10q10k10q10k.net

What changed in BIOCRYST PHARMACEUTICALS INC's 10-K — 2023 vs 2024

vs

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

+472 added−449 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in BIOCRYST PHARMACEUTICALS INC's 2024 10-K

472 paragraphs added · 449 removed · 355 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

115 edited+42 added−35 removed188 unchanged
Biggest changeThere is currently no activity between us and UAB on these agreements, but when we license this technology, such as in the case of the Shionogi and Green Cross agreements, or commercialize products related to these programs, we will owe sublicense fees or royalties on amounts received. 12 Table of Contents As discussed above under “Products and Product Candidates” and in “Note 15—Collaborative and Other Relationships” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report, we entered into the Clearside Agreement to develop our investigational plasma kallikrein inhibitor, avoralstat, with Clearside’s SCS Microinjector® to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with DME.
Biggest changeAs discussed in “ Note 15—Collaborative and Other Relationships ” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report, we entered into a license agreement with Clearside Biomedical, Inc. to develop our investigational plasma kallikrein inhibitor, avoralstat, with Clearside’s SCS Microinjector® to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with DME.
Takhzyro® (lanadelumab-flyo) is a monoclonal antibody approved for prophylaxis of HAE attacks and can be self-administered as a subcutaneous injection. • Bradykinin receptor antagonist — Firazyr® (icatibant) and generic icatibant are indicated for the treatment of acute attacks and are administered by subcutaneous administration. • Other medications — Prophylactic administration of synthetic attenuated androgens (generically available as danazol or stanozolol) has been utilized to reduce the frequency or severity of attacks.
Takhzyro® (lanadelumab-flyo) is a monoclonal antibody approved for prophylaxis of HAE attacks and can be self-administered as a subcutaneous injection. • Bradykinin receptor antagonist — Firazyr® (icatibant) and generic icatibant are indicated for the treatment of acute attacks and are administered by subcutaneous injection. • Other medications — Prophylactic administration of synthetic attenuated androgens (generically available as danazol or stanozolol) has been utilized to reduce the frequency or severity of attacks.
We strive to advance our product candidate portfolio from discovery to commercial markets efficiently by utilizing a small group of talented and highly-skilled employees working in conjunction with strategic outsource partners. We are unique in our approach to treat difficult-to-treat rare diseases with orally-administered small molecules and with protein therapeutics, each identified by utilizing crystallography and structure-guided drug design.
We strive to advance our product candidate portfolio from discovery to commercial markets efficiently by utilizing a small group of talented and highly-skilled employees working in conjunction with strategic outsource partners. We are unique in our approach to treat difficult-to-treat rare diseases with orally-administered small molecules and with injectable protein therapeutics, each identified by utilizing crystallography and structure-guided drug design.
State laws may also require disclosure of pharmaceutical pricing information and marketing expenditures. Violations of the physician sunshine act and similar legislation or the fraud and abuse laws may be punishable by civil or criminal sanctions, including fines and civil monetary penalties, and future exclusion from participation in government healthcare programs.
State laws also may require disclosure of pharmaceutical pricing information and marketing expenditures. Violations of the federal Physician Sunshine Act and similar legislation or the fraud and abuse laws may be punishable by civil or criminal sanctions, including fines and civil monetary penalties, and future exclusion from participation in government healthcare programs.
Peramivir was also approved in the United States in 2014, Taiwan in 2016, Canada in 2017, and Australia in 2018. A Supplemental New Drug Application (“sNDA”) was approved in the United States in February 2021, extending RAPIVAB’s availability for the treatment of acute uncomplicated influenza to pediatric patients six months and older.
Peramivir was also approved in the United States in 2014, Taiwan in 2016, Canada in 2017, and Australia in 2018. A Supplemental New Drug Application was approved in the United States in February 2021, extending RAPIVAB’s availability for the treatment of acute uncomplicated influenza to pediatric patients six months and older.
False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, for payment to third party payors (including Medicare and Medicaid) claims for reimbursement or services that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
False claims laws prohibit anyone from knowingly presenting, or causing to be presented, for payment to third party payors (including Medicare and Medicaid) claims for reimbursement or services that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
In August 2022, the Inflation Reduction Act (“IRA”) was enacted and includes provisions requiring that (1) beginning in 2026, mandatory price setting be introduced in Medicare for certain drugs paid for under Parts B and D, whereby manufacturers must accept a price established by the government or face penalties on all U.S. sales (starting with 10 drugs in 2026, adding 15 in 2027 and 2028, and adding 20 in 2029 and subsequent years, such that by 2031 approximately 100 drugs could be subject to such set prices); (2) starting in 2024, Medicare Part D be redesigned to cap beneficiary out-of-pocket costs and, beginning January 1, 2025, federal reinsurance be reduced in the catastrophic phase (resulting in a shift and increase of such costs to Part D plans and manufacturers, including by requiring manufacturer discounts on certain drugs); and (3) beginning October 1, 2022, manufacturers owe rebates on drugs reimbursed under Medicare Part D if price increases outpace inflation, and beginning January 1, 2023, manufacturers owe rebates on drugs 24 Table of Contents reimbursed under Medicare Part B if price increases outpace inflation.
In August 2022, the Inflation Reduction Act (“IRA”) was enacted and includes provisions requiring that (1) beginning in 2026, mandatory price setting be introduced in Medicare for certain drugs paid for under Parts B and D, whereby manufacturers must accept a price established by the government or face penalties on all U.S. sales (starting with 10 drugs in 2026, adding 15 in 2027 and 2028, and adding 20 in 2029 and subsequent years, such that by 2031 approximately 100 drugs could be subject to such set prices); (2) starting in 2024, Medicare Part D be redesigned to cap beneficiary out-of-pocket costs and, beginning January 1, 2025, federal reinsurance be reduced in the catastrophic phase (resulting in a shift and increase of such costs to Part D plans and manufacturers, including by requiring manufacturer discounts on certain drugs); and (3) beginning October 1, 2022, manufacturers owe rebates on drugs reimbursed under Medicare Part D if price increases outpace inflation, and beginning January 1, 2023, manufacturers owe rebates on drugs reimbursed under Medicare Part B if price increases outpace inflation.
On November 19, 2021, we also entered into a Purchase and Sale Agreement (the “OMERS Royalty Purchase Agreement” and, collectively with the RPI Royalty Purchase Agreements, the “Royalty Purchase Agreements”) with OCM IP Healthcare Holdings Limited, an affiliate of OMERS Capital Markets (“OMERS”), pursuant to which we sold to OMERS the right to receive certain royalty payments from the Company.
On November 19, 2021, we also entered into a Purchase and Sale Agreement (the “OMERS Royalty Purchase Agreement” and, collectively with the RPI Royalty Purchase Agreements, the “Royalty Purchase Agreements”) with OCM IP Healthcare Holdings Limited, an affiliate of OMERS Capital Markets (“OMERS”), pursuant to which we sold to OMERS the right to receive certain royalty payments from us.
Upon approval of an ANDA, the FDA indicates that the generic product is “therapeutically equivalent” to the drug product previously approved under an NDA, known as the reference listed drug (“RLD”), and it assigns a therapeutic equivalence rating to the approved generic drug in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.
Upon approval of an ANDA, the FDA indicates that the generic product is “therapeutically equivalent” to the drug product previously approved under an NDA, known as the reference listed drug (“RLD”), and it assigns a therapeutic equivalence rating to the approved generic drug in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book”.
In September 2014, Royalty Sub was unable to pay the full amount of interest payable in September 2013 by the next succeeding payment date for the PhaRMA Notes, which was September 1, 2014. This inability constituted an event of default under the terms of the Indenture. As of December 31, 2023, the PhaRMA Notes remained in default.
In September 2014, Royalty Sub was unable to pay the full amount of interest payable in September 2013 by the next succeeding payment date for the PhaRMA Notes, which was September 1, 2014. This inability constituted an event of default under the terms of the Indenture. As of December 31, 2024, the PhaRMA Notes remained in default.
On each of December 7, 2020 and November 19, 2021, we entered into a Purchase and Sale Agreement with RPI 2019 Intermediate Finance Trust (“RPI”), pursuant to which we sold to RPI the right to receive certain royalty payments from the Company (the “RPI Royalty Purchase Agreements”).
On each of December 7, 2020 and November 19, 2021, we entered into a Purchase and Sale Agreement with RPI 2019 Intermediate Finance Trust (“RPI”), pursuant to which we sold to RPI the right to receive certain royalty payments from us (the “RPI Royalty Purchase Agreements”).
Failure to comply with applicable FDA and other regulatory requirements at any stage during the regulatory process may subject us to sanctions, including: • delays; • warning or untitled letters; • fines; • product recalls or seizures; • injunctions; • penalties; • refusal of the FDA or any foreign regulatory authority to review pending market approval applications or supplements to approval applications; • total or partial suspension of production; • civil penalties; • withdrawals of previously approved marketing applications; and • criminal prosecutions.
Failure to comply with applicable FDA and other regulatory requirements at any stage during the regulatory process may subject us to sanctions, including: • delays; • warning or untitled letters; • fines; • product recalls or seizures; • injunctions; • penalties; • refusal of the FDA or any foreign regulatory authority to review pending market approval applications or supplements to approval applications; 16 Table of Contents • total or partial suspension of production; • civil penalties; • withdrawals of previously approved marketing applications; and • criminal prosecutions.
Torii’s updated royalty payment obligations commenced upon November 30, 2023 and expire upon the later of (i) the tenth anniversary of the date of first commercial sale of ORLADEYO in Japan, (ii) the expiration of our patents covering ORLADEYO, and (iii) the expiration of regulatory exclusivity for ORLADEYO in Japan.
Torii’s updated royalty payment obligations commenced on November 30, 2023 and will expire upon the later of (i) the tenth anniversary of the date of first commercial sale of ORLADEYO in Japan, (ii) the expiration of our patents covering ORLADEYO, and (iii) the expiration of regulatory exclusivity for ORLADEYO in Japan.
Under the terms of these agreements, Neopharm will have the exclusive rights to commercialize ORLADEYO in Israel and the Palestinian Authority, and NewBridge will support commercialization efforts in the UAE, as well as the Gulf Cooperation Council and Iraq.
Under the terms of these agreements, Neopharm has the exclusive rights to commercialize ORLADEYO in Israel and the Palestinian Authority, and NewBridge will support commercialization efforts in the UAE, as well as the Gulf Cooperation Council and Iraq.
Many companies, including biotechnology, chemical and pharmaceutical companies, are actively engaged in activities similar to ours, including research, development, and commercialization of drugs for the treatment of rare medical conditions. Many of these 13 Table of Contents companies have substantially greater financial and other resources, larger research and development staffs, and more extensive commercial and manufacturing organizations than we do.
Many companies, including biotechnology, chemical and pharmaceutical companies, are actively engaged in activities similar to ours, including research, development, and commercialization of drugs for the treatment of rare medical conditions. Many of these companies have substantially greater financial and other resources, larger research and development staffs, and more extensive commercial and manufacturing organizations than we do.
Patent and Trademark Office reviews and approves the application for any patent term extension or restoration in consultation with the FDA. 21 Table of Contents Foreign Regulation In addition to regulations in the United States, we are subject to a variety of foreign regulatory requirements governing human clinical trials and marketing approval, commercial sales, and distribution of drugs.
Patent and Trademark Office reviews and approves the application for any patent term extension or restoration in consultation with the FDA. Foreign Regulation In addition to regulations in the United States, we are subject to a variety of foreign regulatory requirements governing human clinical trials and marketing approval, commercial sales, and distribution of drugs.
The Regulation came into effect on January 31, 2022 with a three-year transition period in which clinical trial sponsors will be able to choose among different submission pathways. The Regulation, which is directly applicable in all EU member states, aims to simplify and streamline the approval of clinical trials in the European Union.
The Regulation came into effect on January 31, 2022 with a three-year transition period in which clinical trial sponsors were able to choose among different submission pathways. The Regulation, which is directly applicable in all EU member states, aims to simplify and streamline the approval of clinical trials in the European Union.
Generally, all payments under the Shionogi Agreement are non-refundable and non-creditable, but they are subject to audit. Shionogi is responsible for all development, regulatory, and marketing costs in Japan. The term of the Shionogi Agreement is from February 28, 2007 until terminated. Either party may terminate the Shionogi Agreement in the event of 11 Table of Contents an uncured breach.
Generally, all payments under the Shionogi Agreement are non-refundable and non-creditable, but they are subject to audit. Shionogi is responsible for all development, regulatory, and marketing costs in Japan. The term of the Shionogi Agreement is from February 28, 2007 until terminated. Either party may terminate the Shionogi Agreement in the event of an uncured breach.
The process for obtaining coverage can be lengthy and costly, and it could take several months before a particular payor initially reviews a product and makes a decision with respect to coverage. For example, third-party payors may require cost-benefit analysis data in order to demonstrate the cost-effectiveness of a particular product.
The process for obtaining coverage can be lengthy and costly, and it could take several months before a particular payor initially reviews a product and makes a decision with respect to 23 Table of Contents coverage. For example, third-party payors may require cost-benefit analysis data in order to demonstrate the cost-effectiveness of a particular product.
Section 20 Table of Contents 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.
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.
It may be possible for others to use this data (for example, competitors who may use this data in their own research and development programs) once this data is in the public domain. We are also subject to the supervision of local data protection authorities in those jurisdictions where we undertake clinical trials.
It may be possible for others to use this data (for example, competitors who may use this data in their own research and development programs) once this data is in the public domain. 25 Table of Contents We are also subject to the supervision of local data protection authorities in those jurisdictions where we undertake clinical trials.
The first NDA applicant with FDA orphan drug designation for a particular active ingredient to receive FDA approval of the designated drug for the disease indication for which it has such designation is entitled to a seven-year exclusive marketing period (“orphan drug exclusivity”) in the United States for that product, for that indication.
The first NDA applicant with FDA orphan drug designation for a particular active ingredient to receive FDA approval of the designated drug for the disease indication for which it has such designation is entitled to a seven-year exclusive marketing period 18 Table of Contents (“orphan drug exclusivity”) in the United States for that product, for that indication.
These agreements may not provide adequate protection for our trade secrets, know-how, or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information. Competition The pharmaceutical and biotechnology industries are intensely competitive.
These agreements may not provide adequate protection for our trade secrets, know-how, or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information. 13 Table of Contents Competition The pharmaceutical and biotechnology industries are intensely competitive.
With the enactment of FDASIA, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation.
With the enactment of FDASIA, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including 20 Table of Contents study objectives and design, any deferral or waiver requests, and other information required by regulation.
Further, the duration of the approval process may be exacerbated by global health concerns or other considerations that could prevent regulatory authorities from conducting their inspections, reviews, or other regulatory 16 Table of Contents activities that could significantly impact the ability of such authorities to timely review and process our regulatory submissions.
Further, the duration of the approval process may be exacerbated by global health concerns or other considerations that could prevent regulatory authorities from conducting their inspections, reviews, or other regulatory activities that could significantly impact the ability of such authorities to timely review and process our regulatory submissions.
Additionally, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. 19 Table of Contents Breakthrough Therapy Designation In addition, the Food and Drug Administration Safety and Innovation Act of 2012 (“FDASIA”) established the Breakthrough Therapy designation.
Additionally, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. Breakthrough Therapy Designation In addition, the Food and Drug Administration Safety and Innovation Act of 2012 (“FDASIA”) established the Breakthrough Therapy designation.
Governments have shown significant interest in implementing cost-containment programs, including price controls, 23 Table of Contents restrictions on reimbursement, and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could limit our net revenue and results.
Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could limit our net revenue and results.
On January 5, 2024, we announced that, if our ongoing proof-of-concept trial produces best-in-class data, we plan to out-license late-stage development and commercialization of BCX10013 to a partner that can drive the speed and breadth of investment required to accelerate BCX10013 for patients across multiple complement-mediated diseases and maximize the commercial potential of the program.
On January 5, 2024, we announced that, if our ongoing proof-of-concept trial produced best-in-class data, we planned to out-license late-stage development and commercialization of BCX10013 to a partner that can drive the speed and breadth of investment required to accelerate BCX10013 for patients across multiple complement-mediated diseases and maximize the commercial potential of the program.
We licensed a series of potent inhibitors of purine nucleoside phosphorylase (“PNP”) from AECOM and IRL, as well as an exclusive worldwide license of galidesivir for any antiviral use, and we have agreements with UAB for influenza neuraminidase and complement inhibitors.
We licensed a series of potent inhibitors of purine nucleoside phosphorylase (“PNP”) from AECOM and IRL, as well as an exclusive worldwide license of galidesivir for any antiviral use, and we have agreements with UAB for influenza neuraminidase and complement 12 Table of Contents inhibitors.
The FDA may refer NDAs for new molecular entities to an appropriate advisory committee for review and evaluation in regard to providing a recommendation as to whether the application should be approved. The FDA is not bound to follow the recommendation of an advisory committee.
The FDA may refer NDAs for new molecular entities 17 Table of Contents to an appropriate advisory committee for review and evaluation in regard to providing a recommendation as to whether the application should be approved. The FDA is not bound to follow the recommendation of an advisory committee.
On June 9, 2022, we announced that we have entered into an exclusive collaboration with Pint Pharma to register and promote ORLADEYO in the pan-Latin America region. Under the terms of the agreement, Pint Pharma will be responsible for obtaining and maintaining all marketing authorizations and for commercializing ORLADEYO in the region.
On June 9, 2022, we announced that we entered into an exclusive collaboration with Pint Pharma to register and promote ORLADEYO in the pan-Latin America region. Under the terms of the agreement, Pint Pharma is responsible for obtaining and maintaining all marketing authorizations and for commercializing ORLADEYO in the region.
