What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-20 compared with 2023-02-23 · 369 added, 298 removed, 424 unchanged (61% of the section changed)

1 unchanged sentence

Actual results and the timing of the events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” set forth elsewhere in this Annual Report.

We are a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare kidney, liver, and metabolic diseases.

In addition to commercializing our portfolio of approved products, our approach centers on advancing our innovative pipeline with multiple late-stage clinical programs targeting rare diseases with significant unmet medical needs.

Our approach centers on advancing our innovative pipeline with multiple late-stage clinical programs targeting rare diseases with significant unmet medical needs.

In February 2023, the U.S.

Food and Drug Administration (FDA) granted accelerated approval to our lead pipeline candidate sparsentan (which will be marketed in the United States under the name FILSPARI™ ) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression.

Food and Drug Administration (FDA) granted accelerated approval to our first development program, FILSPARI® (sparsentan), which is indicated to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression.

Sparsentan is also in late-stage development for focal segmental glomerulosclerosis (FSGS).

IgAN and FSGS are rare kidney disorders that often lead to end-stage kidney disease.

We are also developing pegtibatinase (TVT-058) for the treatment of classical homocystinuria (HCU), a genetic disorder caused by a deficiency in a pivotal enzyme essential to the body.

IgAN and FSGS are rare kidney disorders that lead to kidney failure.

We are also advancing pegtibatinase, a novel investigational enzyme replacement therapy for the treatment of classical homocystinuria (HCU), a genetic disorder caused by a deficiency in a pivotal enzyme essential to the body.

In December 2023, we initiated the pivotal Phase 3 HARMONY Study to support the potential approval of pegtibatinase as the first disease modifying therapy for HCU.

Our early research efforts include partnering with patient advocacy groups and government researchers to identify potential therapeutics for Alagille syndrome (ALGS), a condition with no approved treatment options.

In addition, we continue to evaluate potential opportunities to expand our pipeline and approved products through licenses and acquisitions of products in areas that will serve rare patients with serious unmet medical need and that we believe offer attractive growth characteristics.

In addition, we continue to evaluate potential opportunities to expand our pipeline and approved products through licenses and acquisitions of products in areas that will serve rare disease patients with serious unmet medical need and that we believe offer attractive growth characteristics.

Our research and development efforts are at the forefront of our mission to address the unmet needs of patients and we support this innovation by reinvesting revenues from our commercialized products.

We are committed to ensuring broad access and educational and diagnostic support for patients.

Our vision is to become a leading biopharmaceutical company dedicated to the delivery of innovation and hope to patients in the global rare disease community.

In order to achieve our vision, we intend to:

• Focus on developing products to treat rare diseases characterized by severe unmet medical needs.

We believe that our research, development, and commercialization capabilities in rare disease represent distinct competitive advantages.

We leverage our development capabilities in rare disease to focus on advancing therapeutic candidates with life-changing potential.

Given these capabilities, the well-established regulatory model and the ability to demonstrate clinical effects in small clinical studies, we believe that we can successfully bring new therapies to patients living with severe unmet medical needs.

• Leverage our commercialization expertise to effectively deliver the therapies we develop.

Our strategy is to maximize the benefit and value of our commercial products through commercial execution and expertise needed to successfully support rare disease patients.

Our approach may vary depending on the product and will be based on a number of factors including capital necessary to execute on each option, size of the market and terms of potential collaboration and/or licensing offers from other pharmaceutical and biotechnology companies with respect to jurisdictions outside the United States.

• Develop a sustainable pipeline by employing disciplined decision criteria in the evaluation of potential in-licensing candidates.

We seek to build a sustainable product pipeline by employing multiple therapeutic approaches and by developing or acquiring orphan drug candidates.

We seek to augment our internally developed pipeline projects by selectively and strategically acquiring pipeline assets that will add value to the portfolio.

We continue to evaluate potential in-licensing, out-licensing and other potential relationships with other pharmaceutical or biotechnology companies.

We intend to mitigate risk by employing rigorous decision criteria, favoring therapeutic candidates that have undergone at least some clinical study.

Our decision to acquire rights to a therapeutic candidate also depends on the scientific merits of the available clinical data;

the identifiable orphan patient population;

the economic terms of any proposed acquisition of rights;

the projected amount of capital required to develop the therapeutic candidate;

and the economic potential of the therapeutic

candidate, should it be commercialized.

We believe this strategy minimizes our clinical development risk and allows us to accelerate the development and potential commercialization of current and future therapeutic candidates.

• Listen to patients.

Leadership in rare disease demands attention beyond innovative medicines.

By listening to patients and leaders in the rare disease community, including those who have traditionally been underserved, we are focusing on barriers that prevent some patients from accessing the incredible innovation that our industry is delivering, including access to clinical trials and rare disease specialists.

• Support earlier diagnosis.

We support efforts in furtherance of enabling earlier diagnosis.

The growth of our commercial business reflects the strong capabilities of our commercial and medical teams to work across multiple medical specialties to help patients find a diagnosis.

Our Pipeline and Approved Products

We have a diversified pipeline designed to address areas of high unmet need in rare kidney, liver, and metabolic diseases.

We invest revenues from our commercial portfolio into our pipeline with the goal of delivering new treatments for diseases with no approved or limited therapies.

We have a diversified pipeline designed to address areas of high unmet need in rare kidney and metabolic diseases.

We invest revenues from our commercial portfolio into our pipeline with the goal of delivering new treatments for diseases with limited or no approved therapies.

The following table summarizes the status of our clinical programs, preclinical programs and approved products, each of which is described in further detail below.

cerebrotendinous xanthomatosis

1 On February 17, 2023, the FDA granted accelerated approval of FILSPARI® (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a urine protein-to-creatinine ratio (UPCR) ≥1.5 gram/gram.

2 CDCA is not indicated for CTX, but has received a medical necessity determination in the United States by the FDA for CTX.

We are conducting a Phase 3 clinical trial to examine the safety and efficacy of CDCA (Chenodal®) for the treatment of CTX.

3 Pegtibatinase (TVT-058) is currently in a Phase 1/2 clinical study.

On September 21, 2023, we announced topline two-year confirmatory secondary endpoint results from the pivotal Phase 3 PROTECT Study, as described below.

2 On May 1, 2023, we announced topline primary efficacy results from the pivotal Phase 3 DUPLEX Study, as described below.

FILSPARI® (sparsentan)

On February 17, 2023, the FDA granted accelerated approval of FILSPARI™ (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a urine protein-to-creatinine ratio (UPCR) ≥1.5 gram/gram.

We expect FILSPARI to be available beginning the week of February 27, 2023, and will be providing a comprehensive patient support program throughout the patient’s treatment journey.

This indication is granted under accelerated approval based on reduction in proteinuria.

It has not been established whether FILSPARI slows kidney function decline in patients with IgAN.

The continued approval of FILSPARI may be contingent upon confirmation of a clinical benefit in the ongoing Phase 3 PROTECT Study, which is designed to demonstrate whether FILSPARI slows kidney function decline.

Topline results from the two-year confirmatory endpoints in the PROTECT Study are expected in the fourth quarter of 2023 and are intended to support traditional approval of FILSPARI.

On February 17, 2023, the FDA granted accelerated approval of FILSPARI® (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a UPCR ≥1.5 gram/gram.

FILSPARI became commercially available in the U.S.

beginning the week of February 27, 2023, and we are providing a comprehensive patient support program throughout the patient’s treatment journey.

This indication was granted under accelerated approval based on reduction in proteinuria.

The continued approval of FILSPARI may be contingent upon confirmation of a clinical benefit in the Phase 3 PROTECT Study.

As described in more detail below, in September 2023, we announced topline two-year confirmatory secondary endpoint results from the PROTECT Study, and in December 2023, we announced the completion of a successful pre-NDA meeting with the FDA for FILSPARI in IgAN.

Following our regulatory engagement, we plan to submit a supplemental New Drug Application (sNDA) in the first quarter 2024 for conversion of the existing U.S.

accelerated approval of FILSPARI to full approval.

FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways in the disease progression of IgAN (endothelin 1 and angiotensin-II) and is the first and only non-immunosuppressive therapy approved for the treatment of this condition.

FILSPARI (sparsentan) is a dual endothelin angiotensin receptor antagonist (DEARA).

Pre-clinical data have shown that blockade of both endothelin type A and angiotensin II type 1 pathways in forms of rare chronic kidney disease, reduces proteinuria, protects podocytes and prevents glomerulosclerosis and mesangial cell proliferation.

FILSPARI is a dual endothelin angiotensin receptor antagonist (DEARA).

mesangial cell proliferation.

Sparsentan has been granted Orphan Drug Designation for the treatment of IgAN in the U.S.

We expect that FILSPARI will be granted seven years of Orphan Drug Exclusivity for proteinuria in adults with primary IgAN at risk of rapid disease progression, generally at UPCR ≥1.5 gram/gram.

and the European Economic Area countries (the “EEA”) and FILSPARI has been granted seven years of Orphan Drug Exclusivity in the U.S.

for the reduction of proteinuria in adults with primary IgAN at risk of rapid disease progression.

IgAN is characterized by hematuria, proteinuria, and variable rates of progressive renal failure.

With an estimated prevalence of up to 150,000 people in the United States and greater numbers in Europe and Asia, IgAN is the most common primary glomerular disease.

Most patients are diagnosed between the ages of 16 and 35, with up to 40% progressing to end stage kidney disease within 15 years.

Most patients are diagnosed between the ages of 16 and 35, with up to 40% progressing to kidney failure within 15 years.

FILSPARI is the first and only non-immunosuppressive therapy approved for this condition.

At launch, we expect approximately 30,000 to 50,000 patients in the United States to be addressable under FILSPARI's accelerated approval indication statement.

The approval of FILSPARI, granted under the FDA’s accelerated approval pathway, is based on clinically meaningful and statistically significant improvements in proteinuria compared to an active comparator in the pivotal and ongoing Phase 3 PROTECT Study, the largest head-to-head interventional study to date in IgAN.

It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available ACE or ARB therapy.

We estimate approximately 30,000 to 50,000 patients in the United States to be addressable under FILSPARI's accelerated approval indication statement.

Data to support the accelerated approval of FILSPARI was generated from the Phase 3 PROTECT Study, the largest head-to-head interventional study to date in IgAN.

It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial that evaluated the safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available ACE or ARB therapy, and is currently ongoing in the open label extension phase of the study.

The PROTECT Study protocol provided for an unblinded analysis of at least 280 patients to be performed after 36 weeks of treatment to evaluate the primary efficacy endpoint - the change in proteinuria (UPCR) at week 36 from baseline.

Secondary efficacy endpoints include the rate of change in eGFR following the initiation of randomized treatment over 58-week and 110-week periods, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment in approximately 380 patients.

Secondary efficacy endpoints include the rate of change in estimated glomerular filtration rate (eGFR) following the initiation of randomized treatment over 58-week and 110-week periods, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment in approximately 380 patients.

In August 2021, we announced positive topline interim results from the ongoing Phase 3 PROTECT Study.

1 unchanged sentence

After 36 weeks of treatment, patients receiving FILSPARI achieved a mean reduction in proteinuria from baseline of 49.8 percent, compared to a mean reduction in proteinuria from baseline of 15.1 percent for irbesartan-treated patients (p<0.0001).

