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What changed in Phathom Pharmaceuticals, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Phathom Pharmaceuticals, Inc.'s 2024 and 2025 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 2025 report.

+734 added−977 removedSource: 10-K (2025-12-31) vs 10-K (2024-12-31)

Top changes in Phathom Pharmaceuticals, Inc.'s 2025 10-K

734 paragraphs added · 977 removed · 497 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

109 edited+77 added−301 removed161 unchanged
Biggest changeThe Affordable Care Act increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1%; required collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a coverage gap discount program, which was replaced by a new manufacturer discount program on January 1, 2025 (as discussed below), in which manufacturers were required to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs; implemented a new methodology by which rebates owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; expanded eligibility criteria for Medicaid programs; created a new 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 and Medicaid Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. 43 Since its enactment, there have been judicial and political challenges to certain aspects of the Affordable Care Act.
Biggest changeThe Affordable Care Act increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs from 15.1% to 23.1%; required collection of rebates for drugs paid by Medicaid managed care organizations; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs; implemented a new methodology by which rebates owed by manufacturers under the MDRP are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; expanded eligibility criteria for Medicaid programs; created a new 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 and Medicaid Innovation at the CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: 35 • completion of certain preclinical laboratory tests, animal studies and formulation studies in accordance with Good Laboratory Practice, or GLP, regulations and other applicable regulations; • submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice, or GCP, regulations to establish the safety and efficacy of the proposed drug for its intended use; • submission to the FDA of an NDA; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of potential FDA inspection of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: 13 • completion of certain preclinical laboratory tests, animal studies and formulation studies in accordance with Good Laboratory Practice, or GLP, regulations and other applicable regulations; • submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice, or GCP, regulations to establish the safety and efficacy of the proposed drug for its intended use; • submission to the FDA of an NDA; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of potential FDA inspection of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
The federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
The federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable 17 under Medicare, Medicaid or other federal healthcare programs.
Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients.
Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in 23 children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and subject recruitment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
These competitors also compete with us in 9 recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and subject recruitment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances. We will be responsible, at our cost, for the development, manufacture and commercialization of the vonoprazan products.
During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances. We will be responsible, at our cost, for the development, manufacture and commercialization of the vonoprazan 11 products.
Under the VA/FSS program, a manufacturer must report the Non-Federal Average Manufacturer Price, or Non-FAMP, for its covered drugs to the VA and charge certain federal agencies no more than the Federal Ceiling Price, which is calculated based on Non-FAMP using a statutory formula. These federal agencies are the VA, the U.S. Department of Defense, the U.S.
Under the VA/FSS program, a manufacturer must report the 19 Non-Federal Average Manufacturer Price, or Non-FAMP, for its covered drugs to the VA and charge certain federal agencies no more than the Federal Ceiling Price, which is calculated based on Non-FAMP using a statutory formula. These federal agencies are the VA, the U.S. Department of Defense, the U.S.
Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Physicians may believe that such off-label uses 39 are the best treatment for many patients in varied circumstances.
Physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances.
The GAIN Act provisions prohibit the grant of an exclusivity extension where the application is a supplement to an application for which an extension is in effect or has expired, is a 40 subsequent application for a specified change to an approved product, or is an application for a product that does not meet a definition of QIDP based on the uses for which it is ultimately approved.
The GAIN Act provisions prohibit the grant of an exclusivity extension where the application is a supplement to an application for which an extension is in effect or has expired, is a subsequent application for a specified change to an approved product, or is an application for a product that does not meet a definition of QIDP based on the uses for which it is ultimately approved.
Marketing Authorizations In the EU, medicinal product candidates can only be commercialized after obtaining a marketing authorization, or MA. To obtain regulatory approval of a product candidate in the EU, we must submit a MA Application, or MAA. The process for doing this depends, among other things, on the nature of the medicinal product.
Marketing Authorizations 22 In the EU, medicinal product candidates can only be commercialized after obtaining a marketing authorization, or MA. To obtain regulatory approval of a product candidate in the EU, we must submit a MA Application, or MAA. The process for doing this depends, among other things, on the nature of the medicinal product.
If a Complete Response Letter is issued, the sponsor must resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.
If a Complete Response Letter is issued, the sponsor must resubmit the NDA, addressing all of the deficiencies identified 15 in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA does not satisfy the criteria for approval.
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 the application is submitted. 37 The FDA may refer an application for a novel drug to an advisory committee.
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 the application is submitted. The FDA may refer an application for a novel drug to an advisory committee.
HRSA has also 42 finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.
HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs.
There are two types of MAs: 45 • "Centralized MAs" are issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, and are valid throughout the EU.
There are two types of MAs: • "Centralized MAs" are issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, and are valid throughout the EU.
The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research 36 subjects or patients are being exposed to an unacceptable health risk.
The FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.
Violation of any of such laws or any other governmental regulations that apply may result in significant criminal, civil and administrative penalties including damages, fines, imprisonment, disgorgement, additional reporting requirements and 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, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations. 41 U.S.
Violation of any of such laws or any other governmental regulations that apply may result in significant criminal, civil and administrative penalties including damages, fines, imprisonment, disgorgement, additional reporting requirements and 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, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations.
The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.
The 21 time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.
The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labelling.
The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labeling.
Prior to the introduction of generic and OTC alternatives, annual PPI class sales reached approximately $12.5 billion in the United States, and peak sales for individual brands were approximately $3.7 billion for Prilosec, $3.5 billion for Nexium, and $3.4 billion for Prevacid.
Prior to the introduction of generic and OTC alternatives, annual PPI class sales reached approximately $12.5 billion in the United States, with peak sales for individual brands of approximately $3.7 billion for Prilosec, $3.5 billion for Nexium, and $3.4 5 billion for Prevacid.
Information relating to our corporate governance is also included on our investor relations website. The information in or accessible through the SEC and our website are not incorporated into, and are not considered part of, this filing. 48
Information relating to our corporate governance is also included on our investor relations website. The information in or accessible through the SEC and our website are not incorporated into, and are not considered part of, this filing. 25
Item 1. Bu siness Overview We are a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal, or GI, diseases. Our approved products, VOQUEZNA®, VOQUEZNA® TRIPLE PAK® and VOQUEZNA® DUAL PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB. PCABs are a novel class of medicines that block acid secretion in the stomach.
Item 1. Bu siness Overview We are a commercial-stage biopharmaceutical company focused on commercializing and developing novel treatments for gastrointestinal, or GI, diseases. Our approved products, VOQUEZNA®, VOQUEZNA® DUAL PAK® and VOQUEZNA® TRIPLE PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB. PCABs are a novel class of molecules that block acid secretion in the stomach.
Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval.
U.S. Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidate for which we may seek regulatory approval.
Some of our competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of treatments and commercializing those treatments. These same competitors may invent technology that competes with vonoprazan.
Some of our competitors, either alone or with their strategic partners, have substantially greater financial, technical and human resources and significantly greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of treatments and commercializing those treatments. These same competitors may invent technologies or products that compete with vonoprazan.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaced the Part D coverage gap discount program with a new discounting program (which began in 2025).
In addition, the FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.
In addition, the FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.
Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate it in order to have committed a violation.
Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
FDA approval of VOQUEZNA for the healing and maintenance of healing of all grades of erosive esophagitis and relief of heartburn associated with erosive esophagitis in adults was based on the results from PHALCON‑EE, our Phase 3 clinical trial conducted in the United States and Europe.
FDA approval of VOQUEZNA for the healing and maintenance of healing of all grades of erosive esophagitis and for the relief of heartburn associated with Erosive GERD was based on results from PHALCON-EE, a randomized, controlled Phase 3 clinical trial conducted in the United States and Europe.
License Agreement with Takeda Pharmaceutical Company Limited On May 7, 2019, we and Takeda entered into an exclusive license, or the Takeda License, pursuant to which, Takeda granted us an exclusive, sublicensable (with Takeda’s reasonable consent) license under certain patents and know how relating to vonoprazan and owned or controlled by Takeda during the term of the Takeda License to commercialize vonoprazan products using specified formulations for all human therapeutic uses in the United States, Europe and Canada, and a non-exclusive license under such patents and know how to develop and manufacture such vonoprazan products anywhere in the world (subject to Takeda’s consent as to each country) for the purposes of commercializing the vonoprazan products in the United States, Europe and Canada. 33 We granted Takeda a non-exclusive, royalty-free, sublicensable license under our rights in any patents and know-how that are necessary or useful to enable Takeda to develop and manufacture vonoprazan products anywhere in the world for the purposes of commercialization outside United States, Europe and Canada.
License Agreement with Takeda Pharmaceutical Company Limited On May 7, 2019, we and Takeda entered into the Takeda License, pursuant to which, Takeda granted us an exclusive, sublicensable (with Takeda’s reasonable consent) license under certain patents and know how relating to vonoprazan and owned or controlled by Takeda during the term of the Takeda License to commercialize vonoprazan products using specified formulations for all human therapeutic uses in the United States, Europe and Canada, and a non-exclusive license under such patents and know how to develop and manufacture such vonoprazan products anywhere in the world (subject to Takeda’s consent as to each country) for the purposes of commercializing the vonoprazan products in the United States, Europe and Canada.
Moreover, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products.
Previously, the rebate was capped at 100% of a drug’s AMP. 20 Moreover, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for pharmaceutical products.
Outside the U.S., our competitors may obtain regulatory approval for, or initiate commercial launch of, their products more rapidly than we may obtain approval for or launch products containing vonoprazan, which could result in our competitors establishing a strong market position before we are able to enter the market.
Outside the United States, our competitors may obtain regulatory approval for, or initiate commercial launch of, their products more rapidly than we may obtain approval for or launch products containing vonoprazan, if we seek approval in those territories, which could result in our competitors establishing a strong market position before we are able to enter the market.
Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of good laboratory practice, or GLP, as set forth in EU Directive 2004/10/EC (unless otherwise justified for certain particular medicinal products, e.g., radio-pharmaceutical precursors for radio-labeling purposes).
In the maintenance phase of the trial, both doses of vonoprazan (10 mg and 20 mg) met the primary endpoint of non-inferiority compared to lansoprazole in the number of all patients who maintained healing of Erosive GERD through week 24.
In the maintenance phase of the trial, both doses of vonoprazan (10 mg and 20 mg) met the primary endpoint of non-inferiority compared to lansoprazole in the number of all patients who maintained healing of Erosive GERD through week 24. Further, both vonoprazan doses also met a pre-specified secondary endpoint demonstrating superiority of maintenance of healing versus lansoprazole.
Finally, vonoprazan 20 mg was also compared to lansoprazole 30 mg in a superiority test for onset of sustained resolution of heartburn by day three of the healing phase but did not achieve statistical significance (p=0.2196). Non-Erosive gastroesophageal reflux disease (Non-Erosive GERD).
Finally, vonoprazan 20 mg was also compared to lansoprazole 30 mg in a superiority test for onset of sustained resolution of heartburn by day three of the healing phase but did not achieve statistical significance.
CMS has published the negotiated prices for the initial ten drugs, which will first be effective in 2026, and the list of the subsequent 15 drugs that will be subject to negotiation, although the program is currently subject to legal challenges.
CMS has published the negotiated prices for the initial ten drugs, which went into effect in 2026, and the subsequent 15 drugs, which will first be effective in 2027, as well as the next set of 15 drugs that will be subject to negotiation, although the program is currently subject to legal challenges.
Additionally, both vonoprazan doses also met the secondary endpoint of showing non-inferiority to lansoprazole 15 mg in the mean percentage of 24-hour heartburn free days over the maintenance period.
In PHALCON-EE, vonoprazan 20 mg met the secondary endpoint of showing non-inferiority to lansoprazole 30 mg in the mean percentage of 24-hour heartburn free days over the healing period, and both vonoprazan doses met the secondary endpoint of showing non-inferiority to lansoprazole 15 mg in the mean percentage of 24-hour heartburn free days over the maintenance period.
This trial assessed vonoprazan versus lansoprazole in the healing and maintenance of healing of adult patients with Erosive GERD. In PHALCON-EE, vonoprazan met its primary healing endpoint demonstrating non-inferiority to lansoprazole in the number of patients who showed complete healing of Erosive GERD after eight weeks of treatment.
PHALCON-EE evaluated vonoprazan compared to lansoprazole for both the healing and maintenance of healing of erosive esophagitis in adult patients with Erosive GERD. In PHALCON-EE, vonoprazan met the primary healing endpoint of the trial by demonstrating non-inferiority to lansoprazole in the number of patients who showed complete healing of erosive esophagitis after eight weeks of treatment.
Intellectual Property Intellectual property, including patents, trade secrets, trademarks and copyrights, is important to our business. Our commercial success depends in part on our ability to obtain and maintain proprietary intellectual property protection for vonoprazan, as well as for future product candidates and novel discoveries, product development technologies, and know-how.
Intellectual Property Intellectual property, including patents, trade secrets, trademarks and copyrights, is important to our business. Our commercial success depends in significant part on our ability to obtain, maintain and enforce proprietary intellectual property protection for vonoprazan, as well as for any future product candidates, formulations, manufacturing processes and related know-how.
FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-approval clinical trials, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties.
