10q10k10q10k.net

What changed in Travere Therapeutics, Inc.'s 10-K — 2022 vs 2023

vs

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

+763 added−641 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-23)

Top changes in Travere Therapeutics, Inc.'s 2023 10-K

763 paragraphs added · 641 removed · 465 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

157 edited+114 added−71 removed153 unchanged
Biggest changeThis is usually when the product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. 25 Table of Contents When using the MRP or DCP, the applicant must select which EU member states in which to seek approval.
Biggest changeIn exceptional cases, the CHMP might perform an accelerated review of an MAA in no more than 150 days, excluding clock stops. This is usually when the product targets an unmet medical need and is expected to be of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.
We are partnering with the National Institutes of Health’s National Center for Advancing Translational Sciences (NCATS) and a leading patient advocacy organization, Alagille Syndrome Alliance, aimed at the identification of potential small molecule therapeutics for ALGS. There are no treatment options currently approved for ALGS.
We are partnering with the National Institutes of Health’s National Center for Advancing Translational Sciences (NCATS) and a leading patient advocacy organization, Alagille Syndrome Alliance, aimed at the identification of potential small molecule therapeutics for Alagille syndrome (ALGS). There are no treatment options currently approved for ALGS.
In October 2022, Mission was granted a patent covering the treatment of cystinuria by administering Thiola EC with food (US Patent No. 11,458,104, “the ‘104 patent”) and has listed this patent in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange Book).
Thiola In October 2022, Mission was granted a patent covering the treatment of cystinuria by administering Thiola EC with food (US Patent No. 11,458,104, “the ‘104 patent”) and has listed this patent in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange Book).
FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways in the disease progression of IgAN (endothelin 1 and angiotensin-II) and is the first and only non-immunosuppressive therapy approved for the treatment of this condition. FILSPARI (sparsentan) is a dual endothelin angiotensin receptor antagonist (DEARA).
FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways in the disease progression of IgAN (endothelin 1 and angiotensin-II) and is the first and only non-immunosuppressive therapy approved for the treatment of this condition. FILSPARI is a dual endothelin angiotensin receptor antagonist (DEARA).
As of December 31, 2022, this patent family included two US patents (US Patent No. 9,662,312, which we refer to herein as the ‘312 patent, and US Patent No. 9,993,461, which we refer to herein as the ‘461 patent), a pending US application (Application Serial No. 17/951,830, filed September 23, 2022), two European patents (European Patent No.
As of December 31, 2023, this patent family included two US patents (US Patent No. 9,662,312, which we refer to herein as the ‘312 patent, and US Patent No. 9,993,461, which we refer to herein as the ‘461 patent), a pending US application (Application Serial No. 17/951,830, filed September 23, 2022), two European patents (European Patent No.
The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial resources. FDA Drug Approval Process In the United States, pharmaceutical products (drugs and biologics) are subject to extensive regulation by the FDA.
The process of obtaining these approvals and the subsequent compliance with appropriate federal and state statutes and regulations require the expenditure of substantial time and financial and human resources. FDA Drug Approval Process In the United States, pharmaceutical products (drugs and biologics) are subject to extensive regulation by the FDA.
In addition, we continue to evaluate potential opportunities to expand our pipeline and approved products through licenses and acquisitions of products in areas that will serve rare patients with serious unmet medical need and that we believe offer attractive growth characteristics.
In addition, we continue to evaluate potential opportunities to expand our pipeline and approved products through licenses and acquisitions of products in areas that will serve rare disease patients with serious unmet medical need and that we believe offer attractive growth characteristics.
The 10-year period of marketing exclusivity may extend to 11 years if, during the eight-year period of data exclusivity, the product receives marketing authorization for a second therapeutic that provides a significant clinical benefit in comparison to existing therapies.
The 10-year period of market exclusivity may extend to 11 years if, during the eight-year period of data exclusivity, the product receives marketing authorization for a second therapeutic that provides a significant clinical benefit in comparison to existing therapies.
Following Mission’s listing of the '104 patent in the Orange Book, and as of December 31, 2022, Mission has received three paragraph IV notice letters from three generic manufacturers notifying Mission that each has filed an ANDA seeking approval of a proposed generic version of Thiola EC (tiopronin) 100 mg and 300 mg oral tablets before expiration of the '104 patent and asserting that the '104 patent is not infringed and/or is invalid, with each such ANDA having been filed prior to the granting and listing of the ‘104 patent.
Following Mission’s listing of the '104 patent in the Orange Book, and as of December 31, 2023, Mission has received three paragraph IV notice letters from three generic manufacturers notifying Mission that each has filed an ANDA seeking approval of a proposed generic version of Thiola EC (tiopronin) 100 mg and 300 mg oral tablets before expiration of the '104 patent and asserting that the '104 patent is not infringed and/or is invalid, with each such ANDA having been filed prior to the granting and listing of the ‘104 patent.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH"), and their respective implementing regulations, imposes specified requirements relating to the privacy, security and transmission of individually identifiable health information.
Commercialization Through deep understanding of patient and healthcare provider needs, we believe we are able to: • serve patients living with rare disease that have limited treatment options; • drive optimum performance of our marketed products; • educate and train healthcare providers about our products and the diseases for which they are approved to treat; • support access to and reimbursement coverage for our products without significant restrictions; • minimize the number of patients who discontinue treatment or have low compliance with our products by providing patients with support services and disease education, to the extent and in the manner permitted under applicable laws, to help them utilize our products in a manner consistent with the label and maximize the benefits of treatment; and • successfully launch new treatment options once approved, including FILSPARI.
Through our deep understanding of patient and healthcare provider needs, we believe we are able to: • serve patients living with rare disease that have limited treatment options; • drive optimum performance of our marketed products; • educate and train healthcare providers about our products and the diseases for which they are approved to treat; • support access to and reimbursement coverage for our products without significant restrictions; • minimize the number of patients who discontinue treatment or have low compliance with our products by providing patients with support services and disease education, to the extent and in the manner permitted under applicable laws, to help them utilize our products in a manner consistent with the label and maximize the benefits of treatment; and • successfully launch new treatment options once approved.
Even if a third-party payer covers a particular product, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payers to reimburse all or part of the costs associated with prescription drugs.
Even if a third-party payer covers a particular product, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed medications for the treatment of their conditions, and their prescribing physicians, generally rely on third-party payers to reimburse all or part of the costs associated with prescription therapies.
The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. The IRA, discussed in more detail below, also established new pricing pressures, including government price setting for certain drugs and mandatory rebates on price increases over inflation.
The IRA also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. The IRA, discussed in more detail below, also established new pricing pressures, including government price setting for certain therapies and mandatory rebates on price increases over inflation.
We also sponsor a 401(k) plan that includes a discretionary matching contribution. A similar package of benefits are provided to our employees outside of the United States, subject to regional differences. By focusing on employee retention, engagement and development opportunities, we believe we also improve our ability to support our clinical trials, our pipeline, our business and operations.
We also sponsor a 401(k) plan that includes a discretionary matching contribution. A similar package of benefits is provided to our employees outside of the United States, subject to regional differences. By focusing on employee retention, engagement and development opportunities, we believe we also improve our ability to support our clinical trials, our pipeline, our business and our operations.
Our US commercial initiatives are designed to support patients living with rare diseases and clinicians treating these patients. We believe that it is possible to commercialize our products in the United States with a relatively small specialty sales force. The primary call points for Thiola and Thiola EC include urologists and nephrologists.
Our US commercial initiatives are designed to support patients living with rare diseases and clinicians treating these patients. We believe that it is possible to commercialize our products in the United States with a relatively small specialty sales force. Nephrologists are the primary call point for FILSPARI. The primary call points for Thiola and Thiola EC include urologists and nephrologists.
As of December 31, 2022, this patent family was comprised of a granted U.S. patent (U.S. Patent No. 10,864,197, which we refer to herein as the ‘197 patent) and pending patent applications in the US, Australia, Brazil, Canada, China, the European Patent Office, Hong Kong, Japan, Korea, New Zealand and South Africa.
As of December 31, 2023, this patent family was comprised of a granted U.S. patent (U.S. Patent No. 10,864,197, which we refer to herein as the ‘197 patent) and pending patent applications in the US, Australia, Brazil, Canada, China, the European Patent Office, Hong Kong, Japan, Korea, New Zealand and South Africa.
In addition, certain marketing practices, including off-label promotion, may also violate federal false claims laws. Also, many states have similar fraud and abuse statutes or regulations, including state anti-kickback and false claims laws, that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.
In addition, certain marketing practices, including off-label promotion, may also violate federal false claims laws. Also, many states have similar fraud and abuse statutes or regulations, including state anti-kickback and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payer.
Our competition will be determined in part by the potential indications for which drugs are developed and ultimately approved by regulatory authorities. The speed with which we can develop products, complete preclinical testing, clinical trials, approval processes, and supply commercial quantities to market are expected to be important competitive factors.
Our competition will be determined in part by the potential indications for which therapies are developed and ultimately approved by regulatory authorities. The speed with which we can develop products, complete preclinical testing, clinical trials, approval processes, and supply commercial quantities to market are expected to be important competitive factors.
If we were to be unsuccessful in doing so, we would expect to rely on the data and/or marketing exclusivity that we expect to be available in Europe, as described below under “Regulatory Exclusivity.” The first Travere patent family is directed to methods of using sparsentan in the treatment of various kidney diseases, including focal segmental glomerulosclerosis (FSGS) and IgAN, e.g., by achieving a specified urine protein-to-creatinine ratio.
If we were to be unsuccessful in doing so, we would expect to rely on the data and/or marketing exclusivity that may be available in the EU, as described below under “Regulatory Exclusivity.” The first Travere patent family is directed to methods of using sparsentan in the treatment of various kidney diseases, including focal segmental glomerulosclerosis (FSGS) and IgAN, e.g., by achieving a specified urine protein-to-creatinine ratio.
We continue to evaluate potential in-licensing, out-licensing and other potential relationships with other pharmaceutical or biotechnology companies. We intend to mitigate risk by employing rigorous decision criteria, favoring drug candidates that have undergone at least some clinical study.
We continue to evaluate potential in-licensing, out-licensing and other potential relationships with other pharmaceutical or biotechnology companies. We intend to mitigate risk by employing rigorous decision criteria, favoring therapeutic candidates that have undergone at least some clinical study.
As of December 31, 2022, this patent family was comprised of pending patent applications in the United States, Australia, Brazil, Canada, China, the European Patent Office, Hong Kong, India, Israel, Japan, Korea, Mexico, New Zealand, Russia and South Africa.
As of December 31, 2023, this patent family was comprised of pending patent applications in the United States, Australia, Brazil, Canada, China, the European Patent Office, Hong Kong, India, Israel, Japan, Korea, Mexico, New Zealand, Russia and South Africa.
Government Regulation Regulation by government authorities in the United States and foreign countries is a significant factor in the development, manufacture and marketing of proposed products and in ongoing research and product development activities. All pipeline products will require regulatory approval by government agencies prior to commercialization.
Government Regulation Regulation by government authorities in the United States and foreign countries is a significant factor in the development, manufacture and marketing of proposed products and in ongoing research and product development activities. All pipeline products will require regulatory approval by competent regulatory authorities prior to commercialization.
Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’s privacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA and their covered subcontractors.
Among other things, HITECH, through its implementing regulations, makes certain of HIPAA’s privacy and security standards directly applicable to business associates, defined as a person or organization, other than a member of a covered entity’s workforce, that creates, receives, 24 Table of Contents maintains or transmits protected health information for or on behalf of a covered entity for a function or activity regulated by HIPAA and their covered subcontractors.
After 36 weeks of treatment, patients receiving FILSPARI achieved a mean reduction in proteinuria from baseline of 49.8 percent, compared to a mean reduction in proteinuria from baseline of 15.1 percent for irbesartan-treated patients (p Per request from the FDA, the efficacy data contained in the FDA-approved label is a post-hoc sensitivity analysis that evaluates the first 281 randomized patients, a subset of the full trial population.
After 36 weeks of treatment, patients receiving FILSPARI achieved a mean reduction in proteinuria from baseline of 49.8 percent, compared to a mean reduction in proteinuria from baseline of 15.1 percent for irbesartan-treated patients (p Per request from the FDA, the efficacy data contained in the FDA-approved label under accelerated approval is a post-hoc sensitivity analysis that evaluates the first 281 randomized patients, a subset of the full trial population.
The ‘197 patent claims use of sparsentan for treating Alport syndrome. The second Travere patent family is directed to methods of using sparsentan for treating hearing loss associated with Alport syndrome. As of December 31, 2022, this patent family was comprised of a granted U.S. patent (U.S.
The ‘197 patent claims use of sparsentan for treating Alport syndrome. The second Travere patent family is directed to methods of using sparsentan for treating hearing loss associated with Alport syndrome. As of December 31, 2023, this patent family was comprised of a granted U.S. patent (U.S.
The key steps required before a drug may be marketed in the United States generally include the following: • completion of extensive preclinical laboratory tests, animal studies, toxicology, pharmacology, and formulation studies in accordance with the FDA’s GLP regulations; • submission to the FDA of an IND, and oversight by an Institutional Review Board, for human clinical testing, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication; • submission to the FDA of an NDA or BLA after completion of the required pivotal clinical trials; • satisfactory completion of any FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices ("cGMPs"); and • FDA review and approval of the NDA or BLA.
The key steps required before a drug may be marketed in the United States generally include the following: • completion of extensive preclinical laboratory tests, animal studies, toxicology, pharmacology, and formulation studies in accordance with the FDA’s GLP regulations; • submission to the FDA of an IND, and oversight by an Institutional Review Board, for human clinical testing, which must become effective before human clinical trials may begin; • performance of adequate and well-controlled human clinical trials (phase 1-3) in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication; • submission to the FDA of an NDA or BLA after completion of the required pivotal clinical trials; • satisfactory completion of any FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices ("cGMPs"); and 18 Table of Contents • FDA review and approval of the NDA or BLA.
The requirement for REMS can materially affect the potential market and 19 Table of Contents profitability of the drug. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
The requirement for REMS can materially affect the potential market and profitability of the drug. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
Any legislation that influences these areas could impact, in a significant way, our ability to generate revenues from sales of products that, if successfully developed, we bring to market. There have been a number of enacted or proposed legislative and regulatory changes affecting the healthcare system and pharmaceutical industry that could affect our commercial success.
Any legislation that influences these areas could impact, in a significant way, our ability to generate revenues from sales of products that, if successfully developed, we bring to market. 22 Table of Contents There have been a number of enacted or proposed legislative and regulatory changes affecting the healthcare system and pharmaceutical industry that could affect our commercial success.
For example, in the United States, an FDA-approved drug product may be eligible to receive five years of new chemical entity ("NCE") exclusivity or, for drugs granted an orphan designation by the FDA, seven years of orphan drug exclusivity ("ODE").
For example, in the United States, an FDA-approved therapy may be eligible to receive five years of new chemical entity ("NCE") exclusivity or, for drugs granted an orphan designation by the FDA, seven years of orphan drug exclusivity ("Orphan Drug Exclusivity" or "ODE").
In particular, human therapeutic products are subject to rigorous preclinical studies and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries. Various federal and state statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage and record-keeping related to such products and their marketing.
In particular, human therapeutic products are subject to rigorous preclinical studies and clinical trials and other approval procedures of the FDA and similar regulatory authorities in foreign countries. Various federal and state statutes and regulations also govern or influence analytical testing, manufacturing, safety evaluation, labeling, storage, inspection and record-keeping related to such products and their marketing.
Additionally, there are several pre-clinical, Phase 1, and later-stage programs/assets in development (including those that are academia-sponsored) that may enter the clinic for the treatment of FSGS or related conditions. Licenses and Royalties Ligand License Agreement In 2012, we entered into a license agreement with Ligand Pharmaceuticals, Inc.
Additionally, there are several pre-clinical, Phase 1, and later-stage programs/assets in development (including those that are academia-sponsored) that may enter the clinic for the treatment of FSGS or related conditions. 13 Table of Contents Licenses and Royalties Ligand License Agreement In 2012, we entered into a license agreement with Ligand Pharmaceuticals, Inc.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA or BLA, the FDA typically will inspect one or more clinical sites to assure compliance with GCPs. Additionally, the FDA may inspect the facility or the facilities at which the drug is manufactured.
The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. 19 Table of Contents Before approving an NDA or BLA, the FDA typically will inspect one or more clinical sites to assure compliance with GCPs. Additionally, the FDA may inspect the facility or the facilities at which the drug is manufactured.
Based on public sources, there are other preclinical assets in development that may enter the clinic for the treatment of cystinuria. FILSPARI/Sparsentan FILSPARI is the first and only non-immunosuppressive therapy approved to reduce proteinuria in adults with IgAN at risk of rapid disease progression.
Based on public sources, there are other preclinical assets in development that may enter the clinic for the treatment of cystinuria. 12 Table of Contents FILSPARI/Sparsentan FILSPARI is the first and only non-immunosuppressive therapy approved to reduce proteinuria in adults with IgAN at risk of rapid disease progression.
In addition, it is possible that future legislation in the United States and other jurisdictions could be enacted which could potentially impact the reimbursement rates for the products we are developing and may develop in the future and also could further impact the levels of discounts and rebates paid to federal and state government entities.
In addition, it is possible that future legislation in the United States and other jurisdictions could be enacted which could potentially impact the reimbursement rates for the products we are developing and may develop in the future and also could further 23 Table of Contents impact the levels of discounts and rebates paid to federal and state government entities.
Pegtibatinase As of December 31, 2022, our patent portfolio for pegtibatinase was comprised of six distinct patent families, which we obtained upon our acquisition of Orphan Technologies Limited (now Travere Therapeutics Switzerland GmbH).
Pegtibatinase As of December 31, 2023, our patent portfolio for pegtibatinase was comprised of six distinct patent families, which we obtained upon our acquisition of Orphan Technologies Limited (now Travere Therapeutics Switzerland GmbH).
Specifically, there have been several recent US Congressional inquiries and numerous proposed and enacted legislation at both the state and federal levels designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, expedite generic competition, review the relationship between pricing and manufacturer patient programs, institute drug re-importation, and reform government program reimbursement methodologies for drugs.
Specifically, there have been several recent US Congressional inquiries and numerous proposed and enacted legislation at both the state and federal levels designed to, among other things, bring more transparency to therapy pricing, reduce the cost of prescription therapies under Medicare, expedite generic competition, review the relationship between pricing and manufacturer patient programs, institute therapy re-importation, and reform government program reimbursement methodologies for therapies.
Should any of our drug candidates obtain marketing approval, we anticipate establishing relationships with third-party manufacturers and other service providers in connection with the commercial production of our products.
Should any of our therapeutic candidates obtain marketing approval, we anticipate establishing relationships with third-party manufacturers and other service providers in connection with the commercial production of our products.
Patent No. 11,207,299) and pending patent applications in the US, Australia Brazil, Canada, China, the European Patent Office, Hong Kong, Israel, Japan, Korea, Mexico, New Zealand and South Africa. 14 Table of Contents The third Travere patent family is directed to an amorphous form of sparsentan.
Patent No. 11,207,299) and pending patent applications in the US, Australia Brazil, Canada, China, the European Patent Office, Hong Kong, Israel, Japan, Korea, Mexico, New Zealand and South Africa. The third Travere patent family is directed to an amorphous form of sparsentan.
Regulatory Exclusivity If we obtain marketing approval for sparsentan for the treatment of FSGS in the United States or in certain jurisdictions outside of the United States, or for sparsentan for the treatment of IgAN in certain jurisdictions outside of the United States, we may be eligible for regulatory exclusivity for the approved drug.
Regulatory Exclusivity If we obtain marketing approval for sparsentan for the treatment of FSGS in the United States or in certain jurisdictions outside of the United States, or for sparsentan for the treatment of IgAN in certain jurisdictions outside of the United States, we may be eligible for regulatory exclusivity for the approved therapy.
The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as UPCR ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.
The DUPLEX Study protocol provided for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as urine protein-to-creatinine ratio (UPCR) ≤1.5 g/g and a >40% reduction in UPCR from baseline, at week 36.
If the FDA raises concerns or 18 Table of Contents questions about the conduct of the trial, such as whether human research subjects will be exposed to an unreasonable health risk, the IND sponsor must resolve any outstanding FDA concerns or questions before clinical trials can proceed.
If the FDA raises concerns or questions about the conduct of the trial, such as whether human research subjects will be exposed to an unreasonable health risk, the IND sponsor must resolve any outstanding FDA concerns or questions before clinical trials can proceed.
Likewise, if we obtain marketing approval for pegtibatinase in the United States or in certain jurisdictions outside of the United States, we may be eligible for regulatory exclusivity for the approved product. Pegtibatinase is a biologic product and therefore its application for approval would be via a biologic license application (“BLA”) (vs. an NDA).
Likewise, if we obtain marketing approval for pegtibatinase in the United States or in certain jurisdictions outside of the United States, we may be eligible for regulatory exclusivity for the approved product. Pegtibatinase is a biologic product and therefore its application for approval would be via a biologic license application (“BLA”).
Ligand may terminate the license agreement due to (i) our insolvency, (ii) our material uncured breach of the agreement, (iii) our failure to use commercially reasonable efforts to develop and commercialize sparsentan as described above or (iv) certain other conditions.
Ligand may terminate the license agreement due to (i) our insolvency, (ii) our material uncured breach of the agreement, (iii) our failure to use commercially reasonable efforts to develop and commercialize sparsentan as described above or (iv) certain other conditions. We may terminate the license agreement due to a material uncured breach of the agreement by Ligand.
We expect that the PPACA, the Inflation Reduction Act, as well as other federal and state healthcare reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any of our products, and could seriously affect our future revenues.
We expect that the PPACA, the IRA, as well as other federal and state healthcare reform measures that have been and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any of our products, and could seriously affect our future revenues.
Secondary efficacy endpoints include the rate of change in eGFR following the initiation of randomized treatment over 58-week and 110-week periods, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment in approximately 380 patients.
Secondary efficacy endpoints include the rate of change in estimated glomerular filtration rate (eGFR) following the initiation of randomized treatment over 58-week and 110-week periods, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment in approximately 380 patients.
Trade Secrets In addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position. We seek to protect our proprietary data and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors, and partners. These agreements are designed to protect our proprietary information.
Trade Secrets In addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position. We seek to protect our proprietary data and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific 16 Table of Contents advisors, contractors, and partners. These agreements are designed to protect our proprietary information.
Increasingly, third-party payers are requiring that drug companies provide them with predetermined discounts from list prices as a condition of coverage, are using restrictive formularies and preferred drug lists to leverage greater discounts in competitive classes, and are challenging the prices charged for medical products.
Increasingly, third-party payers are requiring that therapeutic companies provide them with predetermined discounts/rebates from list prices as a condition of coverage, are using restrictive formularies and preferred therapy lists to leverage greater discounts in competitive classes, and are challenging the prices charged for medical products.
In addition, it is possible that future legislation in the US and other jurisdictions could be enacted which could potentially influence the coverage and reimbursement rates for our products and also could further impact the levels of discounts and rebates paid to federal and state government entities.
In addition, it is possible that future legislation in the US and other jurisdictions could be enacted which could potentially influence the coverage and reimbursement rates for our products and also could further impact the levels of discounts and rebates paid to federal and state government entities, as well as commercial payers.
We distribute our other products through one direct to patient pharmacy, Eversana, who also provides our comprehensive patient support services in the US for Thiola, Chenodal and Cholbam (i.e., Travere TotalCare).
We distribute our other products through one direct to patient pharmacy, Eversana, who also provides our comprehensive patient support services in the US for Thiola and Thiola EC (i.e., Travere TotalCare).
As consideration for the expanded territory we paid an up-front fee of $0.3 million and will pay guaranteed minimum royalties equaling the greater of $0.1 million or 20% of our Thiola net sales generated outside of the United States during each calendar year.
As consideration for the expanded territory, we paid an up-front fee of $0.3 million and will pay the greater of $0.1 million, representing the guaranteed minimum royalty, or 20% of our Thiola net sales generated outside of the United States during each calendar year.
Likewise, it is possible, assuming that sparsentan achieves regulatory approval in Europe and depending upon the date of any such approval, that the term of either the European ‘818 patent or the European '277 patent may be extended in various European countries under the provisions governing Supplementary Protection Certificates (SPCs).
Likewise, it is possible, if sparsentan achieves regulatory approval in the EU and depending upon the date of any such approval, that the term of either the European ‘818 patent or the European '277 patent may be extended in various European countries under the provisions governing Supplementary Protection Certificates (SPCs).
We paid Mission an up-front license fee of $3.0 million and during the term of the agreement will pay guaranteed minimum royalties during each calendar year the greater of $2.0 million or 20% of our net sales of Thiola in the United States and Canada.
We paid Mission an up-front license fee of $3.0 million and over the term of the agreement will pay the greater of $2.0 million, representing the guaranteed minimum royalty, or 20% of our net sales of Thiola in the United States and Canada during each calendar year.
Consequently, we anticipate that trade secrets and know-how will, over time, be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from academic to industry scientific positions. Manufacturing STA Pharmaceutical Hong Kong Limited manufactures the active pharmaceutical ingredient for FILSPARI and Catalent Patheon, Inc. formulates and packages FILSPARI.
Consequently, we anticipate that trade secrets and know-how will, over time, be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from academic to industry scientific positions. Manufacturing STA Pharmaceutical Hong Kong Limited manufactures the active pharmaceutical ingredient for FILSPARI.
Breakthrough therapy designation 20 Table of Contents comes with the benefits of Fast Track designation, which means that the sponsor may submit sections of the NDA or BLA for review on a rolling basis.
Breakthrough therapy designation comes with the benefits of Fast Track designation, which means that the sponsor may submit sections of the NDA or BLA for review on a rolling basis.
Pricing and Reimbursement A portion of our end-user demand for our approved drugs comes from patients covered under Medicaid, Medicare and other federal and state government-related programs such as TRICARE and the Department of Veterans Affairs, or the VA. As required by Federal regulations, we provide rebates and discounts in connection with these programs.
Pricing and Reimbursement A portion of our product demand for our approved therapies comes from patients covered under Medicaid, Medicare and other federal and state government-related programs such as TRICARE and the Department of Veterans Affairs, or the VA. As required by Federal regulations, we provide rebates and discounts in connection with these programs.
NDA or BLA review usually does not begin until the drug company has submitted the entire application to the FDA. Once a drug receives Fast Track designation, early and frequent communication between the FDA and a drug company is encouraged throughout the entire drug development and review process.
NDA or BLA review usually does not begin until the drug company has submitted the entire application to the FDA. 20 Table of Contents Once a drug receives Fast Track designation, early and frequent communication between the FDA and a drug company is encouraged throughout the entire drug development and review process.
Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payers in the United States. Therefore, coverage and reimbursement for drug products can differ significantly from payer to payer.
Further, no uniform policy requirement for coverage and reimbursement for therapies exists among third-party payers in the United States. Therefore, coverage and reimbursement for therapies can differ significantly from payer to payer.
During 2022 we continued to focus on ways to maximize a people-centered, inclusive, and recognition-based company culture, building on initiatives that have been implemented over the last several years. Also during 2022, we furthered the development of our hybrid workforce program that provides a variety of virtual and in-person collaboration opportunities.
During 2023 we continued to focus on ways to maximize a people-centered, inclusive, and recognition-based company culture, building on initiatives that have been implemented over the last several years. Also during 2023, we continued to enhance our hybrid workforce program that provides a variety of virtual and in-person collaboration opportunities.
FILSPARI™ (sparsentan) On February 17, 2023, the FDA granted accelerated approval of FILSPARI™ (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a urine protein-to-creatinine ratio (UPCR) ≥1.5 gram/gram.
FILSPARI® (sparsentan) On February 17, 2023, the FDA granted accelerated approval of FILSPARI® (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a UPCR ≥1.5 gram/gram.
Pegtibatinase is currently being evaluated in the Phase 1/2 COMPOSE Study, a double blind, randomized, placebo-controlled dose escalation study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU. In December 2021, we announced positive topline results from the Phase 1/2 COMPOSE Study.
In December 2021, we announced positive topline results from the Phase 1/2 COMPOSE Study, a double blind, randomized, placebo-controlled dose escalation study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU.
Our decision to acquire rights to a drug candidate also depends on the scientific merits of the available clinical data; the identifiable orphan patient population; the economic terms of any proposed acquisition of rights; the projected amount of capital required to develop the drug candidate; and the economic potential of the drug candidate, should it be commercialized.
Our decision to acquire rights to a therapeutic candidate also depends on the scientific merits of the available clinical data; the identifiable orphan patient population; the economic terms of any proposed acquisition of rights; the projected amount of capital required to develop the therapeutic candidate; and the economic potential of the therapeutic 7 Table of Contents candidate, should it be commercialized.
Additionally, although patients diagnosed with IgAN are not part of the label (nor were they included in the initial pivotal studies), Bayer’s non-steroidal mineralocorticoid receptor antagonist, Kerendia, could be used in patients with diabetic kidney disease and theoretically, those with concurrent IgAN.
Additionally, although patients diagnosed with IgAN are not part of the label (nor were they included in the initial pivotal studies), Bayer’s non-steroidal mineralocorticoid receptor antagonist, Kerendia, could be used in patients with diabetic kidney disease and theoretically, those with concurrent IgAN and is currently studied in patients with chronic kidney disease without diabetes.
Employees and Human Capital Management As of January 31, 2023, we had 462 full-time employees, with most of those based in the United States and a small number outside of the United States. We consider the intellectual capital of our employees to be an important driver of our business and key to our future success.
Employees and Human Capital Management As of January 31, 2024, we had 380 full-time employees, with most of those based in the United States and a small number outside of the United States. We consider the intellectual capital and well-being of our employees to be an important driver of our business and key to our future success.
PPACA also increased the mandated Medicaid rebate from 15.1% to 23.1% of the average manufacturer price, expanded the rebate to Medicaid managed care utilization and increased the types of entities eligible for the federal 340B drug discount program. There have been executive, judicial and Congressional challenges to certain aspects of the PPACA.
PPACA also increased the mandated Medicaid rebate from 15.1% to 23.1% of the average manufacturer price, expanded the rebate to Medicaid managed care utilization and increased the types of entities eligible for the federal 340B drug discount program. There have been executive, judicial and Congressional challenges to certain aspects of the PPACA. For example, on June 17, 2021, the U.S.
We desire to have our organization be representative of the communities we aim to serve with our treatments, and we are placing an increased focus on ways in which we can gain greater ethnic and racial diversity within our workforce, as well as increase gender and ethnic/racial diversity in leadership roles.
We desire to have our organization be representative of the communities we aim to serve with our treatments, and we are placing an increased focus on ways in which we can gain greater ethnic and racial diversity within our workforce, as well as other underrepresented groups, both throughout the organization and in leadership roles.
Additionally, there are several pre-clinical, Phase 1, and later-stage programs/assets in development (including those that are academia-sponsored) that may enter the clinic for the treatment of IgAN or related conditions.
Additionally, there are several pre-clinical, Phase 1, and later-stage programs/assets in development (including those that are academia-sponsored) that may enter the clinic for the treatment of IgAN or related conditions (such as diabetic and non-diabetic chronic disease).
There are currently no non-immunosuppressive pharmacological treatments approved by the EMA for IgAN or by the FDA or EMA for the treatment of FSGS. For IgAN, the current standard of care is renin-angiotensin-aldosterone system (RAAS) blockade with immunosuppression. RAAS blockage is also commonly used in patients with significant proteinuria or rapidly progressive glomerulonephritis.
There are currently no non-immunosuppressive pharmacological treatments approved by the European Commission for IgAN or by the FDA or European Commission for the treatment of FSGS. For IgAN, the traditional standard of care has been renin-angiotensin-aldosterone system (RAAS) blockade with immunosuppression. RAAS blockade is also commonly used in patients with significant proteinuria or rapidly progressive glomerulonephritis.
Additionally, the federal Physician Payments Sunshine Act within the PPACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to annually report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians (defined to include to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members. 24 Table of Contents Further, certain states require implementation of commercial compliance programs and marketing codes, compliance with the pharmaceutical industry’s voluntary compliance guidelines, and compliance with the applicable compliance guidance promulgated by the federal government.
Additionally, the federal Physician Payments Sunshine Act within the PPACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to annually report information related to certain payments or other transfers of value made or distributed to physicians and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians (defined to include to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.
The Travere patent family is directed to methods for treating human cystathionine β-synthase deficiency in patients with elevated homocysteine levels. Thiola Our patent portfolio for Thiola is comprised of a patent family which is exclusively licensed from Mission Pharmacal (the “Mission patent family”). The Mission patent family is directed to a new formulation of Thiola, known as Thiola EC.
The Travere patent family is directed to methods for treating human cystathionine β-synthase deficiency in patients with elevated homocysteine levels. 15 Table of Contents Thiola Our patent portfolio for Thiola is comprised of a patent family which is exclusively licensed from Mission Pharmacal (the “Mission patent family”).
It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available ACE or ARB therapy.
It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial that evaluated the safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available ACE or ARB therapy, and is currently ongoing in the open label extension phase of the study.
If sparsentan receives marketing authorization in any of the licensed territories, CSL Vifor will be responsible for all commercialization activities in such licensed territories.
If sparsentan receives marketing authorization in any of the licensed territories covered by the exclusive license to CSL Vifor, CSL Vifor will be responsible for all commercialization activities in such licensed territories.
Leadership in rare disease demands attention beyond innovative medicines. By listening to patients and leaders in the rare disease community, including those who have traditionally been underserved, we are focusing on barriers that prevent some patients from accessing the incredible innovation that our industry is delivering, including access to clinical trials and rare disease specialists. • Support earlier diagnosis.
By listening to patients and leaders in the rare disease community, including those who have traditionally been underserved, we are focusing on barriers that prevent some patients from accessing the incredible innovation that our industry is delivering, including access to clinical trials and rare disease specialists. • Support earlier diagnosis. We support efforts in furtherance of enabling earlier diagnosis.
Based on public sources, Boehringer Ingelheim, Chinook Therapeutics, Dimerix Bioscience, Goldfinch Bio, Horizon Therapeutics (Amgen, Inc.), Pfizer Inc., Reata Pharmaceuticals, River 3 Renal Corp., and Vertex Pharmaceuticals may have programs in clinical development for the treatment of FSGS or related conditions. Some of these programs may no longer be active or may be deprioritized in favor of other indications.
Based on public sources, Amgen Inc., AstraZeneca / Ionis Pharmaceuticals, Boehringer Ingelheim, Dimerix Bioscience, Maze Therapeutics, Novartis, River 3 Renal Corp., Vertex Pharmaceuticals, and ZyVersa Therapeutics may have programs in clinical development for the treatment of FSGS or related conditions. Some of these programs may no longer be active or may be deprioritized in favor of other indications.
Overview We are a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare kidney, liver, and metabolic diseases. In addition to commercializing our portfolio of approved products, our approach centers on advancing our innovative pipeline with multiple late-stage clinical programs targeting rare diseases with significant unmet medical needs.
Overview We are a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare kidney and metabolic diseases. Our approach centers on advancing our innovative pipeline with multiple late-stage clinical programs targeting rare diseases with significant unmet medical needs. In February 2023, the U.S.
Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
Further, the IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions take effect progressively starting in fiscal year 2023.
We previously had one additional licensed patent family related to sparsentan that was owned by BMS, exclusively licensed to Ligand and sub-licensed to us by Ligand. However, as of December 31, 2019, the BMS patent family is expired and therefore no longer in force.
The other five patent families are owned by Travere (the "Travere patent families"). We previously had one additional licensed patent family related to sparsentan that was owned by BMS, exclusively licensed to Ligand and sub-licensed to us by Ligand. However, the BMS patent family expired in 2019 and therefore is no longer in force.
The fourth Travere patent family is comprised of a pending international patent application related to methods of treating kidney diseases or disorders. The fifth Travere patent family is comprised of a U.S. provisional patent application.
The fourth Travere patent family is comprised of a pending international patent application related to methods of treating kidney diseases or disorders. The fifth Travere patent family is comprised of a U.S. provisional patent application, related to methods of treating a kidney disease or disorder comprising sparsentan, and a SGLT2 inhibitor.
Our approach may vary depending on the product and will be based on a number of factors including capital necessary to execute on each option, size of the market and terms of potential collaboration and/or licensing offers from other pharmaceutical and biotechnology companies with respect to jurisdictions outside the United States. • Listen to patients.
Our approach may vary depending on the product and will be based on a number of factors including capital necessary to execute on each option, size of the market and terms of potential collaboration and/or licensing offers from other pharmaceutical and biotechnology companies with respect to jurisdictions outside the United States. • Develop a sustainable pipeline by employing disciplined decision criteria in the evaluation of potential in-licensing candidates.
As we continue to navigate through these challenging times in the wake of a global pandemic, we take pride in the role we play in helping to ensure our employees are as productive and engaged as possible and their physical and emotional health and well-being remains a key priority.
As we continue to navigate through new ways of working, we take pride in the role we play in helping to ensure our employees are as productive and engaged as possible and their physical and emotional health, well-being and safety remains a key priority.
There can be no assurance that we will qualify for any such regulatory exclusivity, or that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies.
The regulatory exclusivity periods run from the date of European Commission approval. There can be no assurance that we will qualify for any such regulatory exclusivity, or that any such exclusivity will prevent competitors from seeking approval solely on the basis of their own studies. See “Government Regulation” below.

… 262 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

203 edited+109 added−54 removed312 unchanged
Biggest changeWe anticipate that our expenses will continue to increase as we: • continue the ongoing portion of the Phase 3 trial of FILSPARI for the treatment of IgAN to the confirmatory endpoint and through the open-label extension period; • continue the open label portion of DUET and the Phase 3 trial of sparsentan for the treatment of FSGS; • continue the research and development of additional product candidates, including pegtibatinase (TVT-058); • expand our sales and marketing infrastructure to commercialize our current approved products, and any other products for which we may obtain regulatory approval; and 44 Table of Contents • expand operational, financial, and management information systems and personnel, including personnel to support product development efforts and our obligations as a public company.
Biggest changeWe anticipate that certain of our expenses will continue to increase, depending on factors including but not limited to: the continuation and cost of our clinical trials and the research and development of additional product candidates; the costs involved in seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution, costs related to our operational, financial, and management information systems and personnel, including personnel to support product development efforts and our obligations as a public company.
Economic, social, and congressional pressure may result in individuals and government entities increasingly seeking to achieve cost savings through mechanisms that limit coverage or payment for our products. For example, state Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and requiring prior authorization for use of drugs.
Economic, social, and congressional pressure may result in individuals and government entities increasingly seeking to achieve cost savings through mechanisms that limit coverage or payment for our products. For example, state Medicaid programs are increasingly requesting manufacturers to pay supplemental rebates and are requiring prior authorization for use of drugs.
For products we develop based on a new chemical entity not previously approved by the FDA, we expect that in addition to the protection afforded by our patent filings that we will be able to obtain five years regulatory exclusivity via the provisions of the Food, Drug, and Cosmetic ("FDC") Act and possibly seven years regulatory exclusivity via the orphan drug provisions of the FDC Act.
For products we develop based on a new chemical entity not previously approved by the FDA, we expect that in addition to the protection afforded by our patent filings that we will be able to obtain five years regulatory exclusivity via the provisions of the Food, Drug, and Cosmetic Act ("FDC Act") and possibly seven years regulatory exclusivity via the orphan drug provisions of the FDC Act.
The timelines and conduct of our ongoing clinical trials previously have been affected by COVID-19 and we may experience similar delays or interruptions due to COVID-19 or other health epidemics or pandemics in the future.
The timelines and conduct of our ongoing clinical trials previously have been affected by COVID-19 and we may experience similar delays or interruptions due to other health epidemics or pandemics in the future.
In particular, the PPACA includes a number of provisions aimed at strengthening the government’s ability to pursue anti-kickback and false claims cases against pharmaceutical manufacturers and other healthcare entities, including substantially increased funding for healthcare fraud enforcement activities, enhanced investigative powers, amendments to the federal False Claims Act that make it easier for the government and whistleblowers to pursue cases for alleged kickback and false claim violations and public reporting of certain payments and transfers of value by certain pharmaceutical manufacturers to physicians and teaching hospitals nationwide.
In particular, the PPACA includes a number of provisions aimed at strengthening the government’s ability to pursue Anti-Kickback and False Claims Act cases against pharmaceutical manufacturers and other healthcare entities, including substantially increased funding for healthcare fraud enforcement activities, enhanced investigative powers, amendments to the federal False Claims Act that make it easier for the government and whistleblowers to pursue cases for alleged kickback and false claim violations and public reporting of certain payments and transfers of value by certain pharmaceutical manufacturers to physicians and teaching hospitals nationwide.
Inability to import personal data from Europe to the United States may significantly and negatively impact our business operations, including by limiting our ability to conduct clinical trial activities in Europe and elsewhere; limiting our ability to collaborate with CROs, service providers, contractors and other companies that are subject to such cross-border data transfer or localization laws; the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense; or requiring us to increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant expense.
Inability to import personal data from Europe to the United States may significantly and negatively impact our business operations, including by limiting our ability to conduct clinical trial activities in Europe and elsewhere; limiting our ability to collaborate with CROs, service providers, contractors and other companies that are subject to such cross-border data transfer or localization laws; the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense; or requiring us to increase our personal data processing capabilities and infrastructure in foreign jurisdictions at significant expense.
Also, while we intend to utilize our continued clinical trial experience with FILSPARI and post-marketing data gathering commitment to potentially support lifting of the liver monitoring REMS in the future following sufficient experience with FILSPARI and if supported by the data, there is no guarantee that the data will support this endeavor, or even if we believe it does, that the FDA will agree with it.
Also, while we intend to utilize our continued clinical trial experience with FILSPARI and post-marketing data gathering commitment to potentially support modifying or lifting of the liver monitoring REMS in the future following sufficient experience with FILSPARI and if supported by the data, there is no guarantee that the data will support this endeavor, or even if we believe it does, that the FDA will agree with it.
In October 2022, our licensor, Mission Pharmacal Company, was granted a patent covering the treatment of cystinuria by administering Thiola EC with food (US Patent No. 11,458,104, “the ‘104 patent”) and has listed this patent in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange Book).
In October 2022, our licensor, Mission Pharmacal Company, was granted a patent covering the treatment of cystinuria by administering Thiola EC with food (US Patent No. 11,458,104, “the ‘104 patent”) and listed this patent in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book").
For example, the EU GDPR imposes significant and complex burdens on processing personal data, particularly for processing “special category personal data” (such as personal data related to health and genetic information), which could be relevant to our operations in the context of our conduct of clinical trials and is of interest to relevant regulators.
For example, the GDPR imposes significant and complex burdens on processing personal data, particularly for processing “special category personal data” (such as personal data related to health and genetic information), which could be relevant to our operations in the context of our conduct of clinical trials and is of interest to relevant regulators.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, higher inflation, or continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, higher inflation, or unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive.
Additionally, in November 2020, a third party filed an opposition to our second European patent (European Patent No. EP3222277, “the ‘277 EP Patent”), in the European Patent Office ("EPO"). While we are vigorously defending the ‘277 EP Patent against the opposition, there is no guarantee that we will be successful in doing so.
In November 2020, a third party filed an opposition to our second European patent (European Patent No. EP3222277, “the ‘277 EP Patent”), in the European Patent Office ("EPO"). While we are vigorously defending the ‘277 EP Patent against the opposition, there is no guarantee that we will be successful in doing so.
However, this insurance may not be adequate to cover all claims. We may be exposed to product liability claims and product recalls, including those which may arise from misuse or malfunction of, or design flaws in, such products, whether or not such problems directly relate to the products and services we have provided.
However, this insurance may not be adequate to cover all claims. We may be exposed to product liability claims and product recalls, including those which may arise from misuse or malfunction of, or design flaws in, such products, whether or not such problems directly relate to the products we have provided.
Effective January 1, 2022, the Tax Cuts and Jobs Act eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years of research activities conducted outside the United States.
Effective January 1, 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenses for tax purposes in the year incurred and requires taxpayers to capitalize and subsequently amortize such expenses over five years for research activities conducted in the United States and over 15 years of research activities conducted outside the United States.
In order to operate our business and increase adoption and sales of our products, we need to continue to develop our commercial organization, including maintaining and growing a highly experienced and skilled workforce with qualified sales representatives. In order to successfully commercialize our products in the United States, we have built a specialized sales force.
In order to operate our business and increase adoption and sales of our products, we need to continue to develop our commercial organization, including maintaining a highly experienced and skilled workforce with qualified sales representatives. In order to successfully commercialize our products in the United States, we have built a specialized sales force.
If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell sparsentan in territories outside of the United States, if approved, our ability to generate product revenue outside of the United States and the Licensed Territories may be limited.
If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell sparsentan in territories outside of the United States, if approved, our ability to generate product revenue outside of the United States may be limited.
Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.
Additionally, hybrid and remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit, and in public locations.
We may experience numerous unforeseen events during, or as a result of, preclinical or nonclinical testing and the clinical trial process that could delay or prevent our ability to obtain, or impact our willingness to pursue, regulatory approval or commercialize our product candidates, including: 31 Table of Contents • our preclinical or nonclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical testing or clinical trials or we may abandon projects that we expect to be clinically promising in light of cost or strategic considerations; • regulators may require us to conduct studies of the long-term effects associated with the use of our product candidates; • regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; • the FDA or any non-United States regulatory authority may impose conditions on us regarding the scope or design of our clinical trials or may require us to resubmit our clinical trial protocols to institutional review boards for re-inspection due to changes in the regulatory environment; • the number of patients required for our clinical trials may be larger than we anticipate or participants may drop out of our clinical trials at a higher rate than we anticipate; • our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; • we might have to suspend or terminate one or more of our clinical trials if we, regulators or institutional review boards determine that the participants are being exposed to unacceptable health risks; • regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; • the cost of our clinical trials or the anticipated commercialization costs may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate, or more expensive than we originally anticipated, or we may not be able to reach agreements on acceptable terms with prospective suppliers or clinical research organizations; and • the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
We may experience numerous unforeseen events during, or as a result of, preclinical or nonclinical testing and the clinical trial process that could delay or prevent our ability to obtain, or impact our willingness to pursue, regulatory approval or commercialize our product candidates, including: • our preclinical or nonclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional nonclinical testing or clinical trials or we may abandon projects that we expect to be clinically promising in light of cost or strategic considerations; • regulators may require us to conduct studies of the long-term effects associated with the use of our product candidates; • regulators, institutional review boards or ethics committees may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; • the FDA or any non-United States regulatory authority may impose conditions on us regarding the scope or design of our clinical trials or may require us to resubmit our clinical trial protocols to institutional review boards or ethics committees for re-inspection due to changes in the regulatory environment; • the number of patients required for our clinical trials may be larger than we anticipate or participants may drop out of our clinical trials at a higher rate than we anticipate; • our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; • we might have to suspend, vary or terminate one or more of our clinical trials if we, regulators or institutional review boards or ethics committees determine that the participants are being exposed to unacceptable health risks; • regulators, institutional review boards or ethics committees may require that we hold, suspend, vary or terminate clinical research for various reasons, including noncompliance with regulatory requirements; 34 Table of Contents • the cost of our clinical trials or the anticipated commercialization costs may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate, or more expensive than we originally anticipated, or we may not be able to reach agreements on acceptable terms with prospective suppliers or clinical research organizations; and • the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
Following Mission’s listing of the '104 patent in the Orange Book, and as of December 31, 2022, Mission has received three paragraph IV notice letters from three generic manufacturers notifying Mission that each has filed an ANDA seeking approval of a proposed generic version of Thiola EC (tiopronin) 100 mg and 300 mg oral tablets before expiration of the '104 patent and asserting that the '104 patent is not infringed and/or is invalid, with each such ANDA having been filed prior to the granting and listing of the ‘104 patent.
Following Mission’s listing of the '104 patent in the Orange Book, and as of December 31, 2023, Mission has received three paragraph IV notice letters from three generic manufacturers notifying Mission that each has filed an ANDA seeking approval of a proposed generic version of Thiola EC (tiopronin) 100 mg and 300 mg oral tablets before expiration of the '104 patent and asserting that the '104 patent is not infringed and/or is invalid, with each such ANDA having been filed prior to the granting and listing of the ‘104 patent.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • we or our licensors were the first to make the inventions covered by each of our pending patent applications; • we or our licensors were the first to file patent applications for these inventions; • others will not independently develop similar or alternative technologies or duplicate any of our technologies; • any patents issued to us or our licensors that provide a basis for commercially viable products will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies that are patentable; • we will file patent applications for new proprietary technologies promptly or at all; • the claims we make in our patents will be upheld by patent offices in the United States and elsewhere; • our patents will not expire prior to or shortly after commencing commercialization of a product; and • the patents of others will not have a negative effect on our ability to do business.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • we or our licensors were the first to make the inventions covered by each of our pending patent applications; • we or our licensors were the first to file patent applications for these inventions; • others will not independently develop similar or alternative technologies or duplicate any of our technologies; 40 Table of Contents • any patents issued to us or our licensors that provide a basis for commercially viable products will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies that are patentable; • we will file patent applications for new proprietary technologies promptly or at all; • the claims we make in our patents will be upheld by patent offices in the United States and elsewhere; • our patents will not expire prior to or shortly after commencing commercialization of a product; and • the patents of others will not have a negative effect on our ability to do business.
We will need to continue to expend significant time and resources to train our sales forces to be credible and persuasive in discussing our products with the specialists treating the patients indicated under the product’s label.
We will need to continue to expend significant time and resources to train our sales forces to be credible in discussing our products with the specialists treating the patients indicated under the product’s label.
Reliance on third-party manufacturers entails risks to which we may not be subject if we manufactured our product candidates or products ourselves, including: • reliance on the third party for regulatory compliance and quality assurance; • limitations on supply availability resulting from capacity and scheduling constraints of the third parties; • less control over cost increases resulting from inflationary pressures affecting raw materials and other supply chain components; • impact on our reputation in the marketplace if manufacturers of our products fail to meet the demands of our customers; • the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and 41 Table of Contents • the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
Reliance on third-party manufacturers entails risks to which we may not be subject if we manufactured our product candidates or products ourselves, including: • reliance on the third party for regulatory compliance and quality assurance; • limitations on supply availability resulting from capacity and scheduling constraints of the third parties; • less control over cost increases resulting from inflationary pressures affecting raw materials and other supply chain components; • impact on our reputation in the marketplace if manufacturers of our products fail to meet the demands of our customers; • the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and • the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to any other debt we may incur in the future; • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; 56 Table of Contents • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increase our cost of borrowing; • place us at a competitive disadvantage compared to our competitors that may have less debt; and • limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.
For example, it could: • make it more difficult for us to satisfy our obligations with respect to any other debt we may incur in the future; • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • increase our cost of borrowing; • place us at a competitive disadvantage compared to our competitors that may have less debt; and • limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments, will stay in effect until 2031 unless additional Congressional action is taken.
For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments, will stay in effect until 2032 unless additional Congressional action is taken.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidates or products that we may develop; • damage to our reputation; • regulatory investigations that could require costly recalls or product modifications; • withdrawal of clinical trial participants; • costs to defend the related litigation; 47 Table of Contents • substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future; • loss of revenue; • the diversion of management’s attention from managing our business; and • the inability to commercialize any products that we may develop.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any product candidates or products that we may develop; • damage to our reputation; • regulatory investigations that could require costly recalls or product modifications; • withdrawal of clinical trial participants; • costs to defend the related litigation; • substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future; • loss of revenue; • the diversion of management’s attention from managing our business; and • the inability to commercialize any products that we may develop.
Pursuant to the Ligand License Agreement, we are obligated to pay to Ligand an escalating annual royalty between 15% and 17% of net sales of FILSPARI and any other products containing sparsentan or related compounds, which will impact our potential future profit from the commercialization of FILSPARI in the United States and sparsentan for the treatment of IgAN in Europe, if approved, as well as sparsentan for the treatment of FSGS, if approved.
Pursuant to the Ligand License Agreement, we are obligated to pay to Ligand an escalating annual royalty between 15% and 17% of net sales of FILSPARI and any other products containing sparsentan or related compounds, which will impact our potential future profit from the commercialization of FILSPARI in the United States and sparsentan for the treatment of IgAN in the EU, if approved, as well as sparsentan for the treatment of FSGS, if approved.
Any disruption in production or inability of our manufacturers in China to produce or ship adequate quantities to meet our needs, whether as a result of a natural disaster or other causes (such as staffing shortages, COVID-19 or other health epidemic or pandemic), could impair our ability to meet commercial demand for FILSPARI, to operate our business on a day-to-day basis and to continue our research and development of our product candidates.
Any disruption in production or inability of our manufacturers in China to produce or ship adequate quantities to meet our needs, whether as a result of a natural disaster or other causes (such as staffing shortages, or a health epidemic or pandemic), could impair our ability to meet commercial demand for FILSPARI, to operate our business on a day-to-day basis and to continue our research and development of our product candidates.
The degree of market acceptance of our current products and product candidates, if approved for commercial sale, will depend on a number of factors, including: • the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; • the efficacy and potential advantages over alternative treatments; • the pricing of our product candidates; • relative convenience and ease of administration; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support and timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; and • sufficient third-party insurance coverage and reimbursement.
The degree of market acceptance of our current products and product candidates, if approved for commercial sale, will depend on a number of factors, including: • the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; • the efficacy and potential advantages over alternative treatments; • the pricing of our product candidates; • the relative convenience and ease of administration; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support and timing of market introduction of competitive products; 38 Table of Contents • publicity concerning our products or competing products and treatments; and • sufficient third-party insurance coverage and reimbursement.
Changes in funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.
Changes in funding for the FDA, the SEC and other government agencies or regulatory authorities could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.
For example, we have certain post-marketing requirements and commitments associated with FILSPARI and Cholbam. Further, we face risks relating to those post-marketing obligations, as well as the commercial acceptance of FILSPARI and Cholbam. If the regulatory approval for FILSPARI, Thiola, Chenodal and/or Cholbam are withdrawn for any reason, it would have a material adverse impact on our sales and profitability.
For example, we have certain post-marketing requirements and commitments associated with FILSPARI. Further, we face risks relating to those post-marketing obligations, as well as the commercial acceptance of FILSPARI. If the regulatory approval for FILSPARI and/or Thiola are withdrawn for any reason, it would have a material adverse impact on our sales and profitability.
Additionally, the federal Physician Payments Sunshine Act within the PPACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biologicals and medical supplies to report annually information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, 49 Table of Contents physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.
Additionally, the federal Physician Payments Sunshine Act within the PPACA, and its implementing regulations, require that certain manufacturers of drugs, devices, biologicals and medical supplies to report annually information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians and their immediate family members.
We may not be able to rely on orphan drug exclusivity for our products. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs, providing eligibility for orphan drug exclusivity upon regulatory approval if certain jurisdictional-specific conditions are met.
We may not be able to rely on orphan drug exclusivity for our products. Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan drugs, providing eligibility for orphan drug exclusivity upon regulatory approval if certain jurisdictional-specific conditions are met.
We currently have no in-house distribution channels for FILSPARI, Thiola, Chenodal or Cholbam and we are dependent on third-party distributors to distribute such products. The outsourcing of our distribution function is complex, and we may experience difficulties that could reduce, delay or stop shipments of such products.
We currently have no in-house distribution channels for FILSPARI or Thiola and we are dependent on third-party distributors to distribute such products. The outsourcing of our distribution function is complex, and we may experience difficulties that could reduce, delay or stop shipments of such products.
While we cannot predict the broader consequences, the conflict and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.
While we cannot predict the broader consequences, the conflict and retaliatory and counter-retaliatory actions could materially adversely affect global trade, currency exchange rates, inflation, regional economies, and the global economy, which in turn may increase our costs, disrupt our supply chain, impair our ability to raise or 62 Table of Contents access additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.
Orphan drug status currently confers seven years of marketing exclusivity in the United States under the FDC Act, and up to ten years of marketing exclusivity in Europe for a particular product in a specified indication or, in the case of orphan drugs for which a pediatric investigation plan has been completed, 12 years.
Orphan drug status currently confers seven years of marketing exclusivity in the United States under the FDC Act, and up to ten years of marketing exclusivity in the EU for a particular product in a specified indication or, in the case of orphan drugs for which a pediatric investigation plan has been completed, 12 years.
The extent and duration of this potential impact on our business is currently unknown. We are dependent on third parties to manufacture and distribute our products. We have no manufacturing capabilities and rely on third-party manufacturers who are sole source suppliers for manufacturing of FILSPARI, Thiola, Chenodal and Cholbam.
The extent and duration of this potential impact on our business is currently unknown. We are dependent on third parties to manufacture and distribute our products. We have no manufacturing capabilities and rely on third-party manufacturers who are sole source suppliers for manufacturing of FILSPARI and Thiola.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.
Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.
Our manufacturing partners are subject to many of the same requirements. Companies may not promote drugs for “off-label” uses-that is, uses that are not described in the product’s labeling and that differ from those approved by the FDA or other applicable regulatory agencies.
Our manufacturing partners are subject to many of the same requirements. Companies may not promote drugs for “off-label” uses—that is, uses that are not described in the product’s labeling and that differ from those approved by the FDA or other applicable regulatory authorities.
If we encounter such distribution problems, and we are unable to quickly enter into a similar agreement with another distributor on substantially similar terms, distribution of FILSPARI, Thiola, Chenodal and/or Cholbam could become disrupted, resulting in lost revenues, provider dissatisfaction, and/or patient dissatisfaction.
If we encounter such distribution problems, and we are unable to quickly enter into a similar agreement with another distributor on substantially similar terms, distribution of FILSPARI and/or Thiola could become disrupted, resulting in lost revenues, provider dissatisfaction, and/or patient dissatisfaction.
We may not be able to initiate or continue clinical trials in the rare diseases on which we are focused if we are unable to locate a sufficient number of eligible patients willing and able to participate in the clinical trials required by the FDA or foreign regulatory agencies.
We may not be able to initiate or continue clinical trials in the rare diseases on which we are focused if we are unable to locate a sufficient number of eligible patients willing and able to participate in the clinical trials required by the FDA or foreign regulatory authorities.
We cannot assure that any current or future clinical trials of sparsentan or pegtibatinase (TVT-058) will ultimately be successful. Before obtaining regulatory approval to conduct clinical trials of our product candidates, we must conduct extensive nonclinical tests to demonstrate the safety of our product candidates in animals.
We cannot assure that any current or future clinical trials of sparsentan or pegtibatinase will ultimately be successful. Before obtaining regulatory approval to conduct clinical trials of our product candidates, we must conduct extensive nonclinical tests to demonstrate the safety of our product candidates in animals.
We have obtained limited product liability insurance coverage for our clinical trials in the amount of $10 million per occurrence and $25 million in the aggregate. However, our insurance may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer.
We have obtained limited product liability insurance coverage for our clinical trials in the amount of $10 million per occurrence and $30 million in the aggregate. However, our insurance may not reimburse us or may not be sufficient to reimburse us for any expenses or losses we may suffer.
If a third party has also filed a United States patent application prior to the effective date of the relevant provisions of the America Invents Act (i.e. before March 16, 2013) covering our product candidates or a similar invention, we may have to participate 38 Table of Contents in an adversarial proceeding, known as an interference, declared by the USPTO to determine priority of invention in the United States.
If a third party has also filed a United States patent application prior to the effective date of the relevant provisions of the America Invents Act (i.e. before March 16, 2013) covering our product candidates or a similar invention, we may have to participate in an adversarial proceeding, known as an interference, declared by the USPTO to determine priority of invention in the United States.
Potential difficulties that may be encountered in the integration process include the following: • integrating personnel, operations and systems, while maintaining focus on producing and delivering consistent, high quality products; • coordinating geographically dispersed organizations; • distracting employees from operations; • retaining existing customers and attracting new customers; and • managing inefficiencies associated with integrating the operations of the acquired company or product into our own operations.
Potential difficulties that may be encountered in the integration process include the following: 49 Table of Contents • integrating personnel, operations and systems, while maintaining focus on producing and delivering consistent, high quality products; • coordinating geographically dispersed organizations; • distracting employees from operations; • retaining existing customers and attracting new customers; and • managing inefficiencies associated with integrating the operations of the acquired company or product into our own operations.
If 55 Table of Contents a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
If a natural disaster, power outage or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure, such as the manufacturing facilities of our third-party contract manufacturers, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time.
Our product candidates may fail to obtain regulatory approval for many reasons, including: • our failure to demonstrate to the satisfaction of the FDA or comparable regulatory authorities that a product candidate is safe and effective for a particular indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable regulatory authorities for approval; • our inability to demonstrate that a product candidate’s benefits outweigh its risks; 50 Table of Contents • our inability to demonstrate that the product candidate presents an advantage over existing therapies; • the FDA’s or comparable regulatory authorities’ disagreement with the manner in which we interpret the data from nonclinical studies or clinical trials; • failure of the third-party manufacturers with which we contract for clinical or commercial supplies to satisfactorily complete an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and • a change in the approval policies or regulations of the FDA or comparable regulatory authorities or a change in the laws governing the approval process.
Our product candidates may fail to obtain regulatory approval for many reasons, including: • our failure to demonstrate to the satisfaction of the FDA or comparable regulatory authorities that a product candidate is safe and effective for a particular indication; • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable regulatory authorities for approval; • our inability to demonstrate that a product candidate’s benefits outweigh its risks; • our inability to demonstrate that the product candidate presents an advantage over existing therapies; • the FDA’s or comparable regulatory authorities’ disagreement with the manner in which we interpret the data from nonclinical studies or clinical trials; • failure of the third-party manufacturers with which we contract for clinical or commercial supplies to satisfactorily complete an FDA or comparable foreign regulatory authority pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s cGMP regulations or comparable foreign regulatory authority requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and • a change in the approval policies or regulations of the FDA or comparable regulatory authorities or a change in the laws governing the approval process.
In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, disruption of clinical trials, loss of data (including data related to clinical trials), loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds.
In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, ability to provide our products, disruption of clinical trials, loss of data (including data related to clinical trials), loss of income, significant extra expenses to restore data or systems, reputational loss and the diversion of funds.
If we, our products and product candidates, or the manufacturing facilities for our products and product candidates fail to comply with applicable regulatory requirements, a regulatory agency, including the FDA, may send enforcement letters, mandate labeling changes, suspend or withdraw regulatory approval, suspend any ongoing clinical trials, refuse to approve pending applications or supplements filed by us, suspend or impose restrictions on manufacturing operations, request a recall of, seize or detain a product, seek criminal prosecution or an injunction, or impose civil or criminal penalties or monetary fines.
If we, our products and product candidates, or the manufacturing facilities for our products and product candidates fail to comply with applicable regulatory requirements, a regulatory authority, including the FDA, may send enforcement letters, mandate labeling changes, suspend, vary or withdraw regulatory approval, suspend, vary or terminate any ongoing clinical trials, refuse to approve pending applications or supplements filed by us, suspend or impose restrictions on manufacturing operations, request a recall of, seize or detain a product, seek criminal prosecution or an injunction, or impose civil or criminal penalties or monetary fines.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, undesirable side effects caused by the product, problems encountered by our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, either before or after product approval, may result in, among other things: • restrictions on the marketing, manufacturing, or distribution of the product; • requirements to include additional warnings on the label; • requirements to create or enhance a medication guide outlining the risks to patients; • withdrawal of the product from the market; • voluntary or mandatory product recalls; • requirements to change the way the product is administered or for us to conduct additional clinical trials; • fines, warning or untitled letters or holds on clinical trials; • refusal by the FDA to approve pending applications or supplements to approved applications filed by us or our strategic partners, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • injunctions or the imposition of civil or criminal penalties; and • harm to our reputation.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, undesirable side effects caused by the product, problems encountered by our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, either before or after product approval, may result in, among other things: • restrictions on the marketing, manufacturing, or distