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What changed in ENANTA PHARMACEUTICALS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ENANTA PHARMACEUTICALS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+405 added−445 removedSource: 10-K (2023-11-22) vs 10-K (2022-11-23)

Top changes in ENANTA PHARMACEUTICALS INC's 2023 10-K

405 paragraphs added · 445 removed · 298 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

130 edited+61 added−54 removed175 unchanged
Biggest changeOur royalties from our AbbVie collaboration provide us funding to support our wholly-owned research and development programs, which are primarily focused on the following disease targets: • Respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to 3 million hospitalizations globally in children under 5 years old and 177,000 hospitalizations in the U.S. in adults over the age of 65; • SARS-CoV-2, the virus that causes COVID-19, as well as other coronaviruses, with estimates suggesting that COVID-19 has caused over 240,000 deaths and over 1.7 million hospitalizations in the U.S. in 2022 through October 29, with comparable, or at least significant, impact in other major populations of the world and with new variants still emerging; • Hepatitis B virus, or HBV, the most prevalent chronic hepatitis, which is estimated by the World Health Organization to affect close to 300 million individuals worldwide; and • Human metapneumovirus, or hMPV, an important, relatively recently identified cause of respiratory tract infections, particularly in children, the elderly and immunocompromised individuals, with symptoms similar to RSV.
Biggest changeOur ongoing royalties from our AbbVie collaboration, combined with the proceeds from our April 2023 royalty sale transaction, have provided us funding to support our wholly-owned research and development programs, which are primarily focused on the following disease targets: • Respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to 3 million hospitalizations globally in children under 5 years old and 60,000-160,000 adults over the age of 65 in the U.S. are hospitalized and 6,000-10,000 die due to RSV infections; • SARS-CoV-2, the virus that causes COVID-19, with estimates suggesting that COVID-19 continues to have a disease burden greater than influenza, including persistent cases of infection often referred to as long COVID and hospitalization and death among the elderly and those with comorbidities, while new variants continue to emerge on a regular basis; and • Hepatitis B virus, or HBV, the most prevalent chronic hepatitis, which is estimated by the World Health Organization to affect close to 300 million individuals worldwide.
In addition, we may seek to augment our product candidate pipeline through the acquisition or in-licensing of external assets and/or technologies in one or more of our disease areas of focus. • Collaborate or out-license, where and when appropriate, with pharmaceutical partners to create combination therapies and accelerate the development and commercialization of our proprietary compounds .
In addition, we may seek to augment our product candidate pipeline through the acquisition or in-licensing of external assets and/or technologies in one or more of our disease areas of focus. • Collaborate or out-license, where and when appropriate, with pharmaceutical partners to create combination therapies and/or accelerate the development and commercialization of our proprietary compounds .
Results demonstrated that EDP-514 was safe and well-tolerated through 28 days of treatment, displayed pharmacokinetics supportive of once-daily dosing. Mean HBV DNA reductions of 2.9, 3.3, and 3.5 logs were observed at 28 days for the 200 mg, 400 mg, and 800 mg cohorts, respectively, compared to 0.2 log in the placebo cohort.
Results demonstrated that EDP-514 was safe and well-tolerated through 28 days of treatment, and displayed pharmacokinetics supportive of once-daily dosing. Mean HBV DNA reductions of 2.9, 3.3, and 3.5 logs were observed at 28 days for the 200 mg, 400 mg, and 800 mg cohorts, respectively, compared to 0.2 log in the placebo cohort.
For more information, see “Risk Factors—Risks Related to Our Intellectual Property Rights.” 17 Government Regulation Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we develop.
For more information, see “Risk Factors—Risks Related to Our Intellectual Property Rights.” Government Regulation Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we develop.
We will not be able to compete successfully unless we are able to: • design and develop products that are superior to other products in the market; • attract qualified scientific, medical, regulatory, sales and marketing and commercial personnel; • obtain patent and/or other proprietary protection for our processes and product candidates; • obtain required regulatory approvals; or • collaborate with others in the development and commercialization of new products.
We will not be able to compete successfully unless we are able to: • design and develop products that are superior to other products in the market; • attract qualified scientific, medical, regulatory, sales and marketing and commercial personnel; • obtain patent and/or other proprietary protection for our processes and product candidates; 14 • obtain required regulatory approvals; or • collaborate with others in the development and commercialization of new products.
Failure to comply with FDA requirements can have negative consequences, including the immediate discontinuation of noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties. Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses.
Failure to comply with FDA requirements can have negative 19 consequences, including the immediate discontinuation of noncomplying materials, adverse publicity, enforcement letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties. Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses.
However, there is no guarantee that any such application will be approved. 21 Federal Food, Drug and Cosmetic Act, or FDCA Market exclusivity provisions under the FDCA, which are independent of patent status and any patent related extensions, can also delay the submission or the approval of certain applications of other companies seeking to reference another company’s NDA.
However, there is no guarantee that any such application will be approved. Federal Food, Drug and Cosmetic Act, or FDCA Market exclusivity provisions under the FDCA, which are independent of patent status and any patent related extensions, can also delay the submission or the approval of certain applications of other companies seeking to reference another company’s NDA.
HCV-associated deaths during 2020 increased 4% (3.45 deaths per 100,000 people), compared to 2019 (3.33 deaths per 100,000 people). We believe that the chronically infected population remains significantly untreated, even with the introduction of several new treatment regimens beginning in 2013. The approved treatments for HCV have provided significant benefit to HCV patients.
HCV-associated deaths during 2020 increased 4% (3.45 deaths per 100,000 11 people), compared to 2019 (3.33 deaths per 100,000 people). We believe that the chronically infected population remains significantly untreated, even with the introduction of several new treatment regimens beginning in 2013. The approved treatments for HCV have provided significant benefit to HCV patients.
Under the terms of our agreement, as amended in October 2014, 50% of AbbVie’s net sales of MAVYRET/MAVIRET are 14 allocated to glecaprevir. Beginning with each January 1, the cumulative net sales of a given royalty-bearing protease inhibitor product start at zero for purposes of calculating the tiered royalties on a product-by-product basis.
Under the terms of our agreement, as amended in October 2014, 50% of AbbVie’s net sales of MAVYRET/MAVIRET are allocated to glecaprevir. Beginning with each January 1, the cumulative net sales of a given royalty-bearing protease inhibitor product start at zero for purposes of calculating the tiered royalties on a product-by-product basis.
In addition to its own review, the FDA may refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be 19 approved and under what conditions.
In addition to its own review, the FDA may refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.
Each of our major research and development programs, including RSV, SARS-CoV-2, HBV and hMPV, as well as our out-licensed products for HCV and our FXR agonist assets, typically has several pending patent claims and issued patents in the program area containing claims to compounds, methods of use and processes for synthesis.
Each of our major research and development programs, including RSV, SARS-CoV-2 as well as HBV and our out-licensed products for HCV and our FXR agonist assets, typically has several pending patent claims and issued patents in the program area containing claims to compounds, methods of use and processes for synthesis.
Manufacturing for glecaprevir is conducted by AbbVie. Wherever possible, we seek to identify multiple suppliers for raw materials and key intermediaries to be used in our manufacturing process. 24 Sales and Marketing We currently do not have any commercialization or sales and marketing capabilities, and currently have no fixed plans to invest in or build such capabilities internally.
Manufacturing for glecaprevir is conducted by AbbVie. Wherever possible, we seek to identify multiple suppliers for raw materials and key intermediaries to be used in our manufacturing process. Sales and Marketing We currently do not have any commercialization or sales and marketing capabilities, and currently have no fixed plans to invest in or build such capabilities internally.
We plan to enroll approximately 90 infants and children aged 28 days to 36 months with RSV-associated respiratory tract infection, who will be dosed in up to four age cohorts and will receive EDP-938 or a placebo for five days. The study will be conducted in two parts.
We plan to enroll approximately 90 infants and children aged 28 days to 36 months with RSV-associated respiratory tract infection, who will be dosed in up to two age cohorts and will receive EDP-938 or a placebo for five days. The study will be conducted in two parts.
Our Wholly-Owned Programs Our primary wholly-owned research and development programs are in virology, namely RSV, SARS-CoV-2, HBV and hMPV: • RSV: We have a clinical stage program for RSV, with two compounds in clinical trials – EDP-938 and EDP-323. EDP-938, which has Fast Track designation from the U.S.
Our Wholly-Owned Programs Our primary wholly-owned research and development programs are in virology, namely RSV, SARS-CoV-2 and HBV: • RSV: We have a clinical stage program for RSV, with two compounds in clinical trials – EDP-938 and EDP-323. EDP-938, which has Fast Track designation from the U.S.
In the European Union, for example, a clinical trial application, or CTA, must be submitted to 22 each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively. Once the CTA is approved in accordance with a country’s requirements, clinical trials may proceed.
In the European Union, for example, a clinical trial application, or CTA, must be submitted to each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively. Once the CTA is approved in accordance with a country’s requirements, clinical trials may proceed.
We also monitor our compensation programs closely and provide what we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our equity programs. None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union.
We also monitor our compensation programs closely and provide what we consider to be a very competitive mix of compensation and insurance benefits for all our employees, as well as participation in our equity programs. None of our 24 employees is subject to a collective bargaining agreement or represented by a trade or labor union.
Accordingly, the final expiration date of the agreement is currently indeterminable. Either party may terminate the agreement for cause in the event of a material breach, subject to prior notice and the opportunity to cure, or in the event of the other party’s bankruptcy. Additionally, AbbVie may terminate the agreement for any reason upon specified prior notice.
Accordingly, the final expiration date of the agreement is currently indeterminable. 13 Either party may terminate the agreement for cause in the event of a material breach, subject to prior notice and the opportunity to cure, or in the event of the other party’s bankruptcy. Additionally, AbbVie may terminate the agreement for any reason upon specified prior notice.
Once we have identified lead compounds, they are tested using in vitro and in vivo pharmacology studies and in vivo research models of antiviral or antibacterial efficacy. 15 Business Development We also regularly examine opportunities to in-license compounds and technologies to complement our existing internal discovery programs.
Once we have identified lead compounds, they are tested using in vitro and in vivo pharmacology studies and in vivo research models of antiviral or antibacterial efficacy. Business Development We also regularly examine opportunities to in-license compounds and technologies to complement our existing internal discovery programs.
Several states have not implemented the provisions of the ACA that involve the expansion of Medicaid eligibility to low-income adults. While the United States Supreme Court recently rejected the latest challenge to the constitutionality of the ACA, it is possible 23 that other legislative efforts may seek to modify it.
Several states have not implemented the provisions of the ACA that involve the expansion of Medicaid eligibility to low-income adults. While the United States Supreme Court recently rejected the latest challenge to the constitutionality of the ACA, it is possible that other legislative efforts may seek to modify it.
Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.
Additionally, the complete 18 response letter may include recommended actions that the applicant might take to place the application in a condition for approval. If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.
However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Other U.S.
However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. 20 Other U.S.
Generally, at least two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA. Post-approval studies, or Phase 4 clinical trials, may be conducted after initial marketing approval.
Generally, at least two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA. 17 Post-approval studies, or Phase 4 clinical trials, may be conducted after initial marketing approval.
Our patent portfolio directed to N-and L-protein inhibitors for RSV, protease inhibitors for SARS-CoV-2 and core inhibitors for HBV, includes issued U.S. patents or pending U.S. patent applications, or both, as well as numerous foreign patent applications.
Our patent portfolio directed to N-and L-protein inhibitors for RSV, protease inhibitors for SARS-CoV-2 and core inhibitors for HBV, includes issued U.S. patents or pending U.S. patent applications, or both, as well as numerous foreign 15 patent applications.
Our decisions regarding our proprietary programs will be based on the results of our early phase clinical studies and the potential for combinations with one or more drugs targeting other mechanisms of action in these diseases. • Continue to use our existing resources and future cash flow from our AbbVie collaboration to fund our research and development activities .
Our decisions regarding our proprietary programs will be based on the results of our early phase clinical studies and the potential for collaborations, including combinations with one or more drugs targeting other mechanisms of action in these diseases. • Continue to use our existing resources and future cash flow from our AbbVie collaboration to fund our research and development activities .
Although manufacturers are generally familiar with inflation rebates under the Medicaid program, where they have existed for decades, the IRA represents the first time that the Centers for Medicare and Medicaid Services, or CMS, has extended inflation rebates to the Medicare program. The IRA also redesigns the Medicare prescription drug benefit in several important ways, beginning in calendar year 2025.
Although manufacturers are generally familiar with inflation rebates under the Medicaid program, where they have existed for decades, the IRA represents the first time that the Centers for Medicare and Medicaid Services, or CMS, has extended inflation rebates to the Medicare program. The IRA also redesigns the Medicare prescription drug benefit in several important ways, beginning in calendar year 2024.
The lengthy process of seeking required approvals, which can often take anywhere from six months from the time the NDA is filed if there is a priority review for a breakthrough therapy to at least twelve months for a standard review, and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources.
The lengthy process of seeking required approvals, which can often take anywhere from six months from the time the NDA is filed if there is a priority review for a breakthrough therapy to at least ten months for a standard review, and the continuing need for compliance with applicable statutes and regulations, require the expenditure of substantial resources.
Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990 and the Veterans Health Care Act of 1992, each as amended. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.
In addition, pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990 and the Veterans Health Care Act of 1992, each as amended. If products are made available to authorized users of the Federal Supply Schedule of the General Services Administration, additional laws and requirements apply.
The goal of the priority review program is to shorten the review period to six months from the twelve months required for standard review. Any drug with breakthrough therapy, accelerated approval designation, or fast track can be granted priority review if it meets the necessary criteria.
The goal of the priority review program is to shorten the review period to six months from the ten months required for standard review. Any drug with breakthrough therapy, accelerated approval designation, or fast track can be granted priority review if it meets the necessary criteria.
Among its many provisions, the IRA authorizes the Medicare program to negotiate pricing for certain high-cost drugs, including physician-administered and self-administered drugs, that have been on the market for a minimum amount of time without generic competition.
Among its many provisions, the IRA authorizes the Medicare program to negotiate pricing for certain high-cost and/or high-volume drugs, including physician-administered and self-administered drugs, that have been on the market for a minimum amount of time without generic competition.
This first-in-human, randomized, double-blind, placebo-controlled study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics, or PK, of oral EDP-235 in single ascending doses and multiple ascending doses for seven days, and the effect of food.
This first-in-human, randomized, double-blind, placebo-controlled study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics of oral EDP-235 in single ascending doses, and multiple ascending doses, for seven days, and the effect of food.
This first-in-human, randomized, double-blind, placebo-controlled study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics, or PK, of oral EDP-235 in single ascending doses and multiple ascending doses for seven days, and the effect of food.
This first-in-human, randomized, double-blind, placebo-controlled study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics of oral EDP-235 in single ascending doses and multiple ascending doses for seven days, and the effect of food.
Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA has twelve months in which to complete its initial review of a standard NDA and respond to the applicant, and six months for a priority NDA.
Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA has ten months in which to complete its initial review of a standard NDA and respond to the applicant, and six months for a priority NDA.
First, the IRA places an annual out-of-pocket cap on Medicare beneficiary cost sharing amounts, which will actually take effect in calendar year 2024 before the full benefit redesign. Previously, beneficiaries’ out-of-pocket costs were uncapped, even if heavily subsidized. Second, the IRA requires that manufacturers share in the cost of prescription drugs throughout the prescription drug benefit.
First, the IRA places an annual out-of-pocket cap on Medicare beneficiary cost sharing amounts, which will take effect in calendar year 2024 before the full benefit redesign. Previously, beneficiaries’ out-of-pocket costs were uncapped, even if heavily subsidized. Second, the IRA requires that manufacturers share in the cost of prescription drugs throughout the prescription drug benefit, beginning in calendar year 2025.