By focusing on rare disease markets, we believe that we can more effectively control the costs of, and our strategic allocation of financial resources toward, post-approval commercialization. We select disease targets and product candidates in which an oral small molecule or protein therapeutic has the potential to be best-in-class or would be the first to market.
By focusing primarily on rare disease markets, we believe that we can more effectively control the costs of, and our strategic allocation of financial resources toward, post-approval commercialization. We select disease targets and product candidates in which an orally-administered small-molecule or an injectable protein therapeutic has the potential to be best-in-class or would be the first to market.
Based on three full years of commercialization experience with ORLADEYO, we believe there is a seasonal impact to our business in the first quarter of each year due to typical first quarter requirements from payors for prescription reauthorization of specialty products, like ORLADEYO, that can temporarily move patients from paid drug to free product.
Based on four full years of commercialization experience with ORLADEYO, we believe there is a seasonal impact to our business in the first quarter of each year due to typical first 8 Table of Contents quarter requirements from payors for prescription reauthorization of specialty products, like ORLADEYO, that can temporarily move patients from paid drug to free product.
Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and three full years of commercialization experience with ORLADEYO in the United States from 2021 through 2023, we anticipate the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual net ORLADEYO revenues.
Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and four full years of commercialization experience with ORLADEYO in the United States from 2021 through 2024, we anticipate that the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual net ORLADEYO revenues.
A clinical trial application (“CTA”) is submitted, which must be supported by an investigational medicinal product dossier and further supporting information prescribed by the Clinical Trials Directive and other applicable guidance documents, including, but not limited to, the clinical trial protocol.
A clinical trial application (“CTA”) is submitted, which must be supported 21 Table of Contents by an investigational medicinal product dossier and further supporting information prescribed by the Clinical Trials Directive and other applicable guidance documents, including, but not limited to, the clinical trial protocol.
In August 2010, our partner, Green Cross, received marketing and manufacturing approval from the Korean Food & Drug Administration under the commercial name PERAMIFLU to treat patients with influenza A & B viruses, including pandemic H1N1 and avian influenza. See “Collaborations and In-License Relationships” below for a discussion of these licensing arrangements.
In August 2010, our partner, Green Cross, received marketing and manufacturing approval from the Korean Food & Drug Administration under the commercial name PERAMIFLU to treat patients with influenza A & B viruses, including pandemic H1N1 and avian influenza. See “ Collaborations and In-License Relationships ” below for a discussion of these licensing arrangements.
As of December 31, 2023, we have been issued approximately 39 U.S. patents that expire between 2027 and 2039 and that relate to our kallikrein inhibitor compounds, neuraminidase inhibitor compounds, broad-spectrum antiviral (“BSAV”) compounds, PNP inhibitor compounds, and complement-mediated disease program compounds.
As of December 31, 2024, we have been issued approximately 44 U.S. patents that expire between 2027 and 2039 and that relate to our kallikrein inhibitor compounds, neuraminidase inhibitor compounds, broad-spectrum antiviral (“BSAV”) compounds, PNP inhibitor compounds, and complement-mediated disease program compounds.
ITEM 1. BUSINESS Our Business We are a global biotechnology company with a deep commitment to improving the lives of people living with complement-mediated and other rare diseases. We leverage our expertise in structure-guided drug design with the goal of developing first-in-class or best-in-class oral small-molecule and protein therapeutics to target difficult-to-treat rare diseases.
ITEM 1. BUSINESS Our Business We are a global biotechnology company with a deep commitment to improving the lives of people living with hereditary angioedema (“HAE”) and other rare diseases. We leverage our expertise in structure-guided drug design with the goal of developing first-in-class or best-in-class oral small-molecule and injectable protein therapeutics to target difficult-to-treat rare diseases.
In cases where such exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification (discussed further below), in which case the applicant may submit its application four years following the original product approval.
In cases where such exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification (discussed further below), in which case the applicant may submit its application four years following the original product approval (referred to as the “NCE-1 date”).
On January 23, 2023, we announced that the Company entered into a collaboration with Swixx BioPharma AG (“Swixx”) to commercialize ORLADEYO in Central and Eastern Europe (“CEE”). Under the terms of the agreement, Swixx will be responsible for commercializing ORLADEYO in 15 markets within CEE.
On January 23, 2023, we announced that we have entered into a collaboration with Swixx BioPharma AG (“Swixx”) to commercialize ORLADEYO in Central and Eastern Europe (“CEE”). Under the terms of the agreement, Swixx is responsible for commercializing ORLADEYO in 15 markets within CEE.
Any of these competitive factors may impact our decisions with respect to our products, product candidates and early-stage discovery programs. See “Risk Factors—Risks Relating to Our Business—Risks Relating to Competing in our Industry” in Part I, Item 1A of this report for further discussion of these risks.
Any of these competitive factors may impact our decisions with respect to our products, product candidates and early-stage discovery programs. See “ Risk Factors—Risks Relating to Our Business—Risks Relating to Competing in our Industry ” in Part I, Item 1A of this report for further discussion of these risks.
Peramivir Injection (RAPIVAB, RAPIACTA, PERAMIFLU) Shionogi & Co., Ltd. ( “ Shionogi ” ) In February 2007, we entered into a License, Development and Commercialization Agreement (as amended, supplemented or otherwise modified, the “Shionogi Agreement”), an exclusive license agreement with Shionogi to develop and commercialize peramivir in Japan for the treatment of seasonal and potentially life-threatening human influenza.
( “ Shionogi ” ) In February 2007, we entered into a License, Development and Commercialization Agreement (as amended, supplemented or otherwise modified, the “Shionogi Agreement”), an exclusive license agreement with Shionogi to develop and commercialize peramivir in Japan for the treatment of seasonal and potentially life-threatening human influenza.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including investigation by federal and state authorities.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including liability under applicable state and federal laws.
The transactions contemplated under the Royalty Purchase Agreements are referred to herein as the “Royalty Sales.” See “Note 8—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about our obligations under the Royalty Purchase Agreements.
The transactions contemplated under the Royalty Purchase Agreements are referred to herein as the “ Royalty Sales .” See “ Note 8—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitor s” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about our obligations under the Royalty Purchase Agreements.
Products and Product Candidates ORLADEYO (Berotralstat) ORLADEYO is an oral, once-daily therapy discovered and developed by us for the prevention of hereditary angioedema (“HAE”) attacks. HAE is a rare, severely debilitating and potentially fatal genetic condition with an estimated 6 Table of Contents prevalence of between 1 in 33,000 to 1 in 67,000 people.
Products and Product Candidates ORLADEYO (berotralstat) ORLADEYO is an oral capsule, once-daily therapy discovered and developed by us for the prevention of HAE attacks. HAE is a rare, severely debilitating and potentially fatal genetic condition with an estimated prevalence of between 1 in 33,000 to 1 in 67,000 people.
Other Collaborations for ORLADEYO We have entered into a number of collaborations with commercial partners to help support the global launch of ORLADEYO. In 2021, we entered into supply and distribution agreements with Neopharm Ltd. (“Neopharm”) and NewBridge Pharmaceuticals (“NewBridge”) to support commercialization efforts in Israel and the UAE, respectively.
Other Collaborations for ORLADEYO We have entered into a number of collaborations with commercial partners to help support the global commercialization of ORLADEYO. In 2021, we entered into supply and distribution agreements with Neopharm Ltd. (“Neopharm”) and NewBridge Pharmaceuticals (“NewBridge”) to support commercialization efforts in Israel and the United Arab Emirates (“UAE”), respectively.
The TCA does not, however, contain wholesale mutual recognition of U.K. and EU pharmaceutical regulations and protect standards. 22 Table of Contents The government of the United Kingdom has enacted the Medicines and Medical Devices Act 2021.
The TCA does not, however, contain wholesale mutual recognition of U.K. and EU pharmaceutical regulations and product standards. The government of the United Kingdom has enacted the Medicines and Medical Devices Act 2021.
Additionally, we have approximately 28 Patent Cooperation Treaty or U.S. patent applications pending related to kallikrein inhibitor compounds, neuraminidase inhibitor compounds, BSAV compounds, PNP inhibitor compounds, KLK5 program compounds, and complement-mediated disease program compounds.
Ad ditionally, we have approximately 21 Patent Cooperation Treaty or U.S. patent applications pending related to kallikrein inhibitor compounds, neuraminidase inhibitor compounds, BSAV compounds, PNP inhibitor compounds, KLK5 program compounds, and complement-mediated disease program compounds.
The information on our website is not incorporated into this report. Financial Information For information related to our revenues, profits, net loss and total assets, in addition to other financial information, please refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements contained in Part II, Item 8 of this report.
Financial Information For information related to our revenues, profits, net loss and total assets, in addition to other financial information, please refer to the Consolidated Financial Statements and Notes to Consolidated Financial Statements contained in Part II, Item 8 of this report.
Manufacturing facilities in non-United States countries that are utilized to manufacture drugs for distribution into the United States are also subject to inspection by the FDA. Additionally, failure to comply with local regulatory requirements could affect production and availability of product in relevant markets.
Based on an inspection, the FDA determines whether manufacturing facilities are in compliance with applicable regulations. Manufacturing facilities in non-United States countries that are utilized to manufacture drugs for distribution into the United States are also subject to inspection by the FDA. Additionally, failure to comply with local regulatory requirements could affect production and availability of product in relevant markets.
The foreign regulatory approval process includes all of the risks associated with FDA approval set forth above, as well as additional country-specific regulations.
Foreign regulatory approval processes include all of the risks associated with FDA approval set forth above, as well as additional country-specific regulations.
The government generally introduces price cut rounds every other year and also mandates price decreases for specific products. New products judged innovative or useful, that are indicated for pediatric use, or that target orphan or small population diseases, however, may be eligible for a pricing premium. The Japanese government has also promoted the use of generics, where available.
The government generally introduces price cut rounds every other year and also mandates price decreases for specific products. New products judged innovative or useful, that are indicated for pediatric use, or that target orphan or small population diseases, 22 Table of Contents however, may be eligible for a pricing premium.
HAE symptoms include recurrent episodes of edema in various locations, including the hands, feet, face, genitalia and airway. Airway swelling is particularly dangerous and can lead to death by asphyxiation. In addition, patients often have bouts of severe abdominal pain, nausea and vomiting caused by swelling in the intestinal wall. By inhibiting plasma kallikrein, ORLADEYO suppresses bradykinin production.
HAE symptoms include recurrent episodes of edema in various locations, including the 6 Table of Contents hands, feet, face, genitalia and airway. Airway swelling is particularly dangerous and can lead to death by asphyxiation. In addition, patients often have bouts of severe abdominal pain, nausea and vomiting caused by swelling in the intestinal wall.
In October 2008, we and Shionogi amended the Shionogi Agreement to expand the territory covered by the agreement to include Taiwan.
In 11 Table of Contents October 2008, we and Shionogi amended the Shionogi Agreement to expand the territory covered by the agreement to include Taiwan.
Diabetic Macular Edema Pursuant to the Clearside Agreement, we are developing our investigational plasma kallikrein inhibitor, avoralstat, with Clearside’s SCS Microinjector® to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with DME.
Avoralstat We are developing our investigational plasma kallikrein inhibitor, avoralstat, with Clearside Biomedical, Inc.’s SCS Microinjector® to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with diabetic macular edema (“DME”).
Molecules from our discovery efforts that are commercially available or that are in active development are summarized in the table below and are discussed in further detail under “Products and Product Candidates” in this “Part I—Item 1—Business” section of this report.
Molecules from our discovery efforts that are commercially available or that are in active development are summarized in the table below and are discussed in further detail under “ Products and Product Candidates ” in this “ Part I—Item 1—Business ” section of this report.
Human Capital Resources As of January 31, 2024, we had approximately 536 employees, of whom approximately 197 employees were engaged in the research and development function of our operations, which we defined this year to include any employee included in research and development expenses for financial reporting purposes.
Human Capital Resources As of December 31, 2024, we had approximately 580 employees, of whom approximately 191 employees were engaged in the research and development function of our operations, which we define to include any employee included in research and development expenses for financial reporting purposes.
The sunshine provisions apply to manufacturers with products reimbursed under certain government programs and require those manufacturers to disclose annually to the federal government certain payments made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians (as defined above) and their immediate family members.
The transparency-focused provisions apply to manufacturers with products reimbursed under certain government programs and require those manufacturers to disclose annually to the federal government certain payments made to covered recipients (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors, as well as other healthcare personnel including physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians (as defined above) and their immediate family members.
Prior to this approval, peramivir had been indicated in the United States for pediatric patients two years and older. In the United States, peramivir is indicated for the treatment of acute uncomplicated influenza in patients who have been symptomatic for no more than two days. In September 2018, the U.S.
Prior to this approval, peramivir had been indicated in the United States for pediatric patients two years and older. In the United States, peramivir is indicated for the treatment of acute uncomplicated influenza in patients who have been symptomatic for no more than two days. Since the 2009 H1N1 pandemic, RAPIVAB has been an important component of the U.S.
However, long-term use of danazol or stanozolol may result in liver damage, virilization and arterial hypertension. Six-month liver function tests, annual lipid profiles, and biennial hepatic ultrasound are recommended for patients on chronic androgen therapy. 14 Table of Contents We are aware of a number of HAE therapies in clinical development that, if approved, may compete with ORLADEYO.
Six-month liver function tests, annual lipid profiles, and biennial hepatic ultrasound are recommended for patients on chronic androgen therapy. 14 Table of Contents We are aware of a number of HAE therapies in (or have recently completed) clinical development that, if approved, may compete with ORLADEYO.
The alternative pathway also provides a critical amplification loop for all three pathways, regardless of the initiating mechanism. Several rare diseases are known to be mediated by dysregulation of the complement system. BCX10013 BCX10013 is a potential once-daily, oral Factor D inhibitor, which targets the alternative pathway of complement.
The alternative pathway also provides a critical amplification loop for all three pathways, regardless of the initiating mechanism. Several rare diseases are known to be mediated by dysregulation of the complement system.
Phase 3 — If a compound is found to be potentially effective and to have an acceptable safety profile in phase 2 evaluations, phase 3 clinical trials, also sometimes called pivotal studies, major studies, or advanced clinical trials, are typically undertaken to further demonstrate clinical efficacy and to further test for safety within an expanded patient population at geographically dispersed clinical trial sites. 17 Table of Contents Initiation and completion of the clinical trial phases are dependent upon many factors, including things that are beyond our control.
Phase 3 — If a compound is found to be potentially effective and to have an acceptable safety profile in phase 2 evaluations, phase 3 clinical trials, also sometimes called pivotal studies, major studies, or advanced clinical trials, are typically undertaken to further demonstrate clinical efficacy and to further test for safety within an expanded patient population at geographically dispersed clinical trial sites.
The FDA may impose a number of post-approval requirements as a condition of approval of an NDA. For example, the FDA may require post-marketing testing, including phase 4 clinical trials, and surveillance programs to further assess and monitor the product’s safety and effectiveness after commercialization.
For example, the FDA may require post-marketing testing, including phase 4 clinical trials, and surveillance programs to further assess and monitor the product’s safety and effectiveness after commercialization.
We have licensed a number of compounds protected by certain composition of matter patents from AECOM and IRL, totaling two additional U.S. patents that expire between 2024 and 2029.
We have licensed a number of compounds protected by certain composition of matter patents from AECOM and IRL, totaling one additional U.S. patent that expi res in 2029.
Drug/Drug Candidate Drug Class Therapeutic Area(s) Phase Rights* ORLADEYO® (berotralstat) Oral Serine Protease Inhibitor Targeting Kallikrein (once-daily treatment) Hereditary angioedema Approved (United States and multiple global markets) BioCryst (worldwide)** Oral Serine Protease Inhibitor Targeting Kallikrein (once-daily treatment for patients who are 2 to Hereditary angioedema Phase 3 BioCryst (worldwide)** BCX10013 Oral Factor D Inhibitor Complement-mediated diseases Phase 1 BioCryst (worldwide) RAPIVAB® (peramivir injection) Intravenous Neuraminidase Inhibitor Acute uncomplicated Influenza Approved (United States, Australia & Canada) BioCryst (worldwide, except Japan, Taiwan, Korea and Israel) RAPIACTA® (peramivir injection) Intravenous Neuraminidase Inhibitor Uncomplicated seasonal Influenza Approved (Japan & Taiwan) Shionogi & Co., Ltd.
Drug/Drug Candidate Drug Class Therapeutic Area(s) Phase Rights* ORLADEYO® (berotralstat) Oral Serine Protease Inhibitor Targeting Kallikrein (once-daily oral capsule treatment) Hereditary Angioedema Approved (United States and multiple global markets) BioCryst (worldwide) Oral Serine Protease Inhibitor Targeting Kallikrein (once-daily oral granules treatment for patients who are 2 to 11 years of age) Hereditary Angioedema Phase 3 BioCryst (worldwide) BCX17725 Protein Therapeutic Netherton Syndrome Phase 1 BioCryst (worldwide) Avoralstat Ocular Plasma Kallikrein Inhibitor Diabetic Macular Edema Preclinical BioCryst (worldwide) RAPIVAB® (peramivir injection) Intravenous Neuraminidase Inhibitor Acute Uncomplicated Influenza Approved (United States, Australia & Canada) BioCryst (worldwide, except Japan, Taiwan, Korea and Israel) RAPIACTA® (peramivir injection) Intravenous Neuraminidase Inhibitor Uncomplicated Seasonal Influenza Approved (Japan & Taiwan) Shionogi & Co., Ltd.
