID-19 and that other sites may cease to participate in the trial entirely.
−Removed: Furthermore, as a result of the SSRE analysis, we have increased the target number of enrolled subjects for our Phase 2b/3 PRISM trial from 240 to 360 subjects, which has also resulted in delays to our expected completion of enrollment for the trial and our anticipated timing for reporting top-line data for the trial.
+Added: This shelter-in-place directive expired in March 2021 and other COVID-19 pandemic related restrictions were lifted in July 2021.
+Added: government may choose to reinstate any and/or all of the restrictions in the future depending on COVID-19 infection rates.
+Added: Screening activity has resumed and is steadily progressing at most sites following the lifting of the shelter-in-place directive.
+Added: However, we expect that some sites may take longer to resume their trial activity as the clinical research related infrastructure was disrupted by the COVID-19 pandemic and that other sites may cease to participate in the trial entirely.
Other companies are conducting clinical trials or have announced plans for future clinical trials that are seeking or are likely to seek to enroll patients with prurigo nodularis in the case of our Phase 2b/3 PRISM trial and patients with IPF in the case of our Phase 2 CANAL trial and patients are generally only able to enroll in a single trial at a time.
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or Europe for the treatment of pruritus associated with prurigo nodularis, many patients use various treatments off-label, such as antihistamines or gabapentin and these patients and their physicians may be reluctant to forgo, discontinue or otherwise alter their use of such off-label therapeutic approaches to participate in our clinical trials.
−Removed: Our inability to enroll a sufficient number of subjects for our clinical trials could result in significant delays or may require us to abandon one or more clinical trials altogether.
+Added: In response to the COVID-19 pandemic, the FDA issued guidance on March 18, 2020, and updated it on July 2, 2020, January 27, 2021 and August 30, 2021, to address the conduct of clinical trials during the pandemic.
+Added: The guidance sets out a number of considerations for sponsors of clinical trials impacted by the pandemic, including the requirement to include in a clinical study report (or as a separate document) contingency measures implemented to manage the study, and any disruption of the study, as a result of the COVID-19 pandemic;
+Added: a list of all study participants affected by COVID-19 pandemic related study disruptions by a unique subject identifier and by investigational site, and a description of how the individual’s participation was altered;
+Added: and analyses and corresponding discussions that address the impact of implemented contingency measures (e.g., participant discontinuation from investigational product and/or study, alternative procedures used to collect critical safety and/or efficacy data) on the safety and efficacy results reported for the study.
+Added: In its most recent update to this guidance, the FDA addressed questions received during the past year from clinical practitioners who are adapting their operations in a pandemic environment.
+Added: These questions focused on, among other things, when to suspend, continue or initiate a trial and how to submit changes to protocols for investigational new drug applications and handle remote site monitoring visits.
+Added: There is no assurance that this guidance governing clinical studies during the pandemic will remain in effect or, even if it does, that it will help address the risks and challenges enumerated above.
+Added: Any inability to enroll a sufficient number of subjects for our clinical trials could result in significant delays or may require us to abandon one or more clinical trials altogether.
Enrollment delays in our clinical trials may result in increased development costs for Haduvio or any future product candidate, delay or halt the development of and approval processes for such product candidate and jeopardize our ability to commence sales of and generate revenues from such product candidate, any of which could cause the value of our company to decline and limit our ability to obtain additional financing, if needed.
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The drug label for nalbuphine, the active ingredient in Haduvio, carries an opioid class label warning for serious, life-threatening or fatal respiratory depression and Haduvio, if approved for marketing in any indication, will likely carry a similar opioid class label.
−Removed: To support our planned submission of an NDA to the FDA for Haduvio, we may be required to conduct a clinical trial of Haduvio to assess cardiac risk and, due to the association of opioids with endocrine dysfunction, a clinical trial to
−Removed: evaluate potential endocrine side effects.
+Added: To support our planned submission of an NDA to the FDA for Haduvio, we may be required to conduct a clinical trial of Haduvio to assess cardiac risk and, due to the association of opioids with endocrine dysfunction, a clinical trial to evaluate potential endocrine side effects.
We cannot be certain that any of these side effects often associated with opioids, or other side effects, will not be observed or observed at more severe levels in the future or that the FDA will not require additional trials or impose more severe labeling restrictions due to these side effects or other concerns.
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If a REMS program is required, depending on the extent of the REMS requirements, the program might significantly increase our costs to commercialize Haduvio.
−Removed: Furthermore, risks of Haduvio that are not adequately addressed through a proposed REMS program for Haduvio may also prevent or delay any approval for commercialization.
+Added: Furthermore, risks of Haduvio that are
+Added: not adequately addressed through a proposed REMS program for Haduvio may also prevent or delay any approval for commercialization.
In addition, the parenteral formulation of nalbuphine is currently not classified as a controlled substance under the federal Controlled Substances Act of 1970 or the regulations of the U.S.
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If Haduvio is classified as a controlled substance, the level of regulation would depend on how it is scheduled and we and our suppliers, manufacturers, contractors, distributors and any future customers would be required to obtain and maintain any applicable registrations from state, federal and foreign law enforcement and regulatory agencies and comply with any applicable state, federal and foreign laws and regulations regarding the manufacture, use, sale, importation, exportation and distribution of controlled substances.
−Removed: Also, if Haduvio is classified as a controlled substance, there is a risk that such regulations could limit its supply for use in
−Removed: clinical trials and, in the future, limit our ability to produce and distribute Haduvio in the volume needed to meet potential commercial demand.