The approvals of MAVYRET/MAVIRET are supported by data from nine registrational studies in AbbVie’s 13 clinical development program, which evaluated more than 2,300 patients in 27 countries across all major HCV genotypes (GT1-6) and special populations: • 8 weeks for treatment-naïve, non-cirrhotic patients: In November 2016, results from several Phase 3 studies of this combination demonstrated 97.5% of chronic HCV infected patients without cirrhosis and new to treatment across all major genotypes (GT1-6) achieved sustained virologic response at 12 weeks post-treatment, referred to as SVR 12 , with just 8 weeks of MAVYRET/MAVIRET treatment. • 8 weeks with chronic kidney disease: Results were also presented from AbbVie’s EXPEDITION-4 study in chronic HCV patients with chronic kidney disease, or CKD, in which 98% of patients (n=102/104) across all major genotypes (GT1-6) achieved SVR 12 with 12 weeks of treatment with MAVYRET/MAVIRET. • 8 weeks for GT-3: Data from AbbVie’s ENDURANCE-3 study were presented at the 2017 ILC, demonstrating that 95% of patients with challenging-to-treat, genotype 3, or GT3, chronic HCV infection, without cirrhosis and new to treatment, achieved SVR 12 after 8 weeks of treatment with MAVYRET/MAVIRET. • 8 weeks for compensated cirrhosis: Based on data from AbbVie’s EXPEDITION-8 study, which demonstrated that with 8 weeks of MAVYRET treatment, 100 percent (n=273/273) of genotype 1, 2, 4, 5 and 6 patients achieved a sustained virologic response 8 weeks after treatment (SVR 8 ) per protocol analysis.
The approvals of MAVYRET/MAVIRET are supported by data from nine registrational studies in AbbVie’s clinical development program, which evaluated more than 2,300 patients in 27 countries across all major HCV genotypes (GT1-6) and special populations: • 8 weeks for treatment-naïve, non-cirrhotic patients: In November 2016, results from several Phase 3 studies of this combination demonstrated 97.5% of chronic HCV infected patients without cirrhosis and new to treatment across all major genotypes (GT1-6) achieved sustained virologic response at 12 weeks post-treatment, referred to as SVR 12 , with just 8 weeks of MAVYRET/MAVIRET treatment. • 8 weeks for GT-3: Data from AbbVie’s ENDURANCE-3 study were presented at the 2017 ILC, demonstrating that 95% of patients with challenging-to-treat, genotype 3, or GT3, chronic HCV infection, without cirrhosis and new to treatment, achieved SVR 12 after 8 weeks of treatment with MAVYRET/MAVIRET. • 8 weeks for compensated cirrhosis: Based on data from AbbVie’s EXPEDITION-8 study, which demonstrated that with 8 weeks of MAVYRET treatment, 100 percent (n=273/273) of genotype 1, 2, 4, 5 and 6 patients achieved a sustained virologic response 8 weeks after treatment (SVR 8 ) per protocol analysis.
We believe that EDP-938 continues to have the greatest potential to show optimal efficacy in high-risk populations, as these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of EDP-938.
We believe that EDP-938 has the greatest potential to show optimal efficacy in high-risk populations since these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of EDP-938.
Certain requirements include, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information on an annual basis or more frequently for specific events, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements.
Certain requirements include, among other things, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information on an annual basis or more frequently for specific events, drug supply chain requirements, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA prescription drug promotion and advertising requirements.
Under this collaboration, we have received royalty payments from AbbVie totaling $812 million through September 30, 2022. Further details of these tiered royalties are set forth in Note 7 in Notes to Consolidated Financial Statements included in this report, which are incorporated herein by this reference.
Under this collaboration, we have received royalty payments from AbbVie totaling $891 million through September 30, 2023. Further details of these tiered royalties are set forth in Note 7 in Notes to Consolidated Financial Statements included in this report, which are incorporated herein by this reference.
Since the introduction of Gilead’s Harvoni ® and AbbVie’s VIEKIRA PAK ® in late 2014, the reported worldwide sales of the leading HCV therapies have declined from $23 billion in 2015 to $3.6 billion in 2021. Through the first nine months of calendar 2022, reported worldwide net sales were $2.5 billion .
Since the introduction of Gilead’s Harvoni ® and AbbVie’s VIEKIRA PAK ® in late 2014, the reported worldwide sales of the leading HCV therapies have declined from $23 billion in 2015 to $3.4 billion in 2022. Through the first nine months of calendar 2023, reported worldwide net sales were $2.5 billion.
The IRA also will require manufacturers, beginning in 2023, to rebate the Medicare program for Medicare utilization of drugs that have price increases faster than the rate of inflation. The benchmark to which price increases are compared will vary depending on the drug.
The IRA also will require manufacturers, beginning in 2023, to rebate the Medicare program for Medicare utilization of Part B and Part D drugs that have price increases faster than the rate of inflation. The benchmark to which price increases are compared will vary depending on the drug.
We are continuing to invest significant resources in our research programs in our efforts to identify and advance additional novel compounds that have the potential to address significant unmet medical needs in our primary disease areas, as well as others. We may also explore clinically other diseases where our assets could play a role.
We are continuing to invest resources in our research programs in our efforts to identify and advance additional novel compounds that have the potential to address significant unmet medical needs in new disease areas. We may also explore clinically other diseases where our assets could play a role.
Research and Development Our research and development expenses were $164.5 million, $174.1 million and $136.8 million for the fiscal years ended September 30, 2022, 2021, and 2020, respectively. Manufacturing We do not have our own manufacturing capabilities, except with respect to limited amounts of active pharmaceutical ingredients needed for preclinical development.
Research and Development Our research and development expenses were $163.5 million, $164.5 million and $174.1 million for the fiscal years ended September 30, 2023, 2022, and 2021, respectively. Manufacturing We do not have our own manufacturing capabilities, except with respect to limited amounts of active pharmaceutical ingredients needed for preclinical development.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practice, or GLPs, or other applicable regulations; • Submission to the FDA of an Investigational New Drug Application, or an IND, which must become effective before human clinical trials may begin; • Performance of adequate and well-controlled human clinical trials according to the FDA’s current Good Clinical Practice, or GCPs, to establish the safety and efficacy of the proposed drug for its intended use; • Submission to the FDA of a New Drug Application, or an NDA, for a new drug product; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug is to be produced to assess compliance with the FDA’s current Good Manufacturing Practice standards, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • Potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA.
Any agency or judicial enforcement action could have a material adverse effect on us. 16 The process required by the FDA before a drug may be marketed in the United States generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practice, or GLPs, or other applicable regulations; • Submission to the FDA of an Investigational New Drug Application, or an IND, which must become effective before human clinical trials may begin; • Performance of adequate and well-controlled human clinical trials according to the FDA’s current Good Clinical Practice, or GCPs, to establish the safety and efficacy of the proposed drug for its intended use; • Submission to the FDA of a New Drug Application, or an NDA, for a new drug product; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug is to be produced to assess compliance with the FDA’s current Good Manufacturing Practice standards, or cGMP, to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • Potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA.
Our principal focus is on antiviral targets for viruses such as RSV, SARS-CoV-2, HBV and hMPV, which in most cases are therapeutic areas that have attracted research and development efforts of many competitors. Our strategy includes the following key elements: • Advance clinical development of novel virology product candidates for RSV, SARS-CoV-2, HBV and hMPV.
Our focus has primarily been on antiviral targets for viruses such as RSV, SARS-CoV-2, and HBV, which in most cases are therapeutic areas that have attracted research and development efforts of many competitors. Our strategy includes the following key elements: • Advance clinical development of novel virology product candidates for RSV.
We expect our existing financial resources and future royalty payments from our AbbVie collaboration will provide us resources to fund our research and development programs into approximately the fourth quarter of fiscal 2024. These resources will allow us to continue to advance compounds in clinical development and to progress the most promising candidates at least through proof-of-concept trials.
We expect our existing financial resources and our retained portion of future royalty payments from our AbbVie collaboration will provide us resources to fund our research and development programs through fiscal 2027. These resources will allow us to continue to advance compounds in clinical development and to progress the most promising candidates at least through proof-of-concept trials.
Human Capital Resources As of September 30, 2022, we had 160 full-time employees, 74 of whom hold Ph.D. or M.D. degrees and an additional 40 of whom hold a master's degree or other post-graduate degree. We consider the intellectual capital of our employees to be an essential driver of our business and key to our future prospects.
Human Capital Resources As of September 30, 2023, we had 145 full-time employees, 70 of whom hold Ph.D. or M.D. degrees and an additional 35 of whom hold a master's degree or other post-graduate degree. We consider the intellectual capital of our employees to be an essential driver of our business and key to our future prospects.
Patients will be eligible to participate if they have had symptoms for five days or less and have not received a SARS-CoV-2 vaccine or been infected with SARS-CoV-2 within 90 days of enrollment. Patients will receive EDP-235 orally with food at a dose of 200 mg or 400 mg or placebo once daily for five days.
Patients were eligible to participate if they had symptoms for five days or less and had not received a SARS-CoV-2 vaccine or been infected with SARS-CoV-2 within 90 days of enrollment. Patients received either 200 mg or 400 mg EDP-235 or placebo orally with food once daily for five days.
Patients will be eligible to participate if they have had symptoms for five days or less and have not received a SARS-CoV-2 vaccine or been infected with SARS-CoV-2 within 90 days of enrollment. Patients will receive EDP-235 orally with food at a dose of 200 mg or 400 mg or placebo once daily for five days.
Patients were eligible to participate if they had symptoms for five days or less and had not received a SARS-CoV-2 vaccine or been infected with SARS-CoV-2 within 90 days of enrollment. Patients received either 200 mg or 400 mg or EDP-235 or placebo orally with food once daily for five days.
Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Currently, there are two Emergency Use Authorizations of oral antiviral treatments for non-hospitalized, high-risk patients with SARS-CoV-2 infection: Paxlovid, a 3CL protease inhibitor, and Molnupiravir, a polymerase inhibitor.
For SARS-CoV-2, there is one approval (Paxlovid, a 3CL protease inhibitor) and two Emergency Use Authorizations (Molnupiravir, a polymerase inhibitor, and Paxlovid) for oral antiviral treatments for non-hospitalized, high-risk patients with SARS-CoV-2 infection.
This 3-DAA combination was sold as VIEKIRA PAK ® (paritaprevir/ritonavir/ombitasvir/dasabuvir) in the U.S. from December 2014 to December 2018, and as VIEKIRAX ® +EXVIERA ® in most other jurisdictions, for non-cirrhotic patients and those with early stage, or compensated, cirrhosis. These regimens have been almost entirely replaced by MAVYRET/MAVIRET.
This 3-DAA combination was sold as VIEKIRA PAK ® (paritaprevir/ritonavir/ombitasvir/dasabuvir) in the U.S. from December 2014 to December 2018, and as VIEKIRAX ® +EXVIERA ® in most other jurisdictions, for non-cirrhotic patients and those with early stage, or compensated, cirrhosis.
Food and Drug Administration, or FDA, is a potent N-protein inhibitor of activity of both major subgroups of RSV, referred to as RSV-A and RSV-B. It has been investigated in a Phase 2a challenge study and is currently in three ongoing Phase 2 studies, each in a different patient population.
Food and Drug Administration, or FDA, is a potent inhibitor of N-protein activity for both major subgroups of RSV, referred to as RSV-A and RSV-B. It is currently in two ongoing Phase 2 studies, each in a different patient population.
Our goal is to develop a combination therapy approach, including existing approved treatments such as a NUC, with EDP-514 and one or more other mechanisms, which could lead to a functional cure for patients with chronic HBV infection. We are actively pursuing opportunities for internal or external development of this combination approach.
Our goal is to develop a combination therapy approach, including existing approved treatments such as a NUC, with EDP-514 and one or more other mechanisms, which could lead to a functional cure for patients with chronic HBV infection.
Synagis, a prophylactic, monoclonal-antibody-based treatment from AstraZeneca, which is commercialized by AbbVie outside the U.S., is approved for infants considered at high risk for RSV infection; however, studies have found that most young children with RSV infection were previously healthy, and thus would not normally be prescribed prophylactic treatment.
Synagis, a prophylactic, monoclonal antibody-based treatment is approved for infants considered at high risk for RSV infection; however, studies have found that most young children with RSV infection were previously healthy, and thus would not normally be prescribed this prophylactic treatment.
EDP-323 has shown nanomolar potency against RSV-A and RSV-B in vitro and is not expected to have cross-resistance to other classes of inhibitors. EDP-323 has the potential to be used alone or in combination with other RSV mechanisms, such as EDP-938, to broaden the treatment window or addressable patient populations.
EDP-323 is not expected to have cross-resistance to other classes of inhibitors and has the potential to be used alone, or in combination with other RSV mechanisms, to broaden the treatment window or addressable patient populations.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the Affordable Care Act, or ACA, substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the pharmaceutical industry. The comprehensive overhaul extended coverage to approximately 20 million previously uninsured Americans.
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the Affordable Care Act, or ACA, substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the pharmaceutical industry.
Secondary endpoints include additional clinical efficacy measures and antiviral activity compared to placebo, pharmacokinetics, and safety of EDP-938. 8 EDP-323, Our RSV L-Protein Inhibitor: In addition to our N-protein inhibitor, EDP-938, our newest clinical candidate for RSV is EDP-323, a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication.
EDP-323, Our RSV L-Protein Inhibitor: In addition to our N-protein inhibitor, EDP-938, our newest clinical candidate for RSV is EDP-323, a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication.
We are prepared to join forces, where and when appropriate, with collaborators with compounds targeting other mechanisms of action in diseases such as HBV, where there is the potential for better treatments with combination therapies.
We are prepared to join forces, where and when appropriate, with collaborators with compounds targeting other mechanisms of action in diseases such as HBV, where there is the potential for better treatments with combination therapies. We may also choose to collaborate with other companies to accelerate the global clinical development of our product candidates.
FDA sanctions could include 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 us.
FDA and other governmental sanctions could include refusal to approve pending applications, withdrawal of an approval, a clinical hold, enforcement 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.
We are continuing to evaluate EDP-938 in high-risk populations in the following ongoing and planned clinical studies, 3 including pediatric patients, adult hematopoietic stem cell recipients and high-risk adults, all of which have significant unmet need: ▪ RSVPEDs: RSVPEDs is a Phase 2 study in pediatric patients.
Based on the efficacy and growing safety profile of EDP-938, we are continuing to evaluate EDP-938 in high-risk populations in the following ongoing clinical studies, including pediatric patients and high-risk adults, all of which have significant unmet need: ▪ RSVPEDs: RSVPEDs is a Phase 2 study in pediatric patients.
Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are commercializing or pursuing the development of products that target HCV, RSV, SARS-CoV-2, HBV, hMPV and other viral infections or other diseases that we may target in the future.
Competition We are engaged in segments of the pharmaceutical industry that are highly competitive and rapidly changing. Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are commercializing or pursuing the development of products that target HCV, RSV, SARS-CoV-2, HBV and other indications that we may target now or in the future.
Previously manufacturers only needed to offer discounted pricing for a single phase of the prescription drug benefit. Finally, the IRA shifts the majority of liability in the “catastrophic phase”—the phase of the prescription drug benefit that only the costliest of Medicare beneficiaries enter—to the private Part D plans, thereby encouraging them to better manage costs.
Finally, the IRA shifts the majority of liability in the “catastrophic phase”—the phase of the prescription drug benefit that only the costliest of Medicare beneficiaries enter—to the private Part D plans, thereby encouraging them to better manage costs. Previously, the Federal government incurred the vast majority of liability during the catastrophic phase.
Collaboration and License Agreement with AbbVie We entered into a Collaborative Development and License Agreement with Abbott Laboratories in November 2006 to develop and commercialize HCV NS3 and NS3/4A protease inhibitors.
These regimens have been almost entirely replaced by MAVYRET/MAVIRET. 12 Collaboration and License Agreement with AbbVie We entered into a Collaborative Development and License Agreement with Abbott Laboratories in November 2006 to develop and commercialize HCV NS3 and NS3/4A protease inhibitors.
However, to obtain payments under this program, we would be required to sell products to Medicare recipients through private prescription drug plans that contract with the federal government and adhere to certain minimum requirements.
