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What changed in Mirum Pharmaceuticals, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Mirum Pharmaceuticals, Inc.'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.

+631 added−649 removedSource: 10-K (2025-02-26) vs 10-K (2024-03-15)

Top changes in Mirum Pharmaceuticals, Inc.'s 2024 10-K

631 paragraphs added · 649 removed · 511 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

145 edited+45 added−32 removed298 unchanged
Biggest changeTo continually assess and improve our employee retention and engagement, we conduct an engagement survey on a regular basis, the results of which are discussed with our board of directors, at all-hands employee meetings and in individual functions. We take actions to address areas of employment concern and follow up routinely to share with employees what we are doing.
Biggest changeWe also have processes in place to conduct activities like performance management, succession and workforce planning in order to support our employees in their growth and development and ensure we provide learning opportunities. 28 Table of Contents To continually assess and improve our employee retention and engagement, we conduct an engagement survey on a regular basis, the results of which are discussed with our board of directors, at all-hands employee meetings and in individual functions.
The most prevalent PFIC types are bile salt export pump (“BSEP”) deficiency, also known as PFIC2 (50%–60%), multidrug resistance protein 3 (MDR3) deficiency, also known as PFIC3 (30%–40%), and familial intrahepatic 3 cholestasis-associated protein 1 (FIC1) deficiency, also known as PFIC1 (10%–20%).
The most prevalent PFIC types are bile salt export pump (“BSEP”) deficiency, also known as PFIC2 (50%–60%), multidrug resistance protein 3 (MDR3) deficiency, also known as PFIC3 (30%–40%), and familial intrahepatic cholestasis-associated protein 1 (FIC1) deficiency, also known as PFIC1 (10%–20%).
We are required to pay Shire up to an aggregate of $109.5 million upon the achievement of certain other clinical development and regulatory milestones for Livmarli in the PFIC and ALGS indications, and a $25.0 million 5 payment upon regulatory approval of Livmarli for each and every other indication.
We are required to pay Shire up to an aggregate of $109.5 million upon the achievement of certain other clinical development and regulatory milestones for Livmarli in the PFIC and ALGS indications, and a $25.0 million payment upon regulatory approval of Livmarli for each and every other indication.
We have licensed an issued United States patent, as well as issued foreign counterparts in Argentina, Austria, Australia, Belgium, Canada, Switzerland, China, Germany, Denmark, Spain, Finland, France, United Kingdom, Greece, Hong Kong, Ireland, Israel, India, Italy, Japan, South Korea, Liechtenstein, Mexico, Malaysia, Netherlands, Norway, Portugal, Russia, Sweden, Singapore, Taiwan, Turkey, and Brazil from Sanofi, that cover the composition and methods of making volixibat and salts thereof, expiring in December 2027.
We have licensed an issued United States patent, as well as issued foreign counterparts in Argentina, Austria, Australia, Belgium, Canada, Switzerland, China, Germany, Denmark, Spain, Finland, France, United Kingdom, Greece, Hong Kong, Ireland, Israel, India, Italy, Japan, South Korea, Liechtenstein, Mexico, Malaysia, the Netherlands, Norway, Portugal, Russia, Sweden, Singapore, Taiwan, Turkey, and Brazil from Sanofi, that cover the composition and methods of making volixibat and salts thereof, expiring in December 2027.
Orphan Designation in the EU In the EU, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no 28 satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.
Orphan Designation in the EU In the EU, Regulation (EC) No. 141/2000, as implemented by Regulation (EC) No. 847/2000 provides that a medicinal product can be designated as an orphan medicinal product by the European Commission if its sponsor can establish that: (i) the product is intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions; (ii) either (a) such conditions affect not more than 5 in 10,000 persons in the EU when the application is made, or (b) the product without the benefits derived from orphan status, would not generate sufficient return in the EU to justify the necessary investment in developing the medicinal product; and (iii) there exists no satisfactory authorized method of diagnosis, prevention, or treatment of the condition that has been authorized in the EU, or even if such method exists, the product will be of significant benefit to those affected by that condition.
In the EU, clinical trials are governed by the Clinical Trials Regulation (EU) No 536/2014 (“CTR”), which entered into application on January 31, 2022 repealing and replacing the former Clinical Trials Directive 2001/20 (“CTD”). 25 The CTR is intended to harmonize and streamline clinical trial authorizations, simplify adverse-event reporting procedures, improve the supervision of clinical trials and increase transparency.
In the EU, clinical trials are governed by the Clinical Trials Regulation (EU) No 536/2014 (“CTR”), which entered into application on January 31, 2022 repealing and replacing the former Clinical Trials Directive 2001/20 (“CTD”). The CTR is intended to harmonize and streamline clinical trial authorizations, simplify adverse-event reporting procedures, improve the supervision of clinical trials and increase transparency.
SPCs have been granted for maralixibat for EP2771003 in Austria, Denmark, Italy, Netherlands, and Portugal, and are pending in Belgium, Czech Republic, Germany, Estonia, Spain, Finland, France, United Kingdom, Ireland, Norway, Poland, Sweden, and Slovakia. We do not have patents or patent applications covering Livmarli as a composition of matter.
SPCs have been granted for maralixibat for EP2771003 in Austria, Denmark, France, Italy, the Netherlands, Portugal, Spain, and Sweden and are pending in Belgium, Czech Republic, Germany, Estonia, Finland, United Kingdom, Ireland, Norway, Poland, and Slovakia. We do not have patents or patent applications covering Livmarli as a composition of matter.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply 14 with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.
In the United States and other countries, sales of 22 pharmaceuticals, including Livmarli, depend, in part, on the extent to which third-party payors provide coverage, and establish adequate reimbursement levels for such drug products. In the United States, third-party payors include federal and state healthcare programs, government authorities, private managed care providers, private health insurers and other organizations.
In the United States and other countries, sales of pharmaceuticals, including Livmarli, depend, in part, on the extent to which third-party payors provide coverage, and establish adequate reimbursement levels for such drug products. In the United States, third-party payors include federal and state healthcare programs, government authorities, private managed care providers, private health insurers and other organizations.
For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”), which may require approval by the competent national authorities in connection with a marketing 29 authorization. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product.
For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”), which may require approval by the competent national authorities in connection with a marketing authorization. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product.
In the event we sublicense our right to commercialize a product utilizing the Sanofi Technology, we are obligated to pay to Sanofi a fee based on a percentage of sublicense fees received by us, which percentage ranges from the 7 mid-teens to low-thirties, depending on the stage of development of such licensed product, and is subject to adjustment in certain circumstances.
In the event we sublicense our right to commercialize a product utilizing the Sanofi Technology, we are obligated to pay to Sanofi a fee based on a percentage of sublicense fees received by us, which percentage ranges from the mid-teens to low-thirties, depending on the stage of development of such licensed product, and is subject to adjustment in certain circumstances.
We also have rights to pending patent applications in United States, Europe, Eurasia,Hong Kong and Singapore, covering methods of treating pediatric cholestatic liver diseases using IBATis that have limited systemic exposure, 10 which, if issued, would expire in October 2032, absent any patent term adjustments or extensions.
We also have rights to pending patent applications in United States, Europe, Eurasia, Hong Kong and Singapore, covering methods of treating pediatric cholestatic liver diseases using IBATis that have limited systemic exposure, which, if issued, would expire in October 2032, absent any patent term adjustments or extensions.
Patent Term Restoration and Marketing Exclusivity 19 Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents, if granted, may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S. patents, if granted, may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.
A marketing authorization may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even 27 after the product has been authorized and subject to specific procedures being introduced.
A marketing authorization may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced.
For example, in relation to clinical trials in Europe, we are subject to Regulation (EU) 2016/679, the General Data Protection Regulation and similar laws in European 21 countries outside of the EU (collectively, the “GDPR”), in relation to our collection, control, processing and other use of personal data (i.e., data relating to an identifiable living individual).
For example, in relation to clinical trials in Europe, we are subject to Regulation (EU) 2016/679, the General Data Protection Regulation and similar laws in European countries outside of the EU (collectively, the “GDPR”), in relation to our collection, control, processing and other use of personal data (i.e., data relating to an identifiable living individual).
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests, preclinical animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice (“GLP”), regulations and other applicable regulations; • submission to the FDA of an investigational new drug (“IND”), which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”), at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with applicable regulations, including the FDA’s good clinical practice (“GCP”), regulations to establish the safety and efficacy of the proposed drug for its proposed indication; • submission to the FDA of an NDA for a new drug; • satisfactory completion of an FDA advisory committee review, if applicable; • a determination by the FDA within 60 days of its receipt of an NDA to file the NDA for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with the FDA’s current good manufacturing practice (“cGMP”), requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • potential FDA inspection of the preclinical and/or clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of extensive preclinical laboratory tests, preclinical animal studies and formulation studies in accordance with applicable regulations, including the FDA’s Good Laboratory Practice (“GLP”), regulations and other applicable regulations; • submission to the FDA of an investigational new drug (“IND”), which must become effective before human clinical trials may begin; • approval by an independent institutional review board (“IRB”), at each clinical site before each trial may be initiated; 14 Table of Contents • performance of adequate and well-controlled human clinical trials in accordance with applicable regulations, including the FDA’s good clinical practice (“GCP”), regulations to establish the safety and efficacy of the proposed drug for its proposed indication; • submission to the FDA of an NDA for a new drug; • satisfactory completion of an FDA advisory committee review, if applicable; • a determination by the FDA within 60 days of its receipt of an NDA to file the NDA for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with the FDA’s current good manufacturing practice (“cGMP”), requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • potential FDA inspection of the preclinical and/or clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.
The FDA may also determine that a risk evaluation and mitigation strategy (“REMS”) is necessary to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of 17 the NDA must submit a proposed REMS; the FDA will not approve the NDA without an approved REMS, if required.
The FDA may also determine that a risk evaluation and mitigation strategy (“REMS”) is necessary to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without an approved REMS, if required.
Unlike the centralized authorization procedure, the decentralized marketing authorization procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EU Member State in which the product is to be marketed. This application is identical to the application that would be submitted to the 26 EMA for authorization through the centralized procedure.
Unlike the centralized authorization procedure, the decentralized marketing authorization procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EU Member State in which the product is to be marketed. This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure.
We are commercializing Chenodal and Cholbam in the United States through one specialty pharmacy. • Develop and commercialize volixibat for the treatment of adults with PSC and PBC. We plan to further leverage our understanding of cholestatic liver disease with volixibat in adult settings.
We are commercializing Chenodal and Cholbam, and plan to commercialize Ctexli, in the United States through one specialty pharmacy. • Develop and commercialize volixibat for the treatment of adults with PSC and PBC. We plan to further leverage our understanding of cholestatic liver disease with volixibat in adult settings.
It is unclear how such challenges and the healthcare reform measures of the current administration will impact the Affordable Care Act and our business. Other legislative changes have also been proposed and adopted in the United States since the Affordable Care Act was enacted.
It is unclear how such challenges and the healthcare reform measures of the current presidential administration will impact the Affordable Care Act and our business. Other legislative changes have also been proposed and adopted in the United States since the Affordable Care Act was enacted.
If we cease all research, development and commercialization efforts with respect to all licensed products related to the ASBTi Technology or the TGR5 Technology for over one year, or we determine to cease all such efforts, Satiogen may elect to terminate the Satiogen Agreement with respect to the license under the ASBTi 8 Technology or the TGR5 Technology, respectively.
If we cease all research, development and commercialization efforts with respect to all licensed products related to the ASBTi Technology or the TGR5 Technology for over one year, or we determine to cease all such efforts, Satiogen may elect to terminate the Satiogen Agreement with respect to the license under the ASBTi Technology or the TGR5 Technology, respectively.
Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and 23 applying new payment methodologies.
Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies.
We have rights to granted and/or issued patents in Australia, Brazil, Canada, China, Israel, Japan, Mexico, South Korea, South Africa, Singapore, Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Macau and Turkmenistan covering methods of treating pediatric cholestatic liver diseases using IBATis that have limited systemic exposure, which expire in October 2032.
We have rights to granted patents in Australia, Brazil, Canada, China, Israel, Japan, Mexico, South Korea, South Africa, Singapore, Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, United Kingdom, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Macau and Turkmenistan covering methods of treating pediatric cholestatic liver diseases using IBATis that have limited systemic exposure, which expire in October 2032.
Cholbam for the treatment of bile acid synthesis disorders and peroxisomal disorders, including PBD-ZSD and SLOS The FDA approved Cholbam (cholic acid capsules) in March 2015, as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for adjunctive treatment of patients with peroxisomal disorders, including PBD-ZSD and SLOS.
Cholbam for the treatment of bile acid synthesis disorders and peroxisomal disorders, including PBD-ZSD The FDA approved Cholbam (cholic acid capsules) in March 2015, as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for adjunctive treatment of patients with peroxisomal disorders, including PBD-ZSD.
The exceptions and safe harbors are drawn narrowly and practices that involve 20 remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.
The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.
We have rights to pending applications in the United States and PCT directed to maralixibat compositions and solid dosage forms which, if issued, would expire in October 2043, absent any patent term adjustments or extensions.
We have rights to pending applications in the United States, PCT, and Taiwan directed to maralixibat compositions and solid dosage forms which, if issued, would expire in October 2043, absent any patent term adjustments or extensions.
An IRB is charged 15 with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.
Pursuant to the Manchester MIPA, we are obligated to pay the MIPA Sellers a mid-single-digit to low double-digit royalty on net sales of certain Chenodiol Products in the U.S. Asklepion APA Pursuant to the Asklepion APA, we are required to pay Asklepion a low single-digit royalty on net sales of Chenodal in the U.S.
Pursuant to the Manchester MIPA, we are obligated to pay the MIPA Sellers a mid-single-digit to low double-digit royalty on net sales of certain Chenodiol Products in the U.S. Asklepion APA Pursuant to the Asklepion APA, we are required to pay Asklepion a low single-digit royalty on net sales of chenodiol in the U.S.
Revenue Interest Purchase Agreement with Oberland 9 In December 2020, we entered into a Revenue Interest Purchase Agreement (“RIPA”) with Mulholland SA LLC, an affiliate of Oberland Capital LLC, as agent for the purchasers party thereto (the “Purchasers”), and the Purchasers.
Revenue Interest Purchase Agreement with Oberland In December 2020, we entered into a Revenue Interest Purchase Agreement (“RIPA”) with Mulholland SA LLC, an affiliate of Oberland Capital LLC, as agent for the purchasers party thereto (the “Purchasers”), and the Purchasers.
In 2020, we established a Culture Team that now consists of two sub-teams, one internationally and one in the United States with over 15 employees across a representative cross-section of 30 departments.
In 2020, we established a Culture Team that now consists of two sub-teams, one internationally and one in the United States with over 15 employees across a representative cross-section of departments.
If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including without limitation, significant civil, criminal and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, imprisonment, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including without limitation, significant civil, criminal and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, imprisonment, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, 21 Table of Contents contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
There has been heightened governmental scrutiny recently over the manner in which pharmaceutical companies set prices for their marketed products, which has resulted in several Congressional inquiries and proposed federal legislation, as well as state efforts, designed to, among other things, bring more transparency to product pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products At the federal level, the previous administration used several means to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.
There has been heightened governmental scrutiny recently over the manner in which pharmaceutical companies set prices for their marketed products, which has resulted in several Congressional inquiries and proposed federal legislation, as well as state efforts, designed to, among other things, bring more transparency to product pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products At the federal level, several means have been used to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.
Results from the RESTORE study demonstrated that treatment with Chenodal not only improved urine bile alcohols but also serum cholestanol. Additionally, a greater proportion of patients receiving placebo required blinded rescue therapy, demonstrating the robustness of the effect. The most commonly reported adverse events while on Chenodal were diarrhea and headache.
Results from the RESTORE study demonstrated that treatment with chenodiol not only improved urine bile alcohols but also serum cholestanol. Additionally, a greater proportion of patients receiving placebo required blinded rescue therapy, demonstrating the robustness of the effect. The most commonly reported adverse events while on chenodiol were diarrhea and headache.
We have rights to granted and/or issued patents in Australia, Brazil, Canada, China, Israel, Japan, Mexico, South Korea, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, South Africa and Macau covering the methods of treating cholestasis using IBATis that have limited systemic exposure, which expire in October 2032.
We have rights to granted patents in Australia, Brazil, Canada, China, Israel, Japan, Mexico, South Korea, Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, South Africa and Macau covering the methods of treating cholestasis using IBATis that have limited systemic exposure, which expire in October 2032.
(“Pfizer”), pursuant to which we obtained an exclusive, worldwide license to Pfizer’s know-how related to Livmarli, (“the Pfizer Know-How”). Under the Pfizer Agreement, we are permitted to research, develop, manufacture and commercialize products utilizing the Pfizer Know-How for the diagnosis, treatment, prevention, mitigation and cure of human diseases and disorders, and to sublicense such rights.
(“Pfizer”), pursuant to which we obtained an exclusive, worldwide license to Pfizer’s know-how related to Livmarli, (the “Pfizer Know-How”). Under the Pfizer Agreement, we are permitted to research, develop, manufacture and commercialize products utilizing the Pfizer Know-How for the diagnosis, treatment, prevention, mitigation and cure of human diseases and disorders, and to sublicense such rights.
The incidence rates for PBC in Europe, North America, Asia, and Australia are reported as ranging from 0.33 to 5.8 per 100,000 people, with a prevalence ranging from 1.91 to 40.2 per 100,000 people, resulting in approximately 230,000 patients across the United States and Europe suffering from PBC.
