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What changed in Ultragenyx Pharmaceutical Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ultragenyx Pharmaceutical Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+482 added−464 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-21)

Top changes in Ultragenyx Pharmaceutical Inc.'s 2024 10-K

482 paragraphs added · 464 removed · 370 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

126 edited+42 added−48 removed228 unchanged
Biggest changeGeneral Data Protection Regulation, or UK GDPR, which apply to processing of personal data in the context of the activities of an entity established in the EEA/UK, and to processing by an entity not established in the EEA/UK where such processing is related to the offering of goods or services to individuals who are in the EEA/UK, or the monitoring of the behavior of individuals who are in the EEA/UK, and imposes requirements and limitations relating to the processing, storage, purpose of collection, accuracy, security, sharing and transfer of personal data outside the EEA/UK, in particular with respect to special categories of personal data like health data, and the notification of supervisory authorities about data breaches, accompanied by a strong sanctioning mechanism—in addition, EU member states may also impose additional requirements in relation to health, genetic and biometric data through their national implementing legislation; 26 • the 21 st Century Cures Act, or the Cures Act, which introduced a wide range of reforms, such as broadening the types of data required to support drug approval, extending protections for generic competition, accelerating approval of breakthrough therapies, expanding the orphan drug product program, requiring disclosures about compassionate care programs, and clarifying how manufacturers communicate about their products; • the federal transparency laws, including the federal Physician Payment Sunshine Act, that requires drug manufacturers to disclose payments and other transfers of value provided to various healthcare professionals and teaching hospitals; and • state and foreign law equivalents, or similar, of each of the above federal laws, such as transparency laws, anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and privacy and security of health information laws, including comprehensive privacy and security laws in California.
Biggest changeThe laws that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting or receiving renumeration in return for, and from knowingly and willfully offering or paying remuneration to induce, referrals of federal healthcare program patients and the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; • federal, civil, and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented to Medicare, Medicaid, or other third-party payers, claims for payment that are false or fraudulent; • federal, civil, and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented to Medicare, Medicaid, or other third-party payers, claims for payment that are false or fraudulent; • international data protection laws and regulations, including, but not limited, to the EU General Data Protection Regulation, or GDPR, which apply to processing of personal data in the context of the activities of an entity established in a respective country, and to processing by an entity not established in a particular country, but where such processing is related to the offering of goods or services to, or the monitoring of the behavior of individuals located therein, and imposes requirements and limitations relating to the processing, storage, purpose of collection, accuracy, security, sharing and transfer of personal data, in particular with respect to special categories of personal data like health data, and the notification of supervisory authorities about data breaches, accompanied by sanctioning mechanisms—in addition to the GDPR, EU member states may also impose additional requirements in relation to health, genetic and biometric data through their national implementing legislation; • the 21st Century Cures Act, or the Cures Act, which introduced a wide range of reforms, such as broadening the types of data required to support drug approval, extending protections for generic competition, accelerating approval of breakthrough therapies, expanding the orphan drug product program, requiring disclosures about compassionate care programs, and clarifying how manufacturers communicate about their products; • the federal transparency laws, including the federal Physician Payment Sunshine Act, that requires drug manufacturers to disclose payments and other transfers of value provided to various healthcare professionals and teaching hospitals; and • state and foreign law equivalents, or similar, of each of the above federal laws, such as transparency laws, anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and privacy and security of health information laws, including comprehensive privacy and security laws in California.
MPS VII is a rare lysosomal storage disease that often leads to multi-organ dysfunction, pervasive skeletal disease, and death. MPS VII and is one of the rarest MPS disorders, affecting an estimated 200 patients in the developed world. Mepsevii is approved in the U.S., the EU and certain other regions for the treatment of children and adults with MPS VII.
MPS VII is a rare lysosomal storage disease that often leads to multi-organ dysfunction, pervasive skeletal disease, and death. MPS VII is one of the rarest MPS disorders, affecting an estimated 200 patients in the developed world. Mepsevii is approved in the U.S., the EU and certain other regions for the treatment of children and adults with MPS VII.
Dojolvi for the treatment of LC-FAOD Dojolvi is a highly purified, synthetic, 7-carbon fatty acid triglyceride administered orally, designed to provide medium-chain, odd-carbon fatty acids as an energy source and metabolite replacement, developed for people with long-chain fatty acid oxidation disorders, or LC-FAOD.
Dojolvi for the treatment of Long-chain Fatty Acid Oxidation Disorders, or LC-FAOD Dojolvi is a highly purified, synthetic, 7-carbon fatty acid triglyceride administered orally, designed to provide medium-chain, odd-carbon fatty acids as an energy source and metabolite replacement, developed for people with LC-FAOD.
Evkeeza for the treatment of HoFH Evkeeza is a fully human monoclonal antibody administered by IV, that binds to and blocks the function of angiopoietin-like 3, or ANGPTL3, a protein that plays a key role in lipid metabolism, developed for the treatment of homozygous familial hypercholesterolemia, or HoFH, a rare inherited condition.
Evkeeza for the treatment of Homozygous Familial Hypercholesterolemia, or HoFH Evkeeza is a fully human monoclonal antibody administered by IV, that binds to and blocks the function of angiopoietin-like 3, or ANGPTL3, a protein that plays a key role in lipid metabolism, developed for the treatment of HoFH, a rare inherited condition.
We do not have the right to control prosecution of the in-licensed patent applications, and our rights to enforce the in-licensed patents are subject to certain limitations.
We do not have the right to control prosecution of the in-licensed patent applications, and our rights to enforce the in-licensed patents are subject to certain limitations.
Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
Please see “—License and Collaboration Agreements—Approved Products—Regeneron” for a description of our license agreement with Regeneron Pharmaceuticals. 6 Clinical Product Candidates UX143 (setrusumab) for the treatment of Osteogenesis Imperfecta, or OI UX143 (setrusumab) is a fully human monoclonal antibody administered by IV that inhibits sclerostin, a protein that acts on a key bone-signaling pathway by inhibiting the activity of bone-forming cells and promoting bone resorption.
Please see “—License and Collaboration Agreements—Approved Products—Regeneron” for a description of our license agreement with Regeneron. 6 Clinical Product Candidates UX143 (setrusumab) for the treatment of Osteogenesis Imperfecta, or OI UX143 (setrusumab) is a fully human monoclonal antibody administered by IV that inhibits sclerostin, a protein that acts on a key bone-signaling pathway by inhibiting the activity of bone-forming cells and promoting bone resorption.
Department of Agriculture’s Animal Welfare Act; • submission to the FDA of an IND, which must become effective before human clinical studies may begin and must be updated annually; • conducting adequate and well-controlled human clinical studies that generally follow the three- to four-phase design described above to establish the safety and efficacy, or for BLA products, the safety, purity, and potency, of the product candidate for each proposed indication under an active IND and approved by an independent IRB representing each clinical site; • preparation of and submission to the FDA of a new drug application, or NDA, or biologics license application, or BLA, after completion of all pivotal clinical studies; • potential review of the product application by an FDA advisory committee, where appropriate and if applicable; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the proposed drug substance and drug product are produced to assess compliance with Good Manufacturing Practices, or GMP; • FDA inspection of one or more clinical sites to assure compliance with GCP; and 19 • FDA review and approval of an NDA or BLA.
Department of Agriculture’s Animal Welfare Act; • submission to the FDA of an IND, which must become effective before human clinical studies may begin and must be updated annually; 19 • conducting adequate and well-controlled human clinical studies that generally follow the three- to four-phase design described above to establish the safety and efficacy, or for BLA products, the safety, purity, and potency, of the product candidate for each proposed indication under an active IND and approved by an independent IRB representing each clinical site; • preparation of and submission to the FDA of a new drug application, or NDA, or biologics license application, or BLA, after completion of all pivotal clinical studies; • potential review of the product application by an FDA advisory committee, where appropriate and if applicable; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the proposed drug substance and drug product are produced to assess compliance with GMP; • FDA inspection of one or more clinical sites to assure compliance with GCP; and • FDA review and approval of an NDA or BLA.
In this circumstance, and upon request by the applicant, the CHMP’s evaluation time frame is reduced to 150 days, excluding time taken by an applicant to respond to questions. MA Validity Period MAs have an initial duration of five years. After five years, the authorization may subsequently be renewed on the basis of a reevaluation of the risk-benefit balance.
In this circumstance, and upon request by the applicant, the CHMP’s evaluation time frame is reduced to 150 days, excluding time taken by an applicant to respond to questions. 24 MA Validity Period MAs have an initial duration of five years. After five years, the authorization may subsequently be renewed on the basis of a reevaluation of the risk-benefit balance.
Patents emanating from this patent family expire in 2028 (not accounting for any available PTE). We also have exclusive rights outside of Europe to two additional Mereo patent families, including an issued U.S. patent expiring in 2037 (not accounting for any available PTE), relating to methods of using anti-sclerostin antibodies including setrusumab for the treatment of OI.
Patents emanating from this patent family expire in 2028 (not accounting for any available PTE). We also have exclusive rights outside of Europe to two additional Mereo patent families, including two issued U.S. patents expiring in 2037 (not accounting for any available PTE), relating to methods of using anti-sclerostin antibodies including setrusumab for the treatment of OI.
Dojolvi is also protected in the U.S. by regulatory exclusivity until 2025 and orphan drug exclusivity for treating FAOD until 2027. Evkeeza (Evinacumab) Exclusivity We have an exclusive license from Regeneron to certain Regeneron patents for the development and commercialization of Evkeeza outside of the U.S. for the treatment of HoFH and other hyperlipidemia/hypercholesterolemia indications.
Dojolvi is also protected in the U.S. by regulatory exclusivity until 2025 and orphan drug exclusivity for treating FAOD until 2027. Evkeeza Exclusivity We have an exclusive license from Regeneron to certain Regeneron patents for the development and commercialization of Evkeeza outside of the U.S. for the treatment of HoFH and other hyperlipidemia and hypercholesterolemia indications.
Our current DP inventories are expected to support demand through at least the end of 2025. 17 Evkeeza On January 7, 2022, we announced a license and collaboration agreement with Regeneron for us to clinically develop, commercialize and distribute Evkeeza in countries outside of the U.S.
Our current DP inventories are expected to support demand through at least the end of 2025. Evkeeza On January 7, 2022, we announced a license and collaboration agreement with Regeneron for us to clinically develop, commercialize and distribute Evkeeza in countries outside of the U.S.
Abeona In May 2022, we announced an exclusive License Agreement with Abeona for an AAV gene therapy for the treatment of MPS IIIA, or UX111. Under the terms of the agreement, we assumed responsibility for the UX111 program and in return, we are obligated 13 to pay Abeona certain UX111-related prior development costs and other transition costs.
Abeona In May 2022, we announced an exclusive License Agreement with Abeona for an AAV gene therapy for the treatment of MPS IIIA, or UX111. Under the terms of the agreement, we assumed responsibility for the UX111 program and in return, we are obligated to pay Abeona certain UX111-related prior development costs and other transition costs.
Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments and permits the filing of an NDA where at least some of the information required for approval 22 comes from studies not conducted by, or for, the applicant, and for which the applicant has not obtained a right of reference.
Section 505(b)(2) was enacted as part of the Hatch-Waxman Amendments and permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by, or for, the applicant, and for which the applicant has not obtained a right of reference.
Food and Drug Administration, or FDA, and European Medicines Agency, or EMA, rare pediatric disease designation from the FDA, and was accepted into the EMA’s Priority Medicines program, or PRIME, program. Setrusumab is subject to our collaboration agreement with Mereo and is the lead clinical asset in our bone endocrinology franchise.
Food and Drug Administration, or FDA, and European Medicines Agency, or EMA, Rare Pediatric Disease designation and Breakthrough Designation from the FDA, and was accepted into the EMA’s Priority Medicines, or PRIME, program. Setrusumab is subject to our collaboration agreement with Mereo and is the lead clinical asset in our bone endocrinology franchise.
The regulatory authorities may also impose specific obligations as a condition of the MA. RMPs and Periodic Safety Update Reports, or PSURs, are routinely available to third parties requesting access, subject to limited redactions. 23 Special rules apply in part for ATMPs.
The regulatory authorities may also impose specific obligations as a condition of the MA. RMPs and Periodic Safety Update Reports, or PSURs, are routinely available to third parties requesting access, subject to limited redactions. Special rules apply in part for ATMPs.
In addition, as a condition for accelerated approval, the FDA currently also requires pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. 20 In addition, the Food and Drug Administration Safety and Innovation Act, or FDASIA, established the Breakthrough Therapy designation.
In addition, as a condition for accelerated approval, the FDA currently also requires pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. In addition, the Food and Drug Administration Safety and Innovation Act, or FDASIA, established the Breakthrough Therapy designation.
We make our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, and amendments to those reports, available on our internet website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. 29
We make our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K, and amendments to those reports, available on our internet website, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
The content of the MAA is similar to that of an NDA or BLA filed in the U.S., with the exception of, among other things, country-specific document requirements. Authorization Procedures Medicines can be authorized by using, among other things, a centralized or decentralized procedure.
The content of the MAA is similar to that of an NDA or BLA filed in the U.S., with the exception of, among other things, country-specific document requirements. 23 Authorization Procedures Medicines can be authorized by using, among other things, a centralized or decentralized procedure.
Our health and safety management system includes several elements, such as incorporation of Global Environmental, Health, Safety and Sustainability (EHSS) standards, site-specific standard operating procedures, incident and safety observation reporting, hazard identification and risk assessments, job safety analyses, ergonomic assessments and industrial hygiene evaluations.
Our health and safety management system includes several elements, such as incorporation of Global Environmental, Health, Safety and Sustainability standards, site-specific standard operating procedures, incident and safety observation reporting, hazard identification and risk assessments, job safety analyses, ergonomic assessments and industrial hygiene evaluations.
UX111 Exclusivity We have an exclusive license from Nationwide Children’s Hospital, or NCH, to a pending U.S. patent application covering a method of treating MPS IIIA by intravenously administering a recombinant AAV9 vector comprising a U1a promoter and a polynucleotide sequence encoding N-sulfoglucosamine sulfohydrolase, or SGSH; we expect any patent emanating from this application to expire in 2032 (not accounting for any available PTE).
UX111 (Rebisufligene Etisparvovec) Exclusivity We have an exclusive license from Nationwide Children’s Hospital, or NCH, to a pending U.S. patent application covering a method of treating MPS IIIA by intravenously administering a recombinant AAV9 vector comprising a U1a promoter and a polynucleotide sequence encoding N-sulfoglucosamine sulfohydrolase, or SGSH; we expect any patent emanating from this application to expire in 2032 (not accounting for any available PTE).
DTX401 for the treatment of glycogen storage disease type Ia, or GSDIa DTX401 is an adeno-associated virus 8, or AAV8, gene therapy clinical candidate, administered by a one-time IV infusion that is designed to deliver stable expression and activity of G6Pase-α, an essential enzyme in glycogen and glucose metabolism.
DTX401 (pariglasgene brecaparvovec) for the treatment of Glycogen Storage Disease Type Ia, or GSDIa DTX401 is an adeno-associated virus 8, or AAV8, gene therapy clinical candidate, administered by a one-time IV infusion that is designed to deliver stable expression and activity of G6Pase-α, an essential enzyme in glycogen and glucose metabolism.
Please see “—License and Collaboration Agreements—Clinical Product Candidates—REGENXBIO Inc.” for a description of our license agreement with REGENXBIO Inc. UX701 for the treatment of Wilson Disease UX701 is an AAV type 9 gene therapy, administered by a one-time IV infusion that is designed to deliver a truncated form of the ATP7B gene.
Please see “—License and Collaboration Agreements—Clinical Product Candidates—REGENXBIO Inc.” for a description of our license agreement with REGENXBIO Inc. UX701 (rivunatpagene miziparvovec) for the treatment of Wilson Disease UX701 is an AAV type 9 gene therapy, administered by a one-time IV infusion that is designed to deliver a truncated form of the ATP7B gene.
This facility is focused on drug substance and drug product manufacturing of AAV gene therapy products and will support our clinical and commercial pipeline. This new capability will combine with our existing gene therapy process and analytical development and QC lab capabilities in nearby Woburn, Massachusetts to form a fully integrated gene therapy development, manufacturing, and testing unit.
This facility is focused on drug substance and drug product manufacturing of AAV gene therapy products and will support our clinical and commercial pipeline. This new capability combines with our existing gene therapy process and analytical development and QC lab capabilities in nearby Woburn, Massachusetts to form a fully integrated gene therapy development, manufacturing, and testing unit.
The majority of new employees hired during the year ended December 31, 2023 were to support and extend our clinical and preclinical pipeline, our in-house manufacturing capacities for our GTMF, as well as our commercialization activities, with hires in commercial, clinical development and operations, research, manufacturing, and general and administrative functions.
The majority of new employees hired during the year ended December 31, 2024 were to support and extend our clinical and preclinical pipeline, our in-house manufacturing capacities for our GTMF, as well as our commercialization activities, with hires in commercial, clinical development and operations, research, manufacturing, and general and administrative functions.
DTX401 is being developed for the treatment of patients with glycogen storage disease type Ia, or GSDIa, and is the most common genetically inherited glycogen storage disease, with an estimated 6,000 patients in the developed world. A Pediatric Investigation Plan, or PIP, was accepted by the EMA.
DTX401 is being developed for the treatment of patients with GSDIa, and is the most common genetically inherited glycogen storage disease, with an estimated 6,000 patients in the developed world. A Pediatric Investigation Plan, or PIP, was accepted by the EMA.
University of Pennsylvania In May 2016, we entered into a research, collaboration and license agreement with the University of Pennsylvania under which we are collaborating on the pre-clinical development of gene therapy products for the treatment of phenylketonuria and Wilson disease, each, a Subfield.
University of Pennsylvania In May 2016, we entered into a research, collaboration and license agreement with the University of Pennsylvania, or UPENN, under which we are collaborating on the pre-clinical development of gene therapy products for the treatment of phenylketonuria and Wilson disease, each, a Subfield.
Crysvita is also approved in the U.S. and certain other regions for the treatment of FGF23-related hypophosphatemia in tumor-induced osteomalacia, or TIO, associated with phosphaturic mesenchymal tumors that cannot be curatively resected or localized in adults and pediatric patients 2 years of age and older. There are approximately 2,000 to 4,000 patients with TIO in the developed world.
Crysvita is also approved in the U.S. and certain other regions for the treatment of FGF23-related hypophosphatemia in TIO, associated with phosphaturic mesenchymal tumors that cannot be curatively resected or localized in adults and pediatric patients 2 years of age and older. There are approximately 2,000 to 4,000 patients with TIO in the developed world.
GTX-102 Exclusivity We have an exclusive license from TAMU to a patent family filed in the U.S. and several foreign jurisdictions relating to UBE3A antisense oligonucleotides including GTX-102 and their use for the treatment of Angelman syndrome. The in-licensed TAMU patent family includes three issued U.S. patents expiring in 2038 (not accounting for any available PTE).
GTX-102 (Antisense Oligonucleotide) Exclusivity We have an exclusive license from TAMU to a patent family filed in the U.S. and several foreign jurisdictions relating to UBE3A antisense oligonucleotides including GTX-102 and their use for the treatment of Angelman syndrome. The in-licensed TAMU patent family includes four issued U.S. patents expiring in 2038 (not accounting for any available PTE).