FDA sanctions could include refusal to approve pending applications, withdrawal of an approval, clinical holds on post-approval clinical trials, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, mandated corrective advertising or communications with doctors, debarment, restitution, disgorgement of profits, or civil or criminal penalties. 16 Non-Patent Data and Market Exclusivity Data and market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications.
Data Privacy and Security Laws As a pharmaceutical company, we are subject to federal, state and foreign data privacy, cybersecurity and data breach notification laws governing the collection, use, disclosure and protection of health-related and other personal information.
Data Privacy and Security Laws As a pharmaceutical company, we are subject to numerous federal, state and foreign data privacy, cybersecurity and data breach notification laws governing the collection, use, disclosure and protection of health-related and other personal information. These laws could apply now or in the future to our operations or the operations of our partners.
On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024. Previously, the rebate was capped at 100% of a drug’s AMP.
On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on manufacturers' Medicaid drug rebate liability, beginning January 1, 2024.
The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, fails to keep a deferral current or fails to submit a request for approval of a pediatric formulation. Expedited Development and Review Programs The FDA offers a number of expedited development and review programs for qualifying product candidates.
The FDA must send a non-compliance letter to any sponsor that fails to submit the required assessment, fails to keep a deferral current or fails to submit a request for approval of a pediatric formulation.
Non-Patent Data and Market Exclusivity Data and market exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications. The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.
The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity.
The trial studied vonoprazan triple therapy and vonoprazan dual therapy compared to lansoprazole in combination with amoxicillin and clarithromycin, or lansoprazole triple therapy.
PHALCON-HP evaluated vonoprazan triple therapy and vonoprazan dual therapy compared to lansoprazole in combination with amoxicillin and clarithromycin, or lansoprazole triple therapy.
Subject to the terms of the license agreement we entered into with Takeda on May 7, 2019, or the Takeda License, we have licensed from Takeda exclusive rights in the United States, Europe, and Canada to patents and patent applications covering the composition of matter, formulation, use and/or manufacture of vonoprazan.
Under the Takeda License, we have exclusive rights in the United States, Europe and Canada to patents and patent applications covering the composition of matter, formulation, use and manufacture of vonoprazan, subject to the terms and conditions of the agreement.
Once the MA is obtained in all EU member states and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan pharmaceutical products, a two-year extension of the orphan market exclusivity is granted. 46 Post-Approval Requirements Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the member states.
Once the MA is obtained in all EU member states and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan pharmaceutical products, a two-year extension of the orphan market exclusivity is granted.
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1 : The product candidate is initially introduced into healthy human volunteers or patients with the target disease or condition.
There are also requirements governing the reporting of certain ongoing or completed clinical trial to clinicaltrials.gov. 14 Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1 : The product candidate is initially introduced into healthy human volunteers or patients with the target disease or condition.
The Tablet Supply Agreement will extend automatically for additional two year periods unless terminated by either party upon at least 24 months prior written notice.
Unless terminated earlier, the term of the Tablet Supply Agreement extends for a period of five years from the Commencement Date. The Tablet Supply Agreement will extend automatically for additional two year periods unless terminated by either party upon at least 24 months prior written notice.
The FDA’s approval of VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK was based on the results from PHALCON-HP, our Phase 3 clinical trial in the United States and Europe studying two vonoprazan-based treatment regimens for the eradication of H. pylori infection, both of which successfully met their primary and all secondary endpoints.
Clinical Data Supporting VOQUEZNA products for Helicobacter pylori Infection FDA approval of VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK for the treatment of H. pylori infection in adults was based on results from PHALCON-HP, our Phase 3 clinical trial in the United States and Europe studying two vonoprazan-based treatment regimens for the eradication of H. pylori infection.
Catalent Commercial Supply Agreement In July 2021, we entered into a Commercial Supply Agreement, or the Tablet Supply Agreement, with Catalent Pharma Solutions, LLC, or Catalent, pursuant to which Catalent has agreed to supply us with commercial quantities of vonoprazan fumarate tablets.
Catalent Commercial Supply Agreement In July 2021, we entered into a Commercial Supply Agreement, or the Tablet Supply Agreement, with Catalent Pharma Solutions, LLC, or Catalent, pursuant to which Catalent has agreed to supply us with commercial quantities of vonoprazan fumarate tablets. 12 Pursuant to the Tablet Supply Agreement, as amended, Catalent has agreed to supply us with, and we have agreed to purchase from Catalent, finished vonoprazan tablets at an agreed upon price per unit.
We have agreed to purchase convenience packs, amoxicillin capsules and clarithromycin tablets, in each case intended for sale in the United States, exclusively from Sandoz during the five-year period following launch. 34 The Sandoz Supply Agreement will continue for five years from launch of the convenience pack in the U.S. and may be terminated effective at the end of the initial five-year term upon written notice by either party prior to the end of the third year following launch.
The Sandoz Supply Agreement will continue for five years from launch of the convenience pack in the U.S. and may be terminated effective at the end of the initial five-year term upon written notice by either party prior to the end of the third year following launch.
Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements. After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications.
Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP requirements. After the FDA evaluates an NDA, it will issue an approval letter or a Complete Response Letter.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life. There are also requirements governing the reporting of ongoing clinical trials and completed trial results to public registries.
In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form.
An approval letter authorizes commercial marketing of the drug with prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form.
Manufacturing We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of vonoprazan. Vonoprazan is a small molecule that can be manufactured using commercially available technologies.
Manufacturing We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of vonoprazan. Vonoprazan is a small molecule that can be manufactured using commercially available technologies. We rely on third-party contract manufacturers to manufacture commercial and clinical quantities of our products, and expect to do so for any future product candidates.
Our patent portfolio comprises 11 distinct patent families protecting the technology relating to the compound vonoprazan and its synthetic intermediates, methods of synthesizing vonoprazan and related compounds, various formulations of vonoprazan products, as well as methods of treating diseases with vonoprazan and related compounds.
This patent portfolio comprises eleven distinct patent families protecting technology relating to vonoprazan and its synthetic intermediates, methods of synthesizing vonoprazan and related compounds, pharmaceutical formulations, and methods of treating diseases using vonoprazan and related compounds.
In December 2024, we submitted a citizen petition requesting that FDA update the Orange Book listings to reflect the same ten-year period of NCE exclusivity for 5 VOQUEZNA as reflected on the VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK Orange Book listings. For additional information, see the discussion in our risk factors related to non-patent regulatory exclusivity.
In December 2024, we submitted a citizen petition requesting that the FDA update the Orange Book listing for VOQUEZNA to reflect the same ten-year period of NCE exclusivity applicable to VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK.
Prior to beginning the first clinical trial with a product candidate in the United States, a sponsor must submit an IND to the FDA. The sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND.
Prior to beginning the first clinical trial with a product candidate in the United States, a sponsor must submit an IND to the FDA.
We maintain equity and cash incentive plans for, and offer a comprehensive benefit package to, every employee to attract, retain and reward personnel. The purpose of our cash and equity compensation plans is to increase stockholder value and the success of our company by motivating our employees to perform to the best of their abilities and achieve our objectives.
The purpose of our cash and equity compensation plans is to increase stockholder value and the success of our company by motivating our employees to perform to the best of their abilities and achieve our objectives.
In addition, VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, are priced at a premium over competitive generic products in the U.S., and our ability to compete may be affected in many cases by insurers or other third-party payers seeking to encourage the use of generic products. 31 We expect that, for the treatment of H. pylori infection, Erosive GERD and Non-Erosive GERD, VOQUEZNA will primarily compete with generic PPIs marketed by multiple pharmaceutical companies in both the prescription and OTC markets.
In addition, VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, are priced at a premium over competitive generic products in the U.S., and our ability to compete may be affected in many cases by insurers or other third-party payers seeking to encourage the use of generic products.
In May 2021, the FDA granted qualified infectious disease product, or QIDP, designations for VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and we thereby received an extension of five years of new chemical entity, or NCE, exclusivity based on the vonoprazan component in the applicable NDAs.
In May 2021, the FDA granted qualified infectious disease product, or QIDP, designation to VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, resulting in an extension of the five-year new chemical entity, or NCE, exclusivity by an additional five years.
In addition to generic PPI-based triple and quad therapies, we expect VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK will compete with Talicia, a co-formulated capsule comprising generic omeprazole, amoxicillin, and rifabutin for the treatment of H. pylori infection, launched in March 2020 by RedHill Biopharma Ltd.
For the treatment of H. pylori infection, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK compete primarily with generic PPI-based triple and quadruple therapies, as well as with branded therapies such as Talicia, a co-formulated capsule containing omeprazole, amoxicillin and rifabutin, marketed by RedHill Biopharma Ltd.
Additionally, we believe that vonoprazan has the ideal profile for an OTC product because of the potential for rapid symptom relief and a well-tolerated safety profile. We plan to explore the economics and potential development in this market to determine the best strategy going forward.
We believe that vonoprazan has a profile that would support its development in the future as an OTC product, including the potential for as-needed symptom relief and a well-tolerated safety profile. We plan to explore the economics and potential development pathway for an OTC product in this market to determine possible future strategies.
The FDA may also place other conditions on approval including the requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the drug, which could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA may also place other conditions on approval including the requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the drug.
Coverage and reimbursement for VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and any future product candidates can be subject to challenge, reduction or denial by third-party payers.
Coverage and reimbursement for VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and any future product candidates can be subject to challenge, reduction or denial by third-party payers. 18 The process for determining whether a third-party payer will provide coverage for a product is typically separate from the process for setting the reimbursement rate that the payer will pay for the product.
The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.
The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a full or partial clinical hold.
On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the Affordable Care Act without specifically ruling on the constitutionality of the Affordable Care Act. Thus, the Affordable Care Act will remain in effect in its current form. In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
Since its enactment, there have been judicial and political challenges to certain aspects of the Affordable Care Act. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the Affordable Care Act without specifically ruling on the constitutionality of the Affordable Care Act.
As of December 31, 2024, our portfolio consists of approximately 25 issued U.S. patents, 4 pending U.S. applications, 16 issued European patents subsequently validated in individual European countries, 2 pending European applications, 6 issued Canadian patents, and 3 pending Canadian applications.
As of December 31, 2025, our portfolio included approximately 26 issued U.S. patents and one pending U.S. patent application, 16 issued European patents validated in individual European countries and two pending European patent applications, and seven issued Canadian patents and two pending Canadian patent applications.
The issued patents and pending applications have nominal expiration dates ranging from 2024 to 2038 without accounting for any available patent term adjustments or extensions. The issued U.S. patent covering the composition of matter of vonoprazan is expected to expire in August 2028, not including patent term extension.
The issued patents and pending applications in our portfolio have nominal expiration dates ranging from 2024 to 2038, without accounting for any patent term adjustments or extensions that may be available.
For example, we plan to expand clinical development of vonoprazan in the U.S. into EoE, the most common type of eosinophilic gastrointestinal disease. EoE is an autoimmune disease with significant unmet need and can result in trouble swallowing, chest pain, vomiting and impaction of food in the esophagus, a medical emergency. There are only two FDA-approved treatments for EoE.
EoE is an autoimmune disease with significant unmet need and can result in trouble swallowing, chest pain, vomiting and impaction of food in the esophagus, a medical emergency. There are only two FDA-approved treatments for EoE. Although not approved for this indication, PPIs are often prescribed as a first-line therapy for the treatment of EoE.
Further, in a pre-specified secondary endpoint, vonoprazan demonstrated superior healing after two weeks of treatment in patients with moderate to severe Erosive GERD compared to lansoprazole. After two weeks of treatment, 70% of patients with moderate to severe Erosive GERD were healed after treatment with vonoprazan versus 53% with lansoprazole (p=0.0008).
In addition, in a pre-specified secondary endpoint, vonoprazan demonstrated superior healing rates after two weeks of treatment in patients with moderate-to-severe Erosive GERD compared to lansoprazole, based on a pre-specified secondary analysis. Following the healing phase, healed patients entered a maintenance phase in which vonoprazan 10 mg and 20 mg were compared to lansoprazole in the maintenance of healing.
In PHALCON-NERD-301, a Phase 3 study evaluating the efficacy and safety of vonoprazan for the daily treatment of adults with Non-Erosive GERD, both doses of vonoprazan (10 mg and 20 mg) met the primary endpoint evaluating the mean percentage of 24-hour heartburn-free days through week four by demonstrating statistical significance versus placebo (mean 45% vonoprazan 10 mg, 44% vonoprazan 20 mg, compared to 28% for placebo; p 7 and 61% for vonoprazan 20 mg.
The trial enrolled adult patients who experienced frequent heartburn symptoms and evaluated the efficacy of vonoprazan compared to placebo over the treatment period. In the study, both doses of vonoprazan (10 mg and 20 mg) met the primary endpoint evaluating the mean percentage of 24-hour heartburn-free days through week four by demonstrating statistical significance versus placebo.
Sales and Marketing We have established robust marketing, sales, and distribution capabilities to support the launch of our approved products and we are independently commercializing VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK in the United States through an experienced national sales force.
Commercial Organization and Sales Strategy We have established marketing, sales, and distribution capabilities to support the commercialization of our approved products in the United States. We are independently commercializing VOQUEZNA tablets, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, through a targeted national sales force primarily focused on gastroenterologists and other high-prescribing healthcare providers, including select primary care physicians.
