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Item 1A. Risk Factors

2022-11-10 compared with 2022-08-11 · 176 added, 156 removed, 1284 unchanged (21% of the section changed)

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We expect to continue to incur significant and increasing net losses for at least the next several years.

Our net losses were $15.4 million and $33.9 million for the six months ended June 30, 2022 and for the year ended December 31, 2021, respectively.

As of June 30, 2022, we had an accumulated deficit of $196.3 million.

Our net losses were $23.6 million and $33.9 million for the nine months ended September 30, 2022 and for the year ended December 31, 2021, respectively.

As of September 30, 2022, we had an accumulated deficit of $204.6 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.

We have financed our operations to date primarily through private placements of our convertible preferred stock and convertible notes prior to our initial public offering, or 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 we entered into in June 2020, which we refer to as the ATM Sales Agreement, the term loan facility with Silicon Valley Bank that we entered into in August 2020, which we refer to as the SVB Term Loan, proceeds from the two private placements we completed in October 2021, or the October 2021 Private Placements, proceeds from the private placement we completed in April 2022, or the April 2022 Private Placement, and proceeds from the exercise of common stock warrants that were issued in 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.

We have financed our operations to date primarily through private placements of our convertible preferred stock and convertible notes prior to our initial public offering, or 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 we entered into in June 2020, which we refer to as the ATM Sales Agreement, the term loan facility with Silicon Valley Bank that we entered into in August 2020, which we refer to as the SVB Term Loan, proceeds from the two private placements we completed in October 2021, or the October 2021 Private Placements, proceeds from the private placement we completed in April 2022, or the April 2022 Private Placement, proceeds from the exercise of common stock warrants that were issued in the October 2021 Private Placements and proceeds from the public offering we completed in September 2022, or the September 2022 Offering.

We have devoted substantially all of our financial resources and efforts to the clinical development of our product candidate Haduvio and related activities.

Our net losses may fluctuate significantly from quarter to quarter and year to year.

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We anticipate that our expenses will increase substantially if and as we:

continue to develop and conduct clinical trials of Haduvio, including the ongoing open-label extension portion of our Phase 2b/3 PRISM trial, our Phase 2 CANAL trial and subsequent trials;

complete other development work required for the filing of a NDA with the FDA, and the filing of marketing authorization applications, or MAAs, with the EMA and the MHRA, for Haduvio for the treatment of prurigo nodularis, including completing the open-label extension portion of our Phase 2b/3 PRISM trial and at least one additional Phase 3 clinical trial in this indication and our continued development work in chronic cough in adults with IPF;

seek regulatory and marketing approvals for Haduvio for the treatment of prurigo nodularis and/or chronic cough in adults with IPF or for other serious neurologically mediated conditions or for any future product candidate that successfully completes clinical trials, if any;

continue to develop and conduct clinical trials of Haduvio, including the next trial we plan to conduct for Haduvio for the treatment of chronic cough in adults with IPF, a Phase 2 clinical trial of Haduvio for the treatment of refractory chronic cough as well as our ongoing open-label extension portion of our Phase 2b/3 PRISM trial and subsequent trials;

complete other development work required for the filing of a new drug application, or NDA , with the FDA , and the filing of marketing authorization applications, or MAAs, with the EMA and the MHRA, for Haduvio;

seek regulatory and marketing approvals for Haduvio for the treatment of chronic cough in adults with IPF, other chronic cough indications, and/or for the treatment of prurigo nodularis, or for any future product candidate that successfully completes clinical trials, if any;

negotiate and execute pediatric development plans and complete any post-approval commitments;

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Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by clinical-stage biopharmaceutical companies such as ours.

Any predictions you make about our future success or

viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

Any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.

We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.

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We have consumed substantial amounts of cash since our inception.

For example, in the six months ended June 30, 2022 and the year ended December 31, 2021, we used net cash of $13.3 million and $28.9 million, respectively, in our operating activities, substantially all of which related to development activities for Haduvio.

As of June 30, 2022, our cash, cash equivalents and marketable securities were $78.9 million.

In July 2022, we also received $4.1 million in proceeds from the exercise of common stock warrants that were issued in the October 2021 Private Placements.

For example, in the nine months ended September 30, 2022 and the year ended December 31, 2021, we used net cash of $21.8 million and $28.9 million, respectively, in our operating activities, substantially all of which related to development activities for Haduvio.

As of September 30, 2022, our cash, cash equivalents and marketable securities were $125.6 million.

In October 2022, we received approximately $3.1 million in gross proceeds from the partial exercise of the underwriters’ option to purchase additional shares of our common stock in connection with the September 2022 Offering, or the Option.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we continue to develop Haduvio, including as we:

complete the open-label extension portion of our ongoing Phase 2b/3 PRISM trial;

complete our Phase 2 CANAL trial and, if the CANAL trial is successful, conduct the next trial we plan to conduct for Haduvio for the treatment of chronic cough in adults with IPF, which we expect will be designed as a Phase 2b/3 trial, subject to discussions with the FDA;

conduct the next trials we plan to conduct for Haduvio for the treatment of chronic cough in adults with IPF;

conduct our planned Phase 2 clinical trial of Haduvio for the treatment of refractory chronic cough;

conduct our HAL study to further characterize the abuse potential of oral nalbuphine;

complete the ongoing open-label extension portion of our Phase 2b/3 PRISM trial in patients with prurigo nodularis;

In addition, we may incur additional expenses:

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if we 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;

as a result of the COVID-19 pandemic and resulting clinical trial delays and interruptions.

as a result of the COVID-19 pandemic or other outbreaks of infectious disease 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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We will be required to expend significant funds to advance the development of Haduvio in multiple indications, as well as any future product candidates we may seek to develop.

Our existing cash, cash equivalents and marketable securities will not be sufficient to complete development of Haduvio for the treatment of prurigo nodularis and chronic cough in adults with IPF or for any other condition or of any future product candidate.

Our existing cash, cash equivalents and marketable securities will not be sufficient to complete development of Haduvio for the treatment of chronic cough in adults with IPF, for refractory chronic cough or for prurigo nodularis, or for any other condition or of any future product candidate.

We do not have any committed external source of funds.

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We indicated that there were a number of factors that raised substantial risks about our ability to continue as a going concern as of the date of our Annual Report on Form 10-K for the year ended December 31, 2021 without additional capital.

We believe that our existing cash, cash equivalents and marketable securities, including the proceeds we received in July 2022 from the exercise of common stock warrants that were issued in the October 2021 Private Placements, will enable us to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2023.

This does not consider the cost of any additional clinical trial that we may determine to conduct for the treatment of prurigo nodularis.

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.

We believe that our existing cash, cash equivalents and marketable securities, including the proceeds from the exercise of the Option in October 2022, will enable us to fund our operating expenses and capital expenditure requirements into 2026.

However, such a financing may not be available to us on acceptable terms, on a timely basis or at all.

