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What changed in PTC THERAPEUTICS, INC.'s 10-K — 2022 vs 2023

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

+877 added−1011 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-21)

Top changes in PTC THERAPEUTICS, INC.'s 2023 10-K

877 paragraphs added · 1011 removed · 669 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

303 edited+89 added−122 removed469 unchanged
Biggest changeIn addition, if a product which has an orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to 48 Table of Contents orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug or biologic for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or the same drug or biologic for different indications.
Biggest changePer guidance issued by the FDA in 2023 with respect to rare diseases, “[t]his flexibility extends from the early stages of development to the design of adequate and well-controlled clinical investigations required to demonstrate effectiveness to support marketing approval and to establish safety data needed for the intended use.” The 45 Table of Contents FDA states that it “is committed to helping sponsors create successful drug development programs that address the particular challenges posed by each disease….” If a product which has an orphan drug designation subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug or biologic for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity or the same drug or biologic for different indications.
Translarna has been generally well-tolerated in all of our clinical trials to date, which have enrolled over 1,000 individuals to date. Planned and ongoing clinical development of Translarna in nonsense mutation Duchenne muscular dystrophy Study 041 Overview .
Translarna has been generally well-tolerated in all of our clinical trials, which have enrolled over 1,000 individuals to date. Planned and ongoing clinical development of Translarna in nonsense mutation Duchenne muscular dystrophy Study 041 Overview .
We are also obligated to pay to Shiratori certain regulatory and development milestones. Termination. Unless earlier terminated, the Shiratori License Agreement will continue in full force and effect on a country-by-country and product-by-product basis until the obligation to pay royalties with respect to the sale of such Sepiapterin Product in such country expires.
We are also obligated to pay Shiratori certain regulatory and development milestones. Termination. Unless earlier terminated, the Shiratori License Agreement will continue in full force and effect on a country-by-country and product-by-product basis until the obligation to pay royalties with respect to the sale of such Sepiapterin Product in such country expires.
The FDA has explained in guidance that in vitro diagnostic companion diagnostic devices may be used for a number of purposes, including identifying appropriate subpopulations for treatment. The type of premarket submission required for a companion diagnostic device will depend on the FDA classification of the device.
The FDA has explained in guidance that in vitro companion diagnostic devices may be used for a number of purposes, including identifying appropriate subpopulations for treatment. The type of premarket submission required for a companion diagnostic device will depend on the FDA classification of the device.
The chart and the disclosure directly below summarizes the status of our clinical-stage programs and commercial products as of the date of this report, including those with our strategic partners: ​ ​ ● Global Commercial Footprint o Global DMD Franchise – We have two products, Translarna TM (ataluren) and Emflaza ® (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening disorder.
The chart and the disclosure directly below summarizes the status of our significant clinical-stage programs and commercial products as of the date of this report, including those with our strategic partners: ​ ​ ​ ● Global Commercial Footprint o Global DMD Franchise – We have two products, Translarna TM (ataluren) and Emflaza ® (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening disorder.
Tegsedi and Waylivra In August 2018 we entered into a Collaboration and License Agreement with Akcea Therapeutics, Inc., or Akcea, a subsidiary of Ionis Pharmaceuticals, Inc., or Ionis, for the commercialization by us of Tegsedi, Waylivra and products containing those compounds in countries in Latin America and the Caribbean, or the PTC Territory. See “Item 1.
Tegsedi and Waylivra In August 2018 we entered into a Collaboration and License Agreement with Akcea Therapeutics, Inc., or Akcea, a subsidiary of Ionis for the commercialization by us of Tegsedi, Waylivra and products containing those compounds in countries in Latin America and the Caribbean, or the PTC Territory. See “Item 1.
In addition, subject- and parent/caregiver-reported questionnaires and at-home diaries are assessed to evaluate the effect of Translarna on health-related quality of life (HRQL) changes from baseline. Stratification . In Stage 1, participants were randomized 1:1 to placebo or Translarna (10, 10, 20 mg/kg).
In addition, subject- and parent/caregiver-reported questionnaires and at-home diaries were assessed to evaluate the effect of Translarna on health-related quality of life (HRQL) changes from baseline. Stratification . In Stage 1, participants were randomized 1:1 to placebo or Translarna (10, 10, 20 mg/kg).
The FDA recently issued a final guidance document on how the agency will determine the “sameness” of gene therapy products. Pursuant to the guidance, “sameness” will depend on the products’ transgene expression, viral vectors groups and variants, and other product features that may have a therapeutic effect.
The FDA issued a final guidance document on how the agency will determine the “sameness” of gene therapy products. Pursuant to the guidance, “sameness” will depend on the products’ transgene expression, viral vectors groups and variants, and other product features that may have a therapeutic effect.
Tegsedi faces competition from drugs like Onpattro (patisiran) which was launched by Alnylam in the United States in 2018 and received approval in Brazil for the treatment of hATTR amyloidosis in 2020 as was well as AMVUTTRA (vutrisiran) which Alnylam received approval for in the United States and Brazil in 2022 for the treatment of the polyneuropathy of hATTR amyloidosis in adults.
Tegsedi faces competition from drugs like Onpattro (patisiran) which was launched by Alnylam Pharmaceuticals in the United States in 2018 and received approval in Brazil for the treatment of hATTR amyloidosis in 2020 as well as AMVUTTRA (vutrisiran) which Alnylam Pharmaceuticals received approval for in the United States and Brazil in 2022 for the treatment of the polyneuropathy of hATTR amyloidosis in adults.
The FDA will typically inspect or conduct a remote regulatory assessment of one or more clinical sites to assure compliance with GCP before approving an NDA or BLA. The FDA also will inspect or conduct a remote regulatory assessment of the facility or the facilities at which the product is manufactured before the NDA or BLA is approved.
The FDA will typically inspect or conduct an inspection or remote regulatory assessment of one or more clinical sites to assure compliance with GCP before approving an NDA or BLA. The FDA also will inspect or conduct a remote regulatory assessment of the facility or the facilities at which the product is manufactured before the NDA or BLA is approved.
In addition to the upfront consideration paid to the Censa securityholders upon the closing of the Censa Merger, p ursuant to the Censa Merger Agreement, Censa securityholders will be entitled to receive contingent payments from us based on (i) the achievement of certain development and regulatory milestones up to an aggregate maximum amount of $217.5 million for sepiapterin’s two most advanced programs and receipt of a priority review voucher from the FDA as set forth in the Censa Merger Agreement, (ii) $109 million in development and regulatory milestones for each additional indication of sepiapterin, (iii) the achievement of certain net sales milestones up to an aggregate maximum amount of $160.0 million, (iv) a percentage of annual net sales during specified terms, ranging from single to low double digits of the applicable net sales threshold amount, and (v) any sublicense fees paid to us in consideration of any sublicense of Censa’s intellectual property to commercialize sepiapterin, on a country-by-country basis, which contingent payment will equal to a mid-double digit percentage of any such sublicense fees.
In addition to the upfront consideration paid to the Censa securityholders upon the closing of the Censa Merger, p ursuant to the Censa Merger Agreement, Censa securityholders will be entitled to receive contingent payments from us based on (i) the achievement of certain development and regulatory milestones up to an aggregate maximum amount of $217.5 28 Table of Contents million for sepiapterin’s two most advanced programs and receipt of a priority review voucher from the FDA as set forth in the Censa Merger Agreement, (ii) $109 million in development and regulatory milestones for each additional indication of sepiapterin, (iii) the achievement of certain net sales milestones up to an aggregate maximum amount of $160.0 million, (iv) a percentage of annual net sales during specified terms, ranging from single to low double digits of the applicable net sales threshold amount, and (v) any sublicense fees paid to us in consideration of any sublicense of Censa’s intellectual property to commercialize sepiapterin, on a country-by-country basis, which contingent payment will equal to a mid-double digit percentage of any such sublicense fees.
Subject to the prior limitations, the period of the extension is calculated by adding half of the time from the effective date of an IND to the initial submission of a marketing application, and all the time between the submission of the marketing application and its approval.
Subject to the prior limitations, the period of the extension is calculated by adding half of the time from the effective date of an IND to the initial submission of a complete marketing application, and all the time between the submission of the marketing application and its approval.
The issued U.S. patents relating to composition of matter are currently scheduled to expire in 2024 and all U.S. patents that issue from U.S. patent applications arising from the composition of matter would also be expected to expire in 2024.
The issued U.S. patents relating to composition of matter are currently scheduled to expire in April 2024 and all U.S. patents that issue from U.S. patent applications arising from the composition of matter would also be expected to expire in April 2024.
We may terminate the NTU Licensing Agreement upon 27 Table of Contents 60 days’ written notice to NTU in the event of (a) the failure of a pivotal clinical study, or serious adverse event in a clinical study, with respect to Upstaza for the treatment of AADC deficiency, that prevents continuing such clinical study under reasonable circumstances or (b) the rejection of a BLA with the FDA or an MAA with the EMA, or equivalent biologics approval application in another territory with respect to Upstaza for the treatment of AADC.
We may terminate the NTU Licensing Agreement upon 25 Table of Contents 60 days’ written notice to NTU in the event of (a) the failure of a pivotal clinical study, or serious adverse event in a clinical study, with respect to Upstaza for the treatment of AADC deficiency, that prevents continuing such clinical study under reasonable circumstances or (b) the rejection of a BLA with the FDA or an MAA with the EMA, or equivalent biologics approval application in another territory with respect to Upstaza for the treatment of AADC.
Item 1. Business Overview We are a science-driven global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines.
Item 1. Business Overview We are a global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines.
Granted European patents will expire in 2024 for those patents drawn to composition of matter, in 2026 and 2027 for those patents drawn to dosing regimen, and in 2027 for those patents drawn to the manufacturing process.
Granted European patents will expire in April 2024 for those patents drawn to composition of matter, in 2026 and 2027 for those patents drawn to dosing regimen, and in 2027 for those patents drawn to the manufacturing process.
As discussed above, we are also collaborating with the SMA Foundation and Roche to further develop these compounds. Pursuant to the sponsored research agreement, as amended, the SMA Foundation provided us with $13.3 million in funding. The SMA Foundation is not obligated to provide any further funding under this agreement. 26 Table of Contents Continuing financial obligations.
As discussed above, we are also collaborating with the SMA Foundation and Roche to further develop these compounds. Pursuant to the sponsored research agreement, as amended, the SMA Foundation provided us with $13.3 million in funding. The SMA Foundation is not obligated to provide any further funding under this agreement. 24 Table of Contents Continuing financial obligations.
Emflaza for treatment of DMD is available on a commercial basis throughout the United States. We utilize six specialty pharmacies to sell and distribute Emflaza to patients. The specialty pharmacies receive prescription orders for Emflaza directly from physicians and ship Emflaza directly to the end-user upon fulfillment of the order. As such, there is very little inventory of Emflaza stocked.
Emflaza for treatment of DMD is available on a commercial basis throughout the United States. We utilize five specialty pharmacies to sell and distribute Emflaza to patients. The specialty pharmacies receive prescription orders for Emflaza directly from physicians and ship Emflaza directly to the end-user upon fulfillment of the order. As such, there is very little inventory of Emflaza stocked.
Such an authorization may be granted where the applicant can demonstrate in its application that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use, because: 1) the indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expected to provide comprehensive evidence; 2) in the present state of scientific knowledge, comprehensive information cannot be provided; or 3) it would be contrary to generally accepted principles of medical ethics to collect 54 Table of Contents such information.
Such an authorization may be granted where the applicant can demonstrate in its application that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use, because: 1) the indications for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expected to provide comprehensive evidence; 2) in the present state of scientific knowledge, comprehensive information cannot be provided; or 3) it would be contrary to generally accepted principles of medical ethics to collect such information.
The move toward public disclosure of development data could adversely affect our business in many ways, including, for example, resulting in the disclosure of our confidential methodologies for development of our products, preventing us from obtaining intellectual property right protection for innovations, requiring us to allocate significant resources to prevent other companies from violating our intellectual property rights, adding even more complexity to processing health data from clinical trials consistent with applicable data privacy regulations, and enabling competitors to use our data to gain approvals for their own products.
The move toward public disclosure of development data could adversely affect our business in many ways, including, for example, resulting in the disclosure of our confidential methodologies for development of our products, preventing us from obtaining intellectual property right protection for 56 Table of Contents innovations, requiring us to allocate significant resources to prevent other companies from violating our intellectual property rights, adding even more complexity to processing health data from clinical trials consistent with applicable data privacy regulations, and enabling competitors to use our data to gain approvals for their own products.
On November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nation payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest per capita Gross Domestic Product-adjusted (GDP-adjusted) price of any non-U.S. member country of the Organisation for Economic Co-operation and Development (OECD) with a GDP per capita that is at least sixty percent of the U.S.
On November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nation payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest 55 Table of Contents per capita Gross Domestic Product-adjusted (GDP-adjusted) price of any non-U.S. member country of the Organisation for Economic Co-operation and Development (OECD) with a GDP per capita that is at least sixty percent of the U.S.
Shiratori may elect to terminate the Shiratori License Agreement upon sixty days’ prior written notice to us in the event that we fail to (i) achieve regulatory approval for a Sepiapterin Product in either the United States or EU by February 8, 2026 or (ii) commercially launch a Sepiapterin Product in the United States or European Union by February 8, 2027.
Shiratori may elect to terminate the Shiratori License Agreement upon sixty days’ prior written notice to us in the event that we fail to (i) achieve regulatory approval for a Sepiapterin Product in either the United States or EU by February 8, 2026 or (ii) commercially launch a Sepiapterin Product in the United States or EU by February 8, 2027.
Similarly, Translarna orders placed through a distributor for the Ministry of Health of the Russian Federation are also intended to cover multiple months of therapy. Any fluctuations in quarterly net product sales in Russia resulting from these centralized group purchase orders may also be exacerbated by any delays.
Similarly, Translarna orders placed through a distributor for the Ministry of Health of the Russian Federation are also intended to cover multiple months of therapy. Any fluctuations in quarterly net product sales in Brazil and Russia resulting from these centralized group purchase orders may also be exacerbated by any delays.
If Fast Track designation is obtained, sponsors may be eligible for more frequent development meetings and correspondence with the FDA. In addition, the FDA may initiate review of sections of an application before the application is complete. This ‘‘rolling review’’ is available if the applicant provides and the FDA approves a schedule for the remaining information.
If Fast Track designation is obtained, sponsors may be eligible for more frequent development meetings and correspondence with the FDA. In addition, the FDA may potentially initiate a rolling review of sections of an application before the application is complete. This ‘‘rolling review’’ is available if the applicant provides and the FDA approves a schedule for the remaining information.
Marketing authorization matters Translarna for the treatment of nonsense mutation Duchenne muscular dystroph y European Economic Area We received marketing authorization from the European Commission in August 2014 for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older in the member states of the EEA, subject to annual renewal and other conditions.
Marketing authorization matters Translarna for the treatment of nonsense mutation Duchenne muscular dystroph y European Economic Area We received marketing authorization from the EC in August 2014 for Translarna for the treatment of nmDMD in ambulatory patients aged five years and older in the member states of the EEA, subject to annual renewal and other conditions.
Each timed function test was analyzed as a secondary endpoint for both the mITT and ITT populations at the end of Stage 1 and will also be analyzed at the end of Stage 2. A separate analysis evaluates 10-meter run/walk results in participants with a baseline 6MWD below 300 meters.
Each timed function test was analyzed as a secondary endpoint for both the mITT and ITT populations at the end of Stage 1 and was also analyzed at the end of Stage 2. A separate analysis evaluates 10-meter run/walk results in participants with a baseline 6MWD below 300 meters.
Translarna for the treatment of nmDMD is also currently available through EAP programs in select countries where funded named patient or cohort programs exist, both within the EEA and in other territories. These programs generally reference the EMA’s determinations with respect to our marketing authorization in the EEA.
Translarna for the treatment of nmDMD is also currently available through EAP or similar styled programs in select countries where funded named patient or cohort programs exist, both within the EEA and in other territories. These programs generally reference the EMA’s determinations with respect to our marketing authorization in the EEA.
Our Brazilian office was recognized as a “great place to work” by the Great Place to Work Institute in 2021 and 2022.
Our Brazilian office was recognized as a “great place to work” by the Great Place to Work Institute in 2021, 2022 and 2023.
The Veterans Health Care Act of 1992 requires, as a condition of payment by certain federal agencies and the Medicaid program, that manufacturers of “covered drugs” (including all drugs approved under an NDA) enter into a Master Agreement and Federal Supply Schedule (FSS) contract with the Department of Veterans Affairs through which their covered drugs must be offered for sale at a mandatory calculated ceiling price to certain federal agencies, including the 57 Table of Contents VA and Department of Defense.
The Veterans Health Care Act of 1992 requires, as a condition of payment by certain federal agencies and the Medicaid program, that manufacturers of “covered drugs” (including all drugs approved under an NDA) enter into a Master Agreement and Federal Supply Schedule (FSS) contract with the Department of Veterans Affairs through which their covered drugs must be offered for sale at a mandatory calculated ceiling price to certain federal agencies, including the VA and Department of Defense.
Financial information about our net product revenues and other revenues generated in the principal geographic regions in which we operate and our long-lived assets is set forth in our financial statements and in Note 16, “Geographic Information” to our consolidated financial statements included in this Annual Report on Form 10-K.
Financial information about our net product revenues and other revenues generated in the principal geographic regions in which we operate and our long-lived assets is set forth in our financial statements and in Note 15, “Geographic Information” to our consolidated financial statements included in this Annual Report on Form 10-K.
The European Commission can grant orphan medicinal product designation to products for which the sponsor can establish that it is intended for the diagnosis, prevention, or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in 10,000 people in the EU, or (2) a life threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that sales of the drug in the EU would generate a sufficient return to justify the necessary investment.
The EC can grant orphan medicinal product designation to products for which the sponsor can establish that it is intended for the diagnosis, prevention, or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in 10,000 people in the EU, or (2) a life threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that sales of the drug in the EU would generate a sufficient return to justify the necessary investment.
As a specific obligation to our marketing authorization in the EEA, we are required to conduct and submit to the EMA the results of a three-year clinical trial to confirm the efficacy and safety of Translarna in the treatment of ambulatory patients with nmDMD aged five years or older.
As a specific obligation to our marketing authorization in the EEA, we were required to conduct and submit to the EMA the results of a three-year clinical trial to confirm the efficacy and safety of Translarna in the treatment of ambulatory patients with nmDMD aged five years or older.
The trial is comprised of two stages: an 18-month randomized, double-blind, placebo controlled clinical trial followed by an 18-month open label extension period. We refer to the 18-month clinical trial portion as “Stage 1” and the 18-month extension period as “Stage 2”. We refer to Stage 1 and Stage 2 together as Study 041.