Government payment for some of the costs of prescription drugs may increase demand for any products for which we receive marketing approval. However, to obtain payments under this program, we would be required to sell products to Medicare recipients through private prescription drug plans that contract with the federal government and adhere to certain minimum requirements.
Drug Discovery We have internally discovered all of the compounds in our research and development programs. Our scientists have expertise in the areas of medicinal chemistry, molecular virology, pharmacology, and toxicology with highly developed sets of skills in compound generation, target selection, screening and pharmacology, preclinical development and lead optimization.
Our scientists have expertise in the areas of medicinal chemistry, molecular virology, pharmacology, and toxicology with highly developed sets of skills in compound generation, target selection, screening and pharmacology, preclinical development and lead optimization. We are utilizing these skills and capabilities in our discovery and development of virology and liver disease product candidates.
This randomized, double-blind, placebo-controlled study is designed to evaluate the safety, tolerability and antiviral activity of 200 mg and 400 mg once-daily doses of EDP-235 compared to placebo. The study will enroll approximately 200 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who are not at increased risk for developing severe disease.
This randomized, double-blind, placebo-controlled study evaluated the safety, tolerability, antiviral activity and clinical symptoms of EDP-235 compared to placebo in approximately 230 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who were not at increased risk for developing severe disease.
This randomized, double-blind, placebo-controlled study is designed to evaluate the safety, tolerability and antiviral activity of 200 mg and 400 mg once-daily doses of EDP-235 compared to placebo. The study will enroll approximately 200 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who are not at increased risk for developing severe disease.
This randomized, double-blind, placebo-controlled study evaluated the safety, tolerability, antiviral activity and clinical symptoms of EDP-235 compared to placebo in approximately 230 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who were not at increased risk for developing severe disease.
The FDA also requires, as a condition for accelerated approval, pre-approval of promotional materials, which could adversely impact the timing of the commercial launch or subsequent marketing of the product. 20 The FDA may also allow the use of unapproved medical products, or unapproved uses of approved medical products, under an emergency use authorization, or EUA, to diagnose, treat, or prevent serious or life-threatening diseases or conditions when certain statutory criteria have been met, including that there are no adequate, approved, and available alternatives.
The FDA may also allow the use of unapproved medical products, or unapproved uses of approved medical products, under an emergency use authorization, or EUA, to diagnose, treat, or prevent serious or life-threatening diseases or conditions when certain statutory criteria have been met, including that there are no adequate, approved, and available alternatives.
The primary endpoint of the study is time to resolution of RSV lower respiratory tract disease symptoms as assessed by the Respiratory Infection Intensity and Impact Questionnaire, or RiiQ™, symptom scale through Day 33.
The primary endpoint of the study is time to resolution of RSV lower respiratory tract disease symptoms as assessed by the Respiratory Infection Intensity and Impact Questionnaire, or RiiQ™, symptom scale through Day 33. Secondary endpoints include additional clinical efficacy measures and antiviral activity compared to placebo, pharmacokinetics, and safety of EDP-938.
In addition, a number of companies have Phase 1 or earlier stage HBV programs. If we are not able to develop new products that can compete effectively against our current and future competitors, our business will not grow and our financial condition, operations and stock price will suffer.
If we are not able to develop new products that can compete effectively against our current and future competitors, our business will not grow and our financial condition, operations and stock price will suffer.
EDP-323 has shown nanomolar potency against RSV-A and RSV-B in vitro and is not expected to have cross-resistance to other classes of inhibitors. EDP-323 has the potential to be used alone or in combination with other RSV mechanisms, such as EDP-938, to broaden the treatment window or addressable patient populations.
EDP-323 is not expected to have cross-resistance to other classes of inhibitors and has the potential to be used alone, or in combination with other RSV mechanisms, to broaden the treatment window or addressable patient populations. We completed a Phase 1 clinical study of EDP-323 in June 2023.
We initiated a Phase 1 clinical study of EDP-323 in October 2022. • COVID-19 : We have been leveraging our expertise in developing protease inhibitors to discover new compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses. o EDP-235 – Protease Inhibitor Candidate – Our lead clinical candidate for COVID-19, EDP-235, is an oral inhibitor of coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, which has been granted Fast Track designation by the FDA.
We have paused this research program as we do not plan to advance a third RSV candidate into the clinic as long as EDP-938 and EDP-323 continue to progress into further clinical development. • COVID-19: We have leveraged our expertise in developing protease inhibitors to discover compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses. o EDP-235 – Protease Inhibitor Candidate: EDP-235 is an oral inhibitor of the coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, which has been granted Fast Track designation by the FDA.
In addition to SARS-CoV-2, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future. ▪ Phase 1 Study – In July 2022, we completed a Phase 1 study and reported positive topline results.
In addition to nanomolar activity against all SARS-CoV-2 variants tested to date, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future.
Historically we have had relatively low turnover of employees, but as our headcount has grown in the past three years and the number of biotechnology and pharmaceutical companies in the Boston area has increased dramatically, we have experienced an increase in the number of employees leaving for other opportunities.
Historically we have had relatively low turnover of employees, but as the number of biotechnology and pharmaceutical companies in the Boston area has increased dramatically, we have experienced an increase in the number of employees leaving for other opportunities. Given our financial resources and our track record, we continue to be able to fill the vacated positions.
In addition, we recently announced the initiation of a Phase 1 clinical study of EDP-323, an inhibitor of the RSV L-protein. o EDP-938 - N-protein Inhibitor Candidate: We have studied EDP-938 in two Phase 2 studies that were designed to be proof-of-concept and exploratory to understand better viral response in the context of RSV infection.
We have studied EDP-938 in two Phase 2 studies that were designed to be proof-of-concept and exploratory studies to understand the viral response better in the context of RSV infection.
The annual royalty tiers return to the lowest tier for sales on and after each January 1. 5 Our Strategy Our primary objective is to become a leader in the discovery and development of treatments for viral infections to provide new therapies for patients with unmet medical needs.
Our Strategy Our primary objective is to become a leader in the discovery and development of small molecule drugs with an emphasis on treatments for viral infections and to provide new therapies for patients with unmet medical needs.
The virus is transmitted through contact with the blood or other bodily fluids of an infected person. It is estimated that close to 300 million people worldwide are chronically infected, and 15-40% of patients with chronic HBV infection develop chronic liver disease, including cirrhosis, liver cancer, or liver decompensation.
Our HBV Program Background and Overview of HBV Hepatitis B virus, or HBV, is a potentially life-threatening liver infection. It is estimated that close to 300 million people worldwide are chronically infected, and 15-40% of patients with chronic HBV infection develop chronic liver disease, including cirrhosis, liver cancer, or liver decompensation.
An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. 18 The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until it is completed.
An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
Almost all children are infected at least once before they are 2 years old, and about a half are infected twice, resulting in over 2 million outpatient visits in young children. Hospitalization rates due to RSV are approximately 16 times higher than for influenza among children aged less than 1 year.
Almost all children are infected at least once before they are 2 years old, and about a half are infected twice, resulting in over 2 million outpatient visits in young children.
These predictions are now supported by Phase 1 pharmacokinetic data at a 200mg and 400mg once-daily dose. 10 Clinical studies of EDP-235 consist of the following: • Phase 1 Study : In July 2022, we completed a Phase 1 study of EDP-235 and reported positive topline results.
Clinical studies of EDP-235 consist of the following: • Phase 1 Study : In July 2022, we completed a Phase 1 study of EDP-235 and reported positive topline results.
In order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of pharmaceutical products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state.
Participation under the VHCA requires submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations. 21 In order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of pharmaceutical products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeClinical trials can be delayed for a variety of reasons, including delays related to: • reaching an agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • failure of third-party contractors, such as CROs, or investigators to comply with regulatory requirements; • failure to obtain on a timely basis, or at all, the necessary approvals from regulators or institutional review boards, or IRBs, to commence a clinical trial at a prospective trial site, or their suspension or termination of a clinical trial once commenced; • difficulty in recruiting suitable patients to participate in a trial; 31 • the impact of the COVID-19 pandemic on the ability of CROs to conduct their own operations, resulting in, among other things, delays in recruitment or dosing of our clinical trials; • the broader impact of the COVID-19 pandemic on the incidence of other viruses (e.g., RSV and hMPV), the economic challenges for clinical trial sites and the political and socio-economic stability affecting their operations generally; • seasonality and variations in the incidence of infection year to year (e.g.
Biggest changeMoreover, regulatory and administrative delays, including those caused by the COVID-19 pandemic, for any product candidate in our pipeline may adversely affect our or any future collaborator’s clinical development plans and jeopardize our or any future collaborator’s ability to attain product approval, commence product sales and compete successfully against other therapies. 29 Clinical trials can be delayed for a variety of reasons, including delays related to: • reaching an agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • failure of third-party contractors, such as CROs, or investigators to comply with regulatory requirements; • failure to obtain on a timely basis, or at all, the necessary approvals from regulators or institutional review boards, or IRBs, to commence a clinical trial at a prospective trial site, or their suspension or termination of a clinical trial once commenced; • difficulty in recruiting suitable patients to participate in a trial; • the broader impact of COVID-19 on the incidence of other viruses (e.g., RSV), and the political and socio-economic stability affecting our clinical trial sites generally; • seasonality and variations in the incidence of infection year to year (e.g.
Restrictions under applicable federal, state and foreign healthcare laws and regulations include the following: • the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; • the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • the federal transparency requirements under the Patient Protection and Affordable Care Act of 2010 require manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; • analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical 46 industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures; and • analogous anti-kickback, fraud and abuse and healthcare laws and regulations in foreign countries.
Restrictions under applicable federal, state and foreign healthcare laws and regulations include the following: • the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; • the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program and also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; • the federal transparency requirements under the Patient Protection and Affordable Care Act of 2010 require manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to physician payments and other transfers of value and physician ownership and investment interests; • analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures; and • analogous anti-kickback, fraud and abuse and healthcare laws and regulations in foreign countries.
The degree of market acceptance of any product candidate for which we obtain approval for commercial sale, will depend on a number of factors, including: • the efficacy and safety of treatment regimens containing one of our product candidates, as demonstrated in clinical trials, and the degree to which these regimens represent a clinically meaningful improvement in care as compared with other available therapies; • the clinical indications for which any treatment regimen containing one of our product candidates become approved; • acceptance among physicians, major operators of clinics, payors and patients of any treatment regimen containing one of our product candidates; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the potential and perceived advantages of treatment regimens containing one of our product candidates over alternative treatments; • the cost of treatment of regimens containing one of our product candidates in relation to the cost of alternative treatments; • the availability of adequate reimbursement and pricing by third parties and government authorities and successful negotiation of favorable agreements with payors by us or any collaborator of ours, as well as the impact of any agreements among any of the foregoing and one or more of our competitors limiting access to our product in favor of one or more competitive products; • the continued longevity of any market for which we develop a drug; • the levels of funding provided by government-funded healthcare for treatment of any disease for which we develop a drug; • the relative convenience and ease of administration of any treatment regimen containing one of our product candidates compared to competitive regimens; • the prevalence and severity of adverse side effects, whether involving the use of treatment regimens containing one of our products candidates or similar, competitive treatment regimens; and • the effectiveness of our sales and marketing efforts.
The degree of market acceptance of any product candidate for which we obtain approval for commercial sale, will depend on a number of factors, including: • the efficacy and safety of treatment regimens containing one of our product candidates, as demonstrated in clinical trials, and the degree to which these regimens represent a clinically meaningful improvement in care as compared with other available therapies; • the clinical indications for which any treatment regimen containing one of our product candidates become approved; • acceptance among physicians, major operators of clinics, payors and patients of any treatment regimen containing one of our product candidates; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the potential and perceived advantages of treatment regimens containing one of our product candidates over alternative treatments; 35 • the cost of treatment of regimens containing one of our product candidates in relation to the cost of alternative treatments; • the availability of adequate reimbursement and pricing by third parties and government authorities and successful negotiation of favorable agreements with payors by us or any collaborator of ours, as well as the impact of any agreements among any of the foregoing and one or more of our competitors limiting access to our product in favor of one or more competitive products; • the continued longevity of any market for which we develop a drug; • the levels of funding provided by government-funded healthcare for treatment of any disease for which we develop a drug; • the relative convenience and ease of administration of any treatment regimen containing one of our product candidates compared to competitive regimens; • the prevalence and severity of adverse side effects, whether involving the use of treatment regimens containing one of our products candidates or similar, competitive treatment regimens; and • the effectiveness of our sales and marketing efforts.
RSV) affecting enrollment in clinical trials; • difficulty in having patients complete a trial or return for post-treatment follow-up; • clinical sites deviating from trial protocol or dropping out of a trial; • problems with drug product or drug substance storage and distribution; • having to add new clinical trial sites; • our inability to manufacture, or obtain from third parties, adequate supply of drug product sufficient to complete our preclinical studies and clinical trials; • changes in governmental or regulatory administration; • lack of clear guidance or changes in regulatory requirements, policy and guidelines, including guidelines specifically addressing requirements for the development of treatments for RSV, COVID-19, HBV or hMPV infection; • difficulty in obtaining and maintaining adequate insurance coverage; • program discontinuations or clinical holds for a program of a competitor, which could increase the level of regulatory scrutiny or delay data review or other response times by regulators with respect to one of our programs in the same class as the competitor’s program; or • varying interpretations of data by the FDA, the EMA and similar foreign regulatory agencies.
RSV) affecting enrollment in clinical trials; • difficulty in having patients complete a trial or return for post-treatment follow-up; • clinical sites deviating from trial protocol or dropping out of a trial; • problems with drug product or drug substance storage and distribution; • having to add new clinical trial sites; • our inability to manufacture, or obtain from third parties, adequate supply of drug product sufficient to complete our preclinical studies and clinical trials; • changes in governmental or regulatory administration; • lack of clear guidance or changes in regulatory requirements, policy and guidelines, including guidelines specifically addressing requirements for the development of treatments for RSV, COVID-19 or HBV infection; • difficulty in obtaining and maintaining adequate insurance coverage; • program discontinuations or clinical holds for a program of a competitor, which could increase the level of regulatory scrutiny or delay data review or other response times by regulators with respect to one of our programs in the same class as the competitor’s program; or • varying interpretations of data by the FDA, the EMA and similar foreign regulatory agencies.
For example, to execute our business plan for the development of our independent RSV and HBV programs, we will need to successfully: • execute clinical development of our product candidates and demonstrate acceptable safety and efficacy for them alone or in combination with other drugs or drug candidates; • obtain required regulatory approvals for the development and commercialization of our product candidates; • develop and maintain any future collaborations we may enter into for any of these programs; • obtain and maintain patent protection for our product candidates and freedom from infringement of intellectual property of others; • establish acceptable commercial manufacturing arrangements with third-party manufacturers; • build and maintain robust sales, distribution and marketing capabilities, either independently or in collaboration with future collaborators; 29 • gain market acceptance for our product candidates among physicians, payors and patients; and • manage our spending as costs and expenses increase due to clinical trials, regulatory approvals and commercialization.
For example, to execute our business plan for the development of our independent RSV and HBV programs, we will need to successfully: • execute clinical development of our product candidates and demonstrate acceptable safety and efficacy for them alone or in combination with other drugs or drug candidates; • obtain required regulatory approvals for the development and commercialization of our product candidates; • develop and maintain any future collaborations we may enter into for any of these programs; • obtain and maintain patent protection for our product candidates and freedom from infringement of intellectual property of others; • establish acceptable commercial manufacturing arrangements with third-party manufacturers; • build and maintain robust sales, distribution and marketing capabilities, either independently or in collaboration with future collaborators; • gain market acceptance for our product candidates among physicians, payors and patients; and • manage our spending as costs and expenses increase due to clinical trials, regulatory approvals and commercialization.
Our research programs may initially show promise in identifying additional potential product candidates, yet fail to yield product candidates for clinical development or commercialization for many reasons, including the following: • the research methodology used may not be successful in identifying additional potential product candidates; • competitors may develop alternatives that render our product candidates less commercially viable or obsolete; • competitors may obtain intellectual property protection that effectively prevents us from developing a product candidate; • a product candidate may, on further study, be shown not to be an effective treatment in humans or to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; and • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all.