In the modified intent-to-treat, or mITT, population, H. pylori eradication rates were 84.7% for vonoprazan triple therapy and 78.5% for vonoprazan dual therapy compared to 78.8% with lansoprazole triple therapy (p H. pylori eradication rates were 90.4% with vonoprazan triple therapy and 81.2% with vonoprazan dual therapy compared to 82.1% with lansoprazole triple therapy (p In PHALCON-HP vonoprazan triple therapy and vonoprazan dual therapy also met all secondary endpoints, demonstrating superior eradication rates versus lansoprazole triple therapy in all patients and in the subgroup of patients with clarithromycin resistant strains of H. pylori .
Vonoprazan triple therapy and vonoprazan dual therapy also met all secondary endpoints in the study, demonstrating superior eradication rates versus lansoprazole triple therapy in all patients and in the subgroup of patients with clarithromycin resistant strains of H. pylori .
The impact of the IRA on the pharmaceutical industry cannot yet be fully determined, but is likely to be significant.
The impact of the IRA on the pharmaceutical industry cannot yet be fully determined, but is likely to be significant. The One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program.
With respect to any future product candidates, we expect to continue to rely on third-party contract manufacturers to manufacture clinical supplies and commercial quantities of any approved products. Although we rely on contract manufacturers, we have personnel with manufacturing experience to oversee our relationships with Sandoz, Catalent and Evonik.
Although we rely on contract manufacturers, we have personnel with manufacturing experience to oversee our relationships with our suppliers, Evonik, Catalent and Sandoz.
Further, on July 17, 2024, the FDA approved VOQUEZNA 10 mg tablets for the relief of heartburn associated with Non-Erosive GERD and we launched vonoprazan in the U.S. for daily treatment of heartburn associated with Non-Erosive GERD in the third quarter of 2024.
We began U.S. commercialization of VOQUEZNA for the treatment of Erosive GERD and H. pylori infection, and of VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK for the treatment of H. pylori infection, in the fourth quarter of 2023. In July 2024, the FDA also approved VOQUEZNA for the relief of heartburn associated with Non-Erosive GERD.
Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others. 44 Regulation and Procedures Governing Marketing Authorization of Medicinal Products in the EU Non-Clinical Studies and Clinical Trials Similarly, to the United States, the various phases of non-clinical and clinical research in the EU are subject to significant regulatory controls.
Regulation and Procedures Governing Marketing Authorization of Medicinal Products in the EU Non-Clinical Studies and Clinical Trials Similarly, to the United States, the various phases of non-clinical and clinical research in the EU are subject to significant regulatory controls. Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances.
Both vonoprazan doses met the Maintenance Phase primary endpoint of non-inferiority while also meeting the pre-specified secondary comparison demonstrating superiority of maintenance of healing versus lansoprazole (79% for vonoprazan 10 mg, 81% for vonoprazan 20 mg compared to 72% for lansoprazole 15 mg) (p Both vonoprazan doses also met the secondary endpoint of demonstrating superiority of the percentage of patients with moderate-to-severe disease who maintained healing of Erosive GERD through Week 24 (75% vonoprazan 10 mg, 77% vonoprazan 20 mg v. 61% lansoprazole 15 mg) (p=0.0490 for vonoprazan 10 mg superiority comparison; p=0.0196 for vonoprazan 20 mg superiority comparison).
Both vonoprazan doses also met the pre-specified secondary endpoint of demonstrating superiority of the percentage of patients with 6 moderate-to-severe disease who maintained healing of Erosive GERD through week 24.
Pursuant to the Tablet Supply Agreement, as amended, Catalent has agreed to supply us with, and we have agreed to purchase from Catalent, finished vonoprazan tablets at an agreed upon price per unit. The price per unit may be adjusted annually based on increases in costs incurred by Catalent.
The price per unit may be adjusted annually based on increases in costs incurred by Catalent. The Tablet Supply Agreement requires us to purchase a specified percentage of our requirements of finished vonoprazan tablets from Catalent, which percentage is subject to adjustment following January 1, 2027.
Decisions regarding whether to cover a product, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. Third-party payers often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes.
Third-party payers often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies, but also have their own methods and approval processes. Therefore, coverage and reimbursement for products can differ significantly from payer to payer.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur common stock has a limited trading history and the market price has fluctuated widely, and may in the future fluctuate widely, depending upon many factors such as those discussed in this “Risk Factors” section and many others, some of which are beyond our control, including the following: • a relatively low-volume trading market for our shares of common stock that could cause trades of small blocks of shares to have a significant impact on the price of our shares of common stock; • market conditions in the biopharmaceutical sector and issuance of securities analysts’ reports or recommendations; • establishment of short positions by holders or non-holders of our common stock; • an inability to obtain additional funding; • sales of our stock by insiders and stockholders, including Takeda; • our ability to enroll patients in our ongoing and any future clinical trials; • results of our clinical trials and preclinical studies, the results of clinical trials conducted by Takeda and others for vonoprazan, and the results of trials of our competitors or those of other companies in our market sector; • additional regulatory approvals of vonoprazan and approvals of any future product candidates, or limitations to specific label indications or patient populations for use of any approved products, or changes or delays in the regulatory review process; • any termination or loss of rights under the Takeda License; • regulatory developments in the United States and foreign countries; 95 • changes in the structure of healthcare payment systems, especially in light of reforms to the U.S. healthcare system; • the success or failure of our efforts to acquire, license or develop additional product candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • manufacturing, supply or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to us; • general economic, industry and market conditions, public health emergencies or other events or factors, many of which are beyond our control; • additions or departures of key personnel; • intellectual property, product liability or other litigation against us; • changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; and • changes in accounting standards, policies, guidelines, interpretations or principles.
Biggest changeOur common stock has a limited trading history and the market price has fluctuated widely, and may in the future fluctuate widely, depending upon many factors such as those discussed in this “Risk Factors” section and many others, some of which are beyond our control, including the following: • achievement of expected product sales, market acceptance and profitability for VOQUEZNA and any future products; • changes in coverage, reimbursement, utilization management or pricing policies affecting VOQUEZNA and any future products, including changes in the structure of healthcare payment systems; • manufacturing, supply or distribution delays or shortages; • any changes to our relationships with manufacturers, suppliers, licensors, future collaborators or other strategic partners; • innovations, new products or generic alternatives introduced by our competitors; • market conditions in the biopharmaceutical sector and the issuance of securities analysts’ reports or recommendations; • establishment of short positions by holders or non-holders of our common stock; • a relatively low-volume trading market for our shares of common stock that could cause trades of small blocks of shares to have a significant impact on the price of our shares of common stock; • sales of our common stock by insiders or other stockholders; • variations in our financial results or those of companies that are perceived to be similar to us; • an inability to obtain additional funding on acceptable terms or at all; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • additional regulatory approvals of vonoprazan or any future product candidates, limitations on approved labeling or patient populations, or changes or delays in regulatory review processes that affect commercialization; • regulatory developments in the United States and foreign countries; • our ability to enroll patients in our ongoing and any future clinical trials and to generate data to support additional indications or formulations; • results of our clinical trials or other clinical studies, including studies supporting additional indications or formulations, as well as clinical results reported by Takeda, our competitors or other companies in our market sector; • the success or failure of our efforts to acquire, license or develop additional product candidates; • any termination or loss of rights under the Takeda License; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; • additions or departures of key personnel; 71 • intellectual property, product liability or other litigation against us; • general economic, industry and market conditions, public health emergencies or other events or factors, many of which are beyond our control; and • changes in accounting standards, policies, guidelines, interpretations or principles.
We may lack the necessary expertise, personnel and resources to successfully commercialize VOQUEZNA, VOQUEZNA TRIPLE PAK, VOQUEZNA DUAL PAK, and any future product candidates that may receive regulatory approval, on our own or together with collaborators.
We may lack the necessary expertise, personnel and resources to successfully commercialize VOQUEZNA, VOQUEZNA DUAL PAK, and VOQUEZNA TRIPLE PAK and any future product candidates that may receive regulatory approval, on our own or together with collaborators.
Later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls; • restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; • fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; • refusal by the FDA or comparable foreign regulatory authority to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of our products; and • injunctions or the imposition of civil or criminal penalties.
The later discovery of previously unknown problems with our products, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or voluntary or mandatory product recalls; • restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; • fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; • refusal by the FDA or comparable foreign regulatory authority to approve pending applications or supplements to approved applications filed by us or suspension or revocation of approvals; • product seizure or detention, or refusal to permit the import or export of our products; and • injunctions or the imposition of civil or criminal penalties.
Our failure, or Catalent’s, Evonik’s, Sandoz’s or any other third-party manufacturer’s failure, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or recalls of product candidates or products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.
Our failure, or Catalent’s, Evonik’s, Sandoz’s or any other third-party manufacturer’s failure, to comply with applicable regulations could result in sanctions being imposed on us, including, suspension or withdrawal of approvals, seizures or recalls of products or product candidates, clinical holds, fines, injunctions, civil penalties, delays, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products.
If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement business strategy, which could harm our business. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating and implementing our development and commercialization strategy.
If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement business strategy, which could harm our business. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating and implementing our commercialization and development strategy.
Although we maintain workers’ compensation insurance for certain costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials or other work- related injuries, this insurance may not provide adequate coverage against potential liabilities.
Although we maintain workers’ compensation insurance for certain costs and expenses, we may incur due to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, and this insurance may not provide adequate coverage against potential liabilities.
There can no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information systems and personal or confidential information.
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information systems and personal or confidential information.
We are exposed to the risk that our employees and independent contractors, including principal investigators, CROs, consultants and vendors may engage in misconduct or other illegal activity.
We are exposed to the risk that our employees and independent contractors, including consultants, vendors, principal investigators or CROs, may engage in misconduct or other illegal activity.
In May 2021, FDA granted qualified infectious disease product, or QIDP, designations to vonoprazan tablets in combination with both amoxicillin capsules and clarithromycin tablets, and with amoxicillin capsules alone, respectively, for the treatment of H. pylori infection. On May 3, 2022, the FDA approved our NDAs for these products, branded as VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, respectively.
In May 2021, the FDA granted qualified infectious disease product, or QIDP, designations to vonoprazan in combination with both amoxicillin capsules and clarithromycin tablets, and with amoxicillin capsules alone, respectively, for the treatment of H. pylori infection. On May 3, 2022, the FDA approved our NDAs for these products, branded as VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, respectively.
Other entities may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import VOQUEZNA and any future product candidates and products that may be approved in the future, or impair our competitive position.
Other entities may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import our VOQUEZNA products and any future product candidates and products that may be approved in the future, or impair our competitive position.
We rely, and expect to continue to rely, on third-party manufacturers to produce vonoprazan, including VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and any future product candidates.
We rely, and expect to continue to rely, on third-party manufacturers to produce vonoprazan, including VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK and any future product candidates.
For example: • others may be able to develop products that are similar to VOQUEZNA or any future product candidates but that are not covered by the claims of the patents that we own in the future or license; • we or our current and future licensors or predecessors might not have been the first to make the inventions covered by the issued patents or patent applications that we own in the future or license; • we or our current and future licensors or predecessors might not have been the first to file patent applications covering certain of the claimed inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that the pending patent applications we own or license will not lead to issued patents; • issued patents that we own in the future or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; 87 • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
For example: • others may be able to develop products that are similar to VOQUEZNA or any future product candidates but that are not covered by the claims of the patents that we own in the future or license; • we or our current and future licensors or predecessors might not have been the first to make the inventions covered by the issued patents or patent applications that we own in the future or license; • we or our current and future licensors or predecessors might not have been the first to file patent applications covering certain of the claimed inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that the pending patent applications we own or license will not lead to issued patents; • issued patents that we own in the future or license may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
Despite the implementation of cybersecurity measures, our internal information systems and those of our current and any future CROs, contract manufacturers, and other service providers, contractors, consultants and collaborators are 80 vulnerable to numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our information systems and confidential information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software, or misconfigurations, 'bugs' or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services, alongside damage from natural disasters, terrorism, war and telecommunication and electrical failures.
Despite the implementation of cybersecurity measures, our internal information systems and those of our current and any future CROs, contract manufacturers, and other service providers, contractors, consultants and collaborators are vulnerable to numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our information systems and confidential information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software, or misconfigurations, 'bugs' or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services, alongside damage from natural disasters, terrorism, war and telecommunication and electrical failures.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation that may cause negative publicity; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from commercializing, or continuing to commercialize, VOQUEZNA (and/or other approved products containing vonoprazan), and any future 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; • subject us to significant liability to third parties; or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in our competitors gaining access to the same technology.
Any claims of patent infringement asserted by third parties would be time consuming and could: • result in costly litigation that may cause negative publicity; • divert the time and attention of our technical personnel and management; • cause development delays; • prevent us from continuing to commercialize, VOQUEZNA (and/or other approved products containing vonoprazan), and any future 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; • subject us to significant liability to third parties; or • require us to enter into royalty or licensing agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in our competitors gaining access to the same technology.