The trial was comprised of two stages: an 18-month randomized, double-blind, placebo controlled clinical trial followed by an 18-month open label extension period. We refer to the 18-month clinical trial portion as “Stage 1” and the 18-month extension period as “Stage 2”. We refer to Stage 1 and Stage 2 together as Study 041.
The patent rights relating to ataluren owned by us include 42 issued U.S. patents relating to composition of matter, methods of use, formulations, dosing regimens and methods of manufacture and multiple pending U.S. patent applications relating to methods of use, formulation, and dosing regimens. We do not license any material patent rights relating to ataluren to unaffiliated parties.
The patent rights relating to ataluren owned by us include 34 issued U.S. patents relating to composition of matter, methods of use, formulations, dosing regimens and methods of manufacture and multiple pending U.S. patent applications relating to methods of use, formulation, and dosing regimens. We do not license any material patent rights relating to ataluren to unaffiliated parties.
If our drug substance provider or either of our drug product manufacturers was to be unable to provide drug substance or manufacture Emflaza product in sufficient quantities to meet projected demand, future sales could be adversely affected, which in turn could have a detrimental impact on our ability to maintain our marketing authorization in the United States and on our ability to commercialize Emflaza, which in turn would have a material adverse effect on our business, financial results and results of operations.
If our drug substance provider or either of our drug product manufacturers was to be unable to provide drug substance or manufacture Emflaza product in sufficient quantities to meet projected demand, future sales could be adversely affected, which in turn could have a detrimental impact on our ability to maintain our marketing authorization in the United States and on our ability to commercialize Emflaza, which in turn would have a material adverse effect on our business, financial 31 Table of Contents results and results of operations.
As a result, our commercial launches of products in the EEA has been and is expected to continue to be on a country-by-country basis and we generally will not be able to commence commercial sales of our products pursuant to our marketing authorizations in the EEA in any 37 Table of Contents particular member state of the EEA until we conclude the applicable pricing and reimbursement negotiations and comply with any licensing, employment or related regulatory requirements in that country.
As a result, our commercial launches of products in the EEA has been and is expected to continue to be on a country-by-country basis and we generally will not be able to commence commercial sales of our products pursuant to our marketing authorizations in the EEA in any particular member state of the EEA until we conclude the applicable pricing and reimbursement negotiations and comply with any licensing, employment or related regulatory requirements in that country.
Under the accelerated approval process, the adequate and well-controlled clinical trials conducted with the drug or biologic product establish that the drug or biologic product has an effect on a “surrogate” endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than 43 Table of Contents survival or irreversible morbidity, that is reasonably likely to predict an effect on irreversible morbidity or mortality, taking into account the severity, rarity, or prevalence of the condition and availability or lack of alternative treatments.
Under the accelerated approval process, the adequate and well-controlled clinical trials conducted with the drug or biologic product establish that the drug or biologic product has an effect on a “surrogate” endpoint that is reasonably likely to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity, that is reasonably likely to predict an effect on irreversible morbidity or mortality, taking into account the severity, rarity, or prevalence of the condition and availability or lack of alternative treatments.
According to the guidance, however, the FDA may approve such a drug/biologic product without an approved/cleared companion diagnostic when the drug/ biologic “is intended to treat a serious or life-threatening condition for which no satisfactory alternative treatment exists” and the FDA determines that the benefits from the use of the drug/biologic “are so pronounced as to outweigh the risks from the lack of an” approved/cleared companion diagnostic.
According to the guidance, however, the FDA may approve such a drug/biologic product without an approved/cleared companion diagnostic when the drug/ biologic “is intended to treat a serious or life-threatening condition 41 Table of Contents for which no satisfactory alternative treatment exists” and the FDA determines that the benefits from the use of the drug/biologic “are so pronounced as to outweigh the risks from the lack of an” approved/cleared companion diagnostic.
See “Item 1. Business-Commercial Matters-Market Access Considerations” and “Item 1A. Risk Factors-Risks Related to the Development and Commercialization of our Product and our Product Candidates” and “-Risks Related to Regulatory Approval of our Product and our Product Candidates” for further information regarding the marketing authorization in the EEA, the market access process and related risks.
Business-Commercial Matters-Market Access Considerations” and “Item 1A. Risk Factors-Risks Related to the Development and Commercialization of our Product and our Product Candidates” and “-Risks Related to Regulatory Approval of our Product and our Product Candidates” for further information regarding the marketing authorization in the EEA, the market access process and related risks.
The patent rights relating to risdiplam co-owned by us and Roche include 4 issued U.S. patents relating to composition of matter, methods of use, and methods of manufacture and pending U.S. patent applications. We do not license any material patent rights relating to risdiplam to unaffiliated parties.
The patent rights relating to risdiplam co-owned by us and Roche include 7 issued U.S. patents relating to composition of matter, methods of use, and methods of manufacture and pending U.S. patent applications. We do not license any material patent rights relating to risdiplam to unaffiliated parties.
Also, quality control and manufacturing procedures must continue to conform to cGMP after approval, including quality control and quality assurance and maintenance of records and documentation. Changes to the manufacturing process are strictly regulated and often require prior FDA approval or notification before being implemented.
Also, quality control and manufacturing procedures must continue to conform to cGMPs after approval, including quality control and quality assurance and maintenance of records and documentation. Changes to the manufacturing process are strictly regulated and often require prior FDA approval or notification before being implemented.
On August 23, 2018, we completed our acquisition of Agilis pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018, or the Agilis Merger Agreement, by and among us, Agility Merger Sub, Inc., a Delaware corporation and our wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC, or the Merger.
On August 23, 2018, we completed our acquisition of Agilis pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018, or the Agilis Merger Agreement, by and among us, Agility Merger Sub, Inc., a Delaware corporation and 27 Table of Contents our wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC, or the Merger.
However, certain patients were delayed in obtaining the final study muscle biopsies performed at our clinical trial site at the University of California, Los Angeles 22 Table of Contents as a result of the COVID-19 pandemic. 8 of 20 patients were unable to undergo biopsies at week 40, and these patients had their second biopsies between 62 and 70 weeks of treatment.
However, certain patients were delayed in obtaining the final study muscle biopsies performed at our clinical trial site at the University of California, Los Angeles as a result of the COVID-19 pandemic. 8 of 20 patients were unable to undergo biopsies at week 40, and these patients had their second biopsies between 62 and 70 weeks of treatment.
Overall in the ITT population, there was an increase in dystrophin expression from baseline, on both ECL as the primary endpoint and IHC as the secondary endpoint, but these did not meet a p-value of We also measured creatine kinase, or CK, levels of patients in Study 045 as an objective measure of muscle damage.
Overall in the ITT population, there was an increase in dystrophin expression from baseline, on both ECL as the primary endpoint and IHC as the secondary endpoint, but these did not meet a p-value of 21 Table of Contents We also measured creatine kinase, or CK, levels of patients in Study 045 as an objective measure of muscle damage.
Moreover, the 2020 Further Consolidated Appropriations Act included provisions requiring that sponsors of approved drug and biologic products, including those subject to REMS, provide samples of the approved products to persons developing 505(b)(2) NDA or ANDA drug products, or biosimilar products within specified timeframes, in sufficient quantities, and on commercially reasonable market-based terms.
Moreover, the 2020 Further Consolidated Appropriations Act included provisions requiring that sponsors of approved drug and biologic products, including those subject to REMS, provide samples of the approved 48 Table of Contents products to persons developing 505(b)(2) NDA or ANDA drug products, or biosimilar products within specified timeframes, in sufficient quantities, and on commercially reasonable market-based terms.
During this market exclusivity period, neither the EMA, nor the European Commission nor any EU member states can accept an application or grant a marketing authorization for a “similar medicinal product.” A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.
During this market exclusivity period, neither the EMA, nor the EC nor any EU member states can accept an application or grant a marketing authorization for a “similar medicinal product.” A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.
Sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the extent to which the costs of the products will be covered and reimbursed by third-party payors, including government 58 Table of Contents healthcare programs (such as, in the United States, Medicare and Medicaid), private health insurers and other organizations.
Sales of any products for which we may receive regulatory approval for commercial sale will depend in part on the extent to which the costs of the products will be covered and reimbursed by third-party payors, including government healthcare programs (such as, in the United States, Medicare and Medicaid), private health insurers and other organizations.
These tools have been implemented to help our employees identify their core strengths and learn how to use these strengths to become more engaged and productive at work as well as to lead an overall more satisfied and healthier lifestyle.
These tools have been implemented to help our employees identify their core strengths and learn how to use these strengths to become more engaged and productive at work as well as to lead an overall more satisfying and healthier lifestyle.
We believe that we provide a competitive total rewards offering to our employees, with market competitive cash compensation, equity, and industry competitive company-paid benefits, including subsidized medical, and dental insurance and retirement plans, as well as group vision insurance, tuition reimbursement, fitness reimbursement and benefits and policies to support parental leave, mental health and wellness, family planning and child bonding.
We believe that we provide a competitive total reward offering to our employees, with market competitive cash compensation, equity, and industry competitive company-paid benefits, including subsidized medical, and dental insurance and retirement plans, as well as group vision insurance, tuition reimbursement, and benefits and policies to support parental leave, mental health and wellness, family planning and child bonding.
In addition, sponsors of biopharmaceutical products and drug products participating in Medicaid and Medicare are required to comply with mandatory price reporting, discount, and rebate requirements. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and ex-U.S. statutes and regulations require the expenditure of substantial time and financial resources. See “Item 1A.
In addition, sponsors of biopharmaceutical products and drug products participating in Medicaid and Medicare are required to comply with mandatory price reporting, discount, and rebate requirements. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and ex-U.S. statutes and regulations require the expenditure of substantial time and financial resources.
As of December 31, 2022, we have paid former equity holders of Agilis a total of $52.4 million in connection with the achievement of certain milestone-based contingent payments under the Agilis Merger Agreement.
As of December 31, 2023, we have paid former equity holders of Agilis a total of $52.4 million in connection with the achievement of certain milestone-based contingent payments under the Agilis Merger Agreement.
On average, patients with AADC deficiency die in the first decade of life due to profound motor dysfunction and secondary complications such as choking, hypoxia, and pneumonia. Currently, no treatment options are available for the underlying cause of the disorder, and care is limited to palliative options with significant burden on caregivers.
On average, patients with AADC deficiency die in the 10 Table of Contents first decade of life due to profound motor dysfunction and secondary complications such as choking, hypoxia, and pneumonia. Currently, no treatment options are available for the underlying cause of the disorder, and care is limited to palliative options with significant burden on caregivers.
Emflaza is approved in the United States for the treatment of DMD in patients two years and older. o Upstaza TM (eladocagene exuparvovec) – Upstaza, a gene therapy for the treatment of Aromatic L-Amino Decarboxylase, or AADC, deficiency, a rare central nervous system, or CNS, disorder is approved for the treatment of AADC deficiency for patients 18 months and older within the EEA and the United Kingdom.
Emflaza is approved in the United States for the treatment of DMD in patients two years and older. 6 Table of Contents o Upstaza TM (eladocagene exuparvovec) – Upstaza, a gene therapy for the treatment of Aromatic L-Amino Decarboxylase, or AADC, deficiency, a rare central nervous system, or CNS, disorder is approved for the treatment of AADC deficiency for patients 18 months and older within the EEA and the United Kingdom.
In connection with the marketing approval for Waylivra in the EU, the European Commission is requiring Akcea to provide results of a study based on a registry of patients to investigate how blood checks and adjustments to frequency of injections are carried out in practice and how well they work to prevent thrombocytopenia and bleeding in FCS patients taking Waylivra.
In connection with the marketing approval for Waylivra in the EU, the EC is requiring Akcea to provide results of a study based on a registry of patients to investigate how blood checks and adjustments to frequency of injections are carried out in practice and how well they work to prevent thrombocytopenia and bleeding in FCS patients taking Waylivra.
NTU received a lump sum of $100,000 upon execution of the NTU Licensing Agreement, as well as $2.0 million milestones payments based on the achievement of certain clinical and regulatory milestones, including $1.2 million that became due and payable in July 2022 upon the European Commission’s approval of Upstaza for the treatment of AADC deficiency.
NTU received a lump sum of $100,000 upon execution of the NTU Licensing Agreement, as well as $2.0 million milestones payments based on the achievement of certain clinical and regulatory milestones, including $1.2 million that became due and payable in July 2022 upon the EC’s approval of Upstaza for the treatment of AADC deficiency.
Additional endpoints included the NSAA test and the Pediatric Outcomes Data Collection Instrument, or PODCI, a validated tool for measuring quality of life in pediatric patients with orthopedic conditions. These additional endpoints favored Translarna in the ITT population but did not meet statistical significance. 20 Table of Contents Pre-Specified Analyses.
Additional endpoints included the NSAA test and the Pediatric Outcomes Data Collection Instrument, or PODCI, a validated tool for measuring quality of life in pediatric patients with orthopedic conditions. These additional endpoints favored Translarna in the ITT population but did not meet statistical significance. Pre-Specified Analyses.
Consistent with the natural history of ambulatory DMD patients with 6MWD greater than 400 meters, which indicates stability in walking ability over a 48 week period, we observed no meaningful difference in 6MWT between patient groups. Similarly, we observed no meaningful difference in 6MWT between patient groups with baseline 6MWD greater than 350 meters. 21 Table of Contents Pre-specified meta-analysis.
Consistent with the natural history of ambulatory DMD patients with 6MWD greater than 400 meters, which indicates stability in walking ability over a 48 week period, we observed no meaningful difference in 6MWT between patient groups. Similarly, we observed no meaningful difference in 6MWT between patient groups with baseline 6MWD greater than 350 meters. Pre-specified meta-analysis.
The progressive 12 Table of Contents accumulation of TTR amyloid deposits in these tissues and organs leads to sensory, motor and autonomic dysfunction often having debilitating effects on multiple aspects of a patient’s life. Patients with hATTR amyloidosis often present with a mixed phenotype and experience overlapping symptoms of polyneuropathy and cardiomyopathy.
The progressive accumulation of TTR amyloid deposits in these tissues and organs leads to sensory, motor and autonomic dysfunction often having debilitating effects on multiple aspects of a patient’s life. Patients with hATTR amyloidosis often present with a mixed phenotype and experience overlapping symptoms of polyneuropathy and cardiomyopathy.
The market exclusivity period for the authorized 52 Table of Contents therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that the orphan designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.
The market exclusivity period for the authorized therapeutic indication may be reduced to six years if, at the end of the fifth year, it is established that the orphan designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.
Intent to deceive is not necessary to establish civil liability, which may be predicated on deliberate indifference or reckless disregard for the truth. The federal government continues to use the False Claims Act, and the accompanying threat of significant liability, in investigations against pharmaceutical and healthcare companies.
Intent to deceive or actual knowledge of falsity is not necessary to establish civil liability, which may be predicated on deliberate indifference or reckless disregard for the truth. The federal government continues to use the False Claims Act, and the accompanying threat of significant liability, in investigations against pharmaceutical and healthcare companies.
In addition, interactions between pharmaceutical companies and physicians are also governed by industry self-regulation codes of conduct and physicians’ codes of professional conduct. In the United States, some state laws require pharmaceutical companies to comply with these industry and physician codes and the relevant compliance guidance for pharmaceutical manufacturers promulgated by the federal government.
In addition, interactions between pharmaceutical companies and physicians are also governed by industry self-regulation codes of conduct and physicians’ codes of professional conduct. In the United States, some state laws require pharmaceutical companies to comply with these industry and physician codes and the relevant compliance guidance for 59 Table of Contents pharmaceutical manufacturers promulgated by the federal government.
Based on preliminary analysis, following administration of Upstaza, the combined group of patients showed significant improvements from baseline capabilities at one-year post-treatment in functional motor skills assessed with the PDMS-2 total score, as well as on the locomotion, grasping, visual-motor integration and stationary subscales.
Following administration of Upstaza, the combined group of patients showed significant improvements from baseline capabilities at one-year post-treatment in functional motor skills assessed with the PDMS-2 total score, as well as on the locomotion, grasping, visual-motor integration and stationary subscales.
Either party may terminate the Tegsedi-Waylivra Agreement on written notice to the other party if such other party is in material breach of its obligations thereunder and has not cured such breach within 30 days after notice in the case of a payment breach or 60 days after notice in the case of any other breach. Shiratori Overview.
Either party may terminate the Tegsedi-Waylivra Agreement on written notice to the other party if such other party is in material breach of its obligations thereunder and has not cured such breach within 30 days after notice in the case of a payment breach or 60 days after notice in the case of any other breach. 26 Table of Contents Shiratori Overview.
If a marketing authorization is granted in the EEA for a medicinal product, such as the marketing authorization granted for Translarna for the treatment of nmDMD by the European Commission, the marketing authorization holder is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal products that are in addition to the other conditions of the marketing authorization described above.
If a marketing authorization is granted in the EEA for a medicinal product, such as the marketing authorization granted for Translarna for the treatment of nmDMD by the EC, the marketing authorization holder is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal products that are in addition to the other conditions of the marketing authorization described above.
Our Pipeline We have a portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology, metabolism and oncology.
Our Pipeline We have a diversified therapeutic portfolio that includes several commercial products and product candidates in various stages of development, including discovery, research and clinical stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology and metabolism.
These trials are well-controlled and are intended to establish the overall risk- benefit profile of the product or product candidate and provide an adequate 42 Table of Contents basis for physician labeling. Phase 3 clinical trials are usually larger, more time consuming, more complex and more costly than Phase 1 and Phase 2 clinical trials.
These trials are well-controlled and are intended to establish the overall risk- benefit profile of the product or product candidate and provide an adequate basis for physician labeling. Phase 3 clinical trials are usually larger, more time consuming, more complex and more costly than Phase 1 and Phase 2 clinical trials.
In July 2018, the European Commission approved a label-extension request to our marketing authorization for Translarna in the EEA to include patients from two to up to five years of age. In July 2020, the European Commission approved the removal of the statement “efficacy has not been demonstrated in non-ambulatory patients” from the indication statement for Translarna.
In July 2018, the EC approved a label-extension request to our marketing authorization for Translarna in the EEA to include patients from two to up to five years of age. In July 2020, the EC approved the removal of the statement “efficacy has not been demonstrated in non-ambulatory patients” from the indication statement for Translarna.
Evrysdi Evrysdi was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the European Commission in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies.
Evrysdi Evrysdi was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the EC in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies.
There were no serious adverse events observed during the trial that were considered possibly or probably 19 Table of Contents related to Translarna. Determination of relatedness of the serious adverse event to Translarna was made by the trial investigator, based on his or her judgment. Translarna was generally well tolerated in ACT DMD.
