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What changed in Kiniksa Pharmaceuticals International, plc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Kiniksa Pharmaceuticals International, plc's 2023 and 2024 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 2024 report.

+753 added−916 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-28)

Top changes in Kiniksa Pharmaceuticals International, plc's 2024 10-K

753 paragraphs added · 916 removed · 568 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

174 edited+82 added−165 removed173 unchanged
Biggest changeThe process required by the FDA before a biologic may be marketed in the United States generally involves the following: ● Completion of extensive preclinical studies and tests in accordance with applicable regulations, including Good Laboratory Practice (“GLP”), regulations and applicable requirements for the humane use of laboratory animals or other applicable regulations; ● Submission to FDA of an investigational new drug application (an “IND”) which must become effective before human clinical trials may begin; ● Approval by an independent institutional review board (an “IRB”), or ethics committee at each clinical trial site before each trial may be initiated; ● Performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, Good Clinical Practices (“GCPs”) and other clinical trial related regulations to evaluate the safety and efficacy of the investigational product for each proposed indication; ● Submission to FDA of a BLA for marketing approval that includes substantive evidence of safety, purity, and potency from results of preclinical testing and clinical trials; ● A determination by FDA within 60 days of its receipt of a BLA to file the application for review; ● Satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the biologic will be produced to assess compliance with cGMPs to assure that the facilities, methods and controls used in product manufacture are adequate to preserve the biologic’s identity, strength, quality and purity; 25 Table of Contents ● Potential FDA audit of the preclinical or clinical trial sites that generated the data in support of the BLA; ● Payment of user fees for FDA review of the BLA; and ● FDA review and approval of the BLA, including satisfactory completion of an FDA advisory committee review, if applicable, prior to any commercial marketing or sale of the product in the United States.
Biggest changeThe process required by the FDA before a biologic may be marketed in the United States generally involves the following: ● Completion of extensive preclinical tests, animal studies, and toxicology, pharmacology and formulation studies in accordance with applicable regulations, including Good Laboratory Practice (“GLP”) regulations; ● Submission to FDA of an investigational new drug application (an “IND”) which must become effective before human clinical trials may begin; ● Approval by an independent institutional review board (an “IRB”) overseeing each clinical trial site, in each case before a trial may be initiated; ● Performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices (“GCPs”) and other clinical trial related regulations to evaluate the safety and efficacy of the product candidate for each proposed indication; ● Submission to FDA of a BLA for marketing approval after completion of the required pivotal clinical trials; ● Satisfactory completion of any FDA pre-approval inspections of the manufacturing facility or facilities where the product will be produced to assess compliance with cGMPs; and ● FDA review and approval of the BLA.
The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.
The product approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.
Brexit and the Regulatory Framework in the United Kingdom Since the end of the Brexit transition period on January 1, 2021, Great Britain (England, Scotland and Wales) has not been directly subject to EU laws, however under the terms of the Ireland/Northern Ireland Protocol, EU laws generally apply to Northern Ireland.
Regulatory Framework in the United Kingdom Since the end of the Brexit transition period on January 1, 2021, Great Britain (England, Scotland and Wales) has not been directly subject to EU laws, however under the terms of the Ireland/Northern Ireland Protocol, EU laws generally apply to Northern Ireland.
Employees are required to participate in periodic and as-needed trainings in order to refresh their understanding of our policies and provide additional instruction for new issues as and when they arise. For the clinical and manufacturing activities that we perform and oversee, we adhere to operating within the accepted GCP, cGMP and other similar regulatory guidelines.
Employees are required to participate in periodic and as-needed trainings in order to refresh their understanding of our policies and provide additional instruction for new issues as and when they arise. For the clinical and manufacturing activities that we perform and oversee, we adhere to operating within the accepted GLP, GCP, cGMP and other similar regulatory guidelines.
Participants (n = 52) were given the option at 18 months from their most recent pericarditis recurrence to continue or suspend rilonacept treatment for observation. There were 33 participants who elected to continue ARCALYST treatment, and the only recurrence in this group was associated with a treatment interruption of 4 weeks.
Participants (n = 52) were given the option at 18 months from their most recent pericarditis recurrence to continue or suspend ARCALYST treatment for observation. There were 33 participants who elected to continue ARCALYST treatment, and the only recurrence in this group was associated with a treatment interruption of 4 weeks.
Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition 34 Table of Contents authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition.
Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected 29 Table of Contents by the condition.
Regeneron manufactures and supplies all of our requirements of ARCALYST for development and commercial activities pursuant to the Supply Agreement (as defined below). The Supply Agreement terminates upon the sooner of the termination of the Regeneron Agreement and the date of the completion of the transfer of technology related to the manufacture of ARCALYST drug substance.
Regeneron currently manufactures and supplies all of our requirements of ARCALYST for development and commercial activities pursuant to the Supply Agreement (as defined below). The Supply Agreement terminates upon the sooner of the termination of the Regeneron Agreement and the date of the completion of the transfer of technology related to the manufacture of ARCALYST drug substance.
See “ Risk Factors—Risks Related to Intellectual Property— If we are unable to adequately protect our proprietary technology or obtain and maintain patent protection for our technology and products, if the scope of the patent protection obtained is not sufficiently broad, or if the terms of our patents are insufficient to protect our product candidates for an adequate amount of time, our competitors could develop and 24 Table of Contents commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be materially impaired .” In the future, if and when our drug candidates receive approval by the FDA or comparable regulatory authorities in other jurisdictions (as applicable, “regulatory authorities”), provided the legal requirements are met, we expect to apply for patent term extensions on issued patents covering those drugs, depending upon the length of the clinical trials for each drug and other factors.
See “ Risk Factors—Risks Related to Intellectual Property— If we are unable to adequately protect our proprietary technology or obtain and maintain patent protection for our technology and products, if the scope of the patent protection obtained is not sufficiently broad, or if the terms of our patents are insufficient to protect our product candidates for an adequate amount of time, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be materially impaired .” In the future, if and when our drug candidates receive approval by the FDA or comparable regulatory authorities in other jurisdictions (as applicable, “regulatory authorities”), provided the legal requirements are met, we expect to apply for patent term extensions on issued patents covering those drugs, depending upon the length of the clinical trials for each drug and other factors.
The FDA may designate a product candidate is eligible for priority review if the product candidate is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or effectiveness compared to marketed products.
The FDA may designate a product candidate for priority review if the product candidate is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or effectiveness compared to marketed products.
The holder of MA for a medicinal product must also comply with pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.
The holder of an MA for a medicinal product must also comply with pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.
In addition, a product candidate intended to treat serious or life-threatening diseases or conditions may be eligible for accelerated approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
A product candidate intended to treat serious or life-threatening diseases or conditions may be eligible for accelerated approval upon a determination that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
For instance, in the EU, many EU member states have adopted specific anti-gift statutes that further limit commercial practices for medicinal products, in particular vis-à-vis healthcare professionals and organizations.
In the EU, many EU member states have adopted specific anti-gift statutes that further limit commercial practices for medicinal products, in particular vis-à-vis healthcare professionals and organizations.
Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement. On April 26, 2023, the Commission published its long-awaited proposals to revise the EU’s pharmaceutical legislation. The proposals seek to balance supporting innovation and increasing affordability and availability of medicines.
Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement. In April 2023, the Commission published its long-awaited proposals to revise the EU’s pharmaceutical legislation. The proposals seek to balance supporting innovation and increasing affordability and availability of medicines.
These changes include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the ACA Medicare Part D coverage gap discount program) and a drug price negotiation program for certain high spend Medicare Part B and D drugs (with the first list of drugs announced in 2023).
These changes include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the prior Medicare Part D coverage gap discount program) and a drug price negotiation program for certain high spend Medicare Part B and D drugs (with the first list of drugs announced in 2023).
Unlike directives, the CTR is directly applicable in all EU member states without the need for member states to further implement it into national law. The CTR notably harmonizes the assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal and database.
The CTR is directly applicable in all EU member states without the need for member states to further implement it into national law. The CTR notably harmonizes the assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, which contains a centralized EU portal and database.
We may be subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws (which typically prohibit soliciting, offering, receiving, or paying anything of value to generate healthcare business reimbursable by third party payors, including Medicare and Medicaid), and false claims laws (which generally 37 Table of Contents prohibit anyone from knowingly and willingly presenting, or causing to be presented, any false or fraudulent claims for payment for reimbursed drugs or services to third party payors, including Medicare and Medicaid).
We may be subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws (which typically prohibit soliciting, offering, receiving, or paying anything of value to generate healthcare business reimbursable by third party payors, including Medicare and Medicaid), and false claims laws (which generally prohibit anyone from knowingly and willingly presenting, or causing to be presented, any false or fraudulent claims for payment for reimbursed drugs or services to third party payors, including Medicare and Medicaid).
See, Risk Factors – Risks Related to Manufacturing and Our Reliance on Third Parties – We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to a new CDMO and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.
See, Risk Factors – Risks Related to Manufacturing and Our Reliance on Third Parties – We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to Samsung and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.
The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance (a “QPPV”) who is 35 Table of Contents responsible for the establishment and maintenance of that system and oversees the safety profiles of medicinal products and any emerging safety concerns.
The holder of a MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance (a “QPPV”) who is responsible for the establishment and maintenance of that system and oversees the safety profiles of medicinal products 30 Table of Contents and any emerging safety concerns.
As of December 31, 2023, the patent rights acquired from Primatope include four patents granted in the United States and 32 patents granted in other jurisdictions, including Australia, Brazil and selected countries in Europe and Asia. In addition, the patent rights acquired from Primatope include patent applications pending in the United States, Australia, Europe, Canada, and selected countries in Asia.
As of December 31, 2024, the patent rights acquired from Primatope include four patents granted in the United States and 32 patents granted in other jurisdictions, including Australia, Brazil and selected countries in Europe and Asia. In addition, the patent rights acquired from Primatope include patent applications pending in the United States, Australia, Europe, Canada, and selected countries in Asia.
There are disease states in which IL-1β inhibition alone does not appear to be sufficient for disease remission in the absence of IL-1α inhibition. Published studies suggest certain autoinflammatory diseases may, in fact, be pathologically driven primarily by IL-1α. We believe that inhibiting both IL-1α and IL-1β signaling is important for treating recurrent pericarditis.
There are disease states in which IL-1β inhibition alone does not appear to be sufficient for disease remission in the absence of IL-1α inhibition. Published studies suggest certain autoinflammatory diseases may, in fact, be pathologically driven primarily by IL-1α. 9 Table of Contents We believe that inhibiting both IL-1α and IL-1β signaling is important for treating recurrent pericarditis.
The median [maximum at end of LTE] duration of continuous rilonacept therapy for all participants in RHAPSODY was 23 [35] months; the median [maximum at end of LTE] duration of continuous rilonacept therapy was 18 months [27] months for United States participants (n=45) and 29 [35] months for non-United States participants (n=29).
The median [maximum at end of LTE] duration of continuous ARCALYST therapy for all participants in RHAPSODY was 23 [35] months; the median [maximum at end of LTE] duration of continuous ARCALYST therapy was 18 months [27] months for United States participants (n=45) and 29 [35] months for non-United States participants (n=29).
Three patents covering methods of using ARCALYST in the treatment of recurrent pericarditis have issued in the United States and have a statutory term that expires in 2038, not including any patent term adjustment.
Four patents covering methods of using ARCALYST in the treatment of recurrent pericarditis have issued in the United States and have a statutory term that expires in 2038, not including any patent term adjustment.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and inclusion/exclusion criteria and the parameters to be used to monitor subject safety and assess efficacy. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND.
Clinical trials also must be conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, participant selection and inclusion/exclusion criteria and the parameters to be used to monitor subject safety and assess efficacy. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND.
Under the Regeneron Agreement, we paid $32.5 million in connection with upfront fees and the achievement of regulatory milestones. We evenly split profits on sales of ARCALYST with Regeneron , where profits are determined after deducting from net sales of ARCALYST certain costs related to the manufacturing and commercialization of ARCALYST.
Under the Regeneron Agreement, we paid $32.5 million in connection with upfront fees and the achievement of regulatory milestones. We evenly split profits on sales of ARCALYST with Regeneron , where profits are determined 18 Table of Contents after deducting from net sales of ARCALYST certain costs related to the manufacturing and commercialization of ARCALYST.
The FDA will attempt to direct additional resources to the evaluation of an application for a biologic designated for priority review in an effort to facilitate the review. The FDA endeavors to review original 29 Table of Contents BLAs with priority review designations within six months of the filing date as compared to ten months under its standard review goals.
The FDA will attempt to direct additional resources to the evaluation of an application for a biologic designated for priority review in an effort to facilitate the review. The FDA endeavors to review original BLAs with priority review designations within six months of the filing date as compared to ten months under its standard review goals.
In addition, we may terminate the applicable Huadong Collaboration Agreement if Huadong or its affiliates or sublicensees challenges the scope, validity, or enforceability of our patent rights being licensed to Huadong.
In addition, we may terminate the ARCALYST Huadong Collaboration Agreement if Huadong or its affiliates or sublicensees challenges the scope, validity, or enforceability of our patent rights being licensed to Huadong.
License Agreement with MedImmune In December 2017, we entered into a license agreement with MedImmune (the “MedImmune Agreement”), pursuant to which MedImmune granted us an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab and any other product containing an antibody to the GM-CSF receptor alpha that is covered by certain MedImmune patent rights for all indications.
License Agreement with MedImmune In December 2017, we entered into a license agreement with MedImmune (subsequently acquired by AstraZeneca PLC) (the “MedImmune Agreement”), pursuant to which MedImmune granted us an exclusive, sublicensable, worldwide license to certain intellectual property rights to make, use, develop and commercialize mavrilimumab and any other product containing an antibody to the GM-CSF receptor alpha that is covered by certain MedImmune patent rights for all indications.
As a condition of approval, the FDA generally requires that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled confirmatory clinical trials to verify the predicted clinical benefit.
As a condition of approval, the FDA generally requires that a sponsor of a product receiving accelerated approval perform adequate and well-controlled confirmatory clinical trials to verify the predicted clinical benefit.
Since March 2021, we have marketed ARCALYST, our only commercial product, in the United States for recurrent pericarditis, a debilitating disease, and have established our own specialty salesforce to expand our commercialization efforts nationwide. Our salesforce is complemented by our medical affairs, payor and patient services teams.
Since March 2021, we have marketed ARCALYST, our only commercial product, in the United States for recurrent pericarditis and have established our own specialty salesforce to expand our commercialization efforts nationwide. Our salesforce is complemented by our medical affairs, payor and patient services teams.
Under the Biogen Agreement, Biogen has a time-limited right of first negotiation to purchase the assets we acquired from Biogen or obtain a license to exploit Biogen Antibody Products, in each case, in the event we decide to 22 Table of Contents sell the Acquired Biogen Assets, including through the sale of our company, or out-license the rights to the Biogen Antibody Products.
Under the Biogen Agreement, Biogen has a time-limited right of first negotiation to purchase the assets we acquired from Biogen or obtain a license to exploit Biogen Antibody Products, in each case, in the event we decide to sell the Acquired Biogen Assets, including through the sale of our company, or out-license the rights to the Biogen Antibody Products.
Under the above-described procedures, in order to grant the MA, the competent authorities of the EU make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. 33 Table of Contents MAs have an initial duration of five years.
Under the above-described procedures, in order to grant the MA, the competent authorities of the EU make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy. MAs have an initial duration of five years.
Furthermore, an IRB representing each institution at which the clinical trial will be conducted must review and approve the plan for any clinical trial, including, among other things, the protocol and informed consent information to be provided to clinical trial subjects or their legal representatives, to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
Furthermore, an IRB representing each institution at which the clinical trial will be conducted must review and approve the plan for any clinical trial, including, among other things, the protocol and informed consent information to be provided to clinical trial subjects or their legal representatives, to ensure that the 23 Table of Contents risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
(“Biogen”) to acquire all of Biogen’s right, title and interest in and to certain assets used in or relating to vixarelimab and other antibodies covered by certain patent rights, including patents and other intellectual property rights, clinical data, certain contracts, know-how and inventory (the “Acquired Biogen Assets”).
(“Biogen”) to acquire all of Biogen’s right, title and interest in and to certain assets used in or relating to vixarelimab and other antibodies covered by certain patent rights, including patents and other intellectual property rights, clinical data, certain contracts, know-how and clinical drug supply (the “Acquired Biogen Assets”).
Member states may approve a specific price or level of reimbursement for the pharmaceutical product, or alternatively adopt a system of direct or indirect controls on the profitability of the company responsible for placing the pharmaceutical product on the market, including volume-based arrangements, caps and reference pricing mechanisms.
Member states may approve a specific price or level of reimbursement for the 33 Table of Contents pharmaceutical product, or alternatively adopt a system of direct or indirect controls on the profitability of the company responsible for placing the pharmaceutical product on the market, including volume-based arrangements, caps and reference pricing mechanisms.
These penalties could include delays or refusal to authorize the conduct of clinical trials or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
These penalties could include delays or refusal to authorize the conduct of clinical trials or to grant an MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
Royalties will be payable on a Huadong Licensed Product-by-Huadong Licensed Product and country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of the applicable Huadong Licensed Product in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers the applicable Huadong Licensed Product in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for the applicable Huadong Licensed Product in such country or region in the Huadong Territory.
Royalties will be payable for ARCALYST on a country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of ARCALYST in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers ARCALYST in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for ARCALYST in such country or region in the Huadong Territory.
Using a data-centric approach, our team considers a wide variety of metrics to drive informed capital allocation strategies and generate value from our portfolio of immune-modulating assets, including by analyzing potential additional indications for our products and product candidates, being opportunistic in our business development activities to in-license or acquire programs, considering appropriate opportunities to partner or out-license our programs and conducting internal research to discover and develop molecules to expand our portfolio.
Using a data-centric approach, our team considers a wide variety of metrics to drive informed capital allocation strategies and generate value from this pipeline, including by analyzing potential additional indications for our products and product candidates, being opportunistic in our business development activities to in-license or acquire programs, considering appropriate opportunities to partner or out-license our programs and conducting internal research to discover and develop molecules to expand our portfolio.
We received Breakthrough Therapy designation from the FDA for ARCALYST for the treatment of recurrent pericarditis in 2019 , Orphan Drug designation from the FDA for ARCALYST for the treatment of pericarditis, which includes the treatment of recurrent pericarditis, in 2020 and FDA approval of ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and pediatric patients 12 years and older in March 2021.
We received Breakthrough Therapy designation from the FDA for ARCALYST for the treatment of recurrent pericarditis in 2019 , Orphan Drug designation from the FDA for ARCALYST for the treatment of pericarditis, which includes the treatment of recurrent pericarditis, in 2020 and FDA approval of ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021.
Pursuant and subject to the terms of the Huadong Collaboration Agreements, Huadong has the exclusive right to conduct Huadong Territory-specific development activities for the Huadong Licensed Products in the Huadong Territory, the first right to support global development of the Huadong Licensed Products by serving as the sponsor of the global clinical trials conducted in the Huadong Territory and the exclusive right to commercialize the Huadong Licensed Products in the Huadong Territory.
Pursuant and subject to the terms of the Huadong Collaboration Agreements, Huadong has the exclusive right to conduct Huadong Territory-specific development activities for ARCALYST in the Huadong Territory, the first right to support global development of ARCALYST by serving as the sponsor of the global clinical trials conducted in the Huadong Territory and the exclusive right to commercialize ARCALYST in the Huadong Territory.