Please see “—License and Collaboration Agreements—Approved Products— Kyowa Kirin Co., Ltd.” for a description of our collaboration and license agreement with KKC. Mepsevii for the treatment of MPS VII Mepsevii is an enzyme replacement therapy administered intravenously, or IV, that replaces the missing enzyme (beta-glucuronidase), developed for the treatment of Mucopolysaccharidosis VII, also known as MPS VII or Sly syndrome.
Please see “—License and Collaboration Agreements—Approved Products— Kyowa Kirin Co., Ltd.” for a description of our collaboration and license agreement with KKC. Mepsevii for the treatment of Mucopolysaccharidosis VII, or MPS VII Mepsevii is an enzyme replacement therapy administered intravenously, or IV, that replaces the missing enzyme (beta-glucuronidase), developed for the treatment of MPS VII or Sly syndrome.
In October 2013, we entered into an exclusive license agreement with REGENXBIO Inc., or REGENX, under which we were granted an option to develop products to treat hemophilia A, OTC deficiency and GSDIa.
In October 2013, we entered into an exclusive license agreement with REGENXBIO Inc., or REGENX, under which we were granted an option to develop products to treat OTC deficiency and GSDIa.
With respect to Crysvita, although we are not aware of any other products currently in clinical development for the treatment of XLH and TIO, it is possible that competitors may produce, develop, and commercialize therapeutics, or utilize other approaches such as gene therapy, to treat XLH and TIO.
With respect to Crysvita, although we are not aware of any other products currently in clinical development by a competitor for the treatment of XLH and TIO, it is possible that competitors may produce, develop, and commercialize therapeutics, or utilize other approaches such as gene therapy, to treat XLH and TIO.
The exclusivity positions for our commercial products and our clinical-stage product candidates as of December 31, 2023, are summarized below. Crysvita (Burosumab) Exclusivity We have in-licensed rights from KKC to patents and patent applications relating to Crysvita and its use for the treatment of XLH, TIO, and various other hypophosphatemic conditions.
The exclusivity positions for our commercial products and our clinical-stage product candidates as of December 31, 2024, are summarized below. Crysvita Exclusivity We have in-licensed rights from KKC to patents and patent applications relating to Crysvita and its use for the treatment of XLH, TIO, and various other hypophosphatemic conditions.
Risk Factors Risks Related to Our Intellectual Property.” As of December 31, 2023, we own, jointly own, or have exclusive rights to more than 250 issued and in-force patents (not including individually validated national patents in European Patent Convention member countries) that cover one or more of our products or product candidates, methods of their use, or methods of their manufacture, including more than 50 in-force patents issued by the U.S.
Risk Factors Risks Related to Our Intellectual Property.” As of December 31, 2024, we own, jointly own, or have exclusive rights to more than 275 issued and in-force patents (not including individually validated national patents in European Patent Convention member countries) that cover one or more of our products or product candidates, methods of their use, or methods of their manufacture, including more than 50 in-force patents issued by the U.S.
If we receive and resell an FDA priority review voucher, or PRV, in connection with a new drug application approval, GeneTx is entitled to receive a portion of proceeds from the sale of the PRV or a cash payment from us, if we choose to retain the PRV.
If we receive and resell an FDA priority review voucher, or PRV, in connection with a new drug application approval, GeneTx unitholders are entitled to receive a portion of proceeds from the sale of the PRV or a cash payment from us, if we choose to retain the PRV.
We take actions to address areas of employment concern and follow-up routinely to share with employees what we are doing. Diversity, Equity, Inclusion and Belonging We are committed to fostering a healthy, inclusive environment while nurturing a culture of belonging where all employees have equal opportunities.
We take actions to address areas of employment concern and follow-up routinely to share with employees what we are doing. Culture We are committed to fostering a healthy, inclusive environment while nurturing a culture of belonging where all employees have equal opportunities.
We invest in the growth and development of our employees through various training and development programs that build and strengthen employees’ leadership and professional skills, including leadership development programs for new leaders, six sigma certification, as well as a mentoring program.
We invest in the growth and development of our employees through various training and development programs that build and strengthen employees’ leadership and professional skills, including leadership development programs tailored for new leaders as well as for more senior leaders, six sigma certification, as well as a mentoring program.
Beyond the patent portfolio in-licensed from BRI, we own a pending U.S. patent application, corresponding foreign patent applications, and issued patents in Australia, Brazil, Canada, Israel, Korea, Malaysia, and Taiwan relating to our pharmaceutical-grade Dojolvi composition; these owned patents and any additional patents issuing from these owned applications are expected to expire in 2034.
Beyond the patent portfolio in-licensed from BRI, we own four pending U.S. patent applications, corresponding foreign patent applications, and issued patents in Australia, Brazil, Canada, Israel, Korea, Malaysia, Taiwan, and Thailand relating to our pharmaceutical-grade Dojolvi composition; these owned patents and any additional patents issuing from these owned applications are expected to expire in 2034.
Similar laws exist in other countries, such as the United Kingdom or in EU member states, that restrict improper payments to public and private parties. Many countries have laws prohibiting these types of payments within the respective country.
Similar laws exist in other countries, such as the UK or in EU member states, that restrict improper payments to public and private parties. Many countries have laws prohibiting these types of payments within the respective country.
Government Regulation Government authorities in the U.S. (including federal, state, and local authorities) and in other countries, extensively regulate, among other things, the manufacturing, research and clinical development, marketing, labeling and packaging, storage, distribution, post-approval monitoring and reporting, advertising and promotion, pricing, and export and import of pharmaceutical products, such as those we are developing.
(including federal, state, and local authorities) and in other countries, extensively regulate, among other things, the manufacturing, research and clinical development, marketing, labeling and packaging, storage, distribution, post-approval monitoring and reporting, advertising and promotion, pricing, and export and import of pharmaceutical products, such as those we are developing.
GeneTx In August 2019, we entered into a Program Agreement and a Unitholder Option Agreement with GeneTx Biotherapeutics LLC, or GeneTx, to collaborate on the development of GeneTx’s GTX-102, an ASO for the treatment of Angelman syndrome.
GeneTx In August 2019, we entered into a Program Agreement and a Unitholder Option Agreement with GeneTx to collaborate on the development of GeneTx’s GTX-102, an ASO for the treatment of Angelman syndrome.
UX111 for the treatment of Sanfilippo syndrome type A or MPS IIIA UX111 (formerly ABO-102) is an adeno-associated virus 9, or AAV9, gene therapy product candidate, administered by a one-time IV infusion that provides the cross-correcting enzyme that enables the break down of Heparan sulfate, or HS.
UX111 (rebisufligene etisparvovec) for the treatment of Sanfilippo syndrome type A or MPS IIIA UX111 (formerly ABO-102) is an adeno-associated virus 9, or AAV9, gene therapy product candidate, administered by a one-time IV infusion that provides the cross-correcting enzyme that enables the breakdown of Heparan sulfate, or HS.
HoFH occurs when two copies of the familial hypercholesterolemia, or FH-causing genes are inherited, one from each parent, resulting in dangerously high levels (>400 mg/dL) of LDL-C, or bad cholesterol. Patients with HoFH are at risk for premature atherosclerotic disease and cardiac events as early as their teenage years.
HoFH occurs when two copies of the genes causing familial hypercholesterolemia are inherited, one from each parent, resulting in dangerously high levels (>400 mg/dL) of low-density lipoprotein-cholesterol, or LDL-C, which is bad cholesterol. Patients with HoFH are at risk for premature atherosclerotic disease and cardiac events as early as their teenage years.
With respect to UX143, there are currently no approved drugs for OI. Most pediatric patients with OI are managed with off-label use of bisphosphonates to increase bone density and reduce frequency of bone fracture. We are aware of another 9 anti-sclerostin antibody, romosozumab, that is in Phase 3 clinical testing by Amgen.
Most pediatric patients with OI are managed with off-label use of bisphosphonates to increase bone density and reduce frequency of bone fracture. We are aware of another anti-sclerostin antibody, romosozumab, that is in Phase 3 clinical testing by Amgen. With respect to GTX-102, there are currently no approved drugs for Angelman syndrome.
Government Regulation — Pediatric Studies and Exclusivity,” “Government Regulation—U.S. Government Regulation — Biosimilars and Exclusivity,” “Government Regulation—U.S. Government Regulation — Abbreviated New Drug Applications for Generic Drugs and New Chemical Entity Exclusivity,” “Government Regulation—U.S.
See “Government Regulation—U.S. Government Regulation — Orphan Designation and Exclusivity,” “Government Regulation—U.S. Government Regulation — Pediatric Studies and Exclusivity,” “Government Regulation—U.S. Government Regulation — Biosimilars and Exclusivity,” “Government Regulation—U.S. Government Regulation — Abbreviated New Drug Applications for Generic Drugs and New Chemical Entity Exclusivity,” “Government Regulation—U.S.
With respect to DTX401, there are currently no pharmacologic treatments for patients with GSDIa. We are aware of an mRNA therapy, mRNA-3745, in Phase 1 for GSDIa by Moderna. With respect to DTX301, the current treatments for patients with OTC deficiency are nitrogen scavenging drugs and severe limitations in dietary protein.
We are aware of an mRNA therapy, mRNA-3745, in Phase 1 for GSDIa by Moderna. With respect to DTX301, the current treatments for patients with OTC deficiency are nitrogen scavenging drugs and severe limitations in dietary protein.
The following table summarizes our approved products and pipeline of clinical product candidates: 5 Approved Products Crysvita for the treatment of XLH and TIO Crysvita is a fully human monoclonal antibody administered via subcutaneous injection, that targets fibroblast growth factor 23, or FGF23, developed for the treatment of XLH.
The following table summarizes our approved products and pipeline of clinical product candidates: 5 Approved Products Crysvita for the treatment of X-Linked Hypophosphatemia, or XLH, and Tumor-Induced Osteomalacia, or TIO Crysvita is a fully human monoclonal antibody administered via subcutaneous injection, that targets fibroblast growth factor 23, or FGF23, developed for the treatment of XLH.
Under the terms of the agreement, we will lead future global development of setrusumab in both pediatric and adult patients with OI and were granted an exclusive license to develop and commercialize setrusumab in the U.S., Turkey, and the rest of the world, excluding the European Economic Area, United Kingdom, and Switzerland, or the Mereo Territory, where Mereo retains commercial rights.
Under the terms of the agreement, we will lead future global development of setrusumab in both pediatric and adult patients with OI and were granted an exclusive license to develop and commercialize setrusumab in the U.S., Turkey, and the rest of the world, excluding the EEA, UK, and Switzerland, or the Mereo Territory, where Mereo retains commercial rights.
Further, 1,089 employees are based in the U.S., including at our facilities in Novato, California, Brisbane, California, Cambridge, Massachusetts, and Woburn, Massachusetts, and 187 employees are based at our international locations.
Further, 1,081 employees are based in the U.S., including at our facilities in Novato, California, Brisbane, California, Cambridge, Massachusetts, and Woburn, Massachusetts, and 213 employees are based at our international locations.
The FDA may approve an NDA or BLA under the accelerated approval program if the drug treats a serious condition, provides a meaningful advantage over available therapies, and demonstrates an effect on either (1) a surrogate endpoint that is reasonably likely to predict clinical benefit, or (2) on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval. 20 The FDA may approve an NDA or BLA under the accelerated approval program if the drug treats a serious condition, provides a meaningful advantage over available therapies, and demonstrates an effect on either (1) a surrogate endpoint that is reasonably likely to predict clinical benefit, or (2) on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Dojolvi (Triheptanoin) Exclusivity We have an exclusive license from BRI to patents and patent applications relating to Dojolvi and its use for the treatment of FAOD. Pursuant to this license, we have rights to two issued U.S. patents covering Dojolvi which expire in 2025 and 2029.
Mepsevii is also protected in the U.S. by regulatory exclusivity until 2029. 15 Dojolvi Exclusivity We have an exclusive license from BRI to patents and patent applications relating to Dojolvi and its use for the treatment of FAOD. Pursuant to this license, we have rights to two issued U.S. patents covering Dojolvi which expire in 2025 and 2029.
Second, we have a non-exclusive license from the National Institutes of Health, or NIH, to an issued U.S. patent expiring in 2034 (not accounting for any available PTE) and corresponding foreign patents covering a recombinant nucleic acid construct used in DTX401 that includes a codon-optimized version of the G6Pase gene. 15 DTX301 (Avalotcagene Ontaparvovec) Exclusivity We have a license to two patent families covering elements of our DTX301 product candidate.
DTX401 (Pariglasgene Brecaparvovec) Exclusivity We have a non-exclusive license from the National Institutes of Health, or NIH, to an issued U.S. patent expiring in 2034 (not accounting for any available PTE) and corresponding foreign patents covering a recombinant nucleic acid construct used in DTX401 that includes a codon-optimized version of the G6Pase gene.
To regularly assess and improve our employee retention and engagement, we conduct an engagement survey approximately every 18 months, with "pulse" surveys in between, the results of which are discussed with our board of directors, at all hands employee meetings and in individual functions.
We encourage all employees to have an individual development plan to identify focus areas for learning and growth. 28 To regularly assess and improve our employee retention and engagement, we conduct an engagement survey approximately every 18 months, with "pulse" surveys in between, the results of which are discussed with our board of directors, at all hands employee meetings and in individual functions.
Following is a description of our significant license and collaboration agreements. Approved Products Kyowa Kirin Co., Ltd. In August 2013, we entered into a collaboration and license agreement with KKC.
Approved Products Kyowa Kirin Co., Ltd. In August 2013, we entered into a collaboration and license agreement with KKC.
We continually evaluate our business need and opportunity and balances in-house expertise and capacity with outsourced expertise and capacity. Currently, we outsource substantial clinical trial work to clinical research organizations and certain drug manufacturing to contract manufacturers. 27 Workforce Safety and Employee Wellbeing We maintain a safety culture grounded on the premise of eliminating workplace incidents, risks and hazards.
Currently, we outsource substantial clinical trial work to clinical research organizations and certain drug manufacturing to contract manufacturers. Workforce Safety and Employee Wellbeing We maintain a safety culture grounded on the premise of eliminating workplace incidents, risks and hazards.
Evkeeza is approved in the U.S., where it is marketed by our partner Regeneron Pharmaceuticals, or Regeneron. It is also approved in the European Economic Area, or EEA, as a first-in-class therapy for use together with diet and other low-density lipoprotein-cholesterol, or LDL-C, lowering therapies to treat adults and adolescents aged five years and older with clinical HoFH.
Evkeeza is approved in the U.S., where it is marketed by our partner Regeneron Pharmaceuticals, or Regeneron. It is also approved in the European Economic Area, or EEA, Brazil and Japan as a first-in-class therapy for use together with diet and other LDL-C lowering therapies.
We seek patent protection in the U.S. and internationally for our products, product candidates, and processes. Our policy is to patent or in-license the technologies, inventions, and improvements that we consider important to the development of our business. In addition to patent protection, we rely on trade secrets, know-how, and continuing innovation to develop and maintain our competitive position.
We seek patent protection in the U.S. and internationally for our products, product candidates, and processes. Our policy is to patent or in-license the technologies, inventions, and improvements that we consider important to the development of our business.
This means that clinical trials conducted in the EU or EEA have to comply with EU clinical trial legislation and that clinical trials conducted outside the EU or EEA have to comply with ethical principles equivalent to those set out in the EEA, including adhering to international good clinical practice and the Declaration of Helsinki. 24 Exceptional Circumstances/Conditional Approval Orphan drugs or drugs with unmet medical needs may be eligible for EU approval under exceptional circumstances or with conditional approval.
This means that clinical trials conducted in the EU or EEA have to comply with EU clinical trial legislation and that clinical trials conducted outside the EU or EEA have to comply with ethical principles equivalent to those set out in the EEA, including adhering to international good clinical practice and the Declaration of Helsinki.
We are aware of another gene therapy, VTX-801, that is in Phase 1 for Wilson disease by Vivet Therapeutics, in collaboration with Pfizer. License and Collaboration Agreements Our products and some of our current product candidates have been either in-licensed from academic institutions or derived from partnerships with other pharmaceutical companies.
We are aware of a chelator, ALXN-1840, that is in Phase 3 for Wilson disease by Monopar Therapeutics. 10 License and Collaboration Agreements Our products and some of our current product candidates have been either in-licensed from academic institutions or derived from partnerships with other pharmaceutical companies. Following is a description of our significant license and collaboration agreements.
As described below, we and KKC shared commercial responsibilities and profits in the Profit-Share Territory until April 2023, KKC has the commercial responsibility in the European Territory, and we are responsible for commercializing Crysvita in Latin America. 10 In the Profit-Share Territory, KKC booked sales of products and we had the sole right to promote the products, with KKC having the right to increasingly participate in the promotion of the products until the transition date of April 2023, which was five years from commercial launch.
In the Profit-Share Territory, KKC booked sales of products and we had the sole right to promote the products, with KKC having the right to increasingly participate in the promotion of the products until the transition date of April 2023, which was five years from commercial launch.
In the European Territory, KKC books sales of products and has the sole right to promote and sell the products, with the exception of Turkey. In Turkey, we have rights to commercialize Crysvita and KKC has the option to assume responsibility for such commercialization efforts, after a certain minimum period.
In Turkey, we have rights to commercialize Crysvita and KKC has the option to assume responsibility for such commercialization efforts. In Latin America, we book sales of products and have the sole right to promote and sell the products.
Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. Priority review designation does not change the scientific/medical standard for approval or the quality of evidence necessary to support approval.
Priority review is granted where there is evidence that the proposed product would be a significant improvement in the safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition.
When an ANDA applicant files its application with the FDA, it must certify, among other things, that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable, which is called a Paragraph IV certification.
This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication. 22 When an ANDA applicant files its application with the FDA, it must certify, among other things, that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable, which is called a Paragraph IV certification.
Pediatric Studies and Exclusivity NDAs and BLAs must contain data to assess the safety and effectiveness of an investigational new drug product for the claimed indications in all relevant pediatric populations in order to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.
Becerra, suggested that orphan drug exclusivity covers the full scope of the orphan-designated “disease or condition” regardless of whether a drug obtained approval for a narrower use. 21 Pediatric Studies and Exclusivity NDAs and BLAs must contain data to assess the safety and effectiveness of an investigational new drug product for the claimed indications in all relevant pediatric populations in order to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.
For the year ended December 31, 2023, more than half of our total revenues were earned from our collaboration partner KKC. Human Capital General Information As of December 31, 2023, we had 1,276 total employees, of which 876 are in research and development and 400 are in sales, general, and administrative.
For the year ended December 31, 2024, 49% of our total revenues were generated by our collaboration partner KKC. Human Capital General Information As of December 31, 2024, we had 1,294 total employees, of which 875 are in research and development and 419 are in sales, general, and administrative.
Mepsevii (Vestronidase Alfa) Exclusivity We own four issued U.S. patents and corresponding issued foreign patents covering Mepsevii and its use in the treatment of lysosomal storage disorders such as MPS VII. These patents expire in 2035. Mepsevii is also protected in the U.S. by regulatory exclusivity until 2029 and by orphan drug exclusivity for treating MPS VII until November 2024.