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Our future funding requirements, both short-term and long-term, will depend on many factors including:

the scope, progress, timing, costs and results of clinical trials of Haduvio for the treatment of prurigo nodularis, and for the treatment of chronic cough in adults with IPF and other serious neurologically mediated conditions;

the scope, progress, timing, costs and results of clinical trials of Haduvio , including the next clinical trials for the treatment of chronic cough in adults with IPF , our planned Phase 2 clinical trial in refractory chronic cough, and our ongoing open-label extension portion of our Phase 2b/3 PRISM trial as well as any future product candidates ;

the number and characteristics of indications for which we seek to develop Haduvio or any future product candidates and their respective development requirements;

the outcome, timing and costs of clinical and nonclinical trials and of seeking regulatory approvals, including the costs of supportive clinical studies such as our planned human abuse liability, or HAL, study and a potential Thorough QT, or TQT, study;

the outcome, timing and costs of clinical and nonclinical trials and of seeking regulatory approvals, including the costs of supportive clinical studies such as our HAL study and a potential Thorough QT, or TQT, study;

the costs associated with the manufacture of necessary quantities of Haduvio or any future product candidate for clinical development in connection with regulatory submissions;

the extent to which rising inflation increases the expenses related to our clinical trials;

the costs of commercialization activities for Haduvio for the treatment of prurigo nodularis, chronic cough in adults with IPF, or for any other serious neurologically mediated conditions or for any future product candidates that receive marketing approval, if any, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

subject to receipt of marketing approvals, revenue, if any, received from commercial sales of Haduvio for the treatment of prurigo nodularis or chronic cough in adults with IPF or for any other serious neurologically mediated conditions or from any future product candidates;

our ability to identify potential collaborators for Haduvio for the treatment of prurigo nodularis or chronic cough in adults with IPF or for any future product candidates and the terms and timing of any collaboration agreement that we may establish for the development and any commercialization of such product candidates;

the costs of commercialization activities for Haduvio for the treatment of chronic cough in adults with IPF or any other chronic cough indications or for the treatment of prurigo nodularis or for any future product candidates that receive marketing approval, if any, including the costs and timing of establishing product sales, marketing, distribution and manufacturing capabilities;

subject to receipt of marketing approvals, revenue, if any, received from commercial sales of Haduvio for the treatment of chronic cough in adults with IPF or for any other chronic cough indications or for the treatment of prurigo nodularis, or from any future product candidates;

our ability to identify potential collaborators for Haduvio for the treatment of prurigo nodularis or for the treatment of chronic cough in adults with IPF or for any other chronic cough indications or for any future product candidates, and the terms and timing of any collaboration agreement that we may establish for the development and any commercialization of such product candidates;

the extent to which we acquire or in-license rights to other potential product candidates or technologies and the terms and timing of any such acquisition or licensing arrangements;

our potential obligation to make milestone payments to Endo, which would become due upon the successful completion of the first Phase 3 clinical trial of a licensed product candidate and the marketing approval of a licensed product in the United States, as well as our potential obligations to pay Endo mid-single digit royalties on the net sales of the product;

our headcount growth and associated costs as we expand our research and development activities and establish a commercial infrastructure;

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On August 13, 2020, we entered into a Loan and Security Agreement, or the SVB Loan Agreement with Silicon Valley Bank, or SVB, pursuant to which SVB provided a term loan to us in the original principal amount of $14.0 million, or the SVB Term Loan.

In April 2022, we entered into a Third Amendment to the SVB Loan Agreement.

Pursuant to the Third Amendment and after we received positive data in our Phase 2b/3 PRISM trial, the SVB Term Loan bears interest at a floating rate per annum equal to the greater of (A) the prime rate plus 3.00% and (B) 6.25%.

The SVB Term Loan bears interest at a floating rate per annum equal to the greater of (A) the prime rate plus 3.00% and (B) 6.25%.

The Federal Reserve has recently raised interest rates to combat the effects of recent high inflation and may raise interest rates further in the future.

The increase in interest rates by the Federal Reserve has caused, and could in the future continue to cause, the prime rate to increase, which has increased and could in the future further increase our

debt service obligations.

Significant increases in such obligations could have a negative impact on our financial position or operating results, including cash available for servicing our indebtedness.

On the first business day of each month, we are required to make monthly interest payments and commencing on March 1, 2022, we are required to repay the SVB Term Loan in 24 consecutive installments of principal plus monthly payments of accrued interest.

All outstanding principal and accrued and unpaid interest under the SVB Term Loan and all other outstanding obligations with respect to the SVB Term Loan are due and payable in full on February 1, 2024.

All outstanding principal and accrued and unpaid interest under the SVB Term Loan and all other outstanding obligations

with respect to the SVB Term Loan are due and payable in full on February 1, 2024.

Our obligations under the Loan Agreement are secured by substantially all of our assets, excluding our intellectual property (which is subject to a negative pledge under the Loan Agreement).

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We expect our expenses to increase substantially in connection with our planned operations, particularly as we:

conduct the open-label extension portion of our Phase 2b/3 PRISM trial;

conduct our Phase 2 CANAL trial;

conduct the next study we plan to conduct for Haduvio for the treatment of chronic cough in adults with IPF, which we expect will be designed as a Phase 2b/3 trial, subject to discussions with the FDA;

conduct any additional Phase 3 clinical trial that we may determine to conduct for the treatment of prurigo nodularis .

conduct the next clinical trials we plan to conduct for Haduvio for the treatment of chronic cough in adults with IPF;

conduct our planned Phase 2 clinical trial of Haduvio for the treatment of refractory chronic cough;

conduct our HAL study to further characterize the abusive potential of oral nalbuphine;

complete the open-label extension portion of our Phase 2b/3 PRISM trial.

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.

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Our ability to obtain further debt financing may be limited by the covenants under the SVB Loan Agreement, which include a covenant not to incur additional indebtedness as well as the pledge of substantially all our assets, excluding our intellectual property (which is subject to a negative pledge under the SVB Loan Agreement), as collateral on the SVB Term Loan.

In addition, further debt

financing, if available, would result in additional fixed payment obligations and may involve agreements that include grants of additional security interests on our assets and additional restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, granting liens over our assets, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business, which covenants may be more restrictive than the covenants to which we are subject under the SVB Loan Agreement.

In addition, further debt financing, if available, would result in additional fixed payment obligations and may involve agreements that include grants of additional security interests on our assets and additional restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, granting liens over our assets, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business, which covenants may be more restrictive than the covenants to which we are subject under the SVB Loan Agreement.

Securing financing could also require a substantial amount of time from our management and may divert a disproportionate amount of their attention away from daily activities, which may adversely affect our management’s ability to oversee the development of Haduvio or that of any future product candidates.

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If we are unable to complete the clinical development of, obtain marketing approval for or successfully commercialize Haduvio or if we experience significant delays in doing so, our business would be substantially harmed.

We currently have no products approved for sale and are investing substantially all our efforts and financial resources to fund the development of Haduvio for multiple serious neurologically mediated conditions.

We currently have no products approved for sale and are investing substantially all our efforts and financial resources to fund the development and commercialization of Haduvio for the treatment of chronic cough in adults with IPF and other chronic cough indications , and for the treatment of prurigo nodularis .

Our prospects are dependent on our ability to develop, obtain marketing approval for and successfully commercialize Haduvio in one or more indications as we currently have no other product candidates under development.

We may acquire or in-license rights to other potential product candidates or technologies in the future, but we are currently not developing any other product candidates.

Our most advanced programs are the development of Haduvio for the treatment of prurigo nodularis and chronic cough in adults with IPF, as our efforts to develop Haduvio for other serious neurologically mediated conditions are only at an early stage.