Our research programs may 28 initially show promise in identifying additional potential product candidates, yet fail to yield product candidates for clinical development or commercialization for many reasons, including the following: • the research methodology used may not be successful in identifying additional potential product candidates; • competitors may develop alternatives that render our product candidates less commercially viable or obsolete; • competitors may obtain intellectual property protection that effectively prevents us from developing a product candidate; • a product candidate may, on further study, be shown not to be an effective treatment in humans or to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; and • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all.
Even though the results of preclinical studies and clinical trials that we have conducted or may conduct in the future may support further development of one or more of our product candidates, we may delay, suspend or terminate the future development of a 35 product candidate at any time for strategic, business, financial or other reasons, including the determination or belief that the emerging profile of the product candidate is such that it may not receive regulatory approvals in key markets, gain meaningful market acceptance, otherwise provide any competitive advantages in its intended indication or market or generate a significant return to stockholders.
Even though the results of preclinical studies and clinical trials that we have conducted or may conduct in the future may support further development of one or more of our product candidates, we may delay, suspend or terminate the future development of a product candidate at any time for strategic, business, financial or other reasons, including the determination or belief that the emerging profile of the product candidate is such that it may not receive regulatory approvals in key markets, gain meaningful market acceptance, otherwise provide any competitive advantages in its intended indication or market or generate a significant return to stockholders.
The following examples are illustrative: • others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; • we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or may in the future exclusively license, which could result in the patent applications not issuing or being invalidated after issuing; • we might not have been the first to file patent applications covering certain of our inventions, which could result in the patent applications not issuing or being invalidated after issuing; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; we may obtain patents for certain compounds many years before we obtain marketing approval for products containing such compounds, and because patents have a limited life, which may begin to run prior to the commercial sale of the related product, the commercial value of our patents may be limited; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may fail to develop additional proprietary technologies that are patentable; • the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States, or we may fail to apply for or obtain adequate intellectual property protection in all the jurisdictions in which we operate; and 43 • the patents of others may have an adverse effect on our business, for example, by preventing us from marketing one or more of our product candidates for one or more indications.
The following examples are illustrative: 40 • others may be able to make compounds that are similar to our product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; • we might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or may in the future exclusively license, which could result in the patent applications not issuing or being invalidated after issuing; • we might not have been the first to file patent applications covering certain of our inventions, which could result in the patent applications not issuing or being invalidated after issuing; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own may not provide us with any competitive advantages, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; we may obtain patents for certain compounds many years before we obtain marketing approval for products containing such compounds, and because patents have a limited life, which may begin to run prior to the commercial sale of the related product, the commercial value of our patents may be limited; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may fail to develop additional proprietary technologies that are patentable; • the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the United States, or we may fail to apply for or obtain adequate intellectual property protection in all the jurisdictions in which we operate; and • the patents of others may have an adverse effect on our business, for example, by preventing us from marketing one or more of our product candidates for one or more indications.
Despite the implementation of security measures, our recovery systems, security protocols, network protection mechanisms, and other security measures and those of our current or future CROs or other contractors and consultants are vulnerable to system failure, interruption, compromise, or damage from data corruption, breakdown, computer hacking, malicious code (such as computer viruses or worms), fraudulent activity, employee misconduct, theft, or error, denial-of-service attacks, telecommunication, and electrical failures, natural disasters, public health epidemics, such as the COVID-19 pandemic, cyber-attacks by sophisticated nation-state and nation-state supported actors, or other system attacks, disruption, or accidents.
Despite the implementation of security measures, our recovery systems, security protocols, network protection mechanisms, and other security measures and those of our current or future CROs or other contractors and consultants are vulnerable to system failure, interruption, compromise, or damage from data corruption, breakdown, 47 computer hacking, malicious code (such as computer viruses or worms), fraudulent activity, employee misconduct, theft, or error, denial-of-service attacks, telecommunication, and electrical failures, natural disasters, public health epidemics, such as the COVID-19 pandemic, cyber-attacks by sophisticated nation-state and nation-state supported actors, or other system attacks, disruption, or accidents.
For product candidates for which we decide to perform sales, marketing and distribution functions ourselves, we could face a number of additional risks, including: • our inability to recruit and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any products; 37 • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
For product candidates for which we decide to perform sales, marketing and distribution functions ourselves, we could face a number of additional risks, including: • our inability to recruit and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
AbbVie’s inability to continue to obtain coverage and profitable payment rates from both government-funded and private payors for MAVYRET/MAVIRET, or our inability 36 to obtain the same for any product candidate that we develop, could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
AbbVie’s inability to continue to obtain coverage and profitable payment rates from both government-funded and private payors for MAVYRET/MAVIRET, or our inability to obtain the same for any product candidate that we develop, could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
We and AbbVie face substantial competition in the markets for HCV drugs, and there are many companies developing potential therapies for RSV, SARS-CoV-2, HBV and hMPV which may result in others discovering, developing or commercializing products before we do or doing so more successfully than we do. The pharmaceutical and biotechnology industries are intensely competitive and rapidly changing.
We and AbbVie face substantial competition in the markets for HCV drugs, and there are many companies developing potential therapies for RSV, SARS-CoV-2, and HBV which may result in others discovering, developing or commercializing products before we do or doing so more successfully than we do. The pharmaceutical and biotechnology industries are intensely competitive and rapidly changing.
We do not know, however, if we have adequate levels of coverage for any liability we may incur, or whether we will always be able to continue to maintain such insurance. Any significant uninsured liability may require us to make 49 substantial payments, which would adversely affect our financial position and results of operations.
We do not know, however, if we have adequate levels of coverage for any liability we may incur, or whether we will always be able to continue to maintain such insurance. Any significant uninsured liability may require us to make substantial payments, which would adversely affect our financial position and results of operations.
Many of our competitors have substantially greater commercial infrastructure and greater financial, technical and personnel resources than we have, as well as drug candidates in late-stage clinical development. In all the disease areas currently under the focus of our research and development efforts, there are other companies with product candidates that are more advanced than ours.
Many of our competitors have substantially greater commercial infrastructure and greater financial, technical and personnel resources than we have, as well as drug candidates in late-stage clinical development. In all the disease areas currently in the focus of our research and development efforts, there are other companies with product candidates that are more advanced than ours.
Furthermore, negative posts or comments about us or our product candidates in social media could seriously damage our reputation, brand image, and goodwill. Any of these events could have a material adverse effect on our business, prospects, operating results, and financial condition and could adversely affect the price of our common stock. 50
Furthermore, negative posts or comments about us or our product candidates in social media could seriously damage our reputation, brand image, and goodwill. Any of these events could have a material adverse effect on our business, prospects, operating results, and financial condition and could adversely affect the price of our common stock.
If AbbVie is unable to maintain sales of this regimen at or above current levels of sales, our royalty revenues will be adversely affected. AbbVie’s MAVYRET/MAVIRET regimen continues to be the leading HCV treatment in the U.S. and several market geographies in developed countries where it is approved.
If AbbVie is unable to maintain sales of this regimen at or above current levels of sales, our royalty revenues will be adversely affected. AbbVie’s MAVYRET/MAVIRET regimen continues to be a leading HCV treatment in the U.S. and several market geographies in developed countries where it is approved.
Ultimately, we could be prevented from commercializing a product, or be forced, by court order or otherwise, to cease some or all aspects of our business operations, if, as a result of actual or threatened patent or other intellectual property claims, we are unable to enter into licenses on acceptable terms.
Ultimately, we could be prevented from commercializing a product, or be forced, by court order or otherwise, to cease some or all aspects of our business operations, if, as a result of actual or threatened patent or other intellectual property claims, we are unable to enter into licenses on 39 acceptable terms.
While there are antiviral medications prescribed for HBV that can suppress HBV DNA, they generally have low cure rates, resulting in the need for lifelong treatment. Many companies are seeking to develop new HBV drugs that alone or in combination with other mechanisms could lead to a 27 functional cure for HBV.
While there are antiviral medications prescribed for HBV that can suppress HBV DNA, they generally have low cure rates, resulting in the need for lifelong treatment. Many companies are seeking to develop new HBV drugs that alone or in combination with other mechanisms could lead to a functional cure for HBV.
In addition, these potential severance payments may discourage or prevent third parties from seeking a business combination with us. 48 Because we do not anticipate paying cash dividends on our common stock for the foreseeable future, investors in our common stock may never receive a return on their investment.
In addition, these potential severance payments may discourage or prevent third parties from seeking a business combination with us. Because we do not anticipate paying cash dividends on our common stock for the foreseeable future, investors in our common stock may never receive a return on their investment.
If we are unable to arrange for such a third-party manufacturing source for any of our product candidates, or fail to do so on commercially reasonable terms, we may not be able to successfully produce, develop and market one or more of our product candidates, or we may be delayed in doing so.
If we are unable to arrange for such a third-party manufacturing source for any of our product candidates, or fail to do so on commercially reasonable 36 terms, we may not be able to successfully produce, develop and market one or more of our product candidates, or we may be delayed in doing so.
In our RSV program, we are developing inhibitors of the N-protein and L-protein. No inhibitor of the RSV N- or L-protein has progressed beyond a Phase 2 clinical trial, so we are not yet able to assess the potential liabilities of an N-protein or L-protein inhibitor in large scale studies or in the general population.
In our RSV program, we are developing inhibitors of the N-protein and L-protein. No inhibitor of the RSV N- or L-protein has progressed beyond a Phase 2 clinical trial, so we are not yet able to assess the potential liabilities of an N-protein or L-protein inhibitor 30 in large scale studies or in the general population.
In addition, several states have not implemented the provisions of the ACA that involve the expansion of Medicaid-eligibility for low-income adults. While the United States Supreme Court recently rejected the latest challenge to the constitutionality of the ACA, it is possible that other legislative efforts may seek to modify it.
In addition, several states have not implemented the provisions of the ACA that 33 involve the expansion of Medicaid-eligibility for low-income adults. While the United States Supreme Court recently rejected the latest challenge to the constitutionality of the ACA, it is possible that other legislative efforts may seek to modify it.
The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the United States government-funded 41 technology, or because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give preference to United States industry.
The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the United States government-funded technology, or because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations or to give preference to United States industry.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval.
Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the 43 business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval.
Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are commercializing or pursuing the development of products that target HCV, RSV, SARS-CoV-2, HBV and hMPV and other viral infections or diseases that we may target in the future.
Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are commercializing or pursuing the development of products that target HCV, RSV, SARS-CoV-2 and HBV and other viral infections or diseases that we may target in the future.
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 candidate to other available therapies. Some countries require approval of the sale price of a drug before it can be marketed.
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 candidate to other available therapies. 34 Some countries require approval of the sale price of a drug before it can be marketed.
In many foreign countries, including those in the European Union, a product candidate must be approved for 34 reimbursement before it can be approved for sale in that country. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates and our business.
In many foreign countries, including those in the European Union, a product candidate must be approved for reimbursement before it can be approved for sale in that country. Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates and our business.
While commercialization of this regimen is exclusively in AbbVie’s control without any 26 required input from us, we believe it is possible that prices will decline further due to payors obtaining additional discounts or competitive market dynamics.
While commercialization of this regimen is exclusively in AbbVie’s control without any required input from us, we believe it is possible that prices will decline further due to payors obtaining additional discounts or competitive market dynamics.
The results of preclinical studies and these early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, if any. In addition, results of 33 Phase 3 clinical trials in one or more ethnic groups are not necessarily indicative of results in other ethnic groups.
The results of preclinical studies and these early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, if any. In addition, results of Phase 3 clinical trials in one or more ethnic groups are not necessarily indicative of results in other ethnic groups.
The market price for our common stock may be influenced by many factors, including: • results from or delays of clinical trials of our product candidates, as well as results of regulatory reviews relating to the approval of our product candidates; • actions by AbbVie regarding the MAVYRET/MAVIRET regimen, including announcements regarding regulatory or commercial developments; • market expectations about and response to the levels of sales or scripts achieved by, or the announced prices or discounts for, AbbVie’s MAVYRET/MAVIRET regimen or competitive HCV drugs; • failure of AbbVie’s MAVYRET/MAVIRET regimen to maintain its sales levels; • the results of our efforts to discover or develop additional product candidates; • new products, product candidates or new uses for existing products or technologies introduced or announced by our competitors and the timing of these introductions or announcements; • our dependence on third parties, including our collaborators, CROs, manufacturers, clinical trial sponsors and clinical investigators; • regulatory, political or legal developments in the United States or other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key scientific or management personnel; • our ability to commercialize our product candidates we develop independently, if approved; • the level of expenses related to any of our product candidates or clinical development programs; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • period-to-period variations in our financial results or those of companies that are perceived to be similar to us; • sales of common stock by us or our stockholders in the future, as well as the overall trading volume of our common stock; • changes in the structure of healthcare payment systems or other actions that affect the effective reimbursement rates for treatment regimens containing our products or for competitive regimens; 47 • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • results from or delays of clinical trials of our product candidates, as well as results of regulatory reviews relating to the approval of our product candidates; • the results of our efforts to discover or develop additional product candidates; • new products, product candidates or new uses for existing products or technologies introduced or announced by our competitors and the timing of these introductions or announcements; 44 • market expectations about and response to the levels of sales or scripts achieved by, or the announced prices or discounts for, AbbVie’s MAVYRET/MAVIRET regimen or competitive HCV drugs; • failure of AbbVie’s MAVYRET/MAVIRET regimen to maintain its sales levels; • our dependence on third parties, including our collaborators, CROs, manufacturers, clinical trial sponsors and clinical investigators; • regulatory, political or legal developments in the United States or other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key scientific or management personnel; • our ability to commercialize our product candidates we develop independently, if approved; • the level of expenses related to any of our product candidates or clinical development programs; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • period-to-period variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the pharmaceutical and biotechnology sectors; • sales of common stock by us or our stockholders in the future, as well as the overall trading volume of our common stock; • changes in the structure of healthcare payment systems or other actions that affect the effective reimbursement rates for treatment regimens containing our products or for competitive regimens; • general economic, industry and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies; and • the other factors described in this “Risk Factors” section.
Such suppliers may not sell these materials to our manufacturers at the times we need them or on 39 commercially reasonable terms. Moreover, we currently do not have any agreements for the production of these materials.
Such suppliers may not sell these materials to our manufacturers at the times we need them or on commercially reasonable terms. Moreover, we currently do not have any agreements for the production of these materials.
Any recall of the manufacturing lots or similar action regarding our API used in clinical trials could delay the trials or detract from the integrity of the trial data and its potential use in future regulatory filings.
Any recall of the manufacturing lots or similar action regarding our API used in clinical trials could delay the trials or detract from the integrity 37 of the trial data and its potential use in future regulatory filings.
Grounds for a validity challenge could be an alleged 42 failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement.
Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement.
If these additional shares of common stock are sold, or it is perceived that they will be sold, in the public market, the trading price of our common stock could decline. If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
If these additional shares of common stock are sold, or it is perceived that they will be sold, in the public market, the trading price of our common stock could decline. If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research about our business, our stock price and trading volume would likely decline.
EDP-938, EDP-235, EDP-514, and EDP-323 and any other product candidate that we may develop in the future, whether as part of a combination therapy or as a monotherapy, are subject to market acceptance among physicians, healthcare payors, patients and the medical community.
EDP-938 and EDP-323 and any other product candidate that we may develop in the future, whether as part of a combination therapy or as a monotherapy, are subject to market acceptance among physicians, healthcare payors, patients and the medical community.
A significant disruption in the operation of those researchers or manufacturers, or a trade war, political unrest or an epidemic in China, such as the COVID-19 pandemic, could materially adversely affect our business, financial condition and results of operations.
A significant disruption in the operation of those researchers or manufacturers, or a trade war, geopolitical unrest or an epidemic in China, such as the COVID-19 pandemic, could materially adversely affect our business, financial condition and results of operations.
Furthermore, since these researchers and manufacturers are located in China, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the United States or Chinese governments, political unrest or unstable economic conditions in China.