Mepsevii Exclusivity We own four issued U.S. patents and corresponding issued foreign patents covering Mepsevii and its use in the treatment of lysosomal storage disorders such as MPS VII. These patents expire in 2035.
DTX301 for the treatment of ornithine transcarbamylase, or OTC, deficiency DTX301 is an AAV8 gene therapy product candidate, administered by a one-time IV infusion that is designed to deliver stable expression and activity of the ornithine transcarbamylase, or OTC , gene.
Please see “—License and Collaboration Agreements—Clinical Product Candidates—REGENXBIO Inc.” for a description of our license agreement with REGENXBIO Inc. 8 DTX301 (avalotcagene ontaparvovec) for the treatment of Ornithine Transcarbamylase, or OTC, deficiency DTX301 is an AAV8 gene therapy product candidate, administered by a one-time IV infusion that is designed to deliver stable expression and activity of the OTC , gene.
Sufficient inventory levels were maintained during the transfer of the fill and finish activities for Mepsevii to BSP. Crysvita The drug substance and drug product for burosumab are made by KKC in Japan under the collaboration and license agreement with KKC. The cell line to produce burosumab is specific for this product and is in KKC’s control.
Crysvita The drug substance and drug product for burosumab are made by KKC in Japan under the collaboration and license agreement and supply agreements with KKC. The cell line to produce burosumab is specific for this product and is in KKC’s control.
In March 2015, we entered into an option and license agreement with REGENX, which was subsequently amended, pursuant to which we have an exclusive worldwide license to make, have made, use, import, sell, and offer for sale licensed products to treat Wilson disease and CDKL5 deficiency.
In the event that we fail to meet a particular milestone within established deadlines, we can extend the relevant deadline by providing a separate payment to REGENX. 12 In March 2015, we entered into an option and license agreement with REGENX, which was subsequently amended, pursuant to which we have an exclusive worldwide license to make, have made, use, import, sell, and offer for sale licensed products to treat Wilson disease and CDKL5 deficiency.
In any event of termination, our rights to Crysvita under the agreement and our obligations to share development costs will cease, and the program will revert to KKC, worldwide if the agreement is terminated as a whole or solely in the terminated countries if the agreement is terminated solely with respect to certain countries.
In any event of termination, our rights to Crysvita under the agreement and our obligations to share development costs will cease, and the program will revert to KKC, worldwide if the agreement is terminated as a whole or solely in the terminated countries if the agreement is terminated solely with respect to certain countries. 11 Saint Louis University In November 2010, we entered into a license agreement with Saint Louis University, or SLU, wherein SLU granted us certain exclusive rights to intellectual property related to Mepsevii.
In the event that we fail to meet a particular milestone within established deadlines, we can extend the relevant deadline by providing a separate payment to REGENX. 12 In March 2020, we entered into a license agreement with REGENX, for an exclusive, sublicensable, worldwide license to REGENX’s NAV AAV8 and AAV9 vectors for the development and commercialization of gene therapy treatments for a rare metabolic disorder.
In March 2020, we entered into a license agreement with REGENX, for an exclusive, sublicensable, worldwide license to REGENX’s NAV AAV8 and AAV9 vectors for the development and commercialization of gene therapy treatments for a rare metabolic disorder.
We also use other means to protect our products and product candidates, including the pursuit of marketing or data exclusivity periods, orphan drug status, and similar rights that are available under regulatory provisions in certain countries, including the U.S., Europe, Japan, and China. See “Government Regulation—U.S. Government Regulation — Orphan Designation and Exclusivity,” “Government Regulation—U.S.
In addition to patent protection, we rely on trade secrets, know-how, and continuing innovation to develop and maintain our competitive position. 14 We also use other means to protect our products and product candidates, including the pursuit of marketing or data exclusivity periods, orphan drug status, and similar rights that are available under regulatory provisions in certain countries, including the U.S., Europe, Japan, and China.
Under the license agreement, we are obligated to pay to SLU a low single-digit royalty on net sales of the licensed products in the U.S., Europe, or Japan, subject to certain potential deductions.
Under the license agreement, we are obligated to pay to SLU a low single-digit royalty on net sales of the licensed products in Europe and Japan, subject to certain potential deductions. Our obligation to pay royalties to SLU in these territories continues until the expiration of any orphan drug exclusivity.
UX701 Exclusivity We have two licenses to patents and patent applications covering elements of our UX701 product candidate. First, we have in-licensed patents owned by UPENN and sublicensed to us by REGENX relating to the AAV9 capsid used in UX701 that expire between September 2024 and 2026 in the U.S., and in September 2024 in foreign countries.
UX701 (Rivunatpagene Miziparvovec) Exclusivity We have two licenses to patents and patent applications covering elements of our UX701 product candidate. First, we have a license to a U.S. patent expiring in January 2026 which relates to the AAV9 capsid used in UX701; this patent is owned by UPENN and sublicensed to us by REGENX.
Our obligation to pay royalties to SLU in these territories continues until the expiration of any orphan drug exclusivity. 11 Baylor Research Institute In September 2012, we entered into a license agreement, which was subsequently amended, with Baylor Research Institute, or BRI, under which we exclusively licensed certain intellectual property related to Dojolvi.
Baylor Research Institute In September 2012, we entered into a license agreement, which was subsequently amended, with Baylor Research Institute, or BRI, under which we exclusively licensed certain intellectual property related to Dojolvi.
This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot accept or approve another application relying on the NDA or BLA sponsor’s data. 21 Biosimilars and Exclusivity The Patient Protection and Affordable Care Act of 2010, or Affordable Care Act, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCI Act, which created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product.
Biosimilars and Exclusivity The Patient Protection and Affordable Care Act of 2010, or Affordable Care Act, includes a subtitle called the Biologics Price Competition and Innovation Act of 2009, or BPCI Act, which created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product.
Pursuant to the terms of the agreement, we received the rights to develop, commercialize and distribute the product for HoFH in countries outside of the U.S. Upon closing of the transaction in January 2022, we paid Regeneron a $30.0 million upfront payment. During the year ended December 31, 2023, a $10.0 million regulatory milestone was achieved.
Regeneron In January 2022, we announced a collaboration with Regeneron to commercialize Evkeeza for HoFH outside of the U.S. Pursuant to the terms of the agreement, we received the rights to develop, commercialize and distribute the product for HoFH in countries outside of the U.S. The Company paid Regeneron a $30.0 million upfront payment.
In addition, federal, state, and foreign government bodies and agencies have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage and disclosure of personally identifiable information or other information treated as confidential obtained from consumers and individuals.
In addition to these anti-corruption laws, we are subject to import and export control laws, tariffs, trade barriers, economic sanctions, and regulatory limitations on our ability to operate in certain foreign markets. 27 In addition, federal, state, and foreign government bodies and agencies have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage and disclosure of personally identifiable information or other information treated as confidential obtained from consumers and individuals.
Furthermore, as of December 31, 2023, we own, jointly own, or have exclusive rights to more than 350 pending patent applications, including more than 50 pending U.S. applications. 14 With respect to our owned or in-licensed issued patents in the U.S. and Europe, we may be entitled to obtain an extension of patent term to extend the patent expiration date.
With respect to our owned or in-licensed issued patents in the U.S. and Europe, we may be entitled to obtain an extension of patent term to extend the patent expiration date.
Although we believe that Dojolvi should be considered a drug and will be regulated that way, it is possible that other companies or individuals may attempt to produce triheptanoin for use in LC-FAOD. Investigators are testing triheptanoin in clinical studies across multiple indications, including LC-FAOD.
With respect to Dojolvi, LC-FAOD is commonly treated with diet therapy and MCT oil. Dojolvi may compete with this approach. Although we believe that Dojolvi should be considered a drug and will be regulated that way, it is possible that other companies or individuals may attempt to produce triheptanoin for use in LC-FAOD.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary • We have a history of operating losses and anticipate that we will continue to incur losses for the foreseeable future. • We have limited experience in generating revenue from product sales. • We may need to raise additional capital to fund our activities. • Clinical drug development is a lengthy, complex, and expensive process with uncertain outcomes. • We may experience delays in commercialization of our products and other adverse effects if we do not achieve our projected development goals in the time frames we announce and expect. • We may experience difficulty in enrolling patients. • The regulatory approval processes of the FDA and comparable foreign authorities are lengthy and inherently unpredictable. • Fast Track Product, Breakthrough Therapy, Priority Review or RMAT designations by the FDA, and analogous designations by the EMA, for our product candidates may not lead to faster development or approval. • Our product candidates may cause undesirable or serious side effects. • We face a multitude of manufacturing risks, particularly with respect to our gene therapy and mRNA product candidates. • Our products remain subject to regulatory scrutiny even if we obtain regulatory approval. • Product liability lawsuits against us could cause us to incur substantial liabilities. • We may not realize the full commercial potential of our product candidates if we are unable to source and develop effective biomarkers. • We rely on third parties to conduct our nonclinical and clinical studies and perform other tasks for us. • We are dependent on KKC for the clinical and commercial supply of Crysvita for all major markets and for the development and commercialization of Crysvita in certain major markets. • We rely on third parties to manufacture our products and product candidates. • The loss of, or failure to supply by, any of any of our single-source suppliers for our drug substance and drug product could adversely affect our business. • The actions of distributors and specialty pharmacies could affect our ability to sell or market products profitably. • Our revenue may be adversely affected if the market opportunities for our products and product candidates are smaller than expected. • Our competitors may develop therapies that are similar, more advanced, or more effective than ours. 30 • We may not successfully manage expansion of our company, including building an integrated commercial organization. • After the transition of our commercialization responsibilities for Crysvita in the U.S. and Canada, the success of Crysvita in those territories is dependent on the effectiveness of KKC’s commercialization efforts. • Commercial success of our products depends on the degree of market acceptance. • We face uncertainty related to insurance coverage and reimbursement status of our newly approved products. • If we, or our third-party partners, are unable to maintain effective proprietary rights for our products or product candidates, we may not be able to compete effectively. • Claims of intellectual property infringement may prevent or delay our development and commercialization efforts. • We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses. • We may face competition from biosimilars of our biologics product and product candidates or from generic versions of our small-molecule product and product candidates, which may result in a material decline in sales of affected products. • We could lose license rights that are important to our business if we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties. • We may become involved in lawsuits to protect or enforce our patents or the patents of our licensors, or be subject to claims that challenge the inventorship or ownership of our patents. • Changes to patent laws in the U.S. and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products. • We may not be able to protect our intellectual property rights throughout the world. • We have limited experience as a company operating our own manufacturing facility. • Our success depends in part on our ability to retain our President and Chief Executive Officer and other qualified personnel. • Our revenue may be impacted if we fail to obtain or maintain orphan drug exclusivity for our products. • Our operating results may be adversely impacted if our intangible assets become impaired. • We may not be successful in identifying, licensing, developing, or commercializing additional product candidates. • We may fail to comply with laws and regulations or changes in laws and regulations could adversely affect our business. • We are exposed to risks related to international expansion of our business outside of the U.S. • Our business may be adversely affected in the event of computer system failures or security breaches. • We or our third-party partners may be adversely affected by earthquakes or other serious natural disasters. • We may incur various costs and expenses and risks related to acquisition of companies or products or strategic transactions. • The market price of our common stock is highly volatile. • Future sales and issuances of our common stock could dilute the percentage ownership of our current stockholders and result in a decline in stock price. • Provisions in our amended and restated certificate of incorporation and by-laws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us or could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • We face general risks related to our ability to maintain effective internal controls over financial reporting, additional tax liabilities related to our operations, our ability to use our net operating loss carryforwards, costs of litigation, stockholder activism and increased scrutiny regarding our ESG practices and disclosures. 31 Risks Related to Our Financial Condition and Capital Requirements We have a history of operating losses and anticipate that we will continue to incur losses for the foreseeable future.
Biggest changeBecause of the following factors, as well as other factors affecting our financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. 29 Risk Factor Summary • We have a history of operating losses and expect to continue to incur operating losses in the near term. • We have limited experience in generating revenue from product sales. • We may need to raise additional capital to fund our activities. • Clinical drug development is a lengthy, complex, and expensive process with uncertain outcomes. • We may experience delays in commercialization of our products and other adverse effects if we do not achieve our projected development goals in the time frames we announce and expect. • We may experience difficulty in enrolling patients. • The regulatory approval processes of the FDA and comparable foreign authorities are lengthy and inherently unpredictable. • Fast Track Product, Breakthrough Therapy, Priority Review or RMAT designations by the FDA, and analogous designations by the EMA, for our product candidates may not lead to faster development or approval. • Our product candidates may cause undesirable or serious side effects. • We face a multitude of manufacturing risks, particularly with respect to our gene therapy product candidates. • Our products remain subject to regulatory scrutiny even if we obtain regulatory approval. • Product liability lawsuits against us could cause us to incur substantial liabilities. • We may not realize the full commercial potential of our product candidates if we are unable to source and develop effective biomarkers. • We rely on third parties to conduct our nonclinical and clinical studies and perform other tasks for us. • We are dependent on KKC for the commercialization of Crysvita in certain major markets, including the U.S. and Canada, and for our supply of Crysvita in our markets. • We rely on third parties to manufacture our products and product candidates. • The loss of, or failure to supply by, any of any of our single-source suppliers for our drug substance and drug product could adversely affect our business. • The actions of distributors and specialty pharmacies could affect our ability to sell or market products profitably. • Our revenue may be adversely affected if the market opportunities for our products and product candidates are smaller than expected. • Our competitors may develop therapies that are similar, more advanced, or more effective than ours. • We may not successfully manage expansion of our company. • Commercial success of our products depends on the degree of market acceptance. • We face uncertainty related to insurance coverage and reimbursement status of our newly approved products. • If we, or our third-party partners, are unable to maintain effective proprietary rights for our products or product candidates, we may not be able to compete effectively. • Claims of intellectual property infringement may prevent or delay our development and commercialization efforts. • We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses. • We may face competition from biosimilars of our biologics products and product candidates or from generic versions of our small-molecule products and product candidates, which may result in a material decline in sales of affected products. • We could lose license rights that are important to our business if we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties. 30 • We may become involved in lawsuits to protect or enforce our patents or the patents of our licensors, or be subject to claims that challenge the inventorship or ownership of our patents. • Changes to patent laws in the U.S. and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products. • We may not be able to protect our intellectual property rights throughout the world. • We have limited experience as a company operating our own manufacturing facility. • Our success depends in part on our ability to retain our President and Chief Executive Officer and other qualified personnel. • Our revenue may be impacted if we fail to obtain or maintain orphan drug exclusivity for our products. • Our operating results may be adversely impacted if our intangible assets become impaired. • We may not be successful in identifying, licensing, developing, or commercializing additional product candidates. • We may fail to comply with laws and regulations or changes in laws and regulations could adversely affect our business. • We are exposed to risks related to international expansion of our business outside of the U.S. • Our employees or consultants may engage in misconduct which could cause significant liability for us. • If we are found to have promoted off-label uses for our products, we may become subject to significant liability from the FDA and other regulatory agencies. • Our business may be adversely affected in the event of computer system failures or security breaches. • We or our third-party partners may be adversely affected by earthquakes or other serious natural disasters. • We may incur various costs and expenses and risks related to acquisition of companies or products or strategic transactions. • The market price of our common stock is highly volatile. • Future sales and issuances of our common stock could dilute the percentage ownership of our current stockholders and result in a decline in stock price. • Provisions in our amended and restated certificate of incorporation and by-laws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us or could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • We face general risks related to our ability to maintain effective internal controls over financial reporting, additional tax liabilities related to our operations, our ability to use our net operating loss carryforwards, costs of litigation, stockholder activism and increased scrutiny regarding our ESG practices and disclosures.
Our ability to generate substantial future revenue from product sales, including named patient sales, depends heavily on our success in many areas, including, but not limited to: • obtaining regulatory and marketing approvals with broad indications for product candidates for which we complete clinical studies; • developing a sustainable and scalable manufacturing process for our products and any approved product candidates and establishing and maintaining supply and manufacturing relationships with third parties that can conduct the processes 32 and provide adequate (in amount and quality) product supply to support market demand for our products and product candidates, if approved; • launching and commercializing our products and product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor; • obtaining market acceptance of our products and product candidates as viable treatment options; • obtaining adequate market share, reimbursement and pricing for our products and product candidates; • our ability to sell our products and product candidates on a named patient basis or through an equivalent mechanism and the amount of revenue generated from such sales; • our ability to find patients so they can be diagnosed and begin receiving treatment; • addressing any competing technological and market developments; • negotiating favorable terms, including commercial rights, in any collaboration, licensing, or other arrangements into which we may enter, any amendments thereto or extensions thereof; • maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and • attracting, hiring, and retaining qualified personnel.
Our ability to generate substantial future revenue from product sales, including named patient sales, depends heavily on our success in many areas, including, but not limited to: • obtaining regulatory and marketing approvals with broad indications for product candidates for which we complete clinical studies; • developing a sustainable and scalable manufacturing process for our products and any approved product candidates and establishing and maintaining supply and manufacturing relationships with third parties that can conduct the processes and provide adequate (in amount and quality) product supply to support market demand for our products and product candidates, if approved; • launching and commercializing our products and product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor; • obtaining market acceptance of our products and product candidates as viable treatment options; • obtaining adequate market share, reimbursement and pricing for our products and product candidates; • our ability to sell our products and product candidates on a named patient basis or through an equivalent mechanism and the amount of revenue generated from such sales; • our ability to find patients so they can be diagnosed and begin receiving treatment; • addressing any competing technological and market developments; • negotiating favorable terms, including commercial rights, in any collaboration, licensing, or other arrangements into which we may enter, any amendments thereto or extensions thereof; 32 • maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and • attracting, hiring, and retaining qualified personnel.
Further, as one of the goals of Phase 1 and/or 2 clinical trials is to identify the highest dose of treatment that can be safely provided to study participants, adverse side effects, including serious adverse effects, have occurred in certain studies as a result of changes to the dosing regimen during such studies and may occur in future studies.
Further, as one of the goals of Phase 1 and/or Phase 2 clinical trials is to identify the highest dose of treatment that can be safely provided to study participants, adverse side effects, including serious adverse effects, have occurred in certain studies as a result of changes to the dosing regimen during such studies and may occur in future studies.
We rely on third parties to manufacture our products and our product candidates and we are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit the supply of our product and product candidates.
We rely on third parties to manufacture our products and our product candidates and we are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit the supply of our products and product candidates.
Regarding our anti-sclerostin antibody product candidate, setrusumab, we are aware of litigation involving patents owned by a third-party, OssiFi-Mab LLC (OMab), relating to methods of using sclerostin antagonists in combination with antiresorptive drugs to increase bone growth, bone formation, and/or bone density.
Regarding our anti-sclerostin antibody product candidate, setrusumab, we are aware of litigation involving patents owned by a third-party, OssiFi-Mab LLC, or OMab, relating to methods of using sclerostin antagonists in combination with antiresorptive drugs to increase bone growth, bone formation, and/or bone density.