(Japan & Taiwan) PERAMIFLU® (peramivir injection) Intravenous Neuraminidase Inhibitor Uncomplicated seasonal Influenza Approved (Korea) Green Cross Corporation (Korea) * See “ Business — Collaborations and In-License Relationships ” for a description of our relationships with the third parties identified in this column. ** We share rights in Japan with Torii Pharmaceutical Co., Ltd. 5 Table of Contents In addition to the molecules referenced in the table above, we are pursuing medicines directed at other targets across the classical, lectin and alternative pathways of the complement system, as well as inhibitors designed to treat patients with Netherton syndrome and diabetic macular edema.
(Japan & Taiwan) PERAMIFLU® (peramivir injection) Intravenous Neuraminidase Inhibitor Uncomplicated Seasonal Influenza Approved (Korea) Green Cross Corporation (Korea) * See “ Business — Collaborations and In-License Relationships ” for a description of our relationships with third parties regarding our products and product candidates. 5 Table of Contents In addition to the molecules referenced in the table above, we are pursuing medicines directed at other targets across the classical, lectin and alternative pathways of the complement system.
In particular, the claims in all promotional materials and activities must be consistent with the FDA approvals for approved products and must be appropriately substantiated and fairly balanced with information on the safety risks and limitations of the products.
In particular, the claims in all promotional materials and activities must be consistent with the FDA approvals for approved products and must be appropriately substantiated and fairly balanced with information on the safety risks and limitations of the products. We also may engage in appropriate truthful, non-misleading, and non-promotional scientific exchange concerning our products.
In addition, FUJIFILM Corporation’s favipiravir, a polymerase inhibitor, is approved in Japan. Various government entities throughout the world are offering incentives, grants, and contracts to encourage additional investment into preventative and therapeutic agents against influenza, which may have the effect of further increasing the number of our competitors and/or providing advantages to certain competitors.
Various government entities throughout the world are offering incentives, grants, and contracts to encourage additional investment into preventative and therapeutic agents against influenza, which may have the effect of further increasing the number of our competitors and/or providing advantages to certain competitors. Research and Development We initiated our research and development activities in 1986.
Data Privacy and Security Laws Pharmaceutical companies may be subject to U.S. federal and state health information privacy, security, data breach notification, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act) which may govern the collection, use, disclosure, and protection of health-related and other personal data.
Compliance with these electronic pedigree requirements may increase our operational expenses and impose significant administrative burdens. 24 Table of Contents Data Privacy and Security Laws Pharmaceutical companies may be subject to U.S. federal and state health information privacy, security, data breach notification, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act) which may govern the collection, use, disclosure, and protection of health-related and other personal data.
Although the IRA has passed, the environment remains dynamic, and the presidential administration and Congress are continuing to consider drug pricing reforms. Other potential policies cover a wide range of areas, including allowing the importation of drugs from other countries; increasing transparency in drug pricing; and using third-party value assessments to determine drug prices.
Other potential policies cover a wide range of areas, including allowing the importation of drugs from other countries; increasing transparency in drug pricing; and using third-party value assessments to determine drug prices.
Antivirals The pharmaceutical market for products that prevent or treat influenza is very competitive. Key competitive factors for RAPIVAB (peramivir injection) include, among others, efficacy, ease of use, safety, price and cost-effectiveness, storage and handling requirements, and reimbursement.
Key competitive factors for RAPIVAB (peramivir injection) include, among others, efficacy, ease of use, safety, price and cost-effectiveness, storage and handling requirements, and reimbursement.
We also have non-material license agreements with certain third parties, such as Albert Einstein College of Medicine of Yeshiva University (“AECOM”), Industrial Research, Ltd.
We delivered 2,304 doses of RAPIVAB under the HHS Contract in the fourth quarter of 2024. We also have non-material license agreements with certain third parties, such as Albert Einstein College of Medicine of Yeshiva University (“AECOM”), Industrial Research, Ltd.
The cGMP regulations include requirements relating to product quality, as well as the corresponding maintenance of records and documentation. Manufacturing facilities must be approved by the FDA before they can be used to manufacture our products. Based on an inspection, the FDA determines whether manufacturing facilities are in compliance with applicable regulations.
The cGMP regulations include requirements relating to product quality, investigation and remediation of issues through corrective and preventative actions, as well as the corresponding maintenance of records and documentation. Manufacturing facilities must be approved by the FDA before they can be used to manufacture our products.
Although the specific provisions of these laws vary, their scope is generally broad and there may be no regulations, guidance or court decisions that clarify how the laws apply to particular industry practices.
Anti-kickback laws generally prohibit a manufacturer from soliciting, offering, receiving, or paying any remuneration to generate business, including the purchase or prescription of a particular drug. Although the specific provisions of these laws vary, their scope is generally broad and there may be no regulations, guidance or court decisions that clarify how the laws apply to particular industry practices.
A number of products are currently available in the United States and/or other countries, including Japan, for the prevention or treatment of influenza, including seasonal flu vaccines, F. Hoffmann-La Roche Ltd.’s (“Roche”) TAMIFLU® (oseltamivir), generic oseltamivir, GlaxoSmithKline plc’s RELENZA®, Genentech and Shionogi’s XOFLUZA® and Daiichi Sankyo Co., Ltd.’s (“Daiichi”) INAVIR®.
A number of products are currently available in the United States and/or other countries, including Japan, for the prevention or treatment of influenza, including seasonal flu vaccines, Roche’s TAMIFLU® (oseltamivir), generic oseltamivir, GlaxoSmithKline plc’s RELENZA®, Genentech and Shionogi’s XOFLUZA® and Daiichi’s INAVIR®. In addition, FUJIFILM Corporation’s favipiravir, a polymerase inhibitor, is approved in Japan.
See “Business—Products and Product Candidates” below for additional details.
See “ Business—Products and Product Candidates ” below for additional details.
Our research and development staff, many of whom hold Ph.D. or M.D. degrees, have diversified experience in biochemistry, pharmacology, X-ray crystallography, 26 Table of Contents synthetic organic chemistry, computational chemistry, medicinal chemistry, clinical development, quality assurance, and regulatory affairs.
Our research and development staff, many of whom hold Ph.D. or M.D. degrees, have diversified experience in biochemistry, pharmacology, X-ray crystallography, synthetic organic chemistry, computational chemistry, medicinal chemistry, clinical development, quality assurance, and regulatory affairs. We believe that our ability to successfully execute on our strategic initiatives is highly dependent upon our ability to recruit, retain, and reward our employees.
See “Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain” in Part I, Item 1A of this report for further discussion of these risks. 8 Table of Contents Complement-Mediated Diseases The goal of our overall complement program is to advance several first-in-class and/or best-in-class compounds across multiple pathways in the complement system to treat many complement-mediated diseases.
See “ Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain ” in Part I, Item 1A of this report for further discussion of these risks.
The limited approved options for treating diseases like CAD and wAIHA are injectable or infused. An oral C2 inhibitor developed by us could be first-in-class and allow patients to switch from infused therapy and address their disease earlier in the treatment paradigm.
Oral C2 Inhibitor We are developing a classical and lectin pathway complement inhibitor. An oral C2 inhibitor developed by us could be first-in-class and allow patients to switch from infused therapy and address their disease earlier in the treatment paradigm.
Oral C5 Inhibitor On November 3, 2023, we announced that we are developing an oral C5 inhibitor that could be the first targeted oral therapy with competitive efficacy to currently-approved injected and infused anti-C5 therapies, such as eculizumab and ravulizumab.
Oral C5 Inhibitor We are developing an oral C5 inhibitor that could be the first targeted oral therapy with competitive efficacy to currently-approved injected and infused anti-C5 therapies, such as eculizumab and ravulizumab. A drug with this profile could enable patients to switch from infused therapy and address their disease earlier in the treatment paradigm.

… 112 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

127 edited+37 added−18 removed284 unchanged
Biggest changeSecurities litigation, and any other type of litigation, brought against us could result in substantial costs 54 Table of Contents and divert our management’s attention from other business concerns, which could seriously harm our business and adversely affect our results of operations. We have identified a material weakness in our internal control over financial reporting.
Biggest changeSecurities litigation, and any other type of litigation, brought against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business and adversely affect our results of operations. 55 Table of Contents If we fail to maintain effective internal control over financial reporting, we may not be able to produce accurate and timely financial statements, which may adversely affect investor confidence in us and our financial reporting, adversely affect our business and operating results and may negatively impact the trading price of our common stock.
Furthermore, we have exposure to many different industries, financing partners and counterparties, including commercial banks, investment banks and partners (which include investors, licensing partners, distribution partners, and others), which may be unstable or may become unstable in the current economic and political environment, including as a result of the impacts of inflation, increased interest rates, disruption or instability in the banking industry, a potential U.S.
Furthermore, we have exposure to many different industries, financing partners and counterparties, including commercial banks, investment banks and partners (which include investors, licensing partners, distribution partners, and others), which may be unstable or may become unstable in the current economic and political environment, including as a result of the impacts of inflation, increased interest rates, disruption or instability in the banking industry, potential U.S.
The process of establishing and implementing collaborative relationships is difficult, time-consuming and involves significant uncertainty, including: • we or our partners may seek to renegotiate or terminate our relationships due to unsatisfactory commercial, regulatory or clinical results, including post-approval clinical commitments, a change in business strategy, a change of control or other reasons; • our contracts for collaborative arrangements may expire; • the possibility that expiration or termination of collaborative relationships, such as those with certain of our distribution partners, may trigger repurchase obligations of the Company for unsold product held by our partners; • our partners may choose to pursue alternative technologies, including those of our competitors; 34 Table of Contents • we have had in the past, and in the future may have, disputes with a partner that could lead to litigation or arbitration, which could result in substantial costs and divert the attention of our management; • we do not have day-to-day control over the activities of our partners and have limited control over their decisions; • our ability to generate future event payments and royalties from our partners depends upon their abilities to establish the safety and efficacy of our product candidates, obtain regulatory approvals and achieve market acceptance of products developed from our product candidates; • we or our partners may fail to properly initiate, maintain or defend our intellectual property rights, where applicable, or a party may utilize our proprietary information in such a way as to invite litigation that could jeopardize or potentially invalidate our proprietary information or expose us to potential liability; • we or our partners may not devote sufficient capital or resources toward our products and product candidates; and • we or our partners may not comply with applicable government regulatory requirements.
The process of establishing and implementing collaborative relationships is difficult, time-consuming and involves significant uncertainty, including: • we or our partners may seek to renegotiate or terminate our relationships due to unsatisfactory commercial, regulatory or clinical results, including post-approval clinical commitments, a change in business strategy, a change of control or other reasons; 34 Table of Contents • our contracts for collaborative arrangements may expire; • the possibility that expiration or termination of collaborative relationships, such as those with certain of our distribution partners, may trigger repurchase obligations of the Company for unsold product held by our partners; • our partners may choose to pursue alternative technologies, including those of our competitors; • we have had in the past, and in the future may have, disputes with a partner that could lead to litigation or arbitration, which could result in substantial costs and divert the attention of our management; • we do not have day-to-day control over the activities of our partners and have limited control over their decisions; • our ability to generate future event payments and royalties from our partners depends upon their abilities to establish the safety and efficacy of our product candidates, obtain regulatory approvals and achieve market acceptance of products developed from our product candidates; • we or our partners may fail to properly initiate, maintain or defend our intellectual property rights, where applicable, or a party may utilize our proprietary information in such a way as to invite litigation that could jeopardize or potentially invalidate our proprietary information or expose us to potential liability; • we or our partners may not devote sufficient capital or resources toward our products and product candidates; and • we or our partners may not comply with applicable government regulatory requirements.
Our ability to receive revenue from products we or our partners commercialize is subject to several risks, including: • we or our partners may fail to complete clinical trials successfully, or satisfy post-marketing commitments, sufficient to obtain and maintain regulatory agency marketing approval; • many competitors are more experienced and have significantly more resources, and their products could reach the market faster, be more cost effective or have a better efficacy or tolerability profile than our products and product candidates; • we may fail to employ a comprehensive and effective intellectual property strategy, which could result in decreased commercial value of our Company, our products and product candidates, or royalties associated with such products (e.g., the loss of the peramivir patent in Korea, which may result in a reduced royalty from Green Cross); • we may fail to employ a comprehensive and effective regulatory strategy, which could result in a delay or failure in commercialization of our products; • our and our partners’ ability to successfully commercialize our products is affected by the competitive landscape, which cannot be fully known at this time; • revenue from product sales depends on our ability to obtain and maintain favorable pricing; • reimbursement is constantly changing, which could greatly affect usage of our products; • future revenue from product sales will depend on our ability to successfully complete clinical studies, obtain regulatory approvals, and manufacture, market, distribute and commercialize our approved drugs; and 35 Table of Contents • the impact of public health emergencies or the outbreak of disease, such as the COVID-19 pandemic, on us or our partners.
Our ability to receive revenue from products we or our partners commercialize is subject to several risks, including: • we or our partners may fail to complete clinical trials successfully, or satisfy post-marketing commitments, sufficient to obtain and maintain regulatory agency marketing approval; • many competitors are more experienced and have significantly more resources, and their products could reach the market faster, be more cost effective or have a better efficacy or tolerability profile than our products and product candidates; • we may fail to employ a comprehensive and effective intellectual property strategy, which could result in decreased commercial value of our Company, our products and product candidates, or royalties associated with such products (e.g., the loss of the peramivir patent in Korea, which may result in a reduced royalty from Green Cross); • we may fail to employ a comprehensive and effective regulatory strategy, which could result in a delay or failure in commercialization of our products; 35 Table of Contents • our and our partners’ ability to successfully commercialize our products is affected by the competitive landscape, which cannot be fully known at this time; • revenue from product sales depends on our ability to obtain and maintain favorable pricing; • reimbursement is constantly changing, which could greatly affect usage of our products; • future revenue from product sales will depend on our ability to successfully complete clinical studies, obtain regulatory approvals, and manufacture, market, distribute and commercialize our approved drugs; and • the impact of public health emergencies or the outbreak of disease, such as the COVID-19 pandemic, on us or our partners.
Similar responsibilities would apply upon regulatory approval of any of our other product candidates currently under development. In addition, we are subject to the federal physician sunshine act and certain similar physician payment and drug pricing transparency legislation in various states.
Similar responsibilities would apply upon regulatory approval of any of our other product candidates currently under development. In addition, we are subject to the federal Physician Payment Sunshine Act and certain similar physician payment and drug pricing transparency legislation in various states.
Regulatory approval of a product may be subject to limitations on the indicated uses for which the product may be marketed or to the other restrictive conditions of approval that limit our ability to promote, sell or distribute a product.
Regulatory approval of a product may be subject to limitations on the indicated uses for which the product may be marketed or to other restrictive conditions of approval that limit our ability to promote, sell or distribute a product.
The development of protein therapeutics may create additional risks and challenges, including, among others: • patent protection for protein therapeutics may be narrower in scope than for our small-molecule medicines, and our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our protein therapeutic candidates or prevent others from designing around our claims; • formulation issues with our protein therapeutic candidates may require redevelopment of the formulation, which may be time-consuming or unsuccessful; • the patent applications that we own or in-license may fail to result in issued patents with claims that cover our protein therapeutic candidates in the United States or in other countries; • our competitors may be able to more easily develop and seek patent protection on similar protein therapeutic candidates; and • orally-administered drugs are often less expensive and present a reduced treatment burden as compared to protein therapeutics and therefore would have competitive advantages if they were developed and shown to be safe and effective for the indication that our protein therapeutics product candidates are targeting.
The development of protein therapeutics may create additional risks and challenges, including, among others: • patent protection for protein therapeutics may be narrower in scope than for our small-molecule medicines, and our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our protein therapeutic candidates or prevent others from designing around our claims; • formulation issues with our protein therapeutic candidates may require redevelopment of the formulation, which may be time-consuming or unsuccessful; • the patent applications that we own or in-license may fail to result in issued patents with claims that cover our protein therapeutic candidates in the United States or in other countries; • our competitors may be able to more easily develop and seek patent protection on similar protein therapeutic candidates; and • orally-administered drugs are often less expensive and present a reduced treatment burden as compared to protein therapeutics and therefore would have competitive advantages if they were developed and shown to be safe and effective for the indication that our protein therapeutic product candidates are targeting.
In March 2011, JPR Royalty Sub LLC, our wholly-owned subsidiary (“Royalty Sub”), issued $30.0 million in aggregate principal amount of PhaRMA Senior Secured 14% Notes due on December 1, 2020 (the “PhaRMA Notes”).
In March 2011, JPR Royalty Sub LLC, our wholly-owned subsidiary (“Royalty Sub”), issued $30.0 million in aggregate principal amount of PhaRMA Senior Secured 14.0% Notes due on December 1, 2020 (the “PhaRMA Notes”).
The global impact of a health epidemic or pandemic such as COVID-19 could also materially affect global economies and financial markets, which could reduce our ability to access the equity or debt capital markets or obtain other sources of capital if needed, which could negatively affect our liquidity.
The global impact of a health epidemic or pandemic, such as the COVID-19 pandemic, could also materially affect global economies and financial markets, which could reduce our ability to access the equity or debt capital markets or obtain other sources of capital if needed, which could negatively affect our liquidity.
Our business, operations, clinical development or commercialization plans and timelines, and access to capital could be adversely affected by unpredictable and unstable market and economic conditions, including as a result of inflation, increased interest rates, disruption or instability in the banking industry, foreign exchange rate fluctuations, a potential U.S.
Our business, operations, clinical development or commercialization plans and timelines, and access to capital could be adversely affected by unpredictable and unstable market and economic conditions, including as a result of inflation, increased interest rates, disruption or instability in the banking industry, foreign exchange rate fluctuations, potential U.S.