Furthermore, since these researchers and manufacturers are located in China, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the United States or Chinese governments, geopolitical unrest or unstable economic conditions in China.
In addition, as of September 30, 2022, we had 4.0 million and 0.4 million shares of common stock that are subject to outstanding options and restricted stock unit awards, respectively, under our outstanding equity plans eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, and Rule 144 under the Securities Act.
In addition, as of September 30, 2023, we had 4.4 million and 0.6 million shares of common stock that are subject to outstanding options and restricted stock unit awards, respectively, under our outstanding equity plans eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, and Rule 144 under the Securities Act.
For example, either of these risks could be triggered by an epidemic such as the outbreak of COVID-19 in the Wuhan region of China or the continuing series of so-called “lock-downs” in China when strict quarantine requirements are imposed on large population areas in response to new incidents of COVID infection.
For example, either of these risks could be triggered by an epidemic such as the outbreak of COVID-19 in the Wuhan region of China or the series of so-called “lock-downs” in China when strict quarantine requirements were imposed on large population areas in response to new incidents of COVID infection.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including reliance on the third party for regulatory compliance and quality control and assurance, volume production, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control (including a failure to synthesize and manufacture our product candidates in accordance with our product specifications), shutdowns of manufacturing sites or other supply chain constraints resulting from the COVID-19 pandemic, and the possibility of termination or nonrenewal of the agreement by the third party at a time that is costly or damaging to us.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including reliance on the third party for regulatory compliance and quality control and assurance, volume production, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control (including a failure to synthesize and manufacture our product candidates in accordance with our product specifications), shutdowns of manufacturing sites or other supply chain constraints, and the possibility of termination or nonrenewal of the agreement by the third party at a time that is costly or damaging to us.
Luly, Or, or Rottinghaus has informed us to date that he expects to retire or resign in the near future, the loss of the services of any of these individuals or one or more of our other members of senior management could delay or prevent the successful development of our product candidates.
Although none of Drs. Luly, Or, or Rottinghaus has informed us to date that he expects to retire or resign in the near future, the loss of the services of any of these individuals or one or more of our other members of senior management could delay or prevent the successful development of our product candidates.
Our future capital requirements depend on many factors, including: • the amount of royalties generated from MAVYRET/MAVIRET sales under our existing collaboration with AbbVie, including any continuing impact of the COVID-19 pandemic on the number of treated HCV patients; • the number and characteristics of our research and development programs; • the scope, progress, results and costs of researching and developing our existing product candidates on our own, including conducting advanced clinical trials; • our ability to establish new collaborations, licensing or other arrangements, if any, and the financial terms of such arrangements; • delays and additional expense in our clinical trials as a result of the COVID-19 pandemic; • the cost of manufacturing our product candidates for clinical development and any products we successfully commercialize independently; • opportunities to in-license or otherwise acquire new technologies, therapeutic candidates and therapies ; • costs associated with prosecuting our patent infringement suit regarding the use of a coronavirus 3CL protease inhibitor in Paxlovid, Pfizer’s antiviral treatment for COVID-19; • the timing of, and the costs involved in, obtaining regulatory approvals for any product candidates we develop independently; • the cost of commercialization activities, if any, of any product candidates we develop independently that are approved for sale, including marketing, sales and distribution costs; • the timing and amount of any sales of our product candidates, if any, or royalties thereon ; • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including any litigation costs and the outcomes of any such litigation ; and • potential fluctuations in foreign currency exchange rates.
Our future capital requirements depend on many factors, including: • the number and characteristics of our research and development programs; • the scope, progress, results and costs of researching and developing our product candidates on our own, including conducting advanced clinical trials; • our ability to establish new collaborations, licensing or other arrangements, if any, and the financial terms of such arrangements; • the amount of our retained portion of royalties generated from MAVYRET/MAVIRET sales under our existing collaboration with AbbVie; • delays and additional expenses in our clinical trials; • the cost of manufacturing our product candidates for clinical development and any products we successfully commercialize independently; • opportunities to in-license or otherwise acquire new technologies and therapeutic candidates ; • costs associated with prosecuting our patent infringement suit regarding use of a coronavirus 3CL protease inhibitor in Paxlovid, Pfizer’s antiviral treatment for COVID-19; • the timing of, and the costs involved in, obtaining regulatory approvals for any product candidates we develop independently; • the cost of commercialization activities, if any, of any product candidates we develop independently that are approved for sale, including marketing, sales and distribution costs; • the timing and amount of any sales of our product candidates, if any, or royalties thereon ; • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including any litigation costs and the outcomes of any such litigation ; and • potential fluctuations in foreign currency exchange rates.
We will require substantial additional funding to achieve our goals. A failure to obtain this funding when needed could force us to delay, limit, reduce or terminate some or all of our product development efforts. We will continue to expend substantial resources discovering and developing our proprietary product candidates.
A failure to obtain this funding when needed could force us to delay, limit, reduce or terminate some or all of our product development efforts. We will continue to expend substantial resources discovering and developing our proprietary product candidates.
The same could occur in our patent infringement suit recently brought against Pfizer regarding Paxlovid, its antiviral treatment for COVID-19, even though our ‘953 patent at issue does not cover EDP-235 or our other discovery efforts targeted at SARS-CoV-2. In patent litigation in the United States and in some other jurisdictions, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
The same could occur in our patent infringement suit recently brought against Pfizer regarding Paxlovid, its antiviral treatment for COVID-19, even though our ‘953 patent at issue does not cover EDP-235. In patent litigation in the United States and in some other jurisdictions, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
Currently, there are two Emergency Use Authorizations of oral antiviral treatments for non-hospitalized, high-risk patients with SARS-CoV-2 infection: Paxlovid, a 3CL protease inhibitor, and Molnupiravir, a polymerase inhibitor.
Currently, there are two Emergency Use Authorizations of oral antiviral treatments for non-hospitalized, high-risk patients with SARS-CoV-2 infection: PAXLOVID™, a 3CL protease inhibitor (nirmatrelvir) boosted with ritonavir, and LAGEVRIO™ (molnupiravir), a polymerase inhibitor.
As our operations expand, we expect that we will need to manage additional relationships with various strategic partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management.
As our pipeline expands, we expect that we will need to manage additional relationships with various strategic partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management.
If we are not successful in developing EDP-938, EDP-235, EDP-514 and/or EDP-323, or in discovering further product candidates, our ability to expand our business and achieve our strategic objectives will be impaired. Much of our internal research is at preclinical stages.
If we are not successful in developing EDP-938, EDP-323, or in obtaining a partner to advance EDP-235, or in discovering further product candidates, our ability to expand our business and achieve our strategic objectives will be impaired. Much of our internal research is at preclinical stages.
To date, our contract manufacturers in China, which are not located in the Wuhan region, have avoided any material delays in their ability to deliver API and other services through extraordinary efforts, including temporarily housing staff in the manufacturing facility.
Our contract manufacturers in China, which are not located in the Wuhan region, managed to avoid any material delays in their ability to deliver API and other services through extraordinary efforts, including temporarily housing staff in the manufacturing facility.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. As of September 30, 2022 we had 20.8 million shares of common stock outstanding.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. As of September 30, 2023 we had 21.1 million shares of common stock outstanding.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our product candidates or any resulting products; • injury to our reputation; • withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • loss of revenue; • the inability to commercialize our product candidates; and • a decline in our stock price.
There is also risk that third parties we have agreed to indemnify could incur liability. 42 Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our product candidates or any resulting products; • injury to our reputation; • withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • loss of revenue; • the inability to commercialize our product candidates; and • a decline in our stock price.
These expenditures will include costs associated with research and development, preclinical manufacturing of product candidates, conducting preclinical 28 experiments and clinical trials and obtaining regulatory approvals, as well as commercializing any products later approved for sale.
These expenditures will exceed our royalty revenues from our AbbVie collaboration and will include costs associated with research and development, preclinical manufacturing of product candidates, conducting preclinical experiments and clinical trials and obtaining regulatory approvals, as well as commercializing any products later approved for sale.
If we do not apply for patent protection prior to such publication, or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized, which could adversely affect our business. 44 Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
If we do not apply for patent protection prior to such publication, or if we cannot otherwise maintain the confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection or to protect our trade secret information may be jeopardized, which could adversely affect our business.
Our executive officers are parties to employment agreements that provide for aggregate cash payments of up to approximately $6.0 million for severance and other non-equity-based benefits in the event of a termination of employment in connection with a change of control of our company.
Our executive officers are parties to employment agreements that provide for aggregate cash payments of up to approximately $6.2 million for severance and other non-equity-based benefits in the event of a termination of employment in connection with a change of control of our company. The payment of these severance benefits could harm our company’s financial condition and results.
An adverse outcome in such litigation or proceedings may expose us or any future strategic partners to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available on commercially acceptable terms, if at all, each of which could have a material adverse effect on our business.
An adverse outcome in such litigation or proceedings may expose us or any future strategic partners to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available on commercially acceptable terms, if at all, each of which could have a material adverse effect on our business. 41 Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. There is also risk that third parties we have agreed to indemnify could incur liability.
If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources.
The stock market in general and the market for biopharmaceutical companies, and for those developing potential therapies for viral infections and liver diseases in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies, which in some cases has been exacerbated by the COVID-19 pandemic.
The stock market in general and the market for biopharmaceutical companies, and for those developing potential therapies for viral infections in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
If we are not able to maintain or secure agreements with such third parties on acceptable terms, if these third parties do not perform their services as required, or if these third parties fail to timely transfer any regulatory information held by them to us, we may not be able to obtain regulatory approval for, or commercialize, our product candidates.
If we are not able to maintain or secure agreements with such third parties on acceptable terms, if these third parties do not perform their services as required, if geopolitical unrest disrupts activity at a number of our clinical trial sites, or if these third parties fail to timely transfer any regulatory information held by them to us, we may not be able to conduct our clinical trials in a timely manner, obtain regulatory approval for, or commercialize, our product candidates.
In addition, our ability to apply our proprietary technologies to develop proprietary compounds will depend on our ability to establish and maintain licensing arrangements or other collaborative arrangements with the holders of proprietary rights to such compounds. We may not be able to establish such arrangements on favorable terms or at all, and our collaborative arrangements may not be successful.
In addition, our ability to apply our proprietary technologies to develop proprietary compounds will depend on our ability to establish and maintain licensing arrangements or other collaborative arrangements with the holders of proprietary rights to such compounds.
The United States Supreme Court has ruled on several patent cases in recent years, and in certain circumstances has narrowed the scope of patent protection available or otherwise weakened the rights of patent owners.
For example, Congress recently passed patent reform legislation, and may pass patent reform legislation in the future. The United States Supreme Court has ruled on several patent cases in recent years, and in certain circumstances has narrowed the scope of patent protection available or otherwise weakened the rights of patent owners.
Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information. In addition to patents, we rely on trade secrets, technical know-how and proprietary information concerning our business strategy and product candidates to protect our competitive position in the field of each of our antiviral product candidates and our NASH compounds.
In addition to patents, we rely on trade secrets, technical know-how and proprietary information concerning our business strategy and product candidates to protect our competitive position in the field of each of our antiviral product candidates and our NASH compounds.
To date, COVID-19 vaccines, therapeutic antibodies and other therapeutics that have demonstrated positive results in clinical trials have moved rapidly through the FDA regulatory review and EUA process, as well as the review and authorization process in a number of other jurisdictions, including the EU.
Initial COVID-19 vaccines, therapeutic antibodies and other therapeutics that demonstrated positive results in clinical trials have moved rapidly through the FDA regulatory review and emergency use authorization, or EUA, process, as well as the review and authorization process in a number of other jurisdictions, including the EU when there were no adequate, approved, and available alternatives.
If AbbVie is not able to compete effectively against its competitors in HCV, our business will not grow and our financial condition, operations and stock price will suffer. Similarly, RSV, COVID-19, HBV and hMPV, represent competitive therapeutic areas.
If AbbVie is not able to compete effectively against its competitors in HCV, our business will not grow and our financial condition, operations and stock price will suffer.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. In addition, if too few securities or industry analysts cover our company, the trading price for our stock would likely be negatively impacted.
The speed at which all parties are acting to create and test many therapeutics for COVID-19 is unusual, while evolving or changing plans or priorities within the FDA or the regulatory authorities in other jurisdictions, including changes based on new data regarding potential therapeutics of others, and new variants of the virus, may significantly affect the regulatory timeline for further authorizations or approvals for therapeutics such as EDP-235.
Evolving priorities within the FDA or the regulatory authorities in other jurisdictions, including changes based on new data regarding potential therapeutics of others, and new variants of the virus, may significantly affect the regulatory timeline for further authorizations or approvals for therapeutics such as EDP-235.
Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which they might otherwise receive a premium for their shares.
Provisions in our corporate charter and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which they might otherwise receive a premium for their shares. 45 These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.
Additionally, there are companies developing oral direct acting antivirals for SARS-CoV-2 that are currently in Phase 2 or 3 studies including Shionogi, Toyama, Atea, Pardes, SyneuRx and Todos as well as additional compounds in Phase 1 studies.
Additionally, there are companies developing oral direct acting antivirals for SARS-CoV-2 27 that are currently in global Phase 3 studies include Shionogi, Atea, and Gilead (an oral formulation of remdesivir), as well as additional compounds in Phase 1 studies.
Our commercial success will depend, in large part, on our ability to obtain and maintain patent and other intellectual property protection with respect to our product candidates.
We could be unsuccessful in obtaining or maintaining adequate patent protection for one or more of our product candidates. Our commercial success will depend, in large part, on our ability to obtain and maintain patent and other intellectual property protection with respect to our product candidates.
Any such change in formulary coverage, discounts or rebates or reimbursement for MAVYRET/MAVIRET would negatively affect the demand for this regimen and our royalty revenue derived from its sales.
Any such change in formulary coverage, discounts or rebates or reimbursement for MAVYRET/MAVIRET would negatively affect the demand for this regimen and our royalty revenue derived from its sales. In addition, AbbVie has the right to make decisions regarding the commercialization of licensed products without consulting us.
If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development activities for one or more of our product candidates.
If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development activities for one or more of our product candidates. 26 Our revenues are dependent upon royalty revenues derived from AbbVie’s net sales of its MAVYRET/MAVIRET regimen for HCV, which includes our protease inhibitor, glecaprevir.
If treatment regimens containing one of our product candidates are approved and then fail to achieve market acceptance, we may not be able to generate significant additional revenue.
If treatment regimens containing one of our product candidates are approved and then fail to achieve market acceptance, we may not be able to generate significant additional revenue. Further, if new, more favorably received therapies are introduced after any such regimen achieves market acceptance, then we may not be able to maintain that market acceptance over time.
In most foreign countries, particularly in the European Union and Japan, prescription drug pricing and/or reimbursement is subject to governmental control. In those countries that impose price controls, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
In those countries that impose price controls, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
If those analysts are unable to predict accurately the demand and net sales of AbbVie’s HCV regimens, that could result in our reported revenues and earnings being lower than the so-called “market consensus” of our projected revenues, which could negatively affect our stock price.
For example, when those analysts are unable to predict accurately the demand and net sales of AbbVie’s HCV regimens, our reported revenues have often been lower than the so-called “market consensus” of our projected revenues, which has at times negatively affected our stock price.
In addition, any new product that competes with an approved product typically must demonstrate compelling advantages in efficacy, convenience, tolerability or safety, or some combination of these factors, to gain regulatory approvals, overcome price competition and be commercially successful. We expect AbbVie’s MAVYRET/MAVIRET to continue to face intense competition due to existing approved products in the HCV market.
In addition, any new product that competes with an approved product typically must demonstrate compelling advantages in efficacy, convenience, tolerability or safety, or some combination of these factors, to gain regulatory approvals, overcome price competition and be commercially successful. RSV, COVID-19 and HBV represent competitive therapeutic areas.
As we expand our research efforts and seek to advance our product candidates through clinical trials, we will need to expand our development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to obtain these capabilities.
We may not be able to attract and retain quality personnel on acceptable terms. We may encounter difficulties expanding our operations successfully to advance our product candidates. As we seek to advance our product candidates through clinical trials, we will need to expand our development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to obtain these capabilities.
As is the case with many other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining, maintaining and enforcing patents in the biopharmaceutical industry involves both technological complexity and legal complexity. Therefore, the process of obtaining, maintaining and enforcing biopharmaceutical patents is costly, time-consuming and inherently uncertain.
Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our products. As is the case with many other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining, maintaining and enforcing patents in the biopharmaceutical industry involves both technological complexity and legal complexity.
Any of these changes could make the results of planned clinical trials or other future clinical trials we may initiate less predictable and could cause our product candidates to perform differently, which could delay completion of clinical trials, delay approval of our product candidates and/or jeopardize our ability to commence product sales and generate revenues.
Any of these changes could make the results of planned clinical trials or other future clinical trials we may initiate less predictable and could cause our product candidates to perform differently, which could delay completion of clinical trials, delay approval of our product candidates and/or jeopardize our ability to commence product sales and generate revenues. 31 The regulatory approval processes of the FDA, the EMA and other comparable foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain timely regulatory approval for our product candidates, our business will be substantially harmed.
In addition, recent legislative and judicial developments in the United States and elsewhere have in some cases narrowed the protection afforded to patent owners, made patents more difficult to obtain, or increased the uncertainty regarding the ability to obtain, maintain and enforce patents. For example, Congress recently passed patent reform legislation, and may pass patent reform legislation in the future.
Therefore, the process of obtaining, maintaining and enforcing biopharmaceutical patents is costly, time-consuming and inherently uncertain. In addition, recent legislative and judicial developments in the United States and elsewhere have in some cases narrowed the protection afforded to patent owners, made patents more difficult to obtain, or increased the uncertainty regarding the ability to obtain, maintain and enforce patents.
In addition, the principal target populations in RSV, namely infants, the elderly, and the immunocompromised, represent sensitive patient populations that could be more prone to adverse effects of therapy. In our SARS-CoV-2 program, we have designed EDP-235 as a 3CL protease inhibitor specifically for the SARS-CoV-2 virus.
In addition, the principal target populations in RSV, namely infants, the elderly, and the immunocompromised, represent sensitive patient populations that could be more prone to adverse effects of therapy.
From June 30, 2016 through September 30, 2022, the daily closing price of our common stock on the NASDAQ Global Select Market has ranged from $21.00 to $126.37.
From October 1, 2018 through September 30, 2023, the daily closing price of our common stock on the NASDAQ Global Select Market has ranged from $11.09 to $105.66.
We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. 45 Our internal computer systems, or those of our collaborator, CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of development programs for our product candidates.
We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease approximately 38,000 square feet of additional office space located in Watertown, Massachusetts. The term of this lease expires on June 1, 2034.
Biggest changeWe also lease approximately 38,000 square feet of additional office space located in Watertown, Massachusetts. The terms of this lease and the new lease expire on June 1, 2034.
In May 2022, we entered into a new lease agreement for approximately 73,000 square feet of laboratory and office space in Watertown, Massachusetts, at a to-be-constructed facility located at Arsenal on the Charles. We expect to gain access to the facility in October 2023 to construct tenant improvements.
In May 2022, we entered into a new lease agreement for approximately 73,000 square feet of laboratory and office space in Watertown, Massachusetts, at a to-be-constructed facility located at Arsenal on the Charles. We expect to gain access to the facility in December 2023 to construct tenant improvements.
In conjunction with the new lease agreement at Arsenal on the Charles, we amended the 500 Arsenal Street lease agreement to shorten the term of the lease from September 2027 to the date when the Arsenal on the Charles facility is completed and ready for the Company's occupancy.
In conjunction with the new lease agreement at Arsenal on the Charles, we amended the 500 Arsenal Street lease agreement to shorten the term of the lease from September 2027 to the date when the Arsenal on the Charles facility is completed and ready for our occupancy.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to legal proceedings is included in Note 12 of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.
Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to legal proceedings is included in Note 13 of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe have never declared or paid cash dividends on our common stock, and we do not expect to declare or pay any cash dividends for the foreseeable future. 52 Performance Graph (1) The following graph shows a comparison from September 30, 2017 through September 30, 2022 of cumulative total return on assumed investments of $100.00 in cash in each of our common stock, the NASDAQ Composite Index and the NASDAQ Biotechnology Index.
Biggest changeThe following table shows the high and low sales price for our common stock as reported by The NASDAQ Global Select Market for the quarterly periods in the fiscal years ended September 30, 2023 and 2022: Fiscal 2023 High Low First Quarter $ 54.20 $ 39.60 Second Quarter $ 62.06 $ 38.16 Third Quarter $ 41.45 $ 19.91 Fourth Quarter $ 22.15 $ 11.03 Fiscal 2022 High Low First Quarter $ 102.00 $ 57.21 Second Quarter $ 75.28 $ 54.42 Third Quarter $ 79.50 $ 37.59 Fourth Quarter $ 76.36 $ 47.20 We have never declared or paid cash dividends on our common stock, and we do not expect to declare or pay any cash dividends for the foreseeable future. 49 Performance Graph (1) The following graph shows a comparison from September 30, 2018 through September 30, 2023 of cumulative total return on assumed investments of $100.00 in cash in each of our common stock, the NASDAQ Composite Index and the NASDAQ Biotechnology Index.
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and Stockholder Information Our common stock has been listed on The NASDAQ Global Select Market under the symbol “ENTA” since March 21, 2013.
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market and Stockholder Information Our common stock has been listed on The NASDAQ Global Select Market under the symbol “ENTA” since March 21, 2013 and we had 17 stockholders of record as of November 10, 2023.
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The following table shows the high and low sales price for our common stock as reported by The NASDAQ Global Select Market for the quarterly periods in the fiscal years ended September 30, 2022 and 2021: Fiscal 2022 High Low First Quarter $ 102.00 $ 57.21 Second Quarter $ 75.28 $ 54.42 Third Quarter $ 79.50 $ 37.59 Fourth Quarter $ 76.36 $ 47.20 Fiscal 2021 High Low First Quarter $ 47.47 $ 41.16 Second Quarter $ 54.95 $ 41.69 Third Quarter $ 53.11 $ 43.76 Fourth Quarter $ 58.65 $ 41.02 As of November 14, 2022 there were 18 stockholders of record of our common stock, which excludes stockholders whose shares were held in nominee or street name by brokers.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur royalties from our AbbVie collaboration provide us funding to support our wholly-owned research and development programs, which are primarily focused on the following disease targets: • Respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to 3 million hospitalizations globally in children under 5 years old and 177,000 hospitalizations in the U.S. in adults over the age of 65; • SARS-CoV-2, the virus that causes COVID-19, as well as other coronaviruses, with estimates suggesting that COVID-19 has caused over 240,000 deaths and over 1.7 million hospitalizations in the U.S. in 2022 through October 29, with comparable, or at least significant, impact in other major populations of the world and with new variants still emerging; • Hepatitis B virus, or HBV, the most prevalent chronic hepatitis, which is estimated by the World Health Organization to affect close to 300 million individuals worldwide; and • Human metapneumovirus, or hMPV, an important, relatively recently identified cause of respiratory tract infections, particularly in children, the elderly and immunocompromised individuals, with symptoms similar to RSV.
Biggest changeOur ongoing royalties from our AbbVie collaboration, combined with the proceeds from our April 2023 royalty sale transaction, have provided us funding to support our wholly-owned research and development programs, which are primarily focused on the following disease targets: • Respiratory syncytial virus, or RSV, the most common cause of bronchiolitis and pneumonia in young children and a significant cause of respiratory illness in older adults, with estimates suggesting that on average each year RSV leads to 3 million hospitalizations globally in children under 5 years old and 60,000-160,000 adults over the age of 65 in the U.S. are hospitalized and 6,000-10,000 die due to RSV infections; • SARS-CoV-2, the virus that causes COVID-19, with estimates suggesting that COVID-19 continues to have a disease burden greater than influenza, including persistent cases of infection often referred to as long COVID and hospitalization and death among the elderly and those with comorbidities, while new variants continue to emerge on a regular basis; and • Hepatitis B virus, or HBV, the most prevalent chronic hepatitis, which is estimated by the World Health Organization to affect close to 300 million individuals worldwide.
These expenses consist primarily of: • personnel costs, including salaries, related benefits and stock-based compensation for employees engaged in scientific research and development functions; • third-party contract costs relating to research, formulation, manufacturing, preclinical study and clinical trial activities; • laboratory consumables; • allocated facility-related costs; and • third-party license fees.
These expenses consist primarily of: • third-party contract costs relating to research, formulation, manufacturing, preclinical study, and clinical trial activities; • personnel costs, including salaries, related benefits, and stock-based compensation for employees engaged in scientific research and development functions; • allocated facility-related costs; • laboratory consumables; and • third-party license fees.
Our Royalty Revenue Collaboration Our royalty revenue is generated through our Collaborative Development and License Agreement with AbbVie, under which we have discovered and out-licensed to AbbVie two protease inhibitor compounds that have been clinically tested, manufactured, and commercialized by AbbVie as part of its combination regimens for HCV.
Our Royalty Revenue Collaboration and Royalty Sale Agreement Our royalty revenue is generated through our Collaborative Development and License Agreement with AbbVie, under which we have discovered and out-licensed to AbbVie two protease inhibitor compounds that have been clinically tested, manufactured, and commercialized by AbbVie as part of its combination regimens for HCV.
Our Wholly-Owned Programs Our primary wholly-owned research and development programs are in virology, namely RSV, SARS-CoV-2, HBV and hMPV: • RSV: We have a clinical stage program for RSV, with two compounds in clinical trials – EDP-938 and EDP-323. EDP-938, which has Fast Track designation from the U.S.
Our Wholly-Owned Programs Our primary wholly-owned research and development programs are in virology, namely RSV, SARS-CoV-2 and HBV: • RSV: We have a clinical stage program for RSV, with two compounds in clinical trials – EDP-938 and EDP-323. EDP-938, which has Fast Track designation from the U.S.
We have entered into a third lease agreement with the same landlord to lease additional laboratory and office space at a to-be-constructed facility located at Arsenal on the Charles in Watertown, Massachusetts. 62 Our first lease for office and laboratory space at 500 Arsenal Street expires on September 1, 2027.
We have entered into a third lease agreement with the same landlord to lease additional laboratory and office space at a to-be-constructed facility located at Arsenal on the Charles in Watertown, Massachusetts. Our first lease for office and laboratory space at 500 Arsenal Street expires on September 1, 2027.
Internal Programs As our internal product candidates are currently in Phase 1 or Phase 2 clinical development, we have not generated any revenue from our own product sales and do not expect to generate any revenue from product sales derived from these product candidates for at least the next several years.
Internal Programs As our internal product candidates are currently in Phase 1 or Phase 2 clinical development, we have not generated any revenue from our own product sales. We do not expect to generate any revenue from product sales derived from these product candidates for at least the next several years.
See also Note 2 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information about these critical accounting policies as well as a description of our other significant accounting policies. 59 Research and Development and Pharmaceutical Drug Manufacturing Accruals We have entered into various contracts with third parties to perform research and development and pharmaceutical drug manufacturing.
See also Note 2 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information about these critical accounting policies as well as a description of our other significant accounting policies. 55 Research and Development and Pharmaceutical Drug Manufacturing Accruals We have entered into various contracts with third parties to perform research and development and pharmaceutical drug manufacturing.
In May 2022, we entered into a new ten-year lease for laboratory and office space in Watertown, Massachusetts, adjacent to our 400 Talcott Avenue premises at Arsenal on the Charles, at a to-be-constructed facility. We currently anticipate we will gain access to construct tenant improvements in October 2023.
In May 2022, we entered into a new ten-year lease for laboratory and office space in Watertown, Massachusetts, adjacent to our 400 Talcott Avenue premises at Arsenal on the Charles, at a to-be-constructed facility. We currently anticipate we will gain access to construct tenant improvements in December 2023.
To date we have not experienced a significant impact of inflation on spending in general and administrative, but we anticipate inflation may impact future periods. Other Income (Expense) Other income (expense) consists of interest and investment income, net and the change in fair value of our outstanding Series 1 nonconvertible preferred stock.
To date we have not experienced a significant impact of inflation on general and administrative expenses, but we anticipate inflation may impact future periods. Other Income (Expense) Other income (expense) consists of interest expense, interest and investment income, net and the change in fair value of our outstanding Series 1 nonconvertible preferred stock.
The fair value of the preferred stock was measured based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. The fair value of these instruments represents less than 10% of liabilities as of September 30, 2022.
The fair value of the preferred stock was measured based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. The fair value of these instruments represents less than 10% of liabilities as of September 30, 2023.
This first-in-human, randomized, double-blind, placebo-controlled study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics, or PK, of oral EDP-235 in single ascending doses and multiple ascending doses for seven days, and the effect of food.
This first-in-human, randomized, double-blind, placebo-controlled study enrolled healthy volunteers to evaluate the safety, tolerability, and pharmacokinetics of oral EDP-235 in single ascending doses, and multiple ascending doses, for seven days, and the effect of food.
As of September 30, 2022, we had 1.9 million outstanding shares of Series 1 nonconvertible preferred stock, all of which we classified as a long-term liability on our consolidated balance sheet and recorded at fair value of $1.4 million.
As of September 30, 2023, we had 1.9 million outstanding shares of Series 1 nonconvertible preferred stock, all of which we classified as a long-term liability on our consolidated balance sheet and recorded at fair value of $1.4 million.
However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.
However, our projection of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.
Off-Balance Sheet Arrangements We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities or unconsolidated entities, which include special purpose entities and other structured finance entities.
Off-Balance Sheet Arrangements We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities, which include special purpose entities and other structured finance entities.
Project-specific expenses reflect costs directly attributable to our clinical development candidates and preclinical candidates nominated and selected for further development. Remaining research and development expenses are reflected in research and drug discovery, which represents early-stage drug discovery programs. At any given time, we typically have several active early-stage research and drug discovery projects.
Project-specific expenses reflect costs directly attributable to our clinical development and preclinical candidates nominated and selected for further development. Our remaining research and development expenses are reflected in research and drug discovery, which represent early-stage drug discovery programs. At any given time, we typically have several active early-stage research and 54 drug discovery projects.
As of September 30, 2022 and 2021, we continue to record a valuation allowance against our deferred tax assets because it is more likely than not that we will not have sufficient taxable income in the future that would allow us to realize the majority of our deferred tax assets.
As of September 30, 2023 and 2022, we continue to record a valuation allowance against our deferred tax assets because it is more likely than not that we will not have sufficient taxable income in the future to allow us to realize the majority of our deferred tax assets.
Comparison of the Years Ended September 30, 2021 and 2020 For a discussion of our results of operations for the year ended September 30, 2021, as compared to the year ended September 30, 2020, see Item 7.
Comparison of the Years Ended September 30, 2022 and 2021 For a discussion of our results of operations for the year ended September 30, 2022, as compared to the year ended September 30, 2021, see Item 7.
We believe that EDP-938 continues to have the greatest potential to show optimal efficacy in high-risk 54 populations, as these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of EDP-938.
We believe that EDP-938 has the greatest potential to show optimal efficacy in high-risk populations since these patients have reduced RSV immunity, which manifests in a higher and longer duration of viral load and greater disease severity, allowing a bigger window to realize the full potential of EDP-938.
Given the uncertainty associated with clinical trial enrollments, particularly in the context of the COVID-19 pandemic, and the risks inherent in the development process, we are unable to determine the duration and completion costs of the current or future clinical trials of our product candidates or if, or to what extent, we will generate revenue from the commercialization and sale of any of our product candidates.
Given the uncertainty associated with clinical trial enrollments and the risks inherent in the development process, we are unable to determine the duration and completion costs of the current or future clinical trials of our product candidates or if, or to what extent, we will generate revenue from the commercialization and sale of any of our product candidates.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the Years Ended September 30, 2021 and 2020 included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. Liquidity and Capital Resources We fund our operations with cash flows from our royalty revenue and our existing financial resources.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the Years Ended September 30, 2022 and 2021 included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. 57 Liquidity and Capital Resources We fund our operations with cash flows from our retained portion of our royalty revenue and our existing financial resources.
Under the terms of our AbbVie agreement, as amended in October 2014, 50% of AbbVie’s net sales of MAVYRET/MAVIRET are allocated to glecaprevir. Beginning with each January 1, the cumulative net sales of 57 MAVYRET/MAVIRET start at zero for purposes of calculating the tiered royalties.
Under the terms of our AbbVie Agreement, 50% of AbbVie’s net sales of MAVYRET/MAVIRET are allocated to glecaprevir. Beginning with each January 1, the cumulative net sales of MAVYRET/MAVIRET start at zero for purposes of calculating the tiered royalties.
Patients will be eligible to participate if they have had 55 symptoms for five days or less and have not received a SARS-CoV-2 vaccine or been infected with SARS-CoV-2 within 90 days of enrollment. Patients will receive EDP-235 orally with food at a dose of 200 mg or 400 mg or placebo once daily for five days.
Patients were eligible to participate if they had symptoms for five days or less and had not received a SARS-CoV-2 vaccine or been infected with SARS-CoV-2 within 90 days of enrollment. Patients received either 200 mg or 400 mg EDP-235 or placebo orally with food once daily for five days.
Our future capital requirements are difficult to forecast and will depend on many factors, including: • the amount of royalties generated from MAVYRET/MAVIRET sales under our existing collaboration with AbbVie; • any continuing impact of the COVID-19 pandemic on the number of treated HCV patients; • the number and characteristics of our research and development programs; • the scope, progress, results and costs of researching and developing our product candidates on our own, including conducting advanced clinical trials; • delays and additional expense in our clinical trials as a result of COVID-19; • the cost of manufacturing our product candidates for clinical development and any products we successfully commercialize independently; • our ability to establish new collaborations, licensing or other arrangements, if any, and the financial terms of such arrangements; • opportunities to in-license or otherwise acquire new technologies and therapeutic candidates; • the timing of, and the costs involved in, obtaining regulatory approvals for any product candidates we develop independently; • the cost of commercialization activities, if any, of any product candidates we develop independently that are approved for sale, including marketing, sales and distribution costs; • the timing and amount of any sales of our product candidates, if any, or royalties thereon; • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including any litigation costs and the outcomes of any such litigation; and • potential fluctuations in foreign currency exchange rates.
Our future capital requirements are difficult to forecast and will depend on many factors, including: • the number and characteristics of our research and development programs; • the scope, progress, results and costs of researching and developing our product candidates on our own, including conducting advanced clinical trials; 58 • our ability to establish new collaborations, licensing or other arrangements, if any, and the financial terms of such arrangements; • the amount of our retained portion of royalties generated from MAVYRET/MAVIRET sales under our existing collaboration with AbbVie; • delays and additional expenses in our clinical trials; • the cost of manufacturing our product candidates for clinical development and any products we successfully commercialize independently; • opportunities to in-license or otherwise acquire new technologies and therapeutic candidates; • costs associated with prosecuting our patent infringement suit regarding use of a coronavirus 3CL protease inhibitor in Paxlovid, Pfizer's antiviral treatment for COVID-19; • the timing of, and the costs involved in, obtaining regulatory approvals for any product candidates we develop independently; • the cost of commercialization activities, if any, of any product candidates we develop independently that are approved for sale, including marketing, sales and distribution costs; • the timing and amount of any sales of our product candidates, if any, or royalties thereon; • the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patents, including any litigation costs and the outcomes of any such litigation; and • potential fluctuations in foreign currency exchange rates.
Food and Drug Administration, or FDA, is a potent N-protein inhibitor of activity of both major subgroups of RSV, referred to as RSV-A and RSV-B. It has been investigated in a Phase 2a challenge study and is currently in three ongoing Phase 2 studies, each in a different patient population.
Food and Drug Administration, or FDA, is a potent inhibitor of N-protein activity for both major subgroups of RSV, referred to as RSV-A and RSV-B. It is currently in two ongoing Phase 2 studies, each in a different patient population.
In May 2022, we amended this lease to expand the rented space and extend the lease term through June 1, 2034. We expect to spend approximately $7.6 million in capital expenditures for the additional space, which primarily relate to tenant improvements. We are eligible to receive a tenant improvement allowance from the landlord of up to $2.6 million.
In May 2022, we amended this lease to expand the rented space and extend the lease term through June 1, 2034. We spent approximately $6.3 million in capital expenditures for the additional space, which primarily relate to tenant improvements. We received a tenant improvement allowance from the landlord of $2.5 million.
General and administrative expenses also include travel expenses, allocated facility-related costs not otherwise included in research and 58 development expenses, directors’ and officers’ liability insurance premiums, professional fees for auditing, tax, and legal services, and patent expenses.
General and administrative expenses also include travel expenses, allocated facility-related costs not otherwise included in research and development expenses, directors’ and officers’ liability insurance premiums, professional fees for auditing, tax, and legal services, and patent expenses. We expect that general and administrative expenses may increase in the long term.
EDP-323 has shown nanomolar potency against RSV-A and RSV-B in vitro and is not expected to have cross-resistance to other classes of inhibitors. EDP-323 has the potential to be used alone or in combination with other RSV mechanisms, such as EDP-938, to broaden the treatment window or addressable patient populations.
EDP-323 is not expected to have cross-resistance to other classes of inhibitors and has the potential to be used alone, or in combination with other RSV mechanisms, to broaden the treatment window or addressable patient populations.
The following table shows a summary of our cash flows: Years Ended September 30, 2022 2021 2020 (in thousands) Cash provided by (used in): Operating activities $ (84,782 ) $ (69,996 ) $ 7,088 Investing activities 54,897 36,991 19,830 Financing activities 20,033 3,080 8,983 Net increase (decrease) in cash, cash equivalents and restricted cash $ (9,852 ) $ (29,925 ) $ 35,901 Net cash used in operating activities Cash used in operating activities was $84.8 million for the year ended September 30, 2022 as compared to cash used in operating activities of $70.0 million for the same period in 2021.
The following table shows a summary of our cash flows: Years Ended September 30, 2023 2022 2021 (in thousands) Cash provided by (used in): Operating activities $ (103,154 ) $ (84,782 ) $ (69,996 ) Investing activities (53,578 ) 54,897 36,991 Financing activities 198,126 20,033 3,080 Net increase (decrease) in cash, cash equivalents and restricted cash $ 41,394 $ (9,852 ) $ (29,925 ) Net cash used in operating activities Cash used in operating activities was $103.2 million for the year ended September 30, 2023 as compared to cash used in operating activities of $84.8 million for the same period in 2022.
We are continuing to evaluate EDP-938 in high-risk populations in the following ongoing and planned clinical studies, including pediatric patients, adult hematopoietic stem cell recipients and high-risk adults, all of which have significant unmet need: ▪ RSVPEDs: RSVPEDs is a Phase 2 study in pediatric patients.
Based on the efficacy and growing safety profile of EDP-938, we are continuing to evaluate EDP-938 in high-risk populations in the following ongoing clinical studies, including pediatric patients and high-risk adults, all of which have significant unmet need: ▪ RSVPEDs: RSVPEDs is a Phase 2 study in pediatric patients.
The following table is a summary of revenue recognized for the years ended September 30, 2022, 2021, and 2020: Years Ended September 30, 2022 2021 2020 (in thousands) AbbVie agreement: Royalties $ 86,160 $ 97,074 $ 122,473 Total revenue $ 86,160 $ 97,074 $ 122,473 AbbVie Agreement We currently receive annually tiered, double-digit royalties on our protease inhibitor product glecaprevir included in AbbVie’s net sales of MAVYRET/MAVIRET.
The following table is a summary of revenue recognized for the years ended September 30, 2023, 2022, and 2021: Years Ended September 30, 2023 2022 2021 (in thousands) Revenue Royalty revenue $ 78,204 $ 86,160 $ 97,074 License revenue 1,000 — — Total revenue $ 79,204 $ 86,160 $ 97,074 AbbVie Agreement To date, we have received annually tiered, double-digit royalties on our protease inhibitor product glecaprevir included in AbbVie’s net sales of MAVYRET/MAVIRET.
We believe that our existing cash, cash equivalents and short-term and long-term marketable securities as of September 30, 2022, and cash flows from our continuing HCV royalties will be sufficient to meet our anticipated cash requirements into approximately the fourth quarter of fiscal 2024.
We believe that our existing cash, cash equivalents and short-term marketable securities as of September 30, 2023, as well as the cash flows from our continuing portion of HCV royalties will be sufficient to meet our anticipated cash requirements through fiscal 2027.
At September 30, 2022, our principal sources of liquidity were cash and cash equivalents and short-term and long-term marketable securities of $278.5 million.
At September 30, 2023, our principal sources of liquidity were cash and cash equivalents and short-term marketable securities of $369.9 million.
The increase in cash used in operating activities was primarily driven by a decrease in royalty payments received under our collaboration with AbbVie.
The increase in cash used in operating activities was primarily driven by timing of operating expense cash payments, a decrease in royalty payments received under our collaboration with AbbVie and the timing of estimated tax payments made in fiscal 2023.
In addition, we recently announced the initiation of a Phase 1 clinical study of EDP-323, an inhibitor of the RSV L-protein. o EDP-938 - N-protein Inhibitor Candidate: We have studied EDP-938 in two Phase 2 studies that were designed to be proof-of-concept and exploratory to understand better viral response in the context of RSV infection.
We initiated a Phase 2 challenge study of EDP323 in the fourth quarter of calendar 2023. o EDP-938 - N-protein Inhibitor Candidate: We have studied EDP-938 in two Phase 2 studies that were designed to be proof-of-concept and exploratory studies to understand the viral response better in the context of RSV infection.
This randomized, double-blind, placebo-controlled study is designed to evaluate the safety, tolerability and antiviral activity of 200 mg and 400 mg once-daily doses of EDP-235 compared to placebo. The study will enroll approximately 200 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who are not at increased risk for developing severe disease.
This randomized, double-blind, placebo-controlled study evaluated the safety, tolerability, antiviral activity and clinical symptoms of EDP-235 compared to placebo in approximately 230 non-hospitalized, symptomatic patients with mild to moderate COVID-19 who were not at increased risk for developing severe disease.
As a result of the timing of our clinical and preclinical development programs, we expect our research and development expenses to fluctuate from period to period. However, in the coming years, we expect our research and development expenses generally to increase as our wholly-owned programs advance.
As a result of the timing of our clinical and preclinical development programs, we expect our research and development expenses will fluctuate from period to period.
Interest income consists of interest earned on our cash equivalents and short-term and long-term marketable securities balances and interest earned for any refunds received from tax authorities. Investment income consists of the amortization or accretion of any purchased premium or discount, respectively, on our short-term and long-term marketable securities.
Investment income consists of the amortization or accretion of any purchased premium or discount, respectively, on our short-term and long-term marketable securities.
Results of Operations Years Ended September 30, 2022 2021 2020 (in thousands) Revenue $ 86,160 $ 97,074 $ 122,473 Research and development 164,522 174,111 136,756 General and administrative 45,482 32,536 27,356 Other income (expense): Interest and investment income, net 1,573 2,021 6,471 Change in fair value of Series 1 nonconvertible preferred stock 83 (27 ) 149 Income tax benefit (expense) 433 28,583 (1,149 ) Net loss $ (121,755 ) $ (78,996 ) $ (36,168 ) Comparison of the Years Ended September 30, 2022 and 2021 Revenue.
Results of Operations Years Ended September 30, 2023 2022 2021 (in thousands) Revenue $ 79,204 $ 86,160 $ 97,074 Research and development 163,524 164,522 174,111 General and administrative 52,887 45,482 32,536 Interest expense (5,148 ) — — Interest and investment income, net 11,360 1,573 2,021 Change in fair value of Series 1 nonconvertible preferred stock — 83 (27 ) Income tax (expense) benefit (2,821 ) 433 28,583 Net loss $ (133,816 ) $ (121,755 ) $ (78,996 ) Comparison of the Years Ended September 30, 2023 and 2022 Revenue We recognized revenue of $79.2 million and $86.2 million during the years ended September 30, 2023 and 2022, respectively.
We initiated a Phase 1 clinical study of EDP-323 in October 2022. • COVID-19 : We have been leveraging our expertise in developing protease inhibitors to discover new compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses. o EDP-235 – Protease Inhibitor Candidate – Our lead clinical candidate for COVID-19, EDP-235, is an oral inhibitor of coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, which has been granted Fast Track designation by the FDA.
We have paused this research program as we do not plan to advance a third RSV candidate into the clinic as long as EDP-938 and EDP-323 continue to progress into further clinical development. • COVID-19 : We have leveraged our expertise in developing protease inhibitors to discover compounds specifically designed to target the SARS-CoV-2 virus and potentially other coronaviruses. o EDP-235 – Protease Inhibitor Candidate: EDP-235 is an oral inhibitor of the coronavirus 3CL protease, also referred to as 3CLpro or the main coronavirus protease, or Mpro, which has been granted Fast Track designation by the FDA.
Glecaprevir is co-formulated as part of AbbVie’s leading brand of direct-acting antiviral, or DAA, combination treatment for HCV, which is marketed under the tradenames MAVYRET ® (U.S.) and MAVIRET ® (ex-U.S.) (glecaprevir/pibrentasvir).
We discovered glecaprevir, the second of two protease inhibitors discovered and developed through our collaboration with AbbVie for the treatment of chronic infection with hepatitis C virus, or HCV. Glecaprevir is co-formulated as part of AbbVie’s leading brand of direct-acting antiviral, or DAA, combination treatment for HCV, which is marketed under the tradenames MAVYRET® (U.S.) and MAVIRET® (ex-U.S.) (glecaprevir/pibrentasvir).
In addition to SARS-CoV-2, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future. ▪ Phase 1 Study – In July 2022, we completed a Phase 1 study and reported positive topline results.
In addition to nanomolar activity against all SARS-CoV-2 variants tested to date, EDP-235 has potent antiviral activity against other human coronaviruses, enabling the potential for a pan-coronavirus treatment, including possibly coronaviruses that may infect human populations in the future.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Flows included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. Funding Requirements As of September 30, 2022, we had $278.5 million in cash, cash equivalents and short-term and long-term marketable securities.
Year Ended September 30, 2022 For a discussion of our cash flows for the year ended September 30, 2022, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Flows included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
Our weighted average royalty rate on the portion of AbbVie’s sales allocable to our protease inhibitor products was approximately 11% in both fiscal 2022 and 2021. Our royalty revenues eligible to be earned in the future will depend on AbbVie’s HCV market share, the pricing of the MAVYRET/MAVIRET regimen and the number of patients treated.
Our royalty revenues eligible to be earned in the future will depend on AbbVie’s HCV market share, the pricing of the MAVYRET/MAVIRET regimen and the number of patients treated.
We expect that our research and development expenses will increase in the future as we advance our research and development programs. To date we have not identified any significant impact of inflation on spending in research and development, but it is uncertain whether there will be inflationary impacts in future periods.
To date, we have not identified any significant impact of inflation on spending in research and development, but it is uncertain whether there will be inflationary impacts in future periods. Our research and drug discovery and development programs are in early stages; therefore, the successful development of our product candidates is highly uncertain and may not result in approved products.
Net cash provided by investing activities The increase of $17.9 million in cash provided by investing activities for the year ended September 30, 2022, as compared to the same period in 2021, was driven primarily by the timing of purchases, sales and maturities of marketable securities.
Net cash provided by (used in) investing activities Cash used in investing activities was $53.6 million for the year ended September 30, 2023 as compared to cash provided by investing activities of $54.9 million for the same period in 2022.
Financial Operations Overview We are currently funding all research and development for our wholly-owned programs, which are targeted toward the discovery and development of novel compounds with an emphasis on treatments for viral infections.
We recognize imputed interest expense over the life of the royalty sale agreement based on our estimated future MAVYRET/MAVIRET royalties. Financial Operations Overview We are currently funding all research and development for our wholly-owned programs, which are targeted toward the discovery and development of novel compounds.
The effective tax rates used to calculate our income tax benefit for the years ended September 30, 2022 and 2021 were 0.4% and 26.6%, respectively. We recorded an income tax benefit in 2022 due to the release of a state tax reserve during the year.
The effective tax rates used to calculate our income tax (expense) benefit for the years ended September 30, 2023 and 2022 were (2.2)% and 0.4%, respectively.
We are funding our operations primarily through royalty payments received under our collaboration agreement with AbbVie and our existing cash, cash equivalents, and short-term and long-term marketable securities. Our revenue is currently dependent on royalty payments we receive from AbbVie on its sales of MAVYRET/MAVIRET.
To date, we have funded our operations primarily through royalty payments received under our collaboration agreement with AbbVie, a $200.0 million payment from our royalty sale agreement, and our existing cash, cash equivalents, and short-term and long-term marketable securities.
Income Tax Benefit (Expense) Income tax benefit for the year ended September 30, 2022 is the result of the release of a state tax reserve.
Income tax benefit for the year ended September 30, 2022 is the result of the release of a state tax reserve. Income tax benefit for the year ended September 31, 2021 is the result of the carryback of net operating losses under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act.
Years Ended September 30, 2022 2021 (in thousands) R&D programs: Virology $ 144,344 $ 127,488 Liver disease (non-viral) 17,658 43,908 Other 2,520 2,715 Total research and development expenses $ 164,522 $ 174,111 Research and development expenses decreased by $9.6 million for the year ended September 30, 2022, as compared to the same period in 2021.
In addition, at the beginning of each calendar year (the second quarter of our fiscal year), our royalty rate resets to the lowest tier for each of our royalty-bearing products licensed to AbbVie. 56 Research and development expenses Years Ended September 30, 2023 2022 (in thousands) R&D programs: Virology $ 151,176 $ 144,344 Liver disease (non-viral) 4,095 17,658 Other 8,253 2,520 Total research and development expenses $ 163,524 $ 164,522 Research and development expenses decreased by $1.0 million for the year ended September 30, 2023, as compared to the same period in 2022.
These studies were conducted in otherwise healthy adults. The first study was the challenge study, which was reported out in mid-2019. The second study, known as RSVP, was designed to confirm the challenge study findings in an adult outpatient population with community-acquired RSV infection to provide additional information on symptom alleviation and viral load decline.
These studies were conducted in otherwise healthy adults (not at high-risk for serious outcomes with RSV) infected with RSV. The first study was a challenge study, in which healthy adults were infected with RSV in a clinical setting. The second study, known as RSVP, was in an otherwise healthy adult outpatient population with community-acquired RSV infection.
While we incurred increased costs of $16.9 million in our virology program, costs in our non-viral liver disease program decreased by $26.3 million from fiscal 2021 to fiscal 2022 as we wound down our non-alcoholic steatohepatitis, or NASH, program, which is now substantially complete.
The costs in our non-viral liver disease program decreased by $13.6 million as we wound down our non-alcoholic steatohepatitis, or NASH, program, which is now substantially complete. The costs in our other discovery programs increased by $5.7 million due to an increase in headcount and lab material and supply purchases.
Increased costs in our virology program were primarily due to an increase in manufacturing and clinical trial costs due to the timing and scope of clinical trials.
The increase in costs of $6.8 million in our virology program was primarily due to an increase in clinical trial costs and an increase in headcount, partially offset by a decrease in preclinical and manufacturing costs due to the timing of our studies in our virology programs and decrease in depreciation expense.
Operating Expenses The following table summarizes our operating expenses for the years ended September 30, 2022, 2021, and 2020: Years Ended September 30, 2022 2021 2020 (in thousands) Research and development $ 164,522 $ 174,111 $ 136,756 General and administrative 45,482 32,536 27,356 Total operating expenses $ 210,004 $ 206,647 $ 164,112 Research and Development Expenses Research and development expenses consist of costs incurred to conduct basic research, such as the discovery and development of novel small molecules as therapeutics, as well as any external expenses of preclinical and clinical development activities.
Operating Expenses Our operating expenses are comprised of research and development expenses and general and administrative expenses. Research and Development Expenses Research and development expenses consist of costs incurred to conduct basic research, such as the discovery and development of novel small molecules as therapeutics, as well as any external expenses of preclinical and clinical development activities.
Net cash provided by financing activities The increase in cash provided by financing activities of $17.0 million for the year ended September 30, 2022, as compared to 2021, was driven by an increase in proceeds from stock option exercises. 61 Year Ended September 30, 2021 For a discussion of our cash flows for the year ended September 30, 2021, see Item 7.
Net cash provided by financing activities Cash provided by financing activities was $198.1 million for the year ended September 30, 2023 as compared to cash provided by financing activities of $20.0 million for the same period in 2022.
We have utilized our internal chemistry and drug discovery capabilities to generate all of our development-stage programs. We continue to invest substantial resources in research programs to discover back-up compounds as well as new compounds targeting different mechanisms of action, both in our disease areas of focus as well as potentially in other disease areas.
Based on these data, we remain convinced that EDP-514, which has Fast Track designation, has the potential to be a best-in-class core inhibitor for HBV. We have utilized our internal chemistry and drug discovery capabilities to generate all of our development-stage programs. We continue to invest substantial resources in research programs to discover compounds targeting new disease areas.
Data from the Phase 1 study demonstrated EDP-235 was generally safe and well-tolerated up to 400 mg for seven days with strong exposure multiples over the EC 90 , which is a measure of potency, specifically the concentration of drug that results in 90% inhibition of viral replication in vitro.
Data from the Phase 1 study demonstrated EDP-235 was generally safe and well-tolerated in doses up to 400 mg for seven days and adverse events were infrequent and mild.
Interest and investment income, net decreased by $0.4 million for the year ended September 30, 2022, as compared to the same period in 2021, primarily due to lower invested cash balances. Income tax benefit (expense). We recorded income tax benefits of $0.4 million and $28.6 million for the years ended September 30, 2022 and 2021, respectively.
The increase was due to an increase in our cash balance due to receipt of the $200.0 million from OMERS and changes in interest rates year over year. Income tax (expense) benefit We recorded income tax expense of $2.8 million and an income tax benefit of $0.4 million for the years ended September 30, 2023 and 2022, respectively.
Revenue Our revenue is derived from our collaboration agreement with AbbVie and AbbVie's sales of MAVYRET/MAVIRET, an 8-week treatment regimen for chronic HCV.
We believe that our existing cash, cash equivalents and short-term marketable securities, as well as our continuing portion of HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements through fiscal 2027. Revenue Our revenue is primarily derived from our collaboration agreement with AbbVie and AbbVie’s sales of MAVYRET/MAVIRET, an 8-week treatment regimen for chronic HCV.
This dose-ranging, randomized, double-blind, placebo-controlled study, will evaluate multiple ascending doses in up to four age cohorts to determine safety, tolerability, and pharmacokinetics, as well as a second part evaluating the selected dose for antiviral activity. ▪ RSVTx: RSVTx is a Phase 2b study in adult hematopoietic cell transplant recipients with acute RSV infection and symptoms of upper respiratory tract infection.
This dose-ranging, randomized, double-blind, placebo-controlled study, is evaluating multiple ascending doses for five days in two age cohorts to determine 51 safety, tolerability, and pharmacokinetics, as well as a second part evaluating antiviral activity at the selected dose. ▪ RSVHR: RSVHR is a Phase 2b study in high-risk adults, including those who are older than 65 years of age and those who have asthma, chronic obstructive pulmonary disease, or COPD, or congestive heart failure.
The future incidence and timing of RSV infections remain highly unpredictable and thus may continue to impact enrollment in our ongoing Phase 2 RSV trials. o EDP-323 - L-protein Inhibitor Candidate: Our newest clinical candidate for RSV is a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication.
Approximately 180 patients will be treated with EDP-938 or placebo for five days with a primary endpoint of time to resolution of RSV lower respiratory tract disease symptoms. ▪ Next steps: We expect to complete enrollment in one or both of our ongoing Phase 2 studies of EDP-938 in the 2023-2024 Northern Hemisphere RSV season and to report data in the third quarter of calendar 2024, assuming there is a normal, pre-pandemic type of RSV season in the Northern Hemisphere. o EDP-323 - L-protein Inhibitor Candidate: Our second clinical RSV candidate, EDP-323, is a novel oral, direct-acting antiviral selectively targeting the RSV L-protein, a viral RNA-dependent RNA polymerase enzyme that contains multiple enzymatic activities required for RSV replication.
General and administrative expenses. General and administrative expenses increased to $45.5 million for the year ended September 30, 2022, as compared to $32.5 million for the same period in 2021. The increase was primarily due to increases in headcount and stock-based compensation expense to support our research and development operations.
In the next 12 months, we expect our external research and development expenses generally to decrease since we will not advance EDP-235 further on our own. General and administrative expenses General and administrative expenses increased to $52.9 million for the year ended September 30, 2023, compared to $45.5 million for the same period in 2022.
Our research and drug discovery and development programs are at early stages; therefore, the successful development of our product candidates is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict.
Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict.
We are in the process of seeking other compounds that could be developed with EDP-514 for such a treatment regimen. o EDP-514 - Core Inhibitor Candidate - In June 2022, final data from two of our Phase 1b studies of EDP-514 were presented at The International Liver Congress TM 2022.
Advancement of this program is dependent upon our accessing another compound that could be developed with EDP-514 for such a treatment regimen. o EDP-514 - Core Inhibitor Candidate: Final data from two Phase 1b studies of EDP-514 demonstrate the compound is safe with strong antiviral activity in two different chronic HBV patient populations – those who have a high viral load and those who are on a treatment with a nucleoside reverse transcriptase inhibitor.
We recognized revenue of $86.2 million and $97.1 million during the years ended September 30, 2022 and 2021, respectively. The decrease in revenue year-over-year was due to AbbVie’s lower reported HCV sales in 2022, as compared to 2021.
The decrease in revenue year-over-year was due to AbbVie’s lower reported HCV sales in 2023, as compared to 2022. Our weighted average royalty rate on the portion of AbbVie’s sales allocable to our protease inhibitor products was approximately 11% in both fiscal 2023 and 2022.
However, a statistically significant difference in the number of subjects achieving undetectable RSV RNA at the end of treatment at Day 5 was observed with EDP-938 compared to placebo (p=0.033). Further, EDP-938 demonstrated a favorable safety profile, consistent with that observed in approximately 500 subjects exposed to EDP-938 to date.
With these studies, EDP-938 has demonstrated a favorable safety profile, consistent with that observed in over 500 subjects exposed to EDP-938 to date.
We had $278.5 million in cash, cash equivalents and short-term and long-term marketable securities at September 30, 2022. In fiscal 2022, we earned $86.2 million in product royalties on AbbVie’s net sales of its HCV regimens.
Funding Requirements As of September 30, 2023, we had $369.9 million in cash, cash equivalents and short-term marketable securities.
Removed
We discovered glecaprevir, the second of two protease inhibitors discovered and developed through our collaboration with AbbVie for the treatment of chronic infection with hepatitis C virus, or HCV.
Added
As of September 30, 2023, we had $369.9 million in cash, cash equivalents and short-term marketable securities. We expect that our existing cash, cash equivalents, short-term marketable securities and our continuing portion of HCV royalties, will enable us to fund our operating expenses and capital expenditure requirements through fiscal 2027.
Removed
We expect cash flows from our continuing HCV royalties and our existing financial resources will allow us to continue to fund our wholly-owned research and development programs into approximately the fourth quarter of fiscal 2024.
Added
We completed a Phase 1 clinical study of EDP-323, an inhibitor of the RSV L-protein with Fast Track designation from the FDA, with positive topline results reported in June 2023.
Removed
In May 2022, we announced topline results for RSVP, noting that EDP-938 did not meet the primary endpoint of reduction in total symptom score compared to placebo, or the secondary antiviral endpoints.
Added
EDP-323 has sub-nanomolar potency against RSV-A and RSV-B in vitro and protected mice in a dose-dependent manner from RSV infection as demonstrated by both virological and pathological endpoints.
Removed
Based on the growing safety profile of EDP-938 and differences in the range of the course of RSV infection in higher risk populations, which have always been our target populations, EDP-938 merits continued study.
Added
In June 2023, we completed a Phase 1 clinical study and reported positive topline results, which demonstrated that EDP-323 was safe and well-tolerated with pharmacokinetics supportive of once-daily dosing with target exposures achieved and no food effect.
Removed
We plan to enroll approximately 200 adult subjects 18 to 75 years of age, within 72 hours of symptom onset, who will receive EDP-938 or placebo for 21 days and will be monitored for the incidence of lower respiratory tract complications within 28 days of enrollment. ▪ RSVHR: On October 3, 2022, we announced the initiation of a Phase 2b study called RSVHR in high-risk adults, including those who are older than 65 years of age and those who have asthma, chronic obstructive pulmonary disease, or COPD, or congestive heart failure.
Added
Based on these positive data, we initiated a Phase 2 challenge study of EDP-323 in the fourth quarter of calendar 2023 and expect topline data in the third quarter of calendar 2024. o RSV/hMPV Dual-Inhibitor: We have a research program targeting development of single agents with broader spectrum antiviral activity against both RSV and human metapneumovirus, or hMPV, a virus that is a significant cause of respiratory tract infections similar to those caused by RSV.
Removed
Approximately 180 patients will be treated with 800 mg of EDP-938 or placebo for five days and evaluated for 28 days thereafter. The primary endpoint of the study is time to resolution of RSV lower respiratory tract disease symptoms. o The prevalence of RSV has not been following any normal seasonal pattern since the COVID-19 pandemic began.
Added
These target compounds, which we refer to as dual-inhibitors, maintained activity against multiple genotypes and strains of RSV and hMPV in a range of cell types in preclinical studies, and blocked replication in a dose-dependent manner in respective mouse models of each virus.
Removed
EDP-235 200 mg taken once daily with food resulted in mean trough plasma levels at steady state that were 3-fold and 7-fold over the plasma-protein-adjusted EC 90 for the tested Alpha variant and Omicron variant, respectively, while 400 mg resulted in levels that were 6-fold and 13-fold over the plasma-protein-adjusted EC 90 for the respective variants.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur operations may become subject to more significant fluctuations in foreign currency exchange rates in the future if we continue to contract with vendors outside of the U.S. ITEM 8.
Biggest changeDuring fiscal 2023 and 2022, the impact of foreign currency exposure was immaterial and thus did not have a significant impact on our consolidated financial statements. Our operations may become subject to more significant fluctuations in foreign currency exchange rates in the future if we continue to contract with vendors outside of the U.S. ITEM 8.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We had cash, cash equivalents and short-term and long-term marketable securities of $278.5 million and $352.4 million at September 30, 2022 and 2021, respectively, which consisted of cash, money market funds, corporate bonds, commercial paper and treasury notes.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We had cash, cash equivalents and short-term marketable securities of $369.9 million and $278.5 million at September 30, 2023 and 2022, respectively, which consisted of cash, money market funds, corporate bonds, commercial paper and treasury notes.
We had no debt outstanding as of September 30, 2022 or 2021. Foreign Exchange Risk As we continue to progress our wholly-owned programs into clinical development, we will conduct clinical trials and clinical manufacturing outside of the U.S. and thus will face exposure to movements in foreign currency exchange rates, primarily the British Pound and Euro, against the U.S.
Foreign Exchange Risk As we continue to progress our wholly-owned programs into clinical development, we will conduct clinical trials and clinical manufacturing outside of the U.S. and thus will face exposure to movements in foreign currency exchange rates, primarily the British Pound and Euro, against the U.S. Dollar, arising from our accounts payable and accrued expenses.
Removed
Dollar, arising from our accounts payable and accrued expenses. During fiscal 2022 and 2021, the impact of foreign currency exposure was immaterial and thus did not have a significant impact on our consolidated financial statements.

Other ENTA 10-K year-over-year comparisons