What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-08 compared with 2023-02-09 · 227 added, 120 removed, 752 unchanged (32% of the section changed)

3 unchanged sentences

We are committed to the use of technologies that support sound science, including genetics and genomics, in drug discovery, clinical trials and the commercial positioning of our products.

Our commercial portfolio is currently comprised of two products, HETLIOZ ® for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and nighttime sleep disturbances in Smith-Magenis Syndrome (SMS) and Fanapt ® for the treatment of schizophrenia.

HETLIOZ ® is the first product approved by the FDA for patients with Non-24 and patients with SMS.

Our commercial portfolio is currently comprised of three products, HETLIOZ ® for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and for the treatment of nighttime sleep disturbances in Smith-Magenis Syndrome (SMS), Fanapt ® for the treatment of schizophrenia and PONVORY ® , which we acquired the U.S.

and Canadian rights to on December 7, 2023, for the treatment of relapsing forms of multiple sclerosis (MS), to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease, in adults.

HETLIOZ ® is the first product approved by the FDA for patients with Non-24 and for patients with SMS.

In addition, we have a number of drugs in development, including:

• HETLIOZ ® (tasimelteon) for the treatment of jet lag disorder, insomnia, delayed sleep phase disorder (DSPD), sleep disturbances in autism spectrum disorder (ASD) and pediatric Non-24;

• Fanapt ® (iloperidone) for the treatment of bipolar I disorder and Parkinson’s disease psychosis and a long acting injectable (LAI) formulation for the treatment of schizophrenia;

• Tradipitant (VLY-686), a small molecule neurokinin-1 (NK-1) receptor antagonist, for the treatment of gastroparesis, motion sickness, atopic dermatitis, and COVID-19 pneumonia;

• VTR-297, a small molecule histone deacetylase (HDAC) inhibitor for the treatment of hematologic malignancies and with potential use as a treatment for several oncology indications;

• Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors, including VSJ-110 for the treatment of dry eye and ocular inflammation and VPO-227 for the treatment of secretory diarrhea disorders, including cholera;

• VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist, for the treatment of performance anxiety and psychiatric disorders;

• HETLIOZ ® (tasimelteon) for the treatment of jet lag disorder, insomnia, delayed sleep phase disorder (DSPD) and pediatric Non-24;

• Fanapt ® (iloperidone) for the treatment of bipolar I disorder and a long acting injectable (LAI) formulation for the treatment of schizophrenia;

• PONVORY (ponesimod) for the treatment of inflammatory/autoimmune disorders, including but not limited to ulcerative colitis, psoriasis, Crohn's disease, atopic dermatitis, eosinophilic esophagitis and alopecia areata;

• Tradipitant (VLY-686), a small molecule neurokinin-1 (NK-1) receptor antagonist, for the treatment of gastroparesis, motion sickness and atopic dermatitis;

• VHX-896, the active metabolite of iloperidone;

• Antisense oligonucleotide (ASO) molecules.

• VTR-297, a small molecule histone deacetylase (HDAC) inhibitor for the treatment of onychomycosis, hematologic malignancies and with potential use as a treatment for several oncology indications;

• VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist, for the treatment of social/performance anxiety and psychiatric disorders;

• Antisense oligonucleotide (ASO) molecules, including VCA-894A for the treatment of Charcot-Marie-Tooth Disease, Type 2S (CMT2S), caused by cryptic slice site variants within IGHMBP2.

We were incorporated in 2002 and commenced operations in 2003.

2 unchanged sentences

The key elements of our strategy to accomplish this goal are to:

• Maximize the commercial success of HETLIOZ ® and Fanapt ® ;

• Maximize the commercial success of HETLIOZ ® , Fanapt ® and PONVORY ® ;

• Enter into strategic partnerships to supplement our capabilities and to extend our commercial reach;

5 unchanged sentences

Our commercial product portfolio consists of:

Product Indication 2022 Net Sales (in millions) Geography

Product Indication 2023 Net Sales (in millions)

Non-24 (capsules)

3 unchanged sentences

Schizophrenia (tablets) $90.9 United States

Relapsing forms of multiple sclerosis (tablets)

$1.6 United States

HETLIOZ ® for Non-24 (capsules)

18 unchanged sentences

patients per year.

Orphan drug designation provides potential financial and regulatory incentives, including study design assistance, tax credits, waiver of FDA user fees, and up to seven years of market exclusivity upon marketing approval.

Orphan drug designation provides potential financial and regulatory incentives, including study design assistance, tax credits, waiver of FDA user fees, and up to seven years of market

exclusivity upon marketing approval.

In February 2011, the European Medicines Agency (EMA) designated HETLIOZ ® as an orphan medicinal product for the same indication.

4 unchanged sentences

For example, a comorbidity has been established between psychiatric mood disorders and Non-24.

Hospitalized individuals with neurological and psychiatric disorders can become insensitive to social cues, which

may predispose them to the development of Non-24.

This recognition of comorbidity led Vanda to an initiative to engage with the psychiatric community.

Hospitalized individuals with neurological and psychiatric disorders can become insensitive to social cues, which may predispose them to the development of Non-24.

This recognition of comorbidity led us to an initiative to engage with the psychiatric community.

Patients diagnosed with traumatic brain injury, including concussions, frequently suffer from sleep disorders, some of which may be circadian rhythm sleep-wake disorders, including Non-24.

14 unchanged sentences

The most common symptom of SMS is a severe sleep disorder associated with significant disruption in the lives of patients and their families.

In September 2023, the EMA designated HETLIOZ ® as an orphan medicinal product for the treatment of SMS.

While there are no FDA approved treatments for patients with SMS other than HETLIOZ ® , there are a number of drugs approved and prescribed for patients with sleep disorders that may be used to treat patients with SMS.

19 unchanged sentences

See Competition below for a discussion of commonly prescribed atypical antipsychotics in addition to Fanapt ® .

PONVORY ® for relapsing multiple sclerosis (tablets)

PONVORY ® is a product approved for the treatment of relapsing forms of MS (RMS), to include clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease, in adults.

In December 2023, we purchased the right to market and sell PONVORY ® in the U.S.

and Canadian markets from Actelion Pharmaceuticals Ltd.

(Janssen), a Johnson & Johnson Company.

In March 2021, the FDA granted U.S.

marketing approval of PONVORY ® for the treatment of RMS in adults.

Health Canada approved PONVORY ® for the treatment of RMS in April 2021.

MS is a chronic autoimmune inflammatory disease of the central nervous system (CNS) in which immune cells attack myelin (the protective casing that insulates nerve cells), damaging or destroying it and causing inflammation.

This affects how the CNS processes information and communicates with the rest of the body, causing the neurologic signs and symptoms of MS.

Symptoms vary by person, but common symptoms include fatigue, balance and walking problems, numbness or tingling, dizziness and vertigo, vision problems, bladder and bowel problems and weakness.