+Added: Also, if Haduvio is classified as a controlled substance, there is a risk that such regulations could limit its supply for use in clinical trials and, in the future, limit our ability to produce and distribute Haduvio in the volume needed to meet potential commercial demand.
Regulations associated with controlled substances govern manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas, record keeping, reporting, handling, shipment and disposal.
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For example, we have designed our Phase 2b/3 PRISM trial based on an assumed discontinuation rate that takes into account observed discontinuation rates in our Phase 2 clinical trial of Haduvio for the treatment of pruritus associated with prurigo nodularis.
−Removed: If enrolled subjects withdraw from our Phase 2b/3 PRISM trial at a rate that is higher than expected, as occurred in our Phase 2 clinical trial of Haduvio for the treatment of pruritus associated with prurigo nodularis or at rates that are inconsistent across clinical sites and treatment arms, we may not achieve the primary endpoint of the trial, the validity or statistical significance of the trial could be impaired and regulatory authorities may not view the trial as supportive of an application for marketing approval.
+Added: If enrolled subjects withdraw from our Phase 2b/3 PRISM trial at a rate that is higher than expected, as occurred in our Phase 2 clinical trial of Haduvio for the treatment of pruritus associated with prurigo nodularis or at rates that are inconsistent across clinical sites and treatment arms, we may not achieve the primary endpoint of the trial, the validity or statistical significance of the trial could
+Added: be impaired and regulatory authorities may not view the trial as supportive of an application for marketing approval.
Preclinical and clinical data are also often susceptible to varying interpretations and analyses.
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Efforts to educate the medical community and third-party payors on the benefits of Haduvio or any future product candidate may require significant resources and may not be successful.
−Removed: If Haduvio or any future product candidate is approved but does not achieve an adequate level of market acceptance, we may not generate significant revenues and we may not become profitable.
+Added: If Haduvio or any future product candidate is approved but does not
+Added: achieve an adequate level of market acceptance, we may not generate significant revenues and we may not become profitable.
The degree of market acceptance of Haduvio or any future product candidate, if approved for commercial sale, will depend on a number of factors, including:
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As a result of entering into arrangements with third parties to perform sales, marketing and distribution services, our product revenues or the profitability of these product revenues may be substantially lower than if we were to directly market and sell products in those markets.
−Removed: Furthermore, we may be unsuccessful in
−Removed: entering into the necessary arrangements with third parties or may be unable to do so on terms that are favorable to us.
+Added: Furthermore, we may be unsuccessful in entering into the necessary arrangements with third parties or may be unable to do so on terms that are favorable to us.
In addition, we may have little or no control over such third parties and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.
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KPL-716, a monoclonal antibody targeting oncostatin M receptor beta being developed by Kiniksa Pharmaceuticals;
−Removed: and CDX-0159, a humanized monoclonal antibody targeting the KIT receptor being developed by Celldex Therapeutics.
+Added: CDX-0159, a humanized monoclonal antibody targeting the KIT receptor being developed by Celldex Therapeutics;
+Added: and abrocitinib, an oral small molecule targeting the janus kinase 1 receptor being developed by Pfizer Inc.
In addition, a number of other product candidates are currently in clinical development to treat other pruritic conditions and Haduvio, if approved for the treatment of pruritus associated with prurigo nodularis, could face competition from these product candidates, including difelikefalin, an oral kappa opioid receptor agonist being developed by Cara Therapeutics that is in Phase 2 clinical trials for chronic pruritus in patients with atopic dermatitis, chronic liver disease, chronic kidney disease and notalgia paresthetica.
−Removed: If Haduvio is approved for the treatment of chronic cough associated with IPF, we expect that it would compete with product candidates currently in clinical development for the treatment of chronic cough associated with IPF, such as ifenprodil which is being developed by Algernon Pharmaceuticals and orvepitant, which is being developed by Nerre Therapeutics and expect that it might also compete with other product candidates currently in development or submitted for approval to the FDA for the treatment of chronic refractory cough and unexplained chronic cough by companies including Merck, Shionogi, Bellus Health and Bayer.
+Added: If Haduvio is approved for the treatment of chronic cough associated with IPF, we expect that it would compete with product candidates currently in clinical development for the treatment of chronic cough associated with IPF, such as orvepitant, which is being developed by Nerre Therapeutics, and expect that it might also compete with other product candidates currently in development or submitted for approval to the FDA for the treatment of chronic refractory cough and unexplained chronic cough by companies including Merck, Shionogi, Bellus Health, Bayer, and Algernon Pharmaceuticals.
In addition, it is possible that product candidates currently in development for the treatment of IPF could, if approved, reduce the need for therapies to treat chronic cough associated with IPF.
−Removed: If Haduvio is approved for the treatment of LID in patients with Parkinson’s disease, we expect that it would compete with Gocovri and Osmolex, which are extended-release capsule formulations of amantadine marketed by Adamas Pharmaceuticals and expect that it might also compete with other product candidates currently in development for the treatment of LID by companies including Addex Therapeutics and IRLAB Therapeutics.
+Added: If Haduvio is approved for the treatment of LID in patients with Parkinson’s disease, we expect that it would compete with G ocovri and Osmolex , which are extended - release capsule formulations of amantadine marketed by Adamas Pharmaceuticals , which is being acquired by Supernus Pharmaceuticals, and expect that it might also compete with other product candidates currently in development for the treatment of LID by companies including Addex Therapeutics and IRLAB Therapeutics.
In addition, it is possible that product candidates currently in development for the treatment of Parkinson’s disease by companies could, if approved, reduce the need for therapies to treat LID.