As a result, if our efforts to develop and commercialize Haduvio for the treatment of prurigo nodularis or chronic cough in adults with IPF are unsuccessful or we experience significant delays in doing so, our business could also be substantially harmed.

The success of Haduvio for the treatment of prurigo nodularis and chronic cough in adults with IPF, as well as for other serious neurologically mediated conditions, will depend on several factors, including the following:

completing the open-label extension portion of our Phase 2b/3 PRISM trial;

initiating and successfully recruiting, enrolling and retaining subjects in and completing additional clinical and nonclinical trials of Haduvio, including the additional Phase 3 clinical trial we believe we would need to conduct to get FDA approval for Haduvio for the treatment of prurigo nodularis and the additional clinical trial we plan to conduct for the treatment of chronic cough in adults with IPF;

completion of other supportive clinical studies such as our planned HAL study, a potential physical dependence study and a potential TQT study;

Our most advanced programs are the development of Haduvio for the treatment of chronic cough in adults with IPF and for the treatment of prurigo nodularis.

As a result, if our efforts to develop and commercialize Haduvio for the treatment of chronic cough in adults with IPF or for the treatment of prurigo nodularis are unsuccessful or we experience significant delays in doing so, our business could also be substantially harmed.

The success of Haduvio for the treatment of chronic cough in adults with IPF and other chronic cough conditions and for the treatment of prurigo nodularis will depend on several factors, including the following:

initiating and successfully recruiting, enrolling and retaining subjects in and completing additional clinical and nonclinical trials of Haduvio, including the additional clinical trials we plan to conduct for the treatment of chronic cough in adults with IPF, which are subject to the submission and clearance by the FDA of an IND for such trials;

completing the open-label extension portion of our Phase 2b/3 PRISM trial and determining the next steps for the program after discussions with the FDA;

completion of other supportive clinical studies such as our HAL study, a potential physical dependence study and a potential TQT study;

demonstrating safety, tolerability and efficacy profiles that are satisfactory to the FDA, EMA, MHRA and other comparable regulatory authorities for marketing approval;

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If we are unable to develop, receive marketing approval for and successfully commercialize Haduvio or if we experience delays as a result of any of these factors or otherwise, our business would be substantially harmed.

Our approach to the development and commercialization of Haduvio to treat serious neurologically mediated conditions is unproven.

We are currently focused on the development and commercialization of Haduvio to treat serious neurologically mediated conditions.

Our approach to the development and commercialization of Haduvio to treat serious neurologically mediated conditions is

We are currently focused on the development and commercialization of Haduvio for the treatment of chronic cough in adults with IPF and other chronic cough indications, and for the treatment of prurigo nodularis .

Haduvio is an oral extended-release formulation of nalbuphine, the active drug ingredient in Haduvio, which is a mixed κ-opioid receptor agonist and μ-opioid receptor antagonist that has been approved and marketed as an injectable for pain indications for more than 20 years in the U.S.

Nalbuphine is currently not commercially available in an oral dosage form, such as Haduvio.

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, chronic cough, 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.

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 cough, 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.

No therapies have been approved in the U.S.

or Europe for the treatment of severe pruritus in prurigo nodularis or chronic cough in adults with IPF 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.

or Europe for the treatment of chronic cough in adults with IPF 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 sample size re-estimation, or SSRE, analysis;

subject enrollment in 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 2b/3 PRISM trial of Haduvio for the treatment of prurigo nodularis;

subject enrollment in clinical trials may be slower than we anticipate, whether as a result of the COVID-19 pandemic or other outbreaks of infectious disease 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 2b/3 PRISM trial of Haduvio for the treatment of prurigo nodularis;

the cost of planned clinical trials may be greater than we anticipate, such as with our Phase 2b/3 PRISM trial where we added additional sites, increased the target number of enrolled subjects, experienced enrollment that took longer than expected and used 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.

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.

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 or the inability of patients to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.

In addition to the above, the COVID-19 pandemic or other outbreaks of infectious disease 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 or other infectious diseases.

The COVID-19 pandemic could also result in further delays in our clinical trials due to prioritization of hospital and medical resources toward the pandemic, restrictions in travel, potential unwillingness of patients to enroll in trials or the inability of patients to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.

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.

While the current trajectory of the COVID-19 pandemic is uncertain, in the future we may continue to experience adverse impacts on our clinical trial activities, business operations, financial condition, and prospects as a result of the future evolution of the virus, among other factors.

If we are required to conduct additional clinical trials or other testing of Haduvio or any future product candidate beyond the trials and testing that we contemplate, we are unable to successfully and timely complete clinical trials or other testing of Haduvio or any future product candidate, the results of these trials or tests are unfavorable, uncertain or are only modestly favorable or there are unacceptable safety concerns associated with the product candidate, we may:

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be required to remove the product from the market after obtaining marketing approval.

Our failure to successfully and timely complete clinical trials of Haduvio for the treatment of prurigo nodularis, chronic cough in adults with IPF or for any other serious neurologically mediated condition or of any future product candidate and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market any such product candidates would significantly harm our business and could result in the loss or impairment of our ability to generate revenues and effectuate our business strategy.

Our failure to successfully and timely complete clinical trials of Haduvio for the treatment of chronic cough in adults with IPF or other chronic cough conditions or for the treatment of prurigo nodularis or of any future product candidate and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market any such product candidates would significantly harm our business and could result in the loss or impairment of our ability to generate revenues and effectuate our business strategy.

Our clinical trials may fail to demonstrate adequately the safety and efficacy of Haduvio or any future product candidates, which would likely prevent or delay regulatory approval and commercialization.

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Such assessments can be influenced by a number of factors and can vary widely from day to day for any particular patient and from patient to patient and site to site within a clinical trial, leading to high variability in PRO measurements.

In addition, PROs for the assessment of pruritus have historically been observed to have high placebo group response rates.

In addition, although the primary endpoint in our future clinical trials of Haduvio for the treatment of chronic cough in adults with IPF and other chronic cough indications is likely to be measured using an objective cough monitor, we will need to validate a supportive PRO instrument of the primary endpoint.

There is not a validated PRO instrument now that has been accepted for chronic cough indications.

In addition, PROs have historically been observed to have high placebo group response rates.

We observed this in some of our clinical trials of Haduvio.

The variability of PRO measures may be greater than other measures used for clinical trial assessments, and that variability can complicate clinical trial design, adversely impact the ability of a trial to show a statistically significant improvement and generally adversely impact a clinical development program by introducing additional uncertainties.

The variability of PRO measures and related high placebo response rates have adversely impacted clinical results of other therapies being tested for pruritus and could adversely impact our clinical development of Haduvio.

The FDA could also require changes in the PROs we are currently using or indicate that the PROs we are using are insufficient for demonstrating efficacy in pruritus, potentially delaying clinical development of Haduvio, increasing our costs and making additional clinical trials necessary.

The variability of PRO measures and related high placebo response rates have adversely impacted clinical results of other therapies being tested and could adversely impact our clinical development of Haduvio.

The FDA could also require changes in the PROs we are currently using or indicate that the PROs we are using are insufficient for demonstrating efficacy, potentially delaying clinical development of Haduvio, increasing our costs and making additional clinical trials necessary.

If we experience delays or difficulties in the enrollment of subjects in clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.

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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;

the impact of the COVID-19 pandemic.

In particular, the successful completion of our clinical development program for Haduvio for the treatment of prurigo nodularis is dependent upon our ability to enroll a sufficient number of subjects with this severe condition.

We 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 delayed the completion of our trials.

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 or chronic cough in adults with IPF, which are the same conditions for which we are or will be conducting clinical trials, and patients are generally only able to enroll in a single trial at a time.

the impact of the COVID-19 pandemic and other outbreaks of infectious disease.

In particular, the successful completion of our clinical development program for Haduvio for the treatment of chronic cough in adults with IPF and for the treatment of prurigo nodularis is dependent upon our ability to enroll a sufficient number of subjects with these severe conditions.

We experienced delays and difficulties in the enrollment of subjects in our clinical trials, including our Phase 2 CANAL trial and our Phase 2b/3 PRISM trial, which delayed the completion of our trials.

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 chronic cough in adults with IPF, refractory chronic cough or prurigo nodularis, which are the same conditions for which we are or will be conducting clinical trials, and patients are generally only able to enroll in a single trial at a time.

In addition, although there are no drugs approved in the U.S.

or Europe for the treatment of 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.

Similarly, many patients use various treatments off-label to treat chronic cough in adults with IPF and these patients and their physicians may also be reluctant to forgo, discontinue or otherwise alter their use of such off-label therapeutic approaches to participate in our clinical trials.

or Europe to treat chronic cough in adults with IPF or refractory chronic cough, patients with these conditions, as well as their physicians, may be reluctant to forgo, discontinue or otherwise alter their use of off-label therapeutic approaches they currently use in order to participate in our clinical trials.

Additionally, Dupixent (dupilumab), an injectable prescription medicine, was approved by the FDA for the treatment of prurigo nodularis in September 2022, and many patients also use various treatments off-label for the treatment of prurigo nodularis, such as antihistamines or gabapentin;

these patients and their physicians may be reluctant to forgo, discontinue or otherwise alter their use of Dupixent or any off-label therapeutic approaches to participate in our clinical trials.

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.

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Adverse events or undesirable side effects caused by or other unexpected properties of, Haduvio or any future product candidate could cause us, an institutional review board or regulatory authorities to interrupt, delay or halt clinical trials of such product candidate and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities.

We cannot be certain that serious adverse events, or SAEs, will not occur in future clinical trials, which could cause the FDA or comparable foreign regulatory authorities to interrupt, delay or halt clinical trials of such product candidate, approve a more restrictive label than we desire or delay or deny regulatory approval.

We cannot be certain that serious adverse events, or SAEs, will not occur in future clinical trials, which could cause the

FDA or comparable foreign regulatory authorities to interrupt, delay or halt clinical trials of such product candidate, approve a more restrictive label than we desire or delay or deny regulatory approval.

In addition, Haduvio, as a mixed κ-opioid receptor agonist and μ-opioid receptor antagonist, may be susceptible to side effects associated with drugs having either of those mechanisms of action.

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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.

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.

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 respiratory depression and 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.

Such drug-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete a trial or result in potential product liability claims.

In our clinical trials of Haduvio for the treatment of prurigo nodularis, the most frequently reported adverse events associated with Haduvio were nausea, dizziness, headache, constipation and somnolence.

In our clinical trials of Haduvio for the treatment of prurigo nodularis, the most frequently reported treatment emergent adverse events associated with Haduvio were nausea, fatigue, dizziness, vomiting, headache, anxiety, depression, constipation and somnolence.

In our Phase 2 CANAL trial of Haduvio for the treatment of chronic cough in adults with IPF, the most frequently reported treatment emergent adverse events associated with Haduvio were nausea, fatigue, dizziness, vomiting, headache, constipation and somnolence.

If Haduvio or any future product candidate is associated with adverse events or undesirable side effects or demonstrates unexpected properties, we may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.

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While Haduvio has a μ-antagonist mechanism of action and has been well-tolerated in clinical trials to date, we have observed a few cases of mild euphoria, somnolence and feeling relaxed or feeling “high,” which are characteristics that have led to misuse, abuse and addiction of μ-opioids.

We plan to conduct a HAL study to further characterize the abuse potential of oral nalbuphine.

We are initiating a HAL study to further characterize the abuse potential of oral nalbuphine.

If the results of the HAL study suggest that Haduvio may carry risks of misuse, abuse or addiction or even if the trial indicates that Haduvio does not carry such risks, the FDA may require us to implement a REMS program in connection with any commercialization of Haduvio.

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While some states automatically classify a drug when the DEA does so, in other states there must be rulemaking or a legislative action.

Regulatory authorities in foreign jurisdictions may also determine to classify Haduvio as a controlled substance under different, but potentially no less burdensome, regulations.

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

Regulatory authorities in foreign

jurisdictions may also determine to classify Haduvio as a controlled substance under different, but potentially no less burdensome, regulations.

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.

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The outcome of preclinical studies and clinical trials may not be predictive of the success of later clinical trials and preliminary or interim results of clinical trials do not necessarily predict final results.

For instance, Haduvio or any future product candidate may fail to show the desired safety and efficacy in clinical development despite demonstrating positive results in preclinical studies or successfully advancing through Phase 1 and Phase 2 clinical trials.

The results of our Phase 2b/3 PRISM trial of Haduvio for the treatment of prurigo nodularis may not be predictive of the results of the next trial we believe we would need to conduct to attain regulatory approval, and the interim results of our Phase 2 CANAL trial may not be predictive of the full trial results for the Phase 2 CANAL trial or of future trials of Haduvio for the treatment of chronic cough in adults with IPF.

For instance, Haduvio or any future product candidate may fail to show the desired safety and efficacy in future clinical trials despite demonstrating positive results in preclinical studies or earlier clinical trials.

The results of our Phase 2 CANAL trial for the treatment of chronic cough in adults with IPF may not be predictive of the results of future trials of Haduvio for the treatment of chronic cough in adults with IPF or other chronic cough indications, and the results of our Phase 2b/3 PRISM trial of Haduvio for the treatment of prurigo nodularis may not be predictive of the results of any future clinical trial in prurigo nodularis.

Many pharmaceutical and biotechnology companies have suffered significant setbacks in late-stage clinical trials after achieving positive results in earlier stages of clinical development and we could face similar setbacks.

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Even if we believe that the results of clinical trials for Haduvio or any future product candidate warrant marketing approval, the FDA or comparable foreign regulatory authorities may disagree and may not grant marketing approval of the product candidate.

In addition, some of our data for Haduvio for the treatment of pruritus is drawn from post hoc analyses of data subsets from our Phase 2 clinical trials of Haduvio in subjects with prurigo nodularis and uremic pruritus.

In addition, some of our data for Haduvio for the treatment of cough and pruritus is drawn from post hoc analyses of data subsets from our Phase 2 clinical trials of Haduvio.

While we believe these data may be useful in informing the design of future Phase 3 clinical trials for Haduvio, post hoc analyses performed after unmasking trial results can result in the introduction of bias and may not be predictive of success in Phase 3 clinical trials.

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We expect that we will face significant competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide with respect to Haduvio or any future product candidate that we may seek to develop or commercialize.

Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective, have fewer or more tolerable side effects or are more convenient or less costly than Haduvio or any future product candidate we may develop, which could render any product

candidates obsolete and noncompetitive.

Our competitors also may obtain FDA or other marketing approval for their products before we are able to obtain approval for ours, which could result in competitors establishing a strong market position before we are able to enter the applicable market.

If Haduvio is approved for the treatment of prurigo nodularis, we expect that it would compete with a number of therapeutics that are used off-label to treat prurigo nodularis, including anti-itch creams and emollients, oral or injectable antihistamines, Dupixent (dupilumab), which is an injectable prescription medicine approved for atopic dermatitis that is in clinical development for the treatment of prurigo nodularis.

Sanofi has reported positive data from two Phase 3 trials of Dupixent for the treatment of prurigo nodularis and that it plans regulatory submissions around the world for this indication in 2022.

If Haduvio is approved for the treatment of chronic cough in adults with IPF, we expect that it may compete with product candidates currently in clinical development for the treatment of chronic cough in adults with IPF, such as orvepitant, which is being developed by Nerre Therapeutics, and ifenprodil, which is being developed by Algernon Pharmaceuticals.

We 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, and Bellus Health.

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 in adults with IPF.

If Haduvio is approved for the treatment of prurigo nodularis, we expect that it would compete with Dupixent (dupilumab), an injectable prescription medicine which was jointly developed by Sanofi and Regeneron and which was approved by the FDA for the treatment of prurigo nodularis in September 2022.

Sanofi has announced its plans to make regulatory submissions around the world for this indication in 2022.

We also expect that Haduvio would compete with a number of therapeutics that are used off-label to treat prurigo nodularis, including anti-itch creams and emollients, and oral or injectable antihistamines.

Patients may also try gabapentin and Lyrica (pregabalin), which are prescription medicines approved for the treatment of seizures and neuropathic pain, naltrexone and UVB light therapy.

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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 prurigo nodularis, could face competition from these product candidates, including difelikefalin, an oral kappa opioid receptor agonist being developed by Cara Therapeutics that is initiating Phase 3 clinical trials for chronic pruritus in patients with atopic dermatitis, and in Phase 2 clinical trials for chronic kidney disease, chronic liver disease and notalgia paresthetica.

If Haduvio is approved for the treatment of chronic cough in adults with IPF, we expect that it may compete with product candidates currently in clinical development for the treatment of chronic cough in adults with IPF, such as orvepitant, which is being developed by Nerre Therapeutics, and ifenprodil which is being developed by Algernon Pharmaceuticals.

We 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, and Bellus Health.

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 in adults with IPF.

Many of our potential competitors, alone or with their strategic partners, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining marketing approvals and commercializing approved products than we do.

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In many countries, the pricing review period begins after marketing or product licensing approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains subject to continuing

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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Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.

Therefore, our ability to commercialize any product candidate will depend in part on the

extent to which coverage and reimbursement for these products and related treatments will be available from third-party payors.

Therefore, our ability to commercialize any product candidate will depend in part on the extent to which coverage and reimbursement for these products and related treatments will be available from third-party payors.

Third-party payors decide which medications they will cover and establish reimbursement levels.

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We will need to increase our insurance coverage if we commercialize any product that receives marketing approval.

sale of Haduvio or any future product candidate could be prevented or inhibited, which could harm our business, financial condition, results of operations and prospects.

If we are unable to maintain sufficient insurance coverage at an acceptable cost or otherwise protect against potential clinical trial liability or product liability claims, the development and commercial production and sale of Haduvio or any future product candidate could be prevented or inhibited, which could harm our business, financial condition, results of operations and prospects.

Risks Related to Our Dependence on Third Parties

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We do not independently conduct clinical trials of our product candidate.

We rely and expect to continue to rely, on third parties, such as clinical research organizations, or CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials of Haduvio and any future product candidate that we may develop.

We rely and expect to continue to rely, on third parties, such as contract research organizations, or CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct our clinical trials of Haduvio and any future product candidate that we may develop.

These third parties may terminate their engagements with us under certain circumstances.

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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.

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.

These third parties may also be impacted by developments in the COVID-19 pandemic or other outbreaks of infectious disease, or government measures taken in response to the pandemic or other such outbreaks, 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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Some of these inspections may be unannounced.

Failure by any of our manufacturers to comply with applicable cGMPs or other regulatory requirements could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspensions or withdrawals of approvals, operating restrictions, seizures or recalls of product candidates, interruptions in supply and criminal prosecutions, any of which could significantly impact the available supplies of Haduvio or any future product candidate and harm our business, financial condition and results of operations.

interruptions in supply and criminal prosecutions, any of which could significantly impact the available supplies of Haduvio or any future product candidate and harm our business, financial condition and results of operations.

Our current and anticipated future dependence upon others for the manufacture of Haduvio or any future product candidate may harm our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

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Alternatively or additionally, we may become involved in post-grant review procedures, oppositions, derivation proceedings, reexaminations, inter partes review or interference proceedings, in the U.S.

or other countries, challenging patents or patent applications in which we have rights, including patents on which we rely to protect our business.

or other countries, challenging

patents or patent applications in which we have rights, including patents on which we rely to protect our business.

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.

Furthermore, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in

fact, conceives or develops intellectual property that we regard as our own.

As a result, the inventorship or ownership of our intellectual property may be challenged in the future.

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Our competitors may also seek approval to market their own products similar to or otherwise competitive with any products that we are able to develop and commercialize.

Alternatively, our competitors may seek to market generic versions of any approved products by submitting ANDAs to the FDA claiming that patents owned or licensed by us are invalid, unenforceable or not infringed.

Alternatively, our competitors may seek to market generic versions of any approved products by submitting abbreviated new drug applications, or ANDAs, to the FDA claiming that patents owned or licensed by us are invalid, unenforceable or not infringed.

In these circumstances, we may need to defend or assert our patents or both, including by filing lawsuits alleging patent infringement.

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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.

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.

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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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation.

There could also be public announcements of the results of hearings, motions or other

interim proceedings or developments.

There could also be public announcements of the results of hearings, motions or other interim proceedings or developments.

If securities analysts or investors perceive these results to be negative, it could adversely affect the price of shares of our common stock.

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patent law in part by changing the U.S.

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.

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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A petition for inter partes review can be filed after the nine-month period for filing a post-grant review petition has expired for a patent with an effective filing date of March 16, 2013 or later.

Post-grant review proceedings can be brought on any ground of invalidity, whereas inter partes

review proceedings can only raise grounds of invalidity based on lack of novelty or obviousness using published prior art and patents.

Post-grant review proceedings can be brought on any ground of invalidity, whereas inter partes review proceedings can only raise grounds of invalidity based on lack of novelty or obviousness using published prior art and patents.

These adversarial actions at the USPTO review patent claims without the presumption of validity afforded to U.S.

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Risks Related to Regulatory Approval and Other Legal Compliance Matters

If the FDA does not conclude that Haduvio for the treatment of prurigo nodularis, chronic cough in adults with IPF or any other development program satisfies the requirements under Section 505(b)(2) of the FDCA or if the requirements for such programs are not as we expect, the approval pathway for these programs will likely take significantly longer, cost significantly more and entail significantly greater complications and risks than anticipated and in any case may not be successful.

If the FDA does not conclude that Haduvio for the treatment of chronic cough in adults with IPF or for the treatment of prurigo nodularis, or any other development program, satisfies the requirements under Section 505(b)(2) of the FDCA or if the requirements for such programs are not as we expect, the approval pathway for these programs will likely take significantly longer,

cost significantly more and entail significantly greater complications and risks than anticipated and in any case may not be successful.

We have completed our Phase 2b/3 PRISM trial of Haduvio for the treatment of prurigo nodularis (other than the open-label extension portion of the trial, which we expect to complete in the first quarter of 2023) and we believe we will need to conduct an additional Phase 3 clinical trial of Haduvio for the treatment of prurigo nodularis under the FDA’s Section 505(b)(2) regulatory pathway.

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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 sponsor and for which the sponsor has not received a right of reference, which could expedite the development program for Haduvio 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 new chemical entity, or 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.

However, while we believe that Haduvio is a reformulation of an existing drug and, therefore, its active moiety will not be treated as a new chemical entity, or 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.

If the FDA does not allow us to pursue the Section 505(b)(2) or similar regulatory pathway as anticipated, we may need to conduct additional preclinical experiments and clinical trials, provide additional data and information and meet additional standards for regulatory approval.

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As of January 1, 2021, the MHRA became responsible for supervising medicines and medical devices in Great Britain, comprising England, Scotland and Wales under domestic law, whereas Northern Ireland will continue to be subject to European Union rules under the Northern Ireland Protocol.

The MHRA will rely on the Human Medicines Regulations 2012 (SI 2012/1916) (as amended), or the HMR, as the basis for regulating medicines.

The MHRA will rely on the Human

Medicines Regulations 2012 (SI 2012/1916) (as amended), or the HMR, as the basis for regulating medicines.

The HMR has incorporated into the domestic law of the body of European Union law instruments governing medicinal products that pre-existed prior to the United Kingdom’s withdrawal from the European Union.

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and workforce uncertainty in countries where labor unrest is more common than in the U.S.

A F ast T rack designation, grant of P riority R eview status or B reakthrough T herapy status by the FDA is not assured and, in any event, may not actually lead to a faster development or regulatory review or approval process and, moreover, would not assure FDA approval of Haduvio or any future product candidate.

A Fast Track designation, grant of Priority Review status or Breakthrough Therapy status by the FDA is not assured and, in any event, may not actually lead to a faster development or regulatory review or approval process and, moreover, would not assure FDA approval of Haduvio or any future product candidate.

We may be eligible for Fast Track designation, Priority Review or Breakthrough Therapy status for specific indications for the product candidates we may develop.

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If we fail to comply or are found to be in violation of FDA regulations restricting the promotion of Haduvio for unapproved uses, we could be subject to criminal penalties, substantial fines or other sanctions and damage awards.

If our clinical trials are successful, we intend to seek approval to market Haduvio for the treatment of prurigo nodularis and chronic cough in adults with IPF.

If our clinical trials are successful, we intend to seek approval to market Haduvio for the treatment of chronic cough in adults with IPF or refractory chronic cough and for the treatment of prurigo nodularis.

If we obtain regulatory approval to market Haduvio with an indication statement for the treatment of chronic cough in adults with IPF or refractory chronic cough, we expect to be prohibited from marketing Haduvio using any promotional claims relating to treatment of cough generally.

If we obtain regulatory approval to market Haduvio with an indication statement for the treatment of prurigo nodularis, we expect to be prohibited from marketing Haduvio using any promotional claims relating to treatment of pruritus generally.

If we obtain regulatory approval to market Haduvio with an indication statement for the treatment of chronic cough in

adults with IPF, we expect to be prohibited from marketing Haduvio using any promotional claims relating to treatment of cough generally.

Marketing of Haduvio may also be limited by regulatory authorities based on use as a monotherapy or adjuvant, concomitant medications, severity of pruritus and other factors.

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In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a drug product.

While we have conducted, and may in the future conduct, clinical trials to evaluate the use of Haduvio to treat pruritic conditions other than prurigo nodularis and cough conditions other than chronic cough in adults with IPF, Haduvio cannot be promoted for uses other than uses approved in the labeling by the FDA, EMA, MHRA or other applicable regulatory authorities.

While we have conducted, or may in the future conduct, clinical trials to evaluate the use of Haduvio to treat cough conditions other than chronic cough in adults with IPF and pruritic conditions other than prurigo nodularis, Haduvio cannot be promoted for uses other than uses approved in the labeling by the FDA, EMA, MHRA or other applicable regulatory authorities.

Physicians may nevertheless prescribe Haduvio off-label to their patients in a manner that is inconsistent with the approved label.

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The FDA and other agencies, including the Department of Justice, closely regulate and monitor the post-approval marketing and promotion of products to ensure that they are manufactured, marketed and distributed only for the approved indications and in accordance with the provisions of the approved labeling.

The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we market any product for an indication that is not approved, we may be subject to warnings or enforcement action for off-label marketing.

The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use and if we market any product for an indication that is not approved, we may be subject to w arnings or enforcement action for off-label marketing.

Violation of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations or allegations of violations of federal and state health care fraud and abuse laws and state consumer protection laws.

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

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.

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.

Further, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

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may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

If a prolonged government shutdown or other disruption 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.

If a prolonged government shutdown or other disruption 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.

Future shutdowns or other disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets.

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policies that undermine the Health Insurance Marketplace or other markets for health insurance;

policies that make it more difficult to enroll in Medicaid and the ACA;

that make it more difficult to enroll in Medicaid and the ACA;

and policies that reduce affordability of coverage or financial assistance, including for dependents.

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The implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which have also been delayed by the Biden administration until January 1, 2023.

More recently, on July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the implementation of which has been delayed until January 1, 2026 by the Infrastructure Investment and Jobs Act.

On July 9, 2021, President Biden signed Executive Order 14063, which focuses on, among other things, the price of pharmaceuticals.

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.

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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.

More recently, with passage of the Inflation Reduction Act in August 2022, Congress authorized Medicare beginning in 2026 to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars.

This provision is limited in terms of the number of pharmaceuticals whose prices can be negotiated in any given year and it only applies to drug products that have been approved for at least nine years and biologics that have been licensed for 13 years.

Drugs and biologics that have been approved for a single rare disease or condition are categorically excluded from price negotiation.

Further, the new legislation provides that if pharmaceutical companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to the government for the difference.

The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.

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.

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

other health care programs.

These measures could reduce the ultimate demand for our products, once approved , or put pressure on our product pricing.

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Transparency Requirements.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to payments or transfers of value made to physicians, other healthcare providers and teaching hospitals, as well as information regarding ownership and investment interests held by physicians, other healthcare providers and their immediate family members.

Analogous State and Foreign Laws.

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It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, individual imprisonment, 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, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm and the curtailment or restructuring of our operations.

If our operations are found to be in violation of any of these laws or any other governmental

regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, individual imprisonment, 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, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, disgorgement, contractual damages, reputational harm and the curtailment or restructuring of our operations.

Defending against any such actions can be costly, time - consuming and may require significant financial and personnel resources.