PONVORY ® was launched commercially in the U.S.

in April 2021 and in Canada in November 2021 by one of the Johnson & Johnson Companies.

There are a number of drugs approved and prescribed to treat patients with MS.

See Competition below for a discussion of these commonly prescribed drugs.

Research and Development

10 unchanged sentences

In the JET8 clinical study, HETLIOZ ® demonstrated significant and clinically meaningful benefits in nighttime and daytime symptoms of jet lag disorder, including improvement in sleep time and benefits in measurements of next day alertness.

The JET study showed effectiveness in treating travelers who traveled either five or eight time zones from Washington, DC to London and San Francisco or Los Angeles to London, respectively.

The JET study showed effectiveness in treating travelers who traveled either five or eight time zones from Washington, D.C.

to London and San Francisco or Los Angeles to London, respectively.

The results support the previously reported pivotal JET5 and JET8 Phase III studies, which demonstrated improvements in patients who experienced circadian advances of five and eight hours, respectively.

1 unchanged sentence

The FDA accepted the filing of our sNDA for HETLIOZ ® for the treatment of jet lag disorder in December 2018.

The FDA determined the action target date under the Prescription Drug User Fee Act Amendments of 2017 to be August 16, 2019 and, on that date, we received a complete response letter (CRL) from the FDA.

The FDA determined the action target action date under the Prescription Drug User Fee Act Amendments of 2017 to be August 16, 2019 and, on that date, we received a complete response letter (CRL) from the FDA.

The FDA asserted in the CRL that the measures demonstrating improved sleep were of unclear clinical significance.

We met with the FDA to discuss the CRL in a Post Action meeting and in 2022 we requested the opportunity for a hearing with the FDA on the approvability of the jet lag disorder sNDA.

We filed a lawsuit against the FDA in September 2022 demanding that the FDA immediately publish in the Federal

We filed a lawsuit against the FDA in September 2022 demanding that the FDA immediately publish in the Federal Register a notice of opportunity for a hearing on the jet lag disorder sNDA.

The FDA then published the notice in the Federal Register in October 2022.

We are undergoing discussions with the FDA on the timing of such hearing.

We have asked the U.S.

District Court for the District of Columbia (DC District Court) to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates the FDCA and the FDA regulations.

In January 2024, the DC District Court held an oral argument on dispositive cross-motions, following which the DC District Court granted our motion for summary judgment.

The DC District Court ruled that the FDA violated the statute and ordered the FDA to either finally resolve our application or commence a hearing on or before March 5, 2024.

Our lawsuit remains pending.

We have asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates the FDCA and the FDA regulations.

In January 2024, the DC District Court held an oral argument on dispositive cross-motions, following which the DC District Court granted our motion for summary judgment.

The DC District Court ruled that the FDA violated the statute and ordered the FDA to either finally resolve our application or commence a hearing on or before March 5, 2024.

Our lawsuit remains pending.

Jet lag disorder is a common circadian disorder frequently observed in millions of travelers who cross multiple time zones.

7 unchanged sentences

Two transient insomnia studies induced by phase advance of the sleep-wake cycle were also conducted with five-hour and eight-hour phase advance, which showed a significant effect the first night in improving sleep parameters.

In July 2023, the FDA accepted our sNDA for HETLIOZ ® in insomnia for filing and set a target action date of March 4, 2024 under the Prescription Drug User Fee Act (PDUFA) for its decision.

HETLIOZ ® for pediatric Non-24

6 unchanged sentences

DSPD is likely the most prevalent circadian-rhythm sleep disorder, affecting approximately 1% of the population, and there is no FDA approved treatment at this time.

HETLIOZ ® for ASD

A clinical program of HETLIOZ ® for the treatment of symptoms of ASD is ongoing.

Sleep disturbances in ASD are a high unmet medical need in people with ASD and have been characterized in the literature to include difficulties falling and staying asleep.

Fanapt ® for bipolar I disorder

In December 2022, we announced Fanapt ® was effective in the treatment of acute manic and mixed episodes associated with bipolar I disorder in adults in a randomized double-blind placebo controlled Phase III study.

The primary endpoint measured in Week 4 of treatment was assessed by the Young Mania Rating Scale (YMRS), a rating scale of clinical severity in the core symptoms of mania.

endpoint measured in Week 4 of treatment was assessed by the Young Mania Rating Scale (YMRS), a rating scale of clinical severity in the core symptoms of mania.

At the end of the 4-week study, Fanapt ® treated patients showed a larger improvement than placebo treated patients, and this difference was highly statistically significant.

7 unchanged sentences

People with bipolar disorders generally have periods of normal mood as well.

In August 2023, the FDA accepted our sNDA for Fanapt ® in bipolar I disorder in adults for filing and set a PDUFA target action date of April 2, 2024 for its decision.

Fanapt ® for schizophrenia (LAI)

1 unchanged sentence

This pharmacokinetic study is ongoing and will serve to inform the dosing for a later clinical study of Fanapt ® LAI for the treatment of schizophrenia.

Fanapt ® for Parkinson ’ s disease psychosis

A clinical program of Fanapt ® in Parkinson ’ s disease psychosis is ongoing.

Parkinson’s disease is a neurodegenerative disorder that affects predominately dopaminergic neurons in a specific area of the brain called substantia nigra.

There are approximately one million adults in the U.S.

with Parkinson’s disease.

Between 20% and 40% of persons with Parkinson ’ s disease experience a combination of hallucinations and delusions.

The disease is associated with significant caregiver burden.

The mechanism of action of PONVORY ® makes it also a potential therapeutic candidate for the treatment of a diverse group of inflammatory/autoimmune disorders including but not limited to ulcerative colitis, psoriasis, Crohn’s disease, atopic dermatitis, eosinophilic esophagitis and alopecia areata.

In a randomized placebo controlled clinical study, PONVORY ® has been shown to reduce the symptoms and signs of psoriasis.

Tradipitant for gastroparesis

8 unchanged sentences

The FDA may not view this data as constituting substantial evidence of efficacy for tradipitant in any indication for the treatment of gastroparesis or its symptoms, for any length of treatment.

We are preparing for submission of an NDA for tradipitant for patients with gastroparesis.

The open-label phase of the study remains open.

We believe that tradipitant has a well-established safety profile, as demonstrated by the results of extensive testing in animals and humans.

Despite these results, however, the FDA informed us in December 2018 that in order to treat patients beyond 12 weeks, we will have to conduct a nine-month non-rodent chronic toxicity study.

Despite these results, however, the FDA informed us in December 2018 that in order to treat patients beyond 12 weeks, we would have to conduct a nine-month non-rodent chronic toxicity study.

This currently limits our ability to collect safety data in humans for more than 12 weeks.

2 unchanged sentences

District Court for the District of Columbia (DC District Court) challenging the FDA’s position, but we ultimately did not prevail.