The incidence rates for PBC in Europe, North America, Asia, and Australia are reported as ranging from 0.33 to 5.8 per 100,000 people, with a prevalence ranging from 1.91 to 40.2 per 100,000 people, resulting in approximately 230,000 patients across the United States and Europe suffering from PBC with approximately 85,000 people in the United States alone.
We expect to continue to add employees in 2024, with a focus on clinical, research and development and commercialization activities. We continually evaluate the business need and opportunity to expand our team and balance in-house expertise and capacity with outsourced expertise and capacity. Currently, we outsource substantial clinical trial work to clinical research organizations and drug manufacturing to contract manufacturers.
We expect to continue to add employees in 2025, with a focus on clinical, research and development and commercialization activities. We continually evaluate the business need and opportunity to expand our team and balance in-house expertise and capacity with outsourced expertise and capacity. Currently, we outsource substantial clinical trial work to clinical research organizations and drug manufacturing to contract manufacturers.
Fast track designation, 18 priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.
Fast track designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.
Based on the number of physicians that treat cholestatic liver diseases, we have designed our commercial organization to target the relevant audience for our approved medicines and volixibat, if approved, in North America and certain countries in Europe primarily through an internal sales force.
Based on the number of physicians that treat cholestatic liver diseases, we have designed our commercial organization to target the relevant audience for our approved medicines in North America and certain countries in Europe primarily through an internal sales force.
Despite the lack of FDA approval, these older, generic agents are perceived as part of the standard of care for treating ALGS and PFIC patients suffering from cholestatic pruritus. Further, we may compete with companies that are developing gene therapy for the treatment of PFIC.
Despite the lack of FDA approval, these older, generic agents are perceived as part of the standard of care for treating ALGS, PFIC, PSC and PBC patients suffering from cholestatic pruritus. Further, we may compete with companies that are developing gene therapy for the treatment of PFIC.
Patents related to Livmarli and volixibat may be eligible for patent term extensions in certain jurisdictions, including the United States, upon approval of a commercial use of the corresponding product by a regulatory agency in the jurisdiction where the patent was granted and/or issued.
Patents related to Livmarli and volixibat may be eligible for patent term extensions in certain jurisdictions, including the United States for volixibat, upon approval of a commercial use of the corresponding product by a regulatory agency in the jurisdiction where the patent was granted.
Sales, Marketing and Distribution We believe we have built the commercial infrastructure necessary to effectively support the commercialization of our approved medicines, and volixibat, if approved, in North America and certain countries in Europe and are using strategic partners, and distributors to assist in the commercialization of our approved medicines and volixibat in other markets.
Sales, Marketing and Distribution We believe we have built the commercial infrastructure necessary to effectively support the commercialization of our approved medicines in North America and certain countries in Europe and are using strategic partners, and distributors to assist in the commercialization of our approved medicines in other markets.
Commercial Agreements related to Chenodal License and Manufacturing Agreement with LGM Pharma Through the Bile Acid Portfolio Acquisition, we were assigned the rights to the License and Manufacturing Agreement, dated November 4, 2009, between LGM Pharma, formerly Nexgen Pharma, Inc. (“LGM”), and Manchester Pharmaceuticals, Inc.
Commercial Agreements related to chenodiol License and Manufacturing Agreement with LGM Pharma Through the Bile Acid Portfolio Acquisition, we were assigned the rights to the License and Manufacturing Agreement, dated November 4, 2009, between LGM Pharma, formerly Nexgen Pharma, Inc. (“LGM”), and Manchester Pharmaceuticals, Inc.
Under the Shire License Agreement and Assigned License Agreements, to date, we have met clinical development, regulatory and sales milestones resulting in the payment of an aggregate of $71.0 million related to our Livmarli and volixibat programs.
Under the Shire License Agreement and Assigned License Agreements, to date, we have met clinical development, regulatory and sales milestones resulting in the payment of an aggregate of $91.0 million related to our Livmarli and volixibat programs.
Other off-label medications are also used in ALGS and PFIC for cholestatic pruritus such as Ursodeoxycholic acid (“UDCA”), cholestyramine and other bile salt resins, rifampin, naltrexone and other agents, such as selective serotonin reuptake inhibitors.
Other off-label medications are also used in ALGS, PFIC, PSC and PBC for cholestatic pruritus such as Ursodeoxycholic acid (“UDCA”), cholestyramine and other bile salt resins, rifampin, naltrexone and other agents, such as selective serotonin reuptake inhibitors.
We have rights to pending patent applications in the United States, Europe, South Korea, Hong Kong, Mexico and Singapore covering the methods of treating various cholestatic liver indications using maralixibat and/or volixibat which, if issued, would expire in October 2032, absent any patent term adjustments or extensions.
We have rights to pending patent applications in the United States, Europe, South Korea, Hong Kong, and Singapore covering the methods of treating various cholestatic liver indications using maralixibat and/or volixibat which, if issued, would expire in October 2032, absent any patent term adjustments or extensions. We have rights to issued U.S.
We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our products in accordance with cGMP regulations. cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP.
We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our products in accordance with cGMP regulations. cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records and documentation and the obligation to investigate and correct any deviations from 18 Table of Contents cGMP.
Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.
Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.
Upon approval in the United States, as volixibat has not previously been approved in the United States for any indication, it may be eligible for five years of NCE exclusivity, which would run concurrently with its seven years of orphan drug exclusivity if we obtain orphan drug designation for its approved uses.
Upon approval in the United States, as volixibat has not previously been approved in the United States for any indication, it may be eligible for five years of NCE exclusivity, which would run concurrently with its seven years of orphan drug exclusivity if we obtain orphan drug exclusivity for an approved orphan indication.
This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial. Other U.S.
This 19 Table of Contents six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial. Other U.S.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.
It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.
At the state level, individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency 23 Table of Contents measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
In addition, Sanofi granted to us, under certain conditions, an exclusive option to obtain an exclusive license to manufacture volixibat during the term of the Sanofi Agreement. We exercised this option in May 2020 and are transferring manufacturing of volixibat to a third-party contract manufacturer.
In addition, Sanofi granted to us, under certain conditions, an 6 Table of Contents exclusive option to obtain an exclusive license to manufacture volixibat during the term of the Sanofi Agreement. We exercised this option in May 2020 and are transferring manufacturing of volixibat to a third-party contract manufacturer.
In addition, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, 24 HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.
In addition, in response to an October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.
In all cases, again, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. Human Capital Management As of December 31, 2023, we employed 264 employees, all of whom are full time, consisting of clinical, research, operations, finance and business development personnel.
In all cases, again, the clinical trials are conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. Human Capital Management As of December 31, 2024, we employed 322 employees, all of whom are full time, consisting of clinical, research, operations, finance and business development personnel.
Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this report is an inactive textual reference only. Our design logo, “Mirum,” and our other registered and common law trade names, trademarks and service marks are the property of Mirum Pharmaceuticals, Inc. 31
Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of our website address in this report is an inactive textual reference only. Our design logo, “Mirum,” and our other registered and common law trade names, trademarks and service marks are the property of Mirum Pharmaceuticals, Inc. 29 Table of Contents
We have rights to pending applications in the United States, Taiwan, and PCT directed to treatment of PFIC with maralixibat which, if issued, would expire in October 2043, absent any patent term adjustments or extensions.
We have rights to pending applications in the United States, Taiwan, and PCT directed to methods of treating PFIC with maralixibat which, if issued, would expire in October 2043, absent any patent term adjustments or extensions.
Even if favorable coverage and reimbursement status is attained for Livmarli or any other products for which we or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Healthcare Reform A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
Even if favorable coverage and reimbursement status is attained for Livmarli or any other products for which we or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. 22 Table of Contents Healthcare Reform A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
(“Travere”) that are primarily related to the development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of Chenodal and Cholbam (also known as Kolbam, and together with Chenodal, the “Bile Acid Medicines”) pursuant to an asset purchase agreement dated July 16, 2023 (such acquisition, the “Bile Acid Portfolio Acquisition”).
(“Travere”) that are primarily related to the development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of chenodiol and Cholbam (also known as Kolbam) (and together with chenodiol, the “Bile Acid Medicines”) pursuant to an asset purchase agreement dated July 16, 2023 (such acquisition, the “Bile Acid Portfolio Acquisition”). The U.S.
Amongst other initiatives, our Culture Team engages in continual discussions across the various business functions to identify potential actions to address areas of improvement and is focused on building accountability across the organization to ensure we meet our diversity objectives. Corporate Information We were incorporated in Delaware in May 2018.
Amongst other initiatives, our Culture Team engages in continual discussions across the various business functions to identify potential actions to address areas of improvement and is focused on building accountability across the organization. Corporate Information We were incorporated in Delaware in May 2018.
Manufacturing We do not own or operate manufacturing facilities for the production of our approved medicines and volixibat or other product candidates that we may develop, nor do we have plans to develop our own manufacturing operations in the foreseeable future.
Manufacturing We do not own or operate manufacturing facilities for the production of our approved medicines or our product candidates that we may develop, nor do we have plans to develop our own manufacturing operations in the foreseeable future.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial marketing authorization of the reference product in the EU.
The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial marketing authorization of the reference 26 Table of Contents product in the EU.
We have rights to pending applications in the United States, Argentina, Taiwan, Uruguay, Paraguay and PCT directed to highly pure maralixibat forms and intermediates which, if issued, would expire in September 2043, absent any patent term adjustments or extensions.
We have rights to pending applications in the United States, Argentina, Taiwan, Uruguay, Paraguay and Patent Cooperation Treaty (“PCT”) directed to highly pure maralixibat forms and intermediates which, if issued, would expire in September 2043, absent any patent term adjustments or extensions.
If an orphan designated product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan exclusivity. Orphan drug status in the EU has similar but not identical benefits in that jurisdiction.
If an orphan designated product receives marketing approval for an 17 Table of Contents indication broader than what is designated, it may not be entitled to orphan exclusivity. Orphan drug status in the EU has similar but not identical benefits in that jurisdiction.
We have licensed patent applications in the United States and a pending application in Europe from Satiogen covering therapeutic uses of IBATis that have limited systemic exposure for treating inflammatory intestinal conditions, which, if issued, would expire in May 2031, absent any patent term adjustments or extensions.
We have licensed patent applications in the United States, Hong Kong, and Europe from Satiogen covering therapeutic uses of IBATis that have limited systemic exposure for treating inflammatory intestinal conditions, which, if issued, would expire in May 2031, absent any patent term adjustments or extensions.
We have licensed know-how related to volixibat from 11 Sanofi. Our existing license agreements as related to Livmarli and volixibat impose various development, regulatory and/ commercial diligence obligations, payment of milestones and/or royalties and other obligations.
We have licensed know-how related to volixibat from Sanofi. We have licensed know-how related to MRM-3379 from Enthorin. Our existing license agreements as related to Livmarli, volixibat, and MRM-3379 impose various development, regulatory and/ commercial diligence obligations, payment of milestones and/or royalties and other obligations.
(together with its affiliates, “Manchester”) related to the manufacture of Chenodal, pursuant to which we obtained an exclusive, perpetual license to market Chenodal in the U.S. under the terms of an abbreviated new drug application approved by the FDA and owned by LGM, which grants to LGM the authority to manufacture and sell Chenodal in the U.S.
(together with its affiliates, “Manchester”) related to the manufacture of chenodiol, pursuant to which 8 Table of Contents we obtained an exclusive, perpetual license to market chenodiol in the U.S. under the terms of an abbreviated new drug application approved by the FDA and owned by LGM, which grants to LGM the authority to manufacture and sell chenodiol in the U.S.
Our success also depends in part on our ability to operate without infringing the proprietary rights of others, and in part, on our ability to prevent others from infringing our proprietary rights.
Our success also depends in part on our ability to operate without infringing the proprietary rights of others, and in part, on our 9 Table of Contents ability to prevent others from infringing our proprietary rights.
This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision after it the application is submitted.
This review typically takes twelve months from the date the NDA is submitted to FDA because the FDA has approximately two months to make a “filing” decision after it the 16 Table of Contents application is submitted.
Similar to the patent term-extensions in the United States, Supplementary Protection Certificates (“SPCs”) serve as an extension to a patent right in the European Union (“EU”) for up to five years.
Similar to the patent term-extensions in the United States, Supplementary Protection Certificates (“SPCs”) serve as an extension to a patent right in the EU for up to five years.
In addition, we currently have orphan drug designation for Livmarli for the treatment of ALGS, PFIC, PSC and PBC in the United States and the EU, providing the opportunity to receive seven years of market exclusivity in the United States, which can be extended to seven and a half years if trials are conducted in accordance with an agreed-upon pediatric investigational plan, and ten years of market exclusivity in the EU, which can be extended to 12 years in the EU if trials are conducted in accordance with an agreed-upon pediatric investigational plan.
In addition, we currently have orphan drug designation for volixibat for the treatment of PBC in the United States and in the EU, providing the opportunity to receive 11 Table of Contents seven years of market exclusivity in the United States, which can be extended to seven and a half years if trials are conducted in accordance with an agreed-upon pediatric investigational plan, and ten years of market exclusivity in the EU, which can be extended to 12 years in the EU if trials are conducted in accordance with an agreed-upon pediatric investigational plan.
We are developing volixibat for the treatment of PSC and PBC. Volixibat has been studied in over 400 adults for up to 48 weeks. Clinical trials of volixibat have shown significant activity on IBAT and bile acid markers such as 7αC4, fecal bile acids and cholesterol, demonstrating potent biological activity.
Volixibat has been studied in over 400 adults for up to 48 weeks. Clinical trials of volixibat have shown significant activity on IBAT and bile acid markers such as 7αC4, fecal bile acids and cholesterol, demonstrating potent biological activity.
Livmarli is a novel, orally administered, minimally-absorbed ileal bile acid transporter (“IBAT”) inhibitor (“IBATi”) that is approved for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) in the United States and various other countries around the world and for cholestatic pruritus in patient with progressive familial intrahepatic cholestasis (“PFIC”) in the United States.
Livmarli is a novel, orally administered, minimally-absorbed ileal bile acid transporter (“IBAT”) inhibitor (“IBATi”) that is approved for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) in the United States (“U.S.”) and various other countries around the world and for cholestatic pruritus in patients with progressive familial intrahepatic cholestasis (“PFIC”) in the U.S and for the treatment of PFIC in the European Union (“EU”).
We have rights to pending patent applications in the United States, Europe, Canada, China, Japan, South Korea, Israel, Brazil, Russia, Mexico, Australia, New Zealand, UAE, and Saudi Arabia directed to methods for modulating a dosage of an IBATi and to methods for using patient genotype to predict response to IBATi administration in patients with BSEP deficiency.
We have rights to pending patent applications in the United States, Europe, Canada, China, Japan, South Korea, Israel, Brazil, Russia, Mexico, Australia, New Zealand, UAE, and Saudi Arabia directed to methods for treating cholestatic liver disease and to methods for using patient genotype to predict response to IBATi administration in patients with BSEP deficiency.
We concurrently entered into a transitional services agreement with Travere, pursuant to which Travere is obligated to perform certain services for a period of time, not anticipated to last beyond 12 months post-close, with respect to our use and operation of the assets purchased.
We concurrently entered into a transitional services agreement with Travere, pursuant to which Travere was obligated to perform certain services for a period of time, not anticipated to last beyond 12 months post-close, with respect to our use and operation of the assets purchased. The transitional services agreement has since terminated according to its terms.
Up to approximately 60% of PSC patients suffer from pruritus during the course of the disease. We are conducting the VANTAGE Phase 2b clinical trial of volixibat in patients with pruritus and PBC and we expect interim results from VANTAGE in the first half of 2024. There are no approved therapies for PSC in the United States.
Up to approximately 60% of PSC patients suffer from pruritus during the course of the disease. We are conducting the VANTAGE Phase 2b clinical trial of volixibat in patients with pruritus and PBC and we expect to complete enrollment in 2026. There are no approved therapies for PSC in the United States.
PSC is a serious, idiopathic chronic cholestatic liver disease characterized by the progressive inflammation and destruction of bile ducts, which can lead to life-threatening complications. It is estimated that approximately 54,000 people in the United States and Europe suffer from PSC. Up to approximately 65% of PSC patients suffer from pruritus during the course of the disease.
PSC is a serious, idiopathic chronic cholestatic liver disease characterized by the progressive inflammation and destruction of bile ducts, which can lead to life-threatening complications. It is estimated that approximately 54,000 people in the United States and Europe suffer from PSC with approximately 30,000 people in the United States alone.
Forty of our employees hold Ph.D. or M.D. degrees. Further, 202 of our employees are located in the United States, and 56 in Europe and six in Canada. As of December 31, 2023, none of our employees is subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
Forty-eight of our employees hold Ph.D. or M.D. degrees. Further, 241 of our employees are located in the United States, and 74 in Europe and seven in Canada. As of December 31, 2024, none of our employees is subject to a collective bargaining agreement. We consider our relationship with our employees to be good.
The FDA approved Cholbam in March 2015 as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for adjunctive treatment of patients with peroxisomal disorders, including peroxisome biogenesis disorder-Zellweger spectrum disorder (“PBD-ZSD”) and Smith-Lemli-Opitz syndrome (“SLOS”).
Food and Drug Administration (“FDA”) approved Cholbam in March 2015 as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for adjunctive treatment of patients with peroxisomal disorders, including peroxisome biogenesis disorder-Zellweger spectrum disorder (“PBD-ZSD”).