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Manufacturers may seek approval of generic versions of reference-listed drugs through submission of abbreviated new drug applications, or ANDAs, in the U.S.
−Removed: In support of an ANDA, a
−Removed: generic manufacturer need not conduct clinical trials.
+Added: In support of an ANDA, a generic manufacturer need not conduct clinical trials.
Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference-listed drug and that the generic version is bioequivalent to the reference-listed drug, meaning it is absorbed in the body at the same rate and to the same extent.
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In many countries, the pricing review period begins after marketing or product licensing approval is granted.
−Removed: In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.
+Added: In some foreign markets, prescription pharmaceutical pricing remains subject to continuing
+Added: governmental control even after initial approval is granted.
As a result, we may obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of the product, possibly for lengthy time periods, which may negatively impact the revenues we are able to generate from the sale of the product in that country.
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The commercial potential of any products we are able to commercialize depends in part on reimbursement by government health administration authorities, private health insurers and other organizations.
−Removed: If we are unable to obtain coverage or reimbursement for
−Removed: those products at the levels anticipated, our financial condition could be harmed.
+Added: If we are unable to obtain coverage or reimbursement for those products at the levels anticipated, our financial condition could be harmed.
Additionally, if new compounds currently in development by potential competitors obtain marketing approval, there may be downward pressure on reimbursement levels for therapies in our target indications, which could have a negative impact on our ability to achieve and maintain profitability.
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We may not be able to enter into alternative arrangements or do so on commercially reasonable terms.
−Removed: addition, there is a natural transition period when a new CRO begins work on a clinical trial.
+Added: In addition, there is a natural transition period when a new CRO begins work on a clinical trial.
As a result, delays would likely occur, which could negatively impact our ability to meet our expected clinical development timelines and harm our business, financial condition and prospects.
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Furthermore, the third parties conducting clinical trials on our behalf are not our employees and except for remedies available to us under our agreements with our contractors, we cannot control whether they devote sufficient time, skill and resources to our ongoing development programs.
−Removed: These third parties may be also impacted by developments in COVID-19 or government measures taken in response to the pandemic in ways that negatively impact their ability to fulfill their contractual obligations to us in connection with our clinical trials, even if we are not otherwise directly affected by such developments or measures.
+Added: These third parties may also be impacted by developments in the COVID-19 pandemic or government measures taken in response to the pandemic in ways that negatively impact their ability to fulfill their contractual obligations to us in connection with our clinical trials, even if we are not otherwise directly affected by such developments or measures.
Additionally, these third parties may have relationships with other commercial entities, including potential competitors, for which they may also be conducting clinical trials or other drug development activities, which could impede their ability to devote appropriate time to our clinical programs.
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In such an event, our financial results and the commercial prospects for any product candidates that we seek to develop could be harmed, our costs could increase and we may not be able to generate revenues or become profitable.
−Removed: We contract with third parties for the manufacture, storage, packaging and distribution of Haduvio for clinical trials, including a single supplier for the active ingredient and expect to continue to rely on third parties for these services in connection with our future development and commercialization efforts for Haduvio and any future product candidates.
+Added: We contract with third parties for the manufacture, storage, packaging and distribution of Haduvio for clinical trials, including a single supplier for the active ingredient in Haduvio and expect to continue to rely on third parties for these services in connection with our future development and commercialization efforts for Haduvio and any future product candidates.
We currently have no manufacturing facilities and a relatively small number of personnel with sufficient experience to oversee the manufacturing process.
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We do not have long-term supply agreements with any of our contract manufacturers.
−Removed: If any of our existing manufacturers should become unavailable to us for any reason or fail to supply us with the ordered quantities, including as a result of COVID-19 or government measures taken in response to the pandemic, we may incur delays in identifying or qualifying replacement manufacturers or in obtaining replacement supply.
+Added: If any of our existing manufacturers should become unavailable to us for any reason or fail to supply us with the ordered quantities, including as a result of the COVID-19 pandemic or government measures taken in response to the pandemic, we may incur delays in identifying or qualifying replacement manufacturers or in obtaining replacement supply.
Any performance failure on the part of our contract manufacturers or the other third-party contractors that we use to store and distribute drug substance and drug product could be disruptive to our operations and delay clinical development or marketing approval of Haduvio or any future product candidates of ours or commercialization of any resulting products, producing additional losses and depriving us of potential product revenue.
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If our manufacturers cannot successfully manufacture drug substance or drug product that conforms to our specifications or the strict regulatory requirements of the FDA and any applicable foreign regulatory authority, they will not be able to secure the applicable approval for their manufacturing facilities.
−Removed: If these facilities are not approved for commercial manufacture, we may need to find alternative manufacturing facilities, which could result in delays in obtaining approval for the applicable product candidate and any future commercialization efforts.
+Added: If these facilities are not approved for commercial manufacture, we may need to find alternative
+Added: manufacturing facilities, which could result in delays in obtaining approval for the applicable product candidate and any future commercialization efforts.
In addition, our manufacturers are subject to ongoing periodic inspections by the FDA and corresponding state and foreign agencies for compliance with cGMPs and similar regulatory requirements both prior to and following the receipt of marketing approval for any product candidate.
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under which we have licensed certain patent rights and know-how to develop and commercialize products incorporating nalbuphine hydrochloride in any formulation, including an extended-release formulation such as Haduvio.
−Removed: We are also party to an exclusive license agreement with Rutgers University under which we have licensed certain patent rights and know-how to develop and commercialize products incorporating nalbuphine for any human or animal use.