In addition, commercialization of our products is subject to further risks and may be negatively impacted by a number of factors, including, but not limited to, the following: • our products may not prove to be adequately safe and effective for market approval in markets other than the markets in which they are currently approved; • necessary funding for post-marketing commitments and further development of our products may not be available timely, at all, or in sufficient amounts; • advances in competing products could substantially replace potential demand for our products; • government and third-party payors may not provide sufficient coverage or reimbursement, which would negatively impact the demand for our products; 37 Table of Contents • we may not be able to supply commercial material to our partners and our partners may not be able to maintain or establish sufficient and acceptable commercial manufacturing, either directly or through third-party manufacturers; • the commercial demand and acceptance for our products by healthcare providers and by patients may not be sufficient to result in substantial product revenues to us or to our partners and may result in little to no revenue, milestone payments, or royalties to us; • effectiveness of marketing and commercialization efforts for our products by us or our partners; • market satisfaction with existing alternative therapies; • perceived efficacy relative to other available therapies; • disease prevalence; • cost of treatment; • our pricing and reimbursement strategy may not be effective; • new legislative or regulatory proposals may influence our pricing and reimbursement strategy, which could impact product revenues; • pricing and availability of imports or alternative products; • marketing and sales activities of competitors; • shifts in the medical community to new treatment paradigms or standards of care; and • relative convenience and ease of administration.
In addition, commercialization of our products is subject to further risks and may be negatively impacted by a number of factors, including, but not limited to, the following: • our products may not prove to be adequately safe and effective for market approval in markets other than the markets in which they are currently approved; • necessary funding for post-marketing commitments and further development of our products may not be available timely, at all, or in sufficient amounts; • advances in competing products could substantially replace potential demand for our products; • government and third-party payors may not provide sufficient coverage or reimbursement, which would negatively impact the demand for our products; • we may not be able to supply commercial material to our partners and our partners may not be able to maintain or establish sufficient and acceptable commercial manufacturing, either directly or through third-party manufacturers; • the commercial demand for and acceptance of our products by healthcare providers and by patients may not be sufficient to result in substantial product revenues to us or to our partners and may result in little to no revenue, milestone payments, or royalties to us; • effectiveness of marketing and commercialization efforts for our products by us or our partners; • market satisfaction with existing alternative therapies; • perceived efficacy relative to other available therapies; • disease prevalence; • cost of treatment; • our pricing and reimbursement strategy may not be effective; • new legislative or regulatory proposals may influence our pricing and reimbursement strategy, which could impact product revenues; • pricing and availability of imports or alternative products; • marketing and sales activities of competitors; • shifts in the medical community to new treatment paradigms or standards of care; and • relative convenience and ease of administration.
Because we focus on developing drugs as treatments for rare diseases, we may seek orphan drug, breakthrough therapy or fast track designations for our product candidates in the United States or the equivalent designations elsewhere in the world. Often, regulatory authorities have broad discretion in determining whether or not to grant such designations.
Because we focus primarily on developing drugs as treatments for rare diseases, we may seek orphan drug, breakthrough therapy or fast track designations for our product candidates in the United States or the equivalent designations elsewhere in the world. Often, regulatory authorities have broad discretion in determining whether or not to grant such designations.
The effect of the IRA on our business and the healthcare industry in general is not yet known. The IRA or other government efforts to reduce the price of prescription drugs or to limit the amount that governments pay for healthcare products and services could result in additional pricing pressure and have a significant impact on our business.
The full effect of the IRA on our business and the healthcare industry in general is not yet known. The IRA or other government efforts to reduce the price of prescription drugs or to limit the amount that governments pay for healthcare products and services could result in additional pricing pressure and have a significant impact on our business.
The use of AI-based software may lead to the inadvertent release of confidential or proprietary information, which may adversely impact our ability to realize the benefit of our intellectual property, cause us to incur liabilities as the result of any breaches of confidentiality or impact our ability to comply with data security and privacy laws.
Moreover, the use of AI-based software may lead to the inadvertent release of confidential or proprietary information, which may adversely impact our ability to realize the benefit of our intellectual property, cause us to incur liabilities as the result of any breaches of confidentiality or impact our ability to comply with data security and privacy laws.
Such delays could adversely impact our ability to meet our desired clinical development and any commercialization timelines. In addition, our clinical trials were affected by the COVID-19 pandemic and we may experience similar delays or interruptions due to COVID-19 or other health epidemics or pandemics in the future, which could adversely impact our clinical trial operations.
Such delays could adversely impact our ability to meet our desired clinical development and any commercialization timelines. In addition, our clinical trials were affected by the COVID-19 pandemic, and we may experience similar delays or interruptions due to health epidemics or pandemics in the future, which could adversely impact our clinical trial operations.
Our ability to complete the clinical development process successfully is dependent upon many factors, including, but not limited to: • our or our partners’ ability to secure suitable clinical sites and investigators and to enroll and maintain an adequate number of patients on a timely basis or at all; • patients that enroll in a clinical trial may not comply with the clinical trial protocols or maintain contact with investigators to provide complete data during and after treatment; • our product candidates may not prove to be either safe or effective for our targeted indications, or at all, or may produce unfavorable or inconclusive results; • we or our partners may decide, or be required by regulatory authorities, to pause enrollment in, suspend, or terminate clinical research for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the product candidate, noncompliance with regulatory requirements or their standards of conduct, or findings of undesirable effects caused by a chemically or mechanistically similar product or product candidate; • regulatory authorities may disagree with our or our partners’ clinical trial protocols or our or their interpretation of data from preclinical studies and clinical trials; • clinical protocols or study procedures may not be adequately designed or followed by the investigators; • formulation improvements may not work as expected, which could negatively impact commercial demand for our product candidates; • regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we or our partners enter into agreements for clinical and commercial supplies; • the supply or quantity of raw materials or manufactured product candidates or other materials necessary to conduct development activities may be insufficient, inadequate, or unavailable at an acceptable cost, and we or our partners may experience interruptions in supply; • our or our partners’ development plans may be delayed or changed as a result of changes in development strategy, the impact of new or different regulations, requirements, and guidelines, or other unexpected events or conditions; • the cost of preclinical studies and clinical trials may be greater than we anticipate; • we or our third-party contractors, including those manufacturing our product candidates or components or ingredients thereof, or conducting clinical trials or laboratory testing on our or our partners’ behalf, may fail to comply with regulatory requirements and industry standards or meet contractual obligations in a timely manner or at all; and • the impact of any global health pandemic, such as COVID-19, on one or more of the foregoing factors.
Our ability to complete the clinical development process successfully is dependent upon many factors, including, but not limited to: • our or our partners’ ability to secure suitable clinical sites and investigators and to enroll and maintain an adequate number of patients on a timely basis or at all; • patients that enroll in a clinical trial may not comply with the clinical trial protocols or maintain contact with investigators to provide complete data during and after treatment; • our product candidates may not prove to be either safe or effective for our targeted indications, or at all, or may produce unfavorable or inconclusive results; • we or our partners may decide, or be required by regulatory authorities, to pause enrollment in, suspend, or terminate clinical research for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the product candidate, noncompliance with regulatory requirements or their standards of conduct or evolving guidance, or findings of undesirable effects caused by a chemically or mechanistically similar product or product candidate; • regulatory authorities may disagree with our or our partners’ clinical trial protocols or our or their interpretation of data from preclinical studies and clinical trials; • clinical protocols or study procedures may not be adequately designed or followed by the investigators; • formulation improvements may not work as expected, which could negatively impact commercial demand for our product candidates; • regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we or our partners enter into agreements for clinical and commercial supplies; • the supply or quantity of raw materials or manufactured product candidates or other materials necessary to conduct development activities may be insufficient, inadequate, or unavailable at an acceptable cost, and we or our partners may experience interruptions in supply; • our or our partners’ development plans may be delayed or changed as a result of changes in development strategy, the impact of new or different regulations, requirements, and guidelines, or other unexpected events or conditions; • the cost of preclinical studies and clinical trials may be greater than we anticipate; • we or our third-party contractors, including those manufacturing our product candidates or components or ingredients thereof, or conducting clinical trials or laboratory testing on our or our partners’ behalf, may fail 30 Table of Contents to comply with regulatory requirements and industry standards or meet contractual obligations in a timely manner or at all; and • the impact of any global health pandemic, such as COVID-19, on one or more of the foregoing factors.
We cannot guarantee that any preclinical studies and clinical trials will be conducted as planned or completed on schedule, if at all, or that the results of such trials will be sufficient to support regulatory approval for our product candidates.
We also cannot guarantee that any preclinical studies and clinical trials will be conducted as planned or completed on schedule, if at all, or that the results of such trials will be sufficient to support regulatory approval for our product candidates.
Our expectations as to when we may achieve profitability may change based upon our ability to execute our commercialization goals and operational initiatives and whether or not the assumptions underlying our projected revenues and expenses are correct.
Our expectations as to when we may achieve sustained profitability may change based upon our ability to execute our commercialization goals and operational initiatives and whether or not the assumptions underlying our projected revenues and expenses are correct.
We focus on rare diseases, which may create additional risks and challenges, including that the target patient populations of our products and product candidates may be small.
We focus primarily on rare diseases, which may create additional risks and challenges, including that the target patient populations of our products and product candidates may be small.
The following factors, in addition to other risk factors described in this section, may have, and in some cases have had, a significant impact on the market price of our common stock: • announcements of technological innovations or new products by us or our competitors; • developments or disputes concerning patents or proprietary rights; • additional dilution through sales of our common stock or other derivative securities; • status of new or existing licensing or collaborative agreements and government contracts; • announcements relating to the status of our programs; • us or our partners achieving or failing to achieve development milestones; • publicity regarding actual or potential medical results relating to products under development by us or our competitors; • publicity regarding certain public health concerns for which we are or may be developing treatments; • regulatory developments in both the United States and foreign countries; • public concern as to the safety of pharmaceutical products; • actual or anticipated fluctuations in our operating results; • changes in financial estimates or recommendations by securities analysts and the comparison of such estimates to our actual results; • changes in our public guidance; • changes in the structure of healthcare payment systems, including developments in price control legislation; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments or other monetization transactions; • additions or departures of key personnel or members of our Board of Directors; • purchases or sales of substantial amounts of our stock by existing stockholders, including officers or directors; • economic and other external factors or other disasters or crises; and • period-to-period fluctuations in our financial results.
The following factors, in addition to other risk factors described in this section, may have, and in some cases have had, a significant impact on the market price of our common stock: • announcements of technological innovations or new products by us or our competitors; • developments or disputes concerning patents or proprietary rights; • additional dilution through sales of our common stock or other derivative securities; • status of new or existing licensing or collaborative agreements and government contracts; • announcements relating to the status of our programs; • us or our partners achieving or failing to achieve development milestones; • publicity regarding actual or potential medical results relating to products under development by us or our competitors; • publicity regarding certain public health concerns for which we are or may be developing treatments; • regulatory developments in both the United States and foreign countries; • public concern as to the safety of pharmaceutical products; • actual or anticipated fluctuations in our operating results; • changes in financial estimates or recommendations by securities analysts and the comparison of such estimates to our actual results; • online automated financial platforms’ treatment or classification of our financial information; • changes in our public guidance; • changes in the structure of healthcare payment systems, including developments in price control legislation; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments or other monetization transactions; • additions or departures of key personnel or members of our Board of Directors; • purchases or sales of substantial amounts of our stock by existing stockholders, including officers or directors; • economic and other external factors or other disasters or crises; and • period-to-period fluctuations in our financial results.
If our commercial distribution partners are not able to satisfy our requirements within the expected timeframe, or are unable to provide us with accurate or timely information and data, including with respect to inventories and sales, serious adverse events, and/or product complaints, our business, including our commercialization efforts for and sales of ORLADEYO, may be at risk.
If our commercial distribution partners are not able to satisfy our requirements within the expected timeframe, or are unable to provide us with accurate or timely information and data, including with respect to inventory and sales, serious adverse events, and/or product complaints, our business, including our commercialization efforts for and sales of ORLADEYO, may be at risk.
Recently, there have been reports of disruptions in billing and data systems in healthcare (e.g., the cybersecurity incident affecting Change Healthcare). Such cybersecurity events which materially disrupt the healthcare system upon which our business relies could adversely affect our business if such disruption is widespread and continues for an extended period of time.
Recently, there have been reports of disruptions in billing and data systems in healthcare (e.g., the cybersecurity incident affecting Change Healthcare in February 2024). Such cybersecurity events which materially disrupt the healthcare system upon which our business relies could adversely affect our business if such disruption is widespread and continues for an extended period of time.
Even if we are able to successfully commercialize our existing products, or to develop new commercially viable products, certain obligations we have to third parties, including, without limitation, our obligations to pay royalties on certain revenues from ORLADEYO and BCX10013 under the Royalty Purchase Agreements, may reduce the profitability of such products.
Even if we are able to successfully commercialize our existing products, or to develop new commercially viable products, certain obligations we have to third parties, including, without limitation, our obligations to pay royalties on certain revenues from ORLADEYO under the Royalty Purchase Agreements, may reduce the profitability of such products.
The IRA includes several provisions that will impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries to $2,000 starting in 2025; impose new manufacturer financial liability on all drugs in Medicare Part D; allow the U.S.
The IRA includes several provisions that will impact our business to varying degrees, including provisions that reduced the out-of-pocket spending cap for Medicare Part D beneficiaries to $2,000 starting in 2025; impose new manufacturer financial liability on all drugs in Medicare Part D; allow the U.S.
Once an NDA is approved, the drug covered thereby becomes a “reference-listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations.” Manufacturers may seek marketing approval of generic versions of reference-listed drugs through submission of abbreviated new drug applications, or ANDAs, in the United States, as described in “Business—Government Regulation—FDA Regulation—Abbreviated New Drug Applications for Generic Drugs” in Part I, Item 1 of this report.
Once an NDA is approved, the drug covered thereby becomes a “reference-listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations.” Manufacturers may seek marketing approval of generic versions of reference-listed drugs through submission of abbreviated new drug applications, or ANDAs, in the United States, as described in “ Business—Government Regulation—FDA Regulation—Abbreviated New Drug Applications for Generic Drugs ” in Part I, Item 1 of this report.
The PhaRMA Notes are secured principally by (i) certain royalty and milestone payments under our agreement with Shionogi (the “Shionogi Agreement”), pursuant to which Shionogi licensed from us the rights to market peramivir in Japan and Taiwan and (ii) the pledge by us of our equity interest in Royalty Sub.
The PhaRMA Notes are secured principally by (i) certain royalty and milestone payments under our agreement with Shionogi, pursuant to which Shionogi licensed from us the rights to market peramivir in Japan and Taiwan and (ii) the pledge by us of our equity interest in Royalty Sub.
These agreements may not provide adequate protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information, and if any of our proprietary information is disclosed, our business will suffer because our revenues depend upon our ability to license or commercialize our products and product candidates and any such events would significantly impair the value of such products and product candidates.
These 44 Table of Contents agreements may not provide adequate protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information, and if any of our proprietary information is disclosed, our business will suffer because our revenues depend upon our ability to license or commercialize our products and product candidates and any such events would significantly impair the value of such products and product candidates.
Adequate coverage and reimbursement in the United States and other markets is critical to the commercial success of our approved products. Recently in the United States, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products.
Adequate coverage and reimbursement in the United States and other markets is essential to the commercial success of our approved products. Recently in the United States, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products.
We cannot be sure whether additional legislation or rulemaking related to the IRA will be issued or enacted, how insurance pharmacy benefit managers and other insurance providers that manage benefits for Medicare recipients will react to the IRA, or what impact, if any, such changes will have on the insurance coverage and profitability of our products or any of our product candidates, if approved for commercial use, in the future.
We cannot be sure whether additional legislation or rule-making related to the IRA will be issued or enacted, how insurance pharmacy benefit managers and other insurance providers that manage benefits for Medicare recipients will react to the IRA, or what impact, if any, such changes will have on the insurance coverage and profitability of our products or any of our product candidates, if approved for commercial use, in the future.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could 42 Table of Contents face significant consequences, including, but not limited to, regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
Such divestitures or licenses may also divert management’s attention from our core businesses and lead to potential issues with employees, customers or suppliers. 53 Table of Contents Our business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price.
Such divestitures or licenses may also divert management’s attention from our core businesses and lead to potential issues with employees, customers or suppliers. Our business and operations could be negatively affected if we become subject to stockholder activism or hostile bids, which could cause us to incur significant expense, hinder execution of our business strategy and impact our stock price.
Even upon any approval to market our potential products, whether in the United States or internationally, we will continue to be subject to extensive regulatory requirements, as discussed under “Risk Factors—Risks Relating to Our Business—Legal and Regulatory Risks—We are 32 Table of Contents subject to various laws and regulations related to our products and product candidates, and if we or our partners do not comply with these laws and regulations, we could face substantial penalties.” Our failure to comply with existing or future regulatory requirements for regulatory approval, or our loss of, or changes to, previously obtained approvals, could impair our ability to generate any revenues from product sales or licensing arrangements, which could have a material adverse effect on our business, financial condition, and results of operations.
Even upon any approval to market our potential products, whether in the United States or internationally, we will continue to be subject to extensive regulatory requirements, as discussed under “ Risk Factors—Risks Relating to Our Business—Legal and Regulatory Risks—We are subject to various laws and regulations related to our products and product candidates, and if we or our partners do not comply with these laws and regulations, we could face substantial penalties .” Our failure to comply with existing or future regulatory requirements for regulatory approval, or our loss of, or changes to, previously obtained approvals, could impair our ability to generate any revenues from product sales or licensing arrangements, which could have a material adverse effect on our business, financial condition, and results of operations.
Violations of the physician sunshine act and similar legislation or the fraud and abuse laws may be punishable by civil or criminal sanctions, including fines and civil monetary penalties, and future exclusion from participation in government healthcare programs.