The provisions in our charter documents include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors, unless the board of directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the required approval of at least 66-2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the federal district courts will be the exclusive forum for actions and proceedings a cause of action arising under the Securities Act of 1933, as amended, and that the Court of Chancery of the State of Delaware will be the exclusive forum for certain other actions and proceedings; 97 • the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
The provisions in our charter documents include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; 72 • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors, unless the board of directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the required approval of at least 66-2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause; • the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the federal district courts will be the exclusive forum for actions and proceedings a cause of action arising under the Securities Act of 1933, as amended, and that the Court of Chancery of the State of Delaware will be the exclusive forum for certain other actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; 84 • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patents and other rights to third parties; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of vonoprazan and any future product candidates, and what activities satisfy those diligence obligations; • our right to transfer or assign the license; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • our right to sublicense patents and other rights to third parties; • our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of vonoprazan and any future product candidates, and what activities satisfy those diligence obligations; • our right to transfer or assign the license; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our products; 78 • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • significant negative financial impact; • the inability to commercialize our current products and any future product candidates; and • a decline in our stock price.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our products; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • significant negative financial impact; • the inability to commercialize our current products and any future product candidates; and • a decline in our stock price.
If such an event were to occur and cause interruptions in our operations, result in the unauthorized access to, disclosure, loss, processing or other compromise of, personal information or individually identifiable health information (violating certain privacy laws such as GDPR) or confidential information, or jeopardize the confidentiality, integrity, or availability of our information systems or any information residing therein, it could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.
If such an event were to occur and cause interruptions in our operations, result in the unauthorized access to, disclosure, loss, processing or other compromise of, personal information or individually identifiable health information (violating certain privacy laws such as GDPR) or confidential information, or jeopardize the confidentiality, integrity, or availability of our information systems or any information residing therein, it could result in a material disruption of our commercial operations, development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.
Patent terms may be inadequate to protect our competitive position on VOQUEZNA and any future product candidates for an adequate amount of time. 91 Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date.
Patent terms may be inadequate to protect our competitive position on VOQUEZNA and any future product candidates for an adequate amount of time. Patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional filing date.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous federal, state and foreign laws, regulations, standards and other requirements governing the collection, use, disclosure, retention, security and other processing of personal data, such as information that we may collect in connection with our marketing activities in the U.S. and clinical trials in the U.S. and abroad.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous federal, state and foreign laws, regulations, standards and other requirements governing the collection, use, disclosure, retention, security and other processing of personal data, such as information that we may collect in connection with our marketing and sales activities in the U.S. and clinical trials in the U.S. and abroad.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of 75 value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof.
Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S. companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof.
If we are unable to do so, we may be unable to develop or commercialize the affected product candidates, which could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation.
If we are unable to do so, we may be unable to develop or commercialize the affected products and product candidates, which could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation.
Additionally, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
Additionally, on 51 January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the U.S. government requires that any products embodying any of these inventions or produced through the use of any of these inventions be manufactured substantially in the United States.
Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the U.S. government requires that any products 70 embodying any of these inventions or produced through the use of any of these inventions be manufactured substantially in the United States.
Such a loss of patent protection would have a material adverse impact on our business. 89 Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.
Such a loss of patent protection would have a material adverse impact on our business. Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.
On December 23, 2024, CO Finance LVS XXXVII LLC agreed to assign and transfer to OC III LVS LX LP all of its rights, title and interest as an Additional Investor and in connection therewith, OC III LVS LX LP executed a Joinder Agreement. As of December 31, 2024, no additional funding is available under the Revenue Interest Financing Agreement.
On December 23, 2024, CO Finance LVS XXXVII LLC agreed to assign and transfer to OC III LVS LX LP all of its rights, title and interest as an Additional Investor and in connection therewith, OC III LVS LX LP executed a Joinder Agreement. As of December 31, 2025, no additional funding is available under the Revenue Interest Financing Agreement.
Moreover, even if we or our future strategic partners were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. In addition, we cannot be certain that we could redesign VOQUEZNA and any future product candidates or processes to avoid infringement, if necessary.
Moreover, even if we or our future strategic partners were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. In addition, we cannot be certain that we could redesign our VOQUEZNA products and any future product candidates or processes to avoid infringement, if necessary.
Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.
Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations could involve substantial costs. It is possible that governmental authorities will conclude that our business practices 50 do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.
This breach, among other things, disrupted the processing of transactions under our patient co-pay assistance card program, and the ability of certain pharmacies to fill prescriptions, including prescriptions for VOQUEZNA for a period of time. As a result, we were forced to make alternative arrangements in order to facilitate processing of patient co-pay assistance card program transactions.
This breach, among other things, disrupted the processing of transactions under our patient co-pay assistance card program, and the ability of certain pharmacies to fill 56 prescriptions, including prescriptions for VOQUEZNA for a period of time. As a result, we were forced to make alternative arrangements in order to facilitate processing of patient co-pay assistance card program transactions.
Any failure by a third party to conduct the clinical trials according to GCPs and other requirements and in a timely manner may delay or prevent our ability to seek or obtain additional regulatory approvals for vonoprazan and regulatory approvals for any future product candidates. We are dependent on third parties to conduct our preclinical and clinical trials.
Any failure by a third party to conduct the clinical trials according to GCPs and other requirements and in a timely manner may delay or prevent our ability to seek or obtain additional regulatory approvals for vonoprazan and regulatory approvals for any future product candidates. We are dependent on third parties to conduct our preclinical studies and clinical trials.
Under the terms of the Revenue Interest Financing Agreement and Joinder Agreement, 73 we received $100 million at the initial closing and received an additional $175 million in November 2023 following FDA approval of vonoprazan in its Erosive GERD indication. In addition, we were eligible for $25 million in additional funding for achievement of a sales milestone.
Under the terms of the Revenue Interest Financing Agreement and Joinder Agreement, we received $100 million at the initial closing and received an additional $175 million in November 2023 following FDA approval of vonoprazan in its Erosive GERD indication. In addition, we were eligible for $25 million in additional funding for achievement of a sales milestone.
Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of 58 debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
Thus, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our future patent applications or those of our current and future licensors and the enforcement or defense of our future issued patents or those of our current and future licensors, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Thus, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our future patent applications or 66 those of our current and future licensors and the enforcement or defense of our future issued patents or those of our current and future licensors, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
We have systems in place to remind us to pay these fees, and we rely on third parties to pay these fees when due. Additionally, the USPTO and various foreign patent offices require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
We have systems in place to remind us to pay these fees, and we rely on third parties to pay these fees when due. Additionally, the USPTO and various foreign patent offices require compliance with a 68 number of procedural, documentary, fee payment and other similar provisions during the patent application process.
Our ability to obtain clinical supplies of vonoprazan and any future product candidates could be disrupted if the operations of these suppliers were affected by a manmade or natural disaster or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.
Our ability to obtain commercial and clinical supplies of vonoprazan and any future product candidates could be disrupted if the operations of these suppliers were affected by a manmade or natural disaster or other business interruption. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.
If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products and may not be able to obtain a satisfactory financial return on products that we may develop. There is significant uncertainty related to third-party payer coverage and reimbursement of newly approved products.
If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products and may not be able to obtain a satisfactory financial return on products that we may develop. 32 There is significant uncertainty related to third-party payer coverage and reimbursement of newly approved products.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In 92 these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
As a result, the coverage determination process will require us to provide scientific and clinical support for the use of our products to each payer separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
As a result, the coverage determination process may require us to provide scientific and clinical support for the use of our products to each payer separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts in which case our business operations could be impaired.
We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our 54 coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts in which case our business operations could be impaired.
If we or any of our current and future licensors were to initiate legal proceedings against a third party to enforce a patent directed at VOQUEZNA and any future product candidates, the defendant could counterclaim that our patent or the patent of our current or future licensor is invalid and/or unenforceable in whole or in part.
If we or any of our current and future licensors were to initiate legal proceedings against a third party to enforce a patent directed at our VOQUEZNA products and any future product candidates, the defendant could counterclaim that our patent or the patent of our current or future licensor is invalid and/or unenforceable in whole or in part.
Our Loan Agreement and our Revenue Interest Financing Agreement include, and any future debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures or declaring dividends.
Our Loan Agreement and our Revenue Interest Financing Agreement include, and any future debt financing and preferred equity financing, if available, may involve agreements that include cash covenants and covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures or declaring dividends.
We and any of our third-party manufacturers or suppliers will use biological materials, potent chemical agents and may use hazardous materials, including chemicals and biological agents and compounds that could be dangerous to human health and safety 77 of the environment. Our operations and the operations of our third-party manufacturers and suppliers also produce hazardous waste products.
We and any of our third-party manufacturers or suppliers will use biological materials, potent chemical agents and may use hazardous materials, including chemicals and biological agents and compounds that could be dangerous to human health and safety of the environment. Our operations and the operations of our third-party manufacturers and suppliers also produce hazardous waste products.
It is 85 possible that defects of form in the preparation or filing of our or our current and future licensors’ patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.
It is possible that defects of form in the preparation or filing of our or our current and future licensors’ patents or patent applications may exist, or may arise in the future, for example with respect to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.
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 99 requiring establishment and maintenance of effective disclosure and financial controls 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.
These activities and decisions, while occurring outside of our licensed territories, could harm our commercialization strategy. In addition, product recalls or safety issues with vonoprazan outside our licensed territories could result in serious damage to the brand and impair our ability to successfully market our products containing vonoprazan in our licensed territories.
These activities and decisions, while occurring outside of our licensed territories, could harm our commercialization strategy. In addition, product recalls or safety issues with vonoprazan outside our licensed territories could 30 result in serious damage to the brand and impair our ability to successfully market our products containing vonoprazan in our licensed territories.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our future patents or the patents of our current and future licensors may not cover vonoprazan or any future product candidates or may be challenged in the courts or patent offices in the United States and abroad.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our future patents or the patents of our current and future licensors may not cover vonoprazan or any future product candidates or may be challenged in the 61 courts or patent offices in the United States and abroad.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.
Our efforts to enforce or protect our proprietary rights related to trademarks, 69 trade names, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected. 93 We intend to use registered or unregistered trademarks or trade names to brand and market ourselves and our products.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected. We intend to use registered or unregistered trademarks or trade names to brand and market ourselves and our products.
We currently rely on, and expect to rely on for the foreseeable future, Evonik and Catalent for the manufacture of vonoprazan drug substance and drug product for clinical development and commercial sale, and we expect to rely on Sandoz for commercial supplies of VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and the amoxicillin and clarithromycin in those products.
We currently rely on, and expect to rely on for the foreseeable future, Evonik and Catalent for the manufacture of vonoprazan drug substance and drug product for commercial sale and any clinical development, and we expect to rely on Sandoz for commercial supplies of VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and the amoxicillin and clarithromycin in those products.
Furthermore, the enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
Furthermore, the enforceability of similar choice of forum 73 provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.
Should any of these events occur, it could significantly harm our business, results of operations and prospects. Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
Should any of these events occur, it could significantly harm our business, results of operations and prospects. 63 Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
We cannot be certain that such activities by third parties have been or will be conducted in compliance 86 with applicable laws and regulations or will result in valid and enforceable patents or other intellectual property rights.
We cannot be certain that such activities by third parties have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents or other intellectual property rights.
We are not permitted to market or promote vonoprazan and any future product candidates before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never receive such regulatory approvals for vonoprazan or any future product candidates.
We are not permitted to market or promote vonoprazan and any future product candidates before we receive regulatory approval from applicable regulatory authorities in foreign markets, and we may never seek or receive such regulatory approvals for vonoprazan or any future product candidates.
These laws may constrain the business or financial arrangements and relationships through which we conduct our operations, including how we research, market, sell and distribute any products for which we obtain marketing approval.
These laws may constrain the business or financial arrangements and relationships through 49 which we conduct our operations, including how we research, market, sell and distribute any products for which we obtain marketing approval.
The degree of market acceptance of our current products or any future products, if approved, will depend on a number of factors, including: • demonstration of clinical efficacy and safety compared to other more-established products; • the indications for which our current or any future product candidates are approved; • the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling or comparable approved labeling; • acceptance of a new drug for the relevant indication by healthcare providers and their patients; • the pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in relation to alternative treatments and therapies; • our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from government healthcare programs, including Medicare and Medicaid, private health insurers and other third-party payers; • the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage or adequate reimbursement; • any restrictions on the use of our products, and the prevalence and severity of any adverse effects; • potential product liability claims; • the timing of market introduction of our products as well as competitive drugs; • the effectiveness of our or any of our potential future collaborators’ sales and marketing strategies; and • unfavorable publicity relating to the product.
The degree of market acceptance of our current products or any product candidates, if approved, will depend on a number of factors, including: • acceptance of our products for the relevant indication by healthcare providers and their patients; • the pricing and cost-effectiveness of our products, as well as the cost of treatment with our products in relation to alternative treatments and therapies; • our ability to obtain and maintain sufficient third-party coverage and adequate reimbursement from private health insurers, government healthcare programs, including, Medicare and Medicaid, and other third-party payers; • the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage or adequate reimbursement; • demonstration of clinical efficacy and safety compared to other more-established products; • the timing of market introduction, profile and impact of competitive drugs; • the effectiveness of our or any of our potential future collaborators’ sales and marketing strategies; • the indications for which our current product or any product candidates are approved; • the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling or comparable approved labeling; • any restrictions on the use of our products, and the prevalence and severity of any adverse effects; • potential product liability claims; and • unfavorable publicity relating to the product.