+Added: We are also party to an exclusive license agreement with Rutgers, the State University of New Jersey, under which we have licensed certain patent rights and know-how to develop and commercialize products incorporating nalbuphine for any human or animal use.
We may in the future seek additional licenses from others to develop and commercialize additional product candidates or technologies.
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Our existing license agreements impose and we expect that future license agreements will impose, various diligence, development and commercialization, milestone payment, royalty and other obligations on us.
−Removed: If we fail to comply with our material obligations under these agreements or if we are subject to a bankruptcy event, the licensor may have the right to terminate the license or convert the license to a non-exclusive license, in which event we may be required to negotiate a new or reinstated license with less favorable terms or would not be able to exclusively market or market at all, products covered by the license.
+Added: If we fail to comply with our material
+Added: obligations under these agreements or if we are subject to a bankruptcy event, the licensor may have the right to terminate the license or convert the license to a non-exclusive license, in which event we may be required to negotiate a new or reinstated license with less favorable terms or would not be able to exclusively market or market at all, products covered by the license.
Any termination of our license agreements could have a material adverse impact on our business.
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Pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications.
−Removed: Assuming the other requirements for patentability are met, currently, the first to file a patent application is generally entitled to the patent.
−Removed: However, prior to March 16, 2013, in the U.S., the first to invent was entitled to the patent.
+Added: Assuming the other requirements for patentability are met, currently, the first
+Added: to file a patent application is generally entitled to the patent.
+Added: However, prior to March 16, 2013, in the U.S.
+Added: , the first to invent was entitled to the patent.
Publications of discoveries in the scientific literature often lag behind the actual discoveries and patent applications in the U.S.
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or other countries, challenging patents or patent applications in which we have rights, including patents on which we rely to protect our business.
−Removed: An adverse determination in any such challenge 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
−Removed: products or product candidates or limit the duration of the patent protection of Haduvio or any future product candidates of ours.
+Added: An adverse determination in any such challenge 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 products or product candidates or limit the duration of the patent protection of Haduvio or any future product candidates of ours.
In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
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We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, independent contractors, advisors, contract manufacturers, suppliers and other third parties.
−Removed: We also enter into confidentiality and invention or patent assignment agreements with employees and certain consultants.
+Added: We also enter into confidentiality and invention or patent assignment agreements with employees and certain
Any party with whom we have executed such an agreement may breach that agreement and disclose our proprietary information, including our trade secrets and we may not be able to obtain adequate remedies for such breaches.
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There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover the invention.
−Removed: An adverse outcome in a litigation or proceeding involving one or more of our patents could limit our ability to assert those patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from
−Removed: making and selling similar or competitive products.
+Added: An adverse outcome in a litigation or proceeding involving one or more of our patents could limit our ability to assert those patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products.
Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.
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For example, in the U.S., proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.
−Removed: Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business and operating results.
+Added: Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and
+Added: scientific personnel could be diverted in pursuing these proceedings, which could significantly harm our business and operating results.
In addition, we may not have sufficient resources to bring these actions to a successful conclusion.
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patent law in part by changing the U.S.
−Removed: patent system from a “first to invent” system to a “first inventor to file” system,
−Removed: expanding the definition of prior art and developing a post-grant review system.
+Added: patent system from a “first to invent” system to a “first inventor to file” system, expanding the definition of prior art and developing a post-grant review system.
This legislation changes U.S.
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The Drug Price Competition and Patent Term Restoration Act of 1984 or the Hatch-Waxman Act, added Section 505(b)(2) to the FDCA.
−Removed: Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not received a right of reference, which could expedite the development program for Haduvio for the treatment of
−Removed: pruritus associated with prurigo nodularis and any future product candidates by potentially decreasing the amount of preclinical and clinical data that we would need to generate in order to obtain FDA approval.
+Added: Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not received a right of reference, which could expedite the development program for Haduvio for the treatment of pruritus associated with prurigo nodularis and any future product candidates by potentially decreasing the amount of preclinical and clinical data that we would need to generate in order to obtain FDA approval.
However, while we believe that Haduvio is a reformulation of an existing drug and, therefore, its active moiety will not be treated as a NCE, the submission of an NDA under the Section 505(b)(2) regulatory pathway does not preclude the FDA from determining that Haduvio contains an active moiety that is an NCE and, therefore, is not eligible for review under such regulatory pathway.
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The research, testing, manufacturing, labeling, approval, selling, marketing, promotion and distribution of products are subject to extensive regulation by the FDA and comparable foreign regulatory authorities.
−Removed: We are not permitted to market Haduvio or any other product candidate in the U.S.
+Added: We are not permitted to market Haduvio or any other
+Added: product candidate in the U.S.
until we receive approval of an NDA from the FDA or in other countries until we receive marketing approval from the applicable regulatory authorities outside the U.S.
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Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies.
−Removed: In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit
−Removed: or prevent marketing approval of a product candidate.
+Added: In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate.
Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.
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If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
−Removed: In response to COVID-19, on March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities.
+Added: In response to the COVID-19 pandemic, on March 10, 2020, the FDA announced its intention to postpone most inspections of foreign manufacturing facilities and on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities.
Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system.
3 unchanged sentences
When planning routine surveillance inspections, the agency will prioritize higher-risk establishments.
−Removed: Therefore, a longer interval between inspections will occur for the less high-risk facilities as the FDA adjusts to the impact of COVID-19.
+Added: Therefore, a longer interval between inspections will occur for the less high-risk facilities as the FDA adjusts to the impact of the COVID-19 pandemic.
This means that postponed inspections will be prioritized based on risk and conducted over a longer period of time, ultimately increasing the amount of time between inspections of certain lower-risk facilities.