Applications for our product candidates could fail to receive regulatory approval, or could be delayed in receiving regulatory approval, for many reasons, including but not limited to the following: • regulatory authorities may disagree with the design, implementation, or conduct of our clinical studies; • regulatory authorities may change their guidance or requirements for a development program for a product candidate; • the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical studies; • the data collected from clinical studies of our product candidates may not be sufficient to support the submission of an NDA, or biologics license application, or BLA, or other submission or to obtain regulatory approval; 37 • we may be unable to demonstrate to regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable; • regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities used to manufacture our clinical and commercial supplies; • the U.S. government may be shut down, which could delay the FDA; • the FDA may be delayed in responding to our applications or submissions due to competing priorities or limited resources, including as a result of the lack of FDA funding or personnel; • failure of our nonclinical or clinical development to comply with an agreed upon Pediatric Investigational Plan, or PIP, which details the designs and completion timelines for nonclinical and clinical studies and is a condition of marketing authorization in the EU; and • the approval policies or regulations of regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Applications for our product candidates could fail to receive regulatory approval, or could be delayed in receiving regulatory approval, for many reasons, including but not limited to the following: • regulatory authorities may disagree with the design, implementation, or conduct of our clinical studies; • regulatory authorities may change their guidance or requirements for a development program for a product candidate; • the population studied in the clinical program may not be sufficiently broad or representative to assure efficacy and safety in the full population for which we seek approval; • regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical studies; • the data collected from clinical studies of our product candidates may not be sufficient to support the submission of an NDA, or biologics license application, or BLA, or other submission or to obtain regulatory approval; • we may be unable to demonstrate to regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable; • regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities used to manufacture our clinical and commercial supplies; • the U.S. government may be shut down, which could delay the FDA; • the FDA may be delayed in responding to our applications or submissions due to competing priorities or limited resources, including as a result of the lack of FDA funding or personnel; • failure of our nonclinical or clinical development to comply with an agreed upon Pediatric Investigational Plan, or PIP, which details the designs and completion timelines for nonclinical and clinical studies and is a condition of marketing authorization in the EU; and • the approval policies or regulations of regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Our research programs or licensing efforts may fail to yield additional product candidates for clinical development and commercialization for a number of reasons, including but not limited to the following: • our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates; • we may not be able or willing to assemble sufficient technical, financial or human resources to acquire or discover additional product candidates; • we may face competition in obtaining and/or developing additional product candidates; • our product candidates may not succeed in research, discovery, preclinical or clinical testing; • our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; • competitors may develop alternatives that render our product candidates obsolete or less attractive; • product candidates we develop may be covered by third parties’ patents or other exclusive rights; • the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost or at all; and • a product candidate may not be accepted as safe and effective by regulatory authorities, patients, the medical community, or payors.
Our research programs or licensing efforts may fail to yield additional product candidates for clinical development and commercialization for a number of reasons, including but not limited to the following: • our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates; • we may not be able or willing to assemble sufficient technical, financial or human resources to acquire or discover additional product candidates; 56 • we may face competition in obtaining and/or developing additional product candidates; • our product candidates may not succeed in research, discovery, preclinical or clinical testing; • our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; • competitors may develop alternatives that render our product candidates obsolete or less attractive; • product candidates we develop may be covered by third parties’ patents or other exclusive rights; • the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost or at all; and • a product candidate may not be accepted as safe and effective by regulatory authorities, patients, the medical community, or payors.
Our amended and restated certificate of incorporation and by-laws include provisions that: • authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; • create a classified board of directors whose members serve staggered three-year terms; • specify that special meetings of our stockholders can be called only by our board of directors or the chairperson of our board of directors; • prohibit stockholder action by written consent; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled only by a resolution adopted by the board of directors; • expressly authorize our board of directors to modify, alter or repeal our amended and restated by-laws; and • require holders of 75% of our outstanding common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated by-laws.
Our amended and restated certificate of incorporation and by-laws include provisions that: • authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; • create a classified board of directors whose members serve staggered three-year terms; • specify that special meetings of our stockholders can be called only by our board of directors or the chairperson of our board of directors; • prohibit stockholder action by written consent; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled only by a resolution adopted by the board of directors; • expressly authorize our board of directors to modify, alter or repeal our amended and restated bylaws; and • require holders of 75% of our outstanding common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated by-laws.
Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; 53 • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and • the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and • the priority of invention of patented technology.
We anticipate that our expenses will increase substantially if and as we: • continue our research and nonclinical and clinical development of our product candidates; • expand the scope of our current clinical studies for our product candidates; • advance our programs into more expensive clinical studies; • initiate additional nonclinical, clinical, or other studies for our product candidates; • pursue preclinical and clinical development for additional indications for existing products and product candidates; • change or add additional manufacturers or suppliers; • expand upon our manufacturing-related facilities and capabilities, particularly as we continue to ramp-up operations at our GMP gene therapy manufacturing facility; • seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies; • continue to establish Medical Affairs field teams to initiate relevant disease education; • continue to establish a marketing and distribution infrastructure and field force to commercialize our products and any product candidates for which we may obtain marketing approval; • continue to manage our international subsidiaries and establish new ones; • continue to operate as a public company and comply with legal, accounting and other regulatory requirements; • seek to identify, assess, license, acquire, and/or develop other product candidates, technologies, and/or businesses; • make milestone or other payments under any license or other agreements; • seek to maintain, protect, and expand our intellectual property portfolio; • seek to attract and retain skilled personnel; • create additional infrastructure, including facilities and systems, to support the growth of our operations, our product development, and our commercialization efforts; and • experience any delays or encounter issues with any of the above, including, but not limited to, failed studies, complex results, safety issues, inspection outcomes, or other regulatory challenges that require longer follow-up of existing studies, additional major studies, or additional supportive studies in order to pursue marketing approval.
We anticipate that our expenses will increase substantially if and as we: • continue our research and nonclinical and clinical development of our product candidates; • expand the scope of our current clinical studies for our product candidates; • advance our programs into more expensive clinical studies; • initiate additional nonclinical, clinical, or other studies for our product candidates; • pursue preclinical and clinical development for additional indications for existing products and product candidates; 31 • change or add additional manufacturers or suppliers; • expand upon our manufacturing-related facilities and capabilities, particularly as we continue to increase operations at our GMP gene therapy manufacturing facility; • seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies; • continue to establish Medical Affairs field teams to initiate relevant disease education; • continue to establish or grow a marketing and distribution infrastructure and field force to commercialize our products and any product candidates for which we may obtain marketing approval; • continue to manage our international subsidiaries and establish new ones; • continue to operate as a public company and comply with legal, accounting and other regulatory requirements; • seek to identify, assess, license, acquire, and/or develop other product candidates, technologies, and/or businesses; • make milestone or other payments under any license or other agreements; • seek to maintain, protect, and expand our intellectual property portfolio; • seek to attract and retain skilled personnel; • create additional infrastructure, including facilities and systems, to support the growth of our operations, our product development, and our commercialization efforts; and • experience any delays or encounter issues with any of the above, including, but not limited to, failed studies, complex results, safety issues, inspection outcomes, or other regulatory challenges that require longer follow-up of existing studies, additional major studies, or additional supportive studies in order to pursue marketing approval.
We have, and may in the future, be required to take inventory write-offs and incur other charges and expenses for products and product candidates that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives. 44 The drug substance and drug product for our products and most of our product candidates are currently acquired from single-source suppliers.
We have, and may in the future, be required to take inventory write-offs and incur other charges and expenses for products and product candidates that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives. The drug substance and drug product for our products and most of our product candidates are currently acquired from single-source suppliers.
Examples of such risks include the availability and cost of technologies and products that meet sustainability and ethical supply chain standards, evolving regulatory requirements affecting ESG standards or disclosures, our ability to recruit, develop, and retain diverse talent in our labor markets, and our ability to develop reporting processes and controls that comply with evolving standards for identifying, measuring and reporting ESG metrics.
Examples of such risks include the availability and cost of technologies and products that meet sustainability and ethical supply chain standards, evolving regulatory requirements affecting ESG standards or disclosures, our ability to recruit, develop, and retain talent in our labor markets, and our ability to develop reporting processes and controls that comply with evolving standards for identifying, measuring and reporting ESG metrics.
Fast Track, Breakthrough Therapy, Priority Review, or Regenerative Medicine Advanced Therapy, or RMAT, designations by the FDA, or access to the Priority Medicine scheme, or PRIME, by the EMA, for our product candidates, if granted, may not lead to faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
Fast Track, Breakthrough Therapy, Priority Review, or Regenerative Medicine Advanced Therapy, or RMAT, designations by the FDA, or access to the Priority Medicine scheme, or PRIME, by the EMA, for our product candidates, if granted, may not lead to 37 faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
If our current and future products fail to achieve an adequate level of acceptance by physicians, patients, payors, and others in the medical community, we will not be able to generate sufficient revenue to become or remain profitable. 47 The insurance coverage and reimbursement status of newly approved products is uncertain.
If our current and future products fail to achieve an adequate level of acceptance by physicians, patients, payors, and others in the medical community, we will not be able to generate sufficient revenue to become or remain profitable. The insurance coverage and reimbursement status of newly approved products is uncertain.
However, such a license may not be available on commercially reasonable terms or at all. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to continue commercialization of our products, or block our ability to develop and commercialize one or more of our product candidates.
However, such a license may not be available on commercially reasonable terms or at all. 50 Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to continue commercialization of our products, or block our ability to develop and commercialize one or more of our product candidates.
Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions, including those under the U.K. Bribery Act and similar foreign laws and regulations; and • regulatory and compliance risks relating to doing business with any entity that is subject to sanctions administered by the Office of Foreign Assets Control of the U.S.
Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions, including those under the U.K. Bribery Act and similar anti-corruption foreign laws and regulations; and • regulatory and compliance risks relating to doing business with any entity that is subject to sanctions administered by the Office of Foreign Assets Control of the U.S.
In addition, there may be 64 periods during which the use of state income tax NOL carryforwards and other state tax attribute carryforwards (such as state research tax credits) are suspended or otherwise limited, which could potentially accelerate or permanently increase future state tax liabilities for us. Litigation may substantially increase our costs and harm our business.
In addition, there may be periods during which the use of state income tax NOL carryforwards and other state tax attribute carryforwards (such as state research tax credits) are suspended or otherwise limited, which could potentially accelerate or permanently increase future state tax liabilities for us. Litigation may substantially increase our costs and harm our business.
Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth. We, as a company, have limited, recent experience selling and marketing our product and only some of our employees have prior experience promoting other similar products while employed at other companies.
Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth. We, as a company, have limited, experience selling and marketing our product and only some of our employees have prior experience promoting other similar products while employed at other companies.
Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the U.S., the reimbursement for our products may be reduced compared with the U.S. and may be insufficient to generate commercially reasonable revenue and profits.
Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in foreign markets, the reimbursement for our products may be reduced compared with the U.S. and may be insufficient to generate commercially reasonable revenue and profits.
In addition, even where we now have the right to control patent prosecution of patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensors and their counsel that took place prior to us assuming control over patent prosecution.
In addition, even where we now have the right to control patent 52 prosecution of patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensors and their counsel that took place prior to us assuming control over patent prosecution.
Before we can begin to commercially manufacture any of our product candidates at the facility, we must obtain regulatory approval from the FDA for our manufacturing processes and for the facility. In order to obtain approval, we will need to ensure that all of our processes, quality systems, methods, equipment, policies and procedures are 55 compliant with cGMP.
Before we can begin to commercially manufacture any of our product candidates at the facility, we must obtain regulatory approval from the FDA for our manufacturing processes and for the facility. In order to obtain approval, we will need to ensure that all of our processes, quality systems, methods, equipment, policies and procedures are compliant with cGMP.
We rely on third parties for the automation, characterization and validation, of our bioanalytical assays, companion diagnostics and the manufacture of its critical reagents. Companion diagnostics are subject to regulation by the FDA and similar regulatory authorities outside the U.S. as medical devices and require regulatory clearance or approval prior to commercialization.
We rely on third parties for the automation, characterization and validation, of our bioanalytical assays, companion diagnostics and the manufacture of critical reagents. Companion diagnostics are subject to regulation by the FDA and similar regulatory authorities outside the U.S. as medical devices and require regulatory clearance or approval prior to commercialization.
Kakkis or any of other member of our executive leadership team or other key employee, may impede the progress of our research, development, and commercialization objectives. If we fail to obtain or maintain orphan drug exclusivity for our products, our competitors may sell products to treat the same conditions and our revenue will be reduced.
Kakkis or any of other member of our executive leadership team or other key employee, may impede the progress of our research, development, and commercialization objectives. 55 If we fail to obtain or maintain orphan drug exclusivity for our products, our competitors may sell products to treat the same conditions and our revenue will be reduced.
Because we have limited financial and managerial resources, we focus our sales, marketing and research programs on certain products, product candidates or for specific indications. As a result, we may forego or delay pursuit of opportunities with other 57 products or product candidates or other indications that later prove to have greater commercial potential.
Because we have limited financial and managerial resources, we focus our sales, marketing and research programs on certain products, product candidates or for specific indications. As a result, we may forego or delay pursuit of opportunities with other products or product candidates or other indications that later prove to have greater commercial potential.
Even if our third-party product manufacturers develop acceptable manufacturing processes that provide the necessary quantities of our products and product candidates in a compliant and timely manner, the cost to us for the supply of our products and product candidates manufactured by such third parties may be high and could limit our profitability.
Even if our third-party product manufacturers develop acceptable manufacturing processes that provide the necessary quantities of our products and product candidates in a compliant and timely manner, the cost to us for the supply of our products and product candidates manufactured by 43 such third parties may be high and could limit our profitability.
Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are substantially dependent on, our contract manufacturing partners for compliance with the regulatory requirements. See “- Even if we obtain regulatory approval for our product candidates, our products remain subject to regulatory scrutiny” risk factor above.
Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are substantially dependent on, our contract manufacturing partners for compliance with the regulatory requirements. See the risk factor above entitled “- Even if we obtain regulatory approval for our product candidates, our products remain subject to regulatory scrutiny” .
If we do not have sufficient patent terms or regulatory exclusivity to protect our products, our business and results of operations may be adversely affected. 49 Patent law and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
If we do not have sufficient patent terms or regulatory exclusivity to protect our products, our business and results of operations may be adversely affected. Patent law and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
Delays in completing our clinical studies will increase our costs, slow down our product candidate development and approval process, and jeopardize our ability to commence product sales and generate revenue. 36 The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming, and inherently unpredictable.
Delays in completing our clinical studies will increase our costs, slow down our product candidate development and approval process, and jeopardize our ability to commence product sales and generate revenue. The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming, and inherently unpredictable.
Any delay or failure by us or our collaborators to develop or obtain regulatory approval of the companion diagnostics could delay or prevent approval of our product candidates. Risks Related to our Reliance on Third Parties We rely on third parties to conduct our nonclinical and clinical studies and perform other tasks for us.
Any delay or failure by us or our collaborators to develop or obtain regulatory approval of the companion diagnostics could delay or prevent approval of our product candidates. 41 Risks Related to our Reliance on Third Parties We rely on third parties to conduct our nonclinical and clinical studies and perform other tasks for us.
If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected. Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of our approved products or product candidates.
If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected. 40 Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of our approved products or product candidates.
We also expect the FDA will require the development 41 and regulatory approval of a companion diagnostic assay as a condition to approval of our gene therapy product candidates. There has been limited success to date industrywide in developing and commercializing these types of companion diagnostics.
We also expect the FDA will require the development and regulatory approval of a companion diagnostic assay as a condition to approval of our gene therapy product candidates. There has been limited success to date industrywide in developing and commercializing these types of companion diagnostics.
These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 54 Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
We therefore cannot be certain that we or our licensors were the first to make the invention claimed in our owned and in-licensed patents or pending applications, or that we or our licensor were the first to file for patent protection of such inventions.
We therefore cannot be certain that we or our licensors were the first to make the inventions claimed in our owned and in-licensed patents or pending applications, or that we or our licensor were the first to file for patent protection of such inventions.
Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, privacy and security laws and regulations, and tax laws and regulations.
Our business is subject to evolving regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, privacy and security laws and regulations, and tax laws and regulations.
Scenarios that can prevent successful or timely completion of clinical development include but are not limited to: • delays or failures in generating sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of human clinical studies or filings for regulatory approval; • failure to demonstrate a starting dose for our product candidates in the clinic that might be reasonably expected to result in a clinical benefit; • delays or failures in developing gene therapy, messenger RNA, or mRNA, DNA, small interfering RNA, or siRNA, or other novel and complex product candidates, which are expensive and difficult to develop and manufacture; • delays resulting from a shutdown, or uncertainty surrounding the potential for future shutdowns of the U.S. government, including the FDA; • delays or failures in reaching a consensus with regulatory agencies on study design; • delays in reaching agreement on acceptable terms with contract research organizations, or CROs, clinical study sites, and other clinical trial-related vendors; • failure or delays in obtaining required regulatory agency approval and/or IRB or EC approval at each clinical study site or in certain countries; • failure to correctly design clinical studies which may result in those studies failing to meet their endpoints or the expectations of regulatory agencies; • changes in clinical study design or development strategy resulting in delays related to obtaining approvals from IRBs or ECs and/or regulatory agencies to proceed with clinical studies; • imposition of a clinical hold by regulatory agencies after review of an IND application or amendment, another equivalent application or amendment, or an inspection of our clinical study operations or study sites; • delays in recruiting suitable patients to participate in our clinical studies; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties, or us to adhere to clinical study requirements; • failure to perform in accordance with the FDA’s and/or ICH’s good clinical practices requirements or applicable regulatory guidelines in other countries; • delays in patients’ completion of studies or their returns for post-treatment follow-up; • patients dropping out of a study; • adverse events associated with the product candidate occurring that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • greater than anticipated costs associated with clinical studies of our drug candidates, including as a result of inflation; • clinical studies of our drug candidates producing negative or inconclusive results, which may result in us deciding, or regulators requiring us, to conduct additional clinical or nonclinical studies or to abandon drug development programs; • competing clinical studies of potential alternative product candidates or investigator-sponsored studies of our product candidates; and • delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing.
Scenarios that can prevent successful or timely completion of clinical development include but are not limited to: • delays or failures in generating sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of human clinical studies or filings for regulatory approval; • failure to demonstrate a starting dose for our product candidates in the clinic that might be reasonably expected to result in a clinical benefit; • delays or failures in developing gene therapy, or other novel and complex product candidates, which are expensive and difficult to develop and manufacture; • delays resulting from a shutdown, or uncertainty surrounding the potential for future shutdowns of the U.S. government, including the FDA; • delays or failures in reaching a consensus with regulatory agencies on study design; • delays in reaching agreement on acceptable terms with contract research organizations, or CROs, clinical study sites, and other clinical trial-related vendors; • failure or delays in obtaining required regulatory agency approval and/or IRB or EC approval at each clinical study site or in certain countries; • failure to correctly design clinical studies which may result in those studies failing to meet their endpoints or the expectations of regulatory agencies; 34 • changes in clinical study design or development strategy resulting in delays related to obtaining approvals from IRBs or ECs and/or regulatory agencies to proceed with clinical studies; • imposition of a clinical hold by regulatory agencies after review of an IND application or amendment, another equivalent application or amendment, or an inspection of our clinical study operations or study sites; • delays in recruiting suitable patients to participate in our clinical studies; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties, or us to adhere to clinical study requirements; • failure to perform in accordance with the FDA’s and/or ICH’s good clinical practices requirements or applicable regulatory guidelines in other countries; • delays in patients’ completion of studies or their returns for post-treatment follow-up; • patients dropping out of a study; • adverse events associated with the product candidate occurring that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • greater than anticipated costs associated with clinical studies of our drug candidates, including as a result of inflation; • clinical studies of our drug candidates producing negative or inconclusive results, which may result in us deciding, or regulators requiring us, to conduct additional clinical or nonclinical studies or to abandon drug development programs; • competing clinical studies of potential alternative product candidates or investigator-sponsored studies of our product candidates; and • delays in manufacturing, testing, releasing, validating, or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing.