Huadong has the right to terminate each Huadong Collaboration Agreement at its discretion upon 12 months’ notice and either party may terminate the applicable Huadong Collaboration Agreement in the event of an uncured material breach of the other party or in the case of insolvency of the other party.
Huadong has the right to terminate the ARCALYST Huadong Collaboration Agreement at its discretion upon 12 months’ notice and either party may terminate the ARCALYST Huadong Collaboration Agreement in the event of an uncured material breach of the other party or in the case of insolvency of the other party.
We have seen that, as we expand awareness about the disease and our therapy, healthcare professionals look to prescribe ARCALYST earlier in the 10 Table of Contents disease’s natural history. We expect that continuing to execute on this strategy will enable us to target this additional patient population more fully.
We have seen that, as we expand awareness about the disease and our therapy, healthcare professionals look to prescribe ARCALYST earlier in the disease’s natural history. We expect that continuing to execute on this strategy will enable us to target this additional patient population more fully.
Our sales and marketing teams work to educate patients and prescribers about the signs, symptoms, duration and treatment of the disease, and the impact that recurrent pericarditis has on patients’ lives.
Our sales and marketing teams work to educate patients and prescribers about the signs, symptoms, duration and treatment of the disease, and the impact that 11 Table of Contents recurrent pericarditis has on patients’ lives.
The HTA will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
The HTA permits EU member states to use common HTA tools, methodologies, and procedures across the EU, 35 Table of Contents working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
The issued composition of matter patents acquired from Primatope have statutory expiration dates in 2036, not including any patent term extensions or adjustments. As of December 31, 2023, the patent rights licensed from BIDMC include two patents granted in the United States and 33 patents granted in other jurisdictions, including Canada and selected countries in Europe and Asia.
The issued composition of matter patents acquired from Primatope have statutory expiration dates in 2036, not including any patent term extensions or adjustments. As of December 31, 2024, the patent rights licensed from BIDMC include two patents granted in the United States and 58 patents granted in other jurisdictions, including Australia, Canada and selected countries in Europe and Asia.
Additionally, the FDA may refer applications for novel biologic candidates which present challenges in interpretation of the safety or efficacy data 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, if any.
Additionally, the FDA may refer applications for novel biologic candidates, which present challenges in interpretation of the safety or efficacy data, 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.
Our Strategy The core of our strategy is the identification, development and commercialization of therapeutic medicines for patients suffering from debilitating diseases with significant unmet medical need. We put patients first and live by our motto: Every Second Counts™. ​ Critical components of our business strategy include the following: ● Commercialize ARCALYST and Our Product Candidates, if Approved .
Our Strategy The core of our strategy is the identification, development and commercialization of therapeutic medicines for patients suffering from debilitating cardiovascular diseases with significant unmet medical need. We put patients first and live by our motto: Every Second Counts™. ​ Critical components of our business strategy include the following: ● Commercialize ARCALYST .
Huadong will be responsible for all costs of development activities and commercialization in the Huadong Territory. We and Huadong participate in a joint steering committee, which coordinates and oversees the exploitation of the Huadong Licensed Products in the Huadong Territory. We will supply certain materials to support development and commercialization activities for both mavrilimumab and ARCALYST.
Huadong will be responsible for all costs of development activities and commercialization in the Huadong Territory. We and Huadong participate in a joint steering committee, which coordinates and oversees the exploitation of ARCALYST in the Huadong Territory. We will supply certain materials to support development and commercialization activities for ARCALYST.
We received FDA approval of ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older in March 2021.
In March 2021, we received FDA approval to market ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years of age and older.
If Huadong and its affiliates do not conduct any material development or commercialization activities with respect to a Huadong Licensed Product in the People’s Republic of China for a continuous period of longer than six months, then, subject to certain exceptions, we may terminate the Huadong Collaboration Agreement applicable to such Huadong Licensed Product with 60 days’ prior written notice.
If Huadong and its affiliates do not conduct any material development or commercialization activities for ARCALYST in the People’s Republic of China for a continuous period of longer than six months, then, subject to certain exceptions, we may terminate the ARCALYST Huadong Collaboration Agreement with 60 days’ prior written notice.
We are eligible to receive up to approximately $575.0 million in additional contingent payments, including specified development, regulatory and sales-based milestones, before fulfilling our upstream financial obligations.
We remain eligible to receive up to approximately $570.0 million in additional contingent payments, including specified development, regulatory and sales-based milestones, before fulfilling our upstream financial obligations.
We value diversity and inclusion at all levels of our company. We believe that our business benefits from the different perspectives that a diverse workforce brings, and we pride ourselves on having an inclusive culture. Our diversity statement formally expresses our commitment to diversity, equity and inclusion (“DEI”) goals and we maintain a monthly DEI dashboard for our employees.
We value diversity and inclusion at all levels of our company. We believe that our business benefits from the different perspectives that a diverse workforce brings, and we pride ourselves on having an inclusive culture. Our diversity statement formally expresses our commitment to diversity, equity and inclusion (“DEI”) goals.
See “ Risk Factors—Risks Related to Competition, Executing our Strategy and Managing Growth—We face substantial competition, which may result in others discovering, developing or commercializing drugs before or more successfully than we do .” We are aware of the following products currently marketed or in clinical development for the treatment of the diseases that we are targeting or may plan to target: 17 Table of Contents ARCALYST Recurrent Pericarditis : We are not aware of any FDA-approved therapies for recurrent pericarditis, but we are aware of two programs being developed for this indication.
See “ Risk Factors—Risks Related to Competition, Executing our Strategy and Managing Growth—We face substantial competition, which may result in others discovering, developing or commercializing drugs before or more successfully than we do. ” We are aware of the following products currently marketed or in clinical development for the treatment of the diseases that we are targeting or may plan to target: ARCALYST Recurrent Pericarditis : We are not aware of any FDA-approved therapies for recurrent pericarditis, but we are aware of three competitors developing treatments for this indication.
We believe that each of our product candidates holds the potential to offer differentiated therapies to patients, and we aim to unlock that potential through innovative research and development. ● Explore Opportunities to Drive Value and Maximize the Potential of Our Existing Portfolio.
We believe that each of our product candidates holds the potential to offer differentiated therapy to patients, and we aim to unlock that potential through innovative research and development. 8 Table of Contents ● Explore Opportunities to Drive Value and Maximize the Potential of Our Existing Portfolio.
IL-1α and IL-1β provoke potent, proinflammatory events by engaging the IL-1α and IL-1β receptor. Following tissue insult, the release of IL-1α acts as the primary initiating signal to coordinate the mobilization of immune cells to the damaged area, while IL-1β is secreted mostly by macrophages and is a prototypical cytokine of the canonical NLRP-3 inflammasome.
Following tissue insult, the release of IL-1α acts as the primary initiating signal to coordinate the mobilization of immune cells to the damaged area, while IL-1β is secreted mostly by macrophages and is a prototypical cytokine of the canonical NLRP-3 inflammasome.
In practice this means that, when these provisions take effect on January 1, 2025, medicinal products destined for sale in both Great Britain and Northern Ireland will be sold under one marketing authorization (MA), and in the same packaging and labelling.
In practice this means that, since these provisions took effect on January 1, 2025, medicinal products destined for sale in both Great Britain and Northern Ireland must be sold under one marketing authorization (MA), and in the same packaging and labelling.
Foreign Government Regulation In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials, marketing authorization, post-marketing requirements and any commercial sales and distribution of our product candidates.
Foreign Government Regulation In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials, marketing authorization, post-marketing requirements and any commercial sales and distribution of products approved in such jurisdictions.
We also acquired 21 Table of Contents non-exclusive licenses to other MedImmune technology for use in exploiting licensed products. We also acquired reference rights to relevant manufacturing and regulatory documents, and MedImmune’s existing inventory of mavrilimumab drug substance and product. We are obligated to use commercially reasonable efforts to develop and commercialize the licensed products.
We also acquired non-exclusive licenses to other MedImmune technology for use in exploiting licensed products. We also acquired reference rights to relevant manufacturing and regulatory documents, and MedImmune’s existing supply of mavrilimumab drug substance and product. We were obligated to use commercially reasonable efforts to develop and commercialize the licensed products.
BLA Review and Approval Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls (collectively, “CMC”) and proposed labeling, among other things, are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications.
BLA Review and Approval Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s CMC and proposed labeling, among other things, are submitted to the FDA as part of a BLA requesting marketing approval for a product for one or more indications.
In addition, the Genentech License Agreement will terminate upon termination of the Biogen Agreement (as defined below). 19 Table of Contents Huadong Collaboration Agreements In February 2022 we entered into two collaboration and license agreements (each, a “Huadong Collaboration Agreement” and together, the “Huadong Collaboration Agreements”) with Huadong, pursuant to which we granted Huadong exclusive rights to develop and commercialize ARCALYST and develop, manufacture and commercialize mavrilimumab (each, a “Huadong Licensed Product” and together, the “Huadong Licensed Products”) in the following countries: People’s Republic of China, Hong Kong SAR, Macao SAR, Taiwan Region, South Korea, Indonesia, Singapore, The Philippines, Thailand, Australia, Bangladesh, Bhutan, Brunei, Burma, Cambodia, India, Laos, Malaysia, Maldives, Mongolia, Nepal, New Zealand, Sri Lanka, and Vietnam (collectively, the “Huadong Territory”).
Huadong Collaboration Agreements In February 2022 we entered into two collaboration and license agreements (each, a “Huadong Collaboration Agreement” and together, the “Huadong Collaboration Agreements”) with Huadong, pursuant to which we granted Huadong exclusive rights to develop and commercialize ARCALYST and develop, manufacture and commercialize mavrilimumab (each, a “Huadong Licensed Product” and together, the “Huadong Licensed Products”) in the following countries: People’s Republic of China, Hong Kong SAR, Macao SAR, Taiwan Region, South Korea, Indonesia, Singapore, The Philippines, Thailand, Australia, Bangladesh, Bhutan, Brunei, Burma, Cambodia, India, Laos, Malaysia, Maldives, Mongolia, Nepal, New Zealand, Sri Lanka, and Vietnam (collectively, the “Huadong Territory”).
As of December 31, 2023, 23 Table of Contents the patent rights in-licensed under the Regeneron Agreement relating to our program include three granted patents in the United States and a patent granted in Japan.
As of December 31, 2024, the patent rights in-licensed under the Regeneron Agreement relating to our program include three granted patents in the United States and a patent granted in Japan.
Preclinical Studies and CMC Evaluations Before testing any biological product candidate, including our product candidates, in humans, the product candidate must undergo rigorous preclinical testing. The preclinical development stage generally involves laboratory evaluations of the chemistry, formulation and stability of the product candidate, as well as trials to evaluate toxicity in animals, which support subsequent clinical testing.
Preclinical Studies Before testing any biological product candidate, including our product candidates, in humans, the product candidate must undergo rigorous preclinical testing. The preclinical development stage generally involves laboratory evaluations of the chemistry, formulation and stability of the product candidate, as well as animal trials to evaluate toxicity.
In addition, Huadong’s rights under each Huadong Collaboration Agreement in certain regions within the Huadong Territory may be subject to termination upon failure by Huadong to perform certain clinical, development or commercialization activities, as applicable, with respect to the applicable Huadong Licensed Product in such regions. 20 Table of Contents In-Licensing Agreements License Agreement with Regeneron In September 2017, we entered into a license agreement with Regeneron (the “Regeneron Agreement”).
In addition, Huadong’s rights under the ARCALYST Huadong Collaboration Agreement in certain regions within the Huadong Territory may be subject to termination upon failure by Huadong to perform certain clinical, development or commercialization activities, as applicable, in such regions. In-Licensing Agreements License Agreement with Regeneron In September 2017, we entered into a license agreement with Regeneron (the “Regeneron Agreement”).
Current Treatment Landscape for Recurrent Pericarditis and Our Solution ARCALYST, a weekly, subcutaneously injected, recombinant fusion protein that blocks IL-1α and IL-1β signaling, is the first and only FDA-approved therapy for recurrent pericarditis. A patient’s initial acute episode of pericarditis is typically treated with NSAIDs or colchicine, both of which are used off-label.
Current Treatment Landscape for Recurrent Pericarditis ARCALYST, a weekly, subcutaneously injected, recombinant fusion protein that blocks IL-1α and IL-1β signaling, is the first and only FDA-approved therapy for recurrent pericarditis. A patient’s initial acute episode of pericarditis is typically treated with NSAIDs or colchicine.
Huadong will also be obligated to pay us tiered percentage royalties on a Huadong Licensed Product-by-Huadong Licensed Product basis ranging from the low-teens to low-twenties on annual net sales of each Huadong Licensed Product in the Huadong Territory, subject to certain reductions tied to ARCALYST manufacturing costs and certain other customary reductions, with an aggregate minimum floor.
Huadong will also be obligated to pay us tiered percentage royalties ranging from the low to mid-teens on annual net sales of ARCALYST in the Huadong Territory, subject to certain reductions tied to ARCALYST manufacturing costs and certain other customary reductions, with an aggregate minimum floor.
The telephone number for our registered office is +44 808-189-6257. Our website address is www.kiniksa.com. The information contained on our website is not incorporated by reference into this Annual Report, and you should not consider any information contained on, or that can be accessed through, our website as part of this Annual Report.
The telephone number for our registered office is +1 (781) 431-9100. Our website address is www.kiniksa.com. The information contained on our website is not incorporated by reference into this Annual Report, and you should not consider any information contained on, or that can be accessed through, our website as part of this Annual Report.
Absent early termination, each Huadong Collaboration Agreement will continue on a country-by-country or region-by-region basis until there are no more royalty payments owed to us in such country or region for the applicable Huadong Licensed Product.
Absent early termination, the ARCALYST Huadong Collaboration Agreement will continue on a country-by-country or region-by-region basis until there are no more royalty payments owed to us in such country or region.
Regeneron has a right of first negotiation over our engagement of any third party to support our promotional activities in excess of a specified level and over the assignment or sale of our rights to any product we develop under the Regeneron Agreement to a third party.
Regeneron has a right of first negotiation over our engagement of any third party to support our promotional activities in excess of a specified level and over the assignment or sale of our rights to any product containing ARCALYST to a third party.
Data and Marketing Exclusivity ​ The EU also provides opportunities for market exclusivity. New products authorized for marketing (i.e., reference products) generally receive eight years of data exclusivity and an additional two years of market exclusivity upon receiving MA.
New products authorized for marketing (i.e., reference products) generally receive eight years of data exclusivity and an additional two years of market exclusivity upon receiving an MA.
As of December 31, 2023, we had approximately 297 full-time employees, of which approximately 286 were located within the United States and approximately 11 were located outside of the United States. ​ We believe that the success and growth of our business depends in large part on our continued ability to attract, retain and motivate qualified personnel at all levels of our company.
As of December 31, 2024, we had 315 full-time employees, of which 301 were located within the United States and 14 were located outside of the United States. ​ We believe that the success and growth of our business depends in large part on our continued ability to attract, retain and motivate qualified personnel at all levels of our company.
The application for Orphan Drug designation must be submitted before the application for MA. Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a MA, entitled to ten years of market exclusivity for the approved therapeutic indication.
Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a MA, entitled to ten years of market exclusivity for the approved therapeutic indication.
ARCALYST is also approved in the United States for the treatment of CAPS, including FCAS and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in DIRA in adults and children weighing 10 kg or more.
ARCALYST is currently approved in the United States for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and children 12 years and older, the treatment of CAPS, including FCAS and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in DIRA in adults and children weighing 10 kg or more.
With respect to biologics, third party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the FDA-approved products for a particular indication, or place products at certain formulary levels that result in lower reimbursement levels, which results in higher cost-sharing financial obligation imposed on patients.
Third party payors may limit coverage or take other action to control utilization of covered products, including restricting coverage to specific products on an approved list, also known as a formulary, which might not include all of the FDA-approved products for a particular indication, or place products at certain formulary levels that result in lower reimbursement levels, which results in higher cost-sharing financial obligation imposed on patients.
In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear. In February 2022, we granted Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.
In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear.
In addition, if a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to Orphan Drug exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven years from the date of such approval, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety, by providing a major contribution to patient care or in instances of drug supply issues.
In addition, if a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to Orphan Drug exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven years from the date of such approval, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.
Orphan Drug designation must be requested by the sponsor before submitting a BLA. After the FDA grants Orphan Drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan Drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
After the FDA grants Orphan Drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan Drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
As part of this process, we are qualifying and contracting with a CDMO who will serve as the new manufacturer of ARCALYST drug substance and CTLs who will serve as the new analytical testing labs of ARCALYST drug substance and drug product.
As part of this process, we are working with Samsung, who will serve as the new manufacturer of ARCALYST drug substance and CTLs who will serve as the new analytical testing labs of ARCALYST drug substance and drug product.
We plan to protect our proprietary position using a variety of methods, which include pursuing United States and foreign patent applications related to our proprietary technology, inventions and improvements, including compositions of matter, drug product formulations, methods of use and methods of manufacture, that are important to the development and implementation of our business.
We plan to protect our proprietary position using a variety of methods, which include pursuing United States and foreign patent applications related to our proprietary technology, inventions and improvements, which can include compositions of matter, drug product formulations, methods of use and methods of manufacture.
The FDA reviews a BLA to determine, among other things whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.
Once the BLA submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews a BLA to determine, among other things, whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.
Expedited Review and Approval The FDA is authorized to designate certain product candidates for expedited development and review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs include Fast Track designation, Breakthrough Therapy designation, accelerated approval and priority review.
Expedited Review and Approval The FDA is authorized to designate certain product candidates for expedited development and review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition.
Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license. Additionally, in 2023, we received a total of $35.0 million in additional payments from Genentech related to delivery of certain drug material to Genentech and Genentech’s achievement of a development milestone.
Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license. In total, we have recognized $50.0 million in additional payments from Genentech related to delivery of certain drug material to Genentech and Genentech’s achievement of development milestones under the Genentech License Agreement.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, our continued commercialization of ARCALYST or successful commercialization of any of our current or future product candidates, if approved, is subject to a number of foreseen and unforeseen factors, including: ● our inability to recruit, train and retain adequate numbers of effective sales, marketing, access, and payor and patient support personnel; ● the inability of sales personnel to obtain access to prescribers and accounts as well as for an adequate number of prescribers or accounts to prescribe any of our future products; ● the lack of complementary products to be supported by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; ● an absence or reduction in strong scientific-based relationships to drive disease awareness and education; ● our inability to establish the unmet medical need for a given disease; ● our inability to enable our products to be viewed as the product of choice within any indications for which they are approved; ● our inability to compete with current or future competitor products and/or biosimilars; ● our inability or delay in gaining or maintaining reimbursement and broad patient access at a price that reflects the value of ARCALYST or any of our future products; ● our inability to equip customer-facing personnel with effective materials, including medical and sales literature to help them educate physicians and other healthcare professionals regarding applicable diseases relevant to ARCALYST or any of our future products; ● any delays in our ability to produce sufficient quantities of ARCALYST, or any of our future products, at an acceptable cost or quality, including such delays arising out of quality assurance concerns or changes in regulatory guidance, or those caused by our reliance on our third party manufacturers; ● any delays in the ongoing technology transfer of the process for manufacturing ARCALYST drug substance; ● our inability to provide prescribers and patients adequate support and training to build comfort around the preparation and administration process to initiate and continue to use ARCALYST or any of our future products; ● our inability to develop or sustain robust patient support programs to optimize the patient and customer experience with ARCALYST or any of our future products; ● our inability to develop or obtain and sustain sufficient operational functions and infrastructure to support our commercial activities; ● our inability to establish and maintain patent and trade secret protection or regulatory exclusivity for our products; 48 Table of Contents ● our inability to enforce and defend our intellectual property rights and claims; and ● unforeseen costs and expenses associated with creating and maintaining a sales, marketing, and access organization.