A variety of licensed and off-label therapies are currently used to reduce the impact of the progressive nature of PBC. These include UDCA, obeticholic acid, peroxisome proliferator activator receptors like bezafibrate and fenofibrate, and others. However, the few therapeutic options available to manage PBC associated pruritus are temporary and/or suboptimal.
A variety of licensed and off-label therapies are currently used to reduce the impact of the progressive nature of PBC. These include UDCA, obeticholic acid, seladelpar, elafibranor, and others. However, the few therapeutic options available to manage PBC associated pruritus are temporary and/or suboptimal.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeUnder the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the U.S., or a patient population of greater than 200,000 individuals in the U.S., but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the U.S. 52 In the EU, the European Commission, on the basis of the opinion of the EMA Committee for Orphan Medicinal Products, grants orphan drug designation for medicines to be developed for the diagnosis, prevention or treatment of diseases that are life-threatening or chronically debilitating, for which either no satisfactory method of diagnosis, prevention, or treatment exists, or if such method exists, the medicine is of significant benefit to those affected by such condition.
Biggest changeIn the EU, the European Commission, on the basis of the opinion of the EMA Committee for Orphan Medicinal Products (“COMP”), grants orphan drug designation for medicines to be developed for the diagnosis, prevention or treatment of diseases that are life-threatening or chronically debilitating, for which either no satisfactory method of diagnosis, prevention, or treatment exists, or if such method exists, the medicine is of significant benefit to those affected by such condition.
In many foreign countries, including Member States of the EU, the pricing of prescription drugs is subject to governmental control and the proposed pricing for a drug must be approved before it may be lawfully marketed. In such countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product and varies between countries.
In many foreign countries, including EU Member States, the pricing of prescription drugs is subject to governmental control and the proposed pricing for a drug must be approved before it may be lawfully marketed. In such countries, pricing negotiations with governmental authorities can take considerable time after receipt of regulatory approval for a product and varies between countries.
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 a more restrictive label or the delay or denial of regulatory approval by the FDA, European Commission or comparable foreign regulatory authorities.
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 a more restrictive label or the delay or denial of regulatory approval of our product candidates by the FDA, European Commission or comparable foreign regulatory authorities.
The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the U.S., the EU and EU Member State competent authorities in the EU and by comparable foreign regulatory authorities in other markets.
The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the U.S., the EU and EU Member State competent authorities and by comparable foreign regulatory authorities in other markets.
Our product candidates could fail to receive regulatory approval for many reasons, including the following: • the FDA, EMA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials or the validation of our caregiver and patient reported outcome instruments; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • the FDA, EMA or comparable foreign regulatory authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the U.S., the EU or the applicable foreign jurisdiction; • we may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that a product candidate is safe and effective for any of its proposed indications; • the results of clinical trials may not meet the level of statistical significance required by the FDA, EMA or comparable foreign regulatory authorities for approval; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA, EMA or comparable foreign 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 satisfy the FDA, EMA or comparable foreign regulatory authorities to support the submission of an NDA or other 44 comparable submissions in the EU or other foreign jurisdictions or to obtain regulatory approval in the U.S. or elsewhere; • approval or orphan status may be blocked or rejected by the FDA or the European Commission; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA, European Commission or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our product candidates could fail to receive regulatory approval for many reasons, including the following: • the FDA, EMA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials or the validation of our caregiver and patient reported outcome instruments; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidates; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • the FDA, EMA or comparable foreign regulatory authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the U.S., the EU or the applicable foreign jurisdiction; • we may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that a product candidate is safe and effective for any of its proposed indications; • the results of clinical trials may not meet the level of statistical significance required by the FDA, EMA or comparable foreign regulatory authorities for approval; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA, EMA or comparable foreign 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 satisfy the FDA, EMA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submissions in the EU or other foreign jurisdictions or to obtain regulatory approval in the U.S. or elsewhere; • approval or orphan status may be blocked or rejected by the FDA or the European Commission; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA, European Commission or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Among the provisions of the Affordable Care Act of importance to our potential product candidates, the Affordable Care Act: established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic 48 agents; expanded eligibility criteria for Medicaid programs; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; creates a Medicare Part D coverage gap discount program; established a Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare & Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
Among the provisions of the Affordable Care Act of importance to our potential product candidates, the Affordable Care Act: established an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; expanded eligibility criteria for Medicaid programs; increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; creates a Medicare Part D coverage gap discount program; established a Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare & Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending.
Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: 66 • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things: • increasing our vulnerability to adverse economic and industry conditions; • limiting our ability to obtain additional financing; • requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce the amount of cash available for other purposes; • limiting our flexibility to plan for, or react to, changes in our business; • diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the Notes; and • placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.
Additionally, in respect of our approved medicines or if one or more of our product candidates receives marketing approval, and we or others (including regulatory approval authorities) later identify undesirable side effects caused by our approved medicines or such product candidates or other products with the same or related active ingredients, a number of potentially significant negative consequences could result, including, among other things: • regulatory authorities may withdraw approvals of such product, including the FDA, European Commission or comparable foreign regulatory authorities withdrawing approval for the affected medicine; • regulatory authorities may require additional warnings on the label; • regulatory authorities may require a recall or we or our potential partners may voluntarily recall such product; • we may be required to create a medication guide outlining the risks of such side effects for distribution to patients at significant cost or instate a Risk Evaluation and Mitigation Strategies (“REMS”) or Risk Management Plan (“RMP”); • regulatory authorities may require the addition of warnings, such as black box or other warnings, or contraindications in the product labeling that could diminish the usage of the product or otherwise limit the commercial success of the affected product; • our ability to promote our approved medicines may be limited and we could be required to change administration of, or modify, such product in some other way; • regulatory authorities may require us to modify, suspend or terminate our clinical trials, conduct additional clinical trials or engage in costly post-marketing testing and surveillance to monitor the safety or efficacy of such product; • undesirable side effects may limit physicians’ or patients’ willingness to initiate or continue therapy with such product; • sales may decrease significantly; 36 • we could be sued and held liable for harm caused to patients; and • our corporate brand and reputation or the reputation of our approved medicines may suffer.
Additionally, in respect of our approved medicines or if one or more of our product candidates receives marketing approval, and we or others (including regulatory approval authorities) later identify undesirable side effects caused by our approved medicines or such product candidates or other products with the same or related active ingredients, a number of potentially significant negative consequences could result, including, among other things: • regulatory authorities may withdraw, suspend, or vary approvals of such product, including the FDA, European Commission or comparable foreign regulatory authorities withdrawing approval for the affected medicine; • regulatory authorities may require additional warnings on the label; • regulatory authorities may require a recall or we or our potential partners may voluntarily recall such product; • we may be required to create a medication guide outlining the risks of such side effects for distribution to patients at significant cost or instate a Risk Evaluation and Mitigation Strategies (“REMS”) or Risk Management Plan (“RMP”); • regulatory authorities may require the addition of warnings, such as black box or other warnings, or contraindications in the product labeling that could diminish the usage of the product or otherwise limit the commercial success of the affected product; • our ability to promote our approved medicines may be limited and we could be required to change administration of, or modify, such product in some other way; • regulatory authorities may require us to modify, suspend or terminate our clinical trials, conduct additional clinical trials or engage in costly post-marketing testing and surveillance to monitor the safety or efficacy of such product; • undesirable side effects may limit physicians’ or patients’ willingness to initiate or continue therapy with such product; • sales may decrease significantly; • we could be sued and held liable for harm caused to patients; and • our corporate brand and reputation or the reputation of our approved medicines may suffer.
If we are 38 deemed by the FDA to have engaged in the promotion of off-label uses, we could be subject to FDA regulatory or enforcement actions as well as by other federal, state or foreign enforcement authorities that might take action if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including criminal, civil or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations.
If we are deemed by the FDA to have engaged in the promotion of off-label uses, we could be subject to FDA regulatory or enforcement actions as well as by other federal, state or foreign enforcement authorities that might take action if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including criminal, civil or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations.
The degree and rate of market acceptance depends on a number of factors, including, among other things: • patient demand; • the availability of adequate reimbursement from private third-party payors and government authorities; • the willingness of patients to pay out-of-pocket in the absence of coverage and adequate reimbursement by third-party payors and government authorities; • the cost of treatment in relation to alternative treatments and patients willingness to pay for our approved medicines, including relative to discretionary items; • our ability to successfully compete with available off-label therapies, future approved therapies, and therapies in development and available for use through expanded access programs; • acceptance by physicians, patients, tertiary care centers, transplant centers and others in the medical community that our approved medicines are safe and effective treatments; • physician and patient willingness to adopt a new therapy over other available therapies; • limitations, warnings or adverse drug reactions contained in the labeling or product inserts approved by the FDA, European Commission or comparable foreign regulatory authorities, and patients’ and physicians’ assessment of these limitations and warnings; • overcoming any biases physicians or patients may have toward particular therapies for the treatment of the indications our approved medicines are approved for (or, if applicable, deemed medically necessary for); • patients and caregivers properly using our approved medicines as instructed; • the prevalence and severity of side effects from the use or potential misuse of our approved medicines; • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies, and patient satisfaction with the overall treatment experience; • the ability of specialty pharmacies we contract with to process prescriptions and dispense our approved medicines and the processes required to place orders with those pharmacies; • the ability of our patient services hub to provide adequate support for patients and physicians to prescribe and access our approved medicines; • the timing of market introduction of any of our approved medicines as well as competitive products; • the effectiveness of our sales, marketing and distribution efforts and those of the third parties with whom we contract; • adverse publicity about our approved medicines or favorable publicity about competitive products; • potential product liability claims; • our ability to manage our growth and operations to effectively support our commercialization activities; and • patient satisfaction leading to a high percentage of patients deriving clinical benefit and staying on our approved medicines chronically.
The degree and rate of market acceptance depends on a number of factors, including, among other things: • patient demand; • the availability of adequate reimbursement from private third-party payors and government authorities; • the willingness of patients to pay out-of-pocket in the absence of coverage and adequate reimbursement by third-party payors and government authorities; • the cost of treatment in relation to alternative treatments and patients willingness to pay for our approved medicines, including relative to discretionary items; • our ability to successfully compete with available off-label therapies, future approved therapies, and therapies in development and available for use through expanded access programs; • acceptance by physicians, patients, tertiary care centers, transplant centers and others in the medical community that our approved medicines are safe and effective treatments; • physician and patient willingness to adopt a new therapy over other available therapies; 32 Table of Contents • limitations, warnings or adverse drug reactions contained in the labeling or product inserts approved by the FDA, European Commission or comparable foreign regulatory authorities, and patients’ and physicians’ assessment of these limitations and warnings; • overcoming any biases physicians or patients may have toward particular therapies for the treatment of the indications our approved medicines are approved for (or, if applicable, deemed medically necessary for); • patients and caregivers properly using our approved medicines as instructed; • the prevalence and severity of side effects from the use or potential misuse of our approved medicines; • relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies, and patient satisfaction with the overall treatment experience; • the ability of specialty pharmacies we contract with to process prescriptions and dispense our approved medicines and the processes required to place orders with those pharmacies; • the ability of our patient services hub to provide adequate support for patients and physicians to prescribe and access our approved medicines; • the timing of market introduction of any of our approved medicines as well as competitive products; • the effectiveness of our sales, marketing and distribution efforts and those of the third parties with whom we contract; • adverse publicity about our approved medicines or favorable publicity about competitive products; • potential product liability claims; • our ability to manage our growth and operations to effectively support our commercialization activities; and • patient satisfaction leading to a high percentage of patients deriving clinical benefit and staying on our approved medicines chronically.
The ability of the FDA, the competent authorities of EU Member States and other regulatory authorities to review and approve proposed clinical trials or new product candidates can be affected by a variety of factors, including, but not limited to, government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, statutory, regulatory, and policy changes, and other events that may otherwise affect these regulatory agencies’ ability to perform routine functions.
The ability of the FDA, the competent authorities of EU Member States and other foreign regulatory authorities to review and approve proposed clinical trials or new product candidates can be affected by a variety of factors, including, but not limited to, government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, statutory, regulatory, and policy changes, and other events that may otherwise affect these regulatory agencies’ ability to perform routine functions.
If our CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy 62 of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval for or successfully commercialize our product candidates.
If our CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval for or successfully commercialize our product candidates.
Furthermore, in many jurisdictions, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build 80 brand identity and possibly leading to market confusion.
Furthermore, in many jurisdictions, owning and maintaining a trademark registration may not provide an adequate defense against a subsequent infringement claim asserted by the owner of a senior trademark. At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.
Following such an irrevocable election, if the conversion value of 67 the Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share by assuming that all of the Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess, unless the result would be anti-dilutive.
Following such an irrevocable election, if the conversion value of the Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share by assuming that all of the Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess, unless the result would be anti-dilutive.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation and amended and restated bylaws further provides that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is unclear how any additional health care reform measures of the current administration will impact the Affordable Care Act and our business.
The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program. It is unclear how any additional health care reform measures of the current presidential administration will impact the Affordable Care Act and our business.
Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may conduct their own clinical trials which may not be compliant, may not be successful or may generate contradictory results; • collaborators may not pursue development and commercialization of our approved medicines and any then-approved product or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product or product candidates; • a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; • collaborators may not properly 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; • a collaborator or series of collaborators may improperly or unknowingly sell product directly (or indirectly to a potential customer) into the “gray market” whereby our branded products are diverted from authorized sales channels into the hands of dealers, brokers or the open market, and may result in unauthorized sale of our product in a specific country or region; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future products or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable current or future products; 61 • collaborators may own or co-own intellectual property covering our approved medicines and any then-approved product that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may conduct their own clinical trials which may not be compliant, may not be successful or may generate contradictory results; • collaborators may not pursue development and commercialization of our approved medicines and any then-approved product or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product or product candidates; 55 Table of Contents • a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; • collaborators may not properly 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; • a collaborator or series of collaborators may improperly or unknowingly sell product directly (or indirectly to a potential customer) into the “gray market” whereby our branded products are diverted from authorized sales channels into the hands of dealers, brokers or the open market, and may result in unauthorized sale of our product in a specific country or region; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our current or future products or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable current or future products; • collaborators may own or co-own intellectual property covering our approved medicines and any then-approved product that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and • a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
Similarly, the containment of healthcare costs has become a priority for federal and state governments around the world. Coverage decisions may depend upon the size of a patient population, perceptions of clinical efficacy and economic standards that may disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available.
Similarly, the containment of healthcare costs has become a priority for federal, national, and state governments around the world. Coverage decisions may depend upon the size of a patient population, perceptions of clinical efficacy and economic standards that may disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available.
A Section 505(b)(2) NDA may be for a new or improved version of the original innovator product. Certain of our approved medicines, including Chenodal and Cholbam, are subject to immediate competition from compounded and generic entrants, as the ANDA and NDA for these drug products have no remaining or current patent or non-patent exclusivity.
A Section 505(b)(2) NDA may be for a new or improved version of the original innovator product. Certain of our approved medicines, including Chenodal, Ctexli and Cholbam, are or may be subject to immediate competition from compounded and generic entrants, as the ANDA and NDA for these drug products have no remaining or current patent or non-patent exclusivity.
In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, 76 encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our approved medicines or our product candidates.
In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid, we may incur substantial monetary damages, encounter significant delays in bringing our product candidates to market and be precluded from manufacturing or selling our approved medicines or our product candidates.
Shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public 83 market to the extent permitted by the provisions of various vesting schedules, Rule 144 and Rule 701 under the Securities Act of 1933, as amended (the “Securities Act”).
Shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, Rule 144 and Rule 701 under the Securities Act of 1933, as amended (the “Securities Act”).
Additionally, other pharmaceutical companies targeting these same cholestatic liver diseases are recruiting clinical trial patients from these patient populations, and have expanded access programs available, which have delayed enrollment in our clinical trials. Our inability to enroll a sufficient number of patients for any of our current or future clinical trials would result in significant delays.
Additionally, other pharmaceutical companies targeting the same cholestatic liver diseases are recruiting clinical trial patients from these patient populations, and have expanded access programs available, which have delayed enrollment in our clinical trials. Our inability to enroll a sufficient number of patients for any of our current or future clinical trials would result in significant delays.
For example, in November 2023, we entered into the 2023 Sales Agreement, pursuant to which we may elect to issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $200.0 million through the sales agents. The remaining capacity under the 2023 Sales Agreement was $200.0 million as of December 31, 2023.
For example, in November 2023, we entered into the 2023 Sales Agreement, pursuant to which we may elect to issue and sell, from time to time, shares of common stock having an aggregate offering price of up to $200.0 million through the sales agents. The remaining capacity under the 2023 Sales Agreement was $200.0 million as of December 31, 2024.
Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies 79 will be effective. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our approved medicines and any then-approved product that we consider proprietary.
Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our approved medicines and any then-approved product that we consider proprietary.
Security incidents and any unauthorized access or disclosure of our sensitive information could also compromise our intellectual property and patent portfolio, expose sensitive business information, expose the 87 personal data of our employees, require us to incur significant remediation costs, disrupt key business operations and divert attention of management and key information technology resources.
Security incidents and any unauthorized access or disclosure of our sensitive information could also compromise our intellectual property and patent portfolio, expose sensitive business information, expose the personal data of our employees, require us to incur significant remediation costs, disrupt key business operations and divert attention of management and key information technology resources.