Violations of the federal Physician Payment Sunshine Act and similar legislation or the fraud and abuse laws may be punishable by civil or criminal sanctions, including fines and civil monetary penalties, and future exclusion from participation in government healthcare programs.
Our and our partners’ activities related to approved products or, following their regulatory approval (if applicable), any of our product candidates under development, such as BCX10013, are subject to regulatory and law enforcement authorities in the United States (including the FDA, the Federal Trade Commission, the Department of Justice (“DOJ”), and state and local governments) and their foreign equivalents (including the EMA, MHLW, MHRA, and others).
Our and our partners’ activities related to approved products or, following their regulatory approval (if applicable), any of our product candidates under development, are subject to regulatory and law enforcement authorities in the United States (including the FDA, the Federal Trade Commission, the Department of Justice (“DOJ”), and state and local governments) and their foreign equivalents (including the EMA, MHLW, MHRA, and others).
If any of our product candidates is associated with adverse events or undesirable side effects or has properties that are unexpected, we may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a benefit-risk perspective.
If any of our product candidates is associated with adverse events or undesirable side effects or has properties that are unexpected, we 29 Table of Contents may need to abandon development or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a benefit-risk perspective.
If our operations or those of third parties with whom we conduct business, such as development partners, manufacturers, CROs and others, are impaired or curtailed as a result of such events, the development and commercialization of our products and product candidates could be stopped or delayed, or the costs of such development and commercialization activities could increase, any of which could have a material adverse impact on our business.
If our operations or those of third parties with whom we conduct business, such as development partners, manufacturers, CROs and others, are impaired or curtailed as a result of such events, the development and commercialization of our products and product candidates could be stopped or delayed, or the costs of such development 52 Table of Contents and commercialization activities could increase, any of which could have a material adverse impact on our business.
Given the small number of patients who have the diseases that we are targeting, it is critical to our ability to grow and become profitable that we continue to successfully identify patients with these rare diseases.
Given the small number of patients who have the diseases that we are targeting, it is important to our ability to grow and become profitable that we continue to successfully identify patients with these rare diseases.
A wide variety of events beyond our control, such as natural disasters (including as a result of climate change), epidemic or pandemic disease outbreaks (such as the COVID-19 pandemic), trade wars, armed conflict, political unrest, government shutdowns, instability in connection with the upcoming presidential election in the United States, or other events could disrupt our business or operations or those of our development partners, manufacturers, regulatory authorities, or other third parties with whom we conduct business.
A wide variety of events beyond our control, such as natural disasters (including as a result of climate change), epidemic or pandemic disease outbreaks (such as the COVID-19 pandemic), trade wars, armed conflict, political unrest, government shutdowns, instability in connection with changes in presidential administration in the United States, or other events could disrupt our business or operations or those of our development partners, manufacturers, regulatory authorities, or other third parties with whom we conduct business.
Our efforts to vet our employees, consultants, and independent contractors and prevent their use of the proprietary information or know-how of others in 44 Table of Contents their work for us may not be successful, and we may in the future be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.
Our efforts to vet our employees, consultants, and independent contractors and prevent their use of the proprietary information or know-how of others in their work for us may not be successful, and we may in the future be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties.
Progression of our product candidates through the clinical development process is dependent upon our trials indicating that our product candidates have adequate safety and efficacy in the patients being treated by achieving pre-determined safety and efficacy endpoints according to the clinical trial protocols, as well as an adequate benefit-risk profile.
Progression of our product candidates through the clinical development process is dependent upon our trials indicating that our product candidates have adequate safety and efficacy in the patients being treated by achieving predetermined safety and efficacy endpoints according to the clinical trial protocols, as well as an adequate benefit-risk profile.
Competition may also arise from, among other things: • other drug development technologies; • methods of preventing or reducing the incidence of disease, including vaccines; and • new small molecule or other classes of therapeutic agents. Developments by others may render our products, product candidates, or technologies obsolete or noncompetitive.
Competition may also arise from, among other things: • other drug development technologies; • methods of preventing or reducing the incidence of disease, including vaccines; and • new small molecule or other classes of therapeutic agents. 38 Table of Contents Developments by others may render our products, product candidates, or technologies obsolete or noncompetitive.
Supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
Supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been or will not be compromised.
Neither the United States Patent and Trademark Office (“USPTO”), the Patent Cooperation Treaty offices, nor the courts of the United States and other jurisdictions have consistent policies nor predictable rulings regarding the breadth of claims allowed or the degree of protection afforded under many 42 Table of Contents biotechnology and pharmaceutical patents.
Neither the United States Patent and Trademark Office (“USPTO”), the Patent Cooperation Treaty offices, nor the courts of the United States and other jurisdictions have consistent policies nor predictable rulings regarding the breadth of claims allowed or the degree of protection afforded under many biotechnology and pharmaceutical patents.
Any of these factors could significantly harm our international expansion of operations and adversely affect our business and results of operations. 48 Table of Contents Additionally, in some countries, such as Japan and the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control and access.
Any of these factors could significantly harm our international expansion of operations and adversely affect our business and results of operations. Additionally, in some countries, such as Japan and the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control and access.
For example, the IRA implements a number of drug pricing measures intended to lower the cost of prescription drugs and related healthcare reforms, including limits on price increases and subjecting an escalating number of drugs to annual price negotiations with CMS.
For example, the IRA implements a number of drug pricing 41 Table of Contents measures intended to lower the cost of prescription drugs and related healthcare reforms, including limits on price increases and subjecting an escalating number of drugs to annual price negotiations with CMS.
Our third-party vendors, particularly our third-party manufacturers and distributors, each of which may be the only vendor we have engaged for a particular product, product candidate, or service or in a particular region, may encounter difficulties with meeting our requirements, including, but not limited to, problems involving, as applicable: • insufficient resources being devoted in the manner necessary to satisfy our requirements within expected timeframes; • inconsistent production yields; • product liability claims or recalls of commercial product; • difficulties in scaling production to commercial and validation sizes; • interruption of the delivery of materials required for the manufacturing process; • failure to distribute commercial supplies of our products to commercial vendors or end users in a timely manner; • scheduling of plant time with other vendors or unexpected equipment failure; • potential catastrophes that could strike their facilities or have an effect on infrastructure; • potential impurities in our drug substance or products that could affect availability of product for our clinical trials or future commercialization; 36 Table of Contents • poor quality control and assurance or inadequate process controls; • failure to provide us with accurate or timely information regarding inventories, the number of patients who are using our products, or serious adverse events and/or product complaints regarding our products; • inability of third parties to satisfy their financial obligations to us or to others; • potential breach of the manufacturing or distribution agreement by the third party; • possible termination or nonrenewal of a critical agreement by the third party at a time that is costly or inconvenient to us; and • lack of compliance or cooperation with regulations and specifications or requests set forth by the FDA or other foreign regulatory agencies or local customs, particularly associated with ORLADEYO, BCX10013, peramivir and our early-stage compounds.
Our third-party vendors, particularly our third-party manufacturers and distributors, each of which may be the only vendor we have engaged for a particular product, product candidate, or service or in a particular region, may encounter difficulties with meeting our requirements, including, but not limited to, problems involving, as applicable: • insufficient resources being devoted in the manner necessary to satisfy our requirements within expected timeframes; • inconsistent production yields; • product liability claims or recalls of commercial product; • difficulties in scaling production to commercial and validation sizes; • interruption of the delivery of materials required for the manufacturing process; 36 Table of Contents • failure to distribute commercial supplies of our products to commercial vendors or end users in a timely manner; • scheduling of plant time with other vendors or unexpected equipment failure; • potential catastrophes that could strike their facilities or have an effect on infrastructure; • potential impurities in our drug substance or products that could affect availability of product for our clinical trials or future commercialization; • poor quality control and assurance or inadequate process controls; • failure to provide us with accurate or timely information regarding inventory, the number of patients who are using our products, or serious adverse events and/or product complaints regarding our products; • inability of third parties to satisfy their financial obligations to us or to others; • potential breach of the manufacturing or distribution agreement by the third party; • possible termination or non-renewal of a material agreement by the third party at a time that is costly or inconvenient to us; and • lack of compliance or cooperation with regulations and specifications or requests set forth by the FDA or other foreign regulatory agencies or local customs.
Even if we or our partners successfully complete clinical trials for our product candidates, we or our partners might not file the required regulatory submissions in a timely manner or may not 30 Table of Contents receive regulatory approval for the product candidates, which in either case would adversely impact or preclude our ability to generate any revenues from product sales or licensing arrangements.
Even if we or our partners successfully complete clinical trials for our product candidates, we or our partners might not file the required regulatory submissions in a timely manner or may not receive regulatory approval for the product candidates, which in either case would adversely impact or preclude our ability to generate any revenues from product sales or licensing arrangements.
Such stockholder activism could give rise to perceived uncertainties as to our future strategy, adversely affect our relationships with business partners and make it more difficult to attract and retain qualified personnel. Also, we may incur substantial costs, including significant legal fees and other expenses, related to activist stockholder matters.
Such stockholder activism could give rise to perceived uncertainties as to our future strategy, adversely affect our relationships with business partners and make it more difficult to attract and retain qualified personnel. Also, we may incur substantial costs, including significant legal fees and other 54 Table of Contents expenses, related to activist stockholder matters.
In such event, we may not realize the benefit of future royalty payments, if any, that might 46 Table of Contents otherwise accrue to us following repayment of the PhaRMA Notes, we may incur legal costs, and we might otherwise be adversely affected.
In such event, we may not realize the benefit of future royalty payments, if any, that might otherwise accrue to us following repayment of the PhaRMA Notes, we may incur legal costs, and we might otherwise be adversely affected.
Doing business internationally involves a number of risks, including, but not limited to: • multiple, conflicting, and changing laws and regulations such as privacy and data regulations, transparency regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses; • introduction of new health authority requirements and/or changes in health authority expectations; • failure by us or our partners to obtain and maintain regulatory approvals for the use of our products in various countries; • complexities and difficulties in obtaining and maintaining protection for, and enforcing, our intellectual property; • difficulties in staffing and managing foreign operations; • complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems; • limits on our ability to penetrate international markets; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations, which have been increasingly prevalent alongside a fluctuating U.S. dollar; • natural disasters and political and economic instability, including wars (e.g., the Ukraine-Russia and Israel-Hamas conflicts), terrorism, political unrest, results of certain elections and votes, actual or threatened public health emergencies and outbreak of disease (e.g., the COVID-19 pandemic), boycotts, adoption or expansion of government trade restrictions, and other business restrictions; • certain expenses including, among others, expenses for travel, translation, and insurance; • regulatory and compliance risks that relate to maintaining accurate information and control over commercial operations and activities that may fall within the purview of the FCPA, including its books and records provisions or anti-bribery provisions, or the U.K.
Doing business internationally involves a number of risks, including, but not limited to: • multiple, conflicting, and changing laws and regulations such as privacy and data regulations, transparency regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses; • introduction of new health authority requirements and/or changes in health authority expectations; • failure by us or our partners to obtain and maintain regulatory approvals for the use of our products in various countries; • complexities and difficulties in obtaining and maintaining protection for, and enforcing, our intellectual property; • difficulties in staffing and managing foreign operations; • complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems; • limits on our ability to penetrate international markets; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations, which have been increasingly prevalent alongside a fluctuating U.S. dollar; • natural disasters and political and economic instability, including wars, terrorism, political unrest, results of certain elections and votes, actual or threatened public health emergencies and outbreak of disease, epidemics or pandemics (e.g., the COVID-19 pandemic), boycotts, adoption or expansion of government trade restrictions, and other business restrictions; • certain expenses including, among others, expenses for travel, translation, and insurance; • regulatory and compliance risks that relate to maintaining accurate information and control over commercial operations and activities that may fall within the purview of the U.S.
The rights of the holders of any preferred stock that may be issued in the future may adversely affect the 55 Table of Contents rights of the holders of common stock. The issuance of preferred stock could make it more difficult for third parties to acquire a majority of our outstanding voting stock.
The rights of the holders of any preferred stock that may be issued in the future may adversely affect the rights of the holders of common stock. The issuance of preferred stock could make it more difficult for third parties to acquire a majority of our outstanding voting stock.
In addition, our Certificate of Incorporation provides for staggered terms for the members of the Board of Directors and supermajority approval of the removal of any member of the Board of Directors and prevents our stockholders from acting by written consent. Our Certificate of Incorporation also requires supermajority approval of any amendment of these provisions.
In addition, our Certificate of Incorporation provides for staggered terms for the members of the Board of Directors and supermajority approval of the removal of any member of the Board of Directors and prevents our stockholders from acting by written consent. Our Certificate of Incorporation also requires supermajority approval of any amendment of these 56 Table of Contents provisions.
These laws include the GDPR and similar national legislation within the EEA, the United Kingdom GDPR, Switzerland’s Federal Data Protection Act, the EU Clinical Trials Regulation, and the e-Privacy Directive (2002/58/EC), and are discussed in more detail in “Business—Government Regulation—Data Privacy and Security Laws” in Part I, Item 1 of this report.
These laws include the GDPR and similar national legislation within the EEA, the United Kingdom GDPR, Switzerland’s Federal Data Protection Act, the EU Clinical Trials Regulation, and the e-Privacy Directive (2002/58/EC), and are discussed in more detail in “ Business—Government Regulation—Data Privacy and Security Laws ” in Part I, Item 1 of this report.
We received FDA approval of ORLADEYO, an oral, once-daily therapy for the prevention of HAE attacks in adults and pediatric patients aged 12 years and older, in December 2020. We subsequently received regulatory approvals for ORLADEYO in multiple markets.
We received FDA approval of ORLADEYO, an oral, once-daily therapy for the prevention of HAE attacks in adults and pediatric patients aged 12 years and older, in December 2020, and subsequently received regulatory approvals for ORLADEYO in other global markets.
In addition to medical education efforts, we may offer patient support services to assist patients receiving treatment with our commercially approved products which have increasingly become the focus of government investigation.
In addition to medical education efforts, we may offer patient support services to assist patients receiving treatment with our commercially approved products, and these support services have increasingly become the focus of government investigation.
If our operations with respect to our products that are subject to healthcare laws and regulations are found to be in violation of any of the healthcare fraud and abuse laws described above or in “Business—Government Regulation” in Part I, Item 1 of this report or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, debarment or exclusion from participating in government-funded healthcare programs such as Medicare or Medicaid, and the curtailment or restructuring of our operations.
If our operations with respect to our products that are subject to healthcare laws and regulations are found to be in violation of any of the healthcare fraud and abuse laws described above or in “ Business—Government Regulation ” in Part I, Item 1 of this report or any other governmental regulations that apply to us, we may be subject to liability and penalties, including civil and criminal penalties, damages, fines, debarment or exclusion from participating in government-funded healthcare programs such as Medicare or Medicaid, and the curtailment or restructuring of our operations.
If the USPTO or other foreign patent office upholds patents issued to others or if the USPTO grants patent applications filed by others, we may have to: • obtain licenses or redesign our products or processes to avoid infringement; • stop using the subject matter claimed in those patents; or 43 Table of Contents • pay damages.
If the USPTO or other foreign patent office upholds patents issued to others or if the USPTO grants patent applications filed by others, we may have to: • obtain licenses or redesign our products or processes to avoid infringement; • stop using the subject matter claimed in those patents; or • pay damages.
This exclusive forum provision does not apply to establish the Delaware Court of Chancery as the forum for actions or proceedings brought to enforce a duty or liability created by the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
This exclusive forum provision does not apply to establish the Delaware Court of Chancery as the forum for actions or proceedings brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.
See “Risks Relating to Our Business—Financial and Liquidity Risks—We may need to raise additional capital in the future.
See “ Risks Relating to Our Business—Financial and Liquidity Risks—We may need to raise additional capital in the future.
See “Business—Government Regulation—Data Privacy and Security Laws” in Part I, Item 1 of this report and “Risks Relating to Our Business—Risks Relating to International Operations—Our actual or perceived failure to comply with European governmental laws and regulations and other legal obligations related to privacy, data protection and information security could harm our business” in this section for additional discussion of privacy laws and regulations.
See “ Business—Government Regulation—Data Privacy and Security Laws ” in Part I, Item 1 of this report and “ Risks Relating to Our Business—Risks Relating to International Operations—Our actual or perceived failure to comply with European governmental laws and regulations and other legal obligations related to privacy, data protection and information security could harm our business ” in this section for additional discussion of privacy laws and regulations.
The long-term effects of Brexit will depend in part on how the current and future trade agreements between the United Kingdom and the European Union take effect in practice.
The long-term effects of Brexit will depend in part on how the current and 50 Table of Contents future trade agreements between the United Kingdom and the European Union take effect in practice.
A material weakness, as defined in Rule 12b-2 under the Exchange Act, is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
A material weakness, as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
See, for example, “Risk Factors—Risks Relating to Our Business—Other Operational Risks—Our business, operations, clinical development or commercialization plans and timelines, and access to capital could be adversely affected by unpredictable and unstable market and economic conditions.” In addition, other events, such as the Ukraine-Russia and Israel-Hamas conflicts, or rising tensions between China and Taiwan, could adversely impact our business.
See, for example, “ Risk Factors—Risks Relating to Our Business—Other Operational Risks—Our business, operations, clinical development or commercialization plans and timelines, and access to capital could be adversely affected by unpredictable and unstable market and economic conditions .” In addition, other events, such as the Ukraine-Russia and Middle East conflicts, or rising tensions between China and Taiwan, could adversely impact our business.
The process for obtaining coverage can be lengthy and costly, and we expect that it could take several months before a particular payor 41 Table of Contents initially reviews a product and makes a decision with respect to coverage.