There were no serious adverse events observed during the trial that were considered possibly or probably related to Translarna. Determination of relatedness of the serious adverse event to Translarna was made by the trial investigator, based on his or her judgment. Translarna was generally well tolerated in ACT DMD.
Non-compliance with EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties in the EU Similarly, failure to comply with the EU’s requirements regarding the protection of individual personal data can also lead to significant penalties and sanctions.
Non-compliance with EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial 52 Table of Contents penalties in the EU Similarly, failure to comply with the EU’s requirements regarding the protection of individual personal data can also lead to significant penalties and sanctions.
These investigations have involved, for example, allegations of improper financial relationships with referral sources, providing free product to customers with the expectation that the customers would bill federal programs for the free product, as well as the promotion 60 Table of Contents of products for unapproved uses and reporting false pricing information.
These investigations have involved, for example, allegations of improper financial relationships with referral sources, providing free product to customers with the expectation that the customers would bill federal programs for the free product, as well as the promotion of products for unapproved uses and reporting false pricing information.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. 45 Table of Contents This requirement does not generally apply to products for an indication for which orphan designation has been granted.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. This requirement does not generally apply to products for an indication for which orphan designation has been granted.
The IND must become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt by the FDA, 41 Table of Contents unless before that time the FDA raises concerns or questions about issues such as the conduct of the trials as outlined in the IND.
The IND must become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about issues such as the conduct of the trials as outlined in the IND.
The SmPC is the document that provides information to physicians concerning the 55 Table of Contents safe and effective use of the medicinal product. Promotion of indications not covered by the SmPC is specifically prohibited. ATMP legislation lays down certain minor extra labelling requirements for ATMPs.
The SmPC is the document that provides information to physicians concerning the safe and effective use of the medicinal product. Promotion of indications not covered by the SmPC is specifically prohibited. ATMP legislation lays down certain minor extra labelling requirements for ATMPs.
The primary objective of Study 041 is to evaluate the effect of Translarna on ambulation and endurance as assessed by the 6-minute walk test, or 6MWT.
The primary objective of Study 041 was to evaluate the effect of Translarna on ambulation and endurance as assessed by the 6-minute walk test, or 6MWT.
We own 15 European patents relating to composition of matter, uses, dosing regimens and methods of manufacture of ataluren, as well as multiple pending European patent applications relating to composition of matter, uses and formulations.
We own 13 European patents relating to composition of matter, uses, dosing regimens and methods of manufacture of ataluren, as well as multiple pending European patent applications relating to composition of matter, uses and formulations.
Upstaza Upstaza is a gene therapy for the treatment of AADC deficiency, a rare CNS disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene. In July 2022, the European Commission approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA.
Upstaza Upstaza is a gene therapy for the treatment of AADC deficiency, a rare CNS disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene. In July 2022, the EC approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA.
The meta-analysis of these data demonstrated a 45 meter benefit (nominal p A retrospective analysis performed after unblinding trial results can result in the introduction of bias if the analysis is inappropriately tailored or influenced by knowledge of the data and actual results.
The meta-analysis of these data demonstrated a 45 meter benefit (nominal p 20 Table of Contents A retrospective analysis performed after unblinding trial results can result in the introduction of bias if the analysis is inappropriately tailored or influenced by knowledge of the data and actual results.
Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, are more convenient or are less expensive than any products that we may develop.
Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. 35 Table of Contents Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, are more convenient or are less expensive than any products that we may develop.
Our ability to make Translarna available via commercial or EAP programs is largely dependent upon our ability to maintain our marketing authorization in the EEA for Translarna for the treatment of nmDMD in ambulatory patients aged two years and older.
Our ability to make Translarna available via commercial or EAP programs or through similar styled programs is largely dependent upon our ability to maintain our marketing authorization in the EEA for Translarna for the treatment of nmDMD in ambulatory patients aged two years and older.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur future capital requirements will depend on many factors, including: ● our ability to commercialize and market our products and product candidates; ● our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms, on a timely basis, with third-party payors for our products and product candidates; ● our ability to maintain the marketing authorization in the EEA for Translarna for the treatment of nmDMD, including whether the EMA determines on an annual basis that the benefit-risk balance of Translarna supports renewal of our marketing authorization in the EEA, on the current approved label; ● the timing and outcome of Study 041; ● our ability to obtain marketing authorization for Upstaza for the treatment of AADC deficiency in the United States; ● the costs, timing and outcome of our efforts to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC assessments or analyses at significant cost which, if successful, may enable FDA review of an NDA re-submission by us and, ultimately, may support approval of Translarna for nmDMD in the United States; 85 Table of Contents ● our ability to maintain orphan exclusivity in the United States for Emflaza; ● our ability to successfully complete any post-marketing requirements imposed by regulatory agencies with respect to our products; ● the progress, results and costs of our activities under our splicing, gene therapy, Bio-e, metabolic and oncology programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● the scope, costs and timing of our commercialization activities, including product sales, marketing, legal, regulatory, distribution and manufacturing, for our products and for any of our other product candidates that may receive marketing authorization or any additional indications or territories in which we receive authorization to market our products; ● our ability to utilize the Hopewell Facility to manufacture program materials for certain of our gene therapy product candidates as well as program materials for third parties; ● the costs, timing and outcome of regulatory review of our other product candidates, including those in our splicing, gene therapy, Bio-e, metabolic and oncology programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● our ability to satisfy our obligations under the Blackstone Credit Agreement; ● our ability to satisfy our obligations under the indenture governing our 2026 Convertible Notes; ● the timing and scope of growth in our employee base; ● revenue received from commercial sales of or products or any of our other product candidates; ● our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for our products and product candidates on adequate terms, or at all; ● the ability and willingness of patients and healthcare professionals to access our products and product candidates through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome; ● the costs of preparing, filing and prosecuting patent applications, maintaining, and protecting our intellectual property rights and defending against intellectual property-related claims; ● the extent to which we acquire or invest in other businesses, products, product candidates, and technologies, including the success of any acquisition, in-licensing or other strategic transaction we may pursue, and the costs of subsequent development requirements and commercialization efforts, including with respect to our acquisitions of Emflaza, Agilis, Censa and of BioElectron’s assets, and our licensing of Tegsedi and Waylivra; and ● our ability to establish and maintain collaborations, including our collaborations with Roche and the SMA Foundation, and our ability to obtain research funding and achieve milestones under these agreements.
Biggest changeOur future capital requirements will depend on many factors, including: ● our ability to maintain our marketing authorization for Translarna for the treatment of nmDMD in the EEA following the CHMP’s negative opinion on the conditional marketing authorization following a re-examination procedure or identify other potential mechanisms in which we may provide Translarna to nmDMD patients in the EEA; ● our ability to maintain the marketing authorization for Translarna and our other products in territories outside of the EEA; ● our ability to commercialize and market our products and product candidates that may receive marketing authorization; ● our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms, on a timely basis, with third-party payors for our products and products candidates; ● the amount of generic drug competition that we face for Emflaza following its loss of orphan drug exclusivity related to the treatment of DMD in patients five years and older; ● our ability to obtain marketing authorization for sepiapterin for the treatment of PKU in the United States and EEA; ● our ability to obtain marketing authorization for Upstaza for the treatment of AADC deficiency in the United States; ● the costs, timing and outcome of our efforts to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC assessments or analyses at significant cost which, if successful, may enable FDA review of an NDA re-submission by us and, ultimately, may support approval of Translarna for nmDMD in the United States; ● unexpected decreases in revenue or increase in expenses resulting from potential widespread outbreaks of contagious disease, such as COVID-19; ● our ability to successfully complete all post-marketing requirements imposed by regulatory agencies with respect to our products; ● the progress and results of activities for sepiapterin and our splicing and ferroptosis and inflammation programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● the scope, costs and timing of our commercialization activities, including product sales, marketing, legal, regulatory, distribution and manufacturing, for any of our products and for any of our other product candidates that may receive marketing authorization or any additional territories in which we receive authorization to market Translarna; ● the costs, timing and outcome of regulatory review of sepiapterin and our splicing and ferroptosis and inflammation programs and Translarna and Upstaza in other territories; ● our ability to satisfy our obligations under the indenture governing the 2026 Convertible Notes; ● the timing and scope of any potential future growth in our employee base; ● the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates, including those in our splicing and ferroptosis and inflammation programs; ● revenue received from commercial sales of our products or any of our product candidates; ● our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for Translarna for the treatment of nmDMD on adequate terms, or at all; ● the ability and willingness of patients and healthcare professionals to access Translarna through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome; ● our ability to continue to utilize the Hopewell Facility to manufacture program materials for third parties; 82 Table of Contents ● the costs of preparing, filing and prosecuting patent applications, maintaining, and protecting our intellectual property rights and defending against intellectual property-related claims; ● the extent to which we acquire or invest in other businesses, products, product candidates, and technologies, including the success of any acquisition, in-licensing or other strategic transaction we may pursue, and the costs of subsequent development requirements and commercialization efforts, including with respect to our acquisitions of Emflaza, Agilis, our ferroptosis and inflammation platform and Censa and our licensing of Tegsedi and Waylivra; and ● our ability to establish and maintain collaborations, including our collaborations with Roche and the SMA Foundation, and our ability to obtain research funding and achieve milestones under these agreements. ​ Conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales for certain product candidates or indications.
If we or our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the EU member state regulatory authorities, FDA, or other ex-U.S. regulatory agencies, we or they will not be able to secure and/or maintain regulatory approval for the manufacturing facilities, and we would not be able to secure and/or maintain, or may be delayed in securing regulatory approval of marketing applications or supplements for the applicable products or product candidates.
If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the EU member state regulatory authorities, FDA, or other ex-U.S. regulatory agencies, they will not be able to secure and/or maintain regulatory approval for the manufacturing facilities, and we would not be able to secure and/or maintain, or may be delayed in securing regulatory approval of marketing applications or supplements for the applicable products or product candidates.
For additional information, see the risk factor under “Risks Related to the Development and Commercialization of our Products and Product Candidates” titled, “Certain of our products and product candidates, such as our gene therapies and other biologic product candidates, may be difficult to produce, presenting manufacturing challenges that may delay product development and regulatory approval.” We do not directly control manufacturing for most of our products and product candidates and we are dependent on and will continue to be dependent on, our contract manufacturers for compliance with cGMP or good distribution practice, or GDP, or similar regulatory requirements outside the EU and the United States for manufacture of both active drug substances and finished drug products.
For additional information, see the risk factor under “Risks Related to the Development and Commercialization of our Products and Product Candidates” titled, “Certain of our products and product candidates, such as our gene therapies and other biologic product candidates, may be difficult to produce, presenting manufacturing challenges that may delay product development and regulatory approval.” We do not directly control manufacturing for our products and product candidates and we are dependent on and will continue to be dependent on, our contract manufacturers for compliance with cGMP or good distribution practice, or GDP, or similar regulatory requirements outside the EU and the United States for manufacture of both active drug substances and finished drug products.
Despite our implementation of security measures, including implementing the National Institute of Standards and Technology cybersecurity framework, instituting a training and compliance program on cybersecurity for all employees and doing a yearly external audit and penetration test, these information systems are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet or other mechanisms, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.
Despite our implementation of security measures, including implementing the National Institute of Standards and Technology cybersecurity framework, instituting a training and compliance program on cybersecurity for all employees and doing a yearly external audit and penetration test, these information systems are vulnerable to damage from computer viruses, malware, ransomware, natural disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet or other mechanisms, attachments to emails, persons inside our organization, or persons with access to systems inside our organization.
Collaborations involving our products and product candidates, including our collaborations with the SMA Foundation and Roche, pose the following risks to us: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not pursue development and commercialization of our products and product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that replace or compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● collaborators may fail to comply with the applicable regulatory requirements, subjecting them or us to potential regulatory enforcement action; ● a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; ● collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; ● collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● disputes may arise between the collaborator and us as to the ownership of intellectual property arising during the collaboration; ● we may grant exclusive rights for our products or product candidates to our collaborators, which would prevent us from collaborating with others, or from using our products or product candidates ourselves; ● disputes may arise between the collaborators and us that result in the delay or termination of the collaboration, which may include ending research, development or commercialization activities for our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
Collaborations involving our products and product candidates, including our collaborations with the SMA Foundation and Roche, pose the following risks to us: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; 98 Table of Contents ● collaborators may not pursue development and commercialization of our products and product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; ● collaborators could independently develop, or develop with third parties, products that replace or compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● collaborators may fail to comply with the applicable regulatory requirements, subjecting them or us to potential regulatory enforcement action; ● a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; ● collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; ● collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; ● disputes may arise between the collaborator and us as to the ownership of intellectual property arising during the collaboration; ● we may grant exclusive rights for our products or product candidates to our collaborators, which would prevent us from collaborating with others, or from using our products or product candidates ourselves; ● disputes may arise between the collaborators and us that result in the delay or termination of the collaboration, which may include ending research, development or commercialization activities for our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
If we are unable to manufacture these product materials to the required specifications for the third parties we contract with, our business, financial condition, and results of operations could be materially adversely affected and we may become subject to regulatory or contractual actions, may need to expend significant time and costs to remedy issues, and we may forgo sales, incur liabilities or lose customers, which would materially adversely affect our business, financial condition and results of operations.
If we are unable to manufacture these product materials to the required specifications and regulatory requirements for the third parties we contract with, our business, financial condition, and results of operations could be materially adversely affected and we may become subject to regulatory or contractual actions, may need to expend significant time and costs to remedy issues, and we may forgo sales, incur liabilities or lose customers, which would materially adversely affect our business, financial condition and results of operations.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, both before and after product approval, may yield various results which could negatively affect our business, including: ● restrictions on such products, manufacturers or manufacturing processes; ● changes to or restrictions on the labeling or marketing of a product; ● modifications to promotional pieces; ● issuance of corrective information; ● clinical holds or termination of clinical trials; ● changes in the way a product is administered; ● liability for harm caused to patients or subjects; ● adverse publicity, reputational harm, or the product becoming less competitive; ● regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; ● restrictions on product distribution or use; ● requirements to implement a REMS; ● requirements to conduct post-marketing studies or clinical trials; ● warning, cyber or untitled letters; ● withdrawal of the products from the market or marketing suspensions; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing authorizations; ● refusal to permit the import or export of our products; ● product seizure or detention; ● injunctions; ● the imposition of civil or criminal penalties; or ● FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, both before and after product approval, may yield various results which could negatively affect our business, including: ● restrictions on such products, manufacturers or manufacturing processes; ● changes to or restrictions on the labeling or marketing of a product; ● modifications to promotional pieces; ● issuance of corrective information; ● clinical holds or termination of clinical trials; ● changes in the way a product is administered; ● liability for harm caused to patients or subjects; ● adverse publicity, reputational harm, or the product becoming less competitive; ● regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; ● restrictions on product distribution or use; ● requirements to implement a REMS; ● requirements to conduct post-marketing studies or clinical trials; ● warning, cyber or untitled letters; ● withdrawal of the products from the market or marketing suspensions; ● refusal to approve pending applications or supplements to approved applications that we submit; ● recall of products; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing authorizations; 88 Table of Contents ● refusal to permit the import or export of our products; ● product seizure or detention; ● injunctions; ● the imposition of civil or criminal penalties; or ● FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements.
Factors that may materially affect our efforts to commercialize our products include: ● our ability to recruit, train and retain adequate numbers of effective sales and marketing personnel; ● our ability to monitor the legal and regulatory compliance of sales and marketing personnel; ● an inability to secure adequate coverage and reimbursement by government and private health plans; ● reduced realization on government sales from mandatory discounts, rebates and fees, and from price concessions to private health plans and pharmacy benefit managers necessitated by competition for access to managed formularies; ● the clinical indications for which the products are approved and the claims that we may make for the products; ● limitations or warnings, including distribution or use restrictions, contained in the products’ approved labeling; ● any distribution and use restrictions imposed by the FDA or to which we agree as part of a mandatory REMS or voluntary risk management plan; ● liability for sales or marketing personnel who fail to comply with the applicable legal and regulatory requirements; ● our ability to implement third-party marketing and distribution relationships on favorable terms, or at all, in territories where we do not pursue direct commercialization; ● the ability of our commercial team to obtain access to or persuade adequate numbers of physicians to prescribe our current or any future products; 75 Table of Contents ● the lack of complementary products to be offered by our commercial team, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent commercial organization.
Factors that may materially affect our efforts to commercialize our products include: ● our ability to recruit, train and retain adequate numbers of effective sales and marketing personnel; ● our ability to monitor the legal and regulatory compliance of sales and marketing personnel; ● an inability to secure adequate coverage and reimbursement by government and private health plans; ● reduced realization on government sales from mandatory discounts, rebates and fees, and from price concessions to private health plans and pharmacy benefit managers necessitated by competition for access to managed formularies; ● the clinical indications for which the products are approved and the claims that we may make for the products; ● limitations or warnings, including distribution or use restrictions, contained in the products’ approved labeling; ● any distribution and use restrictions imposed by the FDA or to which we agree as part of a mandatory REMS or voluntary risk management plan; ● liability for sales or marketing personnel who fail to comply with the applicable legal and regulatory requirements; ● our ability to implement third-party marketing and distribution relationships on favorable terms, or at all, in territories where we do not pursue direct commercialization; ● the ability of our commercial team to obtain access to or persuade adequate numbers of physicians to prescribe our current or any future products; ● the lack of complementary products to be offered by our commercial team, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent commercial organization.
On December 22, 2017, the United States government enacted the 2017 Tax Act, which significantly reformed the U.S. Internal Revenue Code of 1986, as amended, or the Code. The Tax Act, among other things, contained significant changes to corporate taxation. As part of Congress’s response to the COVID-19 pandemic, economic relief was enacted in 2020 and 2021.
On December 22, 2017, the United States government enacted the 2017 Tax Act, which significantly reformed the U.S. Internal Revenue Code of 1986, as amended, or the Code. The Tax Act, among other things, contained significant changes to corporate taxation. As part of Congress’s response to the COVID-19 pandemic, economic relief legislation was enacted in 2020 and 2021.
Our current and anticipated future dependence upon others for the manufacture and distribution of Translarna, Emflaza, Upstaza, Tegsedi, Waylivra and certain of our product candidates may adversely affect our business, financial condition, results of operations and limit our ability to grow including our ability to develop product candidates and commercialize our products that receive regulatory approval on a timely and competitive basis.
Our current and anticipated future dependence upon others for the manufacture and distribution of Translarna, Emflaza, Upstaza, Tegsedi, Waylivra and our product candidates may adversely affect our business, financial condition, results of operations and limit our ability to grow including our ability to develop product candidates and commercialize our products that receive regulatory approval on a timely and competitive basis.
In addition, future strategic transactions may entail numerous operational, financial and legal risks, including: ● incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions; ● exposure to known and unknown liabilities, including possible intellectual property infringement claims, violations of laws, tax liabilities and commercial disputes; ● higher than expected acquisition and integration costs; ● difficulty in integrating operations and personnel of any acquired business; ● increased amortization expenses or, in the event that we write-down the value of acquired assets, impairment losses; ● impairment of relationships with key suppliers or customers of any acquired business due to changes in management and ownership; ● inability to retain personnel, customers, distributors, vendors and other business partners integral to an in-licensed or acquired product, product candidate or technology; ● potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges; ● entry into indications or markets in which we have no or limited direct prior development or commercial experience and where competitors in such markets have stronger market positions; and ● other challenges associated with managing an increasingly diversified business.
In addition, future strategic transactions may entail numerous operational, financial and legal risks, including: ● incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions; ● exposure to known and unknown liabilities, including possible intellectual property infringement claims, violations of laws, tax liabilities and commercial disputes; ● higher than expected acquisition and integration costs; ● difficulty in integrating operations and personnel of any acquired business; ● increased amortization expenses or, in the event that we write-down the value of acquired assets, impairment losses; 83 Table of Contents ● impairment of relationships with key suppliers or customers of any acquired business due to changes in management and ownership; ● inability to retain personnel, customers, distributors, vendors and other business partners integral to an in-licensed or acquired product, product candidate or technology; ● potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or challenges; ● entry into indications or markets in which we have no or limited direct prior development or commercial experience and where competitors in such markets have stronger market positions; and ● other challenges associated with managing an increasingly diversified business.
Among other things, these provisions: ● provide for a classified board of directors such that not all members of the board are elected at one time; ● allow the authorized number of our directors to be changed only by resolution of our board of directors; ● limit the manner in which stockholders can remove directors from the board; ● establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; ● require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; ● limit who may call stockholder meetings; ● authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and ● require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
Among other things, these provisions: ● provide for a classified board of directors such that not all members of the board are elected at one time; ● allow the authorized number of our directors to be changed only by resolution of our board of directors; 108 Table of Contents ● limit the manner in which stockholders can remove directors from the board; ● establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; ● require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; ● limit who may call stockholder meetings; ● authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and ● require the approval of the holders of at least 75% of the votes that all our stockholders would be entitled to cast to amend or repeal certain provisions of our charter or bylaws.
Regardless of merit or eventual outcome, liability claims may result in: ● reduced resources of our management to pursue our business strategy; ● decreased demand for our products or any product candidates that we may develop; ● decreased demand for the gene therapy product materials that we manufacture for third parties at the Hopewell Facility; ● injury to our reputation and significant negative media attention; ● the inability to continue current clinical trials or begin planned clinical trials; ● withdrawal or reduced enrollment of clinical trial participants; ● significant costs to defend the related claims/litigation; ● increased insurance costs, or an inability to maintain appropriate insurance coverage; ● substantial monetary awards to trial participants, patients and/or their families; ● loss of revenue; ● the inability to commercialize or to continue commercializing any products or product candidates; ● initiation of investigations and enforcement actions by regulators; and ● the withdrawal of products from the market, product recalls, or the cessation of development or regulatory disapproval of product candidates or withdrawal of approvals, as well as labeling, marketing, or promotional restrictions.
Regardless of merit or eventual outcome, liability claims may result in: ● reduced resources of our management to pursue our business strategy; ● decreased demand for our products or any product candidates that we may develop; ● decreased demand for the gene therapy product materials that we manufacture for third parties at the Hopewell Facility; ● injury to our reputation and significant negative media attention; ● the inability to continue current clinical trials or begin planned clinical trials; ● withdrawal or reduced enrollment of clinical trial participants; ● significant costs to defend the related claims/litigation; ● increased insurance costs, or an inability to maintain appropriate insurance coverage; 100 Table of Contents ● substantial monetary awards to trial participants, patients and/or their families; ● loss of revenue; ● the inability to commercialize or to continue commercializing any products or product candidates; ● initiation of investigations and enforcement actions by regulators; and ● the withdrawal of products from the market, product recalls, or the cessation of development or regulatory disapproval of product candidates or withdrawal of approvals, as well as labeling, marketing, or promotional restrictions.
To the extent that we decide to manufacture our own clinical and commercial supply as an alternative source of supply, there is no guarantee that we will be able to cost effectively produce sufficient quantities of our program material.
To the extent that we decide to manufacture our own clinical and commercial supply of Upstaza as an alternative source of supply, there is no guarantee that we will be able to cost effectively produce sufficient quantities of our program material.
Until such time, if ever, as we can generate enough product revenues to cover our expenses, we expect to supplement our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates; marketing, distribution, licensing or other arrangements.
Until such time, if ever, as we can generate enough product revenues to cover our expenses, we expect to supplement our cash needs through a combination of equity offerings, debt financings, royalty sales, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates; marketing, distribution, licensing or other arrangements.
CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.
CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D effective starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.
An event of default under the applicable indenture governing the 2026 Convertible Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
An event of default under the indenture governing the 2026 Convertible Notes or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
Patient enrollment is affected a number of factors including: ● the size of the patient population (many of our studies concern rare conditions with small patient populations); ● the availability of approved treatments; ● severity of the disease under investigation; ● eligibility criteria for the study in question; ● perceived benefits and risks of the product candidate under study; ● disruptions caused by and the willingness of patients to enroll in a clinical trial during outbreaks of COVID-19; ● efforts to facilitate timely enrollment in clinical trials; ● patient referral practices of physicians; ● competition from other clinical trials; ● the ability to monitor patients adequately during and after treatment; and ● proximity and availability of clinical trial sites for prospective patients.
Patient enrollment is affected a number of factors including: ● the size of the patient population (many of our studies concern rare conditions with small patient populations); ● the availability of approved treatments; ● severity of the disease under investigation; ● eligibility criteria for the study in question; ● perceived benefits and risks of the product candidate under study; ● disruptions caused by and the willingness of patients to enroll in a clinical trial during outbreaks of contagious disease, such as COVID-19; ● efforts to facilitate timely enrollment in clinical trials; ● patient referral practices of physicians; ● competition from other clinical trials; ● the ability to monitor patients adequately during and after treatment; and ● proximity and availability of clinical trial sites for prospective patients.
While we believe that there are alternative sources of supply that can satisfy our clinical and commercial requirements, we cannot be certain that we will be able to identify and establish relationships with such sources, if necessary, in a timely manner or at all, and what the terms and costs of such new arrangements would be, or that such alternative suppliers would be able to supply our potential commercial needs.
While we believe that there are alternative sources of supply that can satisfy our clinical and commercial requirements for Upstaza, we cannot be certain that we will be able to identify and establish relationships with such sources, if necessary, in a timely manner or at all, and what the terms and costs of such new arrangements would be, or that such alternative suppliers would be able to supply our potential commercial needs.
We or our collaborators may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing authorization or commercialize our products or our product candidates, including: ● clinical trials may produce negative or inconclusive results, regulators may disagree with our interpretation of results, our studies may fail to reach the necessary level of statistical significance, or we may not be able to demonstrate that our product candidates are safe, effective, or provide an advantage over current standard of care or other therapies; ● our clinical trials may not meet their primary endpoints.
We or our collaborators may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing authorization or commercialize our products or our product candidates, including: ● clinical trials may produce negative or inconclusive results, regulators may disagree with our interpretation of results, our studies may fail to reach the necessary level of statistical significance, or we may not be able to demonstrate that our product candidates are safe, effective, or provide an advantage over current standard of care or other therapies; 65 Table of Contents ● our clinical trials may not meet their primary endpoints.
With respect to drugs eligible for reimbursement under Medicare Part B, on November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nations payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest per capita Gross Domestic Product-adjusted (GDP-adjusted) price of any non-U.S. member country of the Organisation for Economic Co-operation and Development 80 Table of Contents (OECD) with a GDP per capita that is at least sixty percent of the U.S.
With respect to drugs eligible for reimbursement under Medicare Part B, on November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nations payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest per capita Gross Domestic Product-adjusted (GDP-adjusted) price of any non-U.S. member country of the Organisation for Economic Co-operation and Development (OECD) with a GDP per capita that is at least sixty percent of the U.S.
The rule also expanded the definition of products identified as “line extensions” and, in certain circumstances, required inclusion of patient copay assistance in Medicaid best price (effective January 1, 2023), thereby potentially increasing Medicaid rebates paid by manufacturers for such drugs. 340B program guidance regulations on civil monetary penalties for statutory violations, which had been finalized in early 2017 but deferred, recently also went into effect.
The rule also expanded the definition of products identified as “line extensions” and, in certain circumstances, required inclusion of patient copay assistance in Medicaid best price (effective January 1, 2023), thereby potentially increasing 92 Table of Contents Medicaid rebates paid by manufacturers for such drugs. 340B program guidance regulations on civil monetary penalties for statutory violations, which had been finalized in early 2017 but deferred, recently also went into effect.
Additionally, within Europe, each country has its own reimbursement regime employing various health technology assessment approaches to assess the cost-effectiveness of the product (in the United Kingdom a HTA assessment is conducted by NICE) which may significantly affect the effective access to the market.
Additionally, within Europe, each country has its own reimbursement regime employing various health technology assessment approaches to assess the cost-effectiveness of the product (for example, in the United Kingdom a HTA assessment is conducted by NICE) which may significantly affect the effective access to the market.
The success of our products will depend on a number of additional factors, including the following: ● our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms on a timely basis, or at all; ● the timing, scope and outcome of commercial launches; ● the maintenance and expansion of a commercial infrastructure capable of supporting product sales, marketing and distribution; ● the implementation and maintenance of marketing and distribution relationships with third parties in territories where we do not pursue direct commercialization; ● our ability to establish and maintain commercial manufacturing arrangements with third-party manufacturers; ● our ability or the ability of our third-party manufacturers to successfully produce commercial and clinical supply of drug on a timely basis sufficient to meet the needs of our commercial and clinical activities; ● successful identification of eligible patients; ● acceptance of the drug as a treatment for the approved indication by patients, the medical community and third-party payors; ● effectively competing with other therapies; ● global trade policies; ● a continued acceptable safety profile of the drug; ● the costs, timing and outcome of post-marketing studies and trials required for our products, including, with respect to Translarna, Study 041; ● protecting our rights in our intellectual property portfolio, obtaining and maintaining regulatory exclusivity and whether we are able to maintain market exclusivity periods under the Orphan Drug Act or equivalent protections in other jurisdictions; ● whether negative results from our clinical or pre-clinical trials of a product for one indication affect the perception of such product in another indication, including with respect to determinations by regulators, including the FDA and EMA, with respect to our ongoing or future regulatory submissions for marketing authorization of our products for any indication; ● whether, with respect to Translarna, we are able to continue to satisfy our obligations under, and maintain, the marketing authorization in the EEA for Translarna for the treatment of nmDMD, including whether the EMA determines on an annual basis that the benefit-risk balance of Translarna supports renewal of our marketing authorization in the EEA, on the current approved label; ● whether, and within what timeframe, we are able to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC assessments or analyses at significant cost which, if successful, may enable FDA review of an NDA submission by us and, ultimately, may support approval of Translarna for nmDMD in the United States; ● our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for our products on adequate terms; ● our ability to successfully prepare and advance regulatory submissions for marketing authorizations for our products in additional territories and for additional or expanded indications and whether and in what timeframe we may obtain such authorizations; and 65 Table of Contents ● the ability and willingness of patients and healthcare professionals to access our products through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome. ​ If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to continue to commercialize our products, either of which would have a material adverse effect on our business, results of operations and financial condition.
The success of our products will depend on a number of additional factors, including the following: ● our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms on a timely basis, or at all; ● the timing, scope and outcome of commercial launches; ● the maintenance and expansion of a commercial infrastructure capable of supporting product sales, marketing and distribution; ● the implementation and maintenance of marketing and distribution relationships with third parties in territories where we do not pursue direct commercialization; ● our ability to establish and maintain commercial manufacturing arrangements with third-party manufacturers; ● our ability or the ability of our third-party manufacturers to successfully produce commercial and clinical supply of drug on a timely basis sufficient to meet the needs of our commercial and clinical activities; ● successful identification of eligible patients; ● acceptance of the drug as a treatment for the approved indication by patients, the medical community and third-party payors; ● effectively competing with other therapies; ● global trade policies; ● a continued acceptable safety profile of the drug; ● the costs, timing and outcome of post-marketing studies and trials required for our products; ● protecting our rights in our intellectual property portfolio, obtaining and maintaining regulatory exclusivity and whether we are able to maintain market exclusivity periods under the Orphan Drug Act or equivalent protections in other jurisdictions; ● whether negative results from our clinical or pre-clinical trials of a product for one indication affect the perception of such product in another indication, including with respect to determinations by regulators, including the FDA and EMA, with respect to our ongoing or future regulatory submissions for marketing authorization of our products for any indication; ● whether, with respect to Translarna, we are able to continue to satisfy our obligations under, and maintain, the marketing authorization in the EEA for Translarna for the treatment of nmDMD, including whether the EMA determines on an annual basis that the benefit-risk balance of Translarna supports renewal of our marketing authorization in the EEA, on the current approved label; ● whether, and within what timeframe, we are able to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC assessments or analyses at significant cost which, if successful, may enable FDA review of an NDA submission by us and, ultimately, may support approval of Translarna for nmDMD in the United States; ● our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for our products on adequate terms; ● ● our ability to successfully prepare and advance regulatory submissions for marketing authorizations for our products in additional territories and for additional or expanded indications and whether and in what timeframe we may obtain such authorizations; and ● the ability and willingness of patients and healthcare professionals to access our products through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome. ​ If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to continue to commercialize our products, either of which would have a material adverse effect on our business, results of operations and financial condition. 63 Table of Contents Delays or failures in obtaining regulatory approval would prevent us from commercializing our product candidates in the applicable territory and our ability to generate revenue will be materially impaired.
Preclinical and clinical studies may also reveal unfavorable product candidate characteristics, including safety concerns, or may not demonstrate product candidate efficacy. In some instances, there can be significant variability in results between different clinical trials of the same product candidate due to numerous factors.
Preclinical and clinical studies may also reveal unfavorable product candidate characteristics, including safety concerns, or may not demonstrate product candidate efficacy. There can be significant variability in results between different clinical trials of the same product candidate due to numerous factors.
Although the FDA has not approved a corticosteroid specifically for DMD in the United States other than Emflaza, we face competition in the U.S. DMD market from prednisone/prednisolone, which, while not approved for DMD in the United States, is generically available and has been prescribed off label for DMD patients.
Although the FDA has not approved a corticosteroid specifically for DMD in the United States other than Emflaza, we face competition in the United States in the DMD market from prednisone/prednisolone, which, while not approved for DMD in the United States, is generically available and has been prescribed off label for DMD patients.
Tegsedi also faces competition from drugs like Onpattro (patisiran), which was launched by Alnylam in the United States in 2018 and received approval in Brazil for the treatment of hATTR amyloidosis in 2020 as well as AMVUTTRA (vutrisiran) which Alnylam received approval for in the United States and Brazil in 2022 for the treatment of the polyneuropathy of hATTR amyloidosis in adults.
Tegsedi faces competition from drugs like Onpattro (patisiran) which was launched by Alnylam Pharmaceuticals in the United States in 2018 and received approval in Brazil for the treatment of hATTR amyloidosis in 2020 as was well as AMVUTTRA (vutrisiran) which Alnylam Pharmaceuticals received approval for in the United States and Brazil in 2022 for the treatment of the polyneuropathy of hATTR amyloidosis in adults.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
We expect to continue to generate operating losses through 2023 and, while we anticipate that operating losses generated in future periods should decline versus prior periods, we may never generate profits from operations or maintain profitability. The net losses we incur may fluctuate significantly from period to period.
We expect to continue to generate operating losses through 2024 and, while we anticipate that operating losses generated in future periods should decline versus prior periods, we may never generate profits from operations or maintain profitability. The net losses we incur may fluctuate significantly from period to period.
Our employees, executive officers and directors may also buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information. Additionally, certain shares that we issued in connection with our acquisitions or other strategic transactions have not yet been sold and are currently restricted as a result of securities laws.
Our employees, executive officers and directors may also buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information. 110 Table of Contents Additionally, certain shares that we issued in connection with our acquisitions or other strategic transactions have not yet been sold and are currently restricted as a result of securities laws.
Even if marketing authorization of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed, the product may have labeling that includes significant restrictions, warnings, including black box warnings, and contraindications, the regulatory authorities may not approve label claims 93 Table of Contents necessary for successful product marketing, or the approval may be subject to significant conditions of approval, including the requirement of a REMS.
Even if marketing authorization of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed, the product may have labeling that includes significant restrictions, warnings, including black box warnings, and contraindications, the regulatory authorities may not approve label claims necessary for successful product marketing, or the approval may be subject to significant conditions of approval, including the requirement of a REMS.
We generally will not be able to commence commercial sales of Translarna for the treatment of nmDMD or Upstaza for the treatment of AADC deficiency pursuant to the marketing authorization granted by the European Commission in any particular member state of the EEA until we conclude the applicable pricing and reimbursement negotiations and comply with any licensing, employment or related regulatory requirements in that country.
We generally will not be able to commence commercial sales of Translarna for the treatment of nmDMD or Upstaza for the treatment of AADC deficiency pursuant to the marketing authorization granted by the EC in any particular member state of the EEA until we conclude the applicable pricing and reimbursement negotiations and comply with any licensing, employment or related regulatory requirements in that country.
Evrysdi, an orally bioavailable treatment, faces competition from treatments that are not orally bioavailable, including Spinraza (nusinersen), a drug developed by Ionis and marketed by Biogen, which has received FDA approval to treat SMA and Zolgensma (onasemnogene abeparvovec), a gene therapy drug developed by AveXis, Inc., (acquired by Novartis in 2018), which is approved in the United States and Japan for the treatment of SMA in patients under 2 years of age and in Europe for babies and young children who weigh up to 21 kilograms.
Evrysdi, an orally bioavailable treatment, faces competition from treatments that are not orally bioavailable, including Spinraza (nusinersen), a drug developed by Ionis and marketed by Biogen, which is approved to treat SMA and Zolgensma (onasemnogene abeparvovec), a gene therapy drug developed by AveXis, Inc., (acquired by Novartis in 2018), which is approved in the United States and Japan for the treatment of SMA in patients under 2 years of age and in Europe for babies and young children who weigh up to 21 kilograms.