We also rely on third parties to manufacture vonoprazan and any future product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business.
We also rely on third parties to manufacture vonoprazan, and will rely on third parties to manufacture any future product candidates, and similar events relating to their computer systems could also have a material adverse effect on our business.
As a result, we currently rely, and expect to continue to rely, on third parties for the manufacture of vonoprazan and supply of related raw materials for clinical development and commercial sale.
As a result, we currently rely, and expect to continue to rely, on third parties for the manufacture of vonoprazan and supply of related raw materials for commercial sale and any clinical development.
We cannot be certain that our licensors will allocate sufficient resources or prioritize their or our enforcement of such patents or defense of such claims to protect our interests in the licensed patents.
We cannot be certain that our licensors will allocate sufficient resources or prioritize their or our enforcement of such patents or 62 defense of such claims to protect our interests in the licensed patents.
Because patent applications are maintained as confidential for a certain period of time, until the relevant application is published we may be unaware of third-party patents that may be infringed by commercialization of VOQUEZNA and any future product candidates, and we cannot be certain that we were the first to file a patent application related to a product candidate or technology.
Because patent applications are maintained as confidential for a certain period of time, until the relevant application is published we may be unaware of third-party patents that may be infringed by commercialization of our VOQUEZNA products and any future product candidates, and we cannot be certain that we were the first to file a patent application related to a product candidate or technology.
Given that our proprietary position is based, in part, on our know-how and trade secrets and despite our efforts to protect our trade secrets, a competitor’s discovery of our proprietary technology and confidential information or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business, financial condition, results of operations and prospects.
Given that our proprietary position is based, in part, on our know-how and trade secrets and despite our efforts to protect our trade secrets, a competitor’s discovery of our proprietary technology and confidential information or other unauthorized use or disclosure 45 may impair our competitive position and may have a material adverse effect on our business, financial condition, results of operations and prospects.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are intentionally or inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our current and future competitors, are intentionally or inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements.
We may need to obtain further licenses from third parties to advance our research or allow commercialization of vonoprazan and any future product candidates, and we cannot provide any assurances that third-party patents do not exist which might be enforced against vonoprazan and any future product candidates in the absence of such a license.
We may need to obtain further licenses from third parties to advance our research or continue commercialization of vonoprazan and any future product candidates, and we cannot provide any assurances that third-party patents do not exist which might be enforced against vonoprazan and any future product candidates in the absence of such a license.
For example, Takeda can make statements or use promotional materials with respect to vonoprazan outside of our licensed territories that are inconsistent with our positioning of the product in the United States, Europe, and Canada, and could sell vonoprazan in foreign countries at prices that are dramatically lower than the prices we would charge in our licensed territories.
For example, Takeda can make statements or use promotional materials with respect to vonoprazan outside of our licensed territories that are inconsistent with our positioning of the product in the United States, and could sell vonoprazan in foreign countries at prices that are dramatically lower than the prices we would charge in our licensed territories.
Even if we are successful in our efforts to establish such collaborations, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such collaborations if, for example, development or approval of a product candidate is delayed, the safety of a product candidate is questioned or sales of an approved product candidate are unsatisfactory.
Even if we are successful in our efforts to establish such arrangements, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such arrangements if, for example, development or approval of a product candidate is delayed, the safety of a product candidate is questioned or sales of an approved product candidate are unsatisfactory.
Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of VOQUEZNA and any future product candidates.
Numerous third-party U.S. and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our VOQUEZNA products and any future product candidates.
These products may compete with VOQUEZNA or any future product candidates, and our patents, the patents of our current and future licensors or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products may compete with our approved products or any future product candidates, and our patents, the patents of our current and future licensors or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Our competitors or other third parties may be able to circumvent our future patents or the patents of our current and future licensors by developing similar or alternative technologies or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects.
Our competitors or other third parties may be able to circumvent our future patents or the patents of our current and future licensors by developing similar or alternative technologies, processes, formulations or products in a non-infringing manner which could materially adversely affect our business, financial condition, results of operations and prospects.
If any of our licensors or any of our future licensors or future collaborators fail to appropriately prosecute and maintain patent protection for patents covering VOQUEZNA or any future product candidates, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products.
If any of our licensors or any of our future licensors or future collaborators fail to appropriately prosecute and maintain patent protection for patents covering our approved products or any future product candidates, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products.
In addition, events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the FDA, EMA, and other comparable foreign regulatory authorities in reviewing new drugs based on safety, efficacy, or other regulatory considerations and may result in significant delays in obtaining regulatory approvals.
In addition, events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the FDA, EMA, and other comparable foreign regulatory authorities in reviewing new drugs, new indications or new formulations based on safety, efficacy, or other regulatory considerations and may result in significant delays in obtaining regulatory approvals.
Although no third party has asserted a claim of patent infringement against us as of the date of this annual report, others may hold proprietary rights that could prevent VOQUEZNA and any future product candidates from being marketed.
Although no third party has asserted a claim of patent infringement against us as of the date of this annual report, others may hold proprietary rights that could prevent our VOQUEZNA products and any future product candidates from being marketed.
Average review times at the FDA and other government agencies have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
As a result, average review times at the FDA and other government agencies have fluctuated in recent years. In addition, government funding for agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Although we started developing marketing and distribution 53 capabilities in 2021 in advance of the planned commercialization of VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, due to approval and launch delays, we did not hire our field force until late 2023.
Although we started developing marketing and distribution capabilities in 2021 in advance of the then planned commercialization of VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, due to approval and launch delays, we did not hire our field force until late 2023.
Under the Medicaid Drug Rebate Program, or MDRP, as a condition of having federal funds being made available to the states for covered outpatient drugs under Medicaid and, if applicable, Medicare Part B, pharmaceutical manufacturers must enter into an agreement with the Secretary of Health and Human Services to pay a rebate to state Medicaid programs for each unit of covered outpatient drug dispensed to a Medicaid beneficiary and paid for by the state Medicaid program.
Under the MDRP, as a condition of having federal funds being made available to the states for covered outpatient drugs under Medicaid and, if applicable, Medicare Part B, pharmaceutical manufacturers must enter into a rebate agreement with the Secretary of Health and Human Services and pay rebates to state Medicaid programs for each unit of covered outpatient drug dispensed to a Medicaid beneficiary and paid for by the state Medicaid program.
On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory Medicaid drug rebate cap, beginning January 1, 2024. Previously, the rebate was capped at 100% of a drug’s AMP.
On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on manufacturers' Medicaid drug rebate liability, beginning January 1, 2024. Previously, the rebate was capped at 100% of a drug’s AMP.
If this were to occur, we would no longer have rights to the applicable intellectual property unless we are able to secure our own direct license with the owner of the relevant rights, which we may not be able to do on reasonable terms, or at all, which may impact our ability to continue to develop and commercialize vonoprazan and any future product candidates incorporating the relevant intellectual property.
If this were to occur, we would no longer have rights to the applicable intellectual property unless we are able to secure our own direct license with the owner of the relevant rights, which we may not be able to do on reasonable terms, or at all, which may impact our ability to continue to develop and commercialize any products and product candidates incorporating the relevant intellectual property.
The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products such as our currently approved products, and any additional product candidates containing vonoprazan and any future product candidates, if approved.
The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about prescription products such as our currently approved products, and any additional product candidates containing vonoprazan and any future product candidates, if successfully developed and approved.
Certain states have also adopted comprehensive and health-specific privacy and security laws and regulations, some of which may be more stringent than HIPAA. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.
Certain states have also adopted comprehensive and health-specific privacy and security laws and regulations, some of which may be more stringent than HIPAA. Such laws and regulations are subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and future potential strategic partners.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 100 Item 1B. Unresolve d Staff Comments Not applicable.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. 76 Item 1B. Unresolve d Staff Comments Not applicable.
If securities analysts or investors regard these announcements as negative, the perceived value of our existing products, programs or intellectual property could be diminished. Accordingly, the market price of shares of our common stock may decline. Such announcements could also harm our reputation or the market for our future products, which could have a material adverse effect on our business.
If securities analysts or investors regard these announcements as negative, the perceived value of our existing products, programs or intellectual property could be diminished. Accordingly, the market price of shares of our common stock may decline. Such announcements could also harm our reputation or the market for our product candidates, which could have a material adverse effect on our business.
While the Change Healthcare-related disruption were limited in time, a similar incident in the future with Change Healthcare or other service providers could have a material adverse effect on our business and financial condition.
While the Change Healthcare-related disruption was limited in time, a similar incident in the future with Change Healthcare or other service providers could have a material adverse effect on our business and financial condition.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe full Board also receives briefings from management on our cyber risk management program. 101 Our information technology team, led by our Vice President of Information Technology, is responsible for managing and directing day-to-day assessment and management of materials risks from cybersecurity threats , including oversight of our cybersecurity tools, controls and strategies to protect organization assets, networks and data.
Biggest changeBoard members receive presentations on cybersecurity topics from our Vice President, Information Technology, internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies. 77 Our management team, led by our Vice President of Information Technology, is responsible for managing and directing day-to-day assessment and management of materials risks from cybersecurity threats , including oversight of our cybersecurity tools, controls and strategies to protect organization assets, networks and data.
See “Risk Factors – “ Our internal information systems, or those of any of our CROs, contract manufacturers, service providers, other contractors or consultants or potential future collaborators, may fail or suffer cybersecurity incidents or breaches, which could result in a material disruption of our product development programs .” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (Committee) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
See “Risk Factors – “ Our internal information systems, or those of any of our CROs, contract manufacturers, service providers, other contractors or consultants or potential future collaborators, may fail or suffer cybersecurity incidents or breaches, which could result in a material disruption of our product development programs .” Cybersecurity Governance Our Board of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee, or Committee, oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
This means that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. It does not, however, mean that we meet any technical standards, specifications, or requirements.
This means that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. This does not mean, however, that we meet any technical standards, specifications, or requirements.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • an internal team responsible for, inter alia, managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers with subject matter expertise, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • artificial intelligence based managed detection and response system that provides 24×7 monitoring of our networks, endpoints, and cloud environments; alerts from this system are handled by an external 24x7 staff that reviews the alerts and acts where necessary; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management evaluation process for key service providers, based on our assessment of their criticality to our operations and respective risk profile, suppliers, and vendors with access to our information systems or data.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • an internal team responsible for, inter alia, managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers with subject matter expertise, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • artificial intelligence based managed detection and response system that provides 24×7 monitoring of our networks, endpoints, and cloud environments; alerts from this system are handled by an external 24x7 staff that reviews the alerts and acts where necessary; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management evaluation process for key service providers , based on our assessment of their criticality to our operations and respective risk profile .
The Vice President of Information Technology reports to our Chief Financial and Business Officer. The Vice President of Information Technology has primary responsibility for our overall cybersecurity risk management program and supervises both our internal IT personnel and our retained external cybersecurity consultants. The Vice President of Information Technology has over 25 years of experience in information technology.
The Vice President of Information Technology has primary responsibility for our overall cybersecurity risk management program and supervises both our internal IT personnel and our retained external cybersecurity consultants. The Vice President of Information Technology has over 25 years of experience in information technology.
Removed
However, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
Added
The full Board also receives periodic briefings from management on our cyber risk management program.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safe ty Disclosures Not applicable. 102 PART II
Biggest changeRegardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained. Item 4. Mine Safe ty Disclosures Not applicable. 78 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePrior to our initial public offering, there was no public market for our common stock. Holders of Common Stock As of March 3, 2025, there were 69,636,970 shares of our common stock outstanding held by approximately 56 holders of record of our common stock.
Biggest changePrior to our initial public offering, there was no public market for our common stock. Holders of Common Stock As of February 23, 2026, there were 78,798,712 shares of our common stock outstanding held by approximately 56 holders of record of our common stock.
Performance Graph Not applicable. Unregistered Sales of Equity Securities Not applicable. Use of Proceeds from Registered Securities Not applicable. Issuer Repurchases of Equity Securities None. Item 6. [R eserved] 103
Performance Graph Not applicable. Unregistered Sales of Equity Securities Not applicable. Use of Proceeds from Registered Securities Not applicable. Issuer Repurchases of Equity Securities None. Item 6. [R eserved] 79

Item 7. Management's Discussion & Analysis

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

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Biggest changeOur future capital requirements will depend on many factors, including: • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payers and adequate market share and revenue for any approved products; • patients’ willingness to pay out-of-pocket for any approved products in the absence of coverage and/or adequate reimbursement from third-party payers; • the initiation, type, number, scope, results, costs and timing of our clinical trials of vonoprazan, and preclinical studies or clinical trials of other potential product candidates we may choose to pursue in the future, including feedback received from regulatory authorities; • the costs and timing of manufacturing for vonoprazan or any future product candidates, including commercial scale manufacturing for any approved product candidates; • the costs, timing and outcome of regulatory review of future vonoprazan applications or such applications for any future product candidates; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our business grows; • the timing and amount of the milestone or other payments we must make to Takeda and any future licensors; • the costs and timing of establishing or securing sales and marketing capabilities for vonoprazan or any future product candidate; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; and • costs associated with any products or technologies that we may in-license or acquire.
Biggest changeOur future capital requirements will depend on many factors, including: • our ability to achieve and maintain market acceptance, market share, coverage, reimbursement and revenues from sales of VOQUEZNA in its approved GERD indications, and patients’ willingness to pay out-of-pocket in the absence of coverage and/or adequate reimbursement from third-party payers; • the costs of sales and marketing activities in support of the continued commercial launch of VOQUEZNA, VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, or any future product candidates we may choose to pursue, if successfully developed and approved; • the costs, timing and availability of manufacturing for vonoprazan as well as the costs of manufacturing for any potential product candidates we may pursue in the future; • the initiation, type, number, scope, results, costs and timing of our clinical trials of vonoprazan, and preclinical studies or clinical trials of other potential product candidates we may choose to pursue in the future, including feedback received from regulatory authorities; • the costs, timing and outcome of regulatory review of future vonoprazan applications or such applications for any future product candidates; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights, and the success of our enforcement efforts; • the timing of market introduction, profile and impact of competitive products; • the costs associated with hiring additional personnel and consultants as our business grows and enhancing our operational systems; • the timing and amount of the milestone or other payments we must make to Takeda and any future licensors; • the timing and impact of our obligations under our Loan and Security Agreement with Hercules Capital, Inc., and our Revenue Interest Financing Agreement; and • the costs associated with building a portfolio of product candidates through the acquisition or in-license of additional product candidates or technologies, including the terms and timing of establishing and maintaining future collaborations, licenses and other similar arrangement and the costs associated with development of any products or technologies that we may in-license or acquire.
We paid Takeda upfront consideration consisting of a cash fee of $25 million, 1,084,000 shares of our common stock, a warrant to purchase 7,588,000 shares of our common stock at an exercise price of $0.00004613 per share, or the Takeda Warrant, and issued Takeda a right to receive an additional common stock warrant, or the Takeda Warrant Right, if Takeda’s fully-diluted ownership of the Company represented less than a certain specified percentage of the fully-diluted capitalization, including shares issuable upon conversion of then outstanding convertible promissory notes, calculated immediately prior to the closing of our IPO.
We paid Takeda upfront consideration consisting of a cash fee of $25 million, 1,084,000 shares of our common stock, a warrant to purchase 7,588,000 shares of our common stock at an exercise price of $0.00004613 per share, or the Takeda Warrant, and issued Takeda a right to receive an additional common stock warrant, or the Takeda Warrant Right, if Takeda’s fully-diluted ownership of the Company represented less than a certain specified percentage of the fully-diluted capitalization, including shares 81 issuable upon conversion of then outstanding convertible promissory notes, calculated immediately prior to the closing of our IPO.
If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.
If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our 89 common stock.
On December 23, 2024, CO Finance LVS XXXVII LLC agreed to assign and transfer to OC III LVS LX LP all of its rights, title and interest as an Additional Investor and in connection therewith, OC III LVS LX LP executed a Joinder Agreement. As of December 31, 2024, no additional funding is available under the Revenue Interest Financing Agreement.
On December 23, 2024, CO Finance LVS XXXVII LLC agreed to assign and transfer to OC III LVS LX LP all of its rights, title and interest as an Additional Investor and in connection therewith, OC III LVS LX LP executed a Joinder Agreement. As of December 31, 2025, no additional funding is available under the Revenue Interest Financing Agreement.
If we are unable to raise additional funds through equity or debt 112 financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
If we are unable to raise additional funds through equity or debt financings when and if needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all, and this risk could be exacerbated by the impact of ongoing conflicts throughout the world and global economic conditions.
However, we may be unable to raise additional funds or enter into such other arrangements when and if needed on favorable terms or at all, and this risk could be exacerbated by the impact of ongoing conflicts throughout the world and global economic conditions.
Where appropriate, we utilize the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.
Where appropriate, we utilize the expected value method to determine the appropriate amount for estimates of variable consideration based on factors 91 such as current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns.
Including our existing cash and cash equivalents, we believe that we have sufficient working capital on hand to fund operations such that there is no substantial doubt as to our ability to continue as a going concern at the date the financial statements were issued.
Including our existing cash and cash equivalents, we believe that we have sufficient working capital on hand to fund operations such that there is no substantial doubt as to our ability to continue as a going concern at the date the audited financial statements were issued.
There can be no assurance that we will be successful in acquiring additional funding, that our projections of future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
There can be no assurance that we will be successful in acquiring additional funding, that our projections of future revenues or working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years.
Our operations to date have been funded primarily through commercial bank debt, our revenue interest financing debt and various equity offerings, including our at-the-market offerings. From our inception through December 31, 2024, we sold 34,737,032 shares of our common stock and 2,608,922 pre-funded warrants, generating net proceeds of approximately $543.3 million, after deducting underwriting discounts, commissions and offering costs.
Our operations to date have been funded primarily through commercial bank debt, our revenue interest financing debt and various equity offerings, including our at-the-market offerings. From our inception through December 31, 2025, we sold 34,737,032 shares of our common stock and 2,608,922 pre-funded warrants, generating net proceeds of approximately $543.3 million, after deducting underwriting discounts, commissions and offering costs.
During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances. We will be responsible at our cost for the development, manufacture and commercialization of vonoprazan products.
During the term of the Takeda License, we and our affiliates are not permitted to commercialize any pharmaceutical product, other than vonoprazan, that treats acid-related disorders, except for certain generic and OTC competing products in specified circumstances. We are responsible at our cost for the development, manufacture and commercialization of vonoprazan products.
The tranches consist of (i) a first tranche consisting of term loans in an aggregate principal amount of $100 million, all of which was funded on the Closing Date, or the First Advance, (ii) a second tranche consisting of up to an additional $50 million, (iii) a third and fourth tranches consisting of an additional total $50 million, which became available to us in May 2022.
The tranches consisted of (i) a first tranche consisting of term loans in an aggregate principal amount of $100 million, all of which was funded on the Closing Date, or the First Advance, (ii) a second tranche consisting of up to an additional $50 million, (iii) a third and fourth tranches consisting of an additional total $50 million, which became available to us in May 2022.
Other Company Information Smaller Reporting Company Status We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.
Other Company Information Smaller Reporting Company Status We are currently a smaller reporting company as defined in Rule 12b-2 of the Exchange Act.
Cost of Revenue Cost of revenue includes the cost of producing and distributing inventories that are related to product sales. This also includes royalties payable to Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 for further details). In addition, shipping and handling costs for product sales are recorded as incurred.
Cost of Revenue Cost of revenue includes the cost of producing and distributing inventories that are related to product sales. This also includes royalties payable to Takeda, pursuant to the Takeda License Agreement (Refer to Note 3 Commitments and Contingencies for further details). In addition, shipping and handling costs for product sales are recorded as incurred.
Selling, General and Administrative Selling, general and administrative expenses consist of salaries and employee-related costs, including stock-based compensation, for personnel in commercial, executive, finance, accounting, legal, human resources and other administrative functions, legal fees relating to intellectual property and corporate matters, and professional fees for accounting and consulting services.
Selling, General and Administrative Selling, general and administrative expenses consist of salaries and employee-related costs, including stock-based compensation, for personnel in commercial, executive, finance, accounting, legal, human resources and other administrative functions, restructuring expenses in 2025, legal fees relating to intellectual property and corporate matters, and professional fees for accounting and consulting services.
Upon the occurrence of an event of default taking place prior to April 1, 2025, between April 1, 2025 and April 1, 2028, and after April 1, 2028, we are obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts we previously paid pursuant to the agreement.
Upon the occurrence of an event of default taking place between April 1, 2025 and April 1, 2028, or after April 1, 2028, we are obligated to pay 1.30 times Investment Amount, 1.65 times Investment Amount, and 2.0 times investment amount, respectively, less any amounts we previously paid pursuant to the agreement.
However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties and actual results could vary materially.
However, our forecast of the period of time through which our financial resources may be adequate to support our operations is a forward-looking statement that involves risks and uncertainties and actual results could vary materially.
Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to us significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. We will adjust our estimates based on new information, including information regarding actual rebates, chargebacks and discounts for our products, as it becomes available.
Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to us significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. We will adjust our estimates based on new information, including information regarding actual rebates, chargebacks, co-pay assistance and discounts for our products, as it becomes available.
The financial covenants under the Fourth Loan Amendment include (i) a minimum cash covenant and (ii) a performance covenant as follows: (i) Minimum cash covenant - We must maintain a minimum cash balance of 20% of the outstanding principal balance at all times.
The financial covenants under the Fourth Loan Amendment included (i) a minimum cash covenant and (ii) a performance covenant as follows: (i) Minimum cash covenant - We must maintain a minimum cash balance of 20% of the outstanding principal balance at all times.
The total amount funded by the Initial Investors and any subsequent investors is referred to herein as the Investment Amount. As of December 31, 2024, no additional funding is available under the Revenue Interest Financing Agreement.
The total amount funded by the Initial Investors and any subsequent investors is referred to herein as the Investment Amount. As of December 31, 2025, no additional funding is available under the Revenue Interest Financing Agreement.
Overview We are a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal, or GI, diseases. Our approved products, VOQUEZNA®, VOQUEZNA® TRIPLE PAK® and VOQUEZNA® DUAL PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB. PCABs are a novel class of medicines that block acid secretion in the stomach.
Overview We are a commercial-stage biopharmaceutical company focused on commercializing and developing novel treatments for gastrointestinal, or GI, diseases. Our approved products, VOQUEZNA®, VOQUEZNA® DUAL PAK® and VOQUEZNA® TRIPLE PAK®, contain vonoprazan, an oral small molecule potassium-competitive acid blocker, or PCAB. PCABs are a novel class of molecules that block acid secretion in the stomach.
Under the terms of the Joinder Agreement, we received $15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, in the fourth quarter of 2023 and provides for $25 million in additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding.
Under the terms of the Joinder Agreement, we received $15 million in additional funding upon FDA approval of vonoprazan for Erosive GERD, or Approval Additional Funding, in the fourth quarter of 2023 and provided for $25 million in 87 additional funding for achievement of a sales milestone, or Milestone Additional Funding, and, together with the Approval Additional Funding, or the Additional Investor Funding.
In connection with the entry into the Fourth Amendment, we eliminated the warrant agreement for all future tranches. The Warrant issued with the initial tranche was not modified as part of this amendment. The exercise price and terms of the outstanding Warrant remain unchanged.
In connection with the entry into the Fourth Amendment, we eliminated the warrant agreement for all future tranches. The Warrant issued with the initial tranche was not modified as part of these amendments. The exercise price and terms of the outstanding Warrant remain unchanged.
Investing Activities Net cash used in investing activities for the years ended December 31, 2024 and 2023 was related to payments for acquiring property and equipment.
Investing Activities Net cash used in investing activities for the years ended December 31, 2025 and 2024 was related to payments for acquiring property and equipment.
On December 14, 2023, we entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increases the aggregate principal amount of the term loans from $200 million to $300 million; (ii) provides for the possibility of accessing the $200 million commitment through five additional tranches referred to as tranches 2 through 6, which are available subject to certain milestones and conditions: (a) Tranche 2: $50 million, $40 million of which was funded on December 14, 2023, available through March 15, 2024, (b) Tranche 3: $25 million available through June 15, 2024, (c) Tranche 4: $25 million available through December 15, 2024, (d) Tranche 5: $50 million available, subject to the achievement of a specified revenue milestone, through June 30, 2025, and (e) Tranche 6: $50 million available, subject to the achievement of a specified revenue milestone, through December 31, 2025; (iii) extends the interest only period and the maturity date from October 2026 to December 2027, (iv) reduces the cash interest rate from 10.75% (floating annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25% to 9.85% (floating rate based on the greater of (a) 9.85% or (b) US WSJ Prime + 1.35%), provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, and (v) decreases the payment-in-kind interest rate from 3.35% per annum to 2.15% per annum.
On December 14, 2023, we entered into a Fourth Amendment to Loan and Security Agreement, or the Fourth Loan Amendment, with the lenders, which, among other things, (i) increased the aggregate principal amount of the term loans from $200 million to $300 million; (ii) provided for the possibility of accessing the $200 million commitment through five additional tranches referred to as tranches 2 through 6, which are available subject to certain milestones and conditions: (a) Tranche 2: $50 million, $40 million of which was funded on December 14, 2023, available through March 15, 2024, (b) Tranche 3: $25 million available through June 15, 2024, (c) Tranche 4: $25 million available through December 15, 2024, (d) Tranche 5: $50 million available, subject to the achievement of a specified revenue milestone, through June 30, 2025 and which we did not draw down, and (e) Tranche 6: $50 million available, subject to the achievement of a specified revenue milestone, through December 31, 2025 and which we did not draw down; (iii) extended the interest only period and the maturity date from October 2026 to December 2027, (iv) reduced the cash interest rate from 10.75% (floating annual rate equal to the greater of (a) 5.50% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 2.25% to 9.85% (floating rate based on the greater of (a) 9.85% or (b) US WSJ Prime + 1.35%), provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, and (v) decreased the payment-in-kind interest rate from 3.35% per annum to 2.15% per annum.
We may make payments of interest 109 only through the Maturity Date. After the interest-only period, the principal balance and related interest will be required to be repaid in full on the Maturity Date.
We may make payments of interest only through the maturity date of the Term Loan. After the interest-only period, the principal balance and related interest will be required to be repaid in full on the maturity date.
We have based this estimate on assumptions that may prove to be inaccurate, and we could deplete our capital resources sooner than we expect and not reach cashflow positivity based on the amount and timing of product sales and operating expenses, among other factors.
We have based this estimate on assumptions that may prove to be inaccurate, and we could deplete our capital resources sooner than we expect based on the amount and timing of product sales and operating expenses, among other factors.
The Term Loan bears (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35%, or the Interest Rate, and (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%.
As of December 31, 2025, the Term Loan bore (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35%, or the Interest Rate, and (ii) payment-in-kind interest at a per annum rate of interest 85 equal to 2.15%.
The supply agreement commits us to a minimum purchase obligation of approximately $3.2 million during the first 24-month period following the launch of the final product. We have incurred $0.3 million of expenses under the agreement during each of the years ended December 31, 2024 and 2023.
The supply agreement commits us to a minimum purchase obligation of approximately $3.2 million during the first 24-month period following the launch of the final product. We have incurred $1.7 million and $0.3 million of expenses under the agreement during each of the years ended December 31, 2025 and 2024, respectively.
In addition, we are obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or each a Term Loan Advance and together, the Term Loan Advances.
In addition, under the Fourth Amendment, we were obligated to pay a final payment fee of 7.50% of the original principal amount of amounts actually advanced under the Term Loan, or each Term Loan Advance and together, the Term Loan Advances.
We commenced our operations in 2018 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing our initial and approved product candidate, vonoprazan, meeting with regulatory authorities, managing our clinical trials of vonoprazan, preparing for commercialization of our initial products containing vonoprazan, commercially launching our approved products, and providing other selling, general and administrative support for our 104 operations.
We commenced our operations in 2018 and have devoted substantially all of our resources to date to organizing and staffing our company, business planning, raising capital, in-licensing vonoprazan, meeting with regulatory authorities, managing our clinical trials of vonoprazan, preparing for commercialization of our products containing vonoprazan, commercially launching our approved products in the U.S., and providing other selling, general and administrative support for our operations.
Product revenues were $55.3 million and $0.7 million for the years ended December 31, 2024 and 2023, respectively, related to sales of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK which was launched during the fourth quarter of 2023. Cost of Revenue.
Product revenues were $175.1 million and $55.3 million for the years ended December 31, 2025 and 2024, respectively, related to sales of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK which was launched during the fourth quarter of 2023. Cost of Revenue.
We have generated limited revenue to date, until such time as we can generate significant revenue from sales of our approved products containing vonoprazan, we expect to finance our cash needs through equity offerings, our Loan Agreement, our Revenue Interest Financing Agreement, additional debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.
While we have generated revenue to date, until such time as we can generate significant revenue from sales of our approved products containing vonoprazan, we also expect to finance our cash needs through equity offerings, additional debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.
We incurred an additional $0.4 million of offering expenses in connection with this public offering. 111 On August 20, 2024, we completed an underwritten public offering, in which we sold 8,695,652 shares of our common stock at a price of $11.50 per share and pre-funded warrants to purchase 2,608,922 shares of our common stock at a price of $11.499 per pre-funded warrant for total gross proceeds of $130.0 million.
On August 20, 2024, we completed an underwritten public offering, in which we sold 8,695,652 shares of our common stock at a price of $11.50 per share and pre-funded warrants to purchase 2,608,922 shares of our common stock at a price of $11.499 per pre-funded warrant for total gross proceeds of $130.0 million.
Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.
Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in ongoing and future trials is uncertain.
During the years ended December 31, 2024 and 2023 we made $2.6 million and no royalty payments, respectively, under the Revenue Interest Financing Agreement. We enter into contracts in the normal course of business for our contract research services, contract manufacturing services, professional services and other services and products for operating purposes.
During the years ended December 31, 2025 and 2024 we incurred $14.8 million and $2.6 million, respectively, of royalty payments under the Revenue Interest Financing Agreement. We enter into contracts in the normal course of business for our contract research services, contract manufacturing services, professional services and other services and products for operating purposes.
Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. We make significant estimates and judgments that materially affect our recognition of net product revenue.
If actual results vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. We make significant estimates and judgments that materially affect our recognition of net product revenue.
Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to finance our cash needs through equity offerings, the Loan Agreement, the Revenue Interest Financing Agreement, debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements.
Until such time, if ever, as we can generate substantial product revenues to support our cost structure, we expect to also finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.
As of December 31, 2024, the aggregate $11.5 million of final payment fees includes the first Term Loan Advance of $7.5 million, $2.5 million for the second Term Loan Advance, $0.8 million for the third Term Loan Advance, and $0.7 million for the fourth Term Loan Advance have been recorded within other long-term liabilities.
The remaining aggregate $4.0 million of final payment fees includes $2.5 million for the second Term Loan Advance, $0.8 million for the third Term Loan Advance, and $0.7 million for the fourth Term Loan Advance and have been recorded within other long-term liabilities as of December 31, 2025.
In December 2024, we submitted a citizen petition requesting that FDA update the Orange Book listings to reflect the same ten-year period of NCE exclusivity for VOQUEZNA as reflected on the VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK Orange Book listings.
In December 2024, we submitted a citizen petition requesting that the FDA update the Orange Book listing for VOQUEZNA to reflect the same ten-year period of NCE exclusivity applicable to VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK.
Other expense of $34.3 million for the year ended December 31, 2023 consisted of $42.0 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, partially offset by $7.9 million of interest income related to cash held in money market funds.
Other expense of $61.3 million for the year ended December 31, 2025 consisted of $68.1 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, partially offset by $7.0 million of interest income related to cash held in money market funds.
The amount of variable consideration that is included in the transaction price may be 114 constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.
The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates.
We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and nonclinical studies of vonoprazan or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development. Clinical and preclinical development timelines, the probability of success and development 106 costs can differ materially from expectations.
We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and nonclinical studies of vonoprazan or any future product candidates due to the inherently unpredictable nature of clinical and preclinical development.
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $290.7 million and $117.9 million for the years ended December 31, 2024 and 2023, respectively.
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $279.7 million and $290.7 million for the years ended December 31, 2025 and 2024, respectively.
The net cash used in operating activities for the year ended December 31, 2023 was due to approximately $124.0 million spent on ongoing research and development and selling, general and administrative activities and a $13.6 million net change in operating assets and liabilities.
The net cash used in operating activities for the year ended December 31, 2025 was due to approximately $154.4 million spent on ongoing research and development and selling, general and administrative activities and a $12.4 million net change in operating assets and liabilities.
We are not obligated to, and we cannot provide any assurances that we will, make any sales of the shares under the Sales Agreement. The Sales Agreement may be terminated by the Sales Agent or us at any time.
We are not obligated to, and we cannot provide any assurances that we will, make any sales of the shares under the Sales Agreement. The Sales Agreement may be terminated by the Sales Agent or us at any time. No shares were sold under the Sales Agreement during the years ended December 31, 2025 and 2024.
In connection with the Fourth Loan Amendment, the final payment fee was amended to be $1 million plus 3.00% of any future tranche drawdowns under the agreement, due upon final maturity. Additionally, the initial final payment fee for the first term Loan advance was amended to become payable on October 1, 2026.
In connection with the Fourth Loan Amendment, the final payment fee was amended to be $1 million plus 3.00% of any future tranche drawdowns under the agreement, due upon final maturity.
The net purchase price after deducting the underwriting discounts and commissions and other offering expenses, was $10.77 per share or net proceeds of $121.8 million.
The net purchase price after deducting the underwriting discounts and commissions and other offering expenses, was $15.04 per share or net proceeds of $122.2 million.
Trailing three months net product revenue of at least (x) 30% of agreed upon projected net revenues for periods in the calendar year 2024 and 25% for all periods thereafter or (y) $120 million.
Trailing three months net product revenue of at least (x) 30% of agreed upon projected net revenues for periods in the calendar year 2024 and 25% for all periods thereafter or (y) $120 million. As of December 31, 2025, we were in compliance with all applicable covenants under the Loan Agreement.
Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by us may be declared immediately due and payable by Hercules, as collateral agent. As of December 31, 2024, we were in compliance with all applicable covenants under the Loan Agreement.
Upon the occurrence of an event of default, subject to any specified cure periods, all amounts owed by us may be declared immediately due and payable by Hercules, as collateral agent.
In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Clinical and preclinical development timelines, the probability of success, actual results and development costs can differ materially from expectations. In addition, we cannot forecast which product candidates, if any, may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Net cash provided by financing activities for the year ended December 31, 2023 was $367.6 million, primarily due to $172.7 million of net proceeds from the Revenue Interest Financing Agreement, $155.6 million due to the proceeds from the sale of our common stock, and $39.3 million from the issuance of debt under our Loan Agreement. 113 Contractual Obligations and Commitments On December 30, 2020, we entered into a Supply and Packaging Services Agreement with Sandoz, pursuant to which Sandoz has agreed to supply commercial quantities of amoxicillin capsules and clarithromycin tablets, to package these antibiotics with vonoprazan, in finished convenience packs, and to supply us with these convenience packs.
Net cash provided by financing activities for the year ended December 31, 2024 was $182.8 million, primarily related to $59.4 million of net proceeds from the issuance of debt under our Loan Agreement, $121.8 million of net proceeds from issuance of common stock and pre-funded warrants in connection with the underwritten public offering completed in August 2024, and $1.6 million of proceeds from the exercise of stock options. 90 Contractual Obligations and Commitments On December 30, 2020, we entered into a Supply and Packaging Services Agreement with Sandoz, pursuant to which Sandoz has agreed to supply commercial quantities of amoxicillin capsules and clarithromycin tablets, to package these antibiotics with vonoprazan, in finished convenience packs, and to supply us with these convenience packs.
Since inception, we have incurred significant operating losses. Our net loss was $334.3 million and $201.6 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $1.3 billion. We expect to continue to incur operating losses for the foreseeable future.
Our net loss was $221.2 million and $334.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $1.5 billion. Despite our plans and expectations, we could continue to incur operating losses for the foreseeable future.
Interest Expense Revenue Interest Financing Agreement Interest expense under the Revenue Interest Financing Agreement is based on the imputed effective interest rate derived from expected future payments and the carrying value of the obligation. We recalculate the effective interest rate each period based on the current carrying value and the revised estimated future payments.
Interest Income Interest income consists of interest on our money market funds. Interest Expense Revenue Interest Financing Agreement Interest expense under the Revenue Interest Financing Agreement is based on the imputed effective interest rate derived from expected future payments and the carrying value of the obligation.
Beginning on December 14, 2023, interest expense under the Loan Agreement consists of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35% and provided that the cash interest rate shall be capped at 10.35% and upon Company achieving the certain milestones, the cash interest shall be decreased by 0.35%, (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment. 107 Results of Operations Comparison of the years ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023 (in thousands): Years Ended December 31, 2024 2023 Change Product revenue, net $ 55,252 $ 682 $ 54,570 Cost of revenue 7,973 167 7,806 Gross profit 47,279 515 46,764 Operating expenses: Research and development 34,082 49,899 (15,817 ) Selling, general and administrative 290,664 117,928 172,736 Total operating expenses 324,746 167,827 156,919 Loss from operations (277,467 ) (167,312 ) (110,155 ) Other income (expense): Interest income 15,158 7,876 7,282 Interest expense (72,009 ) (41,968 ) (30,041 ) Other expense, net (8 ) (188 ) 180 Total other expense (56,859 ) (34,280 ) (22,579 ) Net loss $ (334,326 ) $ (201,592 ) $ (132,734 ) Revenue.
Loan Agreement with Hercules Interest expense under the Loan Agreement consists of (i) cash interest at a variable annual rate equal to the greater of (a) 9.85% and (b) the Prime Rate (as reported in the Wall Street Journal) plus 1.35% and provided that the cash interest rate shall be capped at 10.35% and upon us achieving the certain milestones, the cash interest shall be decreased by 0.35%, (ii) payment-in-kind interest at a per annum rate of interest equal to 2.15%, and (iii) amortization of the Loan Agreement debt discount recorded in connection with the fair value of warrants issued to the lenders, the debt issuance costs incurred, and the obligation to make a final payment. 83 Results of Operations Comparison of the years ended December 31, 2025 and 2024 The following table summarizes our results of operations for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Change Product revenue, net $ 175,110 $ 55,252 $ 119,858 Cost of revenue 22,599 7,973 14,626 Gross profit 152,511 47,279 105,232 Operating expenses: Research and development 32,780 34,082 (1,302 ) Selling, general and administrative 279,717 290,664 (10,947 ) Total operating expenses 312,497 324,746 (12,249 ) Loss from operations (159,986 ) (277,467 ) 117,481 Other (expense) income: Interest income 7,044 15,158 (8,114 ) Interest expense (68,115 ) (72,009 ) 3,894 Other expense, net (190 ) (8 ) (182 ) Total other expense (61,261 ) (56,859 ) (4,402 ) Net loss $ (221,247 ) $ (334,326 ) $ 113,079 Revenue.
In May 2021, the FDA granted qualified infectious disease product, or QIDP, designations for VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK and we thereby received an extension of five years of new chemical entity, or NCE, exclusivity based on the vonoprazan component in the applicable NDAs.
In May 2021, the FDA granted qualified infectious disease product, or QIDP, designation to VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK, resulting in an extension of the five-year new chemical entity, or NCE, exclusivity by an additional five years.
The net change in operating assets and liabilities primarily related to a $6.9 million increase in accounts payable and accrued expenses (including interest, operating lease assets and liabilities, and clinical trial expenses), and a $20.5 million increase in prepaid assets and other current assets, accounts receivable, inventory, and other long-term assets, in support of our growth and commercial operations.
The net change in operating assets and liabilities is related to a $34.4 million increase in accounts payable and accrued expenses (including interest, operating lease assets and liabilities), a $5.5 million decrease in prepaid assets and other current assets, and a $52.3 million increase in accounts receivable, inventory, and other long-term assets.
In connection with the Fourth Loan Amendment, an amendment fee of $250,000 was paid to the Agent and was recorded as a debt discount and being amortized to interest expense using the effective interest method over the remaining term of the Term Loan. On March 15, 2024, we drew down the remaining $10 million available under the Second Tranche.
In connection with the Fourth Loan Amendment, an amendment fee of $250,000 was paid to the Agent and was recorded as a debt discount and being amortized to interest expense using the effective interest method over the remaining term of the Term Loan. As amended through the Fourth Amendment, the Term Loan had a maturity date of December 1, 2027.
Cash Flows The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands): Years Ended December 31, 2024 2023 Change Net cash provided by (used in): Operating activities $ (266,770 ) $ (137,580 ) $ (129,190 ) Investing activities (135 ) (1,634 ) 1,499 Financing activities 182,774 367,580 (184,806 ) Net (decrease) increase in cash $ (84,131 ) $ 228,366 $ (312,497 ) Operating Activities Net cash used in operating activities was approximately $266.8 million and $137.6 million for the years ended December 31, 2024 and 2023, respectively.
Cash Flows The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands): Years Ended December 31, 2025 2024 Change Net cash provided by (used in): Operating activities $ (166,775 ) $ (266,770 ) $ 99,995 Investing activities (229 ) (135 ) (94 ) Financing activities (288 ) 182,774 (183,062 ) Net decrease in cash $ (167,292 ) $ (84,131 ) $ (83,161 ) Operating Activities Net cash used in operating activities was approximately $166.8 million and $266.8 million for the years ended December 31, 2025 and 2024, respectively.
Based on our current operating plan, we believe that our existing cash and cash equivalents together with the drawdown of the remaining $100 million under our Loan Agreement with Hercules together with anticipated product revenues, are sufficient to fund operations for at least the next twelve months and we believe will be sufficient to enable us to reach cashflow positivity.
Based on our current operating plan, we believe that our existing cash and cash equivalents together with anticipated product revenues and the $122.2 million of net proceeds from our January 2026 offering, are sufficient to fund operations for at least the next twelve months and will be sufficient to enable us to reach operating profitability beginning in the third quarter of 2026 , excluding stock-based compensation .
Royalties will be payable, on a product-by-product and country-by-country basis from the first commercial sale of such product in such country, until the latest of expiration of the licensed patents covering the applicable product, expiration of regulatory exclusivity in such country, or 15 years following first commercial sale in such country. 105 Components of Results of Operations Revenue We began to recognize revenue from product sales, net of rebates, chargebacks, discounts, and other adjustments, in November 2023 in conjunction with the commercial launch of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK in the United States.
Components of Results of Operations Revenue We began to recognize revenue from product sales, net of rebates, chargebacks, discounts, and other adjustments, in November 2023 in conjunction with the commercial launch of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK in the United States.
The Loan Agreement provides for term loans in an aggregate principal amount of up to $200 million, or the Term Loan, under multiple tranches.
We’ve entered into several amendments to the Loan Agreement which are described below, most recently in February 2026. The Loan Agreement originally provided for term loans in an aggregate principal amount of up to $200 million, or the Term Loan, under multiple tranches.
The initial $1.3 million fair value of the Warrant, the $11.5 million final interest payment fees and $4.6 million of debt issuance costs have been recorded as debt discount and are being amortized to interest expense using the effective interest method over the term of the Term Loan. 110 Revenue Interest Financing Agreement On May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules, together with NQ and Sagard, or the Initial Investors, pursuant to which we could receive up to $260 million in funding from the Initial Investors.
Revenue Interest Financing Agreement On May 3, 2022, we entered into a Revenue Interest Financing Agreement, or the Revenue Interest Financing Agreement, with entities managed or advised by NovaQuest Capital Management, or NQ, Sagard Holdings Manager LP, or Sagard, and Hercules, together with NQ and Sagard, or the Initial Investors, pursuant to which we had the right to receive up to $260 million in funding from the Initial Investors.
Other Income (Expense). Other expense of $56.9 million for the year ended December 31, 2024 consisted of $72.0 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, partially offset by $15.1 million of interest income related to cash held in money market funds.
Other expense of $56.9 million for the year ended December 31, 2024 consisted of $72.0 million of interest expense under the Loan Agreement and Revenue Interest Financing Agreement, partially offset by $15.1 million of interest income related to cash held in money market funds. 84 Liquidity and Capital Resources We have incurred net losses and negative cash flows from operations since our inception and while we expect to continue to incur a net loss in the near term, we anticipate achieving operating profitability beginning in the third quarter of 2026, excluding stock-based compensation.
Research and development expenses include: • Clinical development expenses: external research and development expenses incurred under agreements with CROs, regulatory costs, and consultants to conduct and support our clinical trials of vonoprazan; • Personnel related expenses : salaries, payroll taxes, and employee benefits; • Chemistry manufacturing and controls, or CMC, expenses: costs related to the manufacturing of vonoprazan for our clinical trials; • Consulting, professional and other costs: external costs related to consulting and professional services and other research costs incurred; and • Stock-based compensation expenses : stock-based compensation expense recognized for those individuals involved in research and development efforts.
Research and development expenses include: • Clinical development expenses: external research and development expenses incurred under agreements with CROs, regulatory costs, and consultants to conduct and support our clinical trials of vonoprazan; • Personnel related expenses : salaries, payroll taxes, employee benefits, and restructuring expenses in 2025; • Chemistry manufacturing and controls, or CMC, expenses: costs related to the manufacturing of vonoprazan for our clinical trials; • Consulting, professional and other costs: external costs related to consulting and professional services and other research costs incurred; and • Stock-based compensation expenses : stock-based compensation expense recognized for those individuals involved in research and development efforts including for any restructuring expenses in 2025. 82 The following table summarizes our research and development expenses for the years ended December 31, 2025 and 2024 (in thousands): Years Ended December 31, 2025 2024 Clinical development and regulatory $ 10,491 $ 10,877 Personnel related 11,166 11,909 Chemistry manufacturing and controls 3,179 4,090 Consulting, professional and other costs 1,080 1,639 Stock-based compensation 6,864 5,567 Total research and development expenses $ 32,780 $ 34,082 We plan to invest in our research and development expenses for the foreseeable future as we continue the development of vonoprazan and potentially in the future also develop additional product candidates.
Changes in future payments from previous estimates are included in current and future interest expense.
We recalculate the effective interest rate each period based on the current carrying value and the revised estimated future payments. Changes in future payments from previous estimates are included in current and future interest expense.
It could be several years, if ever, before VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK or other product candidates, if approved, generate significant revenues to offset these operating losses. As a result, we are uncertain when or if we will achieve profitability and, if so, whether we will be able to sustain it.
If we do not achieve our goals, it could be several years, if ever, before our current products or potential future product candidates, if successfully developed and approved, generate significant revenues to offset these operating losses.
Funding Requirements Based on our current operating plan, we believe that our existing cash and cash equivalents together with the drawdown of the remaining $100 million under our Loan Agreement with Hercules together with anticipated product revenues, are sufficient to fund operations for at least the next twelve months and we believe will be sufficient to enable us to reach cashflow positivity.
The net purchase price after deducting the underwriting discounts and commissions and other offering expenses, was $10.77 per share or net proceeds of $121.8 million. 88 Funding Requirements Based on our current operating plan, we believe that our existing cash and cash equivalents together with anticipated product revenues and the $122.2 million of net proceeds from our January 2026 offering, are sufficient to fund operations for at least the next twelve months.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $182.8 million primarily related to $59.4 million of net proceeds from the issuance of debt under our Loan Agreement, $121.8 million of net proceeds from issuance of common stock and pre-funded warrants in connection with the underwritten public offering completed in August 2024, and $1.6 million of proceeds from the exercise of stock options.
Financing Activities Net cash used in financing activities for the year ended December 31, 2025 was $0.3 million primarily related to $1.9 million payments of employee tax obligations related to vesting of PSUs and RSUs offset by $1.6 million of proceeds from the issuance of common stock from exercise of stock options.
Cost of revenue was $8.0 million and $0.2 million for the years ended December 31, 2024 and 2023, respectively.
Cost of revenue was $22.6 million and $8.0 million for the years ended December 31, 2025 and 2024, respectively. The increase of $14.6 million was due to the increase in revenues for the year ended December 31, 2025 as well as an increase in Takeda royalty payments. Research and Development Expenses.
We continue to evaluate potential commercial partnerships for vonoprazan in Europe and Canada, expand development of vonoprazan into other indications, dosing regimens and alternative formulations and packaging, and evaluate the in-license or acquisition of additional clinical or commercial stage product candidates for the treatment of GI diseases in a capital efficient manner.
We may also explore the potential for vonoprazan in Europe and Canada, as well as opportunities to in-license or acquire additional clinical or commercial-stage product candidates for GI diseases.
In addition, due to increasing commercial demand, we continue to make progress in securing broad commercial coverage for VOQUEZNA with over 120 million, or over 80%, of total U.S. commercial lives with access to VOQUEZNA tablets.
We continue to have broad commercial coverage for VOQUEZNA, with access for over 120 million, or over 80%, of U.S. commercial lives. Our commercial efforts are supported by a targeted sales force and continued focus on prescriber engagement and payer access.
In May 2019, we in-licensed the U.S., European, and Canadian rights to vonoprazan from Takeda. In May 2022, the U.S. Food and Drug Administration, or FDA, approved the NDAs for vonoprazan triple therapy, under the brand name VOQUEZNA TRIPLE PAK, and vonoprazan dual therapy, under the brand name VOQUEZNA DUAL PAK.
Food and Drug Administration, or FDA, approved VOQUEZNA for the relief of heartburn associated with Non-Erosive GERD, the largest category of GERD, in July 2024. Vonoprazan was originally developed by Takeda Pharmaceutical Company Limited, or Takeda, and is marketed in multiple countries outside the United States. We licensed U.S., European and Canadian rights to vonoprazan from Takeda in 2019.
As of December 31, 2024, we had cash and cash equivalents of $297.3 million.
As of December 31, 2025, we had cash and cash equivalents of $130.0 million and received $122.2 million of net proceeds from our January 2026 offering.
The net losses we incur may fluctuate significantly from quarter to quarter and year to year.
As a result, we are uncertain if we will achieve profitability on our current expected timeline, if at all, and, if so, whether we will be able to sustain it. The net losses we incur may fluctuate significantly from quarter to quarter and year to year.
For the year ended December 31, 2023, we sold 1,514,219 shares for net proceeds of approximately $14.1 million after deducting $0.4 million of issuance costs. No shares were sold during the year ended December 31, 2024. As of December 31, 2024, all of the available $150 million under the 2023 ATM Offering remains available.
As of December 31, 2025, all of the available $150 million under the 2023 ATM Offering remains available.
The increase of $172.8 million was due to increases of $109.4 million in commercial expenses related to the launch of VOQUEZNA product in late 2023, which includes $48.1 million of external project spend and $61.3 million in advertising and promotional expenses in support of our commercial launch of VOQUEZNA products, $55.5 million increase in personnel-related expenses primarily due to the hiring of the sales force in late 2023 and in early 2024, and an increase of $7.9 million in professional services and other consulting costs.
The decrease of $11.0 million was due to decreases of $19.1 million of commercial related promotional expenses in support of launching VOQUEZNA and a decrease of $0.2 million in consulting expenses, partially offset by an increase of $8.3 million in personnel-related expenses primarily due to $7.3 million of restructuring charges. Other Income (Expense).
Removed
Vonoprazan is the first gastric anti-secretory agent from a novel class approved in the United States, Europe, or Canada in over 30 years, and has shown rapid, potent, and durable anti-secretory effects.
Added
VOQUEZNA is the only PCAB currently approved for marketing and sale in the United States. We began U.S. commercialization of VOQUEZNA for the treatment of erosive gastroesophageal reflux disease, or Erosive GERD, and Helicobacter pylori, or H. pylori , infection, and VOQUEZNA DUAL PAK and VOQUEZNA TRIPLE PAK for the treatment of H. pylori infection, in November 2023. The U.S.
Removed
Vonoprazan has also demonstrated clinical benefits over the current standard of care as a single agent in the treatment of erosive gastroesophageal reflux disease, or Erosive GERD, and in combination with antibiotics for the treatment of Helicobacter pylori , or H. pylori , infection.

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Other PHAT 10-K year-over-year comparisons