The process for obtaining coverage can be lengthy and costly, and we expect that it could take several months before a particular payor initially reviews a product and makes a decision with respect to coverage.
In addition, we currently conduct clinical studies and regulatory activities and have hired, and expect to continue hiring, employees outside of the United States.
In addition, we currently conduct clinical studies and regulatory activities and have hired, and expect to 48 Table of Contents continue hiring, employees outside of the United States.
Further, even if we obtain orphan drug exclusivity for an existing or future product candidate, that exclusivity may not effectively protect the product from competition. See “Business—Government Regulation—FDA Regulation—Orphan Drugs” in Part I, Item 1 of this report.
Further, even if we obtain orphan drug exclusivity for an existing or future product candidate, that exclusivity may not effectively protect the product from competition. See “ Business—Government Regulation—FDA Regulation—Orphan Drugs ” in Part I, Item 1 of this report.
Risks Relating to Our Business Financial and Liquidity Risks We have incurred losses since our inception and may never be profitable. Since our inception, we have not achieved sustained profitability.
Risks Relating to Our Business Financial and Liquidity Risks We have incurred losses since our inception and may never achieve sustained profitability. Since our inception, we have not achieved sustained profitability.
We are subject to new legislation, regulatory, and healthcare payor initiatives, including the PPACA, which made extensive changes to the delivery of healthcare in the United States, as discussed in “Business—Government Regulation” in Part I, Item 1 of this report.
We are subject to new legislation, regulatory, and healthcare payor initiatives, including the PPACA, which made extensive changes to the delivery of healthcare in the United States, as discussed in “ Business—Government Regulation ” in Part I, Item 1 of this report.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in Part II, Item 7 of this report for additional information about our liquidity needs, capital requirements, potential funding alternatives, and adequacy of available funds.
See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources ” in Part II, Item 7 of this report for additional information about our liquidity needs, capital requirements, potential funding alternatives, and adequacy of available funds.
We may be subject to legal obligations at the federal, state, and local level related to privacy and data protection, as described in “Business—Government Regulation—Data Privacy and Security Laws” in Part I, Item 1 of this report.
We may be subject to legal obligations at the federal, state, and local level related to privacy and data protection, as described in “ Business—Government Regulation—Data Privacy and Security Laws ” in Part I, Item 1 of this report.
If we are unable to raise capital if and when needed, we may need to adjust our operations” in this section and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in Part II, Item 7 of this report for additional information about our liquidity risks and capital requirements.
If we are unable to raise capital if and when needed, we may need to adjust our operations ” in this section and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources ” in Part II, Item 7 of this report for additional information about our liquidity risks and capital requirements.
The FDA may not approve an ANDA for a generic drug until any applicable period of non-patent exclusivity for the reference-listed drug has expired, as described in “Business—Government Regulation—FDA Regulation—Abbreviated 33 Table of Contents New Drug Applications for Generic Drugs” in Part I, Item 1 of this report, but such exclusivity will not delay the submission or approval of a full NDA.
The FDA may not approve an ANDA for a generic drug until any applicable period of non-patent exclusivity for the reference-listed drug has expired, as described in “ Business—Government Regulation—FDA Regulation—Abbreviated New Drug Applications for Generic Drugs ” in Part I, Item 1 of this report, but such exclusivity will not delay the submission or approval of a full NDA.
We may be involved in legal proceedings to protect or enforce our patents, the patents of our partners or our other intellectual property rights, which could be expensive, time consuming and unsuccessful. Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights.
We may be involved in legal proceedings to protect or enforce our patents, the patents of our partners or our other intellectual property rights, which could be expensive, time consuming and unsuccessful.
As we continue to expand our operations internationally, our exposure to foreign currency transaction gains or losses may become more significant. See “Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Risk” in Part II, Item 7A of this report for additional information about our foreign currency risk.
As we continue to expand our operations internationally, our exposure to foreign currency transaction gains or losses may become more significant. See “ Quantitative and Qualitative Disclosures about 49 Table of Contents Market Risk—Foreign Currency Risk ” in Part II, Item 7A of this report for additional information about our foreign currency risk.
See “Business—Competition” in Part I, Item 1 of this report for further discussion of our competitors, competitive products or programs, and the competitive conditions in these and other therapeutic areas. 38 Table of Contents If one or more of our competitors’ products or programs, including potential competitors not currently identified, are successful, the market for our products may be reduced or eliminated.
See “ Business—Competition ” in Part I, Item 1 of this report for further discussion of our competitors, competitive products or programs, and the competitive conditions in these and other therapeutic areas. If one or more of our competitors’ products or programs, including potential competitors not currently identified, are successful, the market for our products may be reduced or eliminated.
We have sustained operating losses for the majority of our corporate history and expect that our total 2024 expenses will exceed our total 2024 revenues. We expect to continue to incur operating losses and negative cash flows unless and until revenues reach a level sufficient to support ongoing operations.
We have sustained operating losses for the majority of our corporate history and expect to continue to incur operating losses and negative cash flows unless and until revenues reach a level sufficient to support ongoing operations.
For example, dose-related observations in an ongoing BCX10013 nonclinical study reported in 2023 delayed the clinical program.
For example, dose-related observations in a BCX10013 nonclinical study reported in 2023 delayed the clinical program.
A breakdown, invasion, corruption, destruction, or interruption of information technology systems could negatively impact operations.
A breakdown, invasion, corruption, destruction, or interruption of information 51 Table of Contents technology systems could negatively impact operations.
We are 39 Table of Contents currently subject to certain post-approval commitments. If we fail to comply with post-approval legal and regulatory requirements, we could be subject to penalties, and our products could be subject to continual recordkeeping and reporting requirements, review and periodic inspections by the FDA and other regulatory bodies.
We are currently subject to certain post-approval commitments and evolving FDA guidance. If we fail to comply with any post-approval legal and regulatory requirements, we could be subject to penalties, and our products could be subject to continual recordkeeping and reporting requirements, review and periodic inspections by the FDA and other regulatory bodies.
Government contracts typically contain a number of extraordinary provisions that would not typically be found in commercial contracts and which may create a disadvantage and additional risks to us as compared to competitors that do not rely on U.S. Government contracts. These risks include the ability of the U.S.
Government contracts typically contain a number of extraordinary provisions that would not typically be found in commercial contracts, and which may create a disadvantage and additional risks to us as compared to competitors that do not have U.S. Government contracts. As a U.S.

… 102 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

7 edited+0 added−0 removed20 unchanged
Biggest changeThe IRP provides a standardized framework for investigating, containing, documenting and mitigating cybersecurity incidents, including reporting findings 58 Table of Contents and keeping senior management and other key stakeholders informed and involved as appropriate. The Company’s employees are required to review the IRP and undergo additional cybersecurity training on a regular basis.
Biggest changeThe IRP provides a standardized framework for investigating, containing, documenting and mitigating cybersecurity incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as appropriate.
On at least a quarterly basis, the Cybersecurity Steering Committee meets to discuss recent cybersecurity events or threats, status of ongoing and planned cybersecurity initiatives and strategies, external cybersecurity trends, and risk management measures implemented by the Company to identify and mitigate data protection and cybersecurity risks, among other topics.
On at least a quarterly basis, the Cybersecurity Steering Committee meets to discuss recent cybersecurity events or threats, status of ongoing and planned cybersecurity initiatives and strategies, external cybersecurity trends, and risk management measures 58 Table of Contents implemented by the Company to identify and mitigate data protection and cybersecurity risks, among other topics.
Our Cybersecurity Steering Committee has broad oversight of the Company’s cybersecurity risk management processes. The Cybersecurity Steering Committee is composed of the Company’s Chief Financial Officer, Chief Legal Officer, Senior Vice President, Information Technology, senior cybersecurity professionals, 57 Table of Contents members of the finance and legal departments, and other individuals invited as appropriate on an ad hoc basis.
Our Cybersecurity Steering Committee has broad oversight of the Company’s cybersecurity risk management processes. The Cybersecurity Steering Committee is composed of the Company’s Chief Financial Officer, Chief Legal Officer, Senior Vice President, Information Technology, senior cybersecurity professionals, members of the finance and legal departments, and other individuals invited as appropriate on an ad hoc basis.
He leads the Company’s information security program and sets the strategic direction for, and establishes and governs the structure of, the program. Our Senior Manager, Security Engineering is managed by the Company’s Executive Director, IT Infrastructure & Operations, who directly reports to the Senior Vice President, Information Technology.
He leads the Company’s information security program and sets the strategic direction for, and establishes and governs the structure of, the program. Our Senior Manager, Security Engineering is managed by the Company’s Vice President, IT Infrastructure, Service & Operations, who directly reports to the Senior Vice President, Information Technology.
See “Risk Factors—Risks Relating to Our Business—Risks Relating to Technology—Cyber incidents and related disruptions in our or our third-party vendors’ information technology systems could adversely affect our business” in Part I, Item IA of this report for additional information on cybersecurity risks we face, which should be read together with the foregoing information.
See “ Risk Factors—Risks Relating to Our Business—Risks Relating to Technology—Cyber incidents and related disruptions in our or our third-party vendors’ information technology systems could adversely affect our business ” in Part I, Item IA of this report for additional information on cybersecurity risks we face, which should be read together with the foregoing information.
He has over 38 years of experience in information security and data privacy and has CISSP and Cisco Certified Network Associate (CCNA) certifications. He implements and oversees processes for the regular monitoring of our information systems and detection of cybersecurity vulnerabilities.
He is the former Cloud Security Officer for IBM and has over 40 years of experience in information security and data privacy and has CISSP and Cisco Certified Network Associate (CCNA) certifications. He implements and oversees processes for the regular monitoring of our information systems and detection of cybersecurity vulnerabilities.
Material Cybersecurity Risk, Threats & Incidents As detailed elsewhere in this report, we rely on information technology systems and third-party providers to operate our business.
The Company’s employees are required to review the IRP and undergo additional cybersecurity training on a regular basis. 59 Table of Contents Material Cybersecurity Risk, Threats & Incidents As detailed elsewhere in this report, we rely on information technology systems and third-party providers to operate our business.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeWe currently lease approximately 24,500 square feet in Durham through leases expiring June 30, 2024 and August 31, 2025, and we lease approximately 49,000 square feet in Birmingham through July 31, 2030, with options for additional extensions. We also contract for smaller offices in a number of other countries.
Biggest changeWe currently lease approximately 23,100 square feet in Durham through leases expiring August 31, 2025 and June 30, 2026, and we lease approximately 49,000 square feet in Birmingham through July 31, 2030, with options for additional extensions. We also contract for smaller offices in a number of other countries.
We believe that our facilities are adequate for our current and planned future operations. ITEM 3. LEGAL PROCEEDINGS None.
We believe that our facilities are adequate for our current and planned future operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed3 unchanged
Biggest changePERFORMANCE GRAPH FOR BIOCRYST Indexed Comparison Since 2018 60 Table of Contents Beginning Investment at 12/31/18 Investment at 12/31/19 Investment at 12/31/20 Investment at 12/31/21 Investment at 12/31/22 Investment at 12/31/23 BioCryst Pharmaceuticals, Inc. $ 100.00 $ 42.75 $ 92.32 $ 171.62 $ 142.26 $ 74.23 Nasdaq Stock Market (United States) 100.00 131.17 159.07 200.26 160.75 203.23 Nasdaq Pharmaceutical Stocks 100.00 114.51 126.56 157.42 175.29 182.08 The above graph measures the change in a $100 investment in our common stock based on its closing price of $8.07 on December 31, 2018 and its year-end closing price thereafter.
Biggest changePERFORMANCE GRAPH FOR BIOCRYST Indexed Comparison Since 2019 61 Table of Contents Beginning Investment at 12/31/19 Investment at 12/31/20 Investment at 12/31/21 Investment at 12/31/22 Investment at 12/31/23 Investment at 12/31/24 BioCryst Pharmaceuticals, Inc. $ 100.00 $ 215.94 $ 401.45 $ 332.75 $ 173.62 $ 217.97 Nasdaq Stock Market (United States) 100.00 121.27 152.67 122.55 154.93 192.86 Nasdaq Pharmaceutical Stocks 100.00 110.52 137.47 153.08 159.01 172.62 The above graph measures the change in a $100 investment in our common stock based on its closing price of $3.45 on December 31, 2019 and its year-end closing price thereafter.
Our relative performance is then compared with the CRSP Total Return Indexes for the Nasdaq Stock Market (United States) and Nasdaq Pharmaceutical Stocks. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities There were no repurchases of our common stock during the fourth quarter of 2023. ITEM 6. RESERVED
Our relative performance is then compared with the CRSP Total Return Indexes for the Nasdaq Stock Market (United States) and Nasdaq Pharmaceutical Stocks. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities There were no repurchases of our common stock during the fourth quarter of 2024. ITEM 6. RESERVED
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol BCRX. Holders As of February 23, 2024, there were approximately 152 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol BCRX. Holders As of February 20, 2025, there were approximately 147 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

93 edited+37 added−40 removed47 unchanged
Biggest changeThe increase in interest expense was primarily associated with the interest accrued on the larger Tranche A Loan of $300.0 million under the Pharmakon Loan Agreement (as defined below).
Biggest changeThe decrease in interest expense was primarily due to a decrease in the effective interest rate related to the 2021 RPI Royalty Purchase Agreement (as defined in “ Note 8—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors ” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report) and a decrease in interest expense associated with the borrowings under the Athyrium Credit Agreement (as defined below), which was repaid on April 17, 2023, partially offset by an increase in interest expense associated with the interest accrued on the Tranche A Loan of $300.0 million under the Pharmakon Loan Agreement (as defined below), which was funded on April 17, 2023.
MD&A is provided as a supplement to, and should be read in conjunction with, our audited financial statements and the accompanying notes to the financial statements and other disclosures included in this report (including the “ Cautionary Note Regarding Forward-Looking Statements ” at the beginning of this report and the “ Risk Factors ” section in Part I, Item 1A of this report).
This MD&A is provided as a supplement to, and should be read in conjunction with, our audited financial statements and the accompanying notes to the financial statements and other disclosures included in this report (including the “ Cautionary Note Regarding Forward-Looking Statements ” at the beginning of this report and the “ Risk Factors ” section in Part I, Item 1A of this report).
Direct expenses consist of compensation for research and development personnel and costs of outside parties to conduct laboratory studies, develop manufacturing processes, manufacture the product candidates, and conduct and manage clinical trials, as well as other costs related to our clinical and preclinical studies.
Direct expenses consist of compensation for research and development personnel and costs of outside parties to conduct laboratory studies, develop manufacturing processes and manufacture the product candidates, and conduct and manage clinical trials, as well as other costs related to our clinical and preclinical studies.
Additionally, direct expenses consist of those costs necessary to discontinue and close out a development program, including termination fees and other commitments. Indirect research and development expenses consist of lab supplies and services, facility expenses, depreciation of development equipment and other overhead of our research and development efforts.
Additionally, direct expenses consist of those costs necessary to discontinue and close out a development program, including termination fees and other commitments. Indirect expenses consist of lab supplies and services, facility expenses, depreciation of development equipment and other overhead of our research and development efforts.
Liquidity and Capital Resources Our operations have principally been funded through public offerings and private placements of equity securities; our credit facilities; revenues from ORLADEYO; royalty financing transactions; and cash from collaborative and other research and development agreements, including U.S. Government contracts.
Liquidity and Capital Resources Sources of Liquidity Our operations have principally been funded through public offerings and private placements of equity securities; our credit facilities; revenues from ORLADEYO; royalty financing transactions; and cash from collaborative and other research and development agreements, including U.S. Government contracts.
In addition to the above, we have previously received funding from other sources, including other collaborative and other research and development agreements, government grants, equipment lease financing, facility leases, research grants, and interest income on our investments.
In addition to the above, we have received funding from other sources, including other collaborative and other research and development agreements, government grants, equipment lease financing, facility leases, research grants, and interest income on our investments.
The specialty pharmacy, in turn, charges back to us the difference between the price the specialty pharmacy paid and the negotiated price paid by the contracted customers, which may be higher or lower than the specialty pharmacy’s purchase price with us.
The specialty pharmacy, in turn, charges back to us the difference between the price that the specialty pharmacy paid and the negotiated price paid by the contracted customers, which may be higher or lower than the specialty pharmacy’s purchase price with us.
Research and Development Expenses and Related Accruals Research and development expenses include, among other items, personnel costs, including salaries and benefits, manufacturing costs, clinical, regulatory, and toxicology services performed by clinical research organizations (“CROs), materials and supplies, and overhead allocations consisting of various administrative and facilities related costs, as well as termination fees and other commitments associated with discontinued programs.
Research and Development Expenses and Related Accruals Research and development expenses include, among other items, personnel costs, including salaries and benefits, manufacturing costs, clinical, regulatory, and toxicology services performed by clinical research organizations (“CROs”), materials and supplies, and overhead allocations consisting of various administrative and facilities related costs, as well as termination fees and other commitments associated with discontinued programs.
Certain of the customary negative covenants limit the ability of the Company and certain of its subsidiaries to, among other things, dispose of assets; engage in mergers, acquisitions, and similar transactions; incur additional indebtedness; grant liens; make investments; pay dividends or make distributions or certain other restricted payments in respect of equity; prepay other indebtedness; enter into restrictive 68 Table of Contents agreements; undertake fundamental changes; or amend certain material contracts, among other customary covenants, in each case subject to certain exceptions.
Certain of the customary negative covenants limit the ability of the Company and certain of its subsidiaries to, among other things, dispose of assets; engage in mergers, acquisitions, and similar transactions; incur additional indebtedness; grant liens; make investments; pay dividends or make distributions or certain other restricted payments in respect of equity; prepay other indebtedness; enter into restrictive agreements; undertake fundamental changes; or amend certain material contracts, among other customary covenants, in each case subject to certain exceptions.
We are developing our investigational plasma kallikrein inhibitor, avoralstat, with Clearside Biomedical, Inc.’s (“Clearside”) Microinjector ® to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with diabetic macular edema (“DME”).
Avoralstat We are developing our investigational plasma kallikrein inhibitor, avoralstat, with Clearside Biomedical, Inc.’s SCS Microinjector ® to deliver avoralstat to the back of the eye through the suprachoroidal space to treat patients with diabetic macular edema (“DME”).
Net revenue from sales of ORLADEYO is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (i) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (ii) estimated chargebacks, (iii) estimated costs of co-payment assistance programs and (iv) product returns.
Net revenue from sales of ORLADEYO is recorded at net selling price (transaction price), which includes reserves for variable consideration such as (i) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (ii) estimated chargebacks, (iii) estimated costs of co-payment assistance programs and (iv) product returns.
Chargebacks are discounts that occur when certain contracted customers, pharmacy benefit managers, insurance companies, and government programs purchase directly from our specialty pharmacy. These customers purchase our products under contracts negotiated between them and our specialty pharmacy.
Chargebacks are discounts that occur when certain contracted customers, pharmacy benefit managers, insurance companies, and government programs purchase directly from our specialty pharmacy. These customers purchase our product under contracts negotiated between them and our specialty pharmacy.
Under the Royalty Purchase Agreements, RPI and OMERS are entitled to receive tiered, sales-based royalties on net product sales of ORLADEYO in the United States and certain key European markets (collectively, the “Key Territories”), and other markets where we sell ORLADEYO directly or through distributors.
Under the Royalty Purchase Agreements, RPI and OMERS are entitled to receive tiered, sales-based royalties on net product sales of ORLADEYO in the United States and certain key European markets 67 Table of Contents (collectively, the “Key Territories”), and other markets where we sell ORLADEYO directly or through distributors.
Government funding of our programs, including obtaining procurement contracts. We may, in the future, 67 Table of Contents issue securities, including common stock, preferred stock, depositary shares, purchase contracts, warrants, debt securities, and units, through private placement transactions or registered public offerings.
Government funding of our programs, including obtaining procurement contracts. We may, in the future, issue securities, including common stock, preferred stock, depositary shares, purchase contracts, warrants, debt securities, and units, through private placement transactions or registered public offerings.
We expect to incur additional expenses, potentially resulting in significant losses, as we continue to pursue our research and development activities, commercialize ORLADEYO, and hire additional personnel.
We may incur additional expenses, potentially resulting in significant losses, as we continue to pursue our research and development activities, commercialize ORLADEYO, and hire additional personnel.
Changes to collaborations, such as 70 Table of Contents the extensions of the research term or increasing the number of targets or technology covered under an existing agreement, are assessed for whether they represent a modification or should be accounted for as a new contract.
Changes to collaborations, such as the extensions of the research term or increasing the number of targets or technology covered under an existing agreement, are assessed for whether they represent a modification or should be accounted for as a new contract.
Our operating expenses are also difficult to predict and depend on several factors, including research and development expenses, drug manufacturing, clinical research activities, the ongoing requirements of our development programs, the costs of commercialization, the availability of capital and direction from regulatory agencies, which are difficult to predict, and the factors discussed in the “Risk Factors” section in Part I, Item 1A of this report.
Our operating expenses are also difficult to predict and depend on several factors, including research and development expenses, drug manufacturing, clinical research activities, the ongoing requirements of our development programs, the costs of commercialization, the availability of capital and direction from regulatory agencies, which are difficult to predict, and the factors discussed in the “ Risk Factors ” section in Part I, Item 1A of this report.
Additionally, we have license agreements with third parties, such as Albert Einstein College of Medicine of Yeshiva University, Industrial Research, Ltd., and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements. We expense sublicense payments as incurred. We group our research and development expenses into two major categories: direct external expenses and indirect expenses.
Additionally, we have license agreements with third parties, such as Albert Einstein College of Medicine of Yeshiva University, Industrial Research, Ltd., and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements. We accrue sublicense expenses as incurred. We group our research and development expenses into two major categories: direct expenses and indirect expenses.
Management may be able to control the timing and level of research and development and selling, general and administrative expenses, 62 Table of Contents but many of these expenditures will occur irrespective of our actions due to contractually committed activities and/or payments.
Management may be able to control the timing and level of research and development and selling, general and administrative expenses, but many of these expenditures will occur irrespective of our actions due to contractually committed activities and/or payments.
Most of our manufacturing and clinical and preclinical studies are performed by third-party CROs. Our research and development costs are charged to expense 71 Table of Contents when incurred. Research and development expenses include all direct and indirect development costs related to the development of our portfolio of product candidates.
Most of our manufacturing and clinical and preclinical studies are performed by third-party CROs. Our research and development costs are charged to expense when incurred. Research and development expenses include all direct and indirect development costs related to the development of our portfolio of product candidates.
In 2020 and 2021, we entered into the Royalty Purchase Agreements (as defined in “Note 8—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report) with RPI 2019 Intermediate Finance Trust (“RPI”) and OCM IP Healthcare Holdings Limited, an affiliate of OMERS Capital Markets (“OMERS”).
In 2020 and 2021, we entered into the Royalty Purchase Agreements (as defined in “ Note 8—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors ” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report) with RPI 2019 Intermediate Finance Trust (“RPI”) and OCM IP Healthcare Holdings Limited, an affiliate of OMERS Capital Markets (“OMERS”).
See “Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain” in Part I, Item 1A of this report for further discussion of these risks.
See “ Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain ” in Part I, Item 1A of this report for further discussion of these risks.
See “Risk Factors—Risks Relating to Our Business—Financial and Liquidity Risks” and “Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—If we fail to obtain additional financing or acceptable partnership arrangements if and when needed, we may be unable to complete the development and commercialization of our products and product candidates or continue operations” in Part I, Item 1A of this report for further discussion of the risks related to obtaining additional capital.
See “ Risk Factors—Risks Relating to Our Business—Financial and Liquidity Risks ” and “ Risk Factors—Risks Relating to Our Business—Risks Relating to Drug Development and Commercialization—If we fail to obtain additional financing or acceptable partnership arrangements if and when needed, we may be unable to complete the development and commercialization of our products and product candidates or continue operations ” in Part I, Item 1A of this report for further discussion of the risks related to obtaining additional capital.
We regularly evaluate other opportunities to fund future operations, including: (1) out-licensing rights to certain of our products or product candidates, pursuant to which we would receive cash milestone payments; (2) raising additional capital through equity or debt financings or from other sources, including royalty or other monetization transactions; (3) obtaining additional product candidate regulatory approvals, which would generate revenue, milestone payments and cash flow; (4) reducing spending on one or more research and development programs, including by discontinuing development; (5) restructuring operations to change our overhead structure; and/or (6) securing U.S.
We regularly evaluate other opportunities to fund future operations, including: (1) out-licensing rights to certain of our products or product candidates, pursuant to which we would receive cash milestone payments; (2) royalty or other monetization transactions; (3) obtaining additional product candidate regulatory approvals, which would generate revenue, milestone payments and cash flow; (4) reducing spending on one or more research and development programs, including by discontinuing development; (5) restructuring operations to change our overhead structure; and/or (6) securing U.S.
Overview We are a global biotechnology company with a deep commitment to improving the lives of people living with complement-mediated and other rare diseases. We leverage our expertise in structure-guided drug design with the goal of developing first-in-class or best-in-class oral small-molecule and protein therapeutics to target difficult-to-treat rare diseases.
Overview We are a global biotechnology company with a deep commitment to improving the lives of people living with hereditary angioedema (“HAE”) and other rare diseases. We leverage our expertise in structure-guided drug design with the goal of developing first-in-class or best-in-class oral small-molecule and injectable protein therapeutics to target difficult-to-treat rare diseases.
Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and three full years of commercialization experience with ORLADEYO, we anticipate the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual 61 Table of Contents net ORLADEYO revenues.
Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and four full years of commercialization experience with ORLADEYO, we anticipate that the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual net ORLADEYO revenues.
Based upon the terms of the program and co-payment assistance utilization reports received from the specialty pharmacy, we are able to estimate the co-payment assistance amounts, which are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue.
Based upon the terms of the program and co-payment assistance utilization reports received from the specialty pharmacy, we estimate the co-payment assistance amounts, which are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue and establishment of a current liability.
Revenues and Expenses Our revenues are difficult to predict and depend on several factors, including those discussed in the “Risk Factors” section in Part I, Item 1A of this report.
Revenues and Expenses Our revenues are difficult to predict and depend on several factors, including those discussed in the “ Risk Factors ” section in Part I, Item 1A of this report.
See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 27, 2023, for a summary of our results of operations for the fiscal year ended December 31, 2021.
See Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations ” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024, for a summary of our results of operations for the fiscal year ended December 31, 2022.
Our long-term capital requirements and the adequacy of our available funds will depend upon many factors, including: • market acceptance of approved products and successful commercialization of such products by either us or our partners; • our ability to receive reimbursement and stockpiling procurement contracts; • the progress and magnitude of our research, drug discovery and development programs; • changes in existing collaborative relationships; • our ability to establish additional collaborative relationships with academic institutions, biotechnology or pharmaceutical companies and governmental agencies or other third parties; • the extent to which our partners will share in the costs associated with the development of our programs or run the development programs themselves; • our ability to negotiate favorable development and marketing strategic alliances for certain products and product candidates; • any decision to build or expand internal development and commercial capabilities; • the scope and results of preclinical studies and clinical trials to identify and develop product candidates; • our ability to engage sites and enroll subjects in our clinical trials; • the scope of manufacturing of our products to support our commercial operations and of our product candidates to support our preclinical research and clinical trials; • increases in personnel and related costs to support the development and commercialization of our products and product candidates; • the scope of manufacturing of our drug substance and product candidates required for future new drug application (“NDA”) filings; • competitive and technological advances; • the time and costs involved in obtaining regulatory approvals; • post-approval commitments for ORLADEYO, RAPIVAB, and other products that receive regulatory approval; and • the costs involved in all aspects of intellectual property strategy and protection, including the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims.
Our future liquidity needs, and our ability to address those needs, will largely be determined by the success of our products and product candidates; the timing, scope, and magnitude of our research and development and commercial expenses; and key developments and regulatory events and our decisions in the future. 69 Table of Contents Our long-term capital requirements and the adequacy of our available funds will depend upon many factors, including: • sustained market acceptance of approved products and successful commercialization of such products by either us or our partners; • our ability to perform under any government contracts and to receive reimbursement and stockpiling procurement contracts; • the progress and magnitude of our research, drug discovery and development programs; • changes in existing collaborative relationships; • our ability to establish additional collaborative relationships with academic institutions, biotechnology or pharmaceutical companies and governmental agencies or other third parties; • the extent to which our partners will share in the costs associated with the development of our programs or run the development programs themselves; • our ability to negotiate favorable development and marketing strategic alliances for certain products and product candidates; • any decision to build or expand internal development and commercial capabilities; • the scope and results of preclinical studies and clinical trials to identify and develop product candidates; • our ability to engage sites and enroll subjects in our clinical trials; • the scope of manufacturing of our products to support our commercial operations and of our product candidates to support our preclinical research and clinical trials; • increases in personnel and related costs to support the development and commercialization of our products and product candidates; • the scope of manufacturing of our drug substance and product candidates required for future new drug application (“NDA”) filings; • competitive and technological advances; • the time and costs involved in obtaining regulatory approvals; • post-approval commitments for ORLADEYO, peramivir, and other products that receive regulatory approval; and • the costs involved in all aspects of intellectual property strategy and protection, including the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims.
Products and Product Candidates ORLADEYO® (berotralstat) . ORLADEYO is an oral, once-daily therapy discovered and developed by us for the prevention of hereditary angioedema (“HAE”) attacks. ORLADEYO is approved in the United States and multiple global markets for the prevention of HAE attacks in adults and pediatric patients 12 years and older.
Products and Product Candidates ORLADEYO® (berotralstat) ORLADEYO is an oral capsule, once-daily therapy discovered and developed by us for the prevention of HAE attacks. ORLADEYO is approved in the United States and other global markets for the prevention of HAE attacks in adults and pediatric patients 12 years and older.
Based on our expectations for revenue and operating expenses, we believe our financial resources will be sufficient to fund our operations for at least the next 12 months, and we have no immediate intentions to access the capital markets or draw down additional debt available to us.
Based on our expectations for revenue and operating expenses, we believe our financial resources will be sufficient to fund our operations for at least the next 12 months. We have no immediate intentions to access the capital markets, and we did not draw down the additional debt available to us under the Pharmakon Loan Agreement.
In addition, we reduced the size of our research and development organization and postponed previously planned capital expenditures at our Discovery Center in Alabama, which we believe will help accelerate our path to profitability.
In addition, we reduced the size of our research and development organization and postponed previously planned capital expenditures at our Discovery Center in Alabama in January 2024, which we believe helped accelerate our path to profitability.
However, we have sustained operating losses for the majority of our corporate history and expect that our total 2024 expenses will exceed our total 2024 revenues. We expect to continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations.
However, we have sustained operating losses for the majority of our corporate history and expect to continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations.
We reduce stock-based compensation expense for estimated forfeitures. The estimation of share-based payment awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.
The estimation of share-based payment awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised.
Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from estimates, we adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Government and Managed Care Rebates .
Actual amounts of consideration may differ from our estimates. If actual results vary from estimates, these estimates are adjusted, which would affect net product revenue and earnings in the period such variances become known. Government and Managed Care Rebates .
Recent Accounting Pronouncements “Note 1—Significant Accounting Policies and Concentrations of Risk” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report discusses accounting pronouncements recently issued or proposed but not yet required to be adopted.
Recent Accounting Pronouncements “ Note 1—Significant Accounting Policies and Concentrations of Risk ” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report discusses accounting pronouncements recently issued or proposed but not yet required to be adopted. 74 Table of Contents
These costs apply to work on non-active product candidates and our discovery research efforts. As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
These costs apply to our discovery research efforts. As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.
We intend to contain costs and cash flow requirements by closely managing our third-party costs and headcount, leasing scientific equipment and facilities, contracting with other parties to conduct certain research and development projects, and using consultants.
Plan of Operation and Future Funding Requirements We intend to contain costs and cash flow requirements by closely managing our third-party costs and headcount, leasing scientific equipment and facilities, and contracting with other parties to conduct certain research and development projects.
Interest expense for the year ended December 31, 2023 included $70.4 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations, $28.0 million of interest expense, including the amortization of the deferred financing associated with the borrowings under the Pharmakon Loan Agreement, and $9.5 million of interest expense, net of deferred financing amortization, associated with the borrowings under the Athyrium Credit Agreement (as defined below).
Interest expense for the year ended December 31, 2023 was primarily comprised of $70.4 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations, $28.0 million of interest expense, including the amortization of the deferred financing costs, associated with the borrowings under the Pharmakon Loan Agreement, and $9.5 million of interest expense, including the amortization of the deferred financing, associated with the borrowings under the Athyrium Credit Agreement.
The Pharmakon Loan Agreement contains representations and warranties and affirmative and negative covenants customary for financings of this type, as well as customary events of default.
The maturity date of the Pharmakon Loan Agreement is April 17, 2028. The Pharmakon Loan Agreement contains representations and warranties and affirmative and negative covenants customary for financings of this type, as well as customary events of default.
Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We account for uncertain tax positions in accordance with U.S. GAAP.
Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.
We estimate the rebates that we will provide to third-party payors based upon (i) our contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payor mix, and (iv) product distribution information obtained from our specialty pharmacy. Chargebacks .
We estimate the rebates that we will provide to third-party payors based upon (i) our contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, and (iii) product distribution information obtained from our specialty pharmacy regarding payor mix. Chargebacks .
The following table summarizes our research and development expenses for the periods indicated (amounts are in thousands). Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the total research and development expenses.
Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the total research and development expenses.
Reserves for estimated non-acceptances by patients are recorded as a reduction of revenue in the period that the related revenue is recognized, as well as a reduction to accounts receivable. Estimates of non-acceptance are based on quantitative information provided by the specialty pharmacy.
Reserves for estimated non-acceptances by patients are recorded as a reduction of revenue in the period that the related revenue is recognized, as well as a reduction to accounts receivable. Estimates of non-acceptance are based on quantitative information provided by the specialty pharmacy. Collaborative and Other Revenues We have collaboration and license agreements with a number of third parties.
Selling, general and administrative expenses for the year ended December 31, 2023 were $213.9 million compared to $159.4 million in the year ended December 31, 2022.
Selling, general and administrative expenses for the year ended December 31, 2024 were $266.1 million compared to $213.9 million for the year ended December 31, 2023.
We impute interest on the carrying value of each of the royalty financing obligations and record interest expense using an imputed effective interest rate. We reassess the expected royalty payments each reporting period and account for any changes through an adjustment to the effective interest rate on a prospective basis.
We reassess the expected royalty payments each reporting period and account for any changes through an adjustment to the effective interest rate on a prospective basis.
These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable or as a current liability. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the applicable contract.
These reserves, representing our best estimates of the amount of consideration to which we are entitled based on the terms of the applicable contracts and statutory requirements, are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable if no payments are required of us or a current liability if a payment is required of us.
We estimate chargebacks and adjust gross product revenues and accounts receivable based on the estimates at the time revenues are recognized. Co-payment assistance and patient assistance programs . Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance.
We estimate chargebacks and adjust gross product revenues and establish a current liability at the time revenues are recognized. 71 Table of Contents Co-payment assistance and patient assistance programs . Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance.