We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed or in-licensed by us, or that we or our licensors will not be involved in interference, opposition or other patent office proceedings before the USPTO or non-U.S. patent offices.
We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed or in-licensed by us, or that we or our licensors will not be involved in additional interference, opposition or other patent office proceedings before the USPTO or non-U.S. patent offices.
If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs or comparable foreign programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
We plan to continue to evaluate opportunities to partner with pharmaceutical 32 companies that have established sales and marketing capabilities to commercialize our approved medicines and our product candidates, if approved, outside of these geographies. Our projections of the commercial and sales needs to target these markets may not be accurate.
We plan to continue to evaluate opportunities to partner with pharmaceutical companies that have established sales and marketing capabilities to commercialize our approved medicines and our product candidates, if approved, outside of these geographies. Our projections of the commercial and sales needs to target these markets may not be accurate.
Additionally, coverage policies and third-party reimbursement rates may change at any time. For example, rebate payments may increase, or prices be adjusted, under value-based purchasing arrangements based on evidence-based measures or outcomes-based measures for a patient or beneficiary based on 33 use of our drug.
Additionally, coverage policies and third-party reimbursement rates may change at any time. For example, rebate payments may increase, or prices be adjusted, under value-based purchasing arrangements based on evidence-based measures or outcomes-based measures for a patient or beneficiary based on use of our drug.
We may pursue approval in the U.S. or certain countries in Europe using accelerated, exceptional circumstances or conditional approval pathways, which typically require commitments to complete additional clinical trials. The additional clinical trials may not confirm the treatment effect, which may result in the loss of marketing authorization under accelerated approval, exceptional circumstances or conditional approval.
We may pursue approval in the U.S., Canada or certain countries in Europe using accelerated, exceptional circumstances or conditional approval pathways, which typically require commitments to complete additional clinical trials. The additional clinical trials may not confirm the treatment effect, which may result in the loss of marketing authorization under accelerated approval, exceptional circumstances or conditional approval.
Any of these occurrences may harm our business, financial condition and prospects significantly. 43 Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.
Any of these occurrences may harm our business, financial condition and prospects significantly. Our product candidates are subject to extensive regulation and compliance, which is costly and time consuming, and such regulation may cause unanticipated delays or prevent the receipt of the required approvals to commercialize our product candidates.
In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls 89 and changes in corporate governance practices.
In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
For example, we may be subject to the following: state anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws, such as the EU’s and the United Kingdom’s General Data Protection Regulations (respectively, the “EU GDPR” and “UK GDPR”, together, the “GDPR”) governing the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
For example, we may be subject to the following: state and foreign anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing; state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws, such as the EU’s and the United Kingdom’s General Data Protection Regulations (respectively, the “EU GDPR” and “UK GDPR”, together, the “GDPR”) governing the privacy and 52 Table of Contents security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The FDA, EMA or comparable regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.
The FDA, EMA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for our product candidates either prior to or post-approval, or may object to elements of our clinical development program.
In addition, we may not be able to acquire, discover or develop any additional product candidates, and any additional product candidates we may develop may not be approved, manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially 45 available alternatives.
In addition, we may not be able to acquire, discover or develop any additional product candidates, and any additional product candidates we may develop may not be approved, manufactured or produced economically, successfully commercialized or widely accepted in the marketplace or be more effective than other commercially available alternatives.
We expect to continue to incur net losses for the foreseeable future as we look to acquire products and product candidates, continue our clinical development of, and seek regulatory approvals for, our product candidates and as we continue commercializing our approved medicines in the U.S. and in certain countries in Europe.
We expect to continue to incur net losses for the foreseeable future as we look to acquire products and product candidates, continue our clinical development of, and seek regulatory approvals for, our product candidates and as we continue commercializing our approved medicines in the U.S., Canada and in certain countries in Europe.
Because we rely on numerous consultants, effectively outsourcing many key functions of our business, we will need to be able to effectively manage these consultants to ensure that they successfully carry out their contractual obligations and meet expected 55 deadlines.
Because we rely on numerous consultants, effectively outsourcing many key functions of our business, we will need to be able to effectively manage these consultants to ensure that they successfully carry out their contractual obligations and meet expected deadlines.
Any need to find and qualify new suppliers or manufacturers could adversely impact our ability to commercialize our approved medicines or our product candidates, if approved. Additionally, we and our manufacturers do not currently 63 maintain significant inventory of drug substances and other materials.
Any need to find and qualify new suppliers or manufacturers could adversely impact our ability to commercialize our approved medicines or our product candidates, if approved. Additionally, we and our manufacturers do not currently maintain significant inventory of drug substances and other materials.
If we or our employees, 56 independent contractors, consultants, commercial partners or vendors violate these laws, we could face substantial penalties. These laws may impact, among other things, our clinical research program, as well as sales, marketing and education programs.
If we or our employees, independent contractors, consultants, commercial partners or vendors violate these laws, we could face substantial penalties. These laws may impact, among other things, our clinical research program, as well as sales, marketing and education programs.
In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and 58 other similar laws (e.g. wiretapping laws).
In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
In those 72 jurisdictions, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities.
In those jurisdictions, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities.
Disruptions at the FDA, European Commission, EMA and other regulatory authorities may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary regulatory authorities, which would adversely affect our business.
Disruptions at the FDA, European Commission, EMA and other foreign regulatory authorities may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary regulatory authorities, which would adversely affect our business.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable 70 terms.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing our approved medicines or our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property; • require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation; • divert the time and attention of our technical personnel and management; 69 Table of Contents • cause development delays; • prevent us from commercializing our approved medicines or our product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law; • require us to develop non-infringing technology, which may not be possible on a cost-effective basis; • require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property; • require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; and/or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all.
Any of our existing or future suppliers or manufacturers may, among other things: • fail to supply us with our approved medicines and product candidates on a timely basis or in the requested amount due to unexpected damage to or destruction of facilities, equipment or deliveries, labor disputes or otherwise, including “acts of God”; • fail to increase manufacturing capacity and produce drug product and components in larger quantities and at higher yields in a timely or cost-effective manner, or at all, to sufficiently meet our clinical and commercial needs; • be unable to meet our production demands, including due to issues related to their reliance on sole-source suppliers and manufacturers; • become unavailable through business interruption or financial insolvency; or • be unable or unwilling to supply or manufacture for us, or to renew current supply or manufacturing agreements when such agreements expire on a timely basis, on acceptable terms or at all.
Any of our existing or future suppliers or manufacturers may, among other things: • fail to supply us with our approved medicines and product candidates on a timely basis or in the requested amount due to unexpected damage to or destruction of facilities, equipment or deliveries, labor disputes or otherwise, including “acts of God”; • fail to increase manufacturing capacity and produce drug product and components in larger quantities and at higher yields in a timely or cost-effective manner, or at all, to sufficiently meet our clinical and commercial needs; • be unable to meet our production demands, including due to issues related to their reliance on sole-source suppliers and manufacturers; • become unavailable through business interruption or financial insolvency; or 57 Table of Contents • be unable or unwilling to supply or manufacture for us, or to renew current supply or manufacturing agreements when such agreements expire on a timely basis, on acceptable terms or at all.
The commercial success of our approved medicines or any one of our product candidates, if approved, depends significantly on the market acceptance among physicians, patients, tertiary care centers, transplant centers 34 and others in the medical community.
The commercial success of our approved medicines or any one of our product candidates, if approved, depends significantly on the market acceptance among physicians, patients, tertiary care centers, transplant centers and others in the medical community.
Product liability claims may be brought against us by, among others, consumers, their family members, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our 37 approved medicines or product candidates.
Product liability claims may be brought against us by, among others, consumers, their family members, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our approved medicines or product candidates.
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, import, and sell our approved medicines or our product candidates; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; 68 • any successful opposition or other post-grant proceeding to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the U.S. and most other jurisdictions are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our approved medicines or our product candidates, proprietary technologies and their uses; • an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and • jurisdictions other than the U.S. may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing products.
Patent and Trademark Office (“USPTO”) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; • patent applications may not result in any patents being issued; • patents that may be issued or in-licensed have been and may again in the future be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage; • our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, import, and sell our approved medicines or our product candidates; • other parties may have designed around our claims or developed technologies that may be related or competitive to our platform, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position; 62 Table of Contents • any successful opposition or other post-grant proceeding to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop; • because patent applications in the U.S. and most other jurisdictions are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to our approved medicines or our product candidates, proprietary technologies and their uses; • an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013; • there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the U.S. for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and • jurisdictions other than the U.S. may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing products.
In addition to the factors discussed in this “Risk Factors” section, these factors include, among others: • the degree of physician and patient adoption of our approved medicines and use of our approved medicines necessary for commercial success; • our failure to grow and maintain our own sales force to market our approved medicines; • our ability to market and sell our approved medicines, where approved; • any delay in our regulatory filings for Livmarli, Chenodal or volixibat and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • our ability to scale our distribution capabilities; • any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • our failure to commercialize our product candidates; • the commencement, enrollment or results of our ongoing clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; • adverse results or delays in clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; • changes in laws or regulations applicable to our approved medicines and our product candidates, including but not limited to clinical trial requirements for approvals; • changes in the structure of health care payment systems; • the failure to obtain coverage and adequate reimbursement of our approved medicines and our product candidates, if approved; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved drug product or inability to do so at acceptable prices; • our inability to maintain or establish collaborations if needed; 81 • our ability to in-license, acquire, develop and market additional product candidates or approved medicines; • management transitions and additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our approved medicines or our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • the size and growth, if any, of the markets for our approved medicines with approved indications; • our ability to successfully enter new markets or develop additional product candidates; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • overall performance of the equity markets; • issuances of debt or equity securities; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • geopolitical and macroeconomic developments, including the ongoing military conflicts, economic slowdowns, recessions, inflation, bank failures, high interest rates and tightening of credit markets; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this “Risk Factors” section, these factors include, among others: • the degree of physician and patient adoption of our approved medicines and use of our approved medicines necessary for commercial success; • our failure to grow and maintain our own sales force to market our approved medicines; • our ability to market and sell our approved medicines, where approved; • any delay in our regulatory filings for Livmarli, Ctexli or volixibat and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • our ability to scale our distribution capabilities; • any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • our failure to commercialize our product candidates; • the commencement, enrollment or results of our ongoing clinical trials of our product candidates or any future clinical trials we may conduct, or changes in the development status of our product candidates; • adverse results or delays in clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval for our product candidates; • changes in laws or regulations applicable to our approved medicines and our product candidates, including but not limited to clinical trial requirements for approvals; • changes in the structure of health care payment systems; • the failure to obtain coverage and adequate reimbursement of our approved medicines and our product candidates, if approved; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved drug product or inability to do so at acceptable prices; • our inability to maintain or establish collaborations if needed; • our ability to in-license, acquire, develop and market additional product candidates or approved medicines; 74 Table of Contents • management transitions and additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our approved medicines or our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • the size and growth, if any, of the markets for our approved medicines with approved indications; • our ability to successfully enter new markets or develop additional product candidates; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • overall performance of the equity markets; • issuances of debt or equity securities; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • geopolitical and macroeconomic developments, including the ongoing military conflicts, economic slowdowns, recessions, inflation, tariffs and trade tensions, bank failures, high interest rates and tightening of credit markets; and • other events or factors, many of which are beyond our control.
If our cash flows and capital 65 resources are insufficient to allow us to make required payments, we may have to reduce or delay capital expenditures, sell assets or seek additional capital.
If our cash flows and capital resources are insufficient to allow us to make required payments, we may have to reduce or delay capital expenditures, sell assets or seek additional capital.
If we or a regulatory agency discovers previously unknown problems with a product, such as AEs of unanticipated severity or frequency, or problems with the facility where, or processes by which, the product is manufactured, such events may result in, among other things: • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; • fines, untitled letters, warning letters or holds on clinical trials; 39 • refusal by the FDA or European Commission to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; • product seizure or detention, or refusal to permit the import or export of a product; and • injunctions or the imposition of civil or criminal penalties.
If we or a regulatory authority discovers previously unknown problems with a product, such as AEs of unanticipated severity or frequency, or problems with the facility where, or processes by which, the product is manufactured, such events may result in, among other things: • restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; • fines, untitled letters, warning letters or holds on clinical trials; • refusal by the FDA or European Commission to approve pending applications or supplements to approved applications filed by us or suspension or revocation of license approvals; • product seizure or detention, or refusal to permit the import or export of a product; and • injunctions or the imposition of civil or criminal penalties.
For example: • others may be able to make compounds that are similar to our approved medicines and our product candidates but that are not covered by the claims of our patents; • we might not have been the first to make the inventions covered by our pending patent applications; • we might not have been the first to file patent applications for these inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies; • any patents that we obtain may not provide us with any competitive advantages; • we may not develop additional proprietary technologies that are patentable; • our competitors might conduct research and development activities in jurisdictions where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; 69 • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our approved medicines and any then-approved medicine; • we cannot ensure that we will be able to successfully commercialize our approved medicines and any then-approved product on a substantial scale, if approved, before the relevant patents that we own or license expire; or • the patents of others may have an adverse effect on our business.
For example: • others may be able to make compounds that are similar to our approved medicines and our product candidates but that are not covered by the claims of our patents; • we might not have been the first to make the inventions covered by our pending patent applications; • we might not have been the first to file patent applications for these inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies; • any patents that we obtain may not provide us with any competitive advantages; • we may not develop additional proprietary technologies that are patentable; • our competitors might conduct research and development activities in jurisdictions where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our approved medicines and any then-approved medicine; 63 Table of Contents • we cannot ensure that we will be able to successfully commercialize our approved medicines and any then-approved product on a substantial scale, if approved, before the relevant patents that we own or license expire; or • the patents of others may have an adverse effect on our business.
Moreover, our business may be implicated if any of our CROs violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
Moreover, our business may be implicated if any of our CROs violates federal, state or foreign fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.
Consequently, approval by the FDA does not ensure approval by the European Commission, 47 approval by the European Commission does not assure approval by the FDA, and approval of either or both of the FDA and European Commission does not assure approval by regulatory authorities in other countries or jurisdictions.
Consequently, approval by the FDA does not ensure approval by the European Commission, approval by the European Commission does not assure approval by the FDA, and approval of either or both of the FDA and European Commission does not assure approval by regulatory authorities in other countries or jurisdictions.
The U.S. healthcare laws and regulations that may affect our ability to operate include, but are not limited to: • the federal Anti-Kickback Statute, which prohibits, among other things, any person or entity from knowingly and willfully, offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, the purchasing, leasing, ordering or arranging for the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
The U.S. healthcare laws and regulations that may affect our ability to operate include, but are not limited to: • the federal Anti-Kickback Statute, which prohibits, among other things, any person or entity from knowingly and willfully, offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, the purchasing, leasing, ordering or 51 Table of Contents arranging for the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
We already have and plan to seek further regulatory approval for our product candidates internationally and, accordingly, we are subject to additional risks related to operating in foreign countries if and when we obtain the necessary approvals, including: • differing regulatory requirements in foreign countries, including differing reimbursement, pricing and insurance regimes; • the potential for regulatory approvals in other countries to result in re-examination of previously approved regulatory submissions in other countries; • the potential for so-called parallel importing, which is what happens when a local seller, either with government approval or faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets, including as a result of high interest rates and ongoing military conflicts, as well as any related political or economic responses and counter-responses or otherwise by various global actors; 50 • compliance with tax, employment, immigration and labor laws for employees living or traveling internationally; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • potential liability under the FCPA or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the U.S.; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities internationally; and • business interruptions resulting from geo-political actions, including war and terrorism.
We already have and plan to seek further regulatory approval for our product candidates internationally and, accordingly, we are subject to additional risks related to operating in foreign countries if and when we obtain the necessary approvals, including: • differing regulatory requirements in foreign countries, including differing reimbursement, pricing and insurance regimes; • the potential for regulatory approvals in other countries to result in re-examination of previously approved regulatory submissions in other countries; • the potential for so-called parallel importing, which is what happens when a local seller, either with government approval or faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally; • changes in tariffs (including tariffs imposed by the U.S. and retaliatory tariffs, if any, imposed by U.S. trading partners), trade barriers, price and exchange controls and other regulatory requirements; 45 Table of Contents • economic weakness, including inflation, or political instability in particular foreign economies and markets, including as a result of high interest rates and ongoing military conflicts, as well as any related political or economic responses and counter-responses or otherwise by various global actors; • compliance with tax, employment, immigration and labor laws for employees living or traveling internationally; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • potential liability under the FCPA or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the U.S.; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities internationally; and • business interruptions resulting from geo-political actions, including war and terrorism.
An unfavorable outcome could require us to cease using the related technology or to attempt to license 78 rights to it from the prevailing party.
An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party.
Coverage may be adversely affected by a number of factors, including, but not limited to: • increasing and intense pressure from political, social, competitive and other sources to reduce drug unit costs, access drugs from other countries to achieve better pricing or limit changes in list price; • changes in federal, state or foreign government regulations or private third-party payors’ reimbursement policies; • reimbursement decisions and price negotiations with foreign government payors; • consolidation and increasing assertiveness of commercial payors seeking net price reduction via drug rebates and other forms of discounts linked to the placement of our approved medicines on their formularies; and • the imposition of restrictions on access or coverage of particular drugs or pricing.
Coverage may be adversely affected by a number of factors, including, but not limited to: • increasing and intense pressure from political, social, competitive and other sources to reduce drug unit costs, access drugs from other countries to achieve better pricing or limit changes in list price; • changes in federal, state or foreign government regulations or private third-party payors’ reimbursement policies, including changes that may result from government administration changes; • implementation of federal or state regulations; • reimbursement decisions and price negotiations with foreign government payors; • consolidation and increasing assertiveness of commercial payors seeking net price reduction via drug rebates and other forms of discounts linked to the placement of our approved medicines on their formularies; and • the imposition of restrictions on access or coverage of particular drugs or pricing.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in the U.S. in Medicare, Medicaid and other federal healthcare programs and in equivalent foreign programs, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. In addition, certain provisions in the Notes and the related Indenture could make a third party attempt to acquire us more difficult or expensive.
Any delay or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline. In addition, certain provisions in the Notes and the related Indenture could make a third party’s attempt to acquire us more difficult or expensive.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: • the FDA, EMA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials or agreement to commence our clinical trials; • the FDA’s, EU Member State competent authorities’, or comparable foreign regulatory authorities’ failure to accept our proposed manufacturing processes and suppliers and/or requirement to provide additional information regarding our manufacturing processes before providing marketing authorization; • any failure or delay in reaching an agreement with contract research organizations (“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; • obtaining approval from one or more institutional review boards (“IRBs”) or ethics committees; • IRBs or ethics committees refusing to approve, suspending or terminating the clinical trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the clinical trial; • changes to clinical trial protocol; • selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; • sites deviating from clinical trial protocol or dropping out of a clinical trial; 42 • manufacturing sufficient quantities of product candidate or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post-treatment follow-up; • subjects choosing an alternative treatment for the indication for which we are developing our product candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related AEs; • occurrence of serious adverse events (“SAEs”) in clinical trials of the same class of agents conducted by other companies; • a facility manufacturing our product candidates or any of their components being ordered by the FDA, EU Member State competent authorities or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP, regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; • any changes to our manufacturing process, suppliers or formulation that may be necessary or desired; • the impact of geopolitical and macroeconomic developments on our ongoing and planned clinical trials; and • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA, competent authorities of individual EU Member States or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, suspension or termination.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: • the FDA, EMA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials or agreement to commence our clinical trials; • the FDA’s, EU Member State competent authorities’, or comparable foreign regulatory authorities’ failure to accept our proposed manufacturing processes and suppliers and/or requirement to provide additional information regarding our manufacturing processes before providing marketing authorization; • any failure or delay in reaching an agreement with 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; • obtaining approval from one or more institutional review boards (“IRBs”) or positive ethics committee opinions; • IRBs or ethics committees refusing to approve or provide positive opinions, suspending or terminating the clinical trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the clinical trial; • changes to clinical trial protocol; • selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; • sites deviating from clinical trial protocol or dropping out of a clinical trial; • manufacturing sufficient quantities of product candidate or obtaining sufficient quantities of combination therapies for use in clinical trials; • subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post-treatment follow-up; • subjects choosing an alternative treatment for the indication for which we are developing our product candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; 39 Table of Contents • subjects experiencing severe or unexpected drug-related AEs; • occurrence of serious adverse events (“SAEs”) in clinical trials of the same class of agents conducted by other companies; • a facility manufacturing our product candidates or any of their components being ordered by the FDA, EU Member State competent authorities, or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP, regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; • any changes to our manufacturing process, suppliers or formulation that may be necessary or desired; • the impact of geopolitical and macroeconomic developments on our ongoing and planned clinical trials; and • failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA, competent authorities of individual EU Member States or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, suspension or termination.
On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the Bipartisan Budget Act of 2018 and the Consolidated Appropriations Act of 2023, will remain in effect until 2032 unless additional Congressional action is taken.
On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent 44 Table of Contents legislative amendments to the statute, including the Bipartisan Budget Act of 2018 and the Consolidated Appropriations Act of 2023, will remain in effect until 2032 unless additional Congressional action is taken.
We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. For example, in April 2023, we issued and sold the Notes due 2029 for a $316.3 million aggregate principal amount.
We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. For example, in April 2023, we issued and sold $316.3 million aggregate principal amount of the Notes.
This type of authorization is reviewed annually to reassess the risk-benefit balance of the medicinal product. The purpose of any specific procedures/obligations imposed as part of the marketing authorization granted in exceptional circumstances is to contribute to the provision of information on the safe and effective use of the product.
This type of authorization is reviewed annually to reassess the risk-benefit balance of the medicine. The purpose of any specific procedures/obligations imposed as part of the marketing authorization granted in exceptional circumstances is to contribute to the provision of information on the safe and effective use of the product.
In the EU, the European Commission may approve another drug for the same indication as Livmarli despite its orphan exclusivity on the basis that it is not a similar medicinal product or if it is considered safer, more effective, or otherwise clinically superior.
In the EU, the European Commission may approve another drug for the same indication despite its orphan exclusivity on the basis that it is not a similar medicinal product or if it is considered safer, more effective, or otherwise clinically superior.
We also acquired licensed rights to commercialize Cholbam and Chenodal from certain parties via the Bile Acid Portfolio Acquisition. We are required to use commercially reasonable efforts or diligent efforts to commercialize products based on the licensed rights and to pay certain royalties based off our net sales.
We also acquired licensed rights to commercialize Cholbam and chenodiol from certain parties via the Bile Acid Portfolio Acquisition. We are required to use commercially reasonable efforts or diligent efforts to commercialize products based on the licensed rights and to pay certain royalties based off our net sales.
The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results, and conversion of our outstanding Notes may result in the dilution of existing stockholders, create downward pressure on the price of our common stock, and restrict our ability to take advantage of future opportunities.
The conditional conversion feature of the Notes may adversely affect our financial condition and operating results, and conversion of our outstanding Notes may result in the dilution of existing stockholders, create downward pressure on the price of our common stock, and restrict our ability to take advantage of future opportunities.
Congress failing to timely raise the U.S. debt ceiling, or if global health concerns continue to prevent the FDA, EMA or comparable foreign regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA, European Commission or comparable foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Congress failing to timely raise the U.S. debt ceiling, or if global health concerns continue to prevent the FDA, EMA or comparable foreign regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact 43 Table of Contents the ability of the FDA, European Commission, EMA or comparable foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Furthermore, the EU GDPR provides that EEA Member States may introduce specific requirements related to the processing of “special categories of personal data”, including the personal data related to health and genetic information, which we may process in connection with clinical trials or otherwise; as well as personal data related to 59 criminal offences or convictions where allowed under local law and confirmed by potential employee in employment situations.
Furthermore, the EU GDPR provides that EEA Member States may introduce specific requirements related to the processing of “special categories of personal data”, including the personal data related to health and genetic information, which we may process in connection with clinical trials or otherwise; as well as personal data related to criminal offenses or convictions where allowed under local law and confirmed by potential employee in employment situations.
Our successful commercialization of our approved medicines depends on a number of factors, including, among others, the following: • our ability to grow and maintain our sales team in the United States (“U.S.”), Canada, and certain countries in Europe, as well as scale our distribution capabilities in these locations and others where our products are available; • the availability of adequate reimbursement and a commercially viable sales price of our approved medicines; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our approved medicines, including relative to alternative and competing treatments; • a continued acceptable safety profile of our approved medicines; • the effect of recent or forthcoming health care legislation and regulatory changes in the locations where our approved medicines are authorized; • our ability to successfully obtain the substances and materials used in manufacturing our medicines from third parties and to have finished product manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for our commercial needs; • our ability to establish and enforce intellectual property rights in and to our approved medicines and avoid third-party patent interference or intellectual property infringement claims; • our ability to compete successfully with the marketing and sale of compounded and generic versions of our medicines; and • sufficient patient population that would benefit from our approved medicines as they are intended for use in rare diseases for which the patient population is small.
Our successful commercialization of our approved medicines depends on a number of factors, including, among others, the following: • our ability to grow and maintain our sales team in the U.S., Canada, and certain countries in Europe, as well as scale our distribution capabilities in these locations and others where our products are available; • the availability of adequate reimbursement and a commercially viable sales price of our approved medicines; • acceptance by physicians, payors and patients of the benefits, safety and efficacy of our approved medicines, including relative to alternative and competing treatments; • a continued acceptable safety profile of our approved medicines; • the effect of health care legislation and regulatory changes in the locations where our approved medicines are authorized; • our ability to successfully obtain the substances and materials used in manufacturing our medicines from third parties and to have finished product manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for our commercial needs; • our ability to establish and enforce intellectual property rights in and to our approved medicines and avoid third-party patent interference or intellectual property infringement claims; • our ability to compete successfully with the marketing and sale of compounded and generic versions of our medicines; and • sufficient patient population that would benefit from our approved medicines as they are intended for use in rare diseases for which the patient population is small.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. These provisions take effect progressively starting in fiscal year 2023.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. These provisions took effect progressively starting in fiscal year 2023.
For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.
For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly 72 Table of Contents available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.
If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark or regulatory laws, not infringe the existing rights of third parties and be acceptable to the relevant administrative body.
If the FDA (or an equivalent administrative body in a foreign jurisdiction) objects to 73 Table of Contents any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark or regulatory laws, not infringe the existing rights of third parties and be acceptable to the relevant administrative body.
In such an event, our competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on our business. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect Livmarli and our product candidates.
In such an event, our competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on our business. 65 Table of Contents Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect Livmarli and our product candidates.
We and the third parties upon which we rely may be subject to a variety of threats, including but not limited to errors or malfeasance by our personnel or the personnel of the third parties, malware (including as a result of advanced persistent threat intrusions), malicious code (such as viruses and worms), software vulnerabilities, hacking, denial of service attacks, credential stuffing, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), ransomware, supply-chain attacks, server malfunctions, software or hardware failure, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by artificial intelligence (AI) and other similar threats.
We and the third parties with whom we work may be subject to a variety of threats, including but not limited to errors or malfeasance by our personnel or the personnel of the third parties, malware (including as a result of advanced persistent threat intrusions), malicious code (such as viruses and worms), software vulnerabilities, hacking, denial of service attacks, credential stuffing, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), ransomware, supply-chain attacks, server malfunctions, software or hardware failure, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by artificial intelligence (AI) and other similar threats.
In clinical trials of Livmarli, the most commonly reported AEs were diarrhea, abdominal pain and vomiting, and were mostly mild to moderate in severity and transient in nature. Additionally, AEs reported in greater than 5% of patients included fat-soluble vitamin deficiency, nausea, liver transaminase increases, gastrointestinal bleeding and bone fracture. The frequency of observed AEs has not increased over time.
In clinical trials of Livmarli in ALGS, the most commonly reported AEs were diarrhea, abdominal pain and vomiting, and were mostly mild to moderate in severity and transient in nature. Additionally, AEs reported in greater than 5% of patients included fat-soluble vitamin deficiency, nausea, liver transaminase increases, and bone fracture. The frequency of observed AEs has not increased over time.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; 84 • a requirement that special meetings of stockholders be called only by the chairman of the board of directors, the chief executive officer, the president or by a majority of the total number of authorized directors; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the chairman of the board of directors, the chief executive officer or by a majority of the total number of authorized directors; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors to amend our amended and restated bylaws by stockholder action or to amend specific provisions of our amended and restated certificate of incorporation; and 77 Table of Contents • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Prior to obtaining approval to commercialize a product candidate in the U.S. or internationally, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.
Prior to obtaining approval to commercialize a product candidate in the U.S. or internationally, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA, 40 Table of Contents EMA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.
Other off-label medications are also used in ALGS and PFIC for cholestatic pruritus such as Ursodeoxycholic acid (“UDCA”), cholestyramine and other bile salt resins, rifampin, naltrexone and other agents, such as selective serotonin reuptake inhibitors.
Other off-label medications are also used in ALGS, PFIC, PSC and PBC for cholestatic pruritus such as Ursodeoxycholic acid (“UDCA”), cholestyramine and other bile salt resins, rifampin, naltrexone and other agents, such as selective serotonin reuptake inhibitors.
If we or any of these CROs fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, EMA, the competent authorities of the individual EU Member States, or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.
If we or any of these CROs fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA, EMA, the competent authorities of the individual EU Member States, or comparable foreign 56 Table of Contents regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe audit committee of the board of directors receives annual reports from our Senior Director of Information Technology/Information Security concerning our significant cybersecurity threats and risk and the processes we have implemented to address them. The audit committee of the board of directors also receives and has access to various presentations related to cybersecurity threats, risk and mitigation.
Biggest changeIn addition, our incident response processes include reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee of the board of directors receives annual reports from our Senior Director of Information Technology/Information Security concerning our significant cybersecurity threats and risk and the processes we have implemented to address them.
Our information security team identifies and assesses risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, depending on the context, including, for example manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of certain environments, evaluating our and our industry’s risk profile, evaluating threats reported to us, coordinating with law enforcement about certain threats, conducting internal audits and threat assessments, and conducting vulnerability assessments.
Our information security team identifies and assesses risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, depending on the context, including, for example manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing certain reports of threats and threat actors, conducting scans of certain environments, evaluating our and our industry’s risk profile, evaluating certain threats reported to us, conducting third-party threat assessments, coordinating with law enforcement about certain threats, conducting internal audits and threat assessments, and conducting vulnerability assessments.
Our Senior Director of Information Technology/Information Security has over ten years of experience in information technology and security, and previously held positions such as Associate Director of Informational Technology and Operations, Senior Manager of Informational Technology, and similar roles at other companies.
Our Executive Director of Information Technology/Information Security has over ten years of experience in information technology and security, and previously held positions such as Associate Director of Informational Technology and Operations, Senior Manager of Informational Technology, and similar roles at other companies.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity 90 threats to our Information Systems and Data, including, for example, incident detection and response procedures; disaster recovery/business continuity plans; risk assessments; implementation of security standards; encryption of certain data; network security, access, and physical controls for certain systems; management, tracking and disposal of certain assets; systems monitoring; employee training; penetration tests by third-party service providers; tabletop exercises; and cybersecurity insurance.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example, incident detection and response procedures and policies; disaster recovery/business continuity plans; risk assessments; implementation of certain security controls; encryption of certain data; network security, access, and physical controls for certain systems; management, tracking and disposal of certain assets; systems monitoring; employee training; penetration tests by third-party service providers; tabletop exercises conducted by third parties; and cybersecurity insurance.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider.
Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor 83 Table of Contents management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional service firms such as legal counsel, threat intelligence providers, cybersecurity consultants and software providers, and other third-party service providers including for identity management solutions.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional service firms such as legal counsel, threat intelligence providers, cybersecurity consultants and software providers, penetration testing services, and other third-party service providers including for identity management solutions.
The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Senior Director of Information Technology/Information Security, internal legal counsel, Chief Compliance Officer (“CCO”), and Chief Financial Officer (“CFO”).
The board of directors’ audit committee is responsible for overseeing our cybersecurity risk management processes, including oversight of mitigation of risks from cybersecurity threats. Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Senior Director of Information Technology/Information Security, Vice President, Legal, Chief Compliance Officer (“CCO”), and Chief Financial Officer (“CFO”).
Our actual or perceived failure to comply with such obligations could result in regulatory investigations or actions, litigations (including class claims) and mass arbitration demands, fines and penalties, disruptions of and changes to our business practices, monetary penalties, reputational harm, loss of revenue or profits, and other adverse business consequences. ”; and “ If our information technology systems, or those used by our CMOs, CROs or other contractors, consultants or third parties upon which we rely, or your data are or were compromised, we could experience adverse consequences, including but not limited to regulatory investigation, actions, litigation, fines and penalties, disruptions of our business operations, reputation harm, loss or revenue or profits, and other adverse consequences. ” Governance Our board of directors addresses our cybersecurity risk management as part of its general oversight function.
Our actual or perceived failure to comply with such obligations could result in regulatory investigations or actions, litigations (including class claims) and mass arbitration demands, fines and penalties, disruptions of and changes to our business practices, monetary penalties, reputational harm, loss of revenue or profits, and other adverse business consequences. ”; and “ If our information technology systems, or those used by our CMOs, CROs, commercial vendors or other contractors, consultants or third parties with whom we work, or our data are or were compromised, we could experience material adverse consequences, including but not limited to regulatory investigation, actions, litigation, fines and penalties, disruptions of our business operations, reputation harm, loss of revenue or profits, and other adverse consequences. ” Governance Our board of directors addresses our cybersecurity risk management as part of its general oversight function.
Our Senior Director of Information Technology/Information Security is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, helping prepare for cybersecurity incidents, approving cybersecurity processes, reviewing security assessments and other security-related reports, and communicating key priorities to relevant personnel.
Our Executive Director of Information Technology/Information Security is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, helping prepare for cybersecurity incidents, approving cybersecurity processes, reviewing security assessments and other security-related reports, and communicating key priorities to relevant personnel. Our CFO is responsible for approving budgets as related to cybersecurity.
The program includes conducting risk assessments of certain vendors, reviewing certain vendors’ security assessments, and reviewing reports of certain of our vendors’ security.
The program includes conducting risk assessments of certain vendors, reviewing certain vendors’ security assessments, reviewing reports of certain of our vendors’ security, and reviewing the written information security program of certain vendors.
Our CFO is responsible for approving budgets as related to cybersecurity. 91 Our incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the Senior Director of Information Technology/Information Security, Data Protection Officer, and the Vice President, Legal.
Our incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the Executive Director of Information Technology/Information Security, Data Protection Officer, and the Vice President, Legal. These individuals work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified.