We may engage in additional strategic transactions to expand and diversify our product pipeline, including through the acquisition of assets, businesses, or rights to products, product candidates or technologies or through strategic alliances or collaborations and we may incur expenses, including with respect to transaction costs, subsequent 82 Table of Contents development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction.
We may engage in additional strategic transactions to expand and diversify our product pipeline, including through the acquisition of assets, businesses, or rights to products, product candidates or technologies or through strategic alliances or collaborations and we may incur expenses, including with respect to transaction costs, subsequent development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction.
Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet fully clear, and will depend on a number of marketplace and regulatory factors that are still developing.
Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet fully clear, and will depend on a number 89 Table of Contents of marketplace and regulatory factors that are still developing.
If the quality or accuracy of the data maintained by these service providers is insufficient, or these third parties otherwise fail to comply with regulatory requirements, we could be subject to regulatory sanctions. Additionally, we may contract with a third party to calculate and report pricing information mandated by various government programs.
If the quality or accuracy of the data maintained by these service providers is insufficient, or these third parties otherwise fail to comply with regulatory requirements, we could be subject to regulatory sanctions. 99 Table of Contents Additionally, we may contract with a third party to calculate and report pricing information mandated by various government programs.
A decline in the value of our company could also cause our stockholders to lose all or part of their investment in our company. We may need additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.
A decline in the value of our company could also cause our stockholders to lose all or part of their investment in our company. 81 Table of Contents We may need additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.
We cannot be sure whether additional legislative or regulatory changes will be enacted in any territory in which we are authorized, or become authorized, to market our products or product candidates, 99 Table of Contents or whether applicable regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing authorizations of our products or product candidates, if any, may be.
We cannot be sure whether additional legislative or regulatory changes will be enacted in any territory in which we are authorized, or become authorized, to market our products or product candidates, or whether applicable regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing authorizations of our products or product candidates, if any, may be.
For example, the FDA recently issued a final guidance document specific to sameness determinations.
For example, the FDA issued a final guidance document specific to sameness determinations.
Notwithstanding our large investments to date and anticipated future expenditures in proprietary technologies for both small-molecule and gene therapy drug discovery, to date we have been granted marketing authorization for a limited number of commercial products and have not achieved profitability. We may never realize a return on investment.
Notwithstanding our large investments to date and anticipated future expenditures in proprietary technologies for small-molecule drug discovery, to date we have been granted marketing authorization for a limited number of commercial products and have not achieved profitability. We may never realize a return on investment.
Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at the time we seek to refinance such indebtedness. We may 115 Table of Contents not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at the time we seek to refinance such indebtedness. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Following this announcement, we submitted a meeting request to the FDA to gain clarity on the regulatory pathway for a potential re- 66 Table of Contents submission of an NDA for Translarna. The FDA provided initial written feedback that Study 041 does not provide substantial evidence of effectiveness to support NDA re-submission.
Following this announcement, we submitted a meeting request to the FDA to gain clarity on the regulatory pathway for a potential re-submission of an NDA for Translarna. The FDA provided initial written feedback that Study 041 does not provide substantial evidence of effectiveness to support NDA re-submission.
Moreover, it is possible for a whistleblower to pursue a False 94 Table of Contents Claims Act case against us as a result of such third party conduct, even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim.
Moreover, it is possible for a whistleblower to pursue a False Claims Act case against us as a result of such third party conduct, even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with 102 Table of Contents us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
These elevated enzyme levels did not require cessation of Translarna administration, and enzyme levels typically normalized after completion of the treatment phase. We did not observe any increases in bilirubin, which can be associated with serious harm to the liver, in the Phase 1 clinical trial.
These elevated enzyme levels did not require cessation of Translarna administration, and enzyme levels typically normalized 68 Table of Contents after completion of the treatment phase. We did not observe any increases in bilirubin, which can be associated with serious harm to the liver, in the Phase 1 clinical trial.
As a result, a purchaser in one EU 81 Table of Contents member state may seek to import Translarna from another EU member state where Translarna is sold at a lower price. This could have a negative impact on our business, financial condition, results of operations and growth.
As a result, a purchaser in one EU member state may seek to import Translarna from another EU member state where Translarna is sold at a lower price. This could have a negative impact on our business, financial condition, results of operations and growth.
Further, based on unsustainable economics imposed by the arbitration board in Germany upon the conclusion of an arbitration process in 2016 with us and the German Federal Association of the Statutory Health Insurances, we delisted 96 Table of Contents Translarna from the German pharmacy ordering system, effective April 1, 2016.
Further, based on unsustainable economics imposed by the arbitration board in Germany upon the conclusion of an arbitration process in 2016 with us and the German Federal Association of the Statutory Health Insurances, we delisted Translarna from the German pharmacy ordering system, effective April 1, 2016.
We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
We also are required to register ongoing clinical trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within certain timeframes. Failure to 97 Table of Contents do so can result in fines, adverse publicity and civil and criminal sanctions.
Such rules and any additional healthcare reform measures could further constrain our business or limit the amounts that federal and state governments will pay for healthcare products and services, which could result in additional pricing pressures. In addition, U.S. private health insurers often rely upon Medicare coverage policies and payment limitations in setting their own coverage and reimbursement policies.
Such rules and any additional healthcare reform measures could further constrain our business or limit the amounts that federal and state governments will pay for healthcare products and services, which could result in additional pricing pressures. 77 Table of Contents In addition, U.S. private health insurers often rely upon Medicare coverage policies and payment limitations in setting their own coverage and reimbursement policies.
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 98 Table of Contents with a new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (effective 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 (beginning in 2025).
In October 2020, the Department of Health and Human Services, or HHS, and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.
In October 2020, the Department of Health and 78 Table of Contents Human Services, or HHS, and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.
Doing so will require a high degree of coordination and compliance with laws and regulations in numerous territories, including restrictions on advertising practices, enforcement of intellectual property rights, restrictions on pricing or discounts, transparency laws and regulations, and unexpected changes in regulatory requirements and tariffs.
Doing so will require a high degree of coordination and compliance with laws and regulations in numerous territories, including restrictions on advertising practices, enforcement of intellectual property 71 Table of Contents rights, restrictions on pricing or discounts, transparency laws and regulations, and unexpected changes in regulatory requirements and tariffs.
For example, our marketing authorization for Translarna for the treatment of nmDMD in the EEA is subject to annual review and renewal by the European Commission following reassessment by the EMA of the benefit-risk balance of the authorization, as well as the specific obligation to conduct and report the results of Study 041.
For example, our marketing authorization for Translarna for the treatment of nmDMD in the EEA is subject to annual review and renewal by the EC following reassessment by the EMA of the benefit-risk balance of the authorization, as well as the specific obligation to conduct and report the results of Study 041.
The EU exclusivity period can be reduced to six years, at the end of the fifth year, if a drug no longer meets the criteria for orphan drug designation, including if the drug is sufficiently profitable so that market exclusivity is 91 Table of Contents no longer justified.
The EU exclusivity period can be reduced to six years, at the end of the fifth year, if a drug no longer meets the criteria for orphan drug designation, including if the drug is sufficiently profitable so that market exclusivity is no longer justified.
In addition, the FDA requires surveillance programs to monitor approved products that have been commercialized, as well as REMS, and the agency has the power to require changes in labeling or to prevent further marketing and distribution of a product.
In addition, the FDA requires surveillance programs to monitor approved products that have been commercialized, as well as REMS, and the agency has 87 Table of Contents the power to require changes in labeling or to prevent further marketing and distribution of a product.
If we retain a service provider, we will substantially rely on it as well as other third-party providers that perform 106 Table of Contents services for us, including entrusting our inventories of products to their care and handling.
If we retain a service provider, we will substantially rely on it as well as other third-party providers that perform services for us, including entrusting our inventories of products to their care and handling.
For example, in 2018 we settled a securities class action lawsuit initiated against us and certain of our current and former executive officers during 2016, as well as derivative lawsuits brought against us, as a nominal defendant, certain of our current and former executive officers and certain of our current and 117 Table of Contents former directors during 2017.
For example, in 2018 we settled a securities class action lawsuit initiated against us and certain of our current and former executive officers during 2016, as well as derivative lawsuits brought against us, as a nominal defendant, certain of our current and former executive officers and certain of our current and former directors during 2017.
If we are unable to successfully manage any strategic transaction in which we may engage, our ability to develop new products and continue to expand and diversify our product pipeline may be limited. 88 Table of Contents Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
If we are unable to successfully manage any strategic transaction in which we may engage, our ability to develop new products and continue to expand and diversify our product pipeline may be limited. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
If we fail to satisfy our obligations, the licensor may have the right to terminate the agreement. Disputes may arise between us and any of our licensors regarding intellectual property subject to 114 Table of Contents such agreements and other issues.
If we fail to satisfy our obligations, the licensor may have the right to terminate the agreement. Disputes may arise between us and any of our licensors regarding intellectual property subject to such agreements and other issues.
If future supply chain disruptions 103 Table of Contents create prolonged delays, the supplies of our products or products candidates may be significantly and adversely affected and our business, results of operations and financial condition could be materially adversely affected.
If future supply chain disruptions create prolonged delays, the supplies of our products or products candidates may be significantly and adversely affected and our business, results of operations and financial condition could be materially adversely affected.
For example, the p-values in ACT DMD for change from baseline at week 48 in the 6-minute walk test, or 6MWT (which we also refer to as 6-minute walk distance, or 6MWD) and each secondary end 69 Table of Contents point timed function test were nominal p-values.
For example, the p-values in ACT DMD for change from baseline at week 48 in the 6-minute walk test, or 6MWT (which we also refer to as 6-minute walk distance, or 6MWD) and each secondary end point timed function test were nominal p-values.
Sales of substantial amounts of shares of our common stock or other securities by our stockholders or by us, including sales made under the Sales Agreement, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $125 million from time to time, through the Sales Agent by any method that is deemed to be an “at the market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act, or the issuance of shares of our common stock upon conversion of our outstanding 2026 Convertible Notes or any future securities convertible or exchangeable into our common stock or in connection with a strategic transaction or otherwise, could dilute our stockholders, lower the market price of our common stock and impair our ability to raise capital through the sale of equity securities. ​ 118 Table of Contents Item 1B.
Sales of substantial amounts of shares of our common stock or other securities by our stockholders or by us, including sales made under our At the Market Offering Sales Agreement with Cantor Fitzgerald and RBC Capital Markets, LLC, pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $125 million from time to time, through the Sales Agent by any method that is deemed to be an “at the market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act, or the issuance of shares of our common stock upon conversion of our outstanding 2026 Convertible Notes or any future securities convertible or exchangeable into our common stock or in connection with a strategic transaction or otherwise, could dilute our stockholders, lower the market price of our common stock and impair our ability to raise capital through the sale of equity securities. ​ Item 1B.
Pricing negotiations may continue after reimbursement has been obtained. We cannot predict the timing of Translarna’s or Upstaza’s commercial launch in countries where we are awaiting pricing and reimbursement guidelines.
Pricing negotiations may continue after reimbursement has been obtained. We cannot predict the 90 Table of Contents timing of Translarna’s or Upstaza’s commercial launch in countries where we are awaiting pricing and reimbursement guidelines.
We may not be able to obtain orphan drug exclusivity for our products or product candidates in either the United States or the EU. Regulatory authorities in some jurisdictions, including the EU and the United States, may designate drugs for relatively small patient populations as orphan drugs.
Risks Related to Regulatory Approval of our Products and our Product Candidates We may not be able to obtain orphan drug exclusivity for our products or product candidates in either the United States or the EU. Regulatory authorities in some jurisdictions, including the EU and the United States, may designate drugs for relatively small patient populations as orphan drugs.
Our failure, or the failure of our third-party manufacturers or distributors, over whom we have no direct control, to comply with applicable regulations could result in sanctions being 102 Table of Contents imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, clinical holds or termination of clinical studies, warning or untitled letters, regulatory communications warning the public about safety issues with a product, import or export refusals, license revocation, seizures, detentions, or recalls of product candidates or product, operating restrictions, criminal prosecutions or debarment, suits under the civil False Claims act, corporate integrity agreements, or consent decrees, any of which could significantly and adversely affect our reputation and supplies of our products or product candidates and our business, results of operations and financial condition could be materially adversely affected.
Our failure, or the failure of our third-party manufacturers or distributors, over whom we have no direct control, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, clinical holds or termination of clinical studies, warning or untitled letters, regulatory communications warning the public about safety issues with a product, import or export refusals, license revocation, seizures, detentions, or recalls of product candidates or products, operating restrictions, criminal prosecutions or debarment, suits under the civil False Claims act, corporate integrity agreements, or consent decrees, any of which could significantly and adversely affect our reputation and supplies of our products or product candidates and our business, results of operations and financial condition could be materially adversely affected. 95 Table of Contents In addition, we have no direct control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
Our competitors may also obtain marketing authorization for their products more rapidly than we may obtain approval for our 78 Table of Contents products and product candidates, which could result in our competitors establishing a strong market position before we are able to enter the market.
Our competitors may also obtain marketing authorization for their products more rapidly than we may obtain approval for our products and product candidates, which could result in our competitors establishing a strong market position before we are able to enter the market.
Certain of our products and product candidates, such as our gene therapies and other biologic product candidates, may be difficult to produce, presenting manufacturing challenges that may delay product development and regulatory approval. Manufacturers of pharmaceutical products must comply with strictly enforced manufacturing and quality requirements, including cGMP requirements, state and federal regulations, as well as ex-U.S. requirements when applicable.
Certain of our products and product candidates may be difficult to produce, presenting manufacturing challenges that may delay product development and regulatory approval. Manufacturers of pharmaceutical products must comply with strictly enforced manufacturing and quality requirements, including cGMP requirements, state and federal regulations, as well as ex-U.S. requirements when applicable.
International operations inherently subject us to a number of risks and uncertainties, including: ● political, regulatory, compliance and economic developments that could restrict our ability to manufacture, market and sell our products, including the Russia-Ukraine conflict and related sanctions that have been imposed by various countries in response thereto; ● financial risks such as longer payment cycles, difficulty collecting accounts receivable, potentially high inflation rates and exposure to fluctuations in foreign currency exchange rates; ● difficulty in staffing and managing international operations; ● various effects and responsive measures relating to COVID-19 outbreaks; ● potentially negative consequences from changes in or interpretations of tax laws; ● changes in international medical reimbursement policies and programs; ● unexpected changes in healthcare policies of ex-U.S. jurisdictions; ● trade protection measures, including import or export licensing requirements and tariffs; ● our ability to develop relationships with qualified local distributors and trading companies; ● political and economic instability in particular ex-U.S. economies and markets, in particular in emerging markets, for example in Brazil; ● diminished protection of intellectual property in some countries outside of the United States; ● differing labor regulations and business practices; and ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ and service providers’ activities that may fall within the purview of the Foreign Corrupt Practices Act, UK Bribery Act or similar local regulation.
International operations inherently subject us to a number of risks and uncertainties, including: ● political, regulatory, compliance and economic developments that could restrict our ability to manufacture, market and sell our products, including the Russia-Ukraine conflict and related sanctions that have been imposed by various countries in response thereto; ● financial risks such as longer payment cycles, difficulty collecting accounts receivable, potentially high inflation rates, sustained high interest rates and exposure to fluctuations in foreign currency exchange rates; ● difficulty in staffing and managing international operations; ● potentially negative consequences from changes in or interpretations of tax laws; ● changes in international medical reimbursement policies and programs; ● unexpected changes in healthcare policies of ex-U.S. jurisdictions; ● trade protection measures, including import or export licensing requirements and tariffs; ● our ability to develop relationships with qualified local distributors and trading companies; ● political and economic instability in particular ex-U.S. economies and markets, in particular in emerging markets, for example in Brazil; ● diminished protection of intellectual property in some countries outside of the United States; ● differing labor regulations and business practices; ● regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ and service providers’ activities that may fall within the purview of the Foreign Corrupt Practices Act, UK Bribery Act or similar local regulation; and ● various effects and responsive measures relating to outbreaks of contagious disease, such as COVID-19; For example, the Brazilian Ministry of Health has previously experienced significant administrative delays processing centralized group purchase orders.
As a result, failure to meet the regulatory requirements for the production of those materials and products may generally affect the regulatory status of our contract manufacturers’ facilities.
As a result, failure to meet the regulatory requirements for the production of those materials and products may generally affect the regulatory status of our contract manufacturers’ facilities and our products or product candidates.
The impact on our income tax 89 Table of Contents provision resulting from the above-mentioned factors and others may be significant and could adversely affect our results of operations.
The impact on our income tax provision resulting from the above-mentioned factors and others may be significant and could adversely affect our results of operations.
Many additional factors could cause production or distribution interruptions with the manufacture and distribution of any of our products and product candidates, including human error, natural disasters, labor disputes, acts of terrorism or war, equipment malfunctions, contamination, supply chain disruption, including disruptions caused by the COVID-19 pandemic, or raw material and component shortages.
Many additional factors could cause production or distribution interruptions with the manufacture and distribution of any of our products and product candidates, including human error, natural disasters, labor disputes, acts of terrorism or war, equipment malfunctions, contamination, supply chain disruption, including disruptions caused by outbreaks of contagious disease, such as COVID-19, or raw material and component shortages.
Our current ability to generate revenue from sales of Translarna is dependent upon our ability to maintain our marketing authorizations in the EEA for Translarna for the treatment of nmDMD in ambulatory patients aged two years and older, in Russia for the treatment of nmDMD in patients aged two years and older and in Brazil for the treatment of nmDMD in ambulatory patients two years and older and for continued treatment of patients that become non-ambulatory.
Our current ability to generate revenue from sales of Translarna is dependent upon our ability to maintain our marketing authorizations in the EEA for Translarna for the treatment of nmDMD in ambulatory patients aged two years and older, in Russia for the treatment of nmDMD in patients aged two years and older and in Brazil for the treatment of nmDMD in ambulatory patients two years and older and for continued treatment of patients that become non-ambulatory, as well as in various other countries.
Our failure to repurchase 2026 Convertible Notes at a time when the repurchase is required by the indenture, to make interest payments on the 2026 Convertible Notes when due under the indenture or to pay any cash payable on future conversions of the 2026 Convertible Notes as required by the indenture would constitute a default under each indenture governing the 2026 Convertible Notes and the Blackstone Credit Agreement.
Our failure to repurchase 2026 Convertible Notes at a time when the repurchase is required by the indenture, to make interest payments on the 2026 Convertible Notes when due under the indenture or to pay any cash payable on future conversions of the 2026 Convertible Notes as required by the indenture would constitute a default under the indenture governing the 2026 Convertible Notes.
Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent, and programs intended to provide patient assistance until coverage is established can be very costly.
Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent, and programs intended to provide patient assistance until coverage is established can be very costly and limited in duration by law.
In addition, it is uncertain if and to what extent various states will confirm the IRA, the Tax Act, and additional tax legislation.
In addition, it is uncertain if and to what extent various states will conform the 2017 Tax Act, IRA, and additional tax legislation.
We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors, partners and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants.
We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors, partners and other third parties.
Under a newly enacted law, the FDA must specify the conditions for the required post approval studies, including enrollment targets, the study protocol, milestones, and target completion dates, by the time of approval and the FDA may require that the post-approval studies be commenced before the date of approval.
The FDA must specify the conditions for the required post approval studies, including enrollment targets, the study protocol, milestones, and target completion dates, by the time of approval and the FDA may require that the post-approval studies be commenced before the date of approval.
If we cannot successfully defend ourselves against claims that our product candidates, products or gene therapy product 107 Table of Contents materials caused injuries, we will incur substantial liabilities.
If we cannot successfully defend ourselves against claims that our product candidates, products or gene therapy product materials caused injuries, we will incur substantial liabilities.
In addition, our expenses will increase if and as we: ● seek to satisfy contractual and regulatory obligations that we assumed through our acquisitions and collaborations; ● execute our commercial strategy for our products, including initial commercialization launches of our products, label extensions or entering new markets; ● are required to complete any additional clinical trials, non-clinical studies or CMC assessments or analyses in order to advance Translarna for the treatment of nmDMD in the United States or elsewhere; ● are required to take other steps, in addition to Study 041, to maintain our current marketing authorization in the EEA, Brazil and Russia for Translarna for the treatment of nmDMD or to obtain further marketing authorizations for Translarna for the treatment of nmDMD or other indications; ● utilize the Hopewell Facility to manufacture program materials for certain of our gene therapy product candidates as well as program materials for third parties; ● initiate or continue the research and development of our splicing, gene therapy, Bio-e, metabolic and oncology programs as well as studies in our products for maintaining authorizations, including Study 041, label extensions and additional indications; ● seek to discover and develop additional product candidates; ● seek to expand and diversify our product pipeline through strategic transactions; ● maintain, expand and protect our intellectual property portfolio; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.
In addition, our expenses will increase if and as we: ● seek to satisfy contractual and regulatory obligations that we assumed through our acquisitions and collaborations; ● execute our commercialization strategy for our products, including initial commercialization launches of our products, label extensions or entering new markets; 80 Table of Contents ● are required to complete any additional clinical trials, non-clinical studies or Chemistry, Manufacturing and Controls, or CMC, assessments or analyses in order to advance Translarna for the treatment of nmDMD in the United States or elsewhere; ● are required to take other steps to maintain our current marketing authorization in the EEA, Brazil and Russia for Translarna for the treatment of nmDMD or to obtain further marketing authorizations for Translarna for the treatment of nmDMD or other indications; ● initiate or continue the research and development of sepiapterin and our splicing and ferroptosis and inflammation programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● continue to utilize the Hopewell Facility to manufacture program materials for third parties; ● seek to discover and develop additional product candidates; ● seek to expand and diversify our product pipeline through strategic transactions; ● maintain, expand and protect our intellectual property portfolio; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.
Any termination of these licenses could result in the loss of significant or all rights licensed to us and could harm or prevent our ability to commercialize Upstaza for the treatment of AADC deficiency and our other gene therapy product candidates.
Any termination of these licenses could result in the loss of significant or all rights licensed to us and could harm or prevent our ability to commercialize Upstaza for the treatment of AADC deficiency.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe entered into a lease agreement for approximately 220,500 square feet of office, manufacturing and laboratory space at a facility located in Hopewell Township, New Jersey. The rental term for such facility commenced on July 1, 2020, with an initial term of fifteen years and two consecutive 10-year renewal periods at our option.
Biggest changeThe rental term for such facility commenced on May 1, 2020 with an initial term of seven years and two consecutive five year renewal periods at our option. We entered into a lease agreement for approximately 220,500 square feet of office, manufacturing and laboratory space at a facility located in Hopewell Township, New Jersey.
Additionally, we entered into a lease agreement for approximately 103,000 square feet of laboratory and office space in Bridgewater, New Jersey. The rental term for such facility commenced on May 1, 2020 with an initial term of seven years and two consecutive five year renewal periods at our option.
The rental term for such facility commenced on June 1, 2022, with an initial term of seventeen years followed by three consecutive five-year renewal periods at our option. Additionally, we entered into a lease agreement for approximately 103,000 square feet of laboratory and office space in Bridgewater, New Jersey.
Item 2. Properties Our principal facilities consist of approximately 126,000 square feet of research and office space located at 100, 200, 250 and 400 Corporate Court, Middlesex Business Center, South Plainfield, New Jersey, that we occupy under leases that expire in 2024, with two consecutive five-year renewal options to renew the leases after 2024.
Item 2. Properties Our principal facilities consist of approximately 126,000 square feet of research and office space located at 100, 200, 250 and 400 Corporate Court, Middlesex Business Center, South Plainfield, New Jersey, that we occupy under leases that expire in August 2024.
We also lease additional office space in the U.S. and other countries to support our operations as a global organization, but these leases are not material to us.
Additionally, we lease approximately 5,000 square feet of office space in Sao Paulo, Brazil, that we occupy under a lease that expires in 2024. We also lease additional office space in the U.S. and other countries to support our operations as a global organization, but these leases are not material to us. 112 Table of Contents
We also lease two entire buildings comprised of approximately 360,000 square feet of shell condition, modifiable space at a facility located in Warren, New Jersey. The rental term for such facility commenced on June 1, 2022, with an initial term of seventeen years followed by three consecutive five-year renewal periods at our option.
The rental term for such facility commenced on July 1, 2020, with an initial term of fifteen years and two consecutive 10-year renewal periods at our option. We lease approximately 6,500 square feet of office space in Dublin, Ireland, that we occupy under a lease that expires in 2024.
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We lease approximately 6,500 square feet of office space in Dublin, Ireland, that we occupy under a lease that expires in 2024. Additionally, we lease approximately 5,000 square feet of office space in Sao Paulo, Brazil, that we occupy under a lease that expires in 2024.
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We also lease two entire buildings comprised of approximately 360,000 square feet of shell condition, modifiable space at a facility located in Warren, New Jersey which we intend to make our corporate headquarters in 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures None. ​ 119 Table of Contents PART II
Biggest changeMine Safety Disclosures None. ​ 113 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of February 17, 2023, there were 98 holders of record of our common stock. This number does not include beneficial owners whose shares are held in street name.
Biggest changeHolders As of February 27, 2024, there were 98 holders of record of our common stock. This number does not include beneficial owners whose shares are held in street name.

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 commercialize and market our products and product candidates that may receive marketing authorization; ● our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms, on a timely basis, with third-party payors for our products and products candidates; 139 Table of Contents ● our ability to maintain the marketing authorization for our products, including in the EEA for Translarna for the treatment of nmDMD and whether the EMA determines on an annual basis that the benefit-risk balance of Translarna supports renewal of our marketing authorization in the EEA, on the current approved label; ● the costs, timing and outcome of Study 041; ● our ability to obtain marketing authorization for Upstaza for the treatment of AADC deficiency in the United States; ● the costs, timing and outcome of our efforts to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC assessments or analyses at significant cost which, if successful, may enable FDA review of an NDA re-submission by us and, ultimately, may support approval of Translarna for nmDMD in the United States; ● unexpected decreases in revenue or increase in expenses resulting from the COVID-19 pandemic or other potential widespread outbreaks of contagious disease; ● our ability to maintain orphan exclusivity in the United States for Emflaza; ● our ability to successfully complete all post-marketing requirements imposed by regulatory agencies with respect to our products; ● the progress and results of activities under our splicing, gene therapy, Bio-e, metabolic and oncology programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● the scope, costs and timing of our commercialization activities, including product sales, marketing, legal, regulatory, distribution and manufacturing, for any of our products and for any of our other product candidates that may receive marketing authorization or any additional territories in which we receive authorization to market Translarna; ● the costs, timing and outcome of regulatory review of our splicing, gene therapy, Bio-e, metabolic and oncology programs and Translarna in other territories; ● our ability to utilize the Hopewell Facility to manufacture program materials for certain of our gene therapy product candidates and program materials for third parties; ● our ability to satisfy our obligations under the Blackstone Credit Agreement; ● our ability to satisfy our obligations under the indentures governing the 2026 Convertible Notes; ● the timing and scope of growth in our employee base; ● the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates, including those in our splicing, gene therapy, Bio-e, metabolic and oncology programs; ● revenue received from commercial sales of our products or any of our product candidates; ● our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for Translarna for the treatment of nmDMD on adequate terms, or at all; ● the ability and willingness of patients and healthcare professionals to access Translarna through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome; ● the costs of preparing, filing and prosecuting patent applications, maintaining, and protecting our intellectual property rights and defending against intellectual property-related claims; ● the extent to which we acquire or invest in other businesses, products, product candidates, and technologies, including the success of any acquisition, in-licensing or other strategic transaction we may pursue, and the costs of subsequent development requirements and commercialization efforts, including with respect to our acquisitions of Emflaza, Agilis, our Bio-E platform and Censa and our licensing of Tegsedi and Waylivra; and ● our ability to establish and maintain collaborations, including our collaborations with Roche and the SMA Foundation, and our ability to obtain research funding and achieve milestones under these agreements.
Biggest changeOur future capital requirements will depend on many factors, including: ● our ability to maintain our marketing authorization for Translarna for the treatment of nmDMD in the EEA following the CHMP’s negative opinion on the conditional marketing authorization following a re-examination procedure or identify other potential mechanisms in which we may provide Translarna to nmDMD patients in the EEA; ● our ability to maintain the marketing authorization for Translarna and our other products in territories outside of the EEA; ● our ability to commercialize and market our products and product candidates that may receive marketing authorization; ● our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms, on a timely basis, with third-party payors for our products and products candidates; ● the amount of generic drug competition that we face for Emflaza following its loss of orphan drug exclusivity related to the treatment of DMD in patients five years and older; ​ ● our ability to obtain marketing authorization for sepiapterin for the treatment of PKU in the United States and EEA; ● our ability to obtain marketing authorization for Upstaza for the treatment of AADC deficiency in the United States; ● the costs, timing and outcome of our efforts to advance Translarna for the treatment of nmDMD in the United States, including, whether we will be required to perform additional clinical trials, non-clinical studies or CMC assessments or analyses at significant cost which, if successful, may enable FDA review of an NDA re-submission by us and, ultimately, may support approval of Translarna for nmDMD in the United States; ● unexpected decreases in revenue or increase in expenses resulting from potential widespread outbreaks of contagious disease, such as COVID-19; 133 Table of Contents ● our ability to successfully complete all post-marketing requirements imposed by regulatory agencies with respect to our products; ● the progress and results of activities for sepiapterin and our splicing and ferroptosis and inflammation programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● the scope, costs and timing of our commercialization activities, including product sales, marketing, legal, regulatory, distribution and manufacturing, for any of our products and for any of our other product candidates that may receive marketing authorization or any additional territories in which we receive authorization to market Translarna; ● the costs, timing and outcome of regulatory review of sepiapterin and our splicing and ferroptosis and inflammation programs and Translarna and Upstaza in other territories; ● our ability to satisfy our obligations under the indenture governing the 2026 Convertible Notes; ● the timing and scope of any potential future growth in our employee base; ● the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates, including those in our splicing and ferroptosis and inflammation programs; ● revenue received from commercial sales of our products or any of our product candidates; ● our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for Translarna for the treatment of nmDMD on adequate terms, or at all; ● the ability and willingness of patients and healthcare professionals to access Translarna through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome; ● our ability to continue to utilize the Hopewell Facility to manufacture program materials for third parties; ● the costs of preparing, filing and prosecuting patent applications, maintaining, and protecting our intellectual property rights and defending against intellectual property-related claims; ● the extent to which we acquire or invest in other businesses, products, product candidates, and technologies, including the success of any acquisition, in-licensing or other strategic transaction we may pursue, and the costs of subsequent development requirements and commercialization efforts, including with respect to our acquisitions of Emflaza, Agilis, our ferroptosis and inflammation platform and Censa and our licensing of Tegsedi and Waylivra; and ● our ability to establish and maintain collaborations, including our collaborations with Roche and the SMA Foundation, and our ability to obtain research funding and achieve milestones under these agreements.
We may redeem for cash all or any portion of the 2026 Convertible Notes, at our option, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
We may redeem for cash all or any portion of the 2026 Convertible Notes, at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption, at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Selling, general and administrative expense was $326.0 million for the year ended December 31, 2022, an increase of $40.2 million, or 14%, from $285.8 million for the year ended December 31, 2021. The increase reflects our continued investment to support our commercial activities including our expanding commercial portfolio. ​ Change in the fair value of deferred and contingent consideration.
Selling, general and administrative expense was $326.0 million for the year ended December 31, 2022, an increase of $40.2 million, or 14%, from $285.8 million for the year ended December 31, 2021. The increase reflects our continued investment to support our commercial activities including our expanding commercial portfolio. ​ Change in the fair value of contingent consideration.
Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders.
We did not issue or sell any shares of common stock pursuant to the Sales Agreement during the years ending December 31, 2021 and December 31, 2022. The remaining shares of our common stock available to be issued and sold, under the Sales Agreement, have an aggregate offering price of up to $93.0 million as of December 31, 2022.
We did not issue or sell any shares of common stock pursuant to the Sales Agreement during the years ending December 31, 2023, 2022, and 2021. The remaining shares of our common stock available to be issued and sold, under the Sales Agreement, have an aggregate offering price of up to $93.0 million as of December 31, 2023.
Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within the change in the fair value of deferred and contingent consideration in the consolidated statements of operations. The fair value of development and regulatory milestones are estimated utilizing a probability adjusted, discounted cash flow approach.
Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within the change in the fair value of deferred and contingent consideration on the consolidated statements of operations. The fair value of the development and regulatory milestones are estimated utilizing a probability adjusted, discounted cash flow approach.
Roche and the SMA Foundation Collaboration. In November 2011, we entered into the SMA License Agreement pursuant to which we are collaborating with Roche and the SMA Foundation to further develop and commercialize compounds identified under our SMA program with the SMA Foundation. The research component of this agreement terminated effective December 31, 2014.
In November 2011, we entered into the SMA License Agreement pursuant to which we are collaborating with Roche and the SMA Foundation to further develop and commercialize compounds identified under our SMA program with the SMA Foundation. The research component of this agreement terminated effective December 31, 2014.
Holders may convert their 2026 Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2026 only under the following circumstances: (1) during any calendar quarter commencing on or after December 31, 2019 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period, or the measurement period, in which the trading price (as defined in the 2026 Convertible Notes Indenture) per $1,000 principal amount of 2026 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) during any period after we have issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or (4) upon the occurrence of specified corporate events.
Holders may convert their 2026 Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2026 only under the following circumstances: (1) during any calendar quarter commencing on or after December 31, 2019 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive 129 Table of Contents trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period, or the measurement period, in which the trading price (as defined in the 2026 Convertible Notes Indenture) per $1,000 principal amount of 2026 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) during any period after we have issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or (4) upon the occurrence of specified corporate events.
Royalty revenue was $113.5 million for the years ended December 31, 2022, an increase of $58.9 million, or over 100%, from $54.6 million for the years ended December 31, 2021. The increase in royalty revenue was due to higher Evrysdi sales in the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Royalty revenue was $113.5 million for the year ended December 31, 2022, an increase of $58.9 million, or over 100%, from $54.6 million for the year ended December 31, 2021. The increase in royalty revenue was due to higher Evrysdi sales in the year ended December 31, 2022 as compared to the year ended December 31, 2021.
Our marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission following reassessment by the European Medicines Agency, or EMA, of the benefit-risk balance of the authorization, which we refer to as the annual EMA reassessment.
Our marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission, or EC, following reassessment by the European Medicines Agency, or EMA, of the benefit-risk balance of the authorization, which we refer to as the annual EMA reassessment.
We have relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States since 2014, Emflaza for the treatment of DMD in the United States since 2017 and Upstaza for the treatment of AADC deficiency in the EEA since May 2022.
We have relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States since 2014, Emflaza for the treatment of DMD in the United States since 2017 and Upstaza for the treatment of AADC deficiency in the EEA since 2022.
This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of: ● the scope, rate of progress and expense of our clinical trials and other research and development activities; 127 Table of Contents ● the potential benefits of our product and product candidates over other therapies; ● our ability to market, commercialize and achieve market acceptance for our products or any of our product candidates that we are developing or may develop in the future, including our ability to negotiate pricing and reimbursement terms acceptable to us; ● clinical trial results; ● the terms and timing of regulatory approvals; and ● the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights.
This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of: ● the scope, rate of progress and expense of our clinical trials and other research and development activities; ● the potential benefits of our products and product candidates over other therapies; ● our ability to market, commercialize and achieve market acceptance for our products or any of our product candidates that we are developing or may develop in the future, including our ability to negotiate pricing and reimbursement terms acceptable to us; ● clinical trial results; ● the terms and timing of regulatory approvals; and ● the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights.
For example, if the EMA or FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of any of our products or product candidate or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
For example, if the EMA or FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of any of our products or product candidates or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
Our ongoing ability to generate revenue from sales of Translarna for the treatment of nmDMD is dependent upon our ability to maintain our marketing authorizations in Brazil, Russia and in the EEA and secure market access through commercial programs following the conclusion of pricing and reimbursement terms at sustainable levels in the member states of the EEA or through EAP programs in the EEA and other territories.
Our ongoing ability to generate revenue from sales of Translarna for the treatment of nmDMD is dependent upon our ability to maintain our marketing authorizations in Brazil, Russia and in the EEA and secure market access through commercial programs following the conclusion of pricing and reimbursement terms at sustainable levels in the member states of the EEA or through EAP programs or similar styled programs in the EEA and other territories.
We are a science-driven global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines.
We are a global biopharmaceutical company focused on the discovery, development and commercialization of clinically differentiated medicines that provide benefits to patients with rare disorders. Our ability to innovate to identify new therapies and to globally commercialize products is the foundation that drives investment in a robust and diversified pipeline of transformative medicines.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs primarily through a combination of equity offerings, debt financings, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product and product candidates and marketing, distribution or licensing arrangements.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs 135 Table of Contents primarily through a combination of equity offerings, debt financings, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product and product candidates and marketing, distribution or licensing arrangements.
In addition, we had unrealized losses on our equity investments and convertible debt security in ClearPoint Neuro, Inc.
In addition, we had unrealized and realized losses on our equity investments and convertible debt security in ClearPoint Neuro, Inc.
The conversion rate may be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. We are not permitted to redeem the 2026 Convertible Notes prior to September 20, 2023.
The conversion rate may be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. We were not permitted to redeem the 2026 Convertible Notes prior to September 20, 2023.
The 2026 Convertible Notes represent senior unsecured obligations and will rank senior in right of payment to our future indebtedness that is expressly subordinated in right of payment to the notes, equal in right of payment to our existing 136 Table of Contents and future unsecured indebtedness that is not so subordinated, effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) incurred by our subsidiaries.
The 2026 Convertible Notes represent senior unsecured obligations and will rank senior in right of payment to our future indebtedness that is expressly subordinated in right of payment to the notes, equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated, effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) incurred by our subsidiaries.
We also generated revenue 123 Table of Contents from sales of Upstaza for the treatment of AADC deficiency in the EEA and have recognized revenue associated with milestone and royalty payments from Roche pursuant to a License and Collaboration Agreement, or the SMA License Agreement, by and among us, Roche and, for the limited purposes set forth therein, the SMA Foundation, under our SMA program.
We also generated revenue from sales of Upstaza for the treatment of AADC deficiency in the EEA and have recognized revenue associated with milestone and royalty payments from Roche pursuant to a License and Collaboration Agreement, or the SMA License Agreement, by and among us, Roche and, for the limited purposes set forth therein, the SMA Foundation, under our SMA program.
The SMA program has one approved product, Evrysdi ® (risdiplam), which was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the European Commission in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies.
The SMA program has one approved product, Evrysdi® (risdiplam), which was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the EC in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies.
Change in the fair value of deferred and contingent consideration was a gain of $25.9 million for the year ended December 31, 2022, a change of $25.4 million, or over 100%, from a gain of $0.5 million for the year ended December 31, 2021.
Change in the fair value of contingent consideration was a gain of $25.9 million for the year ended December 31, 2022, a change of $25.4 million, or over 100%, from a gain of $0.5 million for the year ended December 31, 2021.
A change in the outcome of any of these variables with respect to the development of any of our products or product candidates could mean a significant change in the costs and timing associated with the development of that product candidates.
A change in the outcome of any of these variables with respect to the development of our products or product candidates could mean a significant change in the costs and timing associated with the development of those products or product candidates.
We have a portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology, metabolism and oncology.
We have a diversified therapeutic portfolio that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology and metabolism.
We also have made, and expect to continue to make, product available under early access programs, or EAP programs, both in countries in the EEA and other territories.
We also have made, and expect to continue to make, product available under early access programs, or EAP programs, or similar styled programs both in countries in the EEA and other territories.
The timing and amount of these expenses will also depend on the costs associated with potential future clinical trials of our products or product candidates and the related expansion of our research and development organization, regulatory requirements, advancement of our preclinical programs, and product and product candidate manufacturing costs.
The timing and amount of these expenses will also depend on the costs associated with potential 121 Table of Contents future clinical trials of our products or product candidates and the related expansion of our research and development organization, regulatory requirements, advancement of our preclinical programs, and product and product candidate manufacturing costs.
We may seek to expand and diversify our product pipeline through opportunistically in-licensing or acquiring the rights to products, product candidates or technologies and we may incur expenses, including with respect to transaction 125 Table of Contents costs, subsequent development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction, which would increase our future capital requirements.
We may seek to expand and diversify our product pipeline through opportunistically in-licensing or acquiring the rights to products, product candidates or technologies and we may incur expenses, including with respect to transaction costs, subsequent development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction, which would increase our future capital requirements.
With the approval of Upstaza by the European Commission in July 2022, $89.6 million was reclassified from indefinite lived intangible assets to definite lived intangible assets, which is being amortized over its expected useful life.
With the approval of Upstaza by the EC in July 2022, $89.6 million was reclassified from indefinite lived intangible assets to definite lived intangible assets, which is being amortized over its expected useful life.
In September 2022, we submitted a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization, which included a report on the placebo-controlled trial of Study 041 and data from the open-label extension.
In September 2022, we submitted a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization, which included a report on the placebo-controlled trial of Study 041 and data from the open-label extension as further described below.
In July 2022, the European Commission approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. In November 2022, the Medicines and Healthcare Products Regulatory Agency approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the United Kingdom.
In July 2022, the EC approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. In November 2022, the Medicines and Healthcare products Regulatory Agency approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the United Kingdom.
The cash provided by investing activities for the years ended December 31, 2022 and December 31, 2021 were primarily related to net sales and redemptions of marketable securities, partially offset by purchases of marketable securities, purchases of fixed assets and the acquisition of product rights.
The cash provided by investing activities for the years ended December 31, 2022 and December 31, 2021 were primarily related to net sales and redemptions of marketable securities – available for sale and net sales and redemptions of marketable securities – equity investments, partially offset by purchases of marketable securities – available for sale, purchases of marketable securities – equity investments, purchases of fixed assets, and the acquisition of product rights.
In July 2020, we entered into the Royalty Purchase Agreement. Pursuant to the Royalty Purchase Agreement, we sold to RPI the Assigned Royalty Payment in consideration for $650.0 million. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Funding” for additional information regarding this transaction.
In July 2020, we entered into the Original Royalty Purchase Agreement. Pursuant to the Original Royalty Purchase Agreement, we sold to Royalty Pharma the Original Assigned Royalty Rights in consideration for $650.0 million. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Funding” for additional information regarding this transaction.
Translarna is an investigational new drug in the United States. During the first quarter of 2017, we filed a New Drug Application, or NDA, for Translarna for the treatment of nmDMD over protest with the United States Food and Drug Administration, or FDA.
During the first quarter of 2017, we filed a New Drug Application, or NDA, for Translarna for the treatment of nmDMD over protest with the United States Food and Drug Administration, or FDA.
The rental term for such facility commenced on May 1, 2020 with an initial term of seven years and two consecutive five year renewal periods at our option. We have significant lease obligations that stem from our lease of office, manufacturing, and laboratory space in Hopewell, New Jersey.
We have significant lease obligations that stem from our lease of office, manufacturing, and laboratory space in Hopewell, New Jersey. The rental term for such facility commenced on July 1, 2020, with an initial term of fifteen years and two consecutive 10-year renewal periods at our option.
Borrowings under the Blackstone Credit Agreement bear interest at a variable rate equal to, at our option, either an adjusted Term SOFR rate plus seven and a quarter percent (7.25%) or the Base Rate plus six and a quarter percent (6.25%), subject to a floor of one percent (1%) and two percent (2%) with respect to Term SOFR rate and Base Rate (each as defined in the Blackstone Credit Agreement), respectively.
Borrowings under the Blackstone Credit Agreement, which was terminated in October 2023, bore interest at a variable rate equal to, at our option, either an adjusted Term SOFR rate plus seven and a quarter percent (7.25%) or the Base Rate plus six and a quarter percent (6.25%), subject to a floor of one percent (1%) and two percent (2%) with respect to Term SOFR rate and Base Rate (each as defined in the Blackstone Credit Agreement), respectively.
During 2022, our revenues were primarily generated from sales of Translarna for the treatment of nmDMD in countries where we were able to obtain acceptable commercial pricing and reimbursement terms and in select countries where we are permitted to distribute Translarna under our EAP programs, and from sales of Emflaza for the treatment of DMD in the United States.
During 2023, our revenues were primarily generated from sales of Translarna for the treatment of nmDMD in countries where we were able to obtain acceptable commercial pricing and reimbursement terms and in select countries where we are permitted to distribute Translarna under our EAP programs or through similar styled programs, and from sales of Emflaza for the treatment of DMD in the United States.
The cash provided by financing activities for the year ended December 31, 2022 is primarily attributable to the proceeds from the issuance of the senior secured term loan under the Blackstone Credit Agreement, the Stock Purchase Agreement, the exercise of options, and issuance of stock under our Employee Stock Purchase Plan, or ESPP, offset by the repayment of the 2022 Convertible Notes, payments on contingent consideration obligation, and payments on our finance lease principal.
The cash provided by financing activities for the year ended December 31, 2022 is primarily attributable to the proceeds from the issuance of the senior secured term loan under the Blackstone Credit Agreement, the stock purchase agreement entered into in connection with the execution of the Blackstone Credit Agreement, the exercise of options, and issuance of stock under our ESPP, offset by the repayment of the 2022 Convertible Notes, payments on contingent consideration obligation, and payments on our finance lease principal.
In addition, our expenses will increase if and as we: ● seek to satisfy contractual and regulatory obligations that we assumed through our acquisitions and collaborations; ● execute our commercialization strategy for our products, including initial commercialization launches of our products, label extensions or entering new markets; ● are required to complete any additional clinical trials, non-clinical studies or Chemistry, Manufacturing and Controls, or CMC, assessments or analyses in order to advance Translarna for the treatment of nmDMD in the United States or elsewhere; ● are required to take other steps, in addition to Study 041, to maintain our current marketing authorization in the EEA, Brazil and Russia for Translarna for the treatment of nmDMD or to obtain further marketing authorizations for Translarna for the treatment of nmDMD or other indications; ● utilize the Hopewell Facility to manufacture program materials for certain of our gene therapy product candidates as well as program materials for third parties; ● initiate or continue the research and development of our splicing, gene therapy, Bio-e, metabolic and oncology programs as well as studies in our products for maintaining authorizations, including Study 041, label extensions and additional indications; ● seek to discover and develop additional product candidates; ● seek to expand and diversify our product pipeline through strategic transactions; ● maintain, expand and protect our intellectual property portfolio; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.
In addition, our expenses will increase if and as we: ● seek to satisfy contractual and regulatory obligations that we assumed through our acquisitions and collaborations; ● execute our commercialization strategy for our products, including initial commercialization launches of our products, label extensions or entering new markets; ● are required to complete any additional clinical trials, non-clinical studies or Chemistry, Manufacturing and Controls, or CMC, assessments or analyses in order to advance Translarna for the treatment of nmDMD in the United States or elsewhere; ● are required to take other steps to maintain our current marketing authorization in the EEA, Brazil and Russia for Translarna for the treatment of nmDMD or to obtain further marketing authorizations for Translarna for the treatment of nmDMD or other indications; 132 Table of Contents ● initiate or continue the research and development of sepiapterin and our splicing and ferroptosis and inflammation programs as well as studies in our products for maintaining authorizations, label extensions and additional indications; ● continue to utilize our leased biologics manufacturing and laboratory space located in Hopewell Township, New Jersey, or the Hopewell Facility, to manufacture program materials for third parties; ● seek to discover and develop additional product candidates; ● seek to expand and diversify our product pipeline through strategic transactions; ● maintain, expand and protect our intellectual property portfolio; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.
Cost of product sales consist primarily of royalty payments associated with Emflaza, Translarna and Upstaza net product sales, excluding contingent payments to Marathon, costs associated with Emflaza, Translarna and Upstaza product sold during the period, and royalty expense related to royalty revenues and collaboration milestone revenues.
Cost of product sales excluding amortization of acquired intangible asset, consist primarily of royalty payments associated with Emflaza, Translarna and Upstaza net product sales, excluding contingent payments to Marathon, costs associated with Emflaza, Translarna and Upstaza product sold during the period, inventory reserves, and royalty expense related to royalty revenues and collaboration milestone revenues.
We have retained a 57.067% interest in the Royalty and all economic rights to receive the remaining potential regulatory and sales milestone payments under the License Agreement.
At that time, we retained a 57.067% interest in the Royalty and all economic rights to receive the remaining potential regulatory and sales milestone payments under the SMA License Agreement.
As of December 31, 2022, we had recognized a total of $210.0 million in milestone payments and $172.9 million royalties on net sales pursuant to the SMA License Agreement. As of December 31, 2022, there are no remaining research and development event milestones that we can receive.
As of December 31, 2023, we had recognized a total of $310.0 million in milestone payments and $341.8 million royalties on net sales pursuant to the SMA License Agreement. As of December 31, 2023, there are no remaining research and development event milestones that we can receive.
(formerly MRI Interventions, Inc.), or ClearPoint, of $3.5 million and $5.8 million, respectively, for the year ended December 31, 2022, as compared to unrealized losses on our equity investments and convertible debt security in ClearPoint of $6.1 million and $8.3 million, respectively, for the year ended December 31, 2021. ​ Income tax benefit (expense).
In addition, we had unrealized losses on our equity investments and convertible debt security in ClearPoint, of $3.5 million and $5.8 million, respectively, for the year ended December 31, 2022, as compared to unrealized losses on our equity investments and convertible debt security in ClearPoint of $6.1 million and $8.3 million, respectively, for the year ended December 31, 2021 ​ Income tax benefit (expense).
Translarna net product revenues made up $288.6 million, $236.0 million, and $191.9 million of the net product sales outside the United States for the years ended December 31, 2022, 2021, and 2020, respectively.
Translarna net product revenues made up $355.8 million, $288.6 million, and $236.0 million of the net product sales outside the United States for the years ended December 31, 2023, 2022, and 2021, respectively.
We have also relied on revenue associated with milestone and royalty payments from Roche pursuant to the SMA License Agreement, under our SMA program. ​ As of December 31, 2022, we had an accumulated deficit of $2,657.0 million.
We have also relied on revenue associated with milestone and royalty payments from Roche pursuant to the SMA License Agreement, under our SMA program. ​ As of December 31, 2023, we had an accumulated deficit of $3,283.6 million.
The increase in cost of product sales, excluding 131 Table of Contents amortization of acquired intangible asset, is primarily due to the increases in net product revenue, royalty revenues, and collaboration milestone revenue. ​ Amortization of acquired intangible asset.
The increase in cost of product sales, excluding amortization of acquired intangible asset, is primarily due to the increases in net product revenue, Upstaza inventory reserves, royalty revenues, and collaboration milestone revenue. ​ Amortization of acquired intangible asset.
During the years ended December 31, 2022, 2021, and 2020, net product sales in the United States were $218.3 million, $187.3 million, and $139.0 million, respectively, consisting solely of sales of Emflaza, and net product sales outside of the United States were $316.9 million, $241.6 million, and $194.4 million respectively, consisting of sales of Translarna, Tegsedi, Waylivra, and Upstaza.
During the years ended December 31, 2023, 2022, and 2021, net product sales in the United States were $255.1 million, $218.3 million, and $187.3 million, respectively, consisting solely of sales of Emflaza, and net product sales outside of the United States were $406.1 million, $316.9 million, and $241.6 million respectively, consisting of sales of Translarna, Tegsedi, Waylivra, and Upstaza.
Net cash provided by financing activities was $168.0 million, $20.9 million, and $668.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Net cash provided by financing activities was $646.4 million, $168.0 million, and $20.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.
During the year ended December 31, 2022, we recognized $288.6 million in sales of Translarna. We hold worldwide commercialization rights to Translarna for all indications in all territories. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. During the year ended December 31, 2022, Emflaza achieved net sales of $218.3 million.
During the year ended December 31, 2023, we recognized $355.8 million in sales of Translarna. We hold worldwide commercialization rights to Translarna for all indications in all territories. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. During the year ended December 31, 2023, Emflaza achieved net sales of $255.1 million.
Funding requirements We anticipate that our expenses will continue to increase in connection with our commercialization efforts in the United States, the EEA, Latin America and other territories, including the expansion of our infrastructure and corresponding sales and marketing, legal and regulatory, distribution and manufacturing and administrative and employee-based expenses.
Funding requirements We anticipate that we will continue to incur significant expenses in connection with our commercialization efforts in the United States, the EEA, Latin America and other territories, including expenses related to our commercial infrastructure and corresponding sales and marketing, legal and regulatory, and distribution and manufacturing undertakings as well as administrative and employee-based expenses.
The rental term for such facility commenced on July 1, 2020, with an initial term of fifteen years and two consecutive 10-year renewal periods at our option. We also lease two entire buildings comprised of approximately 360,000 square feet of shell condition, modifiable space at a facility located in Warren, New Jersey.
We also lease two entire buildings comprised of approximately 360,000 square feet of shell condition, modifiable space at a facility located in Warren, New Jersey. The rental term for such facility commenced on June 1, 2022, with an initial term of seventeen years followed by three consecutive five-year renewal periods at our option.
Cost of product sales consist primarily of royalty payments associated with Emflaza and Translarna net product sales, excluding contingent payments to Marathon, costs associated with Emflaza and Translarna product sold during the period, and royalty expense related to royalty revenues and collaboration milestone revenues.
Cost of product sales, excluding amortization of acquired intangible asset, consist primarily of royalty payments associated with Emflaza, Translarna and Upstaza net product sales, excluding contingent payments to Marathon, costs associated with Emflaza, Translarna and Upstaza product 127 Table of Contents sold during the period, and royalty expense related to royalty revenues and collaboration milestone revenues.
Net cash provided by investing activities was $290.2 million and 219.2 million for the years ended December 31, 2022 and 2021, respectively. Net cash used in investing activities was $561.5 million for the year ended December 31, 2020.
Net cash provided by investing activities was $290.2 million and 219.2 million for the years ended December 31, 2022, and 2021, respectively.
We expect to make additional payments to the former Censa securityholders of $50.0 million in the aggregate upon the potential achievement in 2023 of certain development and regulatory milestones relating to sepiapterin.
We expect to make additional payments to the former Censa securityholders of $65.0 million in the aggregate in cash upon the potential achievement in 2024 of certain regulatory milestones relating to sepiapterin.
We are not obligated to make such payments unless and until annual sales of a collaboration product exceed a designated threshold. Since inception, the SMA Foundation has earned $28.5 million, $24.5 million which was paid and $4.0 million which was accrued as of December 31, 2022.
We are not obligated to make such payments unless and until annual sales of a collaboration product exceed a designated threshold. Since inception, the SMA Foundation has earned $52.5 million, $35.3 million which was paid and $17.2 million which was accrued as of December 31, 2023.
In addition, we have a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas for rare diseases.
In addition, we have a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas for rare diseases. In May 2023 and September 2023, we announced strategic pipeline prioritizations following reviews of our portfolio.
We followed the FDA’s recommendation and collected, using newer technologies via procedures and methods that we designed, such dystrophin data in a new study, Study 045, and announced the results of Study 045 in February 2021. Study 045 did not meet its pre-specified primary endpoint. In June 2022, we announced top-line results from the placebo-controlled trial of Study 041.
We followed the FDA’s recommendation and collected, using newer technologies via procedures and methods that we designed, such dystrophin data in a new study, Study 045, and announced 115 Table of Contents the results of Study 045 in February 2021. Study 045 did not meet its pre-specified primary endpoint.