Despite our disagreement with the FDA, the preclinical package has allowed us to continue to conduct all of the efficacy studies necessary for New Drug Application (NDA) filing.

Despite our disagreement with the FDA, the preclinical package has allowed us to continue to

conduct all of the efficacy studies necessary for New Drug Application (NDA) filing.

Moreover, in July 2020, the FDA authorized tradipitant through an expanded access program (EAP) for a single patient.

2 unchanged sentences

The EAP is ongoing and a number of patients have initiated treatment.

Although this EAP is not intended for data collection, we collect safety data from this cohort of expanded access patients and plan to include this data in the NDA for tradipitant for patients with gastroparesis.

Although this EAP is not intended for data collection, we collect safety data from this cohort of expanded access patients and included this data in the NDA that we submitted for tradipitant for patients with gastroparesis.

In December 2023, the FDA accepted our NDA for tradipitant in gastroparesis for filing and set a PDUFA target action date of September 18, 2024.

If approved, tradipitant will be the first novel drug to be approved by the FDA for the treatment of gastroparesis in over 40 years and tradipitant is the first novel drug to be accepted for review by the FDA for gastroparesis in over 30 years.

The FDA may disregard such safety data when reviewing the NDA.

The lack of long-term (i.e., more than 12 weeks in humans) safety data would likely impact the FDA’s willingness to approve tradipitant for a chronic indication.

However, because long-term safety data is not normally a requirement for short-term indications, and with a preclinical profile that has not precluded clinical development, we believe the package is complete for any NDA filing to treat patients for 12 weeks or less.

However, because long-term safety data is not normally a requirement for short-term indications, and with a preclinical profile that has not precluded clinical development, we believe the package was complete for any NDA filing to treat patients for 12 weeks or less.

For example, the FDA has communicated to us that it is considering an indication for the short-term relief of nausea in gastroparesis.

12 unchanged sentences

The protocol for a pivotal Phase III motion sickness study was discussed with the FDA at the end of Phase II meeting, and the FDA agreed with the adequacy of the program design to support an NDA.

The Phase III study is ongoing.

In May 2023, we announced positive results from the first Phase III study of tradipitant in motion sickness, confirming the previously reported results demonstrating that tradipitant is effective in the prevention of vomiting associated with motion sickness.

A second Phase III study of tradipitant in motion sickness is ongoing.

Motion sickness is a disorder that arises often as a response to real or perceived movement, as occurring during vehicular travel.

18 unchanged sentences

A 2015 Decision Resources Group report estimated that 9.8 million individuals were diagnosed with atopic dermatitis in the U.S., of which approximately 6.4 million were drug-treated atopic dermatitis patients.

Tradipitant for COVID-19 pneumonia

In April 2020, we announced the initiation of a Phase III clinical study, ODYSSEY VLY-686-3501, in hospitalized patients with COVID-19.

We received permission from the FDA to proceed with the study for the treatment and prevention of pneumonia associated with COVID-19.

Enrollment in the VLY-686-3501 study closed in August 2021 because the study met the pre-defined futility criteria, indicating that the study was unlikely to succeed in its pre-specified primary endpoint.

The study was designed to determine whether tradipitant plus standard of care is superior to placebo plus standard of care in treating hospitalized patients with COVID-19 pneumonia who required supplemental oxygen support.

An independent data and safety monitoring board (DSMB) met to assess the planned interim analysis results and determined that the study is unlikely to show a significant difference between treatment arms at the pre-specified primary endpoint and recommended termination of the study for futility.

The DSMB also determined that there are no safety concerns that contributed to its recommendation.

We have continued the genetics component of the study with the goal of identifying genetic susceptibility factors contributing to the incidence of severe pneumonia among patients infected with COVID-19.

COVID-19 is associated with a lower respiratory tract inflammation that often progresses to acute respiratory distress syndrome requiring mechanical ventilation.

Tradipitant targets the neurokinin-1 receptor, which is coded by the TACR1 gene and is the main receptor for substance P, an 11 amino acid neuropeptide with a diverse set of functions.

It has been shown that the substance P NK-1 receptor system is involved in the neuroinflammatory processes that leads to significant lung injury following a number of insults, including viral challenges.

In 2021, we initiated a bioequivalence study of Fanapt ® and VHX-896, the active metabolite of iloperidone.

We believe that VHX-896 has the potential to improve the clinical profile of Fanapt ® and create sustained, long-term value in the treatment of psychiatric disorders, including schizophrenia and bipolar I disorder.

Other products

In the fourth quarter of 2018, we initiated a clinical study in patients with hematologic malignancies.

1 unchanged sentence

VTR-297 is a small molecule HDAC inhibitor with potential use as a treatment for several oncology indications.

In January 2024, the FDA approved our Investigational New Drug (IND) application to evaluate VTR-297 for the treatment of onychomycosis.

Portfolio of CFTR activators and inhibitors

5 unchanged sentences

We believe that VPO-227 has the potential to be an orally administered treatment for cholera.

In October 2022, VPO-227 was granted orphan drug designation by FDA for the treatment of cholera.

In October 2022, VPO-227 was granted orphan drug designation by the FDA for the treatment of cholera.

We are evaluating VQW-765 for the treatment of psychiatric disorders.

5 unchanged sentences

VQW-765 is a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist that we licensed from Novartis on December 31, 2014 pursuant to a settlement agreement.

Other products

In 2021, we initiated a bioequivalence study of Fanapt ® and VHX-896, the active metabolite of iloperidone.

We believe that VHX-896 has the potential to improve the clinical profile of Fanapt ® and create sustained, long-term value in the treatment of psychiatric disorders.

ASO Molecules

2 unchanged sentences

OliPass’ unique OliPass Peptide Nucleic Acids technology provides the delivery platform to enable these gene expression modifications.

ASOs may have broad applicability in addressing a number of disorders, from nervous system treatments to systemic treatments.

In June 2023, VCA-894A, an ASO molecule, was granted orphan designation by FDA for the treatment of a patient with CMT2S, caused by cryptic splice site variants within IGHMBP2.

In January 2024, we announced that the FDA had approved the Investigational New Drug (IND) application to evaluate VCA-894A for the treatment of a patient with CMT2S.

CMT2S is a rare subtype of Charcot-Marie-Tooth disease (CMT), an inherited peripheral neuropathy for which there is no available treatment.

The estimated prevalence of CMT is 1 in 2,500 individuals, with varying clinical features dependent on the various genetic variants of CMT.

The prevalence of CMT2S is estimated to be less than 1 in 1,000,000 worldwide.

For more detailed information regarding our clinical trial results and regulatory activities for our products please refer to our SEC filings and press releases, which can be found on the SEC EDGAR website and on our website www.vandapharma.com.

1 unchanged sentence

License Agreements

Our rights to develop and commercialize our products are subject to the terms and conditions of licenses granted to us by other pharmaceutical companies.