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These individuals work with our incident response team to help us mitigate and remediate cybersecurity incidents of which they are notified. In addition, our incident response processes include reporting to the audit committee of the board of directors for certain cybersecurity incidents.
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The audit committee of the board of directors also receives and has access to various presentations related to cybersecurity threats, risk and mitigation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe anticipate the Commencement Date to occur in approximately May 2024, and the First Agreement to terminate shortly after. We also lease approximately 3,200 square feet of space for an office in Basel, Switzerland under an agreement that expires in June 2028. Additionally, we lease approximately 3,500 square feet of office space in Zug, Switzerland that expires in January 2025.
Biggest changeItem 2. Properties. We lease 36,318 square feet of space for our headquarters in Foster City, California under an agreement that expires in August 2029. We also lease approximately 3,200 square feet of space for an office in Basel, Switzerland under an agreement that expires in June 2028.
We believe that our facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms, if needed.
Additionally, we lease approximately 3,500 square feet of office space in Zug, Switzerland that expires in January 2030. We believe that our facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms, if needed.
Removed
We lease 11,154 square feet of space for our headquarters in Foster City, California under an agreement (the “First Agreement”) that expires in March 2025; however, we have entered into a separate agreement (the “Second Agreement”) in January 2024 in which we will lease 36,318 square feet of space for our new headquarters in Foster City, California.
Removed
The Second Agreement expires in approximately August 2029, subject to the occurrence of the Commencement Date, which term is defined in the Second Agreement. In connection with the Second Agreement, we have entered into an amendment to the First Agreement that will accelerate the termination date of the First Agreement to be shortly after the Commencement Date.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in legal proceedings relating to claims arising from the ordinary course of business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows.
Biggest changeOur management believes that there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows. 84 Table of Contents Item 4. Mine Safety Disclosures. None. 85 Table of Contents PART II
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Item 4. Mine Safe ty Disclosures. None. 92 PART II
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Item 3. Legal Proceedings. From time to time, we may become involved in legal proceedings relating to claims arising from the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans See Item 12 of Part III of this Annual Report on Form 10-K for information about our equity compensation plans which is incorporated by reference herein. Stock Performance Graph Not applicable. Recent Sales of Unregistered Securities Not applicable. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans See Item 12 of Part III of this Annual Report on Form 10-K for information about our equity compensation plans which is incorporated by reference herein.
Item 5. Market for Registrant’s Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been listed on the Nasdaq Global Market under the symbol “MIRM” since July 18, 2019. Prior to that date, there was no public market for our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been listed on the Nasdaq Global Market under the symbol “MIRM” since July 18, 2019. Prior to that date, there was no public market for our common stock.
Holders of Common Stock As of March 8, 2024 there were 47,003,329 shares of our common stock outstanding held by approximately 21 holders of record. The actual number of stockholders is greater than this number because certain stockholders who are beneficial owners hold our common stock in “street” name with brokers and other nominees.
Holders of Common Stock As of February 21, 2025 there were 49,014,190 shares of our common stock outstanding held by approximately ten holders of record. The actual number of stockholders is greater than this number because certain stockholders who are beneficial owners hold our common stock in “street” name with brokers and other nominees.
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Stock Performance Graph The following is not to be deemed “soliciting material” or to be “filed” with the SEC, is not subject to the liabilities of Section 18 of the Exchange Act and is not to be incorporated by reference into any filing we make under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation by reference language is such filing.
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The following graph compares the cumulative total stockholder return on our common stock relative to the cumulative total returns of the Nasdaq Composite Index and the Nasdaq Biotechnology Index. An investment of $100 is assumed to have been made in our common stock and each index on December 31, 2019 and its relative performance is tracked through December 31, 2024.
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Pursuant to applicable SEC rules, all values assume a reinvestment of the full amount of all dividends, however no dividends have been declared on our common stock to date.
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The stockholder returns shown on 86 Table of Contents the graph below are based on historical results and are not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns.
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COMPARISON OF CUMULATIVE TOTAL RETURN among Mirum Pharmaceuticals, Inc., the NASDAQ Composite Index and the NASDAQ Biotech Index $100 Investment in Stock or Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Mirum Pharmaceuticals, Inc. $ 100.00 $ 71.21 $ 65.05 $ 79.53 $ 120.39 $ 168.64 NASDAQ Composite Index $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 NASDAQ Biotechnology Index $ 100.00 $ 125.69 $ 124.89 $ 111.27 $ 115.42 $ 113.84 Recent Sales of Unregistered Securities There were no sales of equity securities during the period covered by this report that were not registered under the Securities Act and were not previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K filed by the Company.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Reserved. 87 Table of Contents

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe decrease was primarily due to: • for Livmarli programs, a decrease of $10.8 million, primarily due to decreases of $5.4 million in manufacturing development expenses, $3.1 million in clinical trial expenses primarily related to the MARCH Phase 3 clinical trial which was completed during 2022 and $2.4 million in non-clinical and general research and development expenses; and • for volixibat programs, a decrease of $0.9 million, primarily due to a $3.3 million decrease in clinical expenses associated with the discontinuation of the intrahepatic cholestasis of pregnancy clinical trial and lower clinical manufacturing expenses of $1.8 million, partially offset by an increase of $4.1 million of clinical trial expenses for PSC and PBC.
Biggest changeThe net increase was primarily due to: • for volixibat programs, an increase of $13.0 million, primarily due to increased expenses associated with conduct of the PSC and PBC trials; • for MRM-3379, an increase of $7.5 million due to the upfront payment associated with the in-licensing of MRM-3379; • for personnel related expenses, an increase of $9.6 million related to increased employee headcount to support our development pipeline; • for stock-based compensation expense, an increase of $4.3 million associated with incremental employee equity awards; and • for other expense, an increase of $7.4 million, primarily due to other general research and development activities, including expenses related to the Bile Acid Medicines acquired in August of 2023, partially offset by • for Livmarli programs, a decrease of $3.8 million, primarily due to lower clinical expenses associated with completion of the MARCH Phase 3 clinical trial of Livmarli in patients with PFIC and related rollover study as well as lower costs due to discontinuation of the biliary atresia clinical trial, partially offset by increased expenses associated with the Livmarli Phase 3 EXPAND label expansion study .
These increases will likely include increased costs related to hiring of additional personnel and fees to outside consultants to support further marketing, legal, tax, planning and accounting activities. Loss from termination of revenue interest purchase agreement Loss from termination of RIPA is related to the repurchase and termination of the RIPA in the second quarter of 2023.
These increases will likely include increased costs related to hiring of additional personnel and fees to outside consultants to support further marketing, legal, tax, planning and accounting activities. Loss from termination of revenue interest purchase agreement Loss from termination of revenue interest purchase agreement is related to the repurchase and termination of the RIPA in the second quarter of 2023.
The repurchase payment included a premium over the remaining revenue interest liability and resulted in the recognition of a loss from termination of RIPA in our consolidated statements of operations and comprehensive loss. Interest Income Interest income consists of interest earned on our cash equivalents and investments.
The repurchase payment included a premium over the remaining revenue interest liability and resulted in the recognition of a loss from termination of the RIPA in our consolidated statements of operations and comprehensive loss. Interest Income Interest income consists of interest earned on our cash equivalents and investments.
Under the Shire License Agreement and Asset Purchase Agreement with Travere, as well as our other license and acquisition agreements, we have payment obligations that are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sale of products developed under those agreements.
Under the Shire License Agreement and the Asset Purchase Agreement with Travere, as well as our other license and acquisition agreements, we have payment obligations that are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sale of products developed under those agreements.
In September 2022, we filed an automatic statement on Form S-3 with the SEC (the “2022 Shelf Registration”), which became effective upon filing, pursuant to which we registered for sale from time to time in one or more offerings an unlimited amount of any combination of our common stock, preferred stock, debt securities and warrants, so long as we continue to satisfy the requirements of a “well-known seasoned issuer” under SEC rules.
In September 2022, we filed an automatic shelf registration statement on Form S-3 with the SEC (the “2022 Shelf Registration”), which became effective upon filing, pursuant to which we registered for sale from time to time in one or more offerings an unlimited amount of any combination of our common stock, preferred stock, debt securities and warrants, so long as we continue to satisfy the requirements of a “well-known seasoned issuer” under SEC rules.
We anticipate we will continue to generate losses for the foreseeable future as we continue commercial activities for our approved medicines, conduct our ongoing and planned clinical trials, seek regulatory approvals for our product candidates and make potential milestone payments to the licensors and other third parties from whom we have in-licensed or acquired our product candidates.
We anticipate we will continue to generate net losses for the foreseeable future as we continue commercial activities for our approved medicines, conduct our ongoing and planned clinical trials, seek regulatory approvals for our product candidates and make potential milestone payments to the licensors and other third parties from whom we have in-licensed or acquired our product candidates.
We accrue and expense clinical trial activities performed by third parties based upon estimates of the proportion of work completed over the life of the individual study and patient enrollment rates in accordance with agreements established with clinical research organizations, clinical trial sites and other vendors 100 associated with the clinical trials.
We accrue and expense clinical trial activities performed by third parties based upon estimates of the proportion of work completed over the life of the individual study and patient enrollment rates in accordance with agreements established with clinical research organizations, clinical trial sites and other vendors associated with the clinical trials.
We recognize our best estimate of the 99 consideration that we expect to receive when control of the inventory is transferred to our customer and revenue is recognized. Estimates are reviewed and updated quarterly as additional information becomes known. Actual amounts may ultimately differ from our estimates.
We recognize our best estimate of the consideration that we expect to receive when control of the inventory is transferred to our customer and revenue is recognized. Estimates are reviewed and updated quarterly as additional information becomes known. Actual amounts may ultimately differ from our estimates.
Other Expense, Net Other expense, net consists of gain or loss from remeasurement of the liabilities associated with the common stock issued in connection with the acquisition of Satiogen after the satisfaction of certain purchase price adjustments and indemnification obligations that may arise during the 12 month period following the asset 98 acquisition date (“Indemnification Holdback”) and the liability associated with the common stock to be issued in connection with the acquisition of Satiogen as contingent consideration upon achievement of a certain milestone (“Contingent Milestone”) both of which were recorded in connection with our acquisition of Satiogen, unrealized and realized currency gains and losses on net assets and liabilities denominated in foreign currency.
Other Expense, Net Other expense, net consists of unrealized currency gains and losses on net assets and liabilities denominated in foreign currency and gain or loss from remeasurement of the liabilities associated with the common stock issued in connection with the acquisition of Satiogen after the satisfaction of certain purchase price adjustments and indemnification obligations that may arise during the 12 month period following the asset acquisition date (“Indemnification Holdback”) and the liability associated with the common stock to be issued in connection with the acquisition of Satiogen as contingent consideration upon achievement of a certain milestone (“Contingent Milestone”) both of which were recorded in connection with our acquisition of Satiogen.
The terms of the convertible Notes are further described in Note 10 to our consolidated financial statements. We used a portion of the net proceeds to repurchase the revenue interests from the Purchasers at a call price of $192.7 million.
The terms of the Notes are further described in Note 10 to our consolidated financial statements. We used a portion of the net proceeds to repurchase the revenue interests from the Purchasers at a call price of $192.7 million.
Interest Expense We incur interest expense on our convertible notes and on the RIPA. Interest on our convertible notes consists of a 4% per annum fixed rate of interest and amortization of debt discount and amortization costs.
Interest Expense We incur interest expense on our convertible notes and incurred interest expense on the RIPA. Interest on our convertible notes consists of a 4% per annum fixed rate of interest and amortization of debt discount and amortization costs.
Contractual Obligations In addition to ongoing capital needs to fund our ongoing operations, our material cash requirements include the following contractual and other obligations. On April 17, 2023, we completed an offering of $316.3 million aggregate principal of the Notes, which includes the exercise of the initial purchasers’ option in full.
Material Cash Requirements In addition to ongoing capital needs to fund our ongoing operations, our material cash requirements include the following contractual and other obligations. In April 2023, we completed an offering of $316.3 million aggregate principal of the Notes, which includes the exercise of the initial purchasers’ option in full.
We enter into contracts in the normal course of business with clinical research organizations and clinical sites for the conduct of clinical trials, non-clinical research studies, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. These contracts generally provide for termination on notice, and therefore are cancelable contracts.
We enter into contracts in the normal course of business with clinical research organizations and clinical sites for the conduct of clinical trials, non-clinical research studies, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. These contracts generally provide for termination on notice, and therefore are cancellable contracts.
We analyze our inventory levels quarterly for obsolescence and, if required, adjust inventory to its net realizable value for quantities in excess of expected demand. The analysis uses quantitative forecast and historical demand considerations in combination with shelf life and stop sell dates in our estimates to evaluate inventory that may not be sellable.
We analyze our inventory levels quarterly for obsolescence and, if required, adjust inventory to its net realizable value for quantities in excess of expected demand. The analysis uses quantitative forecast and historical demand 92 Table of Contents considerations in combination with shelf life and stop sell dates in our estimates to evaluate inventory that may not be sellable.
We anticipate that we will continue to incur net losses for the foreseeable future as we continue research efforts and the development of our product candidates, continue commercialization activities for our approved medicines and potentially expand into additional markets, hire additional staff, including clinical, scientific, operational, financial and management personnel and pay potential development and commercial and sales based milestones.
We anticipate that we will continue to incur net losses for the foreseeable future as we continue research efforts and the development of our product candidates, continue commercialization activities for our approved medicines and potentially expand into additional markets, hire additional staff, including clinical, scientific, operational, financial and management personnel and pay potential development milestones.
Liquidity and Capital Resources Overview Since inception, we have funded our operations primarily through debt, equity, a revenue interest financing and, to a lesser extent, cash from our product sales and license and collaboration revenue.
Liquidity and Capital Resources Overview Since inception, we have funded our operations primarily through debt, equity, revenue interest financings and, to a lesser extent, cash from our product sales and license and collaboration revenue.
Our rest of world revenue from product sales, net primarily depends on our contractual obligations with our distributors and results of pricing negotiations with governmental authorities in certain European countries where we launch Livmarli and expect to launch our other product candidates, if approved. In addition, in certain countries, governments place large periodic orders.
Our rest of world revenue from product sales, net primarily depends on our contractual obligations with our distributors and results of pricing negotiations with governmental authorities in certain European countries where we launch Livmarli and expect to launch our other product candidates, if approved. In addition, in certain countries we receive large periodic orders.
Based on our current and anticipated level of operations and cash generated from sales of our approved medicines, we believe our existing cash and cash equivalents will be sufficient to fund our planned operations through at least the next 12 months from the filing of this Annual Report and beyond.
Based on our current and anticipated level of operations and cash generated from sales of our approved medicines, we believe our existing unrestricted cash, cash equivalents and investments will be sufficient to fund current operations through at least the next 12 months from the filing of this Annual Report and beyond.
In select countries, we have entered into distribution agreements for the sale of Livmarli and such distributors may have fluctuating purchase levels of Livmarli. As a result, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year.
In select countries, we have entered into distribution agreements for the sale of our approved medicines and such distributors may have fluctuating purchase levels. As a result, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year.
We anticipate that our selling, general and administrative expenses will increase in the future to support our continued commercialization efforts of our approved medicines in the United States and internationally as well as increased costs of operating as a global commercial stage biopharmaceutical public company.
We anticipate that our selling, general and administrative expenses will increase in the future to support our continued commercialization efforts of our approved medicines in the U.S. and internationally as well as increased costs of operating as a global commercial stage biopharmaceutical public company.
The offering resulted in net proceeds of $305.3 million after deducting the initial purchasers’ discounts and commissions and offering expenses. The Notes are our senior, unsecured obligations and accrue interest at a rate of 4.00% per annum, payable semi-annually in arrears on May 1 and November 1 of each year. Our first interest payment was due on November 1, 2023.
The offering resulted in net proceeds of $305.3 million after deducting the initial purchasers’ discounts and commissions and offering expenses. The Notes are our senior, unsecured obligations and accrue interest at a rate of 4.00% per annum, payable semi-annually in arrears on May 1 and November 1 of each year.
Cost of Sales Cost of sales consist of raw materials, third-party manufacturing costs, personnel, facility and other costs of manufacturing commercial products, transportation and freight, amortization of finite-lived intangible assets, amortization of capitalized intangibles and royalty payments payable on net sales of our approved medicines under licensing agreements.
Operating Expenses Cost of Sales Cost of sales consist of raw materials, third-party manufacturing costs, personnel, facility and other costs of manufacturing commercial products, transportation and freight, amortization of finite-lived intangible assets and royalty payments payable on net sales of our approved medicines under licensing agreements.
If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment. Government Rebates We are obligated to pay rebates for mandated discounts under the Medicaid Drug Rebate Program.
If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment. We are obligated to pay rebates for mandated discounts under the Medicaid Drug Rebate Program and other foreign government programs.
We expect total product sales of our approved medicines will continue to increase on an annual basis, though we expect quarterly fluctuations. We have entered into collaboration arrangements with other companies whereby we are entitled to receive upfront and license fees, research and development funding, development and sales-based milestones, and tiered royalties based on sales of commercialized products.
We expect that total product sales of our approved medicines will continue to increase on an annual basis. We have entered into license and collaboration arrangements with other companies whereby we are entitled to receive upfront and license fees, development and sales-based milestones, and tiered royalties based on sales of commercialized products.
Our net loss for the year ended December 30, 2023 includes a $49.1 million loss related to the extinguishment of the liabilities related to the RIPA. As of 2023, we had an accumulated deficit of $556.2 million compared to $392.8 million as of December 31, 2022.
Our net loss for the year ended December 31, 2023 includes a $49.1 million loss related to the extinguishment of the liabilities related to the RIPA. As of December 31, 2024, we had an accumulated deficit of $644.2 million compared to $556.2 million as of December 31, 2023.
Our research and development expenses include, among other things: • salaries and related expenses for employee personnel, including benefits, travel and expenses related to stock-based compensation granted to personnel in development functions; • external expenses paid to clinical trial sites, contract research organizations and consultants that conduct our clinical trials; • expenses related to drug formulation development and the production of clinical trial supplies, including fees paid to contract manufacturers; 97 • licensing milestone payments related to development or regulatory events; • research and development funding for collaboration arrangements; • expenses related to non-clinical studies; • expenses related to compliance with drug development regulatory requirements; and • other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of equipment, and other supplies.
Our research and development expenses include, among other things: • salaries and related expenses for employee personnel, including benefits, travel and expenses related to stock-based compensation granted to personnel in development functions; • external expenses paid to clinical trial sites, contract research organizations (“CROs”) and consultants that conduct our clinical trials; • expenses related to drug formulation development and the production of clinical trial supplies, including fees paid to contract manufacturers; • licensing milestone payments related to development or regulatory events; • payments made for the acquisition or licensing of in-process research and development assets with no alternative future use; • expenses related to non-clinical studies; • expenses related to compliance with drug development regulatory requirements; and • other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of equipment, and other supplies.
The timing of these orders can be inconsistent and can create quarter-to-quarter variation in revenue. License Revenue Under the exclusive licensing agreements with CANbridge and GC Biopharma, we have recognized as revenue the upfront nonrefundable payments related to the licenses granted upon satisfaction of certain performance obligations. Pursuant to the agreements, we are eligible to receive future milestone payments.
The timing of these orders can be inconsistent and can create quarter-to-quarter variation in revenue. 89 Table of Contents License Revenue Under the exclusive licensing agreements with CANbridge and GC Biopharma, we have recognized as revenue the upfront nonrefundable payments related to the licenses granted upon satisfaction of certain performance obligations.
Also, in August 2020, we entered into the 2020 Sales Agreement with Leerink pursuant to which we could issue and sell, in an at the market offering, from time to time, shares of common stock having an aggregate offering price of up to $75.0 million under the 2020 Shelf Registration through Leerink acting as the sales agent and/or principal.
Also, in August 2020, we entered into a sales agreement (the “2020 Sales Agreement”) with SVB Securities LLC, subsequently acquired by Leerink Partners LLC (“Leerink”), pursuant to which we could issue and sell, in an at the market offering, from time to time, shares of common stock having an aggregate offering price of up to $75.0 million under the 2020 Shelf Registration through Leerink acting as the sales agent and/or principal.
Interest Expense Interest expense was $15.1 million for the year ended December 31, 2023, a decrease of $0.9 million compared to the year ended December 31, 2022. For the year ended December 31, 2023, interest expense consisted of $10.0 million related to our convertible notes and $5.1 million related to the RIPA prior to extinguishment.
For the year ended December 31, 2023, interest expense consisted of $10.0 million related to our convertible notes and $5.1 million related to the RIPA prior to extinguishment.
We market and commercialize Livmarli in the United States and certain countries in Europe through our specialized and focused commercial team. We have also entered into license and distribution agreements with several rare disease companies for the commercialization of Livmarli in additional countries. We are also developing Livmarli for PFIC outside of the United States.
We market and commercialize Livmarli in the U.S., Canada and certain countries in Europe through our specialized and focused commercial team. We have also entered into license and distribution agreements with several rare disease companies for the commercialization of Livmarli in additional countries.
As of December 31, 2023, we had cash and cash equivalents of $286.3 million, compared to cash, cash equivalents, restricted cash and investments of $251.7 million as of December 31, 2022.
As of December 31, 2024, we had cash, cash equivalents, restricted cash and investments of $293.3 million, compared to cash and cash equivalents of $286.3 million as of December 31, 2023.
These milestone payments are fully constrained and will be recognized in revenue in the period when it is probable that a significant reversal of cumulative revenue recognized for the contract would not occur. We are also eligible to receive royalty payments related to the agreements, which will be recognized as the underlying product sales occur.
Pursuant to the agreements, we are eligible to receive future milestone payments. These milestone payments are fully constrained and will be recognized in revenue in the period when it is probable that a significant reversal of cumulative revenue recognized for the contract would not occur.
In connection with and immediately prior to the closing of the Bile Acid Portfolio Acquisition, we completed the private placement of 8,000,000 shares of our common stock at a price per share of $26.25, resulting in net proceeds of approximately $202.2 million. Satiogen Acquisition In May 2022, we completed the acquisition of Satiogen for total consideration of $24.2 million.
In connection with and immediately prior to the closing of the Bile Acid Portfolio Acquisition, we completed the private placement of 8,000,000 shares of our common stock at a price per share of $26.25, resulting in net proceeds of approximately $202.2 million, which we used to finance the upfront payment at the closing of the Bile Acid Portfolio Acquisition.
The FDA approved Cholbam in March 2015 as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects and for adjunctive treatment of patients with peroxisomal disorders, including PBD-ZSD and SLOS.
The FDA approved Cholbam in March 2015, as the first FDA-approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for adjunctive treatment of patients with peroxisomal disorders, including peroxisome biogenesis disorder-Zellweger spectrum disorder (“PBD-ZSD”).
Loss from termination of revenue interest purchase agreement Loss from termination of RIPA was $49.1 million for the year ended December 31, 2023, compared to zero for the year ended December 31, 2022. The loss was related to the premium paid to repurchase the revenue interests pursuant to the RIPA.
Loss from termination of revenue interest purchase agreement Loss from termination of RIPA was zero for the year ended December 31, 2024, compared to $49.1 million for the year ended December 31, 2023.
Selling, General and Administrative Expenses Selling, general and administrative expenses were $145.9 million for the year ended December 31, 2023, an increase of $56.8 million compared to the year ended December 31, 2022.
Selling, General and Administrative Expenses Selling, general and administrative expenses were $202.2 million for the year ended December 31, 2024, an increase of $56.3 million compared to the year ended December 31, 2023.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
Our failure to raise capital or enter into such other arrangements when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.
If the equity and credit markets 106 deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
Additionally, if the equity and credit markets deteriorate from adverse geopolitical and macroeconomic developments or otherwise, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
We base the useful lives and related amortization expense on the period of time we estimate the assets will generate net product sales or otherwise be used.
Intangible assets are generally amortized on a straight-line basis over their estimated useful lives. We base the useful lives and related amortization expense on the period of time we estimate the assets will generate net product sales or otherwise be used.
We plan to submit a new drug application for Chenodal for the treatment of CTX to the FDA in the first half of 2024. We are also advancing our product candidate, volixibat, a novel, oral, minimally-absorbed agent designed to inhibit IBAT, for the treatment of adult patients with cholestatic liver diseases.
In addition, we are advancing our product candidate, volixibat, a novel, oral, minimally-absorbed agent designed to inhibit IBAT, for the treatment of adult patients with cholestatic liver diseases.
Our primary use of cash is to fund operating expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Net loss is also impacted by significant non-cash charges related to stock-based compensation and amortization of intangible assets. Our primary use of cash is to fund operating expenses. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.
Estimated rebates are recorded as a reduction of revenue in the period the related sale is recognized. To date, actual government rebates have not differed materially from our estimates. Revenue Interest Liability, Net We imputed interest expense associated with this liability using the effective interest rate method.
Estimated rebates are recorded as a reduction of revenue in the period the related sale is recognized. To date, actual government rebates have not differed materially from our estimates.
This automatic shelf registration statement will remain in effect for up to three years from the date it became effective. As of December 31, 2023, we have not issued any securities pursuant to the 2022 Shelf Registration.
This automatic shelf registration statement will remain in effect for up to three years from the date it became effective. As of December 31, 2024, we have not issued any securities pursuant to the 2022 Shelf Registration. On November 2, 2023, we entered into a Sales Agreement (the “2023 Sales Agreement”) with Leerink and Cantor Fitzgerald & Co.
Certain of our approved medicines, including the Bile Acid Medicines, are subject to immediate competition from compounded and generic entrants, as the ANDA and NDA for these drug products have no remaining or current patent or non-patent exclusivity. In addition, Chenodal is approved for radiolucent stones in the gallbladder yet is used primarily as standard of care for CTX.
Certain of our approved medicines, including the Bile Acid Medicines, are subject to immediate competition from compounded and generic entrants, as the abbreviated new drug application (“ANDA”) and NDA for these drug products have no remaining or current patent or non-patent exclusivity.
The increase in product sales, net was a result of our continued commercialization of Livmarli in the United States, in certain countries in Europe and other international sales through partner market supply orders and sales of Bile Acid Medicines for a partial year following the completion of the Bile Acid Portfolio Acquisition.
The increase in product sales, net was a result of sales of the Bile Acid Medicines following the completion of the Bile Acid Portfolio Acquisition in August 2023 and our continued commercialization of Livmarli in the U.S. for the treatment of ALGS and PFIC, and in certain international markets directly or through partner market supply orders for the treatment of ALGS.
As of December 31, 2023, we have issued and sold an aggregate of 2,125,090 shares of common stock pursuant to the 2020 Sales Agreement, resulting in aggregate gross proceeds to us of $43.7 million.
The 2020 Shelf Registration expired in August 2023, and no further sales may be made under the 2020 Sales Agreement. Prior to the expiration of the 2020 Shelf Registration, we issued and sold an aggregate of 2,125,090 shares of common stock pursuant to the 2020 Sales Agreement, resulting in aggregate gross proceeds to us of $43.7 million.
Our license revenue is dependent upon our licensees’ achievement of future milestones, which are not within our control, and we are unable to reliably estimate the timing of such revenues.
We are also eligible to receive royalty payments related to the agreements, which will be recognized as the underlying product sales occur. Our license revenue is dependent upon our licensees’ achievement of future milestones, which are not within our control, and we are unable to reliably estimate the timing of such revenues.
To date, we have focused primarily on acquiring and in-licensing our product candidates, organizing and staffing our company, business planning, raising capital, advancing our product candidates through clinical development, preparing for commercialization of our product candidates, commercializing Livmarli, and conducting business development activities relating to, among other things, portfolio expansion through collaborations and acquisitions.
To date, we have focused primarily on acquiring and in-licensing our product candidates, organizing and staffing our company, business planning, raising capital, advancing our product candidates through clinical development, preparing for commercialization of our product candidates, commercializing our approved medicines, and conducting business development activities relating to, among other things, portfolio expansion through collaborations and acquisitions. 88 Table of Contents Financial Overview Our net loss was $87.9 million and $163.4 million for the years ended December 31, 2024 and 2023, respectively.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report, we believe the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.
While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report, we believe the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations. 91 Table of Contents Intangible Assets, Net Intangible assets, net are measured at their fair values as of the acquisition date or, in the case of commercial milestone payments, the date they become due.
As a result, our cost of sales exceeds the historical cost to manufacture the inventory and has a negative impact on our gross margin. We expect to sell the acquired inventory within the next two years from the balance sheet date.
As a result, our cost of sales exceeds the historical cost to manufacture the inventory and has a negative impact on our gross margin. As of the balance sheet date we have sold the majority of acquired inventory that is recorded at fair value.
The Notes will mature on May 1, 2029, unless earlier converted, redeemed or repurchased by us. The terms of these Notes are further described in Note 10 to our consolidated financial statements. We used a portion of the net proceeds from the Notes to repurchase the revenue interests from the Purchasers at a call price of $192.7 million.
The 97 Table of Contents Notes will mature on May 1, 2029, unless earlier converted, redeemed or repurchased by us. The terms of these Notes are further described in Note 10 to our consolidated financial statements.
The increase was primarily due to an increase of $26.6 million in personnel and other compensation related expenses, including an increase of $7.2 million in stock-based compensation, reflecting an increase in the number of our selling, marketing and administrative employees to support commercial activities for our approved medicines, and costs associated with the acquisition of the Bile Acid Portfolio and international expansion.
The increase was primarily due to increases of $27.9 million in personnel and other compensation related expenses, including an increase of $8.2 million in stock-based compensation expense, reflecting an increase in the number of our selling, marketing and administrative employees to support commercial activities for our approved medicines, $13.3 million in marketing, advertising, promotion and medical affairs expenses associated with commercial activities for our approved medicines, $8.1 million in expenses primarily related to accounting, legal, compliance, public relations and international expansion activities and $7.0 million in other general administrative expenses.
As of December 31, 2023, such inventories were substantially depleted. Operating Expenses Research and Development Expenses Research and development expenses primarily relate to clinical development and manufacturing activities of our product candidates.
Research and Development Expenses Research and development expenses primarily relate to clinical development and manufacturing activities of our product candidates.
Research and Development Expenses The following table summarizes the period-over-period changes in research and development expenses relating to our product candidates in development for the periods indicated (in thousands): Year Ended December 31, 2023 2022 Change Product-specific costs: Livmarli $ 29,438 $ 40,228 $ (10,790 ) Volixibat 20,286 21,159 (873 ) Non product-specific costs: Personnel 28,569 25,298 3,271 Stock-based compensation 10,892 10,051 841 Other 13,424 10,106 3,318 Total research and development expenses $ 102,609 $ 106,842 $ (4,233 ) Research and development expenses were $102.6 million for the year ended December 31, 2023, a decrease of $4.2 million compared to the year ended December 31, 2022.
Research and Development Expenses The following table summarizes the period-over-period changes in research and development expenses relating to our product candidates in development for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Change Product-specific costs: Livmarli $ 25,631 $ 29,438 $ (3,807) Volixibat 33,325 20,286 13,039 MRM-3379 7,500 — 7,500 Non product-specific costs: Personnel 38,179 28,569 9,610 Stock-based compensation 15,188 10,892 4,296 Other 20,807 13,424 7,383 Total research and development expenses $ 140,630 $ 102,609 $ 38,021 Research and development expenses were $140.6 million for the year ended December 31, 2024, an increase of $38.0 million compared to the year ended December 31, 2023.
Net cash used in operating activities was $120.1 million for the year ended December 31, 2022, reflecting our net loss of $135.7 million partially offset by non-cash items of $36.6 million.
Net cash used in operating activities was $70.9 million for the year ended December 31, 2023, reflecting our net loss of $163.4 million partially offset by adjustments to net loss of $111.7 million.
We expect to satisfy future cash needs through existing capital balances, revenue from our approved medicines and through a combination of equity offerings, including the private placement described above, debt financings or other capital sources, collaborations, licenses and other similar arrangements.
We expect to satisfy future cash needs through existing capital balances, revenue from our approved medicines and through a combination of equity offerings, debt financings or other capital sources, collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all.
Upfront payments, research and development funding and milestone payments made to third parties in connection with licenses and research and development collaborations are expensed as incurred. Our research and development expense may increase in the future as we continue to develop our current product candidates and look to acquire and develop additional product candidates.
Upfront payments, research and development funding and milestone payments made to third parties in connection with licenses and research and development collaborations are expensed as incurred.
Components of Results of Operations Revenue Product Sales, Net We have three approved medicines: Livmarli, Cholbam and Chenodal.
Components of Results of Operations Revenue Product Sales, Net We have three approved medicines: Livmarli, Cholbam and Chenodal or Ctexli. We expect total product sales of our approved medicines will continue to increase on an annual basis.
We enter into commercial inventory supply agreements that obligate us to firm commitments for the purchase of minimum order quantities, which may be material to our financial statements. 107 Cash Flows The following table provides a summary of the net cash flow activity for the periods indicated (in thousands): Year Ended December 31, 2023 2022 Net cash used in operating activities $ (70,944 ) $ (120,136 ) Net cash (used in) provided by investing activities (107,200 ) 7,700 Net cash provided by financing activities 336,600 109,087 Effect of exchange rate on cash, cash equivalents and restricted cash equivalents (133 ) 12 Net increase (decrease) in cash, cash equivalents and restricted cash equivalents $ 158,323 $ (3,337 ) Net Cash Used in Operating Activities Net cash used in operating activities was $70.9 million for the year ended December 31, 2023, reflecting our net loss of $163.4 million, partially offset by non-cash adjustments of $115.1 million.
Cash Flows The following table provides a summary of the net cash flow activity for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in) operating activities $ 10,325 $ (70,944) Net cash used in investing activities (90,125) (107,200) Net cash provided by financing activities 17,699 336,600 Effect of exchange rate on cash, cash equivalents and restricted cash (1,297) (133) Net (decrease) increase in cash, cash equivalents and restricted cash $ (63,398) $ 158,323 Net Cash Provided by (Used in) Operating Activities Net cash provided by operating activities was $10.3 million for the year ended December 31, 2024, reflecting our net loss of $87.9 million partially offset by adjustments to net loss of $75.7 million.
We expect total product sales of our approved medicines will continue to increase on an annual basis, though we expect quarterly fluctuations. 96 Our U.S. revenue from product sales, net further depends on our prescription mix of commercial payors, Medicaid and free medicines under our patient assistance program.
Our U.S. revenue from product sales, net further depends on our prescription mix of commercial payors, Medicaid and amounts of free medicines provided under our patient assistance program. We expect our prescription mix and resulting gross to net adjustment in the U.S. to remain consistent.
Recent Accounting Pronouncements A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements included elsewhere in this Annual Report. 101 Results of Operations for the Years Ended December 31, 2023 and 2022 In this section, we discuss the results of our operations for the year ended December 31, 2023, compared to the year ended December 31, 2022.
To date, there have been no material differences between our estimates of such expenses and the amounts actually incurred. Recent Accounting Pronouncements A description of recent accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements included elsewhere in this Annual Report.
Net Cash (Used in) Provided by Investing Activities Net cash used in investing activities was $107.2 million for the year ended December 31, 2023, primarily due to $212.8 million paid in connection with our acquisition of the Bile Acid Medicines from Travere, $27.3 million used in purchases of investments and $20.0 million used in the acquisition of intangible assets associated with our license payments for Livmarli regulatory and commercial milestones, partially offset by proceeds of $153.0 million from maturities of investments.
Net cash used in investing activities was $107.2 million for the year ended December 31, 2023, primarily due to the payment in connection with our acquisition of the Bile Acid Medicines from Travere, purchases of investments and our milestone payment related to the approval of Livmarli by the European Commission for the treatment of cholestatic pruritus in patients with ALGS two months of age and older, partially offset by proceeds from maturities of investments.
On August 31, 2023, we completed the acquisition of assets of Travere that are primarily related to the development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of the Bile Acid Medicines pursuant to an asset purchase agreement dated July 16, 2023.
(“Travere”) that are primarily related to the development, manufacture (including synthesis, formulation, finishing or packaging) and commercialization of chenodiol and Cholbam (also known as Kolbam) (and together with chenodiol, the “Bile Acid Medicines”) pursuant to an asset purchase agreement dated July 16, 2023 (such acquisition, the “Bile Acid Portfolio Acquisition”).
Our rebate calculations may require estimates, including estimates of customer mix, to determine which sales will be subject to rebates and the amount of such rebates. We update estimates and assumptions on a quarterly basis and record any necessary adjustments to revenue in the period identified.
Our rebate calculations may require estimates based upon our actual historical experience, customer mix and payer mix current contractual and statutory obligations and revenue projections. We update estimates and assumptions on a quarterly basis and record any necessary adjustments to revenue in the period identified.
Livmarli is a novel, orally administered, minimally-absorbed IBATi that is approved for the treatment of cholestatic pruritus in patients with ALGS in the United States and various other countries around the world and for cholestatic pruritus in patients with PFIC in the United States.
Livmarli is a novel, orally administered, minimally-absorbed ileal bile acid transporter (“IBAT”) inhibitor (“IBATi”) that is approved for the treatment of cholestatic pruritus in patients with Alagille syndrome (“ALGS”) in the United States (“U.S.”) and various other countries around the world and for cholestatic pruritus in patients with progressive familial intrahepatic cholestasis (“PFIC”) in the U.S. and for the treatment of PFIC in the European Union (“EU”).
In addition, in connection with the acquisition, we have firm commitments for the purchase of minimum order quantities for active pharmaceutical ingredients. We periodically evaluate these firm commitments to determine if these commitments are in excess of our needs. If any net loss is determined, we record a charge to cost of sales in the period identified.
Cost of sales may also include period costs related to certain manufacturing services and charges for inventory valuation reserves. In addition, we have firm commitments for the purchase of minimum order quantities for active pharmaceutical ingredients. We periodically evaluate these firm commitments to determine if these commitments are in excess of our needs.
Selling, General and Administrative Expense Sales and marketing expense, which is a component of selling, general and administrative expense, primarily consisted of employee-related expenses for our sales group, brand marketing, patient support groups and pre-commercialization expenses related to our product candidates.
We expect our research and development expense may increase in the future as we continue to develop our volixibat product candidates, execute the EXPAND label expansion study for Livmarli and initiate development of MRX-3379. 90 Table of Contents Selling, General and Administrative Expense Sales and marketing expense, which is a component of selling, general and administrative expense, primarily consisted of employee-related expenses for our sales group, brand marketing, patient support groups and pre-commercialization expenses related to our product candidates.
Net cash provided by investing activities was $7.7 million for the year ended December 31, 2022, primarily due to proceeds of $140.3 million from maturities of investments, partially offset by $132.3 million used in purchases of investments and $0.3 million used in purchases of property and equipment. 108 Net Cash Provided by Financing Activities Net cash provided by financing activities was $336.6 million for the year ended December 31, 2023, due to net proceeds of $305.3 million from the issuance of convertible notes, net proceeds of $202.2 million from the issuance and sale of common stock in a private placement offering, $14.5 million net proceeds from the issuance and sale of common stock under the 2020 Sales Agreement with Leerink, pursuant to which we issued and sold an aggregate of 658,206 shares of common stock at a weighted-average price of $22.79 per share, and proceeds of $10.5 million from employee equity award exercises, partially offset by $195.6 million in revenue interest payments and payments to repurchase the revenue interests under the RIPA.
Net cash provided by financing activities was $336.6 million for the year ended December 31, 2023, due to net proceeds from the issuance of the Notes in April 2023, from the issuance and sale of common stock in a private placement offering in August 2023, from the issuance and sale of common stock under the 2020 Sales Agreement with Leerink during the year ended December 31, 2023, and proceeds from employee equity award exercises, partially offset by revenue interest payments and payments to repurchase the revenue interests under the RIPA.
We had $286.3 million of cash and cash equivalents as of December 31, 2023, compared to cash, cash equivalents, restricted cash equivalents and investments of $251.7 million as of December 31, 2022. Since inception, we have incurred operating losses and 104 negative cash flows from operations.
We had $292.8 million of unrestricted cash, cash equivalents and investments as of December 31, 2024, compared to cash and cash equivalents of $286.3 million as of December 31, 2023. Since inception, we have incurred operating losses. As of December 31, 2024, we had an accumulated deficit of $644.2 million, compared to $556.2 million as of December 31, 2023.
Additionally, cash used in operating activities reflected changes in net operating assets of $22.6 million, consisting primarily of a $44.0 million increase in accounts receivable due to the increase in the sales of Livmarli and the acquisition of the Bile Acid Medicines, a $30.8 million increase in accounts payable, accrued expenses and other liabilities resulting primarily from a $19.4 million increase in accrued sales deductions, a $4.3 million increase in accrued royalties payable both due to our increased net product sales, a $6.3 million increase in accrued compensation and related benefits and a $2.1 million increase in accrued interest expense related to the Notes issued in April 2023, a $4.4 million increase in inventory related to Livmarli and a $3.6 million increase in prepaid and other current assets due to timing of payment for deposits for professional services, software license and regulatory fees.
Additionally, cash used in operating activities reflected changes in net operating assets of $19.2 million, consisting primarily of an increase in accounts receivables related to sales of our approved medicines, an increase in accounts payable, accrued expenses and other liabilities primarily related to the increase in accrued sales deductions and accrued royalties payable due to our increased net product sales, and an increase in accrued interest expense related to the Notes issued in April 2023.
We expect to conduct an interim analysis of our VISTAS Phase 2b clinical trial in PSC and report interim data from our VANTAGE Phase 2b clinical trial in PBC, both in the first half of 2024. We were incorporated in May 2018 and commenced operations in November 2018.
We conducted an interim analysis of our VISTAS Phase 2b clinical trial in PSC and reported interim data from our VANTAGE Phase 2b clinical trial in PBC in June 2024.
The increase in cost of sales was primarily a result of increased royalties payable of $9.8 million on net sales of Livmarli and the Bile Acid Medicines under licensing agreements, $7.5 million of amortization of acquired intangibles primarily associated with our acquisition of the Bile Acid Medicines in August 2023 and Satiogen in May 2022, a $5.2 million charge related to net losses associated with excess inventory from certain firm minimum purchase commitments in connection with our acquired Bile Acid Medicines, $3.9 million of increased costs associated with reserves for excess and obsolete inventory, increased product cost of sales of approximately $4.0 million primarily related to the Bile Acid Medicines and $4.0 million of increased commercial product development and supply chain costs.
The increase in cost of sales was primarily a result of increases in royalty expense of $15.6 million on net sales of Livmarli and the Bile Acid Medicines under licensing agreements, amortization expense of $12.4 million primarily due to acquired intangibles associated with our acquisition of the Bile Acid Medicines in August 2023, product cost of sales of $6.9 million related to the Bile Acid Medicines and, to a lesser extent, Livmarli and other period costs of $6.3 million associated with commercial supply chain expenses and other general expenses.
Other (Expense) Income, Net Other (expense) income, net was an expense of $2.8 million, net for the year ended December 31, 2023, compared to an income of $0.4 million, net for the year ended December 31, 2022.
Other Income (Expense), Net Other income (expense), net was income of $1.2 million for the year ended December 31, 2024, compared to expense of $2.8 million for the year ended December 31, 2023. For the year ended December 31, 2024, the income was primarily attributable to unrealized currency gains on net assets and liabilities denominated in foreign currency.
Cost of sales may also include period costs related to certain manufacturing services and charges for inventory valuation reserves. As of the date of our acquisition of the Bile Acid Medicines from Travere, inventory acquired was valued at its fair value.
If any net loss is determined, we record a charge to cost of sales in the period identified. As of the date of our acquisition of the Bile Acid Medicines from Travere, inventory acquired was valued at its fair value.
Interest Income Interest income was $13.7 million for the year ended December 31, 2023, an increase of $9.9 million compared to the year ended December 31, 2022.
The 2023 loss was related to the premium paid to repurchase the revenue interests pursuant to the RIPA. 95 Table of Contents Interest Income Interest income was $13.8 million for the year ended December 31, 2024, compared to $13.7 million for the year ended December 31, 2023.
The following table summarizes our results of operations for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Change Revenue: Product sales, net $ 178,874 $ 75,062 $ 103,812 License revenue 7,500 2,000 5,500 Total revenue 186,374 77,062 109,312 Operating expenses: Cost of sales 47,039 12,374 34,665 Research and development 102,609 106,842 (4,233 ) Selling, general and administrative 145,880 89,066 56,814 Total operating expenses 295,528 208,282 87,246 Loss from operations (109,154 ) (131,220 ) 22,066 Other income (expense): Interest income 13,735 3,857 9,878 Interest expense (15,105 ) (15,979 ) 874 Change in fair value of derivative liability — 906 (906 ) Loss from termination of revenue interest purchase agreement (49,076 ) — (49,076 ) Other (expense) income, net (2,824 ) 365 (3,189 ) Net loss before provision for income taxes (162,424 ) (142,071 ) (20,353 ) Provision for (benefit from) income taxes 991 (6,406 ) 7,397 Net Loss $ (163,415 ) $ (135,665 ) $ (27,750 ) Product Sales, Net Product sales, net was $178.9 million for the year ended December 31, 2023, compared to $75.1 million for the year ended December 31, 2022.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of our Annual Report on Form 10-K filed with the SEC on March 15, 2024. 93 Table of Contents The following table summarizes our results of operations for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Change 2024 2023 Revenue: Product sales, net $ 336,409 $ 178,874 $ 157,535 License and other revenue 479 7,500 (7,021) Total revenue 336,888 186,374 150,514 Operating expenses: Cost of sales 81,643 47,039 34,604 Research and development 140,630 102,609 38,021 Selling, general and administrative 202,221 145,880 56,341 Total operating expenses 424,494 295,528 128,966 Loss from operations (87,606) (109,154) 21,548 Other income (expense): Interest income 13,792 13,735 57 Interest expense (14,311) (15,105) 794 Loss from termination of revenue interest purchase agreement — (49,076) 49,076 Other income (expense), net 1,213 (2,824) 4,037 Loss before provision for income taxes (86,912) (162,424) 75,512 Provision for income taxes 1,030 991 39 Net loss $ (87,942) $ (163,415) $ 75,473 Product Sales, Net Product sales, net was $336.4 million for the year ended December 31, 2024, compared to $178.9 million for the year ended December 31, 2023.
Unless and until Chenodal is approved for CTX, we cannot market or promote Chenodal for CTX which limits its growth potential. Our principal source of liquidity is product revenue from sales of approved medicines, and, to a lesser extent, from our collaboration agreements.
The FDA has also granted orphan exclusivity for chenodiol for that indication. Our principal source of liquidity is product revenue from sales of approved medicines, and, to a lesser extent, from our license and collaboration agreements.
The following table disaggregates total Product sales, net: Year Ended December 31, 2023 2022 Change Product sales, net: Livmarli $ 141,795 $ 75,062 $ 66,733 Bile Acid Medicines 37,079 — 37,079 Total product sales, net $ 178,874 $ 75,062 $ 103,812 License Revenue License revenue was $7.5 million for the year ended December 31, 2023 due to the achievement of regulatory milestones by CANbridge and GC Biopharma associated with our license agreements, compared to $2.0 million for the year ended December 31, 2022, due to the achievement of a regulatory milestone by CANbridge associated with our license agreement. 102 Cost of Sales Cost of sales was $47.0 million for the year ended December 31, 2023, compared to $12.4 million for the year ended December 31, 2022.
The decrease in license and other revenue was primarily due to the achievement of regulatory milestones by CANbridge and GC Biopharma associated with our license agreements in 2023. Cost of Sales Cost of sales was $81.6 million for the year ended December 31, 2024, compared to $47.0 million for the year ended December 31, 2023.
We additionally have contractual obligations for our operating leases for our corporate headquarters. These obligations are further described in Note 9 to our consolidated financial statements. We are party to certain license and collaboration agreements, which contain a number of contractual obligations. Those contractual obligations may entitle us to receive, or may obligate us to make, certain payments.
We expect to initiate our Phase 2 clinical trial in Fragile X Syndrome in 2025. We additionally have contractual obligations for our operating leases for our corporate headquarters. These obligations are further described in Note 9 to our consolidated financial statements.
Provision For (Benefit From) Income Taxes Provision for income taxes was $1.0 million for the year ended December 31, 2023 compared to a benefit from income taxes of $6.4 million for the year ended December 31, 2022.
Interest Expense Interest expense was $14.3 million for the year ended December 31, 2024, a decrease of $0.8 million compared to the year ended December 31, 2023. For the year ended December 31, 2024, interest expense related to our convertible notes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeShould interest rates decrease on money market funds, it will result in lower interest income in future periods. In addition, we maintain significant amounts of cash and cash equivalents at one financial institution that is in excess of federally insured limits. We have outstanding $316.3 million aggregate principal of the Notes.
Biggest changeFor example, a hypothetical change in interest rates of 10% would not have a material impact on the fair market value of our cash equivalents and investments as of December 31, 2024. In addition, we maintain significant amounts of cash, cash equivalents and investments at one financial institution that is in excess of federally insured limits.
Our operating results are exposed to changes in foreign currency exchange rates between the U.S. Dollar (USD) and various foreign currencies, primarily the Euro. When the USD strengthens against these currencies, the relative value of the sales and operating expenses made in the respective foreign currency decreases.
Our operating results are exposed to changes in foreign currency exchange rates between the U.S. Dollar (“USD”) and various foreign currencies, primarily the Euro and Swiss Franc. When the USD strengthens against these currencies, the relative value of the sales and operating expenses made in the respective foreign currency decreases.
Foreign Currency Rate Risk Our operations include activities in the U.S. and to a lesser extent Switzerland and certain other countries in Europe. As a result, our financial results may be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we sell our products.
Foreign Currency Rate Risk Our operations include activities in the U.S., the Netherlands, Switzerland and certain other countries in Europe. As a result, our financial results may be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we sell our products.
Based on our overall foreign currency denominated exposures as of December 31, 2023, we believe that a near-term 10% fluctuation of the USD exchange rate could result in a potential change in the fair value of our net assets and liabilities denominated in foreign currency by approximately $5.8 million.
Based on our overall foreign currency denominated exposures as of December 31, 2024, we believe that a near-term 10% fluctuation of the USD exchange rate could result in a potential change in the fair value of our net assets and liabilities denominated in foreign currency by approximately $0.7 million.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk. Interest Rate Risk Our cash and cash equivalents as of December 31, 2023 consist of readily available checking and money market funds. The primary objective of our investment activities is to preserve our capital to fund operations. We may invest in highly liquid and high-quality government and debt securities.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk Our cash, cash equivalents and investments as of December 31, 2024 consist of readily available checking and money market funds and investments. The primary objective of our investment activities is to preserve our capital to fund operations.
The interest rate on these Notes is fixed and therefore they do not expose us to risk related to increases in interest rates. As of December 31, 2023, the approximate fair value of our Notes was $387.3 million.
We have outstanding $316.3 million aggregate principal of the Notes as of December 31, 2024. The interest rates on these Notes are fixed and therefore they do not expose us to risk related to changing interest rates. As of December 31, 2024, the approximate fair value of our Notes was $481.9 million.
As a result, our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. As of the date of this report, we do not hold investments that expose us to interest rate risk.
We may invest in highly liquid and high-quality government and debt securities. As a result, our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates.
We expect to continue to enter into transactions based in foreign currencies that could be impacted by changes in exchange rates. Effects of Inflation Inflation generally affects us by increasing our cost of labor and clinical trial costs.
We expect to continue to enter into transactions based in foreign currencies that could be impacted by changes in the USD exchange rate. 99 Table of Contents 100 Table of Contents
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We do not believe that inflation and changing prices had a significant impact on our results of operations for any periods presented herein. 109
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Due to the strategies we employ (including the short-term nature of the instruments in our portfolio and the low risk profile of our investments), as of the date of this report, we do not expect anticipated changes in interest rates to have a material effect on our interest rate risk in future reporting periods for our existing investments.

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