The following table provides information regarding our cash flows and our capital expenditures for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended ​ ​ December 31, (in thousands) ​ 2022 2021 2020 Cash (used in) provided by: ​ ​ ​ ​ Operating activities ​ $ (356,654) ​ $ (251,332) ​ $ (194,071) Investing activities ​ $ 290,181 ​ $ 219,182 ​ $ (561,548) Financing activities ​ $ 167,952 ​ $ 20,877 ​ $ 668,715 ​ Net cash used in operating activities was $356.7 million, $251.3 million, and $194.1 million for the years ended December 31, 2022, 2021, and 2020, respectively.
The following table provides information regarding our cash flows and our capital expenditures for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended ​ ​ December 31, (in thousands) ​ 2023 2022 2021 Cash (used in) provided by: ​ ​ ​ ​ Operating activities ​ $ (158,418) ​ $ (356,654) ​ $ (251,332) Investing activities ​ $ (176,737) ​ $ 290,181 ​ $ 219,182 Financing activities ​ $ 646,400 ​ $ 167,952 ​ $ 20,877 ​ Net cash used in operating activities was $158.4 million, $356.7 million, and $251.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.
We initiated a Phase 2 study of PTC518 for the treatment of HD in the first quarter of 2022, which consists of an initial 12-week placebo-controlled phase focused on safety, pharmacology and pharmacodynamic effects followed by a nine-month placebo-controlled phase focused on PTC518 biomarker effect. Enrollment in the Phase 2 study remains active and ongoing outside of the United States.
We initiated a Phase 2 study of PTC518 for the treatment of HD in the first quarter of 2022, which consists of an initial 12-week placebo-controlled phase focused on safety, pharmacology and pharmacodynamic effects followed by a nine-month placebo-controlled phase focused on PTC518 biomarker effect. In June 2023, we announced interim data from the 12-week placebo-controlled phase.
We have historically financed our operations primarily through the issuance and sale of our common stock in public offerings, our “at the market offering” of our common stock, proceeds from the Royalty Purchase Agreement, net proceeds from our borrowings under the Blackstone Credit Agreement, the private placements of our preferred stock and common stock, collaborations, bank and institutional lender debt, convertible debt financings and grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates.
We have financed our operations to date primarily through the private offerings of convertible senior notes, public and “at the market offerings” of common stock, proceeds from royalty purchase agreements, net proceeds from our borrowings under our credit agreement with Blackstone, private placements of our convertible preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by our product candidates.
During the year ended December 31, 2022, two countries, the United States and Russia, accounted for at least 10% of our net product sales, representing $218.3 million and $59.7 million, respectively. During the years ended December 31, 2021 and 2020, only the United States accounted for at least 10% of our net product sales.
During the years ended December 31, 2023 and 2022, two countries, the United States and Russia, accounted for at least 10% of our net product sales, representing $255.1 million and $86.0 million, and $218.3 million and $59.7 123 Table of Contents million, respectively.
These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained.
The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained.
To date, we have financed our operations primarily through our offering of the 2026 Convertible Notes, our public offerings of common stock in February 2014, in October 2014, in April 2018, in January 2019, and in September 2019, the common stock issued in our “at the marketing offering”, our initial public offering of common stock in June 2013, proceeds from the Royalty Purchase Agreement, net proceeds from our borrowings under the Blackstone Credit Agreement, private placements of our convertible preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates.
We have financed our operations to date primarily through private offerings of convertible senior notes, public and “at the market offerings” of common stock, proceeds from royalty purchase agreements, net proceeds from our borrowings under our credit agreement with Blackstone, private placements of our convertible preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by our product candidates.
While outstanding, the 2022 Convertible Notes bore cash interest at a rate of 3.00% per year, payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. ​ In August 2019, we entered into the Sales Agreement, pursuant to which, we may offer and sell shares of our common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.
In August 2019, we entered into the Sales Agreement, pursuant to which, we may offer and sell shares of our common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act.
For a description of our significant accounting policies, see note 2 to our consolidated financial statements. ​ ​ ​ 130 Table of Contents Year ended December 31, 2022 compared to year ended December 31, 2021 The following table summarizes revenues and selected expense and other income data for the year ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ Change (in thousands) 2022 2021 2022 vs. 2021 Net product revenue ​ $ 535,228 ​ $ 428,904 ​ $ 106,324 Collaboration revenue ​ 50,052 ​ 55,046 ​ $ (4,994) Royalty revenue ​ ​ 113,521 ​ ​ 54,643 ​ $ 58,878 Cost of product sales, excluding amortization of acquired intangible assets ​ 44,678 ​ 32,328 ​ $ 12,350 Amortization of acquired intangible assets ​ 116,554 ​ 54,751 ​ $ 61,803 Research and development expense ​ 651,496 ​ 540,684 ​ $ 110,812 Selling, general and administrative expense ​ 325,998 ​ 285,773 ​ $ 40,225 Change in the fair value of deferred and contingent consideration ​ (25,900) ​ (500) ​ $ (25,400) Intangible asset impairment ​ ​ 33,384 ​ ​ — ​ $ 33,384 Interest expense, net ​ (90,871) ​ (86,022) ​ $ (4,849) Other expense, net ​ (49,207) ​ (57,875) ​ $ 8,668 Income tax benefit (expense) ​ 28,470 ​ (5,561) ​ $ 34,031 ​ Net product revenue.
The increase in income tax benefit is attributable to the receipt of an outstanding state tax refund received during the year ended December 31, 2023, and the subsequent release of the associated ASC 740 income tax reserve, as well as the reversal of the deferred tax liability recognized in conjunction with the discontinuation of our preclinical and early research programs in our gene therapy platform, which included programs for Friedreich ataxia and Angelman syndrome, during the year ended December 31, 2023. ​ 126 Table of Contents Year ended December 31, 2022 compared to year ended December 31, 2021 The following table summarizes revenues and selected expense and other income data for the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ Change (in thousands) 2022 2021 2022 vs. 2021 Net product revenue ​ $ 535,228 ​ $ 428,904 ​ $ 106,324 Collaboration revenue ​ 50,052 ​ 55,046 ​ $ (4,994) Royalty revenue ​ 113,521 ​ 54,643 ​ $ 58,878 Cost of product sales, excluding amortization of acquired intangible assets ​ 44,678 ​ 32,328 ​ $ 12,350 Amortization of acquired intangible assets ​ ​ 116,554 ​ ​ 54,751 ​ $ 61,803 Research and development expense ​ ​ 651,496 ​ ​ 540,684 ​ $ 110,812 Selling, general and administrative expense ​ 325,998 ​ 285,773 ​ $ 40,225 Change in the fair value of contingent consideration ​ (25,900) ​ (500) ​ $ (25,400) Intangible asset impairment ​ 33,384 ​ — ​ $ 33,384 Interest expense, net ​ (90,871) ​ (86,022) ​ $ (4,849) Other expense, net ​ (49,207) ​ (57,875) ​ $ 8,668 Income tax benefit (expense) ​ 28,470 ​ (5,561) ​ $ 34,031 ​ Net product revenue.
With respect to our outstanding 2026 Convertible Notes, cash interest payments are payable on a semi-annual basis in arrears, which will require total funding of $4.3 million annually.
With respect to our outstanding 2026 Convertible Notes, cash interest payments are payable on a semi-annual basis in arrears, which will require total funding of $4.3 million annually. In February 2023, we completed enrollment of our Phase 3 placebo-controlled clinical trial for sepiapterin for PKU.
Our ability to generate product revenue from Emflaza will largely depend on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors.
Emflaza is approved in the United States for the treatment of DMD in patients two years and older. Our ability to generate product revenue from Emflaza will largely depend on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors.
There is substantial risk that if we are unable to renew our EEA marketing authorization during any annual renewal cycle, or if our product label is materially restricted, or if Study 041 does not provide the data necessary to maintain our marketing authorization, we would lose all, or a significant portion of, our ability to generate revenue from sales of Translarna in the EEA and other territories.
There is substantial risk that if the EC adopts the CHMP’s negative opinion, or we are otherwise unable to renew our EEA marketing authorization during any annual renewal cycle, or we are unable to identify other potential mechanisms in which we may provide Translarna to nmDMD patients in the EEA should the EC adopts the CHMP’s negative opinion or our product label is materially restricted, we would lose all, or a significant portion of, our ability to generate revenue from sales of Translarna in the EEA and other territories.
Net cash provided by financing activities for the year ended December 31, 2020 is primarily attributable to proceeds from the Royalty Purchase Agreement, net proceeds received from our “at the market offering” of our common stock, the exercise of options, and issuance of stock under our ESPP, partially offset by repayment on our senior secured term loan, payments on deferred consideration obligation, and payments on our finance lease principal.
The cash provided by financing activities for the year ended December 31, 2023 is primarily attributable to the proceeds received from the A&R Royalty Purchase Agreement, exercise of options, issuance of stock under our Employee Stock Purchase Plan, or ESPP, offset by the repayment of the senior secured term loan, debt issuance costs, debt extinguishment costs related to senior secured term loan, and payments on our finance lease principal.
At such meeting, the FDA asked for additional bioanalytical data in support of comparability between the drug product used in the clinical studies and the commercial drug product. We have completed these analyses and provided the results to the FDA for review. We expect to submit a BLA to the FDA in the first half of 2023.
At that meeting, the FDA asked for additional bioanalytical data in support of comparability between the drug product used in the clinical studies and the commercial drug product. We completed these analyses and provided the results to the FDA for review. The FDA stated that the data that we provided were still not sufficient.
Tegsedi has received marketing authorization in the United States, European Union, or EU, and Brazil for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis.
Tegsedi has received marketing authorization in the United States, European Union, or EU, and Brazil for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis. In August 2021, ANVISA, the Brazilian health regulatory authority, approved Waylivra as the first treatment for familial chylomicronemia syndrome, or FCS, in Brazil.
We have never been profitable and we will need to generate significant revenues to achieve and sustain profitability, and we may never do so. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all.
Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all.
In October 2022, we entered into a credit agreement, or the Blackstone Credit Agreement, for fundings of up to $950.0 million consisting of a committed loan facility consisting of a senior secured term loan facility funded on October 27, 2022, or the Closing Date, in the aggregate principal amount of $300.0 million, and a delayed draw term loan facility of up to $150.0 million to be funded at our request within 18 months of the Closing Date subject to specified conditions, and further contemplating the potential for up to $500.0 million of additional financing, to the extent that we request such additional financing and subject to the Lenders’ agreement to provide such additional financing and to mutual agreement on terms among us and certain of our subsidiaries, or, collectively with us, the Loan Parties, and funds and other affiliated entities advised or managed by Blackstone Life Sciences and Blackstone Credit , or collectively, Blackstone, and such lenders, together with their permitted assignees, the Lenders, and Wilmington Trust, National Association, as the administrative agent for the Lenders.
The Blackstone Credit Agreement provided for fundings of up to $950.0 million consisting of a committed loan facility consisting of a senior secured term loan facility funded on October 27, 2022, or the Closing Date, in the aggregate principal amount of $300.0 million, and a delayed draw term loan facility of up to $150.0 million to be funded at our request within 18 months of the Closing Date subject to specified conditions, and further contemplating the potential for up to $500.0 million of additional financing, to the extent that we requested such additional financing and subject to the Lenders’ agreement to provide such additional financing and to mutual agreement on terms.
In February 2023, we completed enrollment of our Phase 3 placebo-controlled clinical trial for sepiapterin for PKU. In connection with this event and in accordance with the Censa Merger Agreement, we are obligated to pay a $30.0 million development milestone to the former Censa securityholders, which we have the option to pay in cash or shares of our common stock.
In February 2023, we completed enrollment of our Phase 3 placebo-controlled clinical trial for sepiapterin for PKU. In connection with this event and pursuant to the Censa Merger Agreement, we paid a $30.0 million development milestone to the former Censa securityholders during the year ended December 31, 2023.
The remaining increase of $3.1 million was due to an increase in net product sales of Tegsedi and Waylivra. Collaboration revenue. Collaboration revenue was $55.0 million for the year ended December 31, 2021, an increase of $12.5 million, or 29%, from collaboration revenue of $42.6 million for the year ended December 31, 2020.
The remaining increase of $22.0 million was due to an increase in net product sales of Tegsedi, Waylivra, and Upstaza. Collaboration revenue. Collaboration revenue was $100.0 million for the year ended December 31, 2023, an increase of $50.0 million, or 100%, from collaboration revenue of $50.1 million for the year ended December 31, 2022.
We have a pipeline of gene therapy product candidates for rare monogenic diseases that affect the CNS, including Upstaza for the treatment of Aromatic L-Amino Decarboxylase, or AADC, deficiency, a rare central nervous system, or CNS, disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene, for patients 18 months and older within the EEA.
Upstaza is a gene therapy for the treatment of Aromatic L Amino Decarboxylase, or AADC, deficiency, a rare central nervous system, or CNS, disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene.
We have a total of $268.0 million in obligations that stem from our operating leases. We have a total of $30.0 million in obligations that stem from a commercial manufacturing services agreement entered into with MassBio on June 19, 2020, for a term of 12.5 years.
We have a total of $27.0 million in obligations that stem from a commercial manufacturing services agreement entered into with MassBio on June 19, 2020, for a term of 12.5 years. Pursuant to the terms of the agreement, MassBio agreed to provide us with four dedicated rooms for our Upstaza program.
We expect our research and development expenses to fluctuate in connection with our ongoing activities, particularly in connection with Study 041 and other studies for Translarna for the treatment of nmDMD, our activities under our splicing, gene therapy, Bio-e, metabolic and oncology programs and performance of any post-marketing requirements imposed by regulatory agencies with respect to our products.
We expect our research and development expenses to fluctuate in connection with our ongoing activities, particularly in connection with our activities for sepiapterin and our splicing and ferroptosis and inflammation programs and performance of any post-marketing requirements imposed by regulatory agencies with respect to our products.
We are required to pay Faes an annual minimum royalty during the first seven calendar years with a fixed percentage royalty during the remainder of the Faes Agreement term. The minimum royalty based on the euro to U.S. dollar exchange rate as of December 31, 2022 is $1.6 million, with the last minimum royalty payment due in 2023.
We are required to pay Faes an annual minimum royalty during the first seven calendar years from the FDA approval date of the Emflaza oral suspension product. The minimum royalty based on the euro to U.S. dollar exchange rate as of December 31, 2023 is $1.7 million, which represents the last annual minimum royalty payment due.
We also expect to pay the former equityholders of Agilis an additional $20.0 million upon the acceptance for filing by the FDA of a BLA for Upstaza for the treatment of AADC deficiency, which we expect to occur in the first half of 2023.
We also expect to pay the former equityholders of Agilis $20.0 million in development milestone payments upon the acceptance for filing by the FDA of a BLA for Upstaza for the treatment of AADC deficiency and $4.5 million in regulatory milestone payments upon the approval of the BLA from the FDA.
In October 2022, we entered into the Blackstone Credit Agreement for fundings of up to $950.0 million consisting of a committed loan facility of $450.0 million and further contemplating the potential for up to $500.0 million of additional financing, to the extent that we request such additional financing and subject to the Lenders’ agreement to provide such additional financing and to mutual agreement on terms.
In October 2022, we entered into the Blackstone Credit Agreement for fundings of up to $950.0 million consisting of a committed loan facility consisting of a senior secured term loan facility funded on the Closing Date, in the aggregate 130 Table of Contents principal amount of $300.0 million, and a delayed draw term loan facility of up to $150.0 million to be funded at our request within 18 months of the Closing Date subject to specified conditions, and further contemplating the potential for up to $500.0 million of additional financing, to the extent that we request such additional financing and subject to the Lenders’ agreement to provide such additional financing and to mutual agreement on terms.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAfter a review of our marketable investment securities, we believe that in the event of a hypothetical ten percent increase in interest rates, the resulting decrease in fair value of our marketable investment securities would be insignificant to the consolidated financial statements. 142 Table of Contents Currently, we do not hedge these interest rate exposures.
Biggest changeAt December 31, 2023, we held $876.7 million in cash and cash equivalents and short-term investments. After a review of our marketable investment securities, we believe that in the event of a hypothetical ten percent increase in interest rates, the resulting decrease in fair value of our marketable investment securities would be insignificant to the consolidated financial statements.
As a result of our ex-U.S. operations, we face exposure to movements in foreign currency exchange rates, including the British Pound, Euro, Brazilian Real, Swiss Franc, and Russian Ruble against the U.S. dollar. The current exposures arise primarily from cash, accounts receivable, intercompany receivables and payables, intercompany loans and product sales denominated in foreign currencies.
As a result of our ex-U.S. operations, we face exposure to movements in foreign currency exchange rates, including the British Pound, Euro, Brazilian Real, and Swiss Franc against the U.S. dollar. The current exposures arise primarily from cash, accounts receivable, intercompany receivables and payables, intercompany loans and product sales denominated in foreign currencies.
Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. At any time, sharp changes in interest rates can affect the fair value of the investment portfolio and its interest earnings. There were no investments classified as long-term at December 31, 2022.
Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. At any time, sharp changes in interest rates can affect the fair value of the investment portfolio and its interest earnings. There were no investments classified as long-term at December 31, 2023.
A hypothetical ten percent increase or decrease in the exchange rate between the U.S. dollar and the British Pound, Euro, Brazilian Real, Swiss Franc, or Russian Ruble from the December 31, 2022 rate would not have a significant impact on our cash flows. We are not currently engaged in any foreign currency hedging activities.
A hypothetical ten percent increase or decrease in the exchange rate between the U.S. dollar and the British Pound, Euro, Brazilian Real, or Swiss Franc from the December 31, 2023 rate would not have a significant impact on our cash flows. We are not currently engaged in any foreign currency hedging activities.
For the year ended December 31, 2022, we recognized realized foreign currency transaction losses, net, of $19.6 million, which is recorded within other income, net on the Statement of Operations.
For the year ended December 31, 2023, we recognized realized foreign currency transaction losses, net, of $2.7 million, which is recorded within other income, net on the Statement of Operations.
The 2026 Convertible Notes are also affected by the price and volatility of our common stock and will generally increase or decrease as the market price of our common stock changes. The estimated fair value of the Convertible Notes was approximately $281.7 million as of December 31, 2022. ​ 143 Table of Contents
The 2026 Convertible Notes are also affected by the price and volatility of our common 136 Table of Contents stock and will generally increase or decrease as the market price of our common stock changes. The estimated fair value of the 2026 Convertible Notes was approximately $265.3 million as of December 31, 2023. ​ 137 Table of Contents
We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity and to meet operating needs.
Currently, we do not hedge these interest rate exposures. We maintain an investment portfolio in accordance with our investment policy. The primary objectives of our investment policy are to preserve principal, maintain proper liquidity and to meet operating needs.
Removed
At December 31, 2022, we held $410.7 million in cash and cash equivalents and short-term investments.

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