Biggest changeIn addition, our continued commercialization of ARCALYST or successful commercialization of any of our current or future product candidates, if approved, could be materially adversely impacted by a number of foreseen and unforeseen factors, including: ● any delays in our ability to produce sufficient quantities of ARCALYST, or any of our future products, at an acceptable cost or quality, including such delays arising out of quality assurance concerns or changes in regulatory guidance, or those caused by our reliance on our third party manufacturers; 39 Table of Contents ● our inability to recruit, train and retain adequate numbers of effective sales, marketing, access, and payor and patient support personnel; ● the inability of sales personnel to obtain access to prescribers and accounts; ● an inadequate number of prescribers or accounts prescribing our current and future products; ● the lack of complementary products to be supported by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; ● an absence or reduction in strong scientific-based relationships to drive disease awareness and education; ● our inability to establish the unmet medical need for a given disease; ● our inability to provide acceptable evidence of safety and efficacy; ● our inability to enable our products to be viewed as the product of choice within any indications for which they are approved; ● the prevalence and severity of side effects associated with any future product; ● our inability to compete with current or future competitor products and/or biosimilars; ● the convenience and ease of administration of our products relative to alternative therapies, if any; ● our inability or delay in gaining or maintaining reimbursement and broad patient access at a price that reflects the value of ARCALYST or any of our future products; ● our inability to address product labeling or product insert requirements, including any changes mandated by regulatory authorities after initial approval; ● our inability to equip customer-facing personnel with effective materials, including medical and sales literature to help them educate physicians and other healthcare professionals regarding applicable diseases relevant to ARCALYST or any of our future products; ● any delays in the ongoing technology transfer of the process for manufacturing ARCALYST drug substance; ● our inability to provide prescribers and patients adequate support and training to build comfort around the preparation and administration process to initiate and continue to use ARCALYST or any of our future products; ● our inability to develop or sustain robust patient support programs to optimize the patient and customer experience with ARCALYST or any of our future products; ● publications of scientific literature, consensus papers and treatment guidelines unfavorable to the administration of our products and product candidates and/or the positioning of the class of drugs to which each of our products and product candidates belongs; ● our inability to develop or obtain and sustain sufficient operational functions and infrastructure to support our commercial activities; 40 Table of Contents ● our inability to establish and maintain patent and trade secret protection or regulatory exclusivity for our products; ● our inability to enforce and defend our intellectual property rights and claims; and ● unforeseen costs and expenses associated with creating and maintaining a sales, marketing, and access organization.
Additionally, our current and future products could be subject to unfavorable changes and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products .
Additionally, our current and future products could be subject to unfavorable regulatory changes and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products .
In certain countries, the term of a patent that covers a drug product may also be eligible for patent term extension when regulatory approval is granted, provided the legal requirements are met.
In certain countries, the term of a patent that covers a drug product may also be eligible for patent term extension when regulatory approval is granted, provided that the legal requirements are met.
The clinical success of our current and future product candidates depends upon several factors, including, but not limited to, the following: ● submission to and authorization to proceed with clinical trials by the FDA under INDs, and CTAs to applicable authorities outside of the United States for our product candidates to commence planned clinical trials or future clinical trials; ● successful completion of nonclinical studies, including toxicology studies, pharmacological, and biodistribution studies, as conducted, where applicable, under GLP; ● successful site activation for, enrollment in, and completion of clinical trials, including the ability of our CROs to successfully conduct such trials within our planned budget and timing parameters without adversely impacting our trials, and our ability to successfully oversee CRO activities; ● positive data from our clinical programs, including post-marketing trials and those intended to satisfy regulatory commitments or for label expansion, with sufficient quality to support an acceptable risk-benefit profile of our products and product candidates for the targeted indications in the intended populations to the satisfaction of the applicable regulatory authorities; ● timely receipt, if at all, of approvals from applicable regulatory authorities and maintenance of any such approvals; ● as applicable, acceptance of pediatric study plans by regulatory authorities, and the follow through of any pediatric study commitments, such as development of pediatric formulations, if required; ● establishment and maintenance of arrangements with third party manufacturers, as applicable, for continued clinical supply and commercial manufacturing; ● successful development of our manufacturing processes and transfer to third party CDMO facilities to support our development and commercialization activities in a manner compliant with all regulatory requirements; ● successful manufacture of sufficient supply of our product candidates within approved specifications for purity, efficacy and cGMP requirements from our facility and from our CDMOs or other sole-source 59 Table of Contents manufacturers in order to meet clinical or commercial demand, as applicable, for ourselves and for our partners; ● continued compliance with any post-marketing requirements imposed by regulatory authorities, including any required post-marketing clinical trial commitments or REMS or similar risk management measures; and ● maintenance of a continued acceptable safety profile of our product candidates before and following approval.
The clinical success of our current and future product candidates depends upon several factors, including, but not limited to, the following: ● submission to and authorization to proceed with clinical trials by the FDA under INDs and CTAs to applicable authorities outside of the United States for our product candidates to commence planned clinical trials or future clinical trials; ● successful completion of nonclinical studies, including toxicology studies, pharmacological, and biodistribution studies, as conducted, where applicable, under GLP; ● successful site activation for, enrollment in, and completion of clinical trials, including the ability of our CROs to successfully conduct such trials within our planned budget and timing parameters without adversely impacting our trials, and our ability to successfully oversee CRO activities; ● positive data from our clinical programs, including post-marketing trials and those intended to satisfy regulatory commitments or for label expansion, with sufficient quality to support an acceptable risk-benefit profile of our products and product candidates for the targeted indications in the intended populations to the satisfaction of the applicable regulatory authorities; ● timely receipt, if at all, of approvals from applicable regulatory authorities and maintenance of any such approvals; 48 Table of Contents ● as applicable, acceptance of pediatric study plans by regulatory authorities, and the follow through of any pediatric study commitments, such as development of pediatric formulations, if required; ● establishment and maintenance of arrangements with third party manufacturers, as applicable, for continued clinical supply and commercial manufacturing; ● successful development of our manufacturing processes and transfer to third party CDMO facilities to support our development and commercialization activities in a manner compliant with all regulatory requirements; ● successful manufacture of sufficient supply of our product candidates within approved specifications for purity, efficacy and cGMP requirements from our facility and from our CDMOs or other sole-source manufacturers in order to meet clinical or commercial demand, as applicable, for ourselves and for our partners; ● continued compliance with any post-marketing requirements imposed by regulatory authorities, including any required post-marketing clinical trial commitments or REMS or similar risk management measures; and ● maintenance of a continued acceptable safety profile of our product candidates before and following approval.
Doing business internationally involves a number of other risks, including but not limited to: ● multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, employment laws, regulatory requirements, permits and export and import restrictions; ● failure by us to obtain and maintain regulatory approvals for the use of our products in various countries; ● additional potentially relevant third party patent rights; ● complexities and difficulties in obtaining protection and enforcing our intellectual property; ● difficulties in staffing and managing operations outside of the United States; ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; ● limits in our ability to penetrate international markets; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability such as war, terrorism, political unrest, outbreak of disease, labor disputes and boycotts; ● curtailment of trade, and other business restrictions; ● certain expenses including, among others, expenses for travel, translation and insurance; and 98 Table of Contents ● regulatory and compliance risks that relate to maintaining accurate information and control over clinical activities, sales and other functions that may fall within the purview of the United States Foreign Corrupt Practices Act, its books and records provisions or its antibribery provisions.
Doing business internationally involves a number of other risks, including but not limited to: ● multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, employment laws, regulatory requirements, permits and export and import restrictions; ● failure by us to obtain and maintain regulatory approvals for the use of our products in various countries; ● additional potentially relevant third party patent rights; 90 Table of Contents ● complexities and difficulties in obtaining protection and enforcing our intellectual property; ● difficulties in staffing and managing operations outside of the United States; ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; ● limits in our ability to penetrate international markets; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability such as war, terrorism, political unrest, outbreak of disease, labor disputes and boycotts; ● curtailment of trade, and other business restrictions; ● certain expenses including, among others, expenses for travel, translation and insurance; and ● regulatory and compliance risks that relate to maintaining accurate information and control over clinical activities, sales and other functions that may fall within the purview of the United States Foreign Corrupt Practices Act, its books and records provisions or its antibribery provisions.
Further, conducting global clinical trials , as we do for certain of our product candidates, may require that we coordinate among the legal requirements and guidelines of regulatory authorities across a number of jurisdictions, including the United States, EU and countries outside of those jurisdictions, which could require that we amend clinical trial protocols or determine not to conduct a trial in one or more jurisdictions or to run separate trials in various jurisdictions due to the inability, cost or delay in harmonizing divergent requests from such regulatory authorities, all of which could increase costs.
Further, conducting global clinical trials , as we do for certain of our product candidates, may require that we coordinate among the legal requirements and guidelines of regulatory authorities across a number of jurisdictions, including the United States, the EU, the United Kingdom and countries outside of those jurisdictions, which could require that we amend clinical trial protocols or determine not to conduct a trial in one or more jurisdictions or to run separate trials in various jurisdictions due to the inability, cost or delay in harmonizing divergent requests from such regulatory authorities, all of which could increase costs.
If we, or our subsidiaries, are classified as a PFIC for any taxable year during which a United States Holder holds our Class A common shares, certain adverse United States federal income tax consequences could apply to such United States Holder, including (i) the treatment as ordinary income of any gain realized on a disposition of our shares and distributions on our shares not being qualified dividend income, (ii) the application of a deferred interest charge on the tax on such gain and distributions, and (iii) the obligation to comply with certain reporting requirements.
If we, or our subsidiaries, are classified as a PFIC for any taxable year during which a United States Holder holds our Class A ordinary shares, certain adverse United States federal income tax consequences could apply to such United States Holder, including (i) the treatment as ordinary income of any gain realized on a disposition of our shares and distributions on our shares not being qualified dividend income, (ii) the application of a deferred interest charge on the tax on such gain and distributions, and (iii) the obligation to comply with certain reporting requirements.
Collaborations, licenses or other strategic transactions or arrangements are subject to numerous risks, which may include risks that the collaborator, licensee or other strategic partner, as applicable: ● may not pursue development and commercialization of the applicable licensed drugs or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or product candidates or their internal development of competitive products and product candidates, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● raise disputes with respect to the ownership or inventorship of any intellectual property developed pursuant to our collaborations or licenses; ● may not properly prosecute, maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; ● may own or co-own intellectual property covering products that results from our arrangement with them, that is not properly prepared, prosecuted, maintained or defended in a way that could impact that patentability of the intellectual property or validity for any granted patent, which could shorten the term during which we are owed royalties on such intellectual property; ● may own or co-own intellectual property covering products that results from our arrangement with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property, and even if we are able to license such exclusive rights, we may have to enter into a license agreement that include obligations to make milestone, royalty or other payments under such agreement; ● may not achieve applicable development, regulatory, or commercial milestones, which may materially impact the collaboration revenue that we expect to realize from such relationship; ● raise disputes that cause the delay or termination of the research, development or commercialization of our current or future products and product candidates or that results in costly litigation or arbitration that diverts management attention and resources; ● cause us to be named defendants in lawsuits due to their improper use of the licensed intellectual property and not indemnify us against losses in such lawsuits; ● enforce licensed intellectual property rights against third parties that lead such third parties to challenge the validity or enforceability of the licensed intellectual property and potentially cause the licensed intellectual property to become invalid or rendered unenforceable; ● fail to maintain issued licensed patents that are under their control, or prosecute licensed patent applications in ways that diminish their value, all of which actions may adversely affect our business if our agreements with them terminate and the rights to the licensed intellectual property return to us or an upstream licensor; may delay, dispute or refuse to pay milestone and royalty payments, which may impact our ability to satisfy upstream payment obligations, if applicable; and ● may conduct sales and marketing activities or other operations that may not comply with applicable laws, resulting in civil or criminal proceedings.
Collaborations, licenses or other strategic transactions or arrangements are subject to numerous risks, which may include risks that the collaborator, licensee or other strategic partner, as applicable: ● may not pursue development and commercialization of the applicable licensed drugs or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or product candidates or their internal development of competitive products and product candidates, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● raise disputes with respect to the ownership or inventorship of any intellectual property developed pursuant to our collaborations or licenses; ● may not properly prosecute, maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; ● may own or co-own intellectual property covering products that results from our arrangement with them, that is not properly prepared, prosecuted, maintained or defended in a way that could impact that patentability of the intellectual property or validity for any granted patent, which could shorten the term during which we are owed royalties on such intellectual property; ● may own or co-own intellectual property covering products that results from our arrangement with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property, and even if we are able to license such exclusive rights, we may have to enter into a license agreement that includes obligations to make milestone, royalty or other payments under such agreement; ● may not achieve applicable development, regulatory, or commercial milestones, which may materially impact the collaboration revenue that we expect to realize from such relationship; ● raise disputes that cause the delay or termination of the research, development or commercialization of our current or future products and product candidates or that results in costly litigation or arbitration that diverts management attention and resources; ● cause us to be named defendants in lawsuits due to their improper use of the licensed intellectual property and not indemnify us against losses in such lawsuits; 71 Table of Contents ● enforce licensed intellectual property rights against third parties that lead such third parties to challenge the validity or enforceability of the licensed intellectual property and potentially cause the licensed intellectual property to become invalid or rendered unenforceable; ● fail to maintain issued licensed patents that are under their control, or prosecute licensed patent applications in ways that diminish their value, all of which actions may adversely affect our business if our agreements with them terminate and the rights to the licensed intellectual property return to us or an upstream licensor; may delay, dispute or refuse to pay milestone and royalty payments, which may impact our ability to satisfy upstream payment obligations, if applicable; and ● may conduct sales and marketing activities or other operations that may not comply with applicable laws, resulting in civil or criminal proceedings.
Such trial sites may also incur risks associated with further delays and expenses as a result of increased shipment costs (including as a result of local quality release or in-country testing of a product candidate supply produced in a different jurisdiction for our clinical trials) and political and economic risks relevant to such countries outside the United States and the EU.
Such trial sites may also incur risks associated with further delays and expenses as a result of increased shipment costs (including as a result of local quality release or in-country testing of a product candidate supply produced in a different jurisdiction for our clinical trials) and political and economic risks relevant to such countries outside the United States, the EU and the United Kingdom.
However, if the results of our clinical trials, including clinical trials evaluating our current products in new indications, or clinical trials conducted by collaboration partners, reveal an unacceptable severity and prevalence of certain side effects, the FDA or applicable regulatory authority outside of the United States may suspend or terminate our clinical trials, or not authorize us to initiate further trials.
If the results of our clinical trials, including clinical trials evaluating our current products in new indications, or clinical trials conducted by collaboration partners, reveal an unacceptable severity and prevalence of certain side effects, the FDA or applicable regulatory authority outside of the United States may suspend or terminate our clinical trials, or not authorize us to initiate further trials.
The marketing of pharmaceutical products and related arrangements with healthcare professionals, third party payors, patients, and other third parties in the healthcare industry are subject to a wide range of healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our current and future products.
The development and marketing of pharmaceutical products and related arrangements with healthcare professionals, third party payors, patients, and other third parties in the healthcare industry are subject to a wide range of healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our current and future products.
For example, most healthcare professionals, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA, as amended. We do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not subject to its requirements or penalties.
For example, most healthcare professionals, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA. We do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not subject to its requirements or penalties.
Any government investigation of alleged violations of law could require us to expend significant time, cost and resources in response, and could generate negative publicity or reputational harm. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products.
Any government investigation of alleged violations of law and regulations could require us to expend significant time, cost and resources in response, and could generate negative publicity or reputational harm. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products.
The market price for our Class A common shares may be influenced by many factors, including: ● our ability to generate revenue through the successful commercialization of our products and product candidates, if approved; ● the size of the market for our products and product candidates, if approved; ● the results of clinical trials for our product candidates or any delays in the commencement, enrollment and the ultimate completion of clinical trials; ● failures in obtaining approval of our product candidates; ● the results and potential impact of competitive products or technologies; ● our ability to manufacture and successfully produce our products and product candidates; ● actual or anticipated changes in estimates as to financial results, capitalization, development timelines or recommendations by securities analysts; ● the level of expenses related to any of our products and product candidates or clinical development programs; ● variations in our financial results or those of companies that are perceived to be similar to us; ● financing or other corporate transactions, or our inability to obtain additional funding; ● failure to meet or exceed the expectations of the investment community; ● regulatory or legal developments in the United States and other countries; ● the recruitment or departure of key personnel; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; 105 Table of Contents ● the results of our efforts to discover, develop, acquire or in-license additional product candidates or from our entering into collaborations or other strategic transaction agreements; ● changes in the structure of healthcare payment systems; ● market conditions in the pharmaceutical and biotechnology sectors; ● general economic, industry and market conditions, including pandemics or other outbreaks of disease and rising inflation rates; ● changes in voting control of, or sales of our shares by, our executive officers and certain other members of our senior management or entities affiliated with certain of our directors that hold our shares; and ● the other factors described in this “Risk Factors” section.
The market price for our Class A ordinary shares may be influenced by many factors, including: ● our ability to generate revenue through the successful commercialization of our products and product candidates, if approved; ● the size of the market for our products and product candidates, if approved; ● the results of clinical trials for our product candidates or any delays in the commencement, enrollment and the ultimate completion of clinical trials; ● failures in obtaining approval of our product candidates; ● the results and potential impact of competitive products or technologies; ● our ability to manufacture and successfully produce our products and product candidates; ● actual or anticipated changes in estimates as to financial results, capitalization, development timelines or recommendations by securities analysts; ● the level of expenses related to any of our products and product candidates or clinical development programs; ● variations in our financial results or those of companies that are perceived to be similar to us; ● financing or other corporate transactions, or our inability to obtain additional funding; ● failure to meet or exceed the expectations of the investment community; ● regulatory or legal developments in the United States and other countries; ● the recruitment or departure of key personnel; 93 Table of Contents ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the results of our efforts to discover, develop, acquire or in-license additional product candidates or from our entering into collaborations or other strategic transaction agreements; ● changes in the structure of healthcare payment systems; ● market conditions in the pharmaceutical and biotechnology sectors; ● general economic, industry and market conditions, including pandemics or other outbreaks of disease and rising inflation rates; ● changes in voting control of, or sales of our shares by, our executive officers and certain other members of our senior management or entities affiliated with certain of our directors that hold our shares; and ● the other factors described in this “Risk Factors” section.
If the market opportunities for our products and product candidates are smaller than we estimate, or if any approval that we obtain is based on a narrower definition of the patient population, our revenue and ability to achieve profitability may be materially adversely affected.
If the market opportunities for our products and product candidates are smaller than we estimate, or if any approval that we obtain is based on a narrower definition of our targeted patient population, our revenue and ability to achieve profitability may be materially adversely affected.
The EMA PRIME scheme or other schemes, designations, or tools, even if obtained or used for any of our product candidates may not lead to a faster development, regulatory review or approval process compared to therapies considered for approval under conventional procedures and do not assure ultimate approval.
The PRIME scheme or other schemes, designations, or tools, even if obtained or used for any of our product candidates may not lead to a faster development, regulatory review or approval process compared to therapies considered for approval under conventional procedures and do not assure ultimate approval.
The competent regulatory authorities in the EU have broad discretion whether to grant such an accelerated assessment, conditional marketing authorization or marketing authorization under exceptional circumstances, and, even if such assessment or authorization is granted, we may not experience a faster development process, review or authorization compared to conventional procedures.
The regulatory authorities in the EU have broad discretion whether to grant such an accelerated assessment, conditional marketing authorization or marketing authorization under exceptional circumstances, and, even if such assessment or authorization is granted, we may not experience a faster development process, review or authorization compared to conventional procedures.
Failure to produce sufficient quantities of our product candidates could delay their development, result in supply shortages for our patients, result in lost revenue, if any, and diminish our potential profitability, as applicable, which may lead to lawsuits or could delay the introduction of our product candidates to the market.
Failure to produce sufficient quantities of our products and product candidates could delay their development, result in supply shortages for our patients, result in lost revenue, if any, and diminish our potential profitability, as applicable, which may lead to lawsuits or could delay the introduction of our product candidates to the market.
We also experience competition for the hiring of scientific, sales, marketing and clinical personnel from other pharmaceutical companies, universities and research institutions, as applicable. Failure to succeed in clinical trials may make it more challenging to recruit and retain qualified scientific and clinical personnel.
We also experience competition for the hiring of corporate, scientific, sales, marketing and clinical personnel from other pharmaceutical companies, universities and research institutions, as applicable. Failure to succeed in clinical trials may make it more challenging to recruit and retain qualified scientific and clinical personnel.
If we obtain approval, and ultimately commercialize, our product candidates in markets outside of the United States, we would be subject to additional risks and uncertainties, including: ● our ability to obtain reimbursement for our product candidates in such markets; ● our inability to directly control commercial activities because we may rely on third parties; ● the burden of complying with complex and changing regulatory, tax, accounting and legal requirements of such countries; ● exposure to increased regulatory risk, including those arising under the FCPA (as defined below); ● different medical practices and customs in such countries affecting acceptance in the marketplace; ● import or export licensing requirements; ● longer accounts receivable collection times; ● longer lead times for shipping; ● language barriers for technical training and the need for language translations; ● reduced protection of intellectual property rights in certain countries; ● the existence of additional potentially relevant third party intellectual property rights; and ● foreign currency exchange rate fluctuations.
If we obtain approval, and ultimately commercialize, our product candidates in markets outside of the United States, we would be subject to additional risks and uncertainties, including: ● our ability to obtain reimbursement for our product candidates in such markets; ● our inability to directly control commercial activities because we may rely on third parties; ● the burden of complying with complex and changing regulatory, tax, accounting and legal requirements of such countries; ● exposure to increased regulatory risk, including those arising under the FCPA (as defined below); ● different medical practices and customs in such countries affecting acceptance in the marketplace; ● import or export licensing requirements; ● longer accounts receivable collection times; ● longer lead times for shipping; ● language barriers for technical training and the need for language translations; ● reduced protection of intellectual property rights in certain countries; ● the existence of additional potentially relevant third party intellectual property rights; and 45 Table of Contents ● foreign currency exchange rate fluctuations.
Some of these patent applications have already been allowed or issued, and others may issue in the future. For example, we are aware of third party patents that contain claims potentially relevant to abiprubart and mavrilimumab .
Some of these patent applications have already been allowed or issued, and others may issue in the future. For example, we are aware of third party patents that contain claims potentially relevant to abiprubart.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. Recruiting and retaining qualified scientific, clinical, regulatory, manufacturing and sales and marketing personnel is also critical to our success.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. Recruiting and retaining qualified corporate, scientific, clinical, regulatory, manufacturing and sales and marketing personnel is also critical to our success.
Our research programs and business development efforts, including businesses or technology acquisitions, collaborations or licensing attempts, may fail to yield additional complementary or successful product candidates for clinical development and commercialization or successful business combinations for a number of reasons, including, but not limited to, the following: ● we may be unsuccessful in identifying potential product candidates or businesses with a high probability of success for development progression; 81 Table of Contents ● we may not be able or willing to assemble sufficient resources or expertise to in-license, acquire or discover additional product candidates or acquire businesses or undertake business combinations, collaborations, or other strategic transactions; ● we may not be able to agree to acceptable terms with potential licensors, partners or acquisition targets; ● we may incur substantial liabilities as part of an acquisition or merger that may not be offset by the benefits of the acquired assets or the synergies we hope to realize; and ● any product candidates or technologies to which we acquire the rights or that we discover may not allow us to leverage our expertise and our development and commercial infrastructure as currently expected.
Our research programs and business development efforts, including businesses or technology acquisitions, collaborations or licensing attempts, may fail to yield additional complementary or successful product candidates for clinical development and commercialization or successful business combinations for a number of reasons, including, but not limited to, the following: ● we may be unsuccessful in identifying potential product candidates or businesses with a high probability of success for development progression; ● we may not be able or willing to assemble sufficient resources or expertise to in-license, acquire or discover additional product candidates or acquire businesses or undertake business combinations, collaborations, or other strategic transactions; ● we may not be able to agree to acceptable terms with potential licensors, partners or acquisition targets; ● we may incur substantial liabilities as part of an acquisition or merger that may not be offset by the benefits of the acquired assets or the synergies we hope to realize; and ● any product candidates or technologies to which we acquire the rights or that we discover may not allow us to leverage our expertise and our development and commercial infrastructure as currently expected.
Risks Related to Ownership of Our Common Shares The concentration of ownership of our Class B common shares, which are held primarily by our executive officers and certain other members of our senior management, and the conversion rights of the holders of our Class A1 common shares, which shares are held primarily by entities affiliated with certain of our directors, and Class B1 common shares, all of which shares are held by entities affiliated with certain of our directors, means that such persons are, and such entities may in the future be, able to influence certain matters submitted to our shareholders for approval, which may have an adverse effect on the price of our Class A common shares and may result in our Class A common shares being undervalued.
Risks Related to Ownership of Our Ordinary Shares The concentration of ownership of our Class B ordinary shares, which are held primarily by our executive officers and certain other members of our senior management, and the conversion rights of the holders of our Class A1 ordinary shares, which shares are held primarily by entities affiliated with certain of our directors, and Class B1 ordinary shares, all of which shares are held by entities affiliated with certain of our directors, means that such persons are, and such entities may in the future be, able to influence certain matters submitted to our shareholders for approval, which may have an adverse effect on the price of our Class A ordinary shares and may result in our Class A ordinary shares being undervalued.
If we or others later identify undesirable side effects caused by our product or any of our product candidates, if approved, a number of potentially significant negative consequences could result, including but not limited to: ● regulatory authorities may withdraw approvals of such product and require us to take it off the market; ● regulatory authorities may require the addition of labeling statements, specific warnings, contraindications or field alerts to prescribers and pharmacies; 65 Table of Contents ● we may be required to create a registry or a REMS plan or similar risk management measures, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare professionals or other elements to assure safe use; ● we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product; ● we may be subject to limitations on how we promote the product, or sales of the product may decrease significantly; ● we could be sued and held liable for harm caused to patients; ● the product may become less competitive; and ● our reputation may suffer.
If we or others later identify undesirable side effects caused by our products or product candidates, if approved, a number of potentially significant negative consequences could result, including but not limited to: ● regulatory authorities may withdraw approvals of such product and require us to take it off the market; ● regulatory authorities may require the addition of labeling statements, specific warnings, contraindications or field alerts to prescribers and pharmacies; ● we may be required to create a registry or a REMS plan or similar risk management measures, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare professionals or other elements to assure safe use; 54 Table of Contents ● we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product; ● we may be subject to limitations on how we promote the product, or sales of the product may decrease significantly; ● we could be sued and held liable for harm caused to patients; ● the product may become less competitive; and ● our reputation may suffer.
If we discover previously unknown problems with a product or product candidate, including adverse events of unanticipated severity or frequency, or with our manufacturing processes; fail to comply with regulatory requirements; or a regulatory agency or enforcement authority disagrees with the promotion, marketing or labeling of our products, such regulatory agency or enforcement authority may, among other things: ● issue warning letters; ● impose civil or criminal penalties; ● suspend or withdraw regulatory approval; ● suspend any of our ongoing clinical trials; ● refuse to approve pending applications or supplements to approved applications submitted by us; ● impose restrictions on our operations, including closing our CDMOs’ facilities; ● require us to withdraw or correct our marketing materials; or ● seize or detain products or require a product recall.
If we discover previously unknown problems with a product or product candidate, including adverse events of unanticipated severity or frequency, or with our manufacturing processes; fail to comply with regulatory requirements; or a regulatory agency or enforcement authority disagrees with the promotion, marketing or labeling of our products, such regulatory agency or enforcement authority may, among other things: ● issue warning letters; ● impose civil or criminal penalties; ● suspend or withdraw regulatory approval; ● suspend any of our ongoing clinical trials; ● refuse to approve pending applications or supplements to approved applications submitted by us; 46 Table of Contents ● impose restrictions on our operations, including closing our CDMOs’ facilities; ● require us to withdraw or correct our marketing materials; or ● seize or detain products or require a product recall.
Our future financial performance and our ability to commercialize our product candidates, if approved, and to compete effectively will depend, in part, on our ability to effectively manage the future development of our company and expansion of our operations.
Our future financial performance and our ability to commercialize our product candidates, if approved, will depend, in part, on our ability to effectively manage the future development of our company and expansion of our operations.
In the event that we cannot successfully negotiate with payors requesting price concessions in connection with a price increase or otherwise, such payors may choose to not cover our current and future products at all or may instate onerous reimbursement policies that limit patient access. We cannot assure you that current payor coverage and reimbursement policies for ARCALYST will continue.
In the event that we cannot successfully negotiate with payors requesting price concessions in connection with a price increase or otherwise, such payors may choose to not cover our current and future products at all or may impose onerous reimbursement policies that limit patient access. We cannot assure you that current payor coverage and reimbursement policies for ARCALYST will continue.
Such technology transfer will be subject to significant risks and uncertainties. ” The facilities used by our CDMOs to manufacture ARCALYST and our current and future product candidates may be inspected by regulatory authorities in connection with the submission of our MAs to, and review by, regulatory authorities or based on their work for other clinical trial sponsors.
Such technology transfer will be subject to significant risks and uncertainties. ” The facilities used by our CDMOs to manufacture, label and package ARCALYST and our current and future product candidates may be inspected by regulatory authorities in connection with the submission of our MAs to, and review by, regulatory authorities or based on their work for other clinical trial sponsors.
Adverse differences between interim data and final data could significantly harm the development of our product candidate and our business prospects with respect thereto. Further, from time to time we may announce or publish topline or preliminary data from our preclinical studies or clinical trials, which are based on a preliminary analysis of data from a completed study.
Adverse differences between interim data and final data could significantly harm the development of our product candidates and our business prospects with respect thereto. Further, from time to time we may announce or publish topline or preliminary data from our preclinical studies or clinical trials, which are based on a preliminary analysis of data from a completed study.
In addition, we make public statements about our use, collection, disclosure and other processing of 101 Table of Contents personal data through our privacy policies and information provided on our website. Although we endeavor to comply with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so.
In addition, we make public statements about our use, collection, disclosure and other processing of personal data through our privacy policies and information provided on our website. Although we endeavor to comply 88 Table of Contents with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so.
An adverse determination in any such submission or proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our or our licensees’ ability to stop others from using or commercializing similar or identical technology and products, without payment to us, could limit the duration of the patent protection covering our technology, product and product candidates, or could reduce the period of time during which our licensees are obligated to make royalty payments to us 87 Table of Contents for the sale of licensed products.
An adverse determination in any such submission or proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our or our licensees’ ability to stop others from using or commercializing similar or identical technology and products, without payment to us, could limit the duration of the patent protection covering our technology, product and product candidates, or could reduce the period of time during which our licensees are obligated to make royalty payments to us for the sale of licensed products.
These collaborations may be subject to a number of risks, including those listed under “ —Risks Related to Competition, Executing our Strategy and Managing Growth – We have entered into and may seek to enter into collaboration, licensing or other strategic transactions or arrangements to further develop, commercialize or otherwise attempt to realize value from one or more of our products and product candidates, and any such transactions or arrangements that we enter into may not be successful or be on favorable terms, which could adversely affect our ability to develop, commercialize or attempt to realize value from our products and product candidates” above.
These collaborations may be subject to a number of risks, including those listed under “ —Risks 77 Table of Contents Related to Competition, Executing our Strategy and Managing Growth – We have entered into and may seek to enter into collaboration, licensing or other strategic transactions or arrangements to further develop, commercialize or otherwise attempt to realize value from one or more of our products and product candidates, and any such transactions or arrangements that we enter into may not be successful or be on favorable terms, which could adversely affect our ability to develop, commercialize or attempt to realize value from our products and product candidates” above.
If a patent holder believes our product candidate infringes its patent, the patent holder may sue us even if we have received patent protection for our technology. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant drug revenue and against whom our own patent portfolio may thus have no deterrent effect.
If a patent holder believes our products or product candidate infringes its patent, the patent holder may sue us even if we have received patent protection for our technology. Moreover, we may face patent infringement claims from non-practicing entities that have no relevant drug revenue and against whom our own patent portfolio may thus have no deterrent effect.
To the extent ESG matters negatively impact our reputation, we may be affected in a number of ways, including an inability to recruit and retain personnel and a decrease in the trading price of our Class A common shares. Climate change, and related regulation, may result in increased costs or otherwise negatively impact our operations and harm our business.
To the extent ESG matters negatively impact our reputation, we may be affected in a number of ways, including an inability to recruit and retain personnel and a decrease in the trading price of our Class A ordinary shares. Climate change, and related regulation, may result in increased costs or otherwise negatively impact our operations and harm our business.
Market conditions are often difficult to predict and there can be no assurance as to the performance of our Class A common shares or that we will not experience any adverse effects that may be material to our consolidated cash flows, results of operations, financial position or our ability to access capital.
Market conditions are often difficult to predict and there can be no assurance as to the performance of our Class A ordinary shares or that we will not experience any adverse effects that may be material to our consolidated cash flows, results of operations, financial position or our ability to access capital.
See “ Risk Factors – Risks Related to Product Development – If we are unable to advance our product candidates in clinical development and obtain regulatory approval, or experience significant delays in doing so, our business may be significantly harmed. ” ​ Commencing a clinical trial is subject to acceptance by the FDA of an IND or IND amendments, acceptance by competent authorities of the EU member states of a CTA under the CTR or acceptance by other applicable regulatory authorities, and finalizing the trial design based on discussions with the FDA, competent authorities of the EU member states or other applicable regulatory authorities.
See “ Risk Factors – Risks Related to Product Development – If we are unable to advance our product candidates in clinical development and obtain regulatory approval, or experience significant delays in doing so, our business may be significantly harmed. ” Commencing a clinical trial is subject to acceptance by the FDA of an IND or IND amendments, acceptance by competent authorities of the EU member states of a CTA under the CTR or acceptance by other applicable regulatory 49 Table of Contents authorities, and finalizing the trial design based on discussions with the FDA, competent authorities of the EU member states or other applicable regulatory authorities.
For more information see “ Risk Factors — Risks Related to Manufacturing and Our Reliance on Third Parties — We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to a new CDMO and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.
For more information see “ Risk Factors — Risks Related to Manufacturing and Our Reliance on Third Parties — We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to Samsung and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.
For more information see “ Risk Factors — Risks Related to Manufacturing and Our Reliance on Third Parties — We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to a new CDMO and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.
For more information see “ Risk Factors — Risks Related to Manufacturing and Our Reliance on Third Parties — We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to Samsung and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.
Any future growth outside of the United States would be subject to additional regulatory burdens and other risks and uncertainties. Our future corporate profitability may depend, in part, on our ability to commercialize our current and future products in markets outside of the United States either on our own or through collaborations with third parties.
Any future growth outside of the United States would be subject to additional regulatory burdens and other risks and uncertainties. Our future growth may depend, in part, on our ability to commercialize our current and future products in markets outside of the United States either on our own or through collaborations with third parties.
We completed an analysis of the Company’s and its subsidiaries sources of income and character of their assets for United States federal income tax purposes and determined that neither the Company nor any of its subsidiaries would be classified as a PFIC for the taxable year ending December 31, 2022.
We completed an analysis of the Company’s and its subsidiaries sources of income and character of their assets for United States federal income tax purposes and determined that neither the Company nor any of its subsidiaries would be classified as a PFIC for the taxable year ending December 31, 2023.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Class A common shares.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Class A ordinary shares.
Further, following the withdrawal of the UK from the EU on January 31, 2020, and the expiration of the transition period, from January 1, 2021, companies have had to comply with the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
Further, following the withdrawal of the United Kingdom from the EU on January 31, 2020, and the expiration of the transition period, from January 1, 2021, companies have had to comply with the GDPR and also the United Kingdom GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.
Given the vast number of patents in our field of technology, we cannot be certain that we do not infringe existing patents or that we will not infringe patents that may be granted in the future. Many companies have filed, and continue to file, patent applications related to immunomodulation.
Given the vast number of patents in our field of technology, we cannot be certain that we do not infringe existing patents or that we will not infringe patents that may be granted in the future. Many companies have filed, and continue to file, patent applications related to immunomodulation and antibody-related technologies.
The price of our Class A common shares may be volatile and fluctuate substantially, which could result in substantial losses for holders of our Class A common shares. Our share price may be subject to change as a result of volatility in the stock market driven by events often unrelated to our operating performance.
The price of our Class A ordinary shares may be volatile and fluctuate substantially, which could result in substantial losses for holders of our Class A ordinary shares. Our share price may be subject to change as a result of volatility in the stock market driven by events often unrelated to our operating performance.
If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our Class A common shares could decrease, which in turn could cause the price of our Class A common shares or its trading volume to decline.
If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our Class A ordinary shares could decrease, which in turn could cause the price of our Class A ordinary shares or its trading volume to decline.
These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company and may prevent our shareholders from receiving the benefit from any premium to the market price of our Class A common shares offered by a bidder in a takeover context.
These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company and may prevent our shareholders from receiving the benefit from any premium to the market price of our Class A ordinary shares offered by a bidder in a takeover context.
Events that have and may in the future delay or prevent commencement or successful completion of clinical development of our product candidates as planned and on schedule, if at all, include but are not limited to: ​ ● inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical trials; ● delays or failure in reaching a consensus with regulatory agencies on trial design or implementation, including the appropriate dosage levels, frequency of dosing, or treatment period in clinical trials; ● delays or failure in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● difficulties in obtaining required IRB, ethics committee approval or positive opinion at each clinical trial site; ● delays or failure in obtaining regulatory approval to commence a trial, or imposition of a clinical hold by regulatory authorities; ● difficulty in identifying and enrolling suitable participants in a particular trial, which may reduce the power of a clinical trial to detect statistically significant results; ● amendments to clinical trial protocols impacting study criteria, endpoints or design, including amendments that either we initiate or are requested by regulatory authorities; ● difficulty collaborating with patient groups and investigators; ● failure by our CROs, medical institutions, or other third parties we contract with in connection with our clinical trials to adhere to clinical trial requirements or to perform their obligations in a timely manner or in compliance with all applicable laws and regulations, including the FCPA; ● failure to perform in accordance with the FDA’s good clinical practices (“GCPs”) or applicable comparable regulatory guidelines in other countries; 61 Table of Contents ● participants not completing a clinical trial or not returning for post-treatment follow-up, including as a result of trial demands on participants; ● clinical trial sites withdrawing from or being unable to conduct activities, or participants withdrawing from clinical trials, including as a result of a pandemic or other outbreak of disease and global conflict; ● participants experiencing serious adverse events or undesirable side effects or being exposed to unacceptable health risks; ● participants failing to experience confirmed pre-specified events during the clinical trial within an expected timeframe, if at all; ● safety issues, including occurrence of adverse events associated with a product candidate, that are viewed to outweigh its potential benefits; ● changes in regulatory requirements, policies and guidance that require amending or submitting new clinical protocols; ● the cost of clinical trials being greater than we anticipate; ● strategic decisions regarding clinical study priority for capital preservation purposes; ● failure by us, our CROs, or other third parties with whom we contract to properly collect, analyze, and/or assess clinical data, including the performance of assays, analyses and other activities; ● clinical trials of our product candidates producing negative, inconclusive or uncompetitive results, which may result in us deciding, or regulatory authorities requiring us, to conduct additional clinical trials or modify or cease development programs for our product candidates; ● failure to replicate safety, efficacy or other data from earlier preclinical studies and clinical trials conducted by us or third parties, including the companies from whom we have licensed or acquired or may in the future license or acquire our product candidates, in our later clinical trials; ● the occurrence of adverse or other events not observed in earlier studies ; ● suspensions or terminations of our clinical trials by us or the IRBs of the institutions in which our clinical trials are being conducted, the Data Safety Monitoring Board for such trials or the FDA or comparable regulatory authorities; ● failure of manufacturers, or us, to produce sufficient quantities of or phase-appropriate supplies of our product candidates for use in our clinical trials in accordance with applicable cGMP requirements and regulations or applicable comparable regulatory guidelines in other countries; ● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing either as a result of quality assurance or due to our reliance on third party manufacturers; and ● disruptions to our business operations, including our manufacturing operations, and the business operations of our third party manufacturers, CROs upon whom we rely to conduct our clinical trials, or other third parties with whom we conduct business or otherwise engage, as well as disruptions in supply chain distribution in the countries in which we conduct our clinical trials, our manufacturers produce our product candidates or we otherwise conduct business or engage with other third parties, now or in the future. 62 Table of Contents Delays in the commencement or completion of our planned and ongoing clinical trials have occurred and may continue to occur.
Events that have and may in the future delay or prevent commencement or successful completion of clinical development of our product candidates as planned and on schedule, if at all, include but are not limited to: ● inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical trials; ● delays or failure in reaching a consensus with regulatory agencies on trial design or implementation, including the appropriate dosage levels, frequency of dosing, or treatment period in clinical trials; ● delays or failure in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● difficulties in obtaining required IRB, ethics committee approval or positive opinion at each clinical trial site; ● delays or failure in obtaining regulatory approval to commence a trial, or imposition of a clinical hold by regulatory authorities; ● difficulty in identifying and enrolling suitable participants in a particular trial, including due to competition from other companies’ clinical trials for a particular indication, which may reduce the power of a clinical trial to detect statistically significant results; ● amendments to clinical trial protocols impacting study criteria, endpoints or design, including amendments that either we initiate or are requested by regulatory authorities; 50 Table of Contents ● difficulty collaborating with patient groups and investigators; ● failure by our CROs, medical institutions, or other third parties we contract with in connection with our clinical trials to adhere to clinical trial requirements or to perform their obligations in a timely manner or in compliance with all applicable laws and regulations, including the FCPA; ● failure to perform in accordance with GCPs or applicable comparable regulatory guidelines in other countries; ● participants not completing a clinical trial or not returning for post-treatment follow-up, including as a result of trial demands on participants; ● clinical trial sites withdrawing from or being unable to conduct activities, or participants withdrawing from clinical trials, including as a result of a pandemic or other outbreak of disease and global conflict; ● participants experiencing serious adverse events or undesirable side effects or being exposed to unacceptable health risks; ● participants failing to experience confirmed pre-specified events during the clinical trial within an expected timeframe, if at all; ● safety issues, including occurrence of adverse events associated with a product candidate, that are viewed to outweigh its potential benefits; ● changes in regulatory requirements, policies and guidance that require amending or submitting new clinical protocols; ● the cost of clinical trials being greater than we anticipate; ● strategic decisions regarding clinical study priority for capital preservation purposes; ● failure by us, our CROs, or other third parties with whom we contract to properly collect, analyze, and/or assess clinical data, including the performance of assays, analyses and other activities; ● clinical trials of our product candidates producing negative, inconclusive or uncompetitive results, which may result in us deciding, or regulatory authorities requiring us, to conduct additional clinical trials or modify or cease development programs for our product candidates; ● failure to replicate safety, efficacy or other data from earlier preclinical studies and clinical trials conducted by us or third parties, including the companies from whom we have licensed or acquired or may in the future license or acquire our product candidates, in our later clinical trials; ● the occurrence of adverse or other events not observed in earlier studies ; ● suspensions or terminations of our clinical trials by us or the IRBs of the institutions in which our clinical trials are being conducted, the Data Safety Monitoring Board for such trials or the FDA or comparable regulatory authorities; ● failure of manufacturers, or us, to produce sufficient quantities of or phase-appropriate supplies of our product candidates for use in our clinical trials in accordance with applicable cGMP requirements and regulations or applicable comparable regulatory guidelines in other countries; 51 Table of Contents ● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing either as a result of quality assurance or due to our reliance on third party manufacturers; and ● disruptions to our business operations, including our manufacturing operations, and the business operations of our third party manufacturers, CROs upon whom we rely to conduct our clinical trials, or other third parties with whom we conduct business or otherwise engage, as well as disruptions in supply chain distribution in the countries in which we conduct our clinical trials, our manufacturers produce our product candidates or we otherwise conduct business or engage with other third parties, now or in the future.
In some cases, when new competitor biosimilar products enter the market, there are mandatory price reductions for the innovator compound. In other cases, payors employ “therapeutic category” price referencing and seek to lower the reimbursement levels for all treatment in the respective therapeutic category.
In some cases, when new competitor biosimilar products enter the market, there are mandatory price reductions for the innovator product. In other cases, payors employ “therapeutic category” price referencing and seek to lower the reimbursement levels for all treatment in the respective therapeutic category.
We do not have any control over the analysts or the content and opinions included in their reports. The price of our Class A common shares could decline if one or more equity research analysts downgrades our shares or issues other unfavorable commentary or research.
We do not have any control over the analysts or the content and opinions included in their reports. The price of our Class A ordinary shares could decline if one or more equity research analysts downgrades our shares or issues other unfavorable commentary or research.
In such an event, the market price of our Class A common shares could decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
In such an event, the market price of our Class A ordinary shares could decline. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
We have also entered into agreements to grant to others licenses under our owned intellectual property and sublicenses under intellectual property that we license from others for those third parties to develop and commercialize ARCALYST, mavrilimumab and vixarelimab, including the Collaboration Agreements with Huadong and the Genentech License Agreement.
We have also entered into agreements to grant to others licenses under our owned intellectual property and sublicenses under intellectual property that we license from others for those third parties to develop and commercialize ARCALYST and vixarelimab, including the ARCALYST Huadong Collaboration Agreement and the Genentech License Agreement.
As a result of the multi-class voting structure of our common shares, our executive officers and certain other members of our senior management collectively control a substantial amount of the voting power of our common shares and therefore are able to control the outcome of certain matters submitted to our shareholders for approval.
As a result of the multi-class voting structure of our ordinary shares, our executive officers and certain other members of our senior management collectively control a substantial amount of the voting power of our ordinary shares and therefore are able to control the outcome of certain matters submitted to our shareholders for approval.
If any of the collaborators, scientific advisors, employees, contractors and consultants who are parties to these agreements breaches or violates the terms of any of these agreements, we may not have adequate remedies for any such breach or violation (e.g., in countries that do not favor the enforcement of 94 Table of Contents intellectual property rights), and we could lose our trade secrets as a result.
If any of the collaborators, scientific advisors, employees, contractors and consultants who are parties to these agreements breaches or violates the terms of any of these agreements, we may not have adequate remedies for any such breach or violation (e.g., in countries that do not favor the enforcement of intellectual property rights), and we could lose our trade secrets as a result.
Furthermore, despite our efforts, we may be unable to procure a replacement supplier or do so on commercially reasonable terms, which could have a material adverse impact upon our business, results of operations and financial condition.
Furthermore, despite our efforts, we may be unable to procure a replacement contractor or do so on commercially reasonable terms, which could have a material adverse impact upon our business, results of operations and financial condition.
If securities or industry analysts cease publishing about us or publish unfavorable research or reports about us, our business or our market, our share price and trading volume could decline . The trading market for our Class A common shares is influenced by the research and reports that equity research analysts publish about us and our business.
If securities or industry analysts cease publishing about us or publish unfavorable research or reports about us, our business or our market, our share price and trading volume could decline . The trading market for our Class A ordinary shares is influenced by the research and reports that equity research analysts publish about us and our business.
We plan to perform an analysis to determine whether the Company or its subsidiaries are expected to be treated as PFICs for the taxable year ending December 31, 2023, and do not believe that the Company or its subsidiaries will be treated as a PFIC for the taxable year ending December 31, 2023.
We plan to perform an analysis to determine whether the Company or its subsidiaries are expected to be treated as PFICs for the taxable year ending December 31, 2024, and do not believe that the Company or its subsidiaries will be treated as a PFIC for the taxable year ending December 31, 2024.
Any of these occurrences may harm our business, financial condition, and prospects significantly. Our products and product candidates may cause undesirable side effects or have other safety risks that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences, including withdrawal of approval, following any potential marketing approval.
Any of these occurrences may harm our business, financial condition, and prospects significantly. 53 Table of Contents Our products and product candidates may cause undesirable side effects or have other safety risks that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences, including withdrawal of approval, following any potential marketing approval.
Regulatory requirements can vary widely from country to country, and clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be 69 Table of Contents obtained in any other country.
Regulatory requirements can vary widely from country to country, and clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be 58 Table of Contents obtained in any other country.
Competitors may use our or their technologies in jurisdictions 92 Table of Contents where we or they have not obtained patent protection, or where we or they have obtained patent protection, but such jurisdictions do not favor the enforcement of patents, and other intellectual property rights, to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our or our licensees’ ability to enforce our patents to stop infringing activities is inadequate.
Competitors may use our or their technologies in jurisdictions where we or they have not obtained patent protection, or where we or they have obtained patent protection, but such jurisdictions do not favor the enforcement of patents, and other intellectual property rights, to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our or our licensees’ ability to enforce our patents to stop infringing activities is inadequate.
If a United States Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such United States Holder may be treated as a “United States shareholder” (as such term is defined in the Code) with respect to us (if we are classified as a controlled 111 Table of Contents foreign corporation) and each controlled foreign corporation in our group (if any).
If a United States Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such United States Holder may be treated as a “United States shareholder” (as such term is defined in the Code) with respect to us (if we are classified as a controlled foreign corporation) and each controlled foreign corporation in our group (if any).
We are party to agreements granting us the rights to develop and commercialize ARCALYST, abiprubart , mavrilimumab and vixarelimab .
We are party to agreements granting us the rights to develop and commercialize ARCALYST, abiprubart and vixarelimab .
Although we seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our collaborators, scientific advisors, contractors, employees, independent contractors and consultants, and invention assignment agreements with our independent contractors, consultants, scientific advisors and employees, we may not be able to prevent the unauthorized disclosure or use of our technical know-how or other trade secrets by the parties to these agreements.
Although we seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our collaborators, scientific advisors, contractors, employees, independent contractors and consultants, and invention assignment agreements with our independent contractors, consultants, scientific advisors and employees, we may be unable to prevent the unauthorized disclosure or use of our technical know-how or other trade secrets by the parties to these agreements.
Further, we may not be able to obtain adequate remedies for any breach. In addition, our confidential information may otherwise become known or be independently discovered by competitors, in which case we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.
Further, we may be unable to obtain adequate remedies for any breach. In addition, our confidential information may otherwise become known or be independently discovered by competitors, in which case we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.
If we are not able to continue to attract and retain, on acceptable terms, the qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or growth. Effective succession planning is also important to our long-term success and ability to operate as a generational company.
If we are not able to continue to attract and retain, on acceptable terms, the qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or growth. 89 Table of Contents Effective succession planning is also important to our long-term success and ability to operate as a generational company.
Participant enrollment depends on many factors, including: 63 Table of Contents ● the size and nature of the patient population; ● the severity of the disease being studied; ● participant referral practices of prescribers; ● participant eligibility criteria for the clinical trial and evolving standards of care; ● the proximity of participants to clinical sites; ● the complexity of the design and nature of the clinical protocol and trial; ● the fact that our product candidates modulate the immune system and carry unique risks associated with immunosuppression, including the risk of serious infections, potential interference with vaccines and other potential serious health risks; ● the availability and nature of competing clinical trials; ● the availability of standard of care or new drugs approved for the indication the clinical trial is investigating; ● competition with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates; ● failure to obtain, maintain and/or timely amend participant consents; ● our ability to recruit clinical trial investigators with applicable competencies and experience; ● the risk that participants enrolled in clinical trials will withdraw from the trials before completion of their treatment or follow-up period (in either case including as a result of trial demands on participants among other things); ● clinicians’ and participants’ perceptions as to the safety and potential advantages of the product candidate being studied in relation to other available therapies; and ● the occurrence of adverse events or undesirable side effects attributable to our product candidates.
Participant enrollment depends on many factors, including: ● the size and nature of the patient population; ● the severity of the disease being studied; ● participant referral practices of prescribers; ● participant eligibility criteria for the clinical trial and evolving standards of care; ● the proximity of participants to clinical sites; ● the complexity of the design and nature of the clinical protocol and trial; ● the fact that our product candidates modulate the immune system and carry unique risks associated with immunosuppression, including the risk of serious infections, potential interference with vaccines and other potential serious health risks; ● the availability and nature of competing clinical trials; ● the availability of standard of care or new drugs approved for the indication the clinical trial is investigating; ● failure to obtain, maintain and/or timely amend participant consents; ● our ability to recruit clinical trial investigators with applicable competencies and experience; ● the risk that participants enrolled in clinical trials will withdraw from the trials before completion of their treatment or follow-up period (in either case including as a result of trial demands on participants among other things); ● clinicians’ and participants’ perceptions as to the safety and potential advantages of the product candidate being studied in relation to other available therapies; and ● the occurrence of adverse events or undesirable side effects attributable to our product candidates.
Regeneron may also disagree with our forecasted safety stock requirements and manufacture less ARCALYST drug substance than we request, exposing us to risks if the process is significantly delayed.
Regeneron may also disagree with our forecasted safety stock requirements and manufacture less ARCALYST drug substance than we request, exposing us to risks if the technology transfer process is significantly delayed.
We currently rely on the EU standard contractual clauses and the UK Addendum to the EU standard contractual clauses, as applicable, to transfer personal data outside the EEA and the UK, including to the United States, with respect to both intragroup and third party transfers.
We currently rely on the EU standard contractual clauses and the United Kingdom Addendum to the EU standard contractual clauses, as applicable, to transfer personal data outside the EEA and the United Kingdom, including to the United States, with respect to both intragroup and third party transfers.
If coverage and reimbursement are not available, or available only at limited levels, or if such coverage will require patient out-of-pocket costs that are unacceptably high, our ability to successfully commercialize ARCALYST or any of the product candidates for which we obtain marketing approval may be adversely affected.
If coverage and reimbursement are not available, or available only at limited levels, or if such coverage will require patient out-of-pocket costs that are unacceptably high, our ability to successfully commercialize ARCALYST or any of the product candidates 41 Table of Contents for which we obtain marketing approval may be adversely affected.
See “ Risk Factors – Risks Related to Commercialization –Evolving health policy and associated legislative changes related to coverage and reimbursement aimed at lowering healthcare expenditure could impact the commercialization of our product candidates.
See “ Risk Factors – Risks Related to Commercialization –Evolving health policy and associated legislative changes related to coverage and reimbursement aimed at lowering healthcare expenditures could impact the commercialization of our product candidates.
If we or our CDMOs are able to find a replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory approval, which could result in further delay.
If we or our CDMOs are able to find a replacement contractor, such replacement contractor would need to be qualified and may require additional regulatory approval, which could result in further delay.
While we have selected a replacement CDMO and replacement CTLs, we are still in the early stages of the technology transfer process and still must determine whether such CDMO and CTLs can meet our requirements regarding production costs and yields, process controls, quality control, quality assurance, data integrity and cGMP compliance, among other factors.
While we have selected Samsung as our replacement CDMO and have selected replacement CTLs, we are still in the early stages of the technology transfer process and still must determine whether Samsung and such CTLs can meet our requirements regarding production costs and yields, process controls, quality control, quality assurance, data integrity and cGMP compliance, among other factors.
In addition, if we are unable to rely on clinical data collected by our CROs, their subcontractors or the clinical trial sites, we could be required to repeat, extend 79 Table of Contents the duration of or increase the size of any clinical trials we conduct, and this could significantly delay commercialization and require significantly greater expenditures.
In addition, if we are unable to rely on clinical data collected by our CROs, their subcontractors or the clinical trial sites, we could be required to repeat, extend the duration of or increase the size of any clinical trials we conduct, and this could significantly delay commercialization and require significantly greater expenditures.
If the claims of any of these patents are asserted against us, we do not believe our proposed activities related to abiprubart and mavrilimumab would be found to infringe any valid claim of these patents.
If the claims of any of these patents are asserted against us, we do not believe our proposed activities related to abiprubart would be found to infringe any valid claim of these patents.
Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Class A common shares if the provisions are viewed as discouraging takeover attempts in the future.
Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our Class A ordinary shares if the provisions are viewed as discouraging takeover attempts in the future.
The UK GDPR mirrors the fines under the GDPR, e.g., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
The United Kingdom GDPR mirrors the fines under the GDPR, e.g., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
Our current and future product candidates could be delayed in receiving, or fail to receive, regulatory approval or we may fail or cease to advance their development for many reasons, including the following: 67 Table of Contents ● regulatory authorities may disagree with the number, design or implementation of our clinical trials to support further development or approval; ● we may be unable to demonstrate to the satisfaction of regulatory authorities that a product candidate is safe and effective for its proposed indication or that its clinical and other benefits outweigh its safety risks; ● regulatory authorities could require us to collect additional data or conduct additional clinical trials, which could include a requirement to compare our products or product candidates to other therapies for the treatment of the same indication; ● regulatory authorities, following the discovery of adverse safety signals or side effects from approved therapeutics or therapeutics in development in the same or related class as our products or product candidates, could require us to collect additional data or conduct additional clinical trials; ● the results of clinical trials may produce negative, inconclusive or uncompetitive results, which may result in us deciding, or regulatory authorities requiring us, to conduct additional clinical trials or to modify or cease development programs for our product candidates; ● the results of clinical trials may not meet the primary or secondary endpoints of the applicable trial or the level of statistical significance required by regulatory authorities; ● regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA, sBLA or other submission or to obtain regulatory approval in the United States or elsewhere; ● the number of participants required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or we may fail to recruit suitable participants for a trial; ● our third party contractors may fail to comply with data quality and regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; ● regulatory authorities may not believe that we have sufficiently demonstrated our ability to manufacture our candidates to the requisite level of quality standards, including that such material is sufficiently comparable to material used in previous clinical trials, or they may fail to approve our manufacturing processes or facilities, or the manufacturing processes or facilities of third party manufacturers with which we contract for clinical and commercial supplies; ● regulatory authorities may not believe that their on-site inspections and data audits have sufficiently demonstrated the quality and integrity of the clinical trial conduct and of data submitted to regulatory authorities in support of our new product approvals and marketing applications; ● the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; ● our product candidates may have undesirable side effects, toxicities or other unexpected characteristics, causing us or our investigators, regulatory authorities or IRBs to reject, suspend or terminate the clinical trials; and 68 Table of Contents ● the approval policies or regulations of regulatory authorities may significantly change in a manner rendering our clinical data, biologic manufacturing process and other supporting information insufficient for approval.
Our current and future product candidates could be delayed in receiving, or fail to receive, regulatory approval or we may fail or cease to advance their development for many reasons, including the following: 56 Table of Contents ● regulatory authorities may disagree with the number, design or implementation of our clinical trials to support further development or approval; ● we may be unable to demonstrate to the satisfaction of regulatory authorities that a product candidate is safe and effective for its proposed indication or that its clinical and other benefits outweigh its safety risks; ● regulatory authorities could require us to collect additional data or conduct additional clinical trials, which could include a requirement to compare our products or product candidates to other therapies for the treatment of the same indication; ● regulatory authorities, following the discovery of adverse safety signals or side effects from approved therapeutics or therapeutics in development in the same or related class as our products or product candidates, could require us to collect additional data or conduct additional clinical trials; ● the results of clinical trials may produce negative, inconclusive or uncompetitive results, which may result in us deciding, or regulatory authorities requiring us, to conduct additional clinical trials or to modify or cease development programs for our product candidates; ● the results of clinical trials may not meet the primary or secondary endpoints of the applicable trial or the level of statistical significance required by regulatory authorities; ● regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA, sBLA, MAA or other submission or to obtain regulatory approval in the United States, Europe or elsewhere; ● the number of participants required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or we may fail to recruit suitable participants for a trial; ● our third party contractors may fail to comply with data quality and regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; ● regulatory authorities may believe that we have not sufficiently demonstrated our ability to manufacture our candidates to the requisite level of quality standards, including that such material is sufficiently comparable to material used in previous clinical trials, or they may fail to approve our manufacturing processes or facilities, or the manufacturing processes or facilities of third party manufacturers with which we contract for clinical and commercial supplies; ● regulatory authorities may conclude that on-site inspections and data audits have not sufficiently demonstrated the quality and integrity of the clinical trial conduct and of data submitted to regulatory authorities in support of our new product approvals and marketing applications; ● the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; ● our product candidates may have undesirable side effects, toxicities or other unexpected characteristics, causing us or our investigators, regulatory authorities or IRBs to reject, suspend or terminate the clinical trials; and ● the policies, regulations and guidelines of regulatory authorities regarding the development, approval and marketing of biologic products may significantly change, including in the United States, as a result of the 57 Table of Contents 2025 change in presidential administration, which may render our clinical data, biologic manufacturing process and other supporting information insufficient for approval or restrict us from marketing our product candidates in the manner in which we anticipate.
Treatment with our products and product candidates may produce undesirable side effects or adverse reactions or events. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, 64 Table of Contents delay or halt clinical trials and could result in more restrictive labels or the delay or denial of regulatory approvals by regulatory authorities.
Treatment with our products and product candidates may produce undesirable side effects or adverse reactions or events. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in more restrictive labels or the delay or denial of regulatory approvals by regulatory authorities.
Our ability to continue to commercialize ARCALYST in its approved indications or any of our future products, if any, particularly in orphan or rare disease indications, will depend in part on the availability of favorable coverage, patient affordability and the adequacy of reimbursement for ARCALYST or the future product and alternative treatments from third party payors (e.g., governmental authorities, private health insurers and other organizations).
Our ability to continue to commercialize ARCALYST in its approved indications or any of our future products, if any, particularly in orphan or rare disease indications, will depend in part on the availability of favorable coverage, the adequacy of reimbursement (including affordability of patient cost-sharing obligations) for ARCALYST or the future product and alternative treatments from third party payors (e.g., governmental authorities, private health insurers and other organizations).
Price concessions that reduce our product revenue may require us to rely on potentially dilutive capital-raising efforts to fund our operations, which may impact the price of our common shares.
Price concessions that reduce our product revenue may require us to rely on potentially dilutive capital-raising efforts to fund our operations, which may impact the price of our ordinary shares.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeVarious risks arising out of a cyberattack, security breach or a failure on our or our third party contractors’ part to maintain an adequate cybersecurity program could adversely affect our business, financial condition, and results of 112 Table of Contents operations.
Biggest changeOur business depends on the availability, reliability and security of our and our third party contractors’ information systems, networks and data. Various risks arising out of a cyberattack, security breach or a failure on our or our third party contractors’ part to maintain an adequate cybersecurity program could adversely affect our business, financial condition, and results of operations.
See “ Risk Factors – General Risk Factors – Our information technology systems, or those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service providers, may fail or suffer cyberattacks or security breaches, which could result in a material disruption of our or such third party’s business or operations, impede our development programs for our product candidates or materially impact our ability to commercialize our products.” ​
See “ Risk Factors – General Risk Factors – Our information technology systems, or those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service 99 Table of Contents providers, may fail or suffer cyberattacks or security breaches, which could result in a material disruption of our or such third party’s business or operations, impede our development programs for our product candidates or materially impact our ability to commercialize our products.” ​
Removed
Our business depends on the availability, reliability and security of our and our third party contractors’ information systems, networks and data.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWhile we believe that our offices are sufficient to meet our current needs, we may in the future seek additional or alternative office space in the United States or internationally to facilitate our operations, as needed. ​ ITEM 3. LEGAL PROCEEDINGS. We are not party to any material legal proceedings. ​ ​ ITEM 4. MINE SAFETY DISCLOSURES.
Biggest changeWe have also leased office space in London, UK, Zug, Switzerland and San Diego, these spaces include commercial and logistical operations, as well as office space to support our research and development operations. ​ ITEM 3. LEGAL PROCEEDINGS. We are not party to any material legal proceedings. ​ ​ ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable. 113 Table of Contents ​ ​ ​ PART II
Not applicable. 100 Table of Contents ​ ​ ​ PART II
ITEM 2. PROPERTIES. Our United States headquarters are located in Lexington, Massachusetts, where Kiniksa Pharmaceuticals Corp., our wholly owned subsidiary (“Kiniksa US”), has leased approximately 55,924 square feet of office and laboratory space, under a lease which expires in August 2028.
ITEM 2. PROPERTIES. Our United States headquarters are located in Lexington, Massachusetts, where we have leased office and laboratory space, under a lease that expires in August 2028.
Removed
Kiniksa US has also leased approximately 2,000 square feet of office space in San Diego, California which expires in March 2025. Further, Kiniksa Pharmaceuticals (UK), Ltd., our wholly owned subsidiary (“Kiniksa UK”), has leased approximately 164 square meters of office space in London, UK which expires in November 2025.
Removed
Kiniksa UK’s Swiss branch office has leased approximately 57 square meters of office space in Zug, Switzerland, which can be terminated upon six months’ notice.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures ​ 113 ​ ​ ​ ​ ​ ​ PART II ​ ​ ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ 114 ​ ​ ​
Biggest changeItem 4. Mine Safety Disclosures ​ 100 ​ ​ ​ ​ ​ ​ PART II ​ ​ ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ 101 ​ ​ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Biggest changeThe actual number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. The number of holders of record also does not include shareholders whose shares may be held in trust by other entities.
Any future determination to declare and pay dividends to holders of our common shares will be made at the discretion of our board of directors, which may take into account several factors, including general economic conditions, our financial condition and results of operations, available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our shareholders and any other factors that our board of directors may deem relevant.
Any future determination to declare and pay dividends to holders of our ordinary shares will be made at the discretion of our board of directors, which may take into account several factors, including general economic conditions, our financial condition and results of operations, available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our shareholders and any other factors that our board of directors may deem relevant.
We intend to retain all of our future earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
Dividends Policy We have never declared or paid any cash dividends on our ordinary shares. We intend to retain all of our future earnings, if any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
Principal Market Our Class A common shares are listed on The Nasdaq Global Select Market under the symbol “KNSA.” ​ Holders ​ As of February 23, 2024, there were eight holders of record of our Class A common shares, three holders of record of our Class B common shares, two holders of record of our Class A1 common shares and two holders of record of our Class B1 common shares.
Principal Market Our Class A ordinary shares are listed on The Nasdaq Global Select Market under the symbol “KNSA.” Holders As of February 21, 2025, there were four holders of record of our Class A ordinary shares, one holder of record of our Class B ordinary shares, one holder of record of our Class A1 ordinary shares and one holder of record of our Class B1 ordinary shares.
Removed
The number of holders of record also does not include shareholders whose shares may be held in trust by other entities. ​ Dividends Policy ​ We have never declared or paid any cash dividends on our common shares.
Added
In addition, pursuant to the United Kingdom Companies Act 2006 a company may not declare or pay dividends unless (1) it has profits available to make the distribution and (2) the distribution must be justified by reference to relevant accounts.
Removed
In addition, pursuant to the Bermuda Companies Act 1981, as amended, a company may not declare or pay dividends if there are reasonable grounds for believing that (1) the company is, or would after the payment be, unable to pay its liabilities as they become due or (2) that the realizable value of its assets would thereby be less than its liabilities.
Added
Under our articles of association, each of our ordinary shares is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferred dividend right of the holders of any preferred shares. 101 Table of Contents Performance Graph The following graph shows a comparison of the total cumulative total shareholder returns (assuming reinvestment of dividends, if any) of an investment of $100 in cash on the last trading day of 2019 to the close of the last trading day of 2024 in each of (i) our Class A ordinary shares, (ii) the Nasdaq Composite Index and (iii) the Nasdaq Biotechnology Index.
Removed
Under our amended and restated bye-laws, each of our common shares is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferred dividend right of the holders of any preferred shares. ​ Recent Sales of Unregistered Securities ​ Not applicable. Use of Proceeds from Registered Securities ​ Not applicable.
Added
The comparisons in the graph are required by the SEC and are not intended to forecast or be indicative of the possible future performance of our ordinary shares. ​ ​ ​ ITEM 6. RESERVED. ​ ​ ​ 102 Table of Contents
Removed
Issuer Purchases of Equity Securities ​ None. ​ ITEM 6. RESERVED. ​ ​ ​ 114 Table of Contents

Item 7. Management's Discussion & Analysis

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

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Biggest changeIn connection with each of the foregoing transfers and /or allocations, we recognized a step-up in basis and did not incur any material tax liabilities. ​ ​ 119 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023, 2022 and 2021 The following table summarizes our results of operations for the years ended December 31, 2023, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023/2022 ​ 2022/2021 ​ ​ Years Ended ​ Comparison ​ Comparison ​ ​ December 31, ​ Increase/(Decrease) ​ Increase/(Decrease) ​ 2023 2022 2021 $ % $ % ​ ​ (in thousands) ​ (in thousands, except percentages) Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 233,176 ​ $ 122,524 ​ $ 38,544 ​ $ 110,652 ​ 90% ​ $ 83,980 ​ 218% License and collaboration revenue ​ ​ 37,083 ​ ​ 97,656 ​ ​ — ​ ​ (60,573) ​ (62)% ​ ​ 97,656 ​ 100% Total revenue ​ ​ 270,259 ​ ​ 220,180 ​ ​ 38,544 ​ ​ 50,079 ​ 23% ​ ​ 181,636 ​ 471% Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold ​ ​ 33,407 ​ ​ 22,895 ​ ​ 9,100 ​ ​ 10,512 ​ 46% ​ ​ 13,795 ​ 152% Collaboration expenses ​ ​ 56,524 ​ ​ 24,071 ​ ​ 835 ​ ​ 32,453 ​ 135% ​ ​ 23,236 ​ 2783% Research and development ​ ​ 76,097 ​ ​ 65,490 ​ ​ 99,297 ​ ​ 10,607 ​ 16% ​ ​ (33,807) ​ (34)% Selling, general and administrative ​ 129,427 ​ 97,951 ​ 85,948 ​ 31,476 ​ 32% ​ 12,003 ​ 14% Total operating expenses ​ 295,455 ​ 210,407 ​ 195,180 ​ 85,048 ​ 40% ​ 15,227 ​ 8% Income (loss) from operations ​ (25,196) ​ 9,773 ​ (156,636) ​ (34,969) ​ (358)% ​ 166,409 ​ (106)% Other income ​ 8,544 ​ 1,253 ​ 97 ​ 7,291 ​ 582% ​ 1,156 ​ 1192% Income (loss) before income taxes ​ (16,652) ​ 11,026 ​ (156,539) ​ (27,678) ​ (251)% ​ 167,565 ​ (107)% Benefit (provision) for income taxes ​ 30,736 ​ 172,337 ​ (1,385) ​ (141,601) ​ (82)% ​ 173,722 ​ (12,543)% Net income (loss) ​ $ 14,084 ​ $ 183,363 ​ $ (157,924) ​ $ (169,279) ​ (92)% ​ $ 341,287 ​ (216)% ​ ​ Product Revenue, Net We recognized net revenue from the sale of ARCALYST of $233.2 million, $122.5 million and $38.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Biggest changeIn connection with the termination of Kiniksa UK rights and the contribution, we revalued the assets at fair market value and did not incur any material tax liabilities. ​ Results of Operations Comparison of the Years Ended December 31, 2024, 2023 and 2022 The following table summarizes our results of operations for the years ended December 31, 2024, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024/2023 ​ 2023/2022 ​ ​ Years Ended ​ Comparison ​ Comparison ​ ​ December 31, ​ Increase/(Decrease) ​ Increase/(Decrease) ​ 2024 2023 2022 $ % $ % ​ ​ (in thousands) ​ (in thousands, except percentages) Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product revenue, net ​ $ 417,029 ​ $ 233,176 ​ $ 122,524 ​ $ 183,853 ​ 79% ​ $ 110,652 ​ 90% License and collaboration revenue ​ ​ 6,210 ​ ​ 37,083 ​ ​ 97,656 ​ ​ (30,873) ​ (83)% ​ ​ (60,573) ​ (62)% Total revenue ​ ​ 423,239 ​ ​ 270,259 ​ ​ 220,180 ​ ​ 152,980 ​ 57% ​ ​ 50,079 ​ 23% Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of goods sold ​ ​ 60,910 ​ ​ 33,407 ​ ​ 22,895 ​ ​ 27,503 ​ 82% ​ ​ 10,512 ​ 46% Collaboration expenses ​ ​ 128,311 ​ ​ 56,524 ​ ​ 24,071 ​ ​ 71,787 ​ 127% ​ ​ 32,453 ​ 135% Research and development ​ ​ 111,623 ​ ​ 76,097 ​ ​ 65,490 ​ ​ 35,526 ​ 47% ​ ​ 10,607 ​ 16% Selling, general and administrative ​ 168,011 ​ 129,427 ​ 97,951 ​ 38,584 ​ 30% ​ 31,476 ​ 32% Total operating expenses ​ 468,855 ​ 295,455 ​ 210,407 ​ 173,400 ​ 59% ​ 85,048 ​ 40% Income (loss) from operations ​ (45,616) ​ (25,196) ​ 9,773 ​ (20,420) ​ 81% ​ (34,969) ​ (358)% Other income ​ 9,464 ​ 8,544 ​ 1,253 ​ 920 ​ 11% ​ 7,291 ​ 582% Income (loss) before income taxes ​ (36,152) ​ (16,652) ​ 11,026 ​ (19,500) ​ 117% ​ (27,678) ​ (251)% Benefit (provision) for income taxes ​ (7,041) ​ 30,736 ​ 172,337 ​ (37,777) ​ (123)% ​ (141,601) ​ (82)% Net income (loss) ​ $ (43,193) ​ $ 14,084 ​ $ 183,363 ​ $ (57,277) ​ (407)% ​ $ (169,279) ​ (92)% ​ Product Revenue, Net We recognized net revenue from the sale of ARCALYST of $417.0 million, $233.2 million and $122.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.
This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.
This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs.
Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products. ​ As of December 31, 2023, a 10% change in our product revenue allowance and reserve would not result in a material change in our net revenue. ​ Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products. ​ As of December 31, 2024, a 10% change in our product revenue allowance and reserve would not result in a material change in our net revenue. ​ Accrued Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
For more information, see “ Business –License and Acquisition Agreements—Out-Licensing Agreements—Huadong Collaboration Agreements ”. ​ Under the Huadong Collaboration Agreements, we received a total upfront cash payment of $22.0 million, which includes $12.0 million for the Huadong Territory license of rilonacept and $10.0 million for the Huadong Territory license of mavrilimumab.
For more information, see “ Business –License and Acquisition Agreements—Out-Licensing Agreements—Huadong Collaboration Agreements ”. ​ Under the Huadong Collaboration Agreements, we received a total upfront cash payment of $22.0 million, which includes $12.0 million for the Huadong Territory license of ARCALYST and $10.0 million for the Huadong Territory license of mavrilimumab.
Generally, our performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer. ​ ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time.
Generally, our performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer. 114 Table of Contents ASC 606 requires entities to record a contract asset when a performance obligation has been satisfied or partially satisfied, but the amount of consideration has not yet been received because the receipt of the consideration is conditioned on something other than the passage of time.
Interest Rate Risk We are exposed to market risk related to changes in interest rates. As of December 31, 2023, our cash, cash equivalents and short-term investments consisted of money market funds and United States Treasury notes.
Interest Rate Risk We are exposed to market risk related to changes in interest rates. As of December 31, 2024, our cash, cash equivalents and short-term investments consisted of money market funds and United States Treasury notes.
We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates. As a result, we expect to incur additional expenses related to milestone, royalty and other payments payable to third parties with whom we have entered into license, acquisition and other similar agreements to acquire the rights to our product candidates.
We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates. As a result, we expect to incur additional expenses related to milestone, royalty and other payments payable 112 Table of Contents to third parties with whom we have entered into license, acquisition and other similar agreements to acquire the rights to our product candidates.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services 127 Table of Contents performed may vary and may result in reporting amounts that are too high or too low in any particular period.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.
With respect to the technology transfer of ARCALYST drug substance manufacturing initiated by Regeneron in March 2023, to the extent permitted by the Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology transfer shall also be deducted from net sales of ARCALYST to determine profit.
With respect to the technology transfer of ARCALYST drug substance manufacturing initiated by Regeneron in March 2023, to the extent permitted by the Regeneron Agreement, the fully-burdened costs of each of us and Regeneron incurred in performing such technology 105 Table of Contents transfer shall also be deducted from net sales of ARCALYST to determine profit.
In addition, if we obtain regulatory approval for any of our current or future product candidates, pursue additional indications or additional territories for our products or any of our current or future product candidates, we expect to incur significant expenses related to product development and manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.
In addition, if we obtain regulatory approval for any of our current or future product candidates, pursue additional indications or additional territories for our products or any of our current or future 113 Table of Contents product candidates, we expect to incur significant expenses related to product development and manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.
The increase of $2.7 million in unallocated research and development expenses in 2023 from 2022 was primarily due to timing of raw material purchases to support internal development.
The increase of $0.2 million in unallocated research and development expenses in 2023 from 2022 was primarily due to timing of raw material purchases to support internal development.
In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a manufacturing commitment with a CDMO to establish a new manufacturing site for ARCALYST drug substance.
In connection with our ongoing technology transfer of ARCALYST drug substance manufacturing, we have entered into a manufacturing commitment with Samsung to establish a new manufacturing site for ARCALYST drug substance.
Royalties will be payable on a Huadong Licensed Product-by-Huadong Licensed Product and country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of the applicable Huadong Licensed Product in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers the applicable Huadong Licensed Product in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for the applicable Huadong Licensed Product in such country or region in the Huadong Territory.
Royalties will be payable on a country-by-country or region-by-region basis until the later of (i) 12 years after the first commercial sale of ARCALYST in such country or region in the Huadong Territory, (ii) the date of expiration of the last valid patent claim of our patent rights or any joint collaboration patent rights that covers ARCALYST in such country or region in the Huadong Territory, and (iii) the expiration of the last regulatory exclusivity for ARCALYST in such country or region in the Huadong Territory.
During the year ended December 31, 2023, expenses incurred primarily related to the manufacturing of clinical material, the continuation of the first two cohorts of the Phase 2 clinical 121 Table of Contents trial of abiprubart in RA and Cohorts 3 and 4 of such trial.
During the year ended December 31, 2023, expenses incurred primarily related to the manufacturing of clinical material, the continuation of the first two cohorts of the Phase 2 clinical trial of abiprubart in RA and Cohorts 3 and 4 of such trial.
During the year ended December 31, 2023, expenses related primarily to intellectual property maintenance. During the year ended December 31, 2022, expenses related primarily to the wind-down activities of the Phase 3 portion of our clinical trial of mavrilimumab in COVID-19 related ARDS.
During the years ended December 31, 2024 and 2023, expenses related primarily to intellectual property maintenance. During the year ended December 31, 2022, expenses related primarily to the wind-down activities of the Phase 3 portion of our clinical trial of mavrilimumab in COVID-19 related ARDS.
ARCALYST is commercially available across the United States through a network of distributors. ARCALYST is also approved in the United States for the treatment of CAPS, including FCAS and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in DIRA in adults and children weighing 10 kg or more.
ARCALYST is also approved in the United States for the treatment of CAPS, including FCAS and Muckle-Wells Syndrome in adults and children 12 years and older, and the maintenance of remission in DIRA in adults and children weighing 10 kg or more. ARCALYST is commercially available across the United States through a select network of specialty pharmacies.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect our shareholders’ rights as a common shareholder.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect our shareholders’ rights as an ordinary shareholder.
As a result of many factors, including those factors set forth in the risks identified in Part I-Item 1A “Risk Factors” section of this Annual Report and our other filings with the Securities and Exchange Commission (the “SEC”), our actual results could differ materially from the results, performance or achievements expressed in or implied by these forward-looking statements.
As a result of many factors, including those factors set forth in the risks identified in Part I-Item 1A “Risk Factors” section of this Annual Report and our other filings with the SEC, our actual results could differ materially from the results, performance or achievements expressed in or implied by these forward-looking statements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of biologic products, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements may be impacted by a number of factors, including those described in Part I, Item 1A.
Because of the numerous risks and uncertainties associated with research, development and commercialization of biologic products, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements may be impacted by a number of factors, including those described in Part I, Item 1A. “ Risk Factors ” in this Annual Report.
Financing Activities During the years ended December 31, 2023, 2022 and 2021, net cash provided by financing activities was $1.5 million, $2.5 million and $5.9 million, respectively, consisting of proceeds from the exercise of employee share options and our 2018 Employee Share Purchase Plan (the “2018 ESPP”).
Financing Activities During the years ended December 31, 2024, 2023 and 2022, net cash provided by financing activities was $12.3 million, $1.5 million and $2.5 million, respectively, consisting of proceeds from the exercise of employee share options and our 2018 Employee Share Purchase Plan (the “2018 ESPP”).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K, or Annual Report.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report.
The increase in cash provided by operating activities is primarily due to an increase in net contribution from higher ARCALYST sales, offset by a decrease in cash received from licensing agreements of $67.0 million. ​ Net cash provided by operations was $5.8 million for the year ended December 31, 2022, compared to net cash used by operating activities of $126.3 million for the year ended December 31, 2021.
The increase in cash provided by operating activities is primarily due to an increase in net contribution from higher ARCALYST sales, offset by a decrease in cash received from licensing agreements of $20.0 million. ​ Net cash provided by operations was $13.3 million for the year ended December 31, 2023, compared to $5.8 million for the year ended December 31, 2022.
Personnel-related costs for the years ended December 31, 2023, 2022 and 2021 included share-based compensation of $5.5 million, $6.8 million and $8.5 million, respectively. ​ Selling, General and Administrative Expenses Selling, general and administrative expenses were $129.4 million, $98.0 million and $85.9 million for the years ended December 31, 2023, 2022 and 2021.
Personnel-related costs for the years ended December 31, 2024, 2023 and 2022 included share-based compensation of $6.1 million, $5.5 million and $6.8 million, respectively. ​ Selling, General and Administrative Expenses Selling, general and administrative expenses were $168.0 million, $129.4 million and $98.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales as well as third party proceeds with Regeneron. In February 2022, we granted Huadong exclusive rights to develop and commercialize ARCALYST in the Asia Pacific region, excluding Japan.
We are responsible for sales and distribution of ARCALYST in all approved indications in the United States, and evenly split profits on sales as well as third party proceeds with Regeneron. In 2022, we granted Huadong exclusive rights to develop and commercialize ARCALYST in the Huadong Territory.
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. As of December 31, 2023, we have accrued $7.9 million of estimated research and development expenses.
To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses. As of December 31, 2024, we have accrued $11 million of estimated research and development expenses.
We expect to incur expenses as we: ● support our sales, marketing and distribution capabilities, infrastructure and organization to commercialize ARCALYST and any product candidates for which we may obtain marketing approval; ● conduct new and ongoing research and pre-clinical and clinical development of our product candidates, including our Phase 2 clinical trial for abiprubart ; ● manufacture our products and product candidates for clinical or commercial use, increase our manufacturing capabilities, add additional manufacturers or suppliers and perform activities related to our technology transfer of the process for manufacturing ARCALYST drug substance; ● seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any; ● make milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreement; ● seek to identify, assess and study new or expanded indications for our products or product candidates, new or alternative dosing levels and frequency for our products or product candidates, or new or alternative administration of our products or product candidates, including method, mode or delivery device; ● seek to identify, assess, acquire or develop additional product candidates; ● enter into licensing, acquisition, collaboration or other strategic transaction agreements; ● seek to maintain, protect and expand our intellectual property portfolio; ● seek to attract and retain skilled personnel; ● create additional infrastructure to support our product development and commercialization efforts; and ● experience delays or encounter issues with any of the above, including but not limited to failed trials, complex results, safety issues, regulatory challenges that require longer follow-up of existing trials, additional major trials, additional supportive trials in order to pursue marketing approval, a pandemic or other outbreak of disease, or the global economic slowdown and rising inflation.
We expect to incur expenses as we: ● support our sales, marketing and distribution capabilities, infrastructure and organization to commercialize ARCALYST and any product candidates for which we may obtain marketing approval; ● conduct new and ongoing research and pre-clinical and clinical development of our product candidates, including our planned Phase 2/3 clinical trial of KPL-387 in recurrent pericarditis, our ongoing Phase 1 clinical trial of KPL-387 in normal healthy volunteers and our pre-clinical investigations of KPL-1161; ● manufacture our products and product candidates for clinical or commercial use, increase our manufacturing capabilities, add additional manufacturers or suppliers and perform activities related to our technology transfer of the process for manufacturing ARCALYST drug substance; ● seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any; ● identify, assess and study new or expanded indications for our products and product candidates and/or new or alternative dosing levels, dosing frequencies or administrations of our products and product candidates; ● make milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreement; ● seek to identify, assess and study new or expanded indications for our products or product candidates, new or alternative dosing levels and frequency for our products or product candidates, or new or alternative administration of our products or product candidates, including method, mode or delivery device; ● seek to identify, assess, acquire or develop additional product candidates; ● address litigation arising out of, but not limited to, product liability claims, intellectual property disputes, disputes arising from our collaboration and license agreements and employment-related disputes; ● enter into licensing, acquisition, collaboration or other strategic transaction agreements; ● seek to maintain, protect and expand our intellectual property portfolio; ● seek to attract and retain skilled personnel; ● create additional infrastructure to support our product development and commercialization efforts; and ● experience delays or encounter issues with any of the above, including but not limited to failed trials, complex results, safety issues, regulatory challenges that require longer follow-up of existing trials, additional major trials, additional supportive trials in order to pursue marketing approval, a pandemic or other outbreak of disease or disruptions to the national or global economy.
We have committed to minimum payments to Regeneron of $24.9 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $14.2 million, $3.0 million of which are due within one year.
We have committed to minimum payments to Regeneron of $40.7 million, all of which are due within one year. We have entered into lease agreements for office and laboratory space, and vehicles, with total future lease payments of $11.3 million, $2.7 million of which are due within one year.
“ Risk Factors ” in this Annual Report. 125 Table of Contents Until such time, if ever, as we can generate substantial and sustained product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, or other sources, including, licensing, collaboration, marketing, distribution or other strategic transactions or arrangements with third parties.
Until such time, if ever, as we can generate substantial and sustained product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, or other sources, including, licensing, collaboration, marketing, distribution or other strategic transactions or arrangements with third parties.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. ​ Revenue Recognition ​ ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied. ​ We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. ​ Revenue Recognition ​ ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied.
Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear.
In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug. Our exclusive license to ARCALYST from Regeneron includes worldwide rights, excluding the Middle East and North Africa, for all applications other than those in oncology and local administration to the eye or ear.
The increase of $10.5 million in 2023 from 2022 related primarily to the increase in sales of ARCALYST and $3.3 million related to the initiation of the technology transfer of the manufacturing process offset by a decrease in average cost per unit resulting from favorable production variances.
The increase of $27.5 million in 2024 from 2023 related primarily to the increase in sales of ARCALYST and a $12.6 million increase related to the technology transfer of the manufacturing process offset by a decrease in average cost per unit resulting from favorable production variances.
Huadong will also be obligated to pay us tiered percentage royalties on a Huadong Licensed Product-by-Huadong Licensed Product basis ranging from the low-teens to low-twenties on 116 Table of Contents annual net sales of each Huadong Licensed Product in the Huadong Territory, subject to certain reductions tied to rilonacept manufacturing costs and certain other customary reductions, with an aggregate minimum floor.
Huadong will also be obligated to pay us tiered percentage royalties on ARCALYST ranging from the low-to-mid teens on annual net sales in the Huadong 104 Table of Contents Territory, subject to certain reductions tied to ARCALYST manufacturing costs and certain other customary reductions, with an aggregate minimum floor.
Benefit (Provision) for Income Taxes For the year ended December 31, 2023, we recorded an income tax benefit of $30.7 million relating to a non-cash deferred tax benefit of $33.8 million primarily associated with Kiniksa UK’s allocation of its ARCALYST assets to its Swiss branch office and the release of the valuation allowance on U.S. deferred tax assets offset by the establishment of a partial valuation allowance on our UK deferred tax assets.
Benefit (Provision) for Income Taxes For the year ended December 31, 2024, we recorded an income tax provision of $7.0 million relating primarily to income earned in Switzerland and the U.S., net of Foreign-Derived Intangible Income (“FDII”) deduction and U.S. federal and state R&D Credits utilized. ​ For the year ended December 31, 2023, we recorded an income tax benefit of $30.7 million relating to a non-cash deferred tax benefit of $33.8 million primarily associated with Kiniksa UK’s allocation of its ARCALYST assets to its Swiss branch office and the release of the valuation allowance on U.S. deferred tax assets offset by the establishment of a partial valuation allowance on our UK deferred tax assets.
We expect to recognize $12.0 million of deferred revenue related to the rilonacept Huadong Collaboration Agreement over the life of the agreement as materials are delivered. 120 Table of Contents Cost of Goods Sold We recognized cost of goods sold of $33.4 million, $22.9 million, and $9.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.
We expect to recognize $31.8 million of deferred revenue related to the ARCALYST Huadong Collaboration Agreement over the life of the agreement as materials are delivered. ​ Cost of Goods Sold We recognized cost of goods sold of $60.9 million, $33.4 million, and $22.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.
In 2022 and 2023 we expanded our ARCALYST salesforce to help drive further prescriber adoption and patient enrollments. The increase of $31.5 million in 2023 from 2022 was primarily due to an increase of $18.9 million in personnel-related costs and an increase in sales and marketing of $6.0 million largely attributable to the expansion of our salesforce.
The increase of $31.5 million in 2023 from 2022 was primarily due to an increase of $18.9 million in personnel-related costs and an increase in sales and marketing of $6.0 million largely attributable to the expansion of our salesforce.
Personnel-related costs for the years ended December 31, 2023, 2022 and 2021 included share-based compensation of $19.8 million, $17.7 million and $16.5 million, respectively. ​ Other Income Other income was $8.5 million for the year ended December 31, 2023, compared to other income of $1.3 million for the year ended December 31, 2022.
Personnel-related costs for the years ended December 31, 2024, 2023 and 2022 included share-based compensation of $22.9 million, $19.8 million and $17.7 million, respectively. ​ 110 Table of Contents Other Income Other income was $9.5 million for the year ended December 31, 2024, compared to $8.5 million for the year ended December 31, 2023.
Such commitment, which includes the purchase of raw materials and related service fees, obligates us to minimum payments of $96.8 million, $19.9 million of which are due within one year.
Such commitment, which includes the purchase of raw materials and related service fees, obligates us to minimum payments of $151.0 million, $15.2 million of which are due within one year.
In the first quarter of 2022, Kiniksa Bermuda transferred exclusive rights to develop and commercialize mavrilimumab in the Asia Pacific region, excluding Japan, to Kiniksa UK. In the third quarter of 2022, Kiniksa Bermuda transferred exclusive worldwide rights to develop and commercialize vixarelimab to Kiniksa UK.
In the third quarter of 2022, Kiniksa Bermuda transferred exclusive worldwide rights to develop and commercialize vixarelimab to Kiniksa UK.
In the first quarter of 2021, Kiniksa Bermuda transferred all rights, title and interest in, among other things, certain contracts, intellectual property rights, product filings and approvals and other information, plans and materials owned insofar as they related exclusively or primarily to ARCALYST to Kiniksa UK.
In the fourth quarter of 2024, Kiniksa UK contributed all of its rights, title and interest in, among other things, certain contracts, intellectual property rights, product filings and approvals and other information, plans and materials owned or controlled by Kiniksa UK insofar as they related exclusively or primarily to vixarelimab to Kiniksa Switzerland.
We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties. ​ 117 Table of Contents Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the research and development of our product candidates.
We also evenly split with Regeneron any proceeds received by us from any licensees, sublicensees and distributors in consideration for the sale, license or other disposition of rights with respect to ARCALYST, including upfront payments, milestone payments and royalties.
The increase of $84.0 million in 2022 from 2021 was primarily driven by an increase in patients as 2022 was our first full year of sales following our commercial launch of ARCALYST in April 2021. ​ License and Collaboration Revenue ​ We reported $37.1 million of license and collaboration revenue for the year ended December 31, 2023, related to the Genentech License Agreement primarily driven by the achievement of $25.0 million in development milestones related to two new indications, materials delivered and our ongoing recognition of the transaction price related to the in-progress Phase 2b clinical trial of vixarelimab in prurigo nodularis.
We reported $37.1 million of license 108 Table of Contents and collaboration revenue for the year ended December 31, 2023, related to the Genentech License Agreement primarily driven by the achievement of $25.0 million in development milestones related to two new indications, materials delivered and our ongoing recognition of the transaction price related to the in-progress Phase 2b clinical trial of vixarelimab in prurigo nodularis.
For the twelve months ended December 31, 2023, we recognized net income of $14.1 million, as compared to net income of $183.4 million for the year ended December 31, 2022. As of December 31, 2023, we had an accumulated deficit of $478.0 million.
For the twelve months ended December 31, 2024, our net loss was $43.2 million, as compared to net income of $14.1 million for the year ended December 31, 2023. As of December 31, 2024, we had an accumulated deficit of $521.1 million compared to an accumulated deficit of $478.0 million as of December 31, 2023.
The increase in cash provided by operating activities is primarily due to cash received from licensing agreements of $102 million and an increase in ARCALYST sales offset by increases in inventory and accounts receivable both related to increased sales of ARCALYST. ​ Investing Activities Net cash used in investing activities was $29.6 million for the year ended December 31, 2023, compared to net cash used in investing activities of $8.1 million for the year ended December 31, 2022 as part of managing our cash and short-term investment portfolio mix.
The increase in cash provided by operating activities is primarily due to an increase in net contribution from higher ARCALYST sales, offset by a decrease in cash received from licensing agreements of $67.0 million. ​ Investing Activities Net cash provided by investing activities was $37.7 million for the year ended December 31, 2024, compared to net cash used in investing activities of $29.6 million for the year ended December 31, 2023 as part of managing our cash and short-term investment portfolio mix.
During the year ended December 31, 2021, expenses incurred primarily related to manufacturing of drug product supply and other start up activities for our anticipated Phase 2 clinical trial of abiprubart in RA. Direct costs of our mavrilimumab program were $0.8 million, $6.4 million and $30.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.
During the year ended December 31, 2022, expenses incurred primarily related to the first two cohorts of our Phase 2 clinical trial of abiprubart in RA, which was initiated in December 2021. Direct costs of our mavrilimumab program were $0.6 million, $0.8 million and $6.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
As of December 31, 2023, we had cash, cash equivalents and short-term investments of $206.4 million. 123 Table of Contents Cash Flows The following table summarizes our cash flows for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2023 2022 2021 ​ ​ (in thousands) Net cash provided by (used in) operating activities ​ $ 13,301 ​ $ 5,807 ​ $ (126,298) Net cash provided by (used in) investing activities ​ (29,557) ​ (8,078) ​ 128,635 Net cash provided by financing activities ​ 1,495 ​ 2,516 ​ 5,885 Net increase in cash and cash equivalents and restricted cash ​ $ (14,761) ​ $ 245 ​ $ 8,222 Operating Activities Net cash provided by operations was $13.3 million for the year ended December 31, 2023, compared to net cash provided by operating activities of $5.8 million for the year ended December 31, 2022.
Cash Flows The following table summarizes our cash flows for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2024 2023 2022 ​ ​ (in thousands) Net cash provided by operating activities ​ $ 25,689 ​ $ 13,301 ​ $ 5,807 Net cash provided by (used in) investing activities ​ 37,672 ​ (29,557) ​ (8,078) Net cash provided by financing activities ​ 12,266 ​ 1,495 ​ 2,516 Net increase (decrease) in cash and cash equivalents ​ $ 75,627 ​ $ (14,761) ​ $ 245 Operating Activities Net cash provided by operations was $25.7 million for the year ended December 31, 2024, compared to $13.3 million for the year ended December 31, 2023.
The increase was due primarily to higher interest rates on U.S. Treasury notes and a higher average balance in short term investments. Other income was $1.3 million for the year ended December 31, 2022, compared to other income of $0.1 million for the year ended December 31, 2021. The increase was due primarily to higher interest rates on U.S.
The increase of $1.0 million was primarily due to interest earned on higher cash, cash equivalents and short-term investment balances. Other income was $8.5 million for the year ended December 31, 2023, compared to other income of $1.3 million for the year ended December 31, 2022. The increase was due primarily to higher interest rates on U.S.
Income Taxes Because our parent company, Kiniksa Pharmaceutical, Ltd. (“Kiniksa Bermuda”) is an exempted company incorporated under the laws of Bermuda, we are principally subject to taxation in Bermuda. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate.
Following the Redomiciliation, our principal holding company is incorporated and principally subject to taxation in the United Kingdom. Under the current laws of Bermuda, there is no corporate income tax levied on an exempted company’s income, resulting in an effective zero percent tax rate.
In the fourth quarter of 2023, following Genentech’s achievement of a development milestone related to a second indication under the Genentech License Agreement, Genentech became obligated to pay a $10.0 million milestone, which was received in the first quarter of 2024. ​ These agreements impact our short-term and long-term liquidity and capital needs.
In the fourth quarter of 111 Table of Contents 2024, following Huadong’s achievement of a regulatory milestone under the ARCALYST Huadong Collaboration Agreement, Huadong became obligated to pay a $20.0 million milestone, which was received in the first quarter of 2025. ​ These agreements impact our short-term and long-term liquidity and capital needs.
ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g. receivable), before the entity transfers a good or service to the customer. ​ ​ 126 Table of Contents Product Revenue, Net Net revenue from product sales is recognized at the transaction price when the specialty pharmacy or specialty distributors obtains control of our products, which occurs at a point in time, typically upon shipment of the product from the third party logistics provider. ​ Our net revenues represent total revenues adjusted for discounts and allowances, including estimated cash discounts, chargebacks, rebates, returns, copay assistance, and specialty pharmacy and distributor fees.
Product Revenue, Net Net revenue from product sales is recognized at the transaction price when the specialty pharmacy or specialty distributors obtains control of our products, which occurs at a point in time, typically upon shipment of the product from the third party logistics provider. ​ Our net revenues represent total revenues adjusted for discounts and allowances, including estimated cash discounts, chargebacks, rebates, returns, copay assistance, and specialty pharmacy and distributor fees.
We have recognized $124.7 million of revenue of the $125.0 million transaction price under the Genentech License Agreement and will recognize the remaining revenue over the remaining duration of the in-progress Phase 2b clinical trial of vixarelimab in prurigo nodularis. ​ Operating Expenses Cost of Goods Sold Cost of goods sold includes production and distribution costs of ARCALYST, amortization of the $20.0 million payment we made to Regeneron in the first quarter of 2021 upon achievement of a regulatory milestone and other miscellaneous product costs associated with ARCALYST.
As of December 31, 2024, we have recognized the $130.0 million received from Genentech under the Genentech License Agreement as revenue. ​ Operating Expenses Cost of Goods Sold Cost of goods sold includes production and distribution costs of ARCALYST, amortization of the $20.0 million payment we made to Regeneron in the first quarter of 2021 upon achievement of a regulatory milestone and other miscellaneous product costs associated with ARCALYST.
We expect that our reported income tax expense for future periods will be higher due to the utilization of our deferred tax assets. ​ For the year ended December 31, 2022, we recorded an income tax benefit of $172.3 million relating to a non-cash deferred tax benefit of $185.5 million primarily associated with the release of the valuation allowance on our UK deferred tax assets.
The net benefit in the net deferred tax asset was offset by current income tax expense of $3.1 million primarily associated with income earned in the UK and the United States. ​ For the year ended December 31, 2022, we recorded an income tax benefit of $172.3 million relating to a non-cash deferred tax benefit of $185.5 million primarily associated with the release of the valuation allowance on our UK deferred tax assets.
Once a contract is determined to be within the scope of ASC 606, we determine the performance obligations that are distinct. We recognize as revenues the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied.
We recognize as revenues the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied.
During the year ended December 31, 2021, expenses primarily related to our Phase 2/3 clinical trial in COVID-19 related ARDS. Direct costs for our vixarelimab program were $7.7 million, $12.8 million and $10.7 million for the year ended December 31, 2023, 2022 and 2021, respectively.
Direct costs for our vixarelimab program were $1.5 million, $7.7 million and $12.8 million for the year ended December 31, 2024, 2023 and 2022, respectively. During the year ended December 31, 2024, expenses incurred were primarily related to the wind-down activities of our Phase 2b clinical trial in prurigo nodularis.
As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting period, and no net operating loss carryforwards are currently available to us for those losses. In December 2023, Bermuda passed legislation enacting a corporate income tax effective in 2025 on companies that meets certain requirements.
As a result, we have not recorded any income tax benefits from our losses incurred in Bermuda during each reporting periods in which it was incorporated there, and no net operating loss carryforwards are currently available to us for those losses.
In August 2022, we entered into the Genentech License Agreement, pursuant to which we granted Genentech exclusive worldwide rights to develop and commercialize the Genentech Licensed Products. For more information, see “ Business –License and Acquisition Agreements—Out-Licensing Agreements—Genentech License Agreement ”. Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license.
For more information, see “ Business –License and Acquisition Agreements—Out-Licensing Agreements—Genentech License Agreement ”. Under the Genentech License Agreement, we received an upfront payment of $80.0 million for the license.
As a result, we expect that our research and development expenses will be substantial over the next several years as we conduct our ongoing and/or planned clinical trials for our product candidates, as well as conduct other preclinical and clinical development, and make regulatory filings for our product candidates. 118 Table of Contents At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of our current or future product candidates or when, if ever, we will realize revenue from the sale of our current or future product candidates.
As a result, we expect that our research and development 106 Table of Contents expenses will be substantial over the next several years as we conduct our ongoing and/or planned clinical trials for our product candidates, as well as conduct other preclinical and clinical development, and make regulatory filings for our product candidates.
During the year ended December 31 2023; we received $20.0 million for the delivery of certain drug supplies as part of the Genentech License Agreement and $15.0 million following Genentech’s achievement of a development milestone related to a new indication under the Genentech License Agreement.
During the year ended December 31, 2024 we received $10.0 million, following Genentech’s achievement of a development milestone in the fourth quarter of 2023 related to a second indication under the Genentech License Agreement and $5.0 million following Genentech’s achievement of a development milestone related to a third indication under the Genentech License Agreement.
We have additionally entered into agreements with several CDMOs to provide the Company with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $6.5 million all of which are due within one year. ​ Under various agreements with third parties, we are entitled to receive upfront payments, milestone payments, and royalties, each based upon specified milestones.
We have additionally entered into agreements with several CDMOs to provide us with preclinical and clinical trial materials for our non-ARCALYST assets, which obligate us to minimum payments of $40.8 million, $39.0 million of which are due within one year.
Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH are subject to taxation in their respective countries.
Our wholly owned subsidiary Kiniksa UK, its Swiss branch office, and Kiniksa UK’s wholly owned subsidiaries, Kiniksa Pharmaceuticals (Germany) GmbH, Kiniksa Pharmaceuticals (France) SARL, and Kiniksa Pharmaceuticals, GmbH (“Kiniksa Switzerland”) are subject to taxation in their respective countries. ​ In the first quarter of 2022, Kiniksa Bermuda transferred exclusive rights to develop and commercialize mavrilimumab in the Asia Pacific region, excluding Japan, to Kiniksa UK.
Research and development expenses were $65.5 million for the year ended December 31, 2022, compared to $99.3 million for the year ended December 31, 2021, or a decrease of $33.8 million. Direct costs for our rilonacept program were $2.6 million, $0.9 million and $10.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Research and development expenses were $76.1 million for the year ended December 31, 2023 compared to $65.5 million for the year ended December 31, 2022, or an increase of $10.6 million. 109 Table of Contents Direct costs for our KPL-387 program were $11.2 million, $2.5 million and less than $0.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.
In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.
We recognized the $10.0 million related to the mavrilimumab license during the year ended December 31, 2022. We deferred the $12.0 million related to the rilonacept license agreement as of December 31, 2023, and will recognize revenue as materials are shipped.
We recognized the $10.0 million related to the mavrilimumab license during the year ended December 31, 2022 and do not expect to recognize any additional license and collaboration revenue following the termination of the mavrilimumab Huadong Collaboration Agreement.
We will be eligible to receive up to a total of approximately $600.0 million in contingent payments, including specified development, regulatory and sales-based milestones, of which approximately $575.0 million remain as of December 31, 2023, as well as royalties in the low double digits to mid-teens on annual net sales, in each case before fulfilling our upstream financial obligations.
We will be eligible to receive up to a total of approximately $600.0 million in contingent payments, including specified development, regulatory and sales-based milestones, of which approximately $570.0 million remains as of December 31, 2024.
Our net income (losses) were $14.1 million, $183.4 million and ($157.9) million for the years ended December 31, 2023, 2022 and 2021, respectively. We expect to incur significant operating losses for the foreseeable future.
Our net income (losses) were ($43.2) million, $14.1 million and $183.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. We expect our cash balance and our expected cash inflows from operations to allow us to meet our current operating plan.
The increase of $23.2 million in 2022 from 2021 relates primarily to an increase in revenue from the sales of ARCALYST and to a $6.0 million payment due to Regeneron related to the rilonacept Huadong Collaboration Agreement. ​ Research and Development Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023/2022 ​ 2022/2021 ​ ​ Years Ended ​ Comparison ​ Comparison ​ December 31, ​ Increase/(Decrease) ​ Increase/(Decrease) ​ ​ 2023 2022 2021 $ % $ % ​ ​ (in thousands) ​ (in thousands, except percentages) Direct research and development expenses by program: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rilonacept ​ $ 2,628 ​ $ 853 ​ $ 10,842 ​ $ 1,775 ​ 208% ​ $ (9,989) ​ (92)% Abiprubart ​ 28,388 ​ ​ 11,563 ​ ​ 5,316 ​ ​ 16,825 ​ 146% ​ ​ 6,247 ​ 118% Mavrilimumab ​ 768 ​ ​ 6,379 ​ ​ 30,704 ​ ​ (5,611) ​ (88)% ​ ​ (24,325) ​ (79)% Vixarelimab ​ 7,717 ​ ​ 12,809 ​ ​ 10,739 ​ ​ (5,092) ​ (40)% ​ ​ 2,070 ​ 19% Unallocated research and development expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel related (including share-based compensation) ​ 22,739 ​ ​ 22,548 ​ ​ 27,736 ​ ​ 191 ​ 1% ​ ​ (5,188) ​ (19)% Other ​ 13,857 ​ ​ 11,338 ​ ​ 13,960 ​ ​ 2,519 ​ 22% ​ ​ (2,622) ​ (19)% Total research and development expenses ​ $ 76,097 ​ $ 65,490 ​ $ 99,297 ​ $ 10,607 ​ 16% ​ $ (33,807) ​ (34)% ​ Research and development expenses were $76.1 million for the year ended December 31, 2023, compared to $65.5 million for the year ended December 31, 2022, or an increase of $10.6 million.
The increase of $32.5 million in 2023 from 2022 relates primarily to an increase in revenue from the sales of ARCALYST and improved profitability under the Regeneron agreement. ​ Research and Development Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024/2023 ​ 2023/2022 ​ ​ Years Ended ​ Comparison ​ Comparison ​ December 31, ​ Increase/(Decrease) ​ Increase/(Decrease) ​ ​ 2024 2023 2022 $ % $ % ​ ​ (in thousands) ​ (in thousands, except percentages) Direct research and development expenses by program: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ARCALYST ​ $ 1,080 ​ $ 2,628 ​ $ 853 ​ $ (1,548) ​ (59)% ​ $ 1,775 ​ 208% KPL-387 ​ ​ 11,221 ​ ​ 2,537 ​ ​ 2 ​ ​ 8,684 ​ 342% ​ ​ 2,535 ​ 126750% KPL-1161 ​ ​ 581 ​ ​ — ​ ​ — ​ ​ 581 ​ 100% ​ ​ — ​ 0% Abiprubart ​ 59,459 ​ ​ 28,388 ​ ​ 11,563 ​ ​ 31,071 ​ 109% ​ ​ 16,825 ​ 146% Vixarelimab ​ 1,530 ​ ​ 7,717 ​ ​ 12,809 ​ ​ (6,187) ​ (80)% ​ ​ (5,092) ​ (40)% Mavrilimumab ​ 647 ​ ​ 768 ​ ​ 6,379 ​ ​ (121) ​ (16)% ​ ​ (5,611) ​ (88)% Unallocated research and development expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel related (including share-based compensation) ​ 24,302 ​ ​ 22,462 ​ ​ 22,548 ​ ​ 1,840 ​ 8% ​ ​ (86) ​ 0% Other ​ 12,803 ​ ​ 11,597 ​ ​ 11,336 ​ ​ 1,206 ​ 10% ​ ​ 261 ​ 2% Total research and development expenses ​ $ 111,623 ​ $ 76,097 ​ $ 65,490 ​ $ 35,526 ​ 47% ​ $ 10,607 ​ 16% ​ Research and development expenses were $111.6 million for the year ended December 31, 2024, compared to $76.1 million for the year ended December 31, 2023, or an increase of $35.5 million.
During the year ended December 31, 2021, expenses primarily related to the completion of RHAPSODY and the transition to the long-term extension portion of the trial. Direct costs for our abiprubart program were $28.4 million, $11.6 million and $5.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
We did not incur any expenses related to KPL-1161 for the years ended December 31, 2023 and 2022. For the year ended December 31, 2024 expenses incurred primarily related to pre-clinical development. Direct costs for our abiprubart program were $59.5 million, $28.4 million and $11.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.
See “— Liquidity and Capital Resources .” Our future viability is dependent on our ability to fund our operations through sales of ARCALYST and/or raise additional capital, such as through debt or equity offerings, as needed. Components of Our Results of Operations Product revenue, net We have been generating product revenue from sales of ARCALYST since April 2021.
See “Management’s Discussion and Analysis of Financial Condition and Results Of Operations — Liquidity and Capital Resources .” Components of Our Results of Operations Product revenue, net We have been generating product revenue from sales of ARCALYST since April 2021.
Payments under some of these contracts depend on factors such as the successful enrollment of participants and the completion of clinical trial milestones. Non-refundable prepayments determined to be used within one year for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses.
Non-refundable prepayments determined to be used within one year for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. 115 Table of Contents Non-refundable prepayments or minimum balance requirements associated to clinical trials determined to not be used within one year are classified as other long-term assets.
During the year ended December 31, 2021, expenses incurred related primarily to the initiation of our Phase 2b clinical trial of vixarelimab in prurigo nodularis. Unallocated research and development expenses were $36.6 million, $33.9 million and $41.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Unallocated research and development expenses were $37.7 million, $34.1 million and $33.9 million for the years ended December 31, 2024, 2023 and 2022, respectively. The increase of $3.6 million in unallocated research and development expenses in 2024 from 2023 was primarily due to an increase in personnel to support our clinical trials.
We expect cost of goods sold to increase as we continue to conduct a technology transfer of the manufacturing process for ARCALYST drug substance. ​ Collaboration Expenses We recognized collaboration expenses of $56.5 million, $24.1 million and $0.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.
The increase of $10.5 million in 2023 from 2022 related primarily to the increase in sales of ARCALYST and $3.3 million related to the initiation of the technology transfer of the manufacturing process offset by a decrease in average cost per unit resulting from favorable production variances. ​ Collaboration Expenses We recognized collaboration expenses of $128.3 million, $56.5 million and $24.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
We have been commercializing ARCALYST since April 2021 and expect that our selling, general and administrative expenses will continue to increase in the future. Other Income Other income consists of interest income recognized from investments in money market funds, United States Treasury notes and other miscellaneous income offset by expenses related to investments.
Other Income Other income consists of interest income recognized from investments in money market funds, United States Treasury notes and other miscellaneous income offset by expenses related to investments. Income Taxes Prior to the Redomiciliation, our principal holding company was incorporated and principally subject to taxation in Bermuda.
The increase of $32.5 million in 2023 from 2022 relates primarily to increased revenue from sales of ARCALYST and improved profitability under the Regeneron agreement.
The increase of $71.8 million in 2024 from 2023 relates primarily to increased revenue from sales of ARCALYST driving higher profits under the Regeneron agreement and to a $10.0 million payment due to Regeneron related to a regulatory milestone achieved under the ARCALYST Huadong Collaboration Agreement.
As of December 31, 2021, we maintained a full valuation allowance against our deferred tax assets of $127.9 million. ​ Liquidity and Capital Resources As of December 31, 2023, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $206.4 million.
Our UK deferred tax asset consists primarily of the tax basis of the intangible assets that were transferred to our wholly-owned UK subsidiary in 2021 and 2022. ​ Liquidity and Capital Resources As of December 31, 2024, our principal source of liquidity was cash, cash equivalents and short-term investments, which totaled $243.6 million.
Our ability to generate product revenue sufficient to achieve sustained corporate profitability will depend heavily on the continued commercialization of ARCALYST and the development and eventual commercialization of one or more of our current or future product candidates, if approved.
Unless Huadong conducts material development activity within 60 days of the notice, the mavrilimumab Huadong Collaboration Agreement will terminate in April 2025. 103 Table of Contents Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan.
Our portfolio of immune-modulating assets, ARCALYST® (rilonacept), abiprubart, and mavrilimumab, is based on strong biologic rationale or validated mechanisms, targets a spectrum of underserved cardiovascular and autoimmune conditions, and offers the potential for differentiation. ARCALYST is an interleukin-1α and interleukin-1β cytokine trap. In 2017, we licensed ARCALYST from Regeneron, which discovered and initially developed the drug.
Overview We are a biopharmaceutical company developing and commercializing novel therapies for diseases with unmet need, with a focus on cardiovascular indications. Our portfolio of assets is based on strong biologic rationale or validated mechanisms and offers the potential for differentiation. ARCALYST is an IL-1α and IL-1β cytokine trap.
We expense research and development costs as incurred.
Research and Development Expenses Research and development expenses consist primarily of costs incurred in connection with the research and development of our product candidates. We expense research and development costs as incurred.
The increase of $12.0 million in 2022 from 2021 was primarily due to an increase of $8.8 million in sales and marketing associated with our first full year of commercial operations of ARCALYST.
The increase of $38.6 million in 2024 from 2023 was primarily due to an increase of $18.9 million in personnel-related costs and an increase in sales and marketing expenses of $13.5 million, largely attributable to a full year of expenses associated with the expansion of our salesforce in 2023 and an increase in professional fees of $2.8 million largely attributable to the Redomiciliation.
We expect to announce data from Cohort 4 of the trial in the second quarter of 2024. Mavrilimumab is an investigational monoclonal antibody inhibitor targeting GM-CSFRα. In 2017, we licensed exclusive worldwide rights in all indications to mavrilimumab from MedImmune. We are currently evaluating potential partnership opportunities to advance mavrilimumab’s development.
We previously announced a Phase 2b clinical trial of abiprubart in Sjögren’s Disease. In February 2025, we announced our plans to discontinue development of abiprubart in the indication and explore strategic alternatives for the asset. Mavrilimumab is an investigational monoclonal antibody inhibitor targeting GM-CSFRα. In 2017, we licensed exclusive worldwide rights in all indications to mavrilimumab from MedImmune.
If we meet those requirements, we could become subject to taxation in Bermuda in the future. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope are subject to federal and state income taxes in the United States.
Following the Redomiciliation, our income is subject to the enacted United Kingdom statutory corporate tax rate and net operating losses incurred have an indefinite carryforward. Our wholly owned United States subsidiaries, Kiniksa US, and Primatope Therapeutics, Inc. are subject to federal and state income taxes in the United States.
We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates. As of December 31, 2023, we had cash, cash equivalents and short-term investments of $206.4 million.
As of December 31, 2024, we had cash, cash equivalents and short-term investments of $243.6 million.

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