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Although the FDA may accept data from clinical trials conducted outside the U.S., acceptance of these data is subject to certain conditions imposed by the FDA.
−Removed: For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with cGCPs.
+Added: For example, the
+Added: clinical trial must be well designed and conducted and performed by qualified investigators in accordance with cGCPs .
The FDA must be able to validate the data from the trial, including, if necessary, through an onsite inspection.
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There can be no assurance that the FDA will accept data from trials conducted outside of the U.S.
−Removed: If the FDA does not accept the data from any trial that we conduct outside the U.S., it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of Haduvio or the applicable future product candidate.
+Added: If the FDA does not accept the data from any trial that we conduct outside the U.S.
+Added: , it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of Haduvio or the applicable future product candidate.
In addition, the conduct of clinical trials outside the U.S.
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Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, the FDA, the Federal Trade Commission and various state Attorneys General offices.
−Removed: These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the FDCA, the False Claims Act, the Prescription Drug Marketing Act and anti-kickback laws and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement.
+Added: These investigations have alleged violations of various federal and state laws and
+Added: regulations, including claims asserting antitrust violations, violations of the FDCA, the False Claims Act, the Prescription Drug Marketing Act and anti-kickback laws and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement.
Many of these investigations originate as “ qui tam ” actions under the False Claims Act.
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To date, there have been several recent U.S.
−Removed: congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among
−Removed: other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for products .
+Added: congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for products.
For example, on September 24, 2020, the Trump Administration finalized a rulemaking allowing states or certain other non-federal government entities to submit importation program proposals to the FDA for review and approval.
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In addition, President Trump issued several executive orders intended to lower the costs of prescription drug products.
−Removed: Certain of these orders are reflected in recently promulgated regulations, including an interim final rule implementing President Trump’s most favored nation model, but such final rule is currently subject to a nationwide preliminary injunction.
+Added: Certain of these orders are reflected in recently promulgated regulations, including an interim final rule implementing President Trump’s most favored nation model, but such final rule is subject to a nationwide preliminary injunction for its failure to comply with notice and comment rulemaking requirements.
The Biden Administration has frozen certain of the previous administration’s measures to reform drug prices, pending further review.
1 unchanged sentence
At the same time, the administration may seek to limit Medicare Part D and public option drug prices through a tax penalty on manufacturers for increases in the cost of drugs and biologics above the general inflation rate.
−Removed: The American Rescue Plan Act of 2021, comprehensive COVID-19 relief legislation recently enacted under the Biden administration, includes a number of healthcare-related provisions, such as support to rural health care providers, increased tax subsidies for health insurance purchased through insurance exchange marketplaces, financial incentives to states to expand Medicaid programs and elimination of the Medicaid drug rebate cap effective in 2024.
+Added: The Biden administration has agreed to delay for a year the implementation of one of President Trump’s signature drug pricing policies, from January 2022 to 2023.
+Added: The policy at issue would have prevented drug makers and middlemen from negotiating rebates on prescription drugs.
+Added: More recently, on July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.
+Added: To address these costs, the Order directs the Department of Health and Human Services, or HHS, to create a plan within 45 days to combat “excessive pricing of prescription drugs and enhance domestic pharmaceutical supply chains, to reduce the prices paid by the federal government for such drugs, and to address the recurrent problem of price gouging.” Thereafter, on September 9, 2021, HHS released its plan to reduce drug prices.
+Added: The key features of that plan are to:
+Added: (a) make drug prices more affordable and equitable for all consumers and throughout the health care system by supporting drug price negotiations with manufacturers;
+Added: (b) improve and promote competition throughout the prescription drug industry by supporting market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase transparency;
+Added: and (c) foster scientific innovation to promote better healthcare and improve health by supporting public and private research and making sure that market incentives promote discovery of valuable and accessible new treatments.
+Added: Further, on August 21, 2021, the Centers for Medicare & Medicaid Services, or CMS, issued a proposed rule to rescind the Trump Administration’s interim final rule, following public notice and comment.
+Added: With issuance of this proposal, CMS stated that it will carefully consider the comments it received on the November 2020 interim final rule as it explores all options to incorporate value into payments for Medicare Part B drugs and improve beneficiaries’ access to evidence-based care.
At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, designed to encourage importation from other countries and bulk purchasing.
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False Claims Laws.
−Removed: The federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions against individuals or entities for, among other things, knowingly presenting or causing to be presented false or fraudulent claims for payment by a federal healthcare program
−Removed: or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties.
+Added: The federal false claims and civil monetary penalties laws, including the federal civil False Claims Act, impose criminal and civil penalties, including through civil whistleblower or qui tam actions against individuals or entities for, among other things, knowingly presenting or causing to be presented false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties.
The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal and civil liability for, among other things, executing a scheme or making materially false statements in connection with the delivery of or payment for health care benefits, items or services.
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and implementing safeguards to protect the security and confidentiality of personal data.
−Removed: The GDPR imposes strict rules on
−Removed: the transfer of personal data to countries outside the E.U.
−Removed: , including the U.S.
+Added: The GDPR imposes strict rules on the transfer of personal data to countries outside the E.U., including the U.S.
Failure to comply with the requirements of the GDPR may result in fines of up to 20 million euros or four percent of annual global revenues, whichever is greater.
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We expect to expand our organization and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
−Removed: As of June 30, 2021, we had 23 employees.
+Added: As of September 30, 2021, we had 26 employees.
We expect to experience significant growth in the number of our employees and the scope of our operations.
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It is not always possible to identify and deter misconduct and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations.
−Removed: If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant criminal, civil and administrative sanctions including monetary penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, reputational harm and requirements to curtail or restructure our operations.
+Added: If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and results of operations, including the imposition of significant criminal, civil and administrative sanctions including monetary penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar
+Added: agreement to resolve allegations of non-compliance with these laws, reputational harm and requirements to curtail or restructure our operations.
Risks Related to Our Common Stock
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actual or anticipated changes in estimated financial results or development timelines;
−Removed: announcements or expectations of additional financing efforts;
+Added: announcements or expectations of additional financing efforts, including with respect to the substantial additional capital that we will need to raise by June 30, 2022 to satisfy the Milestone Conditions;
sales of our common stock by us, our insiders or other stockholders;
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market conditions in the pharmaceutical and biotechnology sectors;
−Removed: general economic, industry and market conditions, including recent adverse changes in the domestic and international financial markets and the impacts of COVID-19;
+Added: general economic, industry and market conditions, including recent adverse changes in the domestic and international financial markets and the impacts of the COVID-19 pandemic;
our obligations in connection with the SVB Term Loan;
1 unchanged sentence
other factors and considerations described in this “Risk Factors” section.
−Removed: In addition, COVID-19 has negatively affected the stock market and investor sentiment.
−Removed: The price and volatility of our common stock may be disproportionately affected as investors may favor traditional profit-making industries and companies during the times of market uncertainty and instability.
+Added: In addition, the COVID-19 pandemic has negatively affected the stock market and investor sentiment.
+Added: The price and volatility of our common stock may be disproportionately affected as investors may favor traditional profit-making industries and companies during such times of market uncertainty and instability.
We could be subject to securities class action litigation.
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These sales or the perception in the market that the holders of a large number of shares of our common stock intend to sell their shares, could reduce the trading price of our common stock.
−Removed: All of our outstanding shares of common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act of 1933, as amended, or the Securities Act, or to the extent that such shares have already been registered under the Securities Act and are held by non-affiliates of ours.
+Added: As of November 10, 2021, we have outstanding 25,846,577 shares of common stock, of which 790,562 shares are subject to restrictions on transfer under lock-up agreements entered into by our directors and officers in connection with the initial October 2021 private placement.
+Added: These restrictions are due to expire on January 3, 2022.
+Added: With the exception of the shares of common stock subject to such lock-up agreements, all of our outstanding shares of common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act of 1933, as amended, or the Securities Act, or to the extent that such shares have already been registered under the Securities Act and are held by non-affiliates of ours.
Moreover, holders of a substantial number of shares of our common stock have rights, subject to specified limitations and conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
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In June 2020, we entered into the ATM Sales Agreement, pursuant to which, from time to time, we may offer and sell under the ATM Sales Agreement up to $12.0 million of the common stock registered under the Shelf Registration Statement pursuant to one or more “at-the-market” offerings.
−Removed: As of June 30, 2021, we had sold 3,421,368 shares of common stock for an aggregate purchase price of $10.6 million, before deducting estimated commissions and allocated fees of $0.8 million, pursuant to the ATM Sales Agreement.
+Added: As of September 30, 2021, we had sold 3,583,394 shares of common stock for an aggregate purchase price of $10.9 million, before deducting estimated commissions and allocated fees of $0.8 million, pursuant to the ATM Sales Agreement.
The extent to which we utilize the ATM Sales Agreement as a source of funding will depend on a number of factors, including the prevailing market price of our common stock, general market conditions and the extent to which we are able to secure funds from other sources.
−Removed: In addition, on June 18, 2021, we entered into the LPC Purchase Agreement with Lincoln Park pursuant to which Lincoln Park has committed to purchase up to $15.0 million of shares of our common stock.
−Removed: We filed a registration statement on Form S-1, or the Form S-1, covering the resale of shares of common stock that are issued to Lincoln Park under the LPC Purchase Agreement, which was declared effective on July 14, 2021.
−Removed: We generally have the right to control the timing and amount of any future sales of shares of our common stock to Lincoln Park.
−Removed: Sales of shares of our common stock, if any, to Lincoln Park will depend upon market conditions and other factors to be determined by us.
−Removed: We may ultimately decide to sell to Lincoln Park all, some or none of the additional shares of our common stock that may be available for us to sell pursuant to the LPC Purchase Agreement.
−Removed: If and when we do sell shares of our common stock to Lincoln Park, after Lincoln Park has acquired the shares of common stock, Lincoln Park may resell all, some or none of those shares of common stock at any time or in its discretion.
−Removed: The sale by Lincoln Park of a substantial number of shares of our common stock issued by us to Lincoln Park under the LPC Purchase Agreement or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.
−Removed: Sales of substantial amounts of shares of our common stock or other securities by our stockholders, by us under the Shelf Registration Statement, whether pursuant to the ATM Sales Agreement or otherwise or by Lincoln Park pursuant to the Form S-1 or through any other means could also lower the market price of our common stock and impair our ability to raise capital through the sale of equity or equity-related securities.
+Added: On October 5, 2021, we issued to a single investor in a private placement, or the Initial Private Placement Investor, (i) 2,373,201 shares of our common stock and accompanying warrants to purchase an aggregate of 4,746,402 shares of our common stock, and (ii) pre-funded warrants to purchase up to an aggregate of 4,926,069 shares of our common stock and accompanying warrants to purchase an aggregate of 9,852,138 shares of our common stock.
+Added: Under the terms of the pre-funded warrants and the accompanying common stock warrants, we may not effect the exercise of any such warrant, and the Initial Private Placement Investor will not be entitled to exercise any portion of any such warrant, if, upon giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the Initial Private Placement Investor, together with its affiliates, would exceed 4.99%, for the accompanying common stock warrants, or 9.99%, for the pre-funded warrants, of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such warrant, which percentage may be increased or decreased at the Initial Private Placement Investor’s election upon 61 days’ notice to us, subject to the
+Added: terms of such warrants, provided that such percentage may in no event exceed 9.99%.
+Added: We refer to such percentage limitations as the Beneficial Ownership Limitations.
+Added: We filed a registration statement on Form S-3 , or the Initial Private Placement Form S-3, covering the resale of up to 21,897,810 shares of common stock, comprised of the 2,373,201 shares of common stock issued outright and the 19,524,609 shares of common stock issuable upon exercise of the warrants, which was declared effective in October 2021.
+Added: While the Initial Private Placement Form S-3 covers the resale of the number of shares of common stock issued or issuable to the Initial Private Placement Investor without giving effect to the Beneficial Ownership Limitations, the Initial Private Placement Investor may not exercise, and subsequently resell the underlying shares of common stock of, any portion of the warrants to the extent such exercise would result in the Initial Private Placement Investor exceeding the applicable Beneficial Ownership Limitation.
+Added: The Initial Private Placement Investor may resell all, some or none of the shares of common stock registered pursuant to the Initial Private Placement Form S-3 at any time or in its discretion, subject to the Beneficial Ownership Limitations.
+Added: Similarly, on October 18, 2021, we issued to NEA, in a private placement, 1,851,852 shares of our common stock and accompanying warrants to purchase an aggregate of 3,703,704 shares of our common stock.
+Added: We filed a registration statement on Form S-3, or the Second Private Placement Form S-3, covering the resale of 5,555,556 shares of common stock, comprised of the 1,851,852 shares of common stock and the 3,703,704 shares of common stock issuable upon exercise of the warrants.
+Added: If and when the Second Private Placement Form S-3 is declared effective, NEA will be able to resell all, some or none of the shares of common stock registered pursuant to the Second Private Placement Form S-3 at any time or in its discretion.
+Added: Sales of substantial amounts of shares of our common stock or other securities by our stockholders, by us under the Shelf Registration Statement, whether pursuant to the ATM Sales Agreement or otherwise, by Lincoln Park pursuant to the Form S-1, by the private placement investors pursuant to the Initial Private Placement Form S-3 or the Second Private Placement Form S-3 or through any other means could also lower the market price of our common stock, make it more difficult for you to sell your shares at a price that you desire and impair our ability to raise capital through the sale of equity or equity-related securities.
+Added: The number of shares of common stock underlying our outstanding warrants is significant in relation to our currently outstanding common stock, which could have a negative effect on the market price of our common stock and make it more difficult for us to raise funds through future equity offerings.
+Added: In addition, in connection with any merger, consolidation or sale of all or substantially all of our assets, holders of our outstanding warrants would be entitled to receive consideration in excess of their reported beneficial ownership of our common stock and this could adversely impact the consideration our other stockholders would receive.
+Added: As part of our October 2021 Private Placements, we issued to the Initial Private Placement Investor warrants to purchase an aggregate of 14,598,540 shares of our common stock at an exercise price of $1.37 per share, and pre-funded warrants to purchase up to an aggregate of 4,926,069 shares of our common stock at an exercise price of $0.001 per share.
+Added: Of the common stock warrants issued to the Initial Private Placement Investor, warrants to purchase an aggregate of 7,299,270 shares will expire on April 5, 2025 and warrants to purchase an aggregate of 7,299,270 shares will expire on October 5, 2028.
+Added: In addition, we issued to NEA warrants to purchase an aggregate of 3,703,704 shares of our common stock at an exercise price of $1.37 per share.
+Added: Of the common stock warrants issued to NEA, warrants to purchase an aggregate of 1,851,852 shares of our common stock will expire on April 18, 2025 and warrants to purchase an aggregate of 1,851,852 shares of our common stock will expire on October 18, 2028.
+Added: As discussed above, the pre-funded warrants and the common stock warrants issued to the Initial Private Placement Investor are subject to Beneficial Ownership Limitations.
+Added: As of November 10, 2021, all of the warrants issued to the Initial Private Placement Investor and NEA in the private placements remained outstanding.
+Added: Although the Initial Private Placement Investor’s warrants are subject to the Beneficial Ownership Limitations, upon exercise in full of the warrants, the shares issuable upon exercise would represent a significant portion of our outstanding common stock.
+Added: As a result, they may be able to exert substantial influence over our business.
+Added: The concentration of voting power resulting from the exercise of the warrants could delay, defer or prevent a change of control, entrench our management and our board of directors or delay or prevent a merger, consolidation, takeover or other business combination involving us on terms that other stockholders may desire.
+Added: In addition, conflicts of interest could arise in the future between us, on the one hand, and the Initial Private Placement Investor and/or NEA on the other hand, concerning potential competitive business activities, business opportunities, the issuance of additional securities and other matters.
+Added: In addition, sales of these shares could cause the market price of our common stock to decline significantly.
+Added: Furthermore, in the event of a sale of our company, whether by merger, sale of all or substantially all of our assets or otherwise, the Initial Private Placement Investor and NEA would be entitled to receive, with respect to each share of common stock issuable upon exercise of the warrants then held by them and, and in the case of the Initial Private Placement Investor, without regard to the Beneficial Ownership Limitations, the same amount and kind of securities, cash or property as they would have been entitled to receive if such securities had been converted into or exercised for shares of our common stock immediately prior to such sale of our company.
+Added: Although the Initial Private Placement Investor’s beneficial ownership of our common stock is reported as 9.99% as a result of the application of the Beneficial Ownership Limitations, in the event of a sale of our company, the Initial Private Placement Investor would receive sale consideration without regard to the Beneficial Ownership Limitations.
+Added: In such a sale, the Initial Private Placement Investor would be entitled to receive a significantly larger portion of the total proceeds distributable to the holders of our securities than is represented by its reported beneficial ownership of our common stock.
+Added: In addition, pursuant to the terms of the common stock warrants issued to both the Initial Private Placement Investor and NEA in our October 2021 Private Placements, in specified circumstances upon a fundamental transaction by us, such warrant holders may have the right to require us to repurchase their common stock warrants at their fair value
+Added: using a Black Scholes option pricing formula.
+Added: As a result, in the event of a sale of our c ompany, the Initial Private Placement Investor and NEA may be entitled to receive a significantly larger portion of the total proceeds distributable to our stockholders than they would if they exercised the warrants immediately prior to the transaction, and our stockholders could receive significantly less than they otherwise would in such a transaction.
+Added: Given the amount and terms of these warrants, we may find it more difficult to raise additional equity capital on favorable terms or at all while these warrants are outstanding.
Ownership of our common stock is concentrated among our executive officers and directors and their affiliates and our significant stockholders, who have significant influence over our business, which may prevent new investors from influencing significant corporate decisions.
−Removed: Our executive officers and directors and their affiliates and our significant stockholders in the aggregate, beneficially own shares representing approximately 61.0% of our common stock as of August 12, 2021.
−Removed: As a result, our executive officers and directors and their
−Removed: affiliates and our significant stockholders acting together would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs.
+Added: Our executive officers and directors and their affiliates and our significant stockholders in the aggregate, beneficially own shares representing approximately 69.3% of our common stock as of November 10, 2021.
+Added: As a result, our executive officers and directors and their affiliates and our significant stockholders acting together would be able to control all matters submitted to our stockholders for approval, as well as our management and affairs.
This concentration of ownership control may:
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As a public company and particularly after we are no longer an “emerging growth company” or a “smaller reporting company,” we incur and will continue to incur, significant legal, accounting, investor relations and other expenses that we did not incur as a private company.
−Removed: The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Stock Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
+Added: The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing
+Added: requirements of the Nasdaq Stock Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
We may need to hire additional accounting, finance and other personnel in connection with our efforts to comply with the requirements of being a public company and our management and other personnel devote a substantial amount of time in complying with these requirements, which could negatively impact our financial results.
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This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
−Removed: We have invested in and intend to continue to invest in, resources to comply with evolving laws, rules and
−Removed: regulations and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
+Added: We have invested in and intend to continue to invest in, resources to comply with evolving laws, rules and regulations and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
If, notwithstanding our efforts to comply with new laws, rules and regulations, we fail to comply, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
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There is also a risk that due to regulatory changes, such as suspensions on the use of net operating losses or other unforeseen reasons, our existing net operating losses could expire or otherwise become unavailable to offset future income tax liabilities.
−Removed: As described below in “Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition,” the Tax Cuts and Jobs Act, or the Tax Act, as amended by the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, includes changes to U.S.
+Added: described below in “Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition,” the Tax Cuts and Jobs Act, or the Tax Act, as amended by the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, includes changes to U.S.
federal tax rates and the rules governing net operating loss carryforwards that may significantly impact our ability to utilize our net operating losses to offset taxable income in the future.
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government enacted the Tax Act, which significantly reformed the IRC.
−Removed: The Tax Act, among other things, contained significant changes to corporate taxation, including a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for net operating losses arising in taxable years beginning after December 31, 2017 to 80% of current year
−Removed: taxable income and elimination of net operating loss carrybacks for losses arising in taxable years ending after December 31, 2017 (though any such NOLs may be carried forward indefinitely), the imposition of a one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, the elimination of U.S.
+Added: The Tax Act, among other things, contained significant changes to corporate taxation, including a reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, the limitation of the tax deduction for net interest expense to 30% of adjusted taxable income (except for certain small businesses), the limitation of the deduction for net operating losses arising in taxable years beginning after December 31, 2017 to 80% of current year taxable income and elimination of net operating loss carrybacks for losses arising in taxable years ending after December 31, 2017 (though any such NOLs may be carried forward indefinitely), the imposition of a one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, the elimination of U.S.
tax on foreign earnings (subject to certain important exceptions), the allowance of immediate deductions for certain new investments instead of deductions for depreciation expense over time and the modification or repeal of many business deductions and credits.
−Removed: As part of Congress’s response to COVID-19, the Families First Coronavirus Response Act, or FFCR Act, was enacted on March 18, 2020 and the CARES Act was enacted on March 27, 2020.
+Added: As part of Congress’s response to the COVID-19 pandemic, the Families First Coronavirus Response Act, or FFCR Act, was enacted on March 18, 2020 and the CARES Act was enacted on March 27, 2020.
Both contain numerous tax provisions.
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Regulatory guidance under the Tax Act, the FFCR Act and the CARES Act is and continues to be forthcoming and such guidance could ultimately increase or lessen impact of these laws on our business and financial condition.
−Removed: It is also likely that Congress will enact additional legislation in connection with COVID-19, some of which could have an impact on our company.
+Added: It is also likely that Congress will enact additional legislation in connection with the COVID-19 pandemic, some of which could have an impact on our company.
In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the FFCR Act or the CARES Act.
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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.