Our rights to develop and commercialize certain of our products are subject to the terms and conditions of licenses granted to us by other pharmaceutical companies.

In February 2004, we entered into a license agreement with Bristol-Myers Squibb (BMS) under which we received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize HETLIOZ ® .

We have paid BMS $37.5 million in upfront fees and milestone obligations.

remaining milestone obligations to BMS.

We have no remaining milestone obligations to BMS.

Additionally, we are obligated to make royalty payments on HETLIOZ ® net sales to BMS.

22 unchanged sentences

Lilly is eligible to receive future payments based upon achievement of specified development, regulatory approval and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits.

We have paid Lilly $3.0 million in upfront fees and development milestones.

As of December 31, 2022, remaining milestones include a $2.0 million development milestone due upon the filing of the first marketing authorization for tradipitant in either the U.S.

or the E.U, $10.0 million and $5.0 million for the first approval of a marketing authorization for tradipitant in the U.S.

and E.U., respectively, and up to $80.0 million for sales milestones.

We have paid Lilly $5.0 million in upfront fees and development milestones, including a $2.0 million development milestone paid in December 2023 for the filing of the first marketing authorization for tradipitant in the U.S.

As of December 31, 2023, remaining milestones include $10.0 million and $5.0 million milestones for the first approval of a marketing authorization for tradipitant in the U.S.

and the E.U., respectively, and up to $80.0 million for sales milestones.

We are obligated to use commercially reasonable efforts to develop and commercialize tradipitant.

9 unchanged sentences

Either party may terminate the agreement under certain circumstances.

In the event that we terminate the agreement, or if UCSF terminates the agreement due to our breach or for certain other reasons set forth in the agreement, all rights licensed

and developed by us under the agreement will revert or otherwise be licensed back to UCSF.

In the event that we terminate the agreement, or if UCSF terminates the agreement due to our breach or for certain other reasons set forth in the agreement, all rights licensed and developed by us under the agreement will revert or otherwise be licensed back to UCSF.

Termination will not relieve us of our obligation to pay royalties or other payments owed, if any, to UCSF under the terms of the agreement.

7 unchanged sentences

Our products are protected from unauthorized use by others only to the extent that our products are covered through regulatory protections or by valid and enforceable patents, either licensed to us by others or generated through our activities internally, that give us sufficient proprietary rights.

Accordingly, securing patents, regulatory data package protection, and other proprietary rights is an essential element of our business strategies.

Tradipitant and VQW-765 are covered by NCE and other patents and patent applications related to their respective medicinal uses.

Accordingly, securing patents, regulatory data package protection, and other proprietary rights are an essential element of our business strategies.

PONVORY ® , tradipitant and VQW-765 are covered by NCE and other patents and patent applications related to their respective medicinal uses.

In addition, NCE patent protection has been sought for VTR-297 and CFTR.

29 unchanged sentences

US 11,285,129* Method of treatment

US 11,566,011

Drug substance

US 11,633,377

Method of treatment

US 11,759,446

Method of treatment

US 11,760,740

Drug substance

US 11,786,502

Method of treatment

US 11,833,130

Method of treatment

US 11,850,229

Method of treatment

US 9,539,234 Method of treatment

1 unchanged sentence

US 10,071,977 Drug substance

Product Number Type

US 10,149,829* Method of treatment

9 unchanged sentences

US 11,285,129* Method of treatment

US 11,566,011

Drug substance

US 11,633,377

Method of treatment

US 11,759,446

Method of treatment

US 11,760,740

Drug substance

US 11,786,502

Method of treatment

US 11,833,130

Method of treatment

US 11,850,229

Method of treatment

US 8,586,610* Method of treatment

7 unchanged sentences

US 9,157,121 Method of treatment

Method of treatment

Drug substance

US 10,220,023

Method of treatment

Drug substance

HETLIOZ ® and HETLOZ LQ ®

Our rights to the NCE patent covering HETLIOZ ® capsules and oral suspension (HETLIOZ LQ ® ) and related intellectual property have been acquired through a license with BMS.

HETLIOZ ® and its formulations, genetic markers and

uses are the subject of numerous patent filings for which protection has been sought in selected countries worldwide.

HETLIOZ ® and its formulations, genetic markers and uses are the subject of numerous patent filings for which protection has been sought in selected countries worldwide.

The NCE patent covering HETLIOZ ® expired in December 2022 in the U.S., which is inclusive of a five-year extension granted under the Hatch-Waxman Act in October 2018.

Corresponding NCE patent protection has expired in most other markets.

Patent and Trademark Office has issued 17 method of treatment patents for HETLIOZ ® that will expire between 2033 and 2035 and three drug substance patents that will expire in 2035.

Patent and Trademark Office has issued 22 method of treatment patents for HETLIOZ ® that will expire between 2033 and 2041 and four drug substance patents that will expire in 2035.

Additionally, the U.S.

6 unchanged sentences

and MSN Laboratories Private Limited (MSN) (collectively, the HETLIOZ ® Defendants) asserting infringement of patents covering HETLIOZ ® 20 mg capsules.

In January 2022, we entered into a license agreement with MSN and Impax Laboratories LLC resolving the lawsuits against MSN.

In January 2022, we entered into a license agreement with MSN and Impax Laboratories LLC

resolving the lawsuits against MSN.

The consolidated lawsuits against the remaining HETLIOZ ® Defendants were tried in March 2022.

3 unchanged sentences

We have appealed the decision to the U.S.

Court of Appeals for the Federal Circuit.

Court of Appeals for the Federal Circuit (Federal Circuit) and in May 2023, a three-judge panel of the Federal Circuit affirmed the Delaware District Court’s ruling.

In August 2023, the Federal Circuit denied our request for a rehearing.

In January 2024, we filed a petition for a writ of certiorari with the U.S.

Supreme Court to review the Federal Circuit’s decision.

We have also filed Hatch-Waxman lawsuits in U.S.

1 unchanged sentence

District Court for the Southern District of Florida against Apotex, in each case, asserting infringement of a method of administration patent that was not litigated in the Delaware District Court.

The New Jersey cases have been transferred to the Delaware District Court, where they remain pending.

This litigation does not affect the sale of HETLIOZ ® in the E.U.

17 unchanged sentences

and in 2010 in other countries, was owned by Sanofi.

Other patents and patent applications relating to Fanapt ® are owned by Vanda.

Other patents and patent applications relating to Fanapt ® are owned by us.

Fanapt ® metabolites, formulations, genetic markers and uses are the subject of numerous patent filings in which protection has been sought in the U.S., Europe, and other markets.

8 unchanged sentences

Patents for the microsphere LAI formulation of Fanapt ® expired in 2022 in some markets in Europe and will expire in 2024 in the U.S.

Patents for the aqueous microcrystals LAI formulation of Fanapt ® expire in 2023 in

Patents for the aqueous microcrystals LAI formulation of Fanapt ® expire in 2023 in the U.S.

and in some markets in Europe.

7 unchanged sentences

and Europe, similar regulatory package protection periods may be available and could protect Fanapt ® from generic competition for varying numbers of years depending upon the country.

Janssen has obtained patent protection for PONVORY ® and its formulations in selected countries worldwide, including the U.S.

In December 2023, we acquired all rights that Janssen had in U.S.

and Canadian patents related to PONVORY ® , pending U.S.

and Canada patent applications related to PONVORY ® , and any further U.S.

and Canadian derivative patents and patent applications arising from the foregoing patents and pending patent applications.

Regulatory exclusivity (NCE) protecting PONVORY ® in the U.S.

will expire on March 18, 2026.

The NCE patent covering the active ingredient in PONVORY ® (Reissue Patent No.

43,728) is set to expire on November 16, 2024, but an application for term extension pursuant to the Hatch-Waxman Act was submitted, which would extend this patent’s term to November 16, 2029 if granted.

Patent and Trademark Office has granted additional patents, including a further patent directed to a crystalline form of the active ingredient in PONVORY ® , which will expire in May 2032 in view of awarded patent term adjustment.

Patent and Trademark Office has also issued three method of treatment patents for PONVORY ® , which will expire between November 2024 and December 2035.

Furthermore, on January 24, 2024, the U.S.

Patent and Trademark Office issued a Notice of Allowance in the case of U.S.

17/962,968, which covers other methods of treatment using the active ingredient in PONVORY ® .

Once issued, this patent would be expected to expire on October 10, 2042.

Also, a number of patent applications covering further methods of treatment remain pending at the U.S.

Patent and Trademark Office.

In Canada, the Patented Medicines (Notice of Compliance) Regulations (PM(NOC) Regulations) create a regime analogous to the Hatch-Waxman Act and link the regulatory approval process for generic and biosimilar drugs to the adjudication of innovator patent rights.

To be eligible for protection under the PM(NOC) Regulations, patents must first be listed on the Patent Register in connection with an innovator’s drug submission to Health Canada.

A generic or biosimilar manufacturer must then provide notice to the innovator of its plans to market a drug that it compared to the innovator’s patented drug in the Health Canada approval process.

Within 45 days of receiving such a notice of allegation, an innovator drug company may commence patent infringement proceedings against the generic or biosimilar manufacturer.

The commencement of an action by the innovator under the PM(NOC) Regulations may stay Health Canada’s regulatory approval of the generic or biosimilar drug for a period of 24 months.

It is also possible that protection through a patent (i.e., a patent claiming a medicinal ingredient, or the combination of all medicinal ingredients, or uses thereof) in Canada can be extended for up to two years by the issuance of a Certificate of Supplementary Protection (CSP).

Health Canada’s Patent Register lists Canadian Patent Nos.

2545582, 2740313, and 2968180 for PONVORY ® , which are respectively directed to the active ingredient in PONVORY ® , the crystalline form of that active ingredient, and methods of treatment.

These listed patents will respectively expire November 16, 2024;

October 19, 2029;

and April 29, 2036 in view of the CSP.

Canada also employs a data exclusivity regime for innovative drugs that provides an eight-year period of data protection from the date of market approval by Health Canada.

An additional six months of data exclusivity is provided for drugs studied in clinical trials relating to use in pediatric populations.

Drug submissions seeking approval based on a comparison to an innovative drug cannot be filed during the first six years of the data exclusivity period.

Generic or biosimilar drug submissions remain on hold until expiry of the innovator’s data protection term, unless the innovative product is a patented drug subject to further protection under the PM(NOC) Regulations.

Canada has no distinct drug submission process for biosimilar or orphan drug products.

Lilly owns the NCE patent as well as patent applications directed to polymorphic forms of, and methods of making tradipitant.

2 unchanged sentences

These patents and patent applications have been licensed to us.

The NCE patent covering tradipitant expires in April 2023, except in the U.S., where it expires normally in June 2024, subject to any extension that may be received under the Hatch-Waxman Act.

The NCE patent covering tradipitant expired in April 2023, except in the U.S., where it expires normally in June 2024, subject to any extension that may be received under the Hatch-Waxman Act.

We have filed additional patent applications based on discoveries made during recent studies with tradipitant.

6 unchanged sentences

In connection with the settlement agreement with Novartis relating to Fanapt ® , we received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.

The NCE patent expires normally in 2023 in the U.S., Europe, and other markets.

The NCE patent expired normally in 2023 in the U.S., Europe, and other markets.

Other patents

5 unchanged sentences

We require all of our employees, relevant consultants and advisors to enter into confidentiality agreements.

Where it is necessary to

share our proprietary information or data with outside parties, our policy is to make available only that information and data required to accomplish the desired purpose and only pursuant to a duty of confidentiality on the part of those parties.

Where it is necessary to share our proprietary information or data with outside parties, our policy is to make available only that information and data required to accomplish the desired purpose and only pursuant to a duty of confidentiality on the part of those parties.

Marketing and Sales

10 unchanged sentences

We continue to explore the regulatory path and commercial opportunity for Fanapt ® oral formulation in other regions.

PONVORY ® tablets were approved in the U.S.

for the treatment of RMS in adults in March 2021 and commercially launched in the U.S.

by Janssen in April 2021.

PONVORY ® tablets were approved in Canada for the treatment of RMS in adults in April 2021 and commercially launched in Canada by Janssen in November 2021.

We acquired the U.S.

and Canadian rights to PONVORY ® in December 2023 from Janssen.

Janssen will continue PONVORY ® operations during a transition period, following which, regulatory and supply responsibilities will be transitioned to us.

Major Customers

Our revenues are generated from product sales and are concentrated with specialty pharmacies, including Accredo (a subsidiary of Express Scripts) and OptumRx (a subsidiary of UnitedHealth Group), and wholesalers, including AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation.

These five major customers each accounted for more than 10% of total revenues for 2022 and, as a group, represented 87% of total revenues for the year ended December 31, 2022.

Our revenues are generated from product sales and are concentrated with two specialty pharmacies and three wholesalers.

There were five major customers that each accounted for more than 10% of total revenues for 2023 and, as a group, represented 80% of total revenues for the year ended December 31, 2023.

The pharmaceutical industry, in particular, is highly competitive and includes a number of established large and mid-sized companies with greater financial, technical and personnel resources than we have and significantly greater commercial infrastructures than we have.

4 unchanged sentences

These developments may render our products or technologies obsolete or noncompetitive.

We believe the primary competitors for HETLIOZ ® and Fanapt ® are as follows:

We believe the competitors for HETLIOZ ® , Fanapt ® and PONVORY ® are as follows:

• For HETLIOZ ® in the treatment of nighttime sleep disturbances in SMS, there are no FDA approved direct competitors.

For HETLIOZ ® in the treatment of Non-24, Teva has launched at risk, and the FDA has approved the Abbreviated New Drug Applications (ANDA) for Apotex and MSN.

In addition, sedative-hypnotic treatments for certain sleep related disorders include, Ambien ® (zolpidem) by Sanofi (including Ambien CR ® ), Lunesta ® (eszopiclone) by Sunovion Pharmaceuticals Inc., Rozerem ® (ramelteon) by Takeda Pharmaceuticals Company Limited, Silenor ® (doxepin) by Currax Pharmaceuticals LLC, Belsomra ® (suvorexant) by Merck & Co., Inc., Dayvigo ® (lemborexant) by Eisai Inc., generic products such as zaleplon, trazodone and doxepin, and over-the-counter remedies such as Benadryl ® and Tylenol PM ® .

The class of melatonin agonists includes Rozerem ® (ramelteon) by Takeda Pharmaceuticals Company Limited, Valdoxan ® (agomelatine) by Servier Laboratories Limited, Circadin ® (long-acting melatonin) by Neurim Pharmaceuticals Ltd.

and the food supplement melatonin.

Shift work and excessive sleepiness disorder treatments include Nuvigil ® (armodafinil) and Provigil ® (modafinil) both by Teva Pharmaceutical Industries Ltd.

• For Fanapt ® in the treatment of schizophrenia, the atypical antipsychotics competitors are Risperdal ® (risperidone), including the LAI formulation Risperdal Consta ® and Invega ® (paliperidone), including the LAI formulation Invega ® Sustenna ® , each by Johnson & Johnson, the LAI formulation Zyprexa ® Relprevv TM (olanzapine) by Lilly, Abilify ® (aripiprazole) by Otsuka America Pharmaceutical Inc., Abilify Maintena ® (the LAI formulation of Abilify ® ) by Lundbeck/Otsuka America Pharmaceutical Inc., Geodon ® (ziprasidone) by Viatris, Inc., Saphris ® (asenapine) by AbbVie Inc., Latuda ® (lurasidone) by Sunovion Pharmaceuticals Inc., Rexulti ® (brexpiprazole) by Lundbeck/Otsuka America Pharmaceutical, Inc., Aristada ® (aripiprazole lauroxil) extended-release injectable suspension by Alkermes, plc, Vraylar ® (cariprazine) by AbbVie Inc., Perseris ® (risperidone) extended-release injectable suspension by Indivior plc, Caplyta ® (lumapteperone) by Intra-Cellular Therapies,

Inc., Lybalvi ® (olanzapine and samidorphan) by Alkermes, plc, and generic clozapine and quetiapine, as well as the typical antipsychotics haloperidol, chlorpromazine, thioridazine, and sulpiride (all of which are generic).

In addition, sedative-hypnotic treatments for certain sleep related disorders include, Ambien ® (zolpidem) by Sanofi (including Ambien CR ® ), Lunesta ® (eszopiclone) by Woodward Pharma Services ., Rozerem ® (ramelteon) by Takeda Pharmaceuticals Company Limited, Silenor ® (doxepin) by Currax Pharmaceuticals LLC, Belsomra ® (suvorexant) by Merck & Co., Inc., Dayvigo ® (lemborexant) by Eisai Inc., generic products such as agomelatine, zaleplon, trazodone and doxepin, and over-the-counter remedies such as Benadryl ® and Tylenol PM ® .

The class of melatonin agonists includes Rozerem ® (ramelteon) by Takeda Pharmaceuticals Company Limited, and the food supplement melatonin.

Shift work and excessive sleepiness disorder treatments include Nuvigil ® (armodafinil) and Provigil ® (modafinil) both by Teva.

• For Fanapt ® in the treatment of schizophrenia, the atypical antipsychotics competitors are Risperdal ® (risperidone), including the LAI formulation Risperdal Consta ® and Invega ® (paliperidone), including the LAI formulation Invega ® Sustenna ® , each by Johnson & Johnson, the LAI formulation Zyprexa ® Relprevv TM (olanzapine) by Cheplapharm, Abilify ® (aripiprazole) by Otsuka America Pharmaceutical Inc., Abilify Maintena ® (the LAI formulation of Abilify ® ) by Lundbeck/Otsuka America Pharmaceutical Inc., Geodon ® (ziprasidone) by Viatris, Inc., Saphris ® (asenapine) by Allergan, Latuda ® (lurasidone) by Sunovion Pharmaceuticals Inc., Rexulti ® (brexpiprazole) by Lundbeck/Otsuka America Pharmaceutical, Inc., Aristada ® (aripiprazole lauroxil) extended-release injectable suspension by Alkermes, plc, Vraylar ® (cariprazine) by AbbVie Inc., Perseris ® (risperidone) extended-release injectable suspension by Indivior plc, Caplyta ® (lumapteperone) by Intra-Cellular Therapies, Inc., Lybalvi ® (olanzapine and samidorphan) by Alkermes, plc, and generic clozapine and quetiapine, as well as the typical antipsychotics haloperidol, chlorpromazine, thioridazine, and sulpiride (all of which are generic).

• For PONVORY ® in the treatment of RMS, the competitors include Avonex ® (interferon beta-1a), Tysabri ® (natalizumab) and Plegridy ® (peginterferon beta-1a), all by Biogen Inc., Vumerity ® (diroximel fumerate) by Biogen Inc./Alkermes, plc, Betaseron ® (interferon beta-1b) by Bayer Healthcare Pharmaceuticals Inc., Rebif ® (interferon beta-1a) and Mavenclad ® (cladribine), both by Merck KGaA, Extavia ® (interferon beta-1b) and Mayzent ® (siponimod), both by Novartis AG, Lemtrada ® (alemtuzumab) by Sanofi, Ocrevus ® (ocrelizumab) by Roche Holding AG/Biogen Inc., Zeposia ® (ozanimod) by BMS, Briumvi ® (ubiltuximab) by TG Therapeutics, Inc., Kesimpta ® (ofatumumab) by Novartis, Tyruko ® (natalizumab) by Sandoz Group AG and generic dimethyl fumarate, fingolimod, glatiramer acetate and teriflunomide.

Our ability to compete successfully will depend in part on our ability to utilize our pharmacogenetics and pharmacogenomics and drug development expertise to identify, develop, secure rights to and obtain regulatory approvals for promising pharmaceutical products before others are able to develop competitive products.

5 unchanged sentences

We expect to continue to rely solely on third-party manufacturers to manufacture drug substance and final drug products for both clinical development and commercial sale.

However, there are numerous factors that could cause interruptions in the supply of our products, including regulatory reviews, changes in our sources for manufacturing, disputes with a manufacturer, or financial instability of manufacturers, all of which could negatively impact our operation and our financial results.

However, there are numerous factors that could cause interruptions in the supply of our products, including regulatory reviews, changes in our sources for manufacturing, disputes with a

manufacturer, or financial instability of manufacturers, all of which could negatively impact our operation and our financial results.

We have agreements in place with Patheon Pharmaceuticals Inc.

13 unchanged sentences

Either party may terminate the Fanapt ® manufacturing agreement under certain circumstances upon specified written notice to the other party.

In December 2020, we entered into a non-exclusive manufacturing agreement for the manufacture of commercial supplies of both 48 and 158 mL HETLIOZ LQ ® bottles.

In December 2020, we entered into a non-exclusive manufacturing agreement for the manufacture of commercial supplies of both 48 mL and 158 mL HETLIOZ LQ ® bottles.

The HETLIOZ LQ ® manufacturing agreement has an initial term of five years and automatically renews after the initial term for successive terms of one year each, unless either party gives notice of its intention to terminate the agreement at least 12 months prior to the end of the then current term.

PONVORY ® is manufactured by third parties and supplied to Jannsen, which is currently distributing PONVORY ® pursuant to the terms of a transition agreement.

During the transition period, Vanda and Janssen will transition supply responsibility for PONVORY ® to us.

Government Regulation

2 unchanged sentences

A new drug must be approved by the FDA through the NDA process before it may be legally marketed in the U.S.

The process of obtaining

regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign laws and regulations require the expenditure of substantial time and financial resources.

The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign laws and regulations require the expenditure of substantial time and financial resources.

Moreover, failure to comply with applicable requirements may result in, among other things, warning letters, clinical holds, civil or criminal penalties, recall or seizure of products, injunction, disbarment, partial or total suspension of production or withdrawal of the product from the market.

7 unchanged sentences

requirements at any time during the product development process, approval process or post-approval may subject an applicant to administrative or judicial sanctions.

These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning

letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

Any agency or judicial enforcement action could have a material adverse effect on our business.

1 unchanged sentence

Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies.

An Investigational New Drug (IND) application sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND.

An IND application sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND.

The sponsor must also include a protocol detailing, among other things, the objectives of the first phase of clinical trials, the parameters to be used in monitoring the safety of the trial, and the effectiveness criteria to be evaluated should the first phase lend itself to an efficacy evaluation.

15 unchanged sentences

Phase III clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population, generally at geographically dispersed clinical study sites.

These clinical trials, often

referred to as “pivotal” clinical trials, are intended to establish the overall risk-benefit ratio of the compound and provide, if appropriate, an adequate basis for product labeling.

These clinical trials, often referred to as “pivotal” clinical trials, are intended to establish the overall risk-benefit ratio of the compound and provide, if appropriate, an adequate basis for product labeling.

The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including any finding that the research subjects or patients are being exposed to an unacceptable health risk.

23 unchanged sentences

The FDA reviews NDAs to determine, among other things, whether the product is safe and effective for its intended use and whether it is manufactured in a cGMP-compliant manner, which will assure and preserve the product’s identity, strength, quality and purity.

Under Prescription Drug User Fee Act Amendments of 2022 (PDUFA), the FDA has a goal of 10 months from the date of “filing” of a standard, completed NDA for a new molecular entity to review and act on the submission.

Under Prescription Drug User Fee Act Amendments of 2022, the FDA has a goal of 10 months from the date of “filing” of a standard, completed NDA for a new molecular entity to review and act on the submission.

This review typically takes 12 months from the date the NDA is submitted to the FDA because the FDA has 60 days to make a “filing” decision after the application is submitted.

1 unchanged sentence

The FDA may request additional information rather than accept an NDA for filing.

In this event, the NDA must be

resubmitted with the additional information.

In this event, the NDA must be resubmitted with the additional information.

The resubmitted application also is subject to review before the FDA accepts it for filing.

5 unchanged sentences

Before approving an NDA, the FDA may also inspect one or more clinical trial sites to assure compliance with GCP requirements.

After the FDA evaluates an NDA, it will issue an approval letter or a complete response letter (CRL).

After the FDA evaluates an NDA, it will issue an approval letter or a CRL.

A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form.

22 unchanged sentences

Manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP regulations and other laws and regulations.

adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.

Our approved products are, and any additional product manufactured or distributed by us following FDA approval will be, subject to continuing regulation by the FDA, including, among other things, recordkeeping requirements, reporting of adverse experiences with the drug, providing the FDA with updated safety and efficacy information, drug sampling and distribution requirements, complying with certain electronic records and signature requirements, and complying with FDA promotion and advertising requirements.

The FDA strictly regulates labeling, advertising, promotion and other types of information regarding approved drugs that are placed on the market, and imposes requirements and restrictions on drug manufacturers, such as those related to direct-to-consumer advertising, the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities and promotional activities involving the internet.

1 unchanged sentence

Failure to comply with the applicable governmental requirements at any time during the product development process, approval process or after approval, may subject an applicant or manufacturer to administrative or judicial civil or criminal sanctions and adverse publicity.

FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-marketing clinical trials, enforcement letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties, any of which could have a material adverse effect on our business.

communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties, any of which could have a material adverse effect on our business.

Orphan drug designation

18 unchanged sentences

Drugs intended to treat serious or life-threatening diseases or conditions may be eligible for accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval

perform adequate and well-controlled post-marketing clinical trials.

As a condition of approval, the FDA may require that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials.

Drugs receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required post-marketing trials or if such trials fail to verify the predicted clinical benefit.

5 unchanged sentences

The Food and Drug Administration Safety and Innovation Act established a category of drugs referred to as “breakthrough therapies” that may be eligible to receive breakthrough therapy designation.

A sponsor may seek FDA designation of a compound as a “breakthrough therapy” if the product is intended, alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

A sponsor may seek FDA

designation of a compound as a “breakthrough therapy” if the product is intended, alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance.

34 unchanged sentences

A certification that the new drug will not infringe the already approved drug’s listed patents or that such patents are invalid is called a Paragraph IV certification.

If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced drug have expired.

applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced drug have expired.

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.

14 unchanged sentences

Failure to meet all of the requirements of a particular statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute, but the legality of the arrangement will be evaluated on a case-by-case basis based on the totality of the facts and circumstances.

Violations of the Anti-Kickback Statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from the participation in federal healthcare programs, such as Medicare and Medicaid.

number of states also have anti-kickback laws that establish similar prohibitions that may apply to items or services reimbursed by government programs, as well as any third-party payors, including commercial payors, known as “all-payor” laws.

Violations of the Anti-Kickback Statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from participation in federal healthcare programs, such as Medicare and Medicaid.

A number of states also have anti-kickback laws that establish similar prohibitions that may apply to items or services reimbursed by government programs, as well as any third-party payors, including commercial payors, known as “all-payor” laws.

Prescription Drug Marketing Act

14 unchanged sentences

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), includes federal criminal statutory provisions that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) and their implementing regulations, impose certain requirements and restrictions on certain types of individuals and entities relating to the privacy and security of individually identifiable health information.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) and their implementing regulations, impose certain requirements and restrictions on certain types of entities relating to the privacy and security of individually identifiable health information.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable not only to covered entities (e.g., health care providers and health plans), but also to business associates (i.e., independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity).

1 unchanged sentence

Physician Payment Sunshine Act

The Physician Payment Sunshine Act requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually (with certain exceptions) to Centers for Medicare & Medicaid Services (CMS) information related to payments or other “transfers of value” made to physicians and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members and payments or other “ transfers of value ” to such physician owners.

Failure to report relevant data may result in civil fines and/or penalties.

7 unchanged sentences

In addition to requiring reporting transfers of value, some states have imposed price reporting requirements.

These state laws apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

These state laws apply to items

and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

In addition, a number of states require pharmaceutical companies to report expenses relating to the marketing and promotion of pharmaceutical products and to report gifts and payments to individual physicians in the states.

27 unchanged sentences

and Japan, the pricing of prescription pharmaceuticals is subject to governmental control.

In these countries, pricing negotiations with governmental authorities can take nine to 12 months or longer after the receipt of regulatory

marketing approval for a product.

In these countries, pricing negotiations with governmental authorities can take nine to 12 months or longer after the receipt of regulatory marketing approval for a product.

To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product to other available therapies, which can be costly and time-consuming.

1 unchanged sentence

is governed by the General Data Protection Regulation (GDPR), which became applicable in May 2018.

The GDPR implements stringent operational requirements for processors and controllers of personal data, including, for example, expanded disclosure requirements about how personal information is to be used, strengthened individual data subject rights, limitations on retention of personal data, increased requirements pertaining to health data and pseudonymised (i.e., key-coded) data, shortened mandatory data breach notification timelines and higher standards for controllers to demonstrate they have obtained valid consent for certain data processing activities.

The GDPR applies to personal data processing carried out by a controller or processor (i) located within the E.U.

or (ii) targeting E.U.

individuals regardless of controller or processor’s location.

The GDPR implements stringent operational requirements for controllers and processors of personal data, including, for example, transparent information for the data subjects regarding the processing of their personal data, appropriate legal basis for processing personal data that may require to obtain the valid consent of the data subjects where applicable, expanded individual data subject rights, limitations on retention of personal data, increased requirements pertaining to data security and confidentiality, shortened mandatory data breach notification with the competent supervisory authority and higher standards for controllers and processors to demonstrate their compliance with the GDPR by documenting it.

The GDPR provides that E.U.

member states may make their own additional laws and regulations in relation to the processing of genetic, biometric or health data, which could result in differences between member states, limit our ability to use and share personal data or cause our costs to increase, and harm our business and financial condition.

Further, the U.K.’s exit from the E.U., often referred to as Brexit, has created uncertainty with regard to data protection regulation in the U.K.

While the transition period has now concluded, decisions are still to be made on how data transfers to and from the U.K.

will be regulated.

We are also subject to evolving and strict rules on the transfer of personal data out of the E.U.

Failure to comply with E.U.

data protection laws may result in significant fines, including GDPR fines of up to the higher of €20,000,000 or 4% of total worldwide annual revenue of the preceding financial year, and other administrative penalties.

Member States may supplement the GDPR with their own additional laws and regulations in relation to the personal data processing, in particular regarding sensitive personal data (e.g., genetic, biometric or health data), which could result in differences between E.U.

Member States, limit our ability to collect, use and share such personal data or cause our costs to increase, and harm our reputation, business and financial condition.

Further, the U.K.’s exit from the E.U., often referred to as Brexit, has created uncertainty with regard to applicable data protection regulation in the U.K.

While the transition period has now concluded, decisions are still to be made on how to adapt the U.K.

data protection provisions further to Brexit.

We are also subject to evolving and strict rules on the transfer of personal data out of the E.U., in particular to the U.S.

Failure to comply with the GDPR results in fines of up to the higher of €20,000,000 or 4% of total worldwide annual revenue of the preceding financial year, and other administrative penalties.

Pharmaceutical Coverage, Pricing and Reimbursement and Healthcare Reform

28 unchanged sentences

These changes include the Budget Control Act of 2011, which, among other things, included aggregate reductions of Medicare payments to providers that started in 2013 and will stay in effect through 2031 unless additional congressional action is taken.

More recently, in March 2021, President Biden signed into law the American Rescue Plan Act of 2021, which will eliminate the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

More recently, in March 2021, President Biden signed into law the American Rescue Plan Act of 2021, which eliminated the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

Additionally, in December 2020, CMS issued a final rule that materially modifies current MDRP regulations by, among other things, broadening the definitions of what constitutes a “line extension.” A “line extension” drug may be subject to a higher Medicaid rebate, and broadening this definition is likely to subject a greater number of drugs to the higher rebate.

6 unchanged sentences

The IRA permits the Secretary of the Department of Health and Human Services (HHS) to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

For that and other reasons, it is currently unclear how the IRA will be effectuated, and while the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

On March 15, 2023 and June 30, 2023, HHS issued guidance regarding implementation of the Medicare drug price negotiation program in initial price applicability year 2026.

HHS stated it would provide additional information in the future related to implementation for initial price applicability years 2027 and beyond.

Several manufacturers and industry groups have challenged the drug price negotiation program for Medicare Parts B and D in federal court.

These lawsuits are ongoing, and additional lawsuits may be filed in the future related to provisions of the IRA.

It is unknown whether such litigation or other litigation, if brought, will be successful.

For these and other reasons, it is currently unclear how the IRA will be effectuated, and while the impact of the IRA on the pharmaceutical industry cannot yet be fully determined, it is likely to be significant.

The cost of prescription pharmaceuticals in the U.S.

11 unchanged sentences

The IRA, as well as other federal, state and foreign healthcare reform measures that have been and may be adopted in the future, could have a material adverse effect on our business.

These healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price for any approved product and/or the level of reimbursement physicians receive for administering any approved product.

and additional downward pressure on the price for any approved product and/or the level of reimbursement physicians receive for administering any approved product.

Reductions in reimbursement levels may negatively impact the prices we can charge or the frequency with which products are prescribed or administered.

29 unchanged sentences

To access these documents from the main page of our website, click on “Investor” at the top of the page, then click on “Learn More” under “Corporate Governance” and then click on the desired document.

to satisfy the disclosure requirements under Item 5.05 of Form 8‑K regarding amendments to, or waivers from, provisions of our code of business conduct and ethics by posting such information on the website address and location specified above.

We intend to satisfy the disclosure requirements under Item 5.05 of Form 8‑K regarding amendments to, or waivers from, provisions of our code of business conduct and ethics by posting such information on the website address and location specified above.

None of the information contained on our website or www.sec.gov is incorporated by reference into this Annual Report or any other report or document filed with the SEC unless expressly stated otherwise therein.

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