Outside the U.S., there have been changes to patent laws in certain jurisdictions that could impair our ability to obtain, maintain, or enforce our patents in those territories. For instance, Europe’s new Unitary Patent system and Unified Patent Court (the “UPC”) may present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe.
Outside the U.S., there have been changes to patent laws in certain jurisdictions that could impair our ability to obtain, maintain, or enforce our patents in those territories. For instance, Europe’s new Unitary Patent system and Unified Patent Court, or the UPC, may present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe.
Further, we depend on our manufacturers 43 to purchase from third-party suppliers the materials necessary to produce our products and product candidates.
Further, we depend on our manufacturers to purchase from third-party suppliers the materials necessary to produce our products and product candidates.
We cannot provide assurances that qualifying alternate sources, if available at all, for the Dojolvi drug product or for any of our other drug substances and drug products, and establishing relationships with such sources would not result in significant expense, supply disruptions or delay in the commercialization of our products or the development of our product candidates.
We cannot provide assurances that qualifying alternate sources, if available at all, for any of our drug substances and drug products, and establishing relationships with such sources would not result in significant expense, supply disruptions or delay in the commercialization of our products or the development of our product candidates.
If the associated research and development effort is abandoned, the related assets will be written-off and we will record a noncash impairment loss on our Consolidated Statement of Operations. We have not recorded any impairments related to our intangible assets through December 31, 2023.
If the associated research and development effort is abandoned, the related assets will be written-off and we will record a noncash impairment loss on our Consolidated Statement of Operations. We have not recorded any impairments related to our intangible assets through December 31, 2024.
Business - Government Regulation” and in the Risk Factor above entitled “ – The insurance coverage and reimbursement status of newly approved products is uncertain ” there have been and continue to be a number of legislative initiatives to contain healthcare costs and to modify the regulation of drug and biologic products.
Business – Government Regulation” and in the Risk Factor above entitled “ – The insurance coverage and reimbursement status of newly approved products is uncertain” there have been and continue to be a number of legislative initiatives to contain healthcare costs and to modify the regulation of drug and biologic products.
However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
Consequently, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
As ESG best-practices, reporting standards, and disclosure requirements continue to develop, we may incur increasing costs related to maintaining or achieving our ESG goals in addition to ESG monitoring and reporting. 65 Item 1B. Unresolved Staff Comments None.
As ESG best-practices, reporting standards, and disclosure requirements continue to develop, we may incur increasing costs related to maintaining or achieving our ESG goals in addition to ESG monitoring and reporting. 66 Item 1B. Unresolved Staff Comments None.
We, and certain of the third parties for which we depend on to operate our business, have experienced cybersecurity incidents, including third party unauthorized access to and misappropriation of financial information, and may experience similar incidents in the future.
We, and certain of the third parties for which we depend on to operate our business, have experienced cybersecurity incidents, including third party unauthorized access to and misappropriation of financial information and clinical data, and may experience similar incidents in the future.
Companies across all industries are facing increasing scrutiny relating to their Environmental, Social and Governance, or “ESG,” practices and disclosures and institutional and individual investors are increasingly using ESG screening criteria in making investment decisions.
Companies across all industries are facing increasing scrutiny relating to their Environmental, Social and Governance, or ESG, practices and disclosures and institutional and individual investors are increasingly using ESG screening criteria in making investment decisions.
Congress, the USPTO, and the relevant law making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents, shorten the term of our existing patents and patents that we might obtain in the future, or impair the validity or enforceability of our patents that may be asserted against our competitors or other third parties.
Congress, the USPTO, and the relevant lawmaking bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents, shorten the term of our existing patents and patents that we might obtain in the future, or impair the validity or enforceability of our patents that may be asserted against our competitors or other third parties.
Our ability to achieve any goal or objective, including with respect to environmental and diversity initiatives and compliance with ESG reporting standards, is subject to numerous risks, many of which are outside of our control.
Our ability to achieve any goal or objective, including with respect to environmental and culture initiatives and compliance with ESG reporting standards, is subject to numerous risks, many of which are outside of our control.
Item 1A. Risk F actors Investing in our common stock involves a high degree of risk. You should carefully consider the following material risks, together with all the other information in this Annual Report, including our financial statements and notes thereto, before deciding to invest in our common stock.
Item 1A. Risk Factors Investing in our common stock involves a high degree of risk. You should carefully consider the following material risks, together with all the other information in this Annual Report, including our financial statements and notes thereto, before deciding to invest in our common stock.
As we currently lack the resources and the full capability to manufacture all of our products and product candidates on a clinical or commercial scale, we rely on third parties to manufacture our products and product candidates.
As we currently lack the resources and the full capability to manufacture all of our products and product candidates on a clinical or commercial scale, we rely on third parties to manufacture, store and distribute our products and product candidates.
Additionally, notwithstanding our prior or future regulatory approvals for our product candidates, if we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including but not limited to: • regulatory authorities may withdraw approvals of such product; • regulatory authorities may require additional warnings on the product’s label or restrict the product’s approved use; • we may be required to create a REMS plan; • patients and physicians may elect not to use our products, or reimbursement authorities may elect not to reimburse for them; and • our reputation may suffer.
Additionally, notwithstanding our prior or future regulatory approvals for our product candidates, if we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including but not limited to: • regulatory authorities may withdraw approvals of such product; • regulatory authorities may require additional warnings on the product’s label or restrict the product’s approved use; • we may be required to create a REMS plan; • we may be required to change the way the product is administered; 38 • patients and physicians may elect not to use our products, or reimbursement authorities may elect not to reimburse for them; and • our reputation may suffer.
Our gene therapy, mRNA, DNA and siRNA product candidates require processing steps that are more complex than those required for most small molecule drugs. Moreover, unlike small molecules, the physical and chemical properties of a biologic such as gene therapy, mRNA, DNA and siRNA product candidates generally cannot be fully characterized.
Our gene therapy product candidates require processing steps that are more complex than those required for most small molecule drugs. Moreover, unlike small molecules, the physical and chemical properties of a biologic such as gene therapy product candidates generally cannot be fully characterized.
We also cannot guarantee that any of our analyses are complete and thorough, nor can we be sure that we have identified each and every patent and pending application in the U.S. and abroad that is relevant or necessary to the commercialization of our products or product candidates.
We also cannot guarantee that any of our analyses are complete and thorough, nor can we be sure that we have identified each and every patent and pending application in the U.S. and abroad that covers technology relevant or necessary to the commercialization of our products or product candidates.
Further, given that cGMP gene therapy, mRNA, DNA and siRNA manufacturing is a nascent industry, there are a small number of CMOs with the experience necessary to manufacture our gene therapy product candidates and we may 39 have difficulty finding or maintaining relationships with such CMOs or hiring experts for internal manufacturing and accordingly, our production capacity may be limited.
Further, given that cGMP gene therapy manufacturing is a nascent industry, there are a small number of CMOs with the experience necessary to manufacture our gene therapy product candidates and we may have difficulty finding or maintaining relationships with such CMOs or hiring experts for internal manufacturing and accordingly, our production capacity may be limited.
The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We are currently aware of various existing treatments that may compete with our products and product candidates. See “Item 1. Business – Competition” above.
The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We are currently aware of various existing treatments that may compete with our products and product candidates. See “Item 1.
In 2012, as part of the European Patent Package (the “EU Patent Package”), regulations were passed with the goal of providing a single pan-European Unitary Patent system and a new UPC, for litigation involving European patents. Implementation of the EU Patent Package occurred in June 2023.
In 2012, as part of the European Patent Package, or the EU Patent Package, regulations were passed with the goal of providing a single pan-European Unitary Patent system and a new UPC, for litigation involving European patents. Implementation of the EU Patent Package occurred in June 2023.
Business – Government Regulation.” Manufacturers and manufacturers’ facilities are required to comply with extensive FDA, and comparable foreign regulatory authority, requirements, including ensuring that quality control and manufacturing procedures conform to Good Manufacturing Practices, or GMP, regulations.
Business – Government Regulation”. Manufacturers and manufacturers’ facilities are required to comply with extensive FDA, and comparable foreign regulatory authority, requirements, including ensuring that quality control and manufacturing procedures conform to Good Manufacturing Practices, or GMP, regulations.
The timing to complete the negotiation process in each country is highly uncertain, and in some countries outside of the United States, we expect the process to exceed several months. Even if a price can be negotiated, countries frequently request or require reductions to the price and other concessions over time, including retrospective “clawback” price reductions.
The timing to complete the negotiation process in each country is highly uncertain, and in some countries outside of the U.S., we expect the process to exceed several months. Even if a price can be negotiated, countries frequently request or require reductions to the price and other concessions over time, including retrospective “clawback” price reductions.
If we are not able to comply with the requirements of Section 404 or if we or our independent registered public accounting firm are unable to attest to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources.
If we are not able to comply with the requirements of Section 404 or if we or our independent registered public accounting firm are unable to attest to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources. 64 We may incur additional tax liabilities related to our operations.
Our stock price could be subject to wide fluctuations in response to a variety of factors, including but not limited to the following: • adverse results or delays in preclinical or clinical studies; • any inability to obtain additional funding; • any delay in filing an IND, NDA, BLA, MAA, or other regulatory submission for any of our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of that IND, NDA, BLA, MAA, or other regulatory submission; • the perception of limited market sizes or pricing for our products and product candidates; • decisions by our collaboration partners with respect to the indications for our products and product candidates in countries where they have the right to commercialize the products and product candidates; • decisions by our collaboration partners regarding market access and pricing in countries where they have the right to commercialize our products and product candidates; 61 • failure to successfully develop and commercialize our products and product candidates; • the level of revenue we receive from our commercialized products or from named patient sales; • post-marketing safety issues; • failure to maintain our existing strategic collaborations or enter into new collaborations; • failure by us or our licensors and strategic collaboration partners to prosecute, maintain, or enforce our intellectual property rights; • changes in laws or regulations applicable to our products; • any inability to obtain adequate product supply for our products and product candidates or the inability to do so at acceptable prices; • adverse regulatory decisions; • introduction of new products, services, or technologies by our competitors; • changes in or failure to meet or exceed financial projections or other guidance we may provide to the public; • changes in or failure to meet or exceed the financial projections or other expectations of the investment community; • the perception of the pharmaceutical industry or our company by the public, legislatures, regulators, and the investment community; • the perception of the pharmaceutical industry’s approach to drug pricing; • announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us, our strategic collaboration partners, or our competitors; • the integration and performance of any businesses we have acquired or may acquire; • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • additions or departures of key scientific or management personnel; • significant investigations, regulatory proceedings or lawsuits, including patent or stockholder litigation; • securities or industry analysts’ reports regarding our stock, or their failure to issue such reports; • changes in the market valuations of similar companies; • general market, macroeconomic conditions or geopolitical developments, rising inflation, and the potential recessionary environment; • sales of our common stock by us or our stockholders in the future; and • trading volume of our common stock.
Our stock price could be subject to wide fluctuations in response to a variety of factors, including but not limited to the following: • adverse results or delays in preclinical or clinical studies; • any inability to obtain additional funding; 61 • any delay in filing an IND, NDA, BLA, MAA, or other regulatory submission for any of our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of that IND, NDA, BLA, MAA, or other regulatory submission; • the perception of limited market sizes or pricing for our products and product candidates; • decisions by our collaboration partners with respect to the indications for our products and product candidates in countries where they have the right to commercialize the products and product candidates; • decisions by our collaboration partners regarding market access and pricing in countries where they have the right to commercialize our products and product candidates; • failure to successfully develop and commercialize our products and product candidates; • the level of revenue we receive from our commercialized products or from named patient sales; • post-marketing safety issues; • failure to maintain our existing strategic collaborations or enter into new collaborations; • failure by us or our licensors and strategic collaboration partners to prosecute, maintain, or enforce our intellectual property rights; • changes in laws or regulations applicable to our products; • any inability to obtain adequate product supply for our products and product candidates or the inability to do so at acceptable prices; • adverse regulatory decisions; • introduction of new products, services, or technologies by our competitors; • changes in or failure to meet or exceed financial projections or other guidance we may provide to the public; • changes in or failure to meet or exceed the financial projections or other expectations of the investment community; • the perception of the pharmaceutical industry or our company by the public, legislatures, regulators, and the investment community; • the perception of the pharmaceutical industry’s approach to drug pricing; • announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us, our strategic collaboration partners, or our competitors; • the integration and performance of any businesses we have acquired or may acquire; • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • additions or departures of key scientific or management personnel; • significant investigations, regulatory proceedings or lawsuits, including patent or stockholder litigation; • securities or industry analysts’ reports regarding our stock, or their failure to issue such reports; • changes in the market valuations of similar companies; • general market, macroeconomic conditions or geopolitical developments, changing interest rates and inflation; • sales of our common stock by us or our stockholders in the future; and • trading volume of our common stock. 62 In addition, biotechnology and biopharmaceutical companies in particular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
This infrastructure consists of both office-based as well as field teams with technical expertise, and will be expanded as we approach the potential approval dates of additional products that result from our development programs.
This infrastructure consists of both office-based as well as field teams with technical expertise, and is expected to be expanded as we approach the potential approval dates of additional products that result from our development programs.
Our products and any product candidates that are approved in the future remain subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the U.S. and requirements of comparable foreign regulatory authorities, as described above in “Item 1.
Even if we obtain regulatory approval for our product candidates, our products remain subject to regulatory scrutiny. 39 Our products and any product candidates that are approved in the future remain subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution, advertising, promotion, sampling, record-keeping, conduct of post-marketing studies, and submission of safety, efficacy, and other post-market information, including both federal and state requirements in the U.S. and requirements of comparable foreign regulatory authorities, as described above in “Item 1.
If any single source supplier breaches an agreement with us, or terminates the agreement in response to an alleged breach by us or otherwise becomes unable or unwilling to fulfill its supply obligations, we would not be able to manufacture and distribute the product or product candidate until a qualified alternative supplier is identified, which could significantly impair our ability to commercialize such product or delay the development of such product candidate.
If any single source supplier breaches an agreement with us, or terminates the agreement in response to an alleged breach by us, ceases operations, is acquired, enters into exclusive arrangements with a competitor or otherwise becomes unable or unwilling to fulfill its supply obligations, we would not be able to manufacture and distribute the product or product candidate until a qualified alternative supplier is identified, which could significantly impair our ability to commercialize such product or delay the development of such product candidate.
Further, risks of unauthorized access and cyber-attacks have increased as most of our personnel, and the personnel of many third-parties with which we do business, have adopted hybrid working arrangements following the COVID-19 pandemic.
Further, risks of unauthorized access and cyber-attacks have increased as most of our personnel, and the personnel of many third parties with which we do business, have adopted hybrid working arrangements.
We may become involved in lawsuits to protect or enforce our patents or the patents of our licensors, or be subject to claims that challenge the inventorship or ownership of our patents or other intellectual property, which could be expensive, time consuming, and result in unfavorable outcomes. Competitors may infringe our patents or the patents of our licensors.
From time to time, we are involved in lawsuits to protect or enforce our patents or the patents of our licensors, or may be subject to claims that challenge the inventorship or ownership of our patents or other intellectual property, which could be expensive, time consuming, and result in unfavorable outcomes.
The risks and uncertainties described below are not the only ones we face. Additional risk and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. If any of the following risks actually materialize, our operating results, financial condition, and liquidity could be materially adversely affected.
Additional risk and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. If any of the following risks actually materialize, our operating results, financial condition, and liquidity could be materially adversely affected.
Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions.
Business – Government Regulation”. Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions.
Additionally, as we and our employees increasingly use social media tools as a means of communication with the public, there is a risk that the use of social media by us or our employees to communicate about our products or business may cause to be found in violation of applicable laws, despite our attempts to monitor such social media communications through company policies and guidelines.
We cannot predict the impact of such changes and cannot be certain of our future compliance. 58 Additionally, as we and our employees increasingly use social media tools as a means of communication with the public, there is a risk that the use of social media by us or our employees to communicate about our products or business may cause to be found in violation of applicable laws, despite our attempts to monitor such social media communications through company policies and guidelines.
Our future funding requirements will depend on many factors, including but not limited to: • the scope, rate of progress, results, and cost of our clinical studies, nonclinical testing, and other related activities; • the cost of manufacturing clinical and commercial supplies of our products and product candidates; • the cost of creating additional infrastructure, including facilities and systems, such as systems in our GMP gene therapy manufacturing facility; • the cost of operating and maintaining our gene therapy manufacturing facility; • the number and characteristics of the product candidates that we pursue; • the cost, timing, and outcomes of regulatory approvals; • the cost and timing of establishing and operating our international subsidiaries; • the cost and timing of establishing and operating field forces, marketing, and distribution capabilities; • the cost and timing of other activities needed to commercialize our products; and • the terms and timing of any collaborative, licensing, acquisition, and other arrangements that we may establish, including any required milestone, royalty, and reimbursements or other payments thereunder. 33 Any additional fundraising efforts may divert our management’s attention from their day-to-day activities, which can adversely affect our ability to develop our product candidates and commercialize our products.
Our future funding requirements will depend on many factors, including but not limited to: • the scope, rate of progress, results, and cost of our clinical studies, nonclinical testing, and other related activities; • the cost of manufacturing clinical and commercial supplies of our products and product candidates; • the cost of creating additional infrastructure, including facilities and systems, such as systems in our GMP gene therapy manufacturing facility; • the cost of operating and maintaining our gene therapy manufacturing facility; • the number and characteristics of the product candidates that we pursue; • the cost, timing, and outcomes of regulatory approvals; • the cost and timing of establishing and operating our international subsidiaries; • the cost and timing of establishing and operating field forces, marketing, and distribution capabilities; • the cost and timing of other activities needed to commercialize our products; and • the terms and timing of any collaborative, licensing, acquisition, and other arrangements that we may establish, including any required milestone, royalty, and reimbursements or other payments thereunder.
We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting, and defending patents on our products or product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S.
Filing, prosecuting, and defending patents on our products or product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the U.S. can be less extensive than those in the U.S.
Our ability to generate significant revenue from product sales depends on our ability, alone or with strategic collaboration partners, to successfully commercialize our products and to complete the development of, and obtain the regulatory and marketing approvals necessary to commercialize, our product candidates.
We have limited experience in generating revenue from product sales. Our ability to generate significant revenue from product sales depends on our ability, alone or with strategic collaboration partners, to successfully commercialize our products and to complete the development of, and obtain the regulatory and marketing approvals necessary to commercialize, our product candidates.
If competitors are able to obtain marketing approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. Competitors could enter the market with generic versions of Dojolvi or our small-molecule product candidates, which may result in a material decline in sales of affected products.
In addition, companies may be developing biosimilars in other countries that could compete with our products. 51 If competitors are able to obtain marketing approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences Competitors could enter the market with generic versions of Dojolvi or our small-molecule product candidates, which may result in a material decline in sales of affected products.
We have recorded on our Consolidated Balance Sheets intangible assets for in-process research and development, or IPR&D, related to DTX301 and DTX401 as a result of the accounting for our acquisition of Dimension Therapeutics. We also recorded an intangible asset related to our license from Regeneron for Evkeeza.
We have recorded on our Consolidated Balance Sheets intangible assets for in-process research and development, or IPR&D, related to DTX301 and DTX401 as a result of the accounting for our acquisition of Dimension Therapeutics. We also recorded intangible assets related to our licenses for Dojolvi and Evkeeza.
Our revenues, financial condition or results of operations may also be affected by fluctuations in buying or distribution patterns of such distributors and specialty pharmacies. These fluctuations may result from seasonality, pricing, wholesaler inventory objectives, or other factors.
The financial failure of any of these parties could adversely affect our revenues, financial condition or results of operations. Our revenues, financial condition or results of operations may also be affected by fluctuations in buying or distribution patterns of such distributors and specialty pharmacies. These fluctuations may result from seasonality, pricing, wholesaler inventory objectives, or other factors.
At December 31, 2023, there were 130,996 shares available for issuance under the Inducement Plan. If our board of directors elects to increase the number of shares available for future grant under the 2023 Plan, the A&R ESPP, or the Inducement Plan, our stockholders may experience additional dilution, which could cause our stock price to fall.
If our board of directors elects to increase the number of shares available for future grant under the 2023 Plan, the A&R ESPP, or the Inducement Plan, our stockholders may experience additional dilution, which could cause our stock price to fall.
For instance, if competitors develop generic version of Dojolvi and are able to enter the market, our sales of Dojolvi could materially decline which could have an adverse impact on our financial results. The patent protection and patent prosecution for some of our products and product candidates is dependent on third parties.
For instance, if the existing ANDA filers or additional competitors are able to enter the market with generic versions of Dojolvi, our sales of Dojolvi could materially decline which could have an adverse impact on our financial results. The patent protection and patent prosecution for some of our products and product candidates is dependent on third parties.
The timing and amount of any royalty payments that are made by KKC based on sales of Crysvita in Europe will depend on, among other things, the efforts, allocation of resources, and successful commercialization of Crysvita by KKC in Europe; • the timing and amount of any payments we may receive under our agreement with KKC will depend on, among other things, the efforts, allocation of resources, and successful commercialization of Crysvita by KKC in the U.S. and Canada under our agreement; • KKC may change the focus of its commercialization efforts or pursue higher priority programs; • KKC may make decisions regarding the indications for our product candidates in countries where it has the sole right to commercialize the product candidates that limit commercialization efforts in those countries or in countries where we have the right to commercialize our product candidates; • KKC may make decisions regarding market access and pricing in countries where it has the sole right to commercialize our product candidates which can negatively impact our commercialization efforts in countries where we have the right to commercialize our product candidates; • KKC may fail to manufacture or supply sufficient drug product of Crysvita in compliance with applicable laws and regulations or otherwise for our development and clinical use or commercial use, which could result in program delays or lost revenue; • KKC may elect to develop and commercialize Crysvita indications with a larger market than XLH and at a lower price, thereby reducing the profit margin on sales of Crysvita for any orphan indications, including XLH; • if KKC were to breach or terminate the agreement with us, we would no longer have any rights to develop or commercialize Crysvita or such rights would be limited to non-terminated countries; • KKC may terminate its agreement with us, adversely affecting our potential revenue from licensed products; and • the timing and amounts of expense reimbursement that we may receive are uncertain, and the total expenses for which we are obligated to reimburse KKC may be greater than anticipated.
Our partnership with KKC may not be successful, and we may not realize the expected benefits from such partnership, due to a number of important factors, including but not limited to the following: • KKC may change the focus of its commercialization efforts or pursue higher priority programs; • KKC may make decisions regarding the indications for our product candidates in countries where it has the sole right to commercialize the product candidates that limit commercialization efforts in those countries or in countries where we have the right to commercialize our product candidates; • KKC may make decisions regarding market access and pricing in countries where it has the sole right to commercialize our product candidates which can negatively impact our commercialization efforts in countries where we have the right to commercialize our product candidates; • KKC may fail to manufacture or supply sufficient drug product of Crysvita in compliance with applicable laws and regulations or otherwise for our development and clinical use or commercial use, which could result in program delays or lost revenue; • KKC may elect to develop and commercialize Crysvita indications with a larger market than XLH and at a lower price, thereby reducing the profit margin on sales of Crysvita for any orphan indications, including XLH; • if KKC were to breach or terminate the agreement with us, we would no longer have any rights to develop or commercialize Crysvita or such rights would be limited to non-terminated countries; • KKC may terminate its agreement with us, adversely affecting our potential revenue from licensed products; and • the timing and amounts of expense reimbursement that we may receive are uncertain, and the total expenses for which we are obligated to reimburse KKC may be greater than anticipated.
In order to successfully commercialize our products as well as any additional products that may result from our development programs or that we acquire or license from third parties, we are expanding our commercial infrastructure in, Europe, Latin America and the Asia-Pacific region.
In order to successfully commercialize our products as well as any additional products that may result from our development programs or that we acquire or license from third parties, we expect to expand our commercial team in the United States as well as in Europe, Latin America and the Asia-Pacific region.
Interference proceedings or derivation proceedings now available under the Leahy-Smith Act provoked by third parties or brought by us or declared or instituted by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors.
The outcome following legal assertions of invalidity and unenforceability is unpredictable. Interference proceedings or derivation proceedings now available under the Leahy-Smith Act provoked by third parties or brought by us or declared or instituted by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors.
Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail to successfully defend against such litigation or claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.
If we fail to successfully defend against such litigation or claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.
Improper or inadvertent behavior by employees, contractors and others with permitted access to our systems, pose a risk that sensitive data may be exposed to unauthorized persons or to the public.
Improper or inadvertent behavior by employees, contractors and others with permitted access to our systems, including through the use of generative AI technologies, pose a risk that sensitive data may be exposed to unauthorized persons or to the public.
Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any stockholder activism. Increased scrutiny regarding ESG practices and disclosures could result in additional costs and adversely impact our business and reputation.
Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any stockholder activism. 65 Increased scrutiny regarding ESG practices and disclosures, as well as existing and proposed laws related to these topics, could result in additional costs and adversely impact our business and reputation.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese processes are managed and monitored by a dedicated information technology team, including a Senior Director of Information Security, and is led by our Senior Vice President, Chief Information Officer, or “CIO”.
Biggest changeOur cybersecurity program is informed in part by industry standards and best practices, such as the National Institute of Standards and Technology (NIST) Cybersecurity Framework. This program is managed and monitored by a dedicated information technology team, including a Senior Director of Information Security, and is led by our Senior Vice President, Chief Information Officer, or CIO.
Our CIO, together with our Senior Director of Information Security and other members of the IT leadership team, are responsible for assessing and managing cybersecurity risks. Our CIO has ten years of experience managing information technology and cybersecurity.
Our CIO, together with our Senior Director of Information Security and other members of the IT leadership team, are responsible for assessing and managing cybersecurity risks. Our CIO has over ten years of experience managing information technology and cybersecurity.
Our Senior Director of Information Security has over 26 years of experience managing information technology and cybersecurity matters and is certified as a Certified Information Systems Security Professional (CISSP). We consider cybersecurity, along with other significant risks that we face, within our overall enterprise risk management framework.
Our Senior Director of Information Security has over 25 years of experience managing information technology and cybersecurity matters and is certified as a Certified Information Systems Security Professional (CISSP). We consider cybersecurity, along with other significant risks that we face, within our overall enterprise risk management framework.
Item 1C: Cybersecurity In the ordinary course of our business, we collect, use, store, and transmit digitally large amounts of confidential, financial, sensitive, proprietary, personal, and health-related information. The secure maintenance of this information and our information technology systems is important to our operations and business strategy.
Item 1C. Cybersecurity In the ordinary course of our business, we collect, use, store, and transmit digitally large amounts of confidential, financial, sensitive, propr ietary, personal, and health-related information. The secure maintenance of this information and our information technology systems is important to our operations and business strategy.
The Audit Committee, which is comprised solely of independent directors, has been designated by our Board to oversee cybersecurity risks. The Audit Committee receives regular updates on cybersecurity and information technology matters and related risk exposures from our CIO. The Board also receives updates from the Audit Committee on cybersecurity risks on at least an annual basis.
The Audit Committee, which is comprised solely of independent directors, has been designated by our Board to oversee cybersecurity risks. The Audit Committee receives regular updates on cybersecurity and information technology matters and related risk exposures from our CIO. The Board also receives updates from the Audit Committee on cybersecurity risks on a regular basis.
During the year ended December 31, 2023, we did not identify risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, but we face certain ongoing cybersecurity risks or threats that, if realized, are reasonably likely to materially affect us.
Since the beginning of the last fiscal year, we have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us , but we face certain ongoing cybersecurity risks or threats that, if realized, are reasonably likely to materially affect us.
Removed
For example, we conduct penetration and vulnerability testing, data recovery testing, security audits, and ongoing risk assessments, including due diligence on and audits of our key technology vendors, and other contractors and suppliers. We also conduct regular employee trainings on cyber and information security, among other topics.
Added
Our program includes, for example: • Regular penetration and vulnerability testing, data recovery testing, security audits, and ongoing risk assessments; • Engagement of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls as part of our operational security model; • Cybersecurity awareness training for our employees, contactors, incident response personnel, and senior management; • A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents and annual tabletop exercises with participants from cross functional teams; • A third-party risk management process for service providers, suppliers, and vendors including due diligence prior to engagement and ongoing periodic review of our key technology vendors, and other contractors and suppliers.
Removed
In addition, we consult with outside advisors and experts, when appropriate, to assist with assessing, identifying, and managing cybersecurity risks, including to anticipate future threats and trends, and their impact on the Company’s risk environment.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperty Location Use Lease Expiration Date Novato, California Headquarters and office December 2024 Novato, California Laboratory and office October 2028 Brisbane, California Office June 2026 Somerville, Massachusetts Laboratory and office October 2029 Woburn, Massachusetts Laboratory and office April 2025 Woburn, Massachusetts Laboratory and office October 2026 Bedford, Massachusetts Manufacturing facility Owned property 66
Biggest changeProperty Location Use Lease Expiration Date Novato, California Headquarters and office December 2026 Novato, California Laboratory and office October 2028 Brisbane, California Office June 2026 Somerville, Massachusetts Laboratory and office January 2030 Woburn, Massachusetts Laboratory and office April 2028 Woburn, Massachusetts Laboratory and office October 2026 Bedford, Massachusetts Manufacturing facility Owned property 67

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are not currently a party to any material legal proceedings.
Biggest changeExcept as disclosed above, we are not currently a party to any other material legal proceedings.
We may, however, in the ordinary course of business face various claims brought by third parties or government regulators and we may, from time to time, make claims or take legal actions to assert our rights, including claims relating to our directors, officers, stockholders, intellectual property rights, employment matters and the safety or efficacy of our products.
We may, however, in the ordinary course of business face various claims brought by third parties or government regulators and, from time to time, make claims or take legal actions to assert our rights, including claims relating to our directors, officers, stockholders, intellectual property rights, employment matters and the safety or efficacy of our products.
If this were to happen, the payment of any such awards could have a material adverse effect on our consolidated operations, cash flows and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. Item 4. Mine Safety Disclosures Not applicable. 67 P ART II
If this were to happen, the payment of any such awards could have a material adverse effect on our consolidated operations, cash flows and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. Item 4. Mine Safety Disclosures Not applicable. 68 P ART II
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Item 3. Legal Proceedings Ultragenyx Pharmaceutical Inc. and Baylor Research Institute v. Navinta LLC, Aurobindo Pharma Limited, Aurobindo Pharma USA, Inc., Esjay Pharma Private Limited and Esjay Pharma LLC On September 26, 2024, we filed a patent infringement suit under the Hatch-Waxman Act against Navinta, Aurobindo and Esjay in the United States District Court for the District of New Jersey.
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The suit is in response to notices from Navinta, Aurobindo, and Esjay concerning the filing of ANDAs with the FDA, seeking FDA approval to market a generic version of Dojolvi® (triheptanoin) along with Paragraph IV certifications which allege that one Orange Book-listed patent covering Dojolvi is invalid, unenforceable, and/or will not be infringed by the manufacture, use, or sale of the proposed generic product.
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The filing of the suit triggers a stay preventing the FDA from granting the ANDAs final approval, which stay extends to December 30, 2027 (i.e., the date that is seven and one-half years from the June 30, 2020 approval of Dojolvi). We intend to vigorously defend our intellectual property.
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In addition to the issued patents for Dojolvi listed in the Orange Book, we own a pending patent application relating to certain pharmaceutical compositions of triheptanoin, including Dojolvi, that would be expected to expire in 2034 upon an issuance.
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Dojolvi is also protected in the U.S. by regulatory exclusivity until 2025 and orphan drug exclusivity for the treatment of pediatric and adult patients with molecularly confirmed long-chain fatty acid oxidation disorders (LC-FAOD) until 2027. Aurobindo and Navinta answered the complaint on December 2, 2024 and December 30, 2024, respectively.
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Esjay filed a motion to dismiss the suit on December 2, 2024. We filed an opposition to Esjay’s motion to dismiss on January 7, 2025. Ultragenyx Pharmaceutical Inc. v.
Added
Catalent Maryland, Inc. and Catalent Pharma Solutions LLC On October 9, 2024, we filed a suit against Catalent Maryland, Inc. and Catalent Pharma Solutions, LLC (collectively, Catalent) in the Superior Court of the State of Delaware alleging that Catalent fraudulently mispresented its manufacturing capabilities and serially breached the terms of its manufacturing agreement with us.
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Our suit seeks monetary damages from Catalent in excess of $100 million. Catalent filed its response, which included a motion to dismiss the fraud claim alleged in the suit, on December 18, 2024. We filed an amended complaint in reply to Catalent’s response on February 3, 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRARE $ 100.00 $ 98.23 $ 318.38 $ 193.40 $ 106.55 $ 109.98 NASDAQ Composite Index ^IXIC $ 100.00 $ 135.23 $ 194.24 $ 235.78 $ 157.74 $ 226.24 NASDAQ Biotechnology Index ^NBI $ 100.00 $ 124.41 $ 156.36 $ 155.37 $ 138.42 $ 143.60 Dividend Policy We have never declared or paid cash dividends on our common stock.
Biggest changeRARE $ 100.00 $ 324.12 $ 196.89 $ 108.48 $ 111.96 $ 98.50 NASDAQ Composite Index ^IXIC $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 NASDAQ Biotechnology Index ^NBI $ 100.00 $ 125.69 $ 124.89 $ 111.27 $ 115.42 $ 113.84 Dividend Policy We have never declared or paid cash dividends on our common stock.
This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. $100 Investment in Stock or Index Ticker December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Ultragenyx Pharmaceutical Inc.
This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. $100 Investment in Stock or Index Ticker December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Ultragenyx Pharmaceutical Inc.
Any future determination to pay dividends will be made at the discretion of our board of directors or any authorized committee thereof. Unregistered Sales of Equity Securities None. Issuer’s Purchases of Equity Securities None.
Any future determination to pay dividends will be made at the discretion of our board of directors or any authorized committee thereof. Unregistered Sales of Equity Securities None. Issuer’s Purchases of Equity Securities 69 None.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been traded on The Nasdaq Global Select Market since January 31, 2014 under the symbol “RARE”. As of February 15, 2024, we had 8 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been traded on The Nasdaq Global Select Market since January 31, 2014 under the symbol “RARE”. As of February 13, 2025, we had eight holders of record of our common stock.
STOCK PRICE PERFORMANCE GRAPH The following stock performance graph compares our total stock return with the total return for (i) the Nasdaq Composite Index and (ii) the Nasdaq Biotechnology Index for the period from December 31, 2018 through December 31, 2023.
STOCK PRICE PERFORMANCE GRAPH The following stock performance graph compares our total stock return with the total return for (i) the Nasdaq Composite Index and (ii) the Nasdaq Biotechnology Index for the period from December 31, 2019 through December 31, 2024.
The figures represented below assume an investment of $100 in our common stock at the closing price of $43.48 on December 31, 2018 and in the Nasdaq Composite Index, or IXIC, and the Nasdaq Biotechnology Index, or NBI, on December 31, 2018 and the reinvestment of dividends into shares of common stock.
The figures represented below assume an investment of $100 in our common stock at the closing price of $42.71 on December 31, 2019 and in the Nasdaq Composite Index, or IXIC, and the Nasdaq Biotechnology Index, or NBI, on December 31, 2019 and the reinvestment of dividends into shares of common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe change in research and development expenses was due to: • for gene therapy programs, an increase of $15.0 million, primarily related to the addition of the development costs for the UX111 program acquired from Abeona Therapeutics in May 2022, and an increase in production materials purchases for internal manufacturing, partially offset by decreases in external clinical manufacturing expenses for DTX401; • for biologic and nucleic acid programs, an increase of $11.6 million, primarily related to the continued clinical progress of the UX143 and GTX102 programs and associated clinical development and manufacturing expenses, partially offset by a reduction in development expense on UX053 for the treatment of Glycogen Storage Disease Type III; • for translational research, a decrease of $9.6 million, primarily related to decreases in manufacturing and headcount expense for IND-stage projects; • for upfront license, acquisition, and milestone fees, a decrease of $66.0 million, due to $9.0 million related to payment for achievement of a clinical enrollment milestone for the UX143 program recognized during the year ended December 31, 2023, as compared to $75.0 million recognized from the GeneTx acquisition for the year ended December 31, 2022; • for approved products, a decrease of $22.2 million, primarily due to transition of Crysvita commercialization responsibilities in North America to KKC and realized cost efficiencies for Dojolvi, partially offset by reimbursement of Regeneron collaboration expenses and increased personnel and launch costs for Evkeeza; • for infrastructure, an increase of $7.3 million, primarily related to increased expenses for support of our clinical and research program pipeline, expansion of laboratory space, depreciation of laboratory-related leasehold improvements and equipment, and IT-related expenses; and • for other research and development expenses, an increase of $6.6 million, primarily related to increased staffing and material costs to support internal manufacturing and increased administrative and general support.
Biggest changeThe change in research and development expenses was due to: • for gene therapy programs, an increase of $25.5 million, primarily related to BLA filing activities for UX111, and continued clinical progress of the other programs, combined with the transition of certain programs to in-house manufacturing which resulted in a decrease in CMC costs and an increase in internal manufacturing costs; • for biologic and nucleic acid programs, an increase of $31.3 million, primarily related to the continued clinical progress of the UX143 and GTX102 programs and associated clinical development and manufacturing expenses, partially offset by a reduction in development expense on UX053 for the treatment of Glycogen Storage Disease Type III due to cessation of development activities for the program; • for translational research, a decrease of $26.1 million, primarily related to decreases in manufacturing and headcount expense for early stage and IND-stage projects; • for upfront license, acquisition, and milestone fees, an increase of $21.5 million, primarily related to the achievement of a clinical enrollment milestone on the GTX-102 program during 2024; • for approved products, a decrease of $18.0 million, primarily due to reduced reimbursement of Regeneron collaboration expenses with the completion of the pediatric and open label extension trials for Evkeeza and reduced operating expenses for Crysvita post-marketing studies; • for infrastructure, an increase of $2.1 million, primarily related to depreciation of the gene therapy manufacturing facility, depreciation of laboratory-related leasehold improvements and equipment, and IT-related expenses; • for stock-based compensation an increase of $12.1 million, primarily related to the increase in total value of stock-based awards granted to employees; and • for other research and development expenses, an increase of $1.2 million, primarily related to increased staffing to support internal manufacturing, and administrative and general support.
Cash Provided by Financing Activities Cash provided by financing activities for the year ended December 31, 2023 was $388.1 million and was primarily comprised of $326.5 million in net proceeds from the sale of common stock in our October 2023 underwritten public offering and $53.3 million in net proceeds from the issuance of common stock from our ATM.
Cash provided by financing activities for the year ended December 31, 2023 was $388.1 million and was primarily comprised of $326.5 million in net proceeds from the sale of common stock in our October 2023 underwritten public offering and $53.3 million in net proceeds from the issuance of common stock from our ATM.
A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have had a material impact on our Consolidated Financial Statements. 79 Item 8. Financial Statements and Supplementary Data Our financial statements are annexed to this Annual Report beginning on page F-1 and are incorporated by reference into this Item 8. Item 9.
A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have had a material impact on our Consolidated Financial Statements. Item 8. Financial Statements and Supplementary Data Our financial statements are annexed to this Annual Report beginning on page F-1 and are incorporated by reference into this Item 8. Item 9.
We determine the actual costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
We determine the actual costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals.
Cash Provided by (Used in) Investing Activities Cash provided by investing activities for the year ended December 31, 2023 was $168.0 million and was primarily related to $219.8 million from net activities in marketable debt securities, offset by purchases of property, plant, and equipment of $44.3 million, primarily related to the fit-out of our gene therapy manufacturing facility.
Cash provided by investing activities for the year ended December 31, 2023 was $168.0 million and was primarily related to $219.8 million from net activities in marketable debt securities, offset by purchases of property, plant, and equipment of $44.3 million, primarily related to the fit-out of our gene therapy manufacturing facility.
We evaluate these agreements under ASC 606, Revenue from Contracts with Customers, or ASC 606, to determine the distinct performance obligations. We analogize to ASC 606 for the accounting for distinct performance obligations for which there is a customer relationship. Prior to recognizing revenue, we make estimates of the transaction price, including variable consideration that is subject to a constraint.
We evaluate these agreements under ASC 606, Revenue from Contracts with Customers , to determine the distinct performance obligations. We analogize to ASC 606 for the accounting for distinct performance obligations for which there is a customer relationship. Prior to recognizing revenue, we make estimates of the transaction price, including variable consideration that is subject to a constraint.
Approved products include costs for disease monitoring programs for post-marketing clinical studies, medical affairs activities to support scientific discovery efforts on 74 existing programs, and regulatory costs for unapproved regions. Infrastructure costs include direct costs related to laboratory, IT, and equipment depreciation costs, and overhead allocations for human resources, IT, and other allocable costs.
Approved products include costs for disease monitoring programs for post-marketing clinical studies, medical affairs activities to support scientific discovery efforts on existing programs, and regulatory costs for unapproved regions. Infrastructure costs include direct costs related to laboratory, IT, and equipment depreciation costs, and overhead allocations for human resources, IT, and other allocable costs.
We are considered an agent when the collaboration partner controls the product before transfer to the customers and has the ability to direct the use of and obtain substantially all of the remaining benefits from the product.
We are considered an agent when 72 the collaboration partner controls the product before transfer to the customers and has the ability to direct the use of and obtain substantially all of the remaining benefits from the product.
We record our share of collaboration revenue, net of transfer pricing related to net sales in the period in which such sales occur, if we are considered as an 70 agent in the arrangement.
We record our share of collaboration revenue, net of transfer pricing related to net sales in the period in which such sales occur, if we are considered as an agent in the arrangement.
We believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next twelve months. Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, corporate bond securities, commercial paper, U.S government securities, asset-backed securities, and money market funds.
We believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next 12 months. Our cash, cash equivalents, and marketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, corporate bond securities, commercial paper, U.S. government securities, asset-backed securities, and money market funds.
The calculation of royalty payments to OMERS 71 is based on net sales of Crysvita beginning in April 2023 and continuing until expiration, which is the earlier of the date on which aggregate payments received by OMERS equals $725.0 million or the date the final royalty payment is made to us under the KKC Collaboration Agreement.
The calculation of royalty payments to OMERS 73 is based on net sales of Crysvita beginning in April 2023 and continuing until expiration, which is the earlier of the date on which aggregate payments received by OMERS equals $725.0 million or the date the final royalty payment is made to us under the KKC Collaboration Agreement.
An adverse movement in foreign exchange rates could have a material effect on payments made to foreign suppliers and payments related to license agreements. For the year ended December 31, 2023, a majority of our revenue, expenses, and capital expenditures were denominated in U.S. dollars.
An adverse movement in foreign exchange rates could have a material effect on payments made to foreign suppliers and payments related to license agreements. For the year ended December 31, 2024, a majority of our revenue, expenses, and capital expenditures were denominated in U.S. dollars.
We expect our annual research and development expenses to continue to moderate in the future as we advance our product candidates through clinical development.
We expect our annual research and development expenses to moderate in the future as we advance our product candidates through clinical development.
Prior to the approval of our products by the U.S. Food and Drug Administration, or FDA, manufacturing and related costs are expensed. As of December 31, 2023, we do not hold a material amount of previously expensed inventory for our approved products.
Prior to the approval of our products by the U.S. Food and Drug Administration, or FDA, manufacturing and related costs are expensed. As of December 31, 2024, we do not hold a material amount of previously expensed inventory for our approved products.
A hypothetical 100 basis point change in interest rates during any of the periods presented would not have had a material impact on the fair market value of our cash equivalents and marketable debt securities as of December 31, 2023.
A hypothetical 100 basis point change in interest rates during any of the periods presented would not have had a material impact on the fair market value of our cash equivalents and marketable debt securities as of December 31, 2024.
Item 6. Reserved 68 I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes included elsewhere in this Annual Report.
Item 6. Reserved 70 I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our Consolidated Financial Statements and related notes included elsewhere in this Annual Report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview Ultragenyx Pharmaceutical Inc., we or the Company, are a biopharmaceutical company committed to bringing novel products to patients for the treatment of serious rare and ultrarare genetic diseases.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview Ultragenyx Pharmaceutical Inc., we or the Company, is a biopharmaceutical company committed to bringing novel products to patients for the treatment of serious rare and ultrarare genetic diseases.
Our Annual Report on Form 10-K for the year ended December 31, 2022 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2021 in "Part II, Item 7.
Our Annual Report on Form 10-K for the year ended December 31, 2023 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022 in "Part II, Item 7.
Pursuant to the agreement, RPI paid us $320.0 million in consideration for our right to receive royalty payments on the net sales of Crysvita in the European Union, or the EU, the United Kingdom, and Switzerland, effective January 1, 2020, under the terms of our Collaboration and License Agreement with Kyowa Kirin Co., Ltd., or KKC.
Pursuant to the agreement, RPI paid us $320.0 million in consideration for our right to receive royalty payments on the net sales of Crysvita in the European Union, or the EU, the UK, and Switzerland, effective January 1, 2020, under the terms of our Collaboration and License Agreement with Kyowa Kirin Co., Ltd., or KKC.
To date, we have not experienced a loss of principal on any of our investments and as of December 31, 2023, we did not record any allowance for credit loss from our investments. Foreign Currency Risk We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars.
To date, we have not experienced a loss of principal on any of our investments and as of December 31, 2024, we did not record any allowance for credit loss from our investments. 81 Foreign Currency Risk We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars.
This discussion and analysis generally covers our financial condition and results of operations for the year ended December 31, 2023, including year-over-year comparisons versus the year ended December 31, 2022.
This discussion and analysis generally covers our financial condition and results of operations for the year ended December 31, 2024, including year-over-year comparisons versus the year ended December 31, 2023.
The terms of certain of our licenses, royalties, development and collaboration agreements, as well as other research and development activities, require us to pay potential future milestone payments based on product development success. The amount and timing of such obligations are unknown or uncertain. These potential obligations are further described in Note 8 to the Consolidated Financial Statements.
The terms of certain of our licenses, royalties, development and collaboration agreements, as well as other research and development activities, require us to pay potential future milestone payments based on product development success. The amount and timing of such obligations are unknown or uncertain. These potential obligations are further described in "Note 9.
Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations. For the year ended December 31, 2023, our total revenues increased to $434.2 million, compared to $363.3 million for the same period in 2022.
Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations. For the year ended December 31, 2024, our total revenues increased to $560.2 million, compared to $434.2 million for the same period in 2023.
To date, we have funded our operations primarily from the sale of our equity securities, revenues from our commercial products, the sale of certain future royalties, and strategic collaboration arrangements. We have incurred net losses in each year since inception. Our net losses were $606.6 million and $707.4 million for the years ended December 31, 2023 and 2022, respectively.
To date, we have funded our operations primarily from the sale of our equity securities, revenues from our commercial products, the sale of certain future royalties, and strategic collaboration arrangements. We have incurred net losses in each year since inception. Our net losses were $569.2 million and $606.6 million for the years ended December 31, 2024 and 2023, respectively.
Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. As of December 31, 2023, our total gross deferred tax assets were $1,041.8 million.
Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. As of December 31, 2024, our total gross deferred tax assets were $1,213.7 million.
As of December 31, 2023, we had cash, cash equivalents, and marketable debt securities totaling $777.1 million, which included bank deposits, money market funds, U.S. government treasury and agency securities, and investment-grade corporate bond securities which are subject to default, changes in credit rating, and changes in market value.
As of December 31, 2024, we had cash, cash equivalents, and marketable debt securities totaling $745.0 million, which included bank deposits, money market funds, U.S. government treasury and agency securities, and investment-grade corporate bond securities which are subject to default, changes in credit rating, and changes in market value.
Liquidity and Capital Resources To date, we have funded our operations primarily from the sale of our equity securities, revenue from our commercial products, the sale of certain future royalties, and strategic collaboration arrangements. As of December 31, 2023, we had $777.1 million in available cash, cash equivalents, and marketable debt securities.
Liquidity and Capital Resources To date, we have funded our operations primarily from the sale of our equity securities, revenue from our commercial products, the sale of certain future royalties, and strategic collaboration arrangements. As of December 31, 2024, we had $745.0 million in available cash, cash equivalents, and marketable debt securities.
Funding Requirements We anticipate that, excluding non-recurring items, we will continue to generate annual losses for the foreseeable future as we continue the development of, and seek regulatory approvals for, our product candidates, and continue with commercialization of approved products.
Funding Requirements We anticipate that, excluding non-recurring items, we will continue to generate annual losses in the near term as we continue the development of, and seek regulatory approvals for, our product candidates, and continue with commercialization of approved products.
Our Crysvita collaboration revenue in the Profit-Share Territory and royalty revenue increased by a net $15.6 million for the year ended December 31, 2023, compared to the same period in 2022; this increase in Crysvita revenue is primarily due to an increase in the number of patients on therapy.
Our Crysvita royalty revenue and collaboration revenue in the Profit-Share Territory increased by a net $22.5 million for the year ended December 31, 2024, compared to the same period in 2023; this increase in Crysvita revenue is primarily due to an increase in the number of patients on therapy.
In connection with the offering, we sold to certain investors pre-funded warrants, in lieu of common stock, to purchase 1,666,722 shares of common stock at a purchase price of $29.999 per pre-funded warrant, which equals the public offering price per share of common stock less the $0.001 exercise price per share of each pre-funded warrant.
In connection with the offering, we sold to certain investors pre-funded warrants, in lieu of common stock, to purchase 1,538,501 shares of common stock at a purchase price of $38.999 per pre-funded warrant, which equals the public offering price per share of common stock less the $0.001 exercise price per share of each pre-funded warrant.
Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue Code of 1986, and similar state provisions.
Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue Code of 1986, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss and tax credit carryforwards before their utilization.
Our significant accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this Annual Report. 69 We define our critical accounting policies as those GAAP accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles.
Summary of Significant Accounting Policies” to our financial statements included elsewhere in this Annual Report. 71 We define our critical accounting policies as those GAAP accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles.
Recent Accounting Pronouncements None. I tem 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to interest earned on our cash equivalents and marketable debt securities. The primary objective of our investment activities is to preserve our capital to fund operations.
Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to interest earned on our cash equivalents and marketable debt securities. The primary objective of our investment activities is to preserve our capital to fund operations.
Income Taxes We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
The increase in revenue was driven by higher demand for our approved products. As of December 31, 2023, we had $777.1 million in available cash, cash equivalents and marketable debt securities.
The increase in revenue was driven by higher demand for our approved products. As of December 31, 2024, we had $745.0 million in available cash, cash equivalents and marketable debt securities.
Revenue Recognition Product Sales We sell our approved products through a limited number of distributors. Under ASC 606, revenue from product sales is recognized at the point in time when control is transferred to these distributors.
Revenue Recognition Product Sales We sell our approved products through a limited number of distributors. Under Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers , revenue from product sales is recognized at the point in time when control is transferred to these distributors.
Proceeds from these transactions were recorded as liabilities (specifically, liabilities for sales of future royalties on the Consolidated Balance Sheets). We are amortizing $320.0 million and $500.0 million, net of transaction costs of $5.8 million and $9.1 million for RPI and OMERS, respectively, using the effective interest method over the estimated life of the applicable arrangement.
Proceeds from these transactions were recorded as liabilities (specifically, liabilities for sales of future royalties on the Consolidated Balance Sheets). We are amortizing $320.0 million and $500.0 million, net of transaction costs of $5.8 million and $9.1 million for RPI and OMERS, respectively.
We periodically review our estimates as a result of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate.
We periodically review our estimates as a result of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. Our significant accounting policies are more fully described in “Note 2.
Cash used in operating activities for the year ended December 31, 2023 was $474.8 million and primarily reflected a net loss of $606.6 million, partially offset by non-cash items of $146.9 million, net, which consisted primarily of non-cash collaboration royalty revenues, interest expense related to the sale of future royalties to RPI and OMERS, net of amounts capitalized, stock-based compensation, amortization of discounts on marketable debt securities, and depreciation and amortization.
Cash used in operating activities for the year ended December 31, 2024 was $414.2 million and primarily reflected a net loss of $569.2 million, partially offset by non-cash items of $141.1 million, net, which consisted primarily of non-cash collaboration royalty revenues, interest expense related to the sale of future royalties to RPI and OMERS, stock-based compensation, amortization of discounts on marketable debt securities, and depreciation and amortization.
Please see “Risk Factors—Risks Related to Our Financial Condition and Capital Requirements.” Contractual Obligations and Commitments Material contractual obligations arising in the normal course of business primarily consist of operating and finance leases and manufacturing and service contract obligations. See Note 9 to the Consolidated Financial Statements for amounts outstanding for operating and finance leases on December 31, 2023.
Please see “Risk Factors—Risks Related to Our Financial Condition and Capital Requirements.” Contractual Obligations and Commitments Material contractual obligations arising in the normal course of business primarily consist of operating and finance leases and manufacturing and service contract obligations. See "Note 10.
The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2023 2022 Cash used in operating activities $ (474,806 ) $ (380,465 ) Cash provided by (used in) investing activities 168,000 (291,652 ) Cash provided by financing activities 388,142 501,208 Effect of exchange rate changes on cash 462 (1,075 ) Net increase (decrease) in cash, cash equivalents, and restricted cash $ 81,798 $ (171,984 ) Cash Used in Operating Activities Our primary use of cash is to fund operating expenses, which consist primarily of research and development and commercial expenditures.
The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Cash used in operating activities $ (414,188 ) $ (474,806 ) Cash (used in) provided by investing activities (17,768 ) 168,000 Cash provided by financing activities 399,241 388,142 Effect of exchange rate changes on cash (2,525 ) 462 Net (decrease) increase in cash, cash equivalents, and restricted cash $ (35,240 ) $ 81,798 Cash Used in Operating Activities Our primary use of cash is to fund operating expenses, which consist primarily of research and development and commercial expenditures.
In May 2021, we entered into an Open Market Sale Agreement with Jefferies LLC, or Jefferies, pursuant to which we may offer and sell shares of our common stock having an aggregate offering proceeds up to $350.0 million, from time to time, in at-the-market, or ATM, offerings through Jefferies.
In February 2024, we entered into a Sales Agreement with Cowen and Company, LLC, or Cowen, pursuant to which the Company may offer and sell shares of the Company’s common stock having an aggregate offering proceeds up to $350.0 million, from time to time, in ATM offerings through Cowen.
Other Expense (dollars in thousands) Year Ended December 31, Dollar Percent 2023 2022 Change Change Other expense $ (337 ) $ (1,566 ) $ 1,229 (78%) Other expense decreased $1.2 million for the year ended December 31, 2023, compared to the same period in 2022. These changes were primarily due to fluctuations in foreign exchange rates.
Other Expense (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Other expense $ (3,963 ) $ (337 ) $ (3,626 ) * Other expense increased $3.6 million for the year ended December 31, 2024, compared to the same period in 2023. These changes were primarily due to fluctuations in foreign exchange rates.
Manufacturing and service contract obligations primarily relate to manufacturing of inventory for our approved products, the majority of which are due in the next 12 months. See Note 15 to the Consolidated Financial Statements for these contractual obligations.
Leases" to the Consolidated Financial Statements for amounts outstanding for operating and finance leases as of December 31, 2024. Manufacturing and service contract obligations primarily relate to manufacturing of inventory for our approved products, the majority of which are due in the next 12 months. See "Note 16. Commitments and Contingencies" to the Consolidated Financial Statements for these contractual obligations.
We realized no benefit for current year losses due to a full valuation allowance against the U.S. net deferred tax assets. The benefit was offset by an income tax expense of $3.0 million from foreign jurisdictions.
For the year ended December 31, 2023, we recognized an income tax benefit of $4.8 million attributable to modifications in our state apportionment 78 methodology. We realized no benefit for 2023 losses due to a full valuation allowance against the U.S. net deferred tax assets. The benefit was offset by an income tax expense of $3.0 million from foreign jurisdictions.
We transitioned commercial responsibilities to KKC in the Profit-Share Territory in April 2023. Post transition, we recognize our revenue share for Crysvita sales in the Profit-Share Territory as royalty revenue, which was recorded as collaboration revenue prior to the transition.
We transitioned commercial responsibilities to KKC in the Profit-Share Territory in April 2023. Post transition, we recognize our revenue share for Crysvita sales in the Profit-Share Territory as royalty revenue, which was recorded as collaboration revenue prior to the transition. Other revenue decreased by $1.5 million for the year ended December 31, 2024, compared to the same period in 2023.
In October 2023, we completed an underwritten public offering in which 9,833,334 shares of common stock were sold, including the exercise in full by the underwriters of their option to purchase an additional 1,500,000 shares, at a public offering price of $30.00 per share.
In June 2024, we completed an underwritten public offering in which 8,782,051 shares of common stock were sold, including the exercise in full by the underwriters of their option to purchase an additional 1,346,153 shares, at a public offering price of $39.00 per share.
Change in Fair Value of Equity Investments (dollars in thousands) Year Ended December 31, Dollar Percent 2023 2022 Change Change Change in fair value of equity investments $ 397 $ (19,299 ) $ 19,696 (102%) For the year ended December 31, 2023, we recorded a net increase in the fair value of our equity investments of $0.4 million due to an increase in the fair value of our investments in Solid Biosciences Inc., or Solid, common stock for the period.
Change in Fair Value of Equity Investments (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Change in fair value of equity investments $ (1,115 ) $ 397 $ (1,512 ) (381%) For the years ended December 31, 2024 and 2023, we recorded a net decrease of $1.1 million and a net increase of $0.4 million, respectively, in the fair value of our equity investments due to unrealized loss and gain, respectively, on our investment in Solid Biosciences Inc., or Solid, common stock.
Our effective annual interest rates were 6.2% and 7.8%, for RPI and OMERS, respectively, as of December 31, 2023. There are a number of factors that could materially affect the amount and timing of royalty payments from KKC in the applicable territories, most of which are not within our control.
There are a number of factors that could materially affect the amount and timing of royalty payments from KKC in the applicable territories, most of which are not within our control.
The increase was primarily due to an increase in demand for Crysvita in Latin America resulting from an increase in the number of patients on therapy, continued increase in demand for our other approved products, and increases in revenue under our named patient programs.
The increase was primarily due to an increase in demand for Crysvita in Latin America resulting from an increase in the number of patients on therapy, ongoing launch of Evkeeza in Japan and in Europe, Middle East and Africa territories, or EMEA, and continued increase in demand for our other approved products.
We will continue to use judgment in evaluating the expected volatility, expected terms, and forfeiture rates utilized for our stock-based compensation calculations on a prospective basis and will revise in subsequent periods, if actual forfeitures differ from those estimates. 72 For restricted stock units, or RSUs, and performance stock units, or PSUs, the fair value is based on the market value of our common stock on the date of grant, except for certain PSUs with a market vesting condition, for which fair value is estimated using a Monte Carlo simulation model.
We will continue to use judgment in evaluating the expected volatility, expected terms, and forfeiture rates utilized for our stock-based compensation calculations on a prospective basis and will revise in subsequent periods, if actual forfeitures differ from those estimates.
For the years ended December 31, 2023, 2022, and 2021 stock-based compensation expense was $135.2 million, $130.4 million, and $105.0 million, respectively. As of December 31, 2023, we had $219.8 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, which we expect to recognize over a weighted-average period of 2.2 years.
As of December 31, 2024, we had $256.8 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, which we expect to recognize over a weighted-average period of 2 years. 74 Income Taxes We use the liability method of accounting for income taxes.
The change in operating assets and liabilities also reflected net cash provided of $60.2 million, primarily due to an increase in accounts payable, accrued, and other liabilities, primarily due to timing of payments and receipt of invoices, as well as an increase in manufacturing accruals related to manufacturing and clinical expenses, an increase in accrued bonus due to an increase in headcount, and an increase in accrued development costs owed to a collaboration partner, partially offset by an increase in accounts receivable primarily related to an increase in sales of our approved products.
The change in operating assets and liabilities also reflected a net use of cash of $15.1 million, primarily due to an increase in accounts receivable primarily related to an increase in sales of our approved products, partially offset by a net decrease in prepaid expenses and other assets, primarily in prepaid manufacturing.
If actual results vary, we may need to adjust these estimates, which could have a material effect on earnings in the period of the adjustment.
If actual results vary, we may need to adjust these estimates, which could have a material effect on earnings in the period of the adjustment. Collaboration, License and Royalty Revenue We have certain license and collaboration agreements that are within the scope of ASC 808, Collaborative Agreements , which provides guidance on the presentation and disclosure of collaborative arrangements.
The change in operating assets and liabilities also reflected a net use of cash of $15.1 million, primarily due to an increase in accounts receivable primarily related to an increase in sales of our approved products, partially offset by a net decrease in other assets primarily in prepaid manufacturing. 77 Cash used in operating activities for the year ended December 31, 2022 was $380.5 million and reflected a net loss of $707.4 million partially offset by non-cash items of $266.7 million, net, which consisted primarily of non-cash collaboration royalty revenues, interest expense related to the sale of future royalties to RPI and OMERS, net of amounts capitalized, stock-based compensation, acquired in-process research and development relating to our acquisition of GeneTx, the change in fair value of equity investments, primarily for the net change in fair value of equity investments from Arcturus and Solid, and depreciation and amortization.
The change in operating assets and liabilities also reflected a net increase of cash of $13.9 million, primarily due to an increase in accounts payable, accrued, and other liabilities, primarily related to an increase in accrued collaboration and higher revenue reserves from increased sales of our approved products, combined with an increase in inventory, primarily for Mepsevii and Evkeeza, partially offset by a decrease in prepaid expenses and other assets, primarily in prepaid manufacturing. 79 Cash used in operating activities for the year ended December 31, 2023 was $474.8 million and primarily reflected a net loss of $606.6 million, partially offset by non-cash items of $146.9 million, net, which consisted primarily of non-cash collaboration royalty revenues, interest expense related to the sale of future royalties to RPI and OMERS, net of amounts capitalized, stock-based compensation, amortization of discounts on marketable debt securities, and depreciation and amortization.
Interest Income (dollars in thousands) Year Ended December 31, Dollar Percent 2023 2022 Change Change Interest income $ 26,688 $ 11,074 $ 15,614 141% Interest income increased $15.6 million for the year ended December 31, 2023 compared to the same period in 2022, primarily due to increases in interest rates.
Interest Income (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Interest income $ 36,506 $ 26,688 $ 9,818 37% Interest income increased $9.8 million for the year ended December 31, 2024 compared to the same period in 2023, primarily due to higher marketable debt securities balances.
Our future funding requirements will depend on many factors, including the following: • the scope, rate of progress, results and cost of our clinical studies, nonclinical testing, and other related activities; • the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates, products that we have begun to commercialize, and any products that we may develop in the future; • the cost of operating our GMP gene therapy manufacturing facility; • the number and characteristics of product candidates that we pursue; • the cost, timing, and outcomes of regulatory interactions and approvals; 78 • the cost and timing of establishing our commercial infrastructure, and distribution capabilities; • the impact of macroeconomic conditions, including the general economic slowdown, inflationary pressure, high interest rates, a potential U.S. federal government shutdown, and potential recessionary environment on our business operations and operating results, as described in “Part I, Item IA.
Our future funding requirements will depend on many factors, including the following: • the scope, rate of progress, results and cost of our clinical studies, nonclinical testing, and other related activities; • the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates, products that we have begun to commercialize, and any products that we may develop in the future; • the cost of operating our GMP gene therapy manufacturing facility; • the number and characteristics of product candidates that we pursue; • the cost, timing, and outcomes of regulatory interactions and approvals; • the cost and timing of establishing our commercial infrastructure, and distribution capabilities; • the impact of macroeconomic conditions, including general economic slowdowns, changing interest rates and inflation on our business operations and operating results; and • the terms and timing of any collaborative, licensing, marketing, distribution, acquisition and other arrangements that we may establish, including any required upfront milestone, royalty, reimbursements or other payments thereunder. 80 We expect to satisfy future cash needs through existing capital balances, revenue from our commercial products, and a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, and other marketing and distribution arrangements.
The timing and amount of expenses incurred will depend largely upon the outcomes of current or future clinical studies for our product candidates as well as the related regulatory requirements, manufacturing costs, and any costs associated with the advancement of our preclinical programs.
The timing and amount of expenses incurred will depend largely upon the outcomes of current or future clinical studies for our product candidates as well as the related regulatory requirements, manufacturing costs, and any costs associated with the advancement of our preclinical programs. 77 Selling, General and Administrative Expenses (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Selling, general and administrative $ 321,610 $ 309,799 $ 11,811 4% Selling, general and administrative expenses increased $11.8 million for the year ended December 31, 2024, compared to the same period in 2023.
Non-cash Interest Expense on Liabilities for Sales of Future Royalties (dollars in thousands) Year Ended December 31, Dollar Percent 2023 2022 Change Change Non-cash interest expense on liabilities for sales of future royalties $ 66,004 $ 43,015 $ 22,989 53% Our non-cash interest expense on liabilities for sales of future royalties increased by $23.0 million for the year ended December 31, 2023, compared to the same period in 2022.
Non-cash Interest Expense on Liabilities for Sales of Future Royalties (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Non-cash interest expense on liabilities for sales of future royalties $ 63,041 $ 66,004 $ (2,963 ) (4%) The non-cash interest expense on liabilities for sales of future royalties decreased by $3.0 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a reduction in total royalty obligation balances as a result of increased royalties generated from our collaboration partner, KKC.
Benefit from (provision for) income taxes Year Ended December 31, Dollar Percent 2023 2022 Change Change Benefit from (provision for) income taxes $ 1,825 $ (5,696 ) $ 7,521 (132%) For the year ended December 31, 2023, we recognized an income tax benefit of $4.8 million attributable to modifications in our state apportionment methodology.
(Provision for) Benefit from Income Taxes (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change (Provision for) benefit from income taxes $ (1,597 ) $ 1,825 $ (3,422 ) (188%) For the year ended December 31, 2024, we recognized an income tax provision of $1.6 million attributable to income tax expense of $0.2 million for state tax, and income tax expense of $1.4 million from foreign jurisdictions.
The total proceeds that we received from the offering were $326.5 million, net of underwriting discounts and commissions.
The total proceeds that we received from the offering were $381.0 million, net of underwriting discounts and commissions. As of December 31, 2024, none of the pre-funded warrants had been exercised.
Our revenue from the Daiichi Sankyo arrangement decreased by $6.2 million for the year ended December 31, 2023, compared to the same period in 2022. The decrease was due to the completion of the technology transfer and the technology transfer period as of March 31, 2023.
The decrease was due to the completion of the technology transfer and the technology transfer period related to the Daiichi Sankyo agreement as of March 31, 2023. 75 Cost of Sales (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Cost of sales $ 76,728 $ 45,209 $ 31,519 70% Cost of sales increased by $31.5 million for the year ended December 31, 2024, compared to the same period in 2023.
Consequently, we estimate an imputed interest on the unamortized portion of the liabilities and record interest expense relating to the transactions. We record the royalty revenue arising from the net sales of Crysvita in the applicable territories as non-cash royalty revenue in the Consolidated Statements of Operations over the term of the arrangements.
We record the royalty revenue arising from the net sales of Crysvita in the applicable territories as non-cash royalty revenue in the Consolidated Statements of Operations over the term of the arrangements. Our effective annual interest rates were 6.2% and 7.5%, for RPI and OMERS, respectively, as of December 31, 2024.
Cash provided by financing activities for the year ended December 31, 2022 was $501.2 million and was primarily comprised of $491.0 million in net proceeds from the partial sale of future North America Crysvita royalties to OMERS and $10.8 million in net proceeds from the issuance of common stock upon the exercise of stock options, net of taxes withheld from the vesting of restricted stock units.
Cash Provided by Financing Activities Cash provided by financing activities for the year ended December 31, 2024 was $399.2 million and was primarily comprised of $381.0 million in net proceeds from the sale of common stock in our June 2024 underwritten public offering and $11.3 million in proceeds from the issuance of common stock from exercise of warrants and equity plan awards, net.
The increase in cost of sales was due to increased demand for our approved products, partially offset by a decrease in the Crysvita transfer price on sales of the product in Latin America from 35% prior to December 31, 2022, to 30% in 2023.
The increase in cost of sales was due to an increase in demand for our approved products, primarily Crysvita in Latin America and Evkeeza in EMEA and Japan.
Cash used in investing activities for the year ended December 31, 2022 was $291.7 million and was primarily related to purchases of property, plant, and equipment of $116.1 million, primarily related to the construction of our gene therapy manufacturing facility, the acquisition of GeneTx for $75.0 million, net of cash acquired, $79.8 million from net activities in marketable debt securities, and the payment to Regeneron for intangible assets of $30.0 million, offset by proceeds from the sale of Arcturus common stock of $10.1 million.
Cash (Used in) Provided by Investing Activities Cash used in investing activities for the year ended December 31, 2024 was $17.8 million and was primarily related to $12.5 million in payments for intangible assets related to milestones on our commercial products, partially offset by $4.7 million from net activities in marketable debt securities.
The annual limitation may result in the expiration of certain net operating loss and tax credit carryforwards before their utilization. 73 Results of Operations Comparison of Years Ended December 31, 2023 and 2022 Revenues (dollars in thousands) Year Ended December 31, Dollar Percent 2023 2022 Change Change Product sales: Crysvita $ 75,697 $ 42,678 $ 33,019 77% Mepsevii 30,441 20,637 9,804 48% Dojolvi 70,633 55,612 15,021 27% Evkeeza 3,642 — 3,642 * Total product sales 180,413 118,927 61,486 52% Crysvita royalty revenue 182,652 21,692 160,960 742% Collaboration and license revenue: Crysvita collaboration revenue in Profit-Share Territory 69,705 215,024 (145,319 ) -68% Daiichi Sankyo 1,479 7,686 (6,207 ) -81% Total collaboration and license revenue 71,184 222,710 (151,526 ) -68% Total revenues $ 434,249 $ 363,329 $ 70,920 20% * not meaningful Our product sales increased $61.5 million for the year ended December 31, 2023, compared to the same period in 2022.
Results of Operations Comparison of Years Ended December 31, 2024 and 2023 Revenues (dollars in thousands) Year Ended December 31, Dollar Percent 2024 2023 Change Change Product sales: Crysvita $ 134,709 $ 75,697 $ 59,012 78% Dojolvi 88,194 70,633 17,561 25% Evkeeza 32,162 3,642 28,520 * Mepsevii 30,350 30,441 (91 ) 0% Total product sales 285,415 180,413 105,002 58% Crysvita royalty revenue 274,815 182,652 92,163 50% Collaboration and license revenue: Crysvita collaboration revenue in Profit-Share Territory — 69,705 (69,705 ) * Other — 1,479 (1,479 ) * Total collaboration and license revenue — 71,184 (71,184 ) * Total revenues $ 560,230 $ 434,249 $ 125,981 29% * not meaningful Our product sales increased $105.0 million for the year ended December 31, 2024, compared to the same period in 2023.
The following table provides a breakout of our research and development expenses by major program type and business activities: Year Ended December 31, Dollar Percent 2023 2022 Change Change Clinical programs: Gene therapy programs $ 168,705 $ 153,754 $ 14,951 10% Biologic and nucleic acid programs 108,914 97,268 11,646 12% Translational research 71,820 81,431 (9,611 ) -12% Upfront license, acquisition, and milestone fees 9,000 75,033 (66,033 ) -88% Approved products 53,478 75,683 (22,205 ) -29% Infrastructure 78,929 71,657 7,272 10% Stock-based compensation 74,531 74,464 67 0% Other research and development 83,072 76,499 6,573 9% Total research and development expenses $ 648,449 $ 705,789 $ (57,340 ) -8% Total research and development expenses decreased $57.3 million for the year ended December 31, 2023 compared to the same period in 2022.
The following table provides a breakout of our research and development expenses by individual product candidate under each major clinical program type and other research and development categories: 76 Year Ended December 31, Dollar Percent 2024 2023 Change Change Clinical programs: Gene therapy programs DTX301 $ 40,831 $ 31,439 $ 9,392 30% DTX401 75,340 72,103 3,237 4% UX701 33,207 24,079 9,128 38% UX111 41,323 24,412 16,911 69% CMC costs 3,459 16,672 (13,213 ) -79% Total gene therapy programs 194,160 168,705 25,455 15% Biologic and nucleic acid programs GTX102 50,757 31,121 19,636 63% UX053 374 12,821 (12,447 ) -97% UX143 89,118 64,972 24,146 37% Total biologic and nucleic acid programs 140,249 108,914 31,335 29% Translational research 45,702 71,820 (26,118 ) -36% Upfront license, acquisition, and milestone fees 30,450 9,000 21,450 238% Approved products 35,432 53,478 (18,046 ) -34% Infrastructure 81,034 78,929 2,105 3% Stock-based compensation 86,616 74,531 12,085 16% Other research and development 84,222 83,072 1,150 1% Total research and development expenses $ 697,865 $ 648,449 $ 49,416 8% Total research and development expenses increased $49.4 million for the year ended December 31, 2024 compared to the same period in 2023.
Removed
Collaboration, License and Royalty Revenue We have certain license and collaboration agreements that are within the scope of Accounting Standards Codification, or ASC, 808, Collaborative Agreements , which provides guidance on the presentation and disclosure of collaborative arrangements.
Added
For restricted stock units, or RSUs, and performance stock units, or PSUs, the fair value is based on the market value of our common stock on the date of grant, except for certain PSUs with a market vesting condition, for which fair value is estimated using a Monte Carlo simulation model.
Removed
In order to determine the amortization of the liabilities, we are required to estimate the total amount of future royalty payments to be received by us and paid to RPI and OMERS, subject to the capped amount, over the life of the arrangements.
Added
For the years ended December 31, 2024, 2023, and 2022, stock-based compensation expense was $158.1 million, $135.2 million, and $130.4 million, respectively.
Removed
The excess of future estimated royalty payments (subject to the capped amount) to RPI and OMERS, in excess of the net proceeds received of $314.2 million and $491.0 million, respectively, is recorded as non-cash interest expense over the life of the arrangements.
Added
We manage our research and development expenses by identifying the research and development activities we expect to be performed during a given period and then prioritizing efforts based on anticipated probability of successful technical development and regulatory approval, market potential, available human and capital resources, scientific data and other considerations.
Removed
We periodically assess the expected royalty payments using a combination of historical results, internal projections and forecasts from external sources. To the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than its original estimates, we will prospectively adjust the amortization of the liabilities and the effective interest rate.
Added
We regularly review our research and development activities based on unmet medical need and, as necessary, reallocate resources among our research and development portfolio that we believe will best support the long-term growth of our business.
Removed
In conjunction with the acquisition of Dimension Therapeutics, or Dimension, in 2017, we recorded a deferred tax liability reflecting the tax impact of the difference between the book basis and tax basis of acquired IPR&D.
Added
We allocate and analyze certain operational expenses by individual product candidates, specifically costs to conduct clinical studies, including expenses incurred with clinical research organizations, direct manufacturing costs, and salaries and benefits. Other operational expenses are not allocated and analyzed by individual product candidates.
Removed
Such deferred income tax liability was not used to offset deferred tax assets when analyzing our valuation allowance as the acquired IPR&D is considered to have an indefinite life until we complete or abandon development of the acquired IPR&D.
Added
For instance, costs associated with Chemistry, Manufacturing and Controls, or CMC costs, are primarily purchases of materials for our internal gene therapy manufacturing activities that qualify as research and development expenses at the time of purchase but for which the allocation and consumption of such costs by a specific product candidate is not determined; accordingly, CMC costs for gene therapy programs are generally spread across multiple product candidates.

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