In addition to these discovery and development efforts, our business strategy includes the efficient commercialization of these drugs in the United States and certain other regions upon regulatory approval. By focusing on rare disease markets, we believe that we can more effectively control the costs of, and our strategic allocation of financial resources toward, post-approval commercialization.
In addition to these discovery and development efforts, our business strategy includes the successful commercialization of these drugs, as well as self-funding all of these efforts by achieving and increasing profitability. By focusing primarily on rare disease markets, we believe that we can more effectively control the costs of, and our strategic allocation of financial resources toward, post-approval commercialization.
Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities. Management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances.
Management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances.
See “Note 9—Debt—Pharmakon Loan Agreement” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about our obligations under the Pharmakon Loan Agreement.
As of December 31, 2024, we were in compliance with the negative covenants under the Pharmakon Loan Agreement. See “ Note 9—Debt—Pharmakon Loan Agreement ” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about our obligations under the Pharmakon Loan Agreement.
Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period of the award.
Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period of the award. Determining the appropriate fair value model and the related assumptions for the model requires judgment, including estimating the stock price volatility and the expected term.
Revenue from sales of ORLADEYO in 2023, which was our third full year of ORLADEYO sales, is discussed under “Results of Operations” in this MD&A.
Revenue from sales of ORLADEYO in 2024, which was our fourth full year of ORLADEYO sales, is discussed under “ Results of Operations ” in this MD&A.
Our expenses, revenues and cash utilization rate could vary significantly depending on many factors, including the development progress of our collaborative agreements for our product candidates, the amount of funding or assistance, if any, we receive from new partnerships with third parties for the development and/or commercialization of our products and product candidates, the progress and results of our current and proposed clinical trials for our most advanced product candidates, the progress made in the manufacturing of our lead product candidates, the success of our commercialization efforts for, and market acceptance of, our products, and the overall progression of our other programs.
Our expenses, revenues and cash utilization rate could vary significantly depending on many factors, including the development progress of our collaborative agreements for our product candidates, the amount of funding or assistance, if any, we receive from new partnerships with third parties for the development and/or commercialization of our products and product candidates, the amount and timing of funding we receive, if any, from U.S.
Patients may have red, scaly and inflamed skin and susceptibility to recurrent immune reactions. Netherton syndrome can be life-threatening, especially during infancy when patients are vulnerable to dehydration and recurrent infections. Currently, there is no approved treatment for Netherton syndrome. Avoralstat.
Netherton syndrome can be life-threatening, especially during infancy when patients are vulnerable to dehydration and recurrent infections. Currently, there are no approved treatments for Netherton syndrome.
RAPIVAB (peramivir injection) is approved in the United States for the treatment of acute uncomplicated influenza for patients six months and older. Peramivir injection is also approved in Canada (RAPIVAB), Australia (RAPIVAB), Japan (RAPIACTA), Taiwan (RAPIACTA), and Korea (PERAMIFLU). Netherton Syndrome.
RAPIVAB®/RAPIACTA®/PERAMIFLU® (peramivir injection) RAPIVAB (peramivir injection) is approved in the United States for the treatment of acute uncomplicated influenza for patients six months and older. Since the 2009 H1N1 pandemic, RAPIVAB has been an important component of the U.S. Government’s influenza preparedness efforts. Peramivir injection is also approved in Canada (RAPIVAB), Australia (RAPIVAB), Japan (RAPIACTA), Taiwan (RAPIACTA), and Korea (PERAMIFLU).
Analyzing the arrangement to identify performance obligations requires the use of judgment, and each may be an obligation to deliver services, a right or license to use an asset, or another performance obligation.
Analyzing the arrangement to identify performance obligations requires the use of judgment, and each may be an obligation to deliver services, a right or license to use an asset, or another performance obligation. Under certain of our license agreements, we receive royalty payments based upon our licensees’ net sales of covered products.
We contract with government agencies and managed care organizations or, collectively, third-party payors, so that ORLADEYO will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. We estimate the rebates we will provide to third-party payors and deduct these estimated amounts from total gross product revenues at the time the revenues are recognized.
We contract with government agencies and managed care organizations or, collectively, third-party payors, so that ORLADEYO will be eligible for purchase by, or partial or full reimbursement from, such third-party payors.
The Pharmakon Loan Agreement also provides for three additional term loan tranches in principal amounts of $50.0 million each, which we may request, at our option, on or prior to September 30, 2024. The maturity date of the Pharmakon Loan Agreement is April 17, 2028.
The Pharmakon Loan Agreement also provided for three additional term loan tranches in principal amounts of $50.0 million each, which we could have requested, at our option, on or prior to September 30, 2024. We chose not to request any of the additional term loan tranches and the options have now expired.
An oral C2 inhibitor developed by us could be first-in-class and allow patients to switch from infused therapy and address their disease earlier in the treatment paradigm. Inhibiting C2 could decrease red cell destruction (hemolysis) in autoimmune hemolytic anemias by blocking the classical and lectin pathways.
We are developing a classical and lectin pathway complement inhibitor. An oral C2 inhibitor developed by us could be first-in-class and allow patients to switch from infused therapy and address their disease earlier in the treatment paradigm. Bifunctional Complement Inhibitor.
Under certain of our license agreements, we receive royalty payments based upon our licensees’ net sales of covered products. Royalties are recognized at the later of when (i) the subsequent sale or usage occurs; or (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been satisfied. Inventory Our inventories primarily relate to ORLADEYO.
Royalties are recognized at the later of when (i) the subsequent sale or usage occurs, or (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been satisfied. Inventory Our inventory primarily relates to ORLADEYO. Additionally, our inventory includes peramivir. We value our inventory at the lower of cost or estimated net realizable value.
In addition, we may experience spoilage of our raw materials and supplies. Our determination that a valuation reserve might be required, in addition to the quantification of such reserve, requires us to utilize significant judgment.
At each reporting date, we evaluate the carrying value of our inventory and provide valuation reserves for any estimated excess, obsolete, short-dated or unmarketable inventory. In addition, we may experience spoilage of our raw materials and supplies. Our determination that a valuation reserve might be required, in addition to the quantification of such reserve, requires us to utilize significant judgment.
This investigational candidate could be a first-in-class combined inhibitor of the classical, lectin and alternative pathways of the complement system to treat complex renal complement-mediated diseases like Immunoglobulin A Nephropathy and lupus nephritis, which are influenced by multiple complement pathways.
We are developing a bifunctional complement inhibitor anti-C2 monoclonal antibody that could be a first-in-class combined inhibitor of the classical, lectin and alternative pathways of the complement system to treat complex complement-mediated diseases that are influenced by multiple complement pathways.
While our significant accounting policies are more fully described in “Note 1—Significant Accounting Policies and Concentrations of Risk” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our financial statements.
Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates, which could have a material impact on the carrying values of assets and liabilities and the results of operations. 70 Table of Contents While our significant accounting policies are more fully described in “ Note 1—Significant Accounting Policies and Concentrations of Risk ” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our financial statements.
Interest expense is accrued using the effective interest rate method over the estimated period each of the related liabilities will be paid. This requires us to estimate the total amount of future royalty payments to be generated from product sales over the life of the agreement.
This requires us to estimate the total amount of future royalty payments to be generated from product sales over the life of the agreement. We impute interest on the carrying value of each of the royalty financing obligations and record interest expense using an imputed effective interest rate.
Collaborative and Other Revenues We have collaboration and license agreements with a number of third parties as well as research and development agreements with certain government entities. Our primary sources of revenue from these collaborative and other research and development arrangements are license, service and royalty revenues.
Our primary sources of revenue from these collaborative and other research and development arrangements are license, service and royalty revenues.
Netherton Syndrome On November 3, 2023, we announced that we are developing BCX17725, a potent and selective investigational fusion protein KLK5 inhibitor designed to provide best-in-class, potentially disease-modifying treatment for people with Netherton syndrome.
We monitor and analyze this data on an ongoing basis as we continue to commercialize ORLADEYO. BCX17725 (Netherton syndrome) BCX17725 is a potent and selective investigational protein therapeutic KLK5 inhibitor designed to provide best-in-class, potentially disease-modifying, treatment for people with Netherton syndrome.
Interest expense for the year ended December 31, 2022 consisted of $76.5 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and $22.5 million of interest expense, net of deferred financing amortization, associated with the borrowings under the Athyrium Credit Agreement.
Interest expense for the year ended December 31, 2024 was primarily comprised of $56.0 million of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and $41.5 million of interest expense, including the amortization of the deferred financing costs, associated with the borrowings under the 66 Table of Contents Pharmakon Loan Agreement.
The valuation allowance is based on estimates of taxable income in each of the jurisdictions in which we operate and the period over which our deferred tax assets will be recoverable.
The valuation allowance is based on estimates of future earnings in each of the jurisdictions in which we operate and the period over which our deferred tax assets will be recoverable. We account for uncertain tax positions in accordance with U.S. GAAP. Uncertain tax positions are recorded based upon certain recognition and measurement criteria.
If the actual timing of the performance of services or the level of effort varies from our estimate, we will adjust the accrual accordingly. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of these costs, our actual expenses could differ from our estimates.
If the actual timing of the performance of services or the level of effort varies from our estimate, we will adjust the accrual accordingly.
Oral C5 Inhibitor On November 3, 2023, we announced that we are developing an oral C5 inhibitor that could be the first targeted oral therapy with competitive efficacy to currently approved injected and infused anti-C5 therapies, such as eculizumab and ravulizumab.
We are developing an oral C5 inhibitor that could be the first targeted oral therapy with competitive efficacy to currently-approved injected and infused anti-C5 therapies, such as eculizumab and ravulizumab. A drug with this profile could enable patients to switch from infused therapy and address their disease earlier in the treatment paradigm. 63 Table of Contents Oral C2 Inhibitor.
For the year ended December 31, 2023, other expense was comprised primarily of a loss on extinguishment of debt of $29.0 million on the repayment of the term loans under the Athyrium Credit Agreement and net foreign currency losses of $1.0 million, partially offset by interest income of $15.8 million.
For the year ended December 31, 2023, loss on extinguishment of debt associated with the repayment of the term loans under the Athyrium Credit Agreement was $29.0 million. For the year ended December 31, 2024, income tax expense was $1.9 million compared to $0.3 million for the year ended December 31, 2023.
Cost of product sales for the years ended December 31, 2023 and 2022 was $4.5 million and $6.4 million, respectively.
The increase in total revenues was also due to an increase in other revenues of $7.6 million, primarily due to an increase in direct sales of RAPIVAB. Cost of product sales for the years ended December 31, 2024 and 2023 was $12.3 million and $4.5 million, respectively.
Raw materials and work-in-process include all inventory costs prior to packaging and labeling, including raw material, active product ingredient, and the drug product. Finished goods include packaged and labeled products. Our inventories are subject to expiration dating. We regularly evaluate the carrying value of our inventories and provide valuation reserves for any estimated obsolete, short-dated or unmarketable inventories.
We determine the cost of our inventory on a first-in, first-out (FIFO) basis. Raw materials and work-in-process include all inventory costs prior to packaging and labeling, including raw material, active product ingredient, and the drug product. Finished goods include packaged and labeled products.
We have built out our U.S. commercial infrastructure to support the launch and continued commercialization of ORLADEYO in the United States and are continuing to build our commercial infrastructure to support launches in other markets.
In addition, the ongoing APeX-P clinical trial, which is complete through the primary endpoint, is continuing to assess an oral granule formulation of ORLADEYO in pediatric patients who are 2 to 11 years of age. 62 Table of Contents We have built out our U.S. commercial infrastructure to support the launch and continued commercialization of ORLADEYO in the United States and are continuing to build our commercial infrastructure to support launches in other markets.
See “Note 8—Royalty Financing Obligations— 66 Table of Contents ORLADEYO and Factor D Inhibitors” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about these financing transactions.
See “ Note 8—Royalty Financing Obligations—ORLADEYO and Factor D Inhibitors ” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about these financing transactions. Our principal sources of liquidity at December 31, 2024 were approximately $104.7 million in cash and cash equivalents and approximately $236.5 million in available-for-sale investments.
Product Sales, Net Our principal sources of product sales are sales of ORLADEYO, which we began shipping to patients in December 2020, sales of peramivir to our licensing partners, and in prior years, sales of RAPIVAB to HHS under our historical procurement contract, which was completed in 2022.
Product Sales, Net Our principal sources of product sales are sales of ORLADEYO, which we began shipping to patients in December 2020 and sales of peramivir to our licensing partners and the HHS. In the United States, we generally ship ORLADEYO directly to patients through a single specialty pharmacy, which is considered our customer.
Determining the appropriate fair value model and the related assumptions for the model requires judgment, including estimating the life of an award, the stock price volatility, and the expected term. We utilize the Black-Scholes option-pricing model to value our stock option awards and recognize compensation expense on a straight-line basis over the vesting periods.
We utilize the Black-Scholes option-pricing model to value our stock option awards and recognize compensation expense on a straight-line basis over the requisite service period. We reduce stock-based compensation expense for estimated forfeitures.
For the year ended December 31, 2022, other income was comprised of interest income of $5.1 million, partially offset by net foreign currency losses of $2.0 million. For the year ended December 31, 2023, we incurred a tax expense of $0.3 million as compared to tax expense of $2.7 million for the year ended December 31, 2022.
For the year ended December 31, 2024, interest income was $14.7 million compared to $15.8 million for the year ended December 31, 2023. Net foreign currency losses were $0.6 million for the year ended December 31, 2024 compared to $1.0 million for the year ended December 31, 2023.

… 90 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−1 removed9 unchanged
Biggest changeInflation Risk Inflation generally impacts us by potentially increasing our operating expenses, including cost of product sales, clinical trial costs and selling activities. We do not believe that inflation has had a material impact on our business or results of operations during the periods for which the consolidated financial statements are presented in this report.
Biggest changeWe do not believe that inflation has had a material impact on our business or results of operations during the periods for which the consolidated financial statements are presented in this report. Significant adverse changes in inflation could negatively impact our future results of operations. 76 Table of Contents
We have not realized any significant losses from our investments. We do not use interest rate derivative instruments to manage exposure to interest rate changes. We ensure the safety and preservation of invested principal funds by limiting default risk, market risk and reinvestment risk. We reduce default risk by investing in investment grade securities.
We have not realized any significant losses from our investments. We do not use interest rate derivative instruments to manage exposure to interest rate changes. We ensure the safety and preservation of invested principal funds by limiting default risk, market risk and reinvestment risk. We reduce default risk by investing exclusively in investment grade securities.
We also had other transactions denominated in foreign currencies during the year ended December 31, 2023, primarily related to operations in Europe, contract manufacturing and ex-U.S. clinical trial activities, and we expect to continue to do so.
We also had other transactions denominated in foreign currencies during the year ended December 31, 2024, primarily related to operations in Europe, contract manufacturing and ex-U.S. clinical trial activities, and we expect to continue to do so.
A hypothetical 100 basis point increase or decrease in interest rates along the entire interest rate yield curve would not significantly affect the fair value of our interest sensitive financial instruments, including our borrowings, but may affect 73 Table of Contents our future earnings and cash flows.
A hypothetical 100 basis point increase or decrease in interest rates along the entire interest rate yield curve would not significantly affect the fair value of our interest sensitive financial instruments, including our borrowings, but may affect our future earnings and cash flows.
Accordingly, increases in interest rates will increase the associated interest payments that we are required to make on the Tranche A Loan. For the year ended December 31, 2023, interest was accrued at an effective rate of 13.30% on the $300.0 million borrowing under the Pharmakon Loan Agreement. We invest in marketable securities in accordance with our investment policy.
Accordingly, increases in interest rates will increase the associated interest payments that we are required to make on the Tranche A Loan. For the year ended December 31, 2024, interest was accrued at an effective rate of 13.14% on the $300.0 million borrowing under the Pharmakon Loan Agreement. We invest in marketable securities in accordance with our investment policy.
The Tranche A Loan under the Pharmakon Loan Agreement accrues interest each quarter at a rate equal to the three-month Secured Overnight Financing Rate (“SOFR”), which is capped to be no less than 1.75%, plus 7.00% or, for each quarterly interest period in which a Pharmakon PIK Interest Payment (as defined in “Note 9—Debt—Pharmakon Loan Agreement” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report) is made, SOFR plus 7.25%.
The Tranche A Loan under the Pharmakon Loan Agreement accrues interest each quarter at a rate equal to the three-month Secured Overnight Financing Rate (“SOFR”), which is capped to be no less than 1.75%, plus 7.00% or, for each quarterly interest period in which a Pharmakon PIK Interest Payment (as defined in “ Note 9—Debt—Pharmakon Loan Agreement ” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report) was made, SOFR plus 7.25%.
We do not anticipate that foreign currency transaction gains or losses will be significant at our current level of operations. However, transaction gains or losses may become significant in the future as we continue to expand our operations internationally. We have not engaged in foreign currency hedging during 2023; however, we may do so in the future.
We do not anticipate that foreign currency transaction gains or losses will be significant at our current level of operations. However, transaction gains or losses may become significant in the future as we continue to expand our operations internationally.
The primary objectives of our investment policy are to preserve capital, maintain proper liquidity to meet operating needs and maximize yields. Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment.
The primary objectives of our investment policy are to preserve capital, maintain proper liquidity to meet operating needs and earn a competitive level of return. Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment.
Removed
Significant adverse changes in inflation could negatively impact our future results of operations. 74 Table of Contents
Added
We have not engaged in foreign currency hedging during 2024; however, we may do so in the future. 75 Table of Contents Inflation Risk Inflation generally impacts us by potentially increasing our operating expenses, including cost of product sales, clinical trial costs and selling activities.

Other BCRX 10-K year-over-year comparisons