We believe that preliminary eGFR data available at the time of the interim analysis are indicative of a potential clinically meaningful treatment effect after two years of treatment.

Results from the interim assessment in the PROTECT Study showed that FILSPARI was well tolerated with a clearly defined safety profile that has been consistent across all clinical trials conducted to date.

In PROTECT, the most common adverse reactions (≥ 5%) are peripheral edema, hypotension (including orthostatic hypotension), dizziness, hyperkalemia, and anemia.

Because of the risks of liver injury and birth defects, FILSPARI is available only through a Risk Evaluation and Mitigation Strategy (REMS) approved by the FDA.

Per request from the FDA, the efficacy data contained in the FDA-approved label is a post-hoc sensitivity analysis that evaluates the first 281 randomized patients, a subset of the full trial population.

In PROTECT, at the interim assessment, the most common adverse reactions (≥ 5%) were peripheral edema, hypotension (including orthostatic hypotension), dizziness, hyperkalemia, and anemia.

FILSPARI is available only through a risk evaluation and mitigation strategy (REMS) approved by the FDA.

Per request from the FDA, the efficacy data contained in the FDA-approved label under accelerated approval is a post-hoc sensitivity analysis that evaluates the first 281 randomized patients, a subset of the full trial population.

The mean reduction in proteinuria from baseline in the post-hoc sensitivity analysis is 45% for FILSPARI versus 15% for the active control, irbesartan.

Both the pre-specified and post-hoc sensitivity analyses have demonstrated that FILSPARI achieves a rapid and sustained reduction in proteinuria, with statistically significant and clinically meaningful improvement compared to the active comparator irbesartan.

The PROTECT Study is fully enrolled and is scheduled to continue as planned on a blinded basis to assess the treatment effect on eGFR slope over 110 weeks in the confirmatory endpoint analysis.

Beginning in 2023, we plan to expand data generation through a sub study in the open-label extension of the ongoing PROTECT Study, as well as an open-label clinical study to investigate the safety and efficacy of sparsentan in combination with sodium glucose cotransporter-2 inhibitors (SGLT2i) for the treatment of IgAN.

In September 2023, we announced topline two-year confirmatory secondary endpoint results from the PROTECT Study;

eGFR total and chronic slope are the secondary confirmatory endpoints for the U.S.

and the EU, respectively.

FILSPARI demonstrated long-term kidney function preservation and achieved a clinically meaningful difference in eGFR total and chronic slope versus irbesartan, narrowly missing statistical significance in eGFR total slope while achieving statistical significance in eGFR chronic slope for purposes of regulatory review in the EU.

All topline efficacy endpoints favored FILSPARI as compared to irbesartan.

A preliminary review of the safety results through 110 weeks of treatment indicates FILSPARI was generally well-tolerated and the overall safety profile in the study has been consistent between treatment groups.

In December 2023, we announced the completion of a successful pre-NDA meeting with the FDA for FILSPARI in IgAN.

Following our regulatory engagement, we plan to submit a supplemental New Drug Application (sNDA) in the first quarter of 2024 for conversion of the existing U.S.

accelerated approval of FILSPARI to full approval.

In August 2022, we and Vifor (International) Ltd.

("CSL Vifor"), with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the European Medicines Agency ("EMA") had accepted for review the conditional marketing authorization application of sparsentan for the treatment of IgAN in Europe.

A review decision is expected in the second half of 2023.

("CSL Vifor"), with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the EMA had accepted for review the conditional marketing authorization ("CMA") application of sparsentan for the treatment of IgAN in the EU.

We anticipate an opinion by the Committee for Medicinal Products for Human Use (the "CHMP") in the first quarter of 2024.

In January 2024, we announced our entry into an exclusive licensing agreement with Renalys Pharma, Inc.

("Renalys"), to bring sparsentan to patients in Japan and other countries in Asia, for the treatment of IgAN.

Renalys will hold regional rights to sparsentan for Japan, South Korea, Taiwan, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Following successful meetings with the Pharmaceuticals and Medical Devices Agency (PMDA) in 2023, Renalys plans to initiate an open label registrational study of sparsentan in Japan in the second quarter of 2024 to support potential approval of sparsentan in Japan.

Results from the urine protein/creatinine ratio (UP/C) endpoint in the study are expected in the second half of 2025 to support a submission for approval to PMDA.

Under the terms of the licensing agreement, Renalys will be responsible for development, regulatory matters, and commercialization in the licensed territories.

Clinical-Stage Programs:

1 unchanged sentence

Sparsentan has been granted Orphan Drug Designation for the treatment of FSGS in the U.S.

FSGS is a leading cause of end-stage kidney disease (ESKD) and nephrotic syndrome.

FSGS is a leading cause of kidney failure and nephrotic syndrome.

There are currently no FDA-approved pharmacologic treatments for FSGS and there remains a high unmet need for patients living with FSGS as off-label treatments such as ACE/ARBs, steroids, and immunosuppressant agents are effective in only a subset of patients and use of some of these off-label treatments may be further inhibited by their safety profiles.

1 unchanged sentence

In 2016, we generated positive data from our Phase 2 DUET study in FSGS.

In 2018, we announced the initiation of the Phase 3 DUPLEX study of sparsentan in FSGS.

In 2018, we announced the initiation of the Phase 3 clinical trial designed to serve as the basis for an NDA and MAA filing for sparsentan for the treatment of FSGS (the "DUPLEX Study").

The DUPLEX Study is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in 371 patients.

The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as UPCR ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.

The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as urine protein-to-creatinine ratio (UPCR) ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.

In February 2021, we announced that the ongoing Phase 3 DUPLEX Study achieved its pre-specified interim FSGS partial remission of proteinuria endpoint following the 36-week interim period.

After 36 weeks of treatment, 42.0 percent of patients receiving sparsentan achieved FPRE, compared to 26.0 percent of irbesartan-treated patients (p=0.0094).

A preliminary review of the results from the interim analysis suggests that, as of the data cut-off, sparsentan has been generally well-tolerated and the overall safety results have been generally comparable between treatment groups.

The confirmatory primary endpoint of the DUPLEX Study to support traditional regulatory approval is the rate of change in eGFR over 108 weeks of treatment.

As of the time of the interim analyses, available long-term eGFR data for the confirmatory endpoint were limited.

Consistent with the DUPLEX Study protocol, patients will continue in a blinded manner to assess the treatment effect on eGFR slope over 108 weeks in the confirmatory endpoint analysis.

The DUPLEX Study is fully enrolled and topline results from the confirmatory endpoint are expected in the second quarter of 2023.

In May 2021, we provided a regulatory update regarding the sparsentan FSGS program, including feedback from the FDA that additional data would be needed to potentially support a submission for accelerated approval under subpart H.

We and the FDA subsequently aligned on a plan for us to provide the FDA with additional eGFR data from a 2022 data-cut to potentially support a submission for accelerated approval for FSGS.

We provided the FDA with such additional eGFR data from the ongoing DUPLEX Study in the first half of 2022 and held a subsequent Type A meeting with the FDA to discuss the data and the potential for a submission for accelerated approval.

Following review of the data, the FDA has communicated that it does not deem such data sufficiently supportive for an accelerated approval submission, but indicated that the DUPLEX Study as designed maintains the potential for traditional approval pending completion of the study.

We are planning to continue the study to completion which is expected to occur in the second quarter of 2023, and if the data are supportive, file for traditional approval in the second half of 2023.

Pending completion of the DUPLEX Study and data supportive of approval, we and CSL Vifor are targeting to submit by the end of 2023 a subsequent variation of sparsentan for the treatment of FSGS in Europe.

If sparsentan receives marketing authorization in any of the licensed territories, CSL Vifor will be responsible for all commercialization activities in such licensed territories.

We remain responsible for the clinical development of sparsentan and will retain all rights to sparsentan in the United States and rest of world outside of the licensed territories, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.

Pegtibatinase (TVT-058)

Pegtibatinase (TVT-058) is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical homocystinuria (HCU).

Following engagement with the FDA on the interim proteinuria analysis and a subsequent eGFR data-cut, we elected to forego the previously planned submission for accelerated approval and pursue a potential traditional approval upon completion of the DUPLEX Study.

In May 2023, we announced topline primary efficacy results from the pivotal Phase 3 DUPLEX Study of sparsentan in FSGS.

The confirmatory primary endpoint of the DUPLEX Study designed to support traditional regulatory approval was the rate of change in eGFR over 108 weeks of treatment.

At the end of the 108-week double-blind period, sparsentan was observed to have a 0.3 mL/min/1.73m 2 per year (95% CI:

-1.74, 2.41) favorable difference on eGFR total slope and a 0.9 mL/min/1.73m 2 per year (95% CI:

-1.27, 3.04) favorable difference on eGFR chronic slope compared to the active control irbesartan, which was not statistically significant.

After 108 weeks of treatment, sparsentan achieved a mean reduction in proteinuria from baseline of 50%, compared to 32% for irbesartan.

Although the DUPLEX Study did not achieve its two-year primary endpoint with statistical significance over the active control irbesartan, we are encouraged by the results, including the secondary endpoints on proteinuria and topline exploratory endpoints, including renal outcomes, which trended favorably for sparsentan.

In addition, a review of the safety results through 108 weeks of treatment indicate sparsentan was generally well-tolerated and the overall safety profile in the study to date was generally consistent between treatment groups.

In December 2023, we announced that we completed our planned Type C meeting with the FDA to discuss previously reported results from the Phase 3 DUPLEX Study of sparsentan in FSGS.

The FDA acknowledged the high unmet need for approved therapies as well as the challenges in studying FSGS but indicated that the two-year results from the Phase 3 DUPLEX Study alone are not sufficient to support an sNDA submission.

The FDA acknowledged the work being done by the larger nephrology community to better understand proteinuria and eGFR as endpoints in clinical trials of FSGS and indicated a willingness to continue to engage with us on a potential path forward for sparsentan in FSGS following our consideration of additional evidence.

Together with CSL Vifor, we also plan to engage with the EMA to determine the potential for a subsequent variation to the Conditional Marketing Authorization (CMA) of sparsentan for the treatment of FSGS, if the MAA of sparsentan in IgA nephropathy is approved.

Given the high unmet need of FSGS patients, with no medicines currently approved for the condition, and the challenges associated with studying FSGS due to its heterogeneity and other attributes, we are conducting additional analyses of FSGS data and intend to engage with regulators to evaluate potential regulatory pathways for a sparsentan FSGS indication.

If sparsentan receives marketing authorization in any of the licensed territories covered by the exclusive license to CSL Vifor, CSL Vifor will be responsible for all commercialization activities in such licensed territories.

If sparsentan receives marketing authorization in any of the territories covered by the exclusive license to Renalys, Renalys will be responsible for all development, regulatory matters, and commercialization activities in such licensed territories.

We remain responsible for the clinical development of sparsentan in the applicable territories and we will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Renalys, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.

Pegtibatinase

Pegtibatinase is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical homocystinuria (HCU).

Classical HCU is a rare metabolic disorder characterized by elevated levels of plasma homocysteine that can lead to vision, skeletal, circulatory and central nervous system complications.

It is estimated that there are at least 3,500 people living with HCU in the United States with similar numbers in Europe.

It is estimated that there are approximately 7,000 to 10,000 people living with HCU globally.

Pegtibatinase has been granted Rare Pediatric Disease, Fast Track and Breakthrough Therapy designations by the FDA, as well as orphan drug designation in the United States and European Union.

Pegtibatinase is currently being evaluated in the Phase 1/2 COMPOSE Study, a double blind, randomized, placebo-controlled dose escalation study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU.

In December 2021, we announced positive topline results from the Phase 1/2 COMPOSE Study.

In December 2021, we announced positive topline results from the Phase 1/2 COMPOSE Study, a double blind, randomized, placebo-controlled dose escalation study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU.

Pegtibatinase demonstrated dose-dependent reductions in total homocysteine (tHcy) during the 12 weeks of treatment, and in the highest dose cohort to date evaluating 1.5mg/kg of pegtibatinase twice weekly (BIW), treatment with pegtibatinase resulted in rapid and sustained reductions in total homocysteine (tHcy) through 12 weeks of treatment, including a 55.1% mean relative reduction in tHcy from baseline as well as maintenance of tHcy below a clinically meaningful threshold of 100 μmol.

Additionally, in a dose-dependent manner in the study to date, methionine levels were substantially reduced and cystathionine levels were substantially elevated following treatment with pegtibatinase, suggesting that pegtibatinase acts in a manner similar to the native CBS enzyme.

To date in the study, pegtibatinase has been generally well-tolerated , with no discontinuations due to treatment-related adverse events.

Following positive results from the first five cohorts of the ongoing Phase 1/2 COMPOSE Study, we are evaluating pegtibatinase in a final cohort in the COMPOSE Study to further inform our pivotal development program to ultimately support potential approval of pegtibatinase for the treatment of HCU.

The additional cohort was initiated to inform and refine formulation work for future development and commercial purposes and to further evaluate the dose response curve for pegtibatinase.

In the fourth quarter of 2022, enrollment completed in the sixth and final cohort of the ongoing Phase 1/2 COMPOSE Study.

We anticipate reporting additional data from COMPOSE in mid-2023.

In parallel with completing the final cohort in the COMPOSE Study, we are preparing for the potential initiation of a pivotal Phase 3 clinical trial of pegtibatinase in patients with HCU in the second half of 2023, subject to communications and feedback from the FDA and associated program assessments.

Additionally, in a dose-dependent manner in the study to date, methionine levels were

substantially reduced and cystathionine levels were substantially elevated following treatment with pegtibatinase, suggesting that pegtibatinase acts in a manner similar to the native CBS enzyme.

In May 2023, we announced positive topline results from the sixth cohort of the Phase 1/2 COMPOSE Study, which was initiated to inform and refine formulation work for future development and commercial purposes and to further evaluate the dose response curve for pegtibatinase, and to further inform our pivotal development program to ultimately support potential approval of pegtibatinase for the treatment of HCU.

In this cohort, five patients were randomized in a blinded fashion to receive 2.5 mg/kg of lyophilized pegtibatinase or placebo twice weekly (BIW), with four patients assigned to the treatment group.

In this highest dose cohort to date, treatment with pegtibatinase resulted in rapid and sustained reductions in total homocysteine (tHcy), with a 67.1% mean relative reduction in tHcy from baseline, as well as maintenance of mean tHcy below the clinically meaningful threshold of 100 μmol, over weeks 6 to 12.

In the double-blind period, pegtibatinase was generally well-tolerated , with no discontinuations due to treatment-related adverse events.

In December 2023, we initiated the pivotal Phase 3 HARMONY Study to support the potential approval of pegtibatinase for the treatment of classical HCU.

The HARMONY Study is a global, randomized, multi-center, double-blind, placebo-controlled Phase 3 clinical trial designed to evaluate the efficacy and safety of pegtibatinase as a novel treatment to reduce total homocysteine (tHcy) levels.

Topline results from the HARMONY Study are expected in 2026.

We acquired pegtibatinase as part of the November 2020 acquisition of Orphan Technologies Limited.

Chenodal (chenodeoxycholic acid or CDCA) is a naturally occurring bile acid that is approved for the treatment of people with radiolucent stones in the gallbladder.

While indicated for radiolucent stones in the gallbladder, Chenodal has been recognized as the standard of care for cerebrotendinous xanthomatosis (CTX) for more than three decades, although it is not currently labeled for this indication.

CTX is a rare, progressive and underdiagnosed bile acid synthesis disorder affecting many parts of the body.

In September 2022, we were granted Fast Track designation by the FDA for the investigation of Chenodal for CTX.

In January 2020, we randomized the first patients in our Phase 3 RESTORE Study to evaluate the effects of Chenodal in adult and pediatric patients with CTX, and the study enrollment remains open.

The pivotal study is intended to support an NDA submission for marketing authorization of Chenodal for CTX in the United States.

During 2023, we expect to complete the ongoing Phase 3 RESTORE Study in CTX.

Pending supportive data, we anticipate being in position to subsequently submit an NDA for a CTX indication.

Preclinical Programs:

We are a participant in a Cooperative Research and Development Agreement (CRADA), which forms a multi-stakeholder approach to pool resources with leading experts, and incorporate the patient perspective early in the therapeutic identification and development process.

We are partnering with the National Institutes of Health’s National Center for Advancing Translational Sciences (NCATS) and a leading patient advocacy organization, Alagille Syndrome Alliance, aimed at the identification of potential small molecule therapeutics for ALGS.

There are no treatment options currently approved for ALGS.

12 unchanged sentences

In May 2021, a generic option for the 100 mg version of the original formulation of Thiola (tiopronin tablets) became available and in June 2022, a second option for the 100 mg version of the original formulation of Thiola (tiopronin tablets) was approved.

These generic versions of the original formulation of Thiola have impacted sales, and these or additional generic versions of either formulation could have a material adverse impact on sales.

Cholbam (cholic acid)

The FDA approved Cholbam (cholic acid capsules) in March 2015, the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for adjunctive treatment of patients with peroxisome biogenesis disorder-Zellweger spectrum disorder.

The effectiveness of Cholbam has been demonstrated in clinical trials for bile acid synthesis disorders and the adjunctive treatment of peroxisomal disorders.

An estimated 200 to 300 patients are current candidates for therapy.

Chenodal (chenodiol)

Chenodal is a synthetic oral form of chenodeoxycholic acid ("CDCA"), a naturally occurring primary bile acid synthesized from cholesterol in the liver.

The FDA approved Chenodal for the treatment of people with radiolucent stones in the gallbladder.

In 2010, Chenodal was granted orphan drug designation for the treatment of cerebrotendinous xanthomatosis ("CTX"), a rare autosomal recessive lipid storage disease.

We acquired Chenodal in March 2014.

While Chenodal is not labeled for CTX, it received a medical necessity determination in the US by the FDA and has been used as the standard of care for more than three decades.

We are working to obtain FDA approval of Chenodal for the treatment of CTX and initiated a Phase 3 clinical trial for this indication in January 2020.

The prevalence of CTX is estimated in the literature to be as high as 1 in 70,000 in the overall population.

Pathogenesis of CTX involves deficiency of the enzyme 27-hydroxylase (encoded by the gene CYP27A1), a rate-limiting enzyme in the synthesis of primary bile acids, including CDCA, from cholesterol.

The disruption of primary bile acid synthesis in CTX leads to toxic accumulation of cholesterol and cholestanol in most tissues.

Patients may present with intractable diarrhea, premature cataracts, tendon xanthomas, atherosclerosis, and cardiovascular disease in childhood and adolescence.

Neurological manifestations of the disease, including dementia and cognitive and cerebellar deficiencies, emerge during late adolescence and adulthood.

The types, combinations and severity of symptoms can be different from person to person, and making diagnosis challenging and often delayed.

Oral administration of CDCA has been shown to normalize primary bile acid synthesis in patients with CTX.

Our vision is to become a leading biopharmaceutical company dedicated to the delivery of innovation and hope to patients in the global rare disease community.

In order to achieve our vision, we intend to:

• Focus on developing products to treat rare diseases characterized by severe unmet medical needs.

We believe that our research, development, and commercialization capabilities in rare disease represent distinct competitive advantages.

We leverage our development capabilities in rare disease to focus on advancing therapeutic candidates with life-changing potential.

• Develop a sustainable pipeline by employing disciplined decision criteria in the evaluation of potential in-licensing candidates.

We seek to build a sustainable product pipeline by employing multiple therapeutic approaches and by developing or acquiring orphan drug candidates.

We seek to augment our internally developed pipeline projects by selectively and strategically acquiring pipeline assets that will add value to the portfolio.

We continue to evaluate potential in-licensing, out-licensing and other potential relationships with other pharmaceutical or biotechnology companies.

We intend to mitigate risk by employing rigorous decision criteria, favoring drug candidates that have undergone at least some clinical study.

Our decision to acquire rights to a drug candidate also depends on the scientific merits of the available clinical data;

the identifiable orphan patient population;

the economic terms of any proposed acquisition of rights;

the projected amount of capital required to develop the drug candidate;

and the economic potential of the drug candidate, should it be commercialized.

We believe this strategy minimizes our clinical development risk and allows us to accelerate the development and potential commercialization of current and future drug candidates.

• Leverage our commercialization expertise to effectively deliver the therapies we develop.

Our strategy is to maximize the benefit and value of our commercial products through commercial execution and expertise needed to successfully support rare disease patients.

• Listen to patients.

Leadership in rare disease demands attention beyond innovative medicines.

• Support earlier diagnosis.

We support efforts in furtherance of enabling earlier diagnosis.

For example, we provide a cholestasis gene panel to help families gain understanding of their infant's condition.

The growth of our commercial business reflects the strong capabilities of our commercial and medical teams to work across multiple medical specialties to help patients find a diagnosis.

These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales.

During 2023, two generic versions of Thiola EC (100 mg and 300 mg) were approved by the FDA.

Following receipt of paragraph IV certification notices from these manufacturers, we and our licensor Mission Pharmacal entered into agreements with these manufacturers in order to settle disputes around patent validity and infringement, providing for a license entry date of April 1, 2026 of these generic versions of Thiola EC (100mg and 300mg), or earlier under certain circumstances.

On January 30, 2024, the FDA approved an additional generic version of Thiola EC (100mg and 300mg).

Accordingly, Thiola EC is subject to immediate generic competitio n, which could impact our sales of Thiola EC.

Sale of Bile Acid Product Portfolio

On July 16, 2023, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Mirum Pharmaceuticals, Inc.

("Mirum Pharmaceuticals" or “Mirum”), pursuant to which Mirum agreed to purchase substantially all of the assets primarily related to our business of development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of Chenodal and Cholbam (also known as Kolbam, and together with Chenodal, the “Products”), collectively, the "bile acid business".

On August 31, 2023, we consummated the transactions contemplated by the Purchase Agreement (the "Closing").

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

2 unchanged sentences

As a result, there are, and will likely continue to be, extensive research and substantial financial resources invested in the discovery and development of new orphan drug products.

Our competition will be determined in part by the potential indications for which drugs are developed and ultimately approved by regulatory authorities.

Our competition will be determined in part by the potential indications for which therapies are developed and ultimately approved by regulatory authorities.

The speed with which we can develop products, complete preclinical testing, clinical trials, approval processes, and supply commercial quantities to market are expected to be important competitive factors.

We expect that competition among products approved for sale will be based on various factors, including product efficacy, safety, reliability, availability, price, reimbursement, patent position, and regulatory exclusivity.

There are other approved chenodeoxycholic acid products available outside of the United States.

Furthermore, Chenodal is subject to immediate competition from compounded and generic entrants, as the Abbreviated New Drug Application ("ANDA") for this drug has no remaining patent or non-patent exclusivity.

Falk Pharma GmbH and Leadiant Biosciences, Inc.

have FDA Orphan Drug Designations granted for the treatment of cerebrotendinous xanthomatosis (“CTX") (granted 2004 and 2007, respectively);

however neither company, based on publicly available information, has initiated any prospective clinical studies in CTX.

There are currently no FDA-approved treatments in the United States that compete with Cholbam.

In March 2022, regulatory exclusivity expired for Cholbam and is subject to immediate generic competition.

Pegtibatinase

Current treatment options for homocystinuria (HCU) are limited to protein-restricted diet and supplemental use of vitamin B6 and betaine.

According to public sources, Aeglea BioTherapeutics, Inc.

(pegtarviliase (formerly known as AGLE-177)) and Codexis, Inc.

(CDX-6512) are developing enzyme replacement therapies for the treatment of HCU.

Additionally, Synlogic Inc.

/ Gingko Bioworks Holdings, Inc.

are developing a microbiome therapy, SYNB1353, for the management of HCU.

According to public sources, Synlogic Inc.

and Ginkgo Bioworks Holdings, Inc.

are developing a microbiome therapy, SYNB1353, for the management of HCU and have completed a Phase 1 study in healthy volunteers.

There are other pre-clinical development programs in HCU that may enter the clinic.

There are currently no FDA-approved generic versions of THIOLA EC ® (tiopronin) tablets in the United States.

However, Thiola EC could be subject to competition from compounded and generic entrants in the future.

Based on paragraph IV notices our licensor, Mission Pharmacal Company ("Mission" or "Mission Pharmacal"), has received to date, we are aware that at least three have filed ANDAs for Thiola EC.

In October 2022, Mission was granted a patent covering the treatment of cystinuria by administering Thiola EC with food (US Patent No.

1 unchanged sentence

Following Mission’s listing of the '104 patent in the Orange Book, and as of December 31, 2023, Mission has received three paragraph IV notice letters from three generic manufacturers notifying Mission that each has filed an ANDA seeking approval of a proposed generic version of Thiola EC (tiopronin) 100 mg and 300 mg oral tablets before expiration of the '104 patent and asserting that the '104 patent is not infringed and/or is invalid, with each such ANDA having been filed prior to the granting and listing of the ‘104 patent.

The ANDAs filed by Par Pharmaceutical Inc.

(Par) and Amneal EU, Limited (Amneal) for a generic version of Thiola EC (100 mg and 300 mg) were approved by the FDA in February and August 2023, respectively.

Under our agreement with Mission, we have the right to enforce the '104 patent.

We are evaluating these paragraph IV notices, and will evaluate any other paragraph IV notices on a case by case basis in order to determine whether to initiate patent litigation against any such generic manufacturer.

Through Mission, we have received notice that at least one of these generic manufacturers may challenge the ‘104 patent through the Patent Appeals Board procedures at the United States Patent and Trademark Office.

As of February 1, 2023, two generic versions of THIOLA® (tiopronin) tablets have been approved in the United States.

We and Mission have entered into agreements with each of Par and Amneal in order to settle patent invalidity and infringement disputes related to the '104 patent and providing for a license entry date of April 1, 2026 for their generic versions of Thiola EC (100mg and 300mg), or earlier under certain circumstances.

On January 30, 2024, an ANDA filed by Torrent Pharmaceuticals Limited (Torrent) for a generic version of Thiola EC (100mg and 300mg) was approved by the FDA.

Accordingly, Thiola EC is subject to immediate generic competition.

As of January 31, 2024, two generic versions of the original formulation of THIOLA® (tiopronin) tablets have been approved in the United States.

Availability of either product is subject to the discretion of either ANDA holder (Teva Pharmaceuticals USA Inc.

8 unchanged sentences

FILSPARI is the first and only non-immunosuppressive therapy approved to reduce proteinuria in adults with IgAN at risk of rapid disease progression.

There are currently no non-immunosuppressive pharmacological treatments approved by the EMA for IgAN or by the FDA or EMA for the treatment of FSGS.

For IgAN, the current standard of care is renin-angiotensin-aldosterone system (RAAS) blockade with immunosuppression.

RAAS blockage is also commonly used in patients with significant proteinuria or rapidly progressive glomerulonephritis.

In December 2021, the FDA granted an accelerated approval for Calliditas’ budesonide delayed release capsules (Tarpeyo) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally at UPCR ≥1.5 gram/gram.

In July 2022, the EMA conditionally authorized Calliditas (along with EU/UK licensee, Stada Arzneimittel) for the same product (branded as Kinpeygo) for a similar indication (for the treatment of primary IgAN in adults at risk of rapid disease progression with a UPCR ≥1.5 gram/gram).

The confirmatory portion of the pivotal global study for the product is ongoing and the company (along with partner Everest Medicines) have filed for approval in China.

Based on public sources, Acelyrin Inc.

(ValenzaBio Inc.), Alnylam Pharmaceuticals, Alpine Immune Sciences Inc., Arrowhead Pharmaceuticals, AstraZeneca (Alexion Pharmaceuticals), BioCity Pharmaceutics Corporation, BioCryst Pharmaceuticals, Calliditas Therapeutics / Stada / Everest Medicines, Chinook Therapeutics / SanReno Therapeutics, DiaMedica Therapeutics, Eledon Pharmaceuticals, Ionis Pharmaceuticals / Roche, Jiangsu HengRui Medicine Corporation, MorphoSys / Human Immunology Biosciences Inc., Novartis, Omeros Corporation, Otsuka (Visterra), Reata Pharmaceuticals, RemeGen, Takeda Pharmaceuticals, and Vera Therapeutics may have programs in clinical development for the treatment of IgAN.

There are currently no non-immunosuppressive pharmacological treatments approved by the European Commission for IgAN or by the FDA or European Commission for the treatment of FSGS.

For IgAN, the traditional standard of care has been renin-angiotensin-aldosterone system (RAAS) blockade with immunosuppression.

RAAS blockade is also commonly used in patients with significant proteinuria or rapidly progressive glomerulonephritis.

In December 2023, the FDA granted full approval for Calliditas’ budesonide delayed release capsules (Tarpeyo) to reduce the loss of kidney function in adults with primary IgAN at risk for disease progression.

The same product was previously granted accelerated approval in December 2021 to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a UPCR ≥1.5 gram/gram.

Calliditas' partner, Everest Medicines, has additionally filed for approval for the same product in other jurisdictions including South Korea, Taiwan, and Singapore.

In July 2022, the European Commission issued a conditional marketing authorization to Calliditas (along with EU/UK licensee, Stada Arzneimittel) for the same product (branded as Kinpeygo) for the treatment of primary IgAN in adults at risk of rapid disease progression with a UPCR ≥1.5 gram/gram.

In September 2023, Calliditas and Stada filed for full marketing authorization of Kinpeygo in the EU.

In the fourth quarter of 2023, Novartis announced Phase 3 data from their IgAN studies with iptacopan (Factor B complement inhibitor) and atrasentan (endothelin receptor antagonist), and we anticipate potential approvals could begin in 2024.

Additionally, Novartis has also announced the commencement of a Phase 3 IgAN study with zigakibart (an anti-APRIL monoclonal antibody (mAb)).

Both atrasentan and zigakibart were obtained by Novartis via the acquisition of Chinook Therapeutics in 2023.

We are aware of three additional Phase 3 IgAN programs that are ongoing and/or enrolling in the United States and Europe.

Roche initiated their Phase 3 study with (licensed via Ionis Pharmaceuticals) sefaxersen (Factor B complement inhibitor) and Vera Therapeutics with atacicept (BAFF / APRIL inhibitor).

Otsuka Corporation started their Phase 3 study in IgAN with sibeprenlimab (anti-APRIL mAb) in 2022.

Based on public sources, Alpine Immune Sciences Inc., Arrowhead Pharmaceuticals, AstraZeneca (with its subsidiary Alexion Pharmaceuticals), BioCity Pharmaceutics Corporation, BioCryst Pharmaceuticals, Calliditas Therapeutics, DiaMedica Therapeutics, Eledon Pharmaceuticals, Everest Medicines, Human Immunology Biosciences Inc., Ionis Pharmaceuticals, Jiangsu HengRui Medicine Corporation, MorphoSys, Novartis (and subsidiaries), Omeros Corporation, Otsuka (Visterra), RemeGen, Roche, Stada Arzneimittel, Takeda Pharmaceuticals, Vera Therapeutics, and Viatris Pharmaceuticals Japan Inc.

have programs in clinical development for the treatment of IgAN.

Some of the listed companies have several assets that are in development for IgAN and some of these programs may no longer be active or may be deprioritized in favor of other indications.

Additionally, there are several pre-clinical, Phase 1, and later-stage programs/assets in development (including those that are academia-sponsored) that may enter the clinic for the treatment of IgAN or related conditions.

In 2021, there were global (including United States, European Union, United Kingdom and Japan) regulatory label expansions of AstraZeneca's Farxiga/Forxiga in chronic kidney disease, which could potentially be competitive with or complementary to sparsentan for the treatment of IgAN and/or FSGS.

There are additional marketed SGLT2 inhibitors (such as Boehringer Ingelheim / Eli Lilly’s Jardiance) which may also expand their current labels to include non-diabetic chronic kidney disease.

Additionally, although patients diagnosed with IgAN are not part of the label (nor were they included in the initial pivotal studies), Bayer’s non-steroidal mineralocorticoid receptor antagonist, Kerendia, could be used in patients with diabetic kidney disease and theoretically, those with concurrent IgAN.

Finally, there are ERAs (endothelin receptor antagonists) that are developed for CKD-related conditions (including for resistant hypertension by Idorsia Pharmaceuticals / Janssen Pharmaceuticals) which could potentially be used (if approved) in CKD patients without a specific IgAN diagnosis.

In 2021-2023, there were global regulatory label expansions of two SGLT2 inhibitors, AstraZeneca's Farxiga/Forxiga and Boehringer Ingelheim and Eli Lilly’s Jardiance, in chronic kidney disease, which could potentially be competitive with or complementary to sparsentan for the treatment of IgAN and/or FSGS.

Notably, Travere has and continues to generate combination data with this class of therapies.

Finally, there are ERAs (endothelin receptor antagonists) that are developed for CKD and CKD-related conditions which could potentially be used (if approved) in CKD patients without a specific IgAN diagnosis.

In December 2022 and January 2023, Idorsia Pharmaceuticals submitted an application for approval of aprocitentan with FDA and EMA, with potential approvals expected in 2024.

The pivotal study was in patients with resistant hypertension, including those with Stage 3 & 4 CKD.

In November 2023, AstraZeneca initiated a registrational fixed-dose combination (FDC) study with zibotentan and Farxiga in CKD patients with high proteinuria.

Patients with IgAN are not excluded from the study.

For FSGS, the current standard of care includes steroids, ACE/ARBs, calcineurin inhibitors, dialysis, and renal transplant.

1 unchanged sentence

A post-approval study with this device is ongoing.

Based on public sources, Boehringer Ingelheim, Chinook Therapeutics, Dimerix Bioscience, Goldfinch Bio, Horizon Therapeutics (Amgen, Inc.), Pfizer Inc., Reata Pharmaceuticals, River 3 Renal Corp., and Vertex Pharmaceuticals may have programs in clinical development for the treatment of FSGS or related conditions.

Based on public sources, Amgen Inc., AstraZeneca / Ionis Pharmaceuticals, Boehringer Ingelheim, Dimerix Bioscience, Maze Therapeutics, Novartis, River 3 Renal Corp., Vertex Pharmaceuticals, and ZyVersa Therapeutics may have programs in clinical development for the treatment of FSGS or related conditions.

Some of these programs may no longer be active or may be deprioritized in favor of other indications.

7 unchanged sentences

We must use commercially reasonable efforts to develop and commercialize sparsentan in specified major market countries and other countries in which we believe it is commercially reasonable to develop and commercialize such products.

As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million, including a $23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) that was triggered upon the accelerated approval of FILSPARI in February 2023.

Upon payment, the $23.0 million will be capitalized as an intangible asset on the Consolidated Balance Sheets.

In addition, we are obligated to pay to Ligand (and BMS) an escalating annual royalty between 15% and 17% of net sales of FILSPARI and any other products containing sparsentan or related compounds.

Through December 31, 2022, the Company has capitalized $18.4 million for contractual milestone payments under the Ligand License Agreement.

As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million.

In March 2023, we capitalized a $23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) that was triggered upon the accelerated approval of FILSPARI in February 2023.

Pursuant to the Ligand License Agreement, we are obligated to pay to Ligand (and BMS) an escalating royalty between 15% and 17% of net sales of sparsentan, with payments due quarterly.

We began incurring costs associated with such royalties following the February 2023 approval of FILSPARI (sparsentan).

For the year ended December 31, 2023, the Company capitalized $4.4 million to intangible assets for royalties owed on net sales of FILSPARI.

Under the terms of the license agreement, BMS has a right of first negotiation and Ligand has a right of second negotiation with respect to any license arrangement for a licensed compound, except to the extent such rights may be waived.

3 unchanged sentences

Thiola License Agreement

In 2014, we entered into a license agreement with Mission, pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola.

We paid Mission an up-front license fee of $3.0 million and during the term of the agreement will pay guaranteed minimum royalties during each calendar year the greater of $2.0 million or 20% of our net sales of Thiola in the United States and Canada.

In 2014, we entered into a license agreement with Mission Pharmacal, pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola.

We paid Mission an up-front license fee of $3.0 million and over the term of the agreement will pay the greater of $2.0 million, representing the guaranteed minimum royalty, or 20% of our net sales of Thiola in the United States and Canada during each calendar year.

In October 2015, the license agreement was amended to allow for us to secure enough API to ensure an adequate level of safety stock to prevent an interruption in the supply of Thiola and to prepare for a reformulation development project.

2 unchanged sentences

In November 2018, the license agreement was amended to remove all territorial restrictions on our license rights.

As consideration for the expanded territory we paid an up-front fee of $0.3 million and will pay guaranteed minimum royalties equaling the greater of $0.1 million or 20% of our Thiola net sales generated outside of the United States during each calendar year.

As consideration for the expanded territory, we paid an up-front fee of $0.3 million and will pay the greater of $0.1 million, representing the guaranteed minimum royalty, or 20% of our Thiola net sales generated outside of the United States during each calendar year.

Intellectual Property

8 unchanged sentences

We previously had one additional licensed patent family related to sparsentan that was owned by BMS, exclusively licensed to Ligand and sub-licensed to us by Ligand.

However, as of December 31, 2019, the BMS patent family is expired and therefore no longer in force.

However, the BMS patent family expired in 2019 and therefore is no longer in force.

The Ligand patent family is directed to methods of using sparsentan in the treatment of various diseases, including glomerulosclerosis and IgAN.

9 unchanged sentences

In November 2020, a third party filed an opposition to the European ‘277 patent and we are vigorously defending the European '277 against the opposition.

If we were to be unsuccessful in doing so, we would expect to rely on the data and/or marketing exclusivity that we expect to be available in Europe, as described below under “Regulatory Exclusivity.”

If we were to be unsuccessful in doing so, we would expect to rely on the data and/or marketing exclusivity that may be available in the EU, as described below under “Regulatory Exclusivity.”

The first Travere patent family is directed to methods of using sparsentan in the treatment of various kidney diseases, including focal segmental glomerulosclerosis (FSGS) and IgAN, e.g., by achieving a specified urine protein-to-creatinine ratio.

9 unchanged sentences

The fifth Travere patent family is comprised of a U.S.

provisional patent application.

It is possible, assuming that sparsentan achieves regulatory approval and depending upon the date of any such approval, that the term of either the ‘312 patent or the ‘461 patent may be extended under the provisions of the Hatch-Waxman Act.

provisional patent application, related to methods of treating a kidney disease or disorder comprising sparsentan, and a SGLT2 inhibitor.

We have filed an application for patent term extension of the ‘461 patent, which may be extended under the provisions of the Hatch-Waxman Act.

Patent term extension also may be available in certain foreign jurisdictions upon regulatory approval.

Likewise, it is possible, assuming that sparsentan achieves regulatory approval in Europe and depending upon the date of any such approval, that the term of either the European ‘818 patent or the European '277 patent may be extended in various European countries under the provisions governing Supplementary Protection Certificates (SPCs).

Likewise, it is possible, if sparsentan achieves regulatory approval in the EU and depending upon the date of any such approval, that the term of either the European ‘818 patent or the European '277 patent may be extended in various European countries under the provisions governing Supplementary Protection Certificates (SPCs).

Pegtibatinase

13 unchanged sentences

Regulatory Exclusivity

If we obtain marketing approval for sparsentan for the treatment of FSGS in the United States or in certain jurisdictions outside of the United States, or for sparsentan for the treatment of IgAN in certain jurisdictions outside of the United States, we may be eligible for regulatory exclusivity for the approved drug.

For example, in the United States, an FDA-approved drug product may be eligible to receive five years of new chemical entity ("NCE") exclusivity or, for drugs granted an orphan designation by the FDA, seven years of orphan drug exclusivity ("ODE").

For example, in the United States, an FDA-approved therapy may be eligible to receive five years of new chemical entity ("NCE") exclusivity or, for drugs granted an orphan designation by the FDA, seven years of orphan drug exclusivity ("Orphan Drug Exclusivity" or "ODE").

In addition, both the five-year NCE period and the seven-year ODE period may be extended by six months upon submission of satisfactory written reports to the FDA of clinical studies conducted in pediatric populations.

Likewise, if we obtain marketing approval for pegtibatinase in the United States or in certain jurisdictions outside of the United States, we may be eligible for regulatory exclusivity for the approved product.

Pegtibatinase is a biologic product and therefore its application for approval would be via a biologic license application (“BLA”) (vs.

Pegtibatinase is a biologic product and therefore its application for approval would be via a biologic license application (“BLA”).

In the United States, an FDA-approved biologic product may be eligible to receive twelve years of regulatory exclusivity.

In addition, the twelve-year BLA exclusivity period may be extended by six months upon submission of satisfactory written reports to the FDA of clinical studies conducted in pediatric populations.

In the European Union and European Free Trade Association ("EFTA") member states, a new drug product approved by the EMA may receive eight years of data exclusivity and 10 years of marketing exclusivity.

The 10-year period of marketing exclusivity may extend to 11 years if, during the eight-year period of data exclusivity, the product receives marketing authorization for a second therapeutic that provides a significant clinical benefit in comparison to existing therapies.

Additionally, upon approval by the EMA, orphan drugs may receive 10 years of market exclusivity or, in the case of orphan drugs for which a pediatric investigational plan (PIP) has been completed, 12 years of market exclusivity.

The new drug exclusivity and the orphan drug exclusivity run concurrently from the date of EMA approval.

In the European Union and European Free Trade Association ("EFTA") countries, innovative medicinal products approved by the European Commission may receive eight years of data exclusivity and 10 years of market exclusivity.

The 10-year period of market exclusivity may extend to 11 years if, during the eight-year period of data exclusivity, the product receives marketing authorization for a second therapeutic that provides a significant clinical benefit in comparison to existing therapies.

Additionally, upon approval by the European Commission, orphan drugs may receive 10 years of market exclusivity or, in the case of orphan drugs for which a pediatric investigational plan (PIP) has been completed, 12 years of market exclusivity.

This period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.

The regulatory exclusivity periods run from the date of European Commission approval.

There can be no assurance that we will qualify for any such regulatory exclusivity, or that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies.

See “Government Regulation” below.

FILSPARI (sparsentan) received orphan drug designation in the United States and Europe for the treatment of IgAN in 2021 and FSGS in 2015.

We expect that FILSPARI will be granted seven years of Orphan Drug Exclusivity for proteinuria in adults with primary IgAN at risk of rapid disease progression, generally at UPCR ≥1.5 gram/gram.

Chenodal received orphan drug designation in the United States for the treatment of CTX in 2010.

Consequently, if Chenodal is the first chenodeoxycholic acid product to gain FDA approval for the treatment of CTX, we expect it will be granted seven years of marketing exclusivity in the US for that indication.

Currently Chenodal does not have regulatory exclusivity in the US.

Upon approval in March 2015, Cholbam received seven years of orphan drug exclusivity in the United States for the treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for patients with peroxisomal disorders.

This marketing exclusivity in the US expired in March 2022.

FILSPARI (sparsentan) received orphan drug designation in the United States and in the European Union for the treatment of IgAN in 2021 and FSGS in 2015.

In the United States, FILSPARI has been granted seven years of Orphan Drug Exclusivity for the reduction of proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a UPCR ≥1.5 gram/gram.

Thiola does not have regulatory exclusivity in the United States.

Our trademark portfolio includes both Travere-owned and Travere-licensed trademarks and is comprised of various US and foreign registered trademarks and pending trademark applications relating to our company name, our commercial products (FILSPARI, Thiola, Thiola EC, Chenodal and Cholbam), and sparsentan.

More specifically, as of December 31, 2022, our trademark portfolio included an allowed US trademark application and foreign registered trademark and trademark applications for the mark “Travere Therapeutics”, US and foreign trademark applications and foreign registered trademarks relating to sparsentan, one registered US trademark and one registered Canadian trademark for the mark “CHENODAL”, one allowed US trademark application directed to the Chenodal logo, one registered US trademark for the mark “MANCHESTER PHARMACEUTICALS”, registered US and foreign trademarks for the mark “CHOLBAM”, a registered European Union trademark for the mark “KOLBAM”, a registered US trademark for the mark “TOTALCARE”, a registered US trademark for the TotalCare logo, and a registered US trademark for a leaves logo.

More specifically, as of December 31, 2023, our trademark portfolio included an allowed US trademark application and foreign registered trademark and trademark applications for the mark “Travere Therapeutics”, US and foreign trademark applications and foreign registered trademarks relating to sparsentan, a registered US trademark for the mark “TOTALCARE”, a registered US trademark for the TotalCare logo, and a registered US trademark for a leaves logo.

In addition, under our license agreement with Mission we have an exclusive license to use Mission’s trademarks related to Thiola and Thiola EC, including three registered US trademarks and one registered Canadian trademark for the mark “THIOLA”, and one registered US trademark for the mark "Thiola EC", in the United States and Canada.

1 unchanged sentence

In addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position.

We seek to protect our proprietary data and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors, and partners.

We seek to protect our proprietary data and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific

advisors, contractors, and partners.

These agreements are designed to protect our proprietary information.

3 unchanged sentences

Manufacturing

STA Pharmaceutical Hong Kong Limited manufactures the active pharmaceutical ingredient for FILSPARI and Catalent Patheon, Inc.

formulates and packages FILSPARI.

LGM Pharma manufactures Chenodal, Patheon, part of Thermo Fisher Scientific, manufactures Cholbam, and Mission Pharmacal manufactures Thiola and Thiola EC.

We intend to continue to use our financial resources to accelerate development of our drug candidates rather than establishing our own manufacturing facilities.

STA Pharmaceutical Hong Kong Limited manufactures the active pharmaceutical ingredient for FILSPARI.

Catalent Pharma Solutions manufactures FILSPARI and performs primary packaging.

PCI Pharma Services performs secondary packaging and serialization for FILSPARI.

Mission Pharmacal manufactures Thiola and Thiola EC.

We intend to continue to use our financial resources to accelerate development of our therapeutic candidates rather than establishing our own manufacturing facilities.

We intend to meet our preclinical and clinical trial manufacturing requirements by establishing relationships with third-party manufacturers and other service providers to perform these services for us.

Because we rely on these third parties, we have personnel with pharmaceutical development and manufacturing experience who are responsible for maintaining our third-party manufacturing relationships.

Should any of our drug candidates obtain marketing approval, we anticipate establishing relationships with third-party manufacturers and other service providers in connection with the commercial production of our products.

We have some flexibility in securing other manufacturers to produce

our drug candidates;

however, our alternatives may be limited due to proprietary technologies or methods used in the manufacture of some of our drug candidates.

Should any of our therapeutic candidates obtain marketing approval, we anticipate establishing relationships with third-party manufacturers and other service providers in connection with the commercial production of our products.

We have some flexibility in securing other manufacturers to produce our therapeutic candidates;

however, our alternatives may be limited due to proprietary technologies or methods used in the manufacture of some of our therapeutic candidates.

Sales, Marketing and Distribution

During fiscal 2022, we continued to utilize our specialty sales force to market our FDA-approved products in the US.

In preparation for the FILSPARI launch in the US, the commercial organization was expanded with additional marketing, sales and distribution capabilities in 2022.

Commercialization

Through deep understanding of patient and healthcare provider needs, we believe we are able to:

In 2023, we continued to utilize our specialty sales force to market our FDA-approved products in the US.

Through our deep understanding of patient and healthcare provider needs, we believe we are able to:

• serve patients living with rare disease that have limited treatment options;

3 unchanged sentences

• minimize the number of patients who discontinue treatment or have low compliance with our products by providing patients with support services and disease education, to the extent and in the manner permitted under applicable laws, to help them utilize our products in a manner consistent with the label and maximize the benefits of treatment;

• successfully launch new treatment options once approved, including FILSPARI.

• successfully launch new treatment options once approved.

Our US commercial initiatives are designed to support patients living with rare diseases and clinicians treating these patients.

We believe that it is possible to commercialize our products in the United States with a relatively small specialty sales force.

Nephrologists are the primary call point for FILSPARI.

The primary call points for Thiola and Thiola EC include urologists and nephrologists.

The primary call points for Cholbam are gastroenterologists, hepatologists, and metabolic specialists.

The primary call point for FILSPARI will be nephrologists.

We do not promote Chenodal.

Our sales force is differentiated by its high level of experience, averaging more than 20 years in pharmaceutical sales including over five years of experience in rare disease.

Our commercial management and operations team has an average of more than 15 years of pharmaceutical experience focused on specialty and rare disease.

Our marketing and market access teams, supported by third-party agencies with rare disease experience, drives our commercialization and disease awareness efforts in the United States.

Our marketing and patient access teams, supported by third-party agencies with rare disease experience, drive our commercialization and disease awareness efforts in the United States.

Specifically, we implement a variety of industry accepted programs to educate physicians, including direct-to-physician contact by sales representatives, peer-to-peer educational programs, and participation in targeted medical convention programs.

We plan to distribute FILSPARI through three direct to patient pharmacies, and operate Travere TotalCare, pursuant to which we will provide our comprehensive patient support services.

This patient support program for FILSPARI in the United States will provide services, assistance and resources that will help patients understand IgAN, manage the insurance process, fill their prescriptions and initiate treatment.

We distribute our other products through one direct to patient pharmacy, Eversana, who also provides our comprehensive patient support services in the US for Thiola, Chenodal and Cholbam (i.e., Travere TotalCare).

We distribute FILSPARI through three direct to patient pharmacies, and operate Travere TotalCare, pursuant to which we provide our comprehensive patient support services.

This patient support program for FILSPARI in the United States provides services, assistance and resources that help patients understand IgAN, manage the insurance process, fill their prescriptions and initiate treatment.

We distribute our other products through one direct to patient pharmacy, Eversana, who also provides our comprehensive patient support services in the US for Thiola and Thiola EC (i.e., Travere TotalCare).

This patient support program includes a case-managed approach to patient education, insurance verification and reimbursement support, co-pay and other financial assistance for eligible patients, monitoring and support of adherence, and 24/7 access to pharmacist counseling.

In September 2021, we entered into a license and collaboration agreement ("License Agreement") with Vifor (International) Ltd.

("CSL Vifor").

In August 2022, we and CSL Vifor announced that the European Medicines Agency ("EMA") had accepted for review the conditional marketing authorization application of sparsentan for the treatment of IgAN in Europe.

A review decision is expected in the second half of 2023.

In August 2022, we and CSL Vifor, with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the EMA had accepted for review the CMA application of sparsentan for the treatment of IgAN in the EU.

We anticipate an opinion by the Committee for Medicinal Products for Human Use (the "CHMP") in the first quarter of 2024.

If sparsentan receives marketing authorization in any of the licensed territories, CSL Vifor will be responsible for all commercialization activities in such licensed territories.

In January 2024, we announced our entered into an exclusive licensing agreement with Renalys, to bring sparsentan for the treatment of IgAN to patients in Japan and other countries in Asia.

Renalys will hold regional rights to sparsentan for Japan, South Korea, Taiwan, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

Results from the urine protein/creatinine ratio (UP/C) endpoint in the study are expected in the second half of 2025 to support a submission for approval to PMDA.

Under the terms of the agreement, Renalys will be responsible for development, regulatory matters, and commercialization in the licensed territories.

Medical Affairs

3 unchanged sentences

Regulation by government authorities in the United States and foreign countries is a significant factor in the development, manufacture and marketing of proposed products and in ongoing research and product development activities.

All pipeline products will require regulatory approval by government agencies prior to commercialization.

All pipeline products will require regulatory approval by competent regulatory authorities prior to commercialization.

In particular, human therapeutic products are subject to rigorous preclinical studies and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries.

Various federal and state statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage and record-keeping related to such products and their marketing.

The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources.

Various federal and state statutes and regulations also govern or influence analytical testing, manufacturing, safety evaluation, labeling, storage, inspection and record-keeping related to such products and their marketing.

The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial and human resources.

FDA Drug Approval Process

2 unchanged sentences

Failure to comply with applicable US requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending new drug or new biologic license applications, or NDAs and BLAs, respectively, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

Firms are also subject to potential inspection by FDA.

We cannot market a drug product candidate in the United States until the drug has received FDA approval.

2 unchanged sentences

• submission to the FDA of an IND, and oversight by an Institutional Review Board, for human clinical testing, which must become effective before human clinical trials may begin;

• performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication;

• performance of adequate and well-controlled human clinical trials (phase 1-3) in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication;

• submission to the FDA of an NDA or BLA after completion of the required pivotal clinical trials;

8 unchanged sentences

If the FDA has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin.

If the FDA raises concerns or

questions about the conduct of the trial, such as whether human research subjects will be exposed to an unreasonable health risk, the IND sponsor must resolve any outstanding FDA concerns or questions before clinical trials can proceed.

If the FDA raises concerns or questions about the conduct of the trial, such as whether human research subjects will be exposed to an unreasonable health risk, the IND sponsor must resolve any outstanding FDA concerns or questions before clinical trials can proceed.

Clinical trials involve the administration of the investigational new drug or biologic to healthy volunteers or patients under the supervision of a qualified investigator.

34 unchanged sentences

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

As a condition of approval, the FDA may require risk evaluation and mitigation strategies ("REMS") to ensure that the benefits of the drug outweigh the potential risks.

As a condition of approval, the FDA may require a REMS to ensure that the benefits of the drug outweigh the potential risks.

REMS can include a medication guide, a communication plan for healthcare professionals and elements to assure safe use, such as special training and certification requirements for individuals who prescribe or dispense the drug, requirements that patients enroll in a registry and other measures that the FDA deems necessary to assure the safe use of the drug.

The requirement for REMS can materially affect the potential market and

profitability of the drug.

The requirement for REMS can materially affect the potential market and profitability of the drug.

Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy.

31 unchanged sentences

and considering alternative clinical trial designs when scientifically appropriate, which may result in smaller trials or more efficient trials that require less time to complete and may minimize the number of patients exposed to a potentially less efficacious treatment.

Breakthrough therapy designation

comes with the benefits of Fast Track designation, which means that the sponsor may submit sections of the NDA or BLA for review on a rolling basis.

Breakthrough therapy designation comes with the benefits of Fast Track designation, which means that the sponsor may submit sections of the NDA or BLA for review on a rolling basis.

Accelerated Approval

34 unchanged sentences

Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies.

Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess

compliance with cGMPs.

Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs.

Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality-control to maintain compliance with cGMPs.

6 unchanged sentences

Pricing and Reimbursement

A portion of our end-user demand for our approved drugs comes from patients covered under Medicaid, Medicare and other federal and state government-related programs such as TRICARE and the Department of Veterans Affairs, or the VA.

A portion of our product demand for our approved therapies comes from patients covered under Medicaid, Medicare and other federal and state government-related programs such as TRICARE and the Department of Veterans Affairs, or the VA.

As required by Federal regulations, we provide rebates and discounts in connection with these programs.

2 unchanged sentences

Even if a third-party payer covers a particular product, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payers to reimburse all or part of the costs associated with prescription drugs.

Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the cost of our products.

3 unchanged sentences

Government authorities and other third-party payers have and are developing methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications.

Increasingly, third-party payers are requiring that drug companies provide them with predetermined discounts from list prices as a condition of coverage, are using restrictive formularies and preferred drug lists to leverage greater discounts in competitive classes, and are challenging the prices charged for medical products.

Increasingly, third-party payers are requiring that therapeutic companies provide them with predetermined discounts/rebates from list prices as a condition of coverage, are using restrictive formularies and preferred therapy lists to leverage greater discounts in competitive classes, and are challenging the prices charged for medical products.

Third party payers also are carefully evaluating the medical necessity and cost-effectiveness of medical products and services, in addition to a product's safety and efficacy, which may require us to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products.

Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payers in the United States.

Therefore, coverage and reimbursement for drug products can differ significantly from payer to payer.

Further, no uniform policy requirement for coverage and reimbursement for therapies exists among third-party payers in the United States.

Therefore, coverage and reimbursement for therapies can differ significantly from payer to payer.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payer separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

In addition, it is possible that future legislation in the US and other jurisdictions could be enacted which could potentially influence the coverage and reimbursement rates for our products and also could further impact the levels of discounts and rebates paid to federal and state government entities.

Any legislation that influences these areas could impact, in a significant way, our ability to generate revenues from sales of products that, if successfully developed, we bring to market.

4 unchanged sentences

There have been executive, judicial and Congressional challenges to certain aspects of the PPACA.

For example, President Trump signed several Executive Orders and other directives designed to delay the implementation of certain provisions of the PPACA or otherwise circumvent some of the requirements for health insurance mandated by the PPACA.

Concurrently, Congress considered legislation to repeal or repeal and replace all or part of the PPACA.

While Congress has not passed comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the PPACA have been signed into law.

Legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act of 2017 (“Tax Act”), includes a provision which repealed, effective January 1, 2019, the

tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.

In addition, the 2020 federal spending package permanently eliminates, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the health insurer tax.

The Bipartisan Budget Act of 2018, or the BBA, among other things, amended the PPACA, effective January 1,2019, to increase the discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D from 50% to 70%, to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole.” On June 17, 2021, the U.S.

For example, on June 17, 2021, the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the PPACA is unconstitutional in its entirety because the "individual mandate" was repealed by Congress.

1 unchanged sentence

The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.

The IRA, discussed in more detail below, also established new pricing pressures, including government price setting for certain drugs and mandatory rebates on price increases over inflation.

The IRA, discussed in more detail below, also established new pricing pressures, including government price setting for certain therapies and mandatory rebates on price increases over inflation.

In addition, other legislative changes have been proposed and adopted since the PPACA was enacted.

2 unchanged sentences

This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments, will stay in effect until 2031, unless additional Congressional action is taken.

Under current legislation the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.

Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals and imaging centers.

Moreover, the Drug Supply Chain Security Act imposes additional obligations on manufacturers of pharmaceutical products related to product tracking and tracing.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

There has been increasing legislative and enforcement interest in the United States with respect to drug pricing practices.

Specifically, there have been several recent US Congressional inquiries and numerous proposed and enacted legislation at both the state and federal levels designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, expedite generic competition, review the relationship between pricing and manufacturer patient programs, institute drug re-importation, and reform government program reimbursement methodologies for drugs.

At the federal level, the Trump administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

In addition, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

Legislative and regulatory proposals have been made to expand post-approval requirements and alter sales and promotional activities for pharmaceutical products.

There has been increasing legislative and enforcement interest in the United States with respect to therapy pricing practices.

Specifically, there have been several recent US Congressional inquiries and numerous proposed and enacted legislation at both the state and federal levels designed to, among other things, bring more transparency to therapy pricing, reduce the cost of prescription therapies under Medicare, expedite generic competition, review the relationship between pricing and manufacturer patient programs, institute therapy re-importation, and reform government program reimbursement methodologies for therapies.

At the federal level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, the U.S.

1 unchanged sentence

Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.

Additionally, the Biden administration released an additional executive order on October 14, 2022, directing HHS to report on how the Center for Medicare and Medicaid Innovation can be further leveraged to test new models for lowering drug costs for Medicare and Medicaid beneficiaries.

These provisions take effect progressively starting in fiscal year 2023.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.

In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.

It is unclear whether the models will be utilized in any health reform measures in the future.

Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.

On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.

While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.

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.

We expect that the PPACA, the Inflation Reduction Act, as well as other federal and state healthcare reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any of our products, and could seriously affect our future revenues.

In addition, it is possible that future legislation in the United States and other jurisdictions could be enacted which could potentially impact the reimbursement rates for the products we are developing and may develop in the future and also could further impact the levels of discounts and rebates paid to federal and state government entities.

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.

Other states have also submitted SIP proposals that are pending review by the FDA.

Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.

We expect that the PPACA, the IRA, as well as other federal and state healthcare reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any of our products, and could seriously affect our future revenues.

impact the levels of discounts and rebates paid to federal and state government entities.

Any legislation that impacts these areas could impact, in a significant way, our ability to generate revenues from sales of products that, if successfully developed, we bring to market.

18 unchanged sentences

In addition, certain marketing practices, including off-label promotion, may also violate federal false claims laws.

Also, many states have similar fraud and abuse statutes or regulations, including state anti-kickback and false claims laws, that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.

Also, many states have similar fraud and abuse statutes or regulations, including state anti-kickback and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.

The US Foreign Corrupt Practices Act, and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business.

6 unchanged sentences

In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’s privacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA and their covered subcontractors.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH"), and their respective implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information.

maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA and their covered subcontractors.

Additionally, the federal Physician Payments Sunshine Act within the PPACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to annually report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians (defined to include to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.

15 unchanged sentences

Clinical Trials and Marketing Authorization in the European Union

In Europe, a clinical trial application (“CTA”) must currently be submitted to the competent national regulatory authority and to an independent ethics committee in each country in which we intend to conduct clinical trials.

Once the CTA is approved in accordance with that country’s requirements, clinical trial development may proceed in that country.

Under the new Regulation on Clinical Trials, which took effect in January 2022, there will be a centralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities have more limited involvement.

Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be notified to or approved by the relevant competent authorities and ethics committees.

In all cases, the clinical trials must be conducted in accordance with good clinical practices and other applicable regulatory requirements and medicines used in clinical trials must be manufactured in accordance with good manufacturing practices.

A clinical trial may only be undertaken subject to certain conditions.

The relevant ethics committee must give its opinion, before a clinical trial commences, on any issue requested.

Clinical trials information must be entered into a European database.

There are strict requirements in relation to the labeling and packaging of our product candidates, the verification of compliance with the provisions on good clinical and manufacturing practice and the notification of adverse events and serious adverse reactions.

In the EU, clinical trials are governed by the Clinical Trials Regulation (EU) No 536/2014, or CTR, which entered into application on January 31, 2022 repealing and replacing the former Clinical Trials Directive 2001/20, or CTD.

The CTR is intended to harmonize and streamline clinical trial authorizations, simplify adverse-event reporting procedures, improve the supervision of clinical trials and increase transparency.

Specifically, the Regulation, which is directly applicable in all EU Member States, introduces a streamlined application procedure through a single-entry point, the "EU portal", the Clinical Trials Information System, or CTIS;

a single set of documents to be prepared and submitted for the application;

as well as simplified reporting procedures for clinical trial sponsors.

A harmonized procedure for the assessment of applications for clinical trials has been introduced and is divided into two parts.

Part I assessment is led by the competent authorities of a reference Member State selected by the trial sponsor and relates to clinical trial aspects that are considered to be scientifically harmonized across EU Member States.

This assessment is then submitted to the competent authorities of all concerned Member States in which the trial is to be conducted for their review.

Part II is assessed separately by the competent authorities and Ethics Committees in each concerned EU Member State.

Individual EU Member States retain the power to authorize the conduct of clinical trials on their territory.

The extent to which on-going clinical trials will be governed by the CTR will depend on the duration of the individual clinical trial.

For clinical trials in relation to which an application for approval was made on the basis of the CTD before January 31, 2023, the CTD will continue to apply on a transitional basis until January 31, 2025.

By that date, all ongoing trials will become subject to the provisions of the CTR.

The CTR will apply to clinical trials from an earlier date if the related clinical trial application was made on the basis of the CTR or if the clinical trial has already transitioned to the CTR framework before January 31, 2025.

In all cases, clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

Medicines used in clinical trials must be manufactured in accordance with the guidelines on cGMP and in a GMP licensed facility, which can be subject to GMP inspections.

Under European Union regulatory systems, a company may not market a medicinal product without a marketing authorization.

There are four procedures for submitting a Marketing Authorization Application (“MAA”) in Europe:

(i) the national procedure, (ii) the mutual recognition procedure (“MRP”);

(iii) the decentralized procedure (“DCP”) and (iv) the centralized procedure (“CP”).

In the EU, medicinal products can only be commercialized after a related marketing authorization (“MA”), has been granted.

To obtain an MA for a product in the EU, an applicant must submit a Marketing Authorization Application (“MAA”), either under a centralized procedure administered by the EMA or one of the procedures administered by the competent national authorities of EU Member States:

(i) the national procedure, (ii) the mutual recognition procedure;

or (iii) the decentralized procedure.

The submission strategy for a given product will depend on the nature of the product, the target indication(s), the history of the product and the marketing plan.

The centralized procedure is compulsory for certain medicinal products which are produced by biotechnology processes, advanced therapy medicinal products and for those which are designated as orphan medicinal products.

Besides the products falling under the mandatory scope, the centralized procedure is also optional for medicinal products that constitute a significant therapeutic, scientific or technical innovation i.e.

new active substances or other medicinal products that constitute a significant therapeutic, scientific or technical innovation, that contain an active substance not authorized in the European Union before May 20, 2004 or for which a centralized procedure would be in the interest of patients.

The centralized procedure leads to approval of the product in all 27 EU member states and in Norway, Iceland and Liechtenstein, collectively referred to herein as the EEA.

Submission of one MAA thus leads to one assessment process and one authorization that allows access to the market of the entire EEA.

The process of the centralized procedure is triggered when the applicant submits an MAA to the EMA.

The letter of intent also initiates the assignment of the Rapporteur and Co-Rapporteur, who are the appointed members of the Committee for Human Medicinal Products (“CHMP”) representing two EU member states.

The centralized procedure provides for the grant of a single MA by the European Commission that is valid throughout the European Economic Area (which is comprised of the 27 EU Member States plus Norway, Iceland and Liechtenstein).

The centralized procedure is compulsory for certain medicinal products which are produced by biotechnology processes, advanced therapy medicinal products, products which are designated as orphan medicinal products and products with a new active substance indicated for the treatment of HIV/AIDS, cancer, neurodegenerative diseases, diabetes, auto-immune and other immune dysfunctions and viral diseases.

For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, authorization through the centralized procedure is optional on related approval.

Under the centralized procedure, the EMA’s Committee for Human Medicinal Products (“CHMP”) conducts the initial assessment of a product.

Under the centralized procedure, the maximum timeframe for the evaluation of an MAA by the EMA is 210 days.

1 unchanged sentence

At the end of the review period, the CHMP provides an opinion to the European Commission.

If this is opinion favorable, the Commission may then adopt a decision to grant a marketing authorization.

In exceptional cases, the CHMP might perform an accelerated review of an MAA in no more than 150 days.

This is usually when the product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.

When using the MRP or DCP, the applicant must select which EU member states in which to seek approval.

In the case of an MRP, the applicant must initially receive national approval in one EU member state.

This will be the so-called reference member state (“RMS”) for the MRP.

Then, the applicant seeks approval for the product in other EU member states, the so-called concerned member states, in a second step:

the mutual recognition process.

For the DCP, the applicant will approach all chosen member states at the same time.

To do so, the applicant will identify the RMS that will assess the submitted MAA and provide the other selected member states with the conclusions and results of the assessment.

If this opinion is favorable, the Commission may then adopt a decision to grant a marketing authorization.

In exceptional cases, the CHMP might perform an accelerated review of an MAA in no more than 150 days, excluding clock stops.

This is usually when the product targets an unmet medical need and is expected to be of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.

The CHMP can, however, revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment.

Unlike the centralized authorization procedure, the decentralized MA procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EU Member State in which the product is to be marketed.

This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure.

The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application.

The resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials.

If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralised Procedures – Human, or CMDh, for review.

The subsequent decision of the European Commission is binding on all EU Member States.

The mutual recognition procedure allows companies that have a medicinal product already authorized in one EU Member State to apply for this authorization to be recognized by the competent authorities in other EU Member States.

Like the decentralized procedure, the mutual recognition procedure is based on the acceptance by the competent authorities of the EU Member States of the MA of a medicinal product by the competent authorities of other EU Member States.

The holder of a national MA may submit an application to the competent authority of an EU Member State requesting that this authority recognize the MA delivered by the competent authority of another EU Member State.

An MA has, in principle, an initial validity of five years.

The MA may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the EU Member State in which the original MA was granted.

To support the application, the MA holder must provide the EMA or the competent authority with a consolidated version of the Common Technical Document providing up-to-date data concerning the quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid.

The European Commission or the competent authorities of the EU Member States may decide on justified grounds relating to pharmacovigilance, to proceed with one further five-year renewal period for the MA.

Once subsequently definitively renewed, the MA shall be valid for an unlimited period.

Any authorization which is not followed by the actual placing of the medicinal product on the EU market (for a centralized MA) or on the market of the authorizing EU Member State within three years after authorization ceases to be valid (the so-called sunset clause).

In the EU, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available.

The European Commission may grant a conditional MA for a medicinal product if it is demonstrated that all of the following criteria are met:

(i) the benefit-risk balance of the medicinal product is positive;

(ii) it is likely that the applicant will be able to provide comprehensive data post-authorization;

(iii) the medicinal product fulfils an unmet medical need;

and (iv) the benefit of the immediate availability to patients of the medicinal product is greater than the risk inherent in the fact that additional data are still required.

The conditional MA is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures.

It is valid for one year and must be renewed annually until all related conditions have been fulfilled.

Once any pending studies are provided, the conditional MA can be converted into a traditional MA.

However, if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission, the MA will cease to be renewed.

An MA may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced.

These circumstances may arise in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not

possible to provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles.

Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA.

However, unlike the conditional MA, an applicant for authorization in exceptional circumstances is not subsequently required to provide the missing data.

Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually, and the MA will be withdrawn if the risk-benefit ratio is no longer favorable.

Pediatric Development in the European Union

In the EU, Regulation (EC) No 1901/2006 provides that all MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO.

The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the medicinal product for which MA is being sought.

The PDCO can grant a deferral of the obligation to implement some or all of the measures provided in the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults.

Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients.

Once the MA is obtained in all EU Member States and study results are included in the product information, even when negative, the product is eligible for a six-month extension to the Supplementary Protection Certificate, or SPC, if any is in effect at the time of authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity.

An innovator company enjoys a period of “data exclusivity” during which their pre-clinical and clinical trials data may not be referenced in the regulatory filings of another company (typically a generic company) for the same drug substance.

Data exclusivity in Europe is eight years from the date of first authorization in Europe with an additional period of two years of “market exclusivity.” This is the period of time during which a generic company may not market an equivalent generic version of the originator’s pharmaceutical product.

An additional one year of market exclusivity may be obtained where the innovator company is granted a marketing authorization within the above eight-year period for a significant new indication for the relevant medicinal product.

Additionally, medicines that meet the criteria for orphan designation benefit from ten years of market exclusivity once they are approved for marketing in the EU.

This protects them from market competition by similar medicines for the same therapeutic indication.

Specifically, the competent regulatory authorities will not for a period of ten years following approval of an orphan designated product accept another application for marketing authorization, grant a marketing authorization, or accept an application to extend an existing marketing authorization for the same therapeutic indication, in respect of a similar medicinal product.

Each orphan designation carries the potential for a market exclusivity for the particular indication.

Thus, a medicine that has several separate orphan designations for different indications can have a separate orphan marketing exclusivity for each orphan indication.

The Paediatric Regulation provides that an application for a new marketing authorization must include the results of all trials performed and details of all information collected in compliance with an agreed pediatric investigation plan (PIP), unless a deferral or waiver applies on the basis that pediatric use is not relevant.

This requirement can also be deferred by agreement.

Further, each ten-year period of marketing exclusivity based upon an orphan designation is extended by two years for products that have complied with an agreed PIP for that orphan designation.

When the application for marketing authorization is made, the competent authority responsible for granting a marketing authorization must verify whether the application complies with the relevant requirements, including compliance with the agreed PIP.

Assuming it does, the marketing authorization may be granted and the relevant results are included in the summary of product characteristics (“SmPC”) for the product, along with a statement indicating compliance with the agreed PIP.

In the case of non-orphan products, the applicant then receives the six-month extension to the SPC (the “pediatric extension”).

However, the six-month pediatric extension to SPC is not available for orphan designated products, or where the product has received an additional one year of marketing exclusivity by obtaining approval for a second marketing authorization for a significant new indication within the first eight years following the first marketing authorization.

Where the six-month pediatric extension is available, it is not necessary for the product to actually be indicated for use in the pediatric population (for example, if the results show that that would not be appropriate).

Upon receiving an MA, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity.

Data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product, after which a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced.

The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU.

The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies.

However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.

Orphan Designation in the European Union

In the EU, Regulation (EC) No.

141/2000, as implemented by Regulation (EC) No.

847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that:

(i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions;

(ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product;

and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.

Regulation (EC) No 847/2000 sets out further provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product.

An application for the designation of a medicinal product as an orphan medicinal product must be submitted at any stage of development of the medicinal product but before filing of an MAA.

An MA for an orphan medicinal product may only include indications designated as orphan.

For non-orphan indications treated with the same active pharmaceutical ingredient, a separate marketing authorization has to be sought.

Orphan medicinal product designation entitles an applicant to incentives such fee reductions or fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.

Upon grant of a marketing authorization, orphan medicinal products are entitled to a ten-year period of market exclusivity for the approved therapeutic indication, which means that the EMA cannot accept another marketing authorization application or accept an application to extend for a similar product and the European Commission cannot grant a marketing authorization for the same indication for a period of ten years.

The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed PIP.

No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications.

Orphan medicinal product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold.

Additionally, an MA may be granted to a similar medicinal product with the same

orphan indication during the 10 year period if:

(i) if the applicant consents to a second original orphan medicinal product application, (ii) if the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities;

or (iii) if the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior to the original orphan medicinal product.

A company may voluntarily remove a product from the register of orphan products.

Post-authorization Requirements

Where an MA is granted in relation to a medicinal product in the EU, the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.

Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the individual EU Member States.

The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new MAAs must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

The regulatory authorities may also impose specific obligations as a condition of the MA.

Such risk- minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs or the conduct of additional clinical trials or post-authorization safety studies.

In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices.

General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law.

However, the details are governed by regulations in individual EU Member States and can differ from one country to another.

For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, which may require approval by the competent national authorities in connection with an MA.

The SmPC is the document that provides information to physicians concerning the safe and effective use of the product.

Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU.

Other Laws and Regulatory Processes

7 unchanged sentences

As of January 31, 2024, we had 380 full-time employees, with most of those based in the United States and a small number outside of the United States.

We consider the intellectual capital of our employees to be an important driver of our business and key to our future success.

We consider the intellectual capital and well-being of our employees to be an important driver of our business and key to our future success.

The biopharmaceutical industry is very competitive and we believe that our future success largely depends upon our continued ability to attract, develop and retain highly skilled employees as our operations expand, as well as our continued focus on our culture and patient centricity.

Our workforce primarily consists of college-educated workers with experience in the biopharmaceutical industry, many of whom have advanced degrees.

Our employees primarily focus on our drug development and commercialization efforts, including sales and general and administrative operational

support of those functions.

Our employees primarily focus on our drug development and commercialization efforts, including sales and general and administrative operational support of those functions.

Currently, we rely on third-party contract manufacturers and conduct our discovery research efforts via collaborations and/or contracted third-party engagements.

None of our employees in the United States are represented by a labor union or covered by collective bargaining agreements.

We consider our current employee relations to be good.

We are committed to creating a multigenerational, multiracial, and multibackground workforce by welcoming each member’s unique experiences, backgrounds and talents and empowering them to reach their highest potential.

We desire to have our organization be representative of the communities we aim to serve with our treatments, and we are placing an increased focus on ways in which we can gain greater ethnic and racial diversity within our workforce, as well as increase gender and ethnic/racial diversity in leadership roles.

We have an internal diversity council that is open to all employees of our organization, and has a focus on a number of initiatives that directly impact our human capital, including efforts to further diversity, inclusion and equity initiatives within our recruitment, retention and developmental programs, and increase cultural awareness and engagement.

We desire to have our organization be representative of the communities we aim to serve with our treatments, and we are placing an increased focus on ways in which we can gain greater ethnic and racial diversity within our workforce, as well as other underrepresented groups, both throughout the organization and in leadership roles.

We support a number of initiatives that directly impact our human capital, including efforts to further diversity, equity, inclusion and belonging ("DEIB") initiatives

within our recruitment, retention and developmental programs, and increase cultural awareness and engagement.

We disclose information about our DEIB efforts on our website.

Information on our website is not incorporated in this annual report on Form 10-K.

We strive to provide compensation, benefits and support services that help meet the varying needs of our employees.

3 unchanged sentences

We also sponsor a 401(k) plan that includes a discretionary matching contribution.

A similar package of benefits are provided to our employees outside of the United States, subject to regional differences.

By focusing on employee retention, engagement and development opportunities, we believe we also improve our ability to support our clinical trials, our pipeline, our business and operations.

Our success also depends on our ability to respond to the needs of employees and we do this by listening to our employees through many avenues, for example, through formal engagement initiatives, such as surveys, as well as informal listening sessions hosted by senior leaders, including our CEO and our human resources department.

A similar package of benefits is provided to our employees outside of the United States, subject to regional differences.

By focusing on employee retention, engagement and development opportunities, we believe we also improve our ability to support our clinical trials, our pipeline, our business and our operations.

We value the growth and professional development of our employees.

We do this through clear organizational, team, and individual goal setting, performance measurement, customized professional development, and employee training and development sessions on various topics.

Our success also depends on our ability to respond to the needs of employees.

We do this by listening to our employees through many avenues, including formal engagement initiatives, such as surveys, as well as informal listening sessions hosted by senior leaders, including our CEO and our human resources department.

The response rate for our latest employee engagement survey, which was conducted in November 2023, was 85%.

During 2023 we continued to focus on ways to maximize a people-centered, inclusive, and recognition-based company culture, building on initiatives that have been implemented over the last several years.

Also during 2022, we furthered the development of our hybrid workforce program that provides a variety of virtual and in-person collaboration opportunities.

As we continue to navigate through these challenging times in the wake of a global pandemic, we take pride in the role we play in helping to ensure our employees are as productive and engaged as possible and their physical and emotional health and well-being remains a key priority.

Also during 2023, we continued to enhance our hybrid workforce program that provides a variety of virtual and in-person collaboration opportunities.

As we continue to navigate through new ways of working, we take pride in the role we play in helping to ensure our employees are as productive and engaged as possible and their physical and emotional health, well-being and safety remains a key priority.

We are committed to providing a safe and healthy working environment for our employees and to avoiding adverse impact to the environment and the communities in which we do business.

Available Information

6 unchanged sentences

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-K

Item 1. Business