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The FCPA also obligates companies whose securities are listed in the U.S.

to comply with certain accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the company, including international subsidiaries and to devise and maintain an adequate system of internal accounting controls for international operations.

to comply with certain accounting provisions requiring us to maintain

books and records that accurately and fairly reflect all transactions of the company, including international subsidiaries and to devise and maintain an adequate system of internal accounting controls for international operations.

Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem.

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Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

If we expand our presence outside of the U.S.

, it will require us to dedicate additional resources to comply with these laws and these laws may preclude us from developing, manufacturing or selling certain products and product candidates outside of the U.S.

, which could limit our growth potential and increase our development costs.

If we expand our presence outside of the U.S., it will require us to dedicate additional resources to comply with these laws and these laws may preclude us from developing, manufacturing or selling certain products and product candidates outside of the U.S., which could limit our growth potential and increase our development costs.

The failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting.

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Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or internal bad actors or breached due to employee error, a technical vulnerability, malfeasance or other disruptions.

Although, to our knowledge, we have not experienced any such material security breach to date, any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.

Although, to our knowledge, we have not experienced any

such material security breach to date, any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information and significant regulatory penalties and such an event could disrupt our operations, damage our reputation and cause a loss of confidence in us and our ability to conduct clinical trials, which could adversely affect our reputation and delay our clinical development of our product candidates.

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Once an NDA is approved, the product covered thereby becomes a “reference listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the Orange Book.

Manufacturers may seek approval of generic versions of reference listed drugs through submission of abbreviated new drug applications, or ANDAs, in the United States.

Manufacturers may seek approval of generic versions of reference listed drugs through submission of ANDAs in the United States.

In support of an ANDA, a generic manufacturer need not conduct clinical trials to assess safety and efficacy.

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Our future success depends on our ability to retain our executive team and to attract, retain and motivate qualified personnel.

We are highly dependent on Jennifer Good, our President and Chief Executive Officer, and Thomas Sciascia, M.D., our Chief Medical Officer, as well as the other principal members of our management and scientific teams.

We are highly dependent on Jennifer Good, our President and Chief Executive Officer, and Thomas Sciascia, M.D., our Chief Scientific Officer, as well as the other principal members of our management and scientific teams.

Although we have formal employment agreements with Ms.

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For instance, on August 8, 2022, Dr.

Forbes notified the Company that he would be stepping down as Chief Development Officer, effective September 1, 2022.

William Forbes notified the Company that he would be stepping down as Chief Development Officer, effective September 1, 2022.

The loss of the services of any of these persons could impede the achievement of our research, development and commercialization objectives.

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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.

As of June 30, 2022, we had 23 employees.

As of September 30, 2022, we had 23 employees.

We expect to experience significant growth in the number of our employees and the scope of our operations.

For example, if any product candidate appears likely to receive marketing approval, we expect to significantly expand our sales, marketing and distribution capabilities to support the potential commercialization of the product candidate.

For example, if any product candidate appears likely to receive marketing approval, we expect to

significantly expand our sales, marketing and distribution capabilities to support the potential commercialization of the product candidate.

Our management may need to devote a significant amount of its attention to managing these growth activities.

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Our expected growth could also require significant capital expenditures and may divert financial resources from other projects, such as the development of Haduvio for additional indications or the development of additional product candidates.

If we are unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may be unable to implement our business strategy, including the successful commercialization of any product candidate.

If we are unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may be un able to implement our business strategy, including the successful commercialization of any product candidate.

Our employees, independent contractors and consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

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regulatory authorities, to report financial information or data accurately or to disclose unauthorized activities to us.

Such misconduct could also involve the improper use of information obtained in the course

of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

Such misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation.

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.

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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.

As of June 30, 2022, we had sold 3,583,394 shares of common stock for an aggregate purchase price of $11.0 million, before deducting estimated commissions and allocated fees of $0.8 million, pursuant to the ATM Sales Agreement.

In May 2022, we amended the ATM Sales Agreement with SVB Leerink LLC to increase the maximum aggregate offering price of common stock that we may issue and sell from time to time under the ATM Sales Agreement by $50.0 million, from $12.0 million to up to $62.0 million.

As of September 30, 2022, we had sold 3,583,394 shares of common stock for an aggregate purchase price of $11.0 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.

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.

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 terms of such warrants, provided that such percentage may in no event exceed 9.99%.

terms of such warrants, provided that such percentage may in no event exceed 9.99%.

We refer to such percentage limitations as the Initial Private Placement Beneficial Ownership Limitations.

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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 Initial Private Placement Beneficial Ownership Limitations.

As of August 11, 2022, all of the pre-funded warrants and the common stock warrants that were set to expire on April 5, 2025 have been exercised.

As of November 10, 2022 , 6 , 000 , 000 of the warrants to purchase shares of common stock that are to expire in October 2028 remained outstanding.

Similarly, on October 18, 2021, we issued to New Enterprise Associates 16, L.P., or 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.

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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.

As of November 10, 2022, all of the warrants issued to NEA remained outstanding.

Similarly, on April 11, 2022, we issued to several purchasers in a private placement, (i) an aggregate of 4,580,526 shares of our common stock and (ii) pre-funded warrants to purchase an aggregate of 24,379,673 shares of our common stock.

purchaser's for purposes of Section 13(d) or Section 16 of the Exchange Act) would exceed 9.99% 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 such purchaser’s election upon 61 days’ notice to us subject to the terms of such warrants, provided that such percentage may in no event exceed 19.99%.

Under the terms of the pre-funded warrants, we may not effect the exercise of any such warrant, and a purchaser 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 such purchaser (together with its affiliates, any other persons acting as a group together with such purchaser or any of such purchaser’s affiliates, and any other persons whose beneficial ownership of common stock would or could be aggregated with such purchaser's for purposes of Section 13(d) or Section 16 of the Exchange Act) would exceed 9.99% 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 such purchaser’s election upon 61 days’ notice to us subject to the terms of such warrants, provided that such percentage may in no event exceed 19.99%.

We refer to such percentage limitations as the 2022 Private Placement Beneficial Ownership Limitations.

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The purchasers will be able to resell all, some or none of the shares of common stock registered pursuant to the Third Private Placement Form S-3 at any time or in their discretion, subject to the 2022 Private Placement Beneficial Ownership Limitations.

As of November 10, 2022, all of the pre-funded warrants issued to purchasers in the 2022 Private Placement remained outstanding.

Finally, on September 27, 2022, we issued in the September 2022 Offering an aggregate of 14,252,670 shares of our common stock, and, in lieu of common stock to certain investors, pre-funded warrants to purchase 14,247,330 shares of common stock.

We refer to such percentage limitations as the September 2022 Offering Beneficial Ownership Limitations.

The shares of common stock, the pre-funded warrants were issued pursuant to a prospectus supplement dated September 22, 2022 to the Shelf Registration Statement.

A purchaser may not exercise, and subsequently resell the underlying shares of common stock of, any portion of the pre-funded warrants to the extent such exercise would result in such purchaser exceeding the applicable September 2022 Offering Beneficial Ownership Limitation.

The purchasers will be able to resell all, some or none of the shares of common stock registered pursuant to the Shelf Registration Statement at any time or in their discretion, subject to the September 2022 Offering Beneficial Ownership Limitations.

As of November 10, 2022, all of the pre-funded warrants issued to purchasers in the September 2022 Offering remained outstanding.

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, the Second Private Placement Form S-3 or the Third 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.

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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.

Finally, we issued pre-funded warrants to purchase up to an aggregate of 24,379,673 shares of our common stock to the purchasers in the April 2022 Private Placement at an exercise price of $0.001 per share.

As discussed above, the common stock warrants issued to the Initial Private Placement Investor are subject to the Initial Investor Beneficial Ownership Limitations and the pre-funded warrants issued to the purchasers in the April 2022 Private Placement are subject to the 2022 Private Placement Beneficial Ownership Limitations.

As of August 11, 2022, (i) none of the pre-funded warrants issued to the Initial Private Placement Investor were outstanding, (ii) 7,299,270 of the common stock warrants issued to the Initial Private Placement Investor and all of the common stock warrants issued to NEA in the October 2021 Private Placements remained outstanding, and (iii) all of the pre-funded warrants issued to the purchasers in the April 2022 Private Placement remained outstanding.

Although the Initial Private Placement Investor’s warrants are subject to the Initial Investor Beneficial Ownership Limitations and the pre-funded warrants issued to the purchasers in the April 2022 Private Placement are subject to the 2022 Private Placement 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.

As a result, the Initial Private Placement Investor, NEA and the other purchasers in the April 2022 Private Placement may be able to exert substantial influence over our business.

We issued pre-funded warrants to purchase up to an aggregate of 24,379,673 shares of our common stock to the purchasers in the April 2022 Private Placement.

Finally, we issued pre-funded warrants to purchase up to an aggregate of 14,247,330 shares of our common stock at an exercise price of $0.001 per share to certain purchasers in the September 2022 Offering.

As discussed above, the common stock warrants issued to the Initial Private Placement Investor are subject to the Initial Investor Beneficial Ownership Limitations, the pre-funded warrants issued to the purchasers in the April 2022 Private Placement are subject to the 2022 Private Placement Beneficial Ownership Limitations and the pre-funded warrants issued to certain purchasers in the September 2022 Offering are subject to the September 2022 Offering Beneficial Ownership Limitations.

Although the Initial Private Placement Investor’s warrants are subject to the Initial Investor Beneficial Ownership Limitations, the pre-funded warrants issued to the purchasers in the April 2022 Private Placement are subject to the 2022 Private Placement Beneficial Ownership Limitations and the pre-funded warrants issued to the purchasers in the September 2022 Offering are subject to the September 2022 Offering 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.

As a result, the Initial Private Placement Investor, NEA and the other purchasers in the April 2022 Private Placement and the September 2022 Offering may be able to exert substantial influence over our business.

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.

In addition, conflicts of interest could arise in the future between us, on the one hand, and the Initial Private Placement Investor, NEA and/or the purchasers in the April 2022 Private Placement on the other hand, concerning potential competitive business activities, business opportunities, the issuance of additional securities and other matters.

In addition, conflicts of interest could arise in the future between us, on the one hand, and the Initial Private Placement Investor, NEA, the purchasers in the April 2022 Private Placement and/or the purchasers in the September 2022 Offering on the other hand, concerning potential competitive business activities, business opportunities, the issuance of additional securities and other matters.

In addition, sales of these shares could cause the market price of our common stock to decline significantly.

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.

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.

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 holders of warrants 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.

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.

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 P rivate P lacements, 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 using a Black Scholes option pricing formula.

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.

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 using a Black Scholes option pricing formula.

As a result, in the event of a sale of our company, 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.

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.

Our executive officers and directors, their respective affiliates, and other holders of 10% or more of our common stock beneficially own, in the aggregate, shares representing approximately 36.7% of our common stock as of August 11, 2022.

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.

Ownership of our common stock is concentrated among our executive officers and directors and their affiliates, who have significant influence over our business, which may prevent new investors from influencing significant corporate decisions.

Our executive officers and directors and their respective affiliates, beneficially own, in the aggregate, shares representing approximately 37.1% of our common stock as of November 10, 2022.

As a result, our executive officers and directors and their affiliates acting together may be able to significantly influence 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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Provisions in our organizational documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management or hinder efforts to acquire a controlling interest in us.

Provisions in our certificate of incorporation and our by-laws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

Provisions in our certificate of incorporation and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the trading price of our common stock.

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authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors;

require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our certificate of incorporation or by-laws.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware, which prohibits an “interested stockholder,” which is either a person who owns at least 15% of our outstanding voting stock or an affiliate or associate who owned at least 15% of our outstanding voting stock at any time within the prior three years, from engaging in a business combination with us for a period of three years after the date of the transaction in which the person became an “interested stockholder” unless the business combination is approved in a prescribed manner.

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These choice of forum provisions could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of fiduciary duty owed by any director, officer, other employee or stockholder of our company to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery or (4) any action asserting a claim arising pursuant to any provision of our certificate of incorporation or by-laws or governed by the internal affairs doctrine.

which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery or (4) any action asserting a claim arising pursuant to any provision of our certificate of incorporation or bylaws or governed by the internal affairs doctrine.

Our certificate of incorporation further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S.

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We have experienced restrictions and delays at our existing clinical sites.

For example, in our Phase 2b/3 PRISM trial, new subject screening and most enrollment was temporarily halted in March 2020 due to the COVID-19 pandemic.

For example, the clinical sites in our Phase 2 CANAL trial for chronic cough in adults with IPF experienced delays in the enrollment and treatment of subjects in the trial due to the vulnerability of IPF patients to COVID-19 and as a result, we amended the protocol for the trial to reduce the number of in-person subject visits and procedures.

Any trials we may conduct in the future for the treatment of chronic cough in adults with IPF or other chronic cough conditions could be delayed or negatively impacted by the COVID-19 pandemic or other outbreaks of infectious diseases due to the vulnerability of this patient population to respiratory illness.

In addition, in our Phase 2b/3 PRISM trial, new subject screening and most enrollment was temporarily halted in March 2020 due to the COVID-19 pandemic.

After resuming screening and enrollment, multiple sites in the Phase 2b/3 PRISM trial required some remote monitoring of subject data.

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.

In addition, the clinical sites in our Phase 2 CANAL trial for chronic cough in adults with IPF experienced delays in the enrollment and treatment of subjects in the trial due to the vulnerability of IPF patients to COVID-19 and as a result, we amended the protocol for the trial to reduce the number of in-person subject visits and procedures.

Although both the Phase 2 CANAL and Phase 2b/3 PRISM trials have now ended enrollment, the COVID-19 pandemic could still adversely affect our ability to retain subjects, 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, or potential inability of subjects to comply with clinical trial protocols if quarantines or travel restrictions impede subject movement or interrupt healthcare services.

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.

Although the Phase 2 CANAL trial has concluded and the Phase 2b/3 PRISM trial open-label extension is ongoing, the COVID-19 pandemic and other outbreaks of infectious disease could still adversely affect our ability to retain subjects, principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 and other infectious diseases and may result in further disruptions to our clinical trials in the future due to prioritization of hospital and medical resources toward the pandemic or future outbreaks, restrictions on travel of patients and healthcare providers, or potential inability of subjects to comply with clinical trial protocols if quarantines or travel restrictions impede subject movement or interrupt healthcare services.

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.

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, which could negatively affect our business.

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.

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 or other outbreaks of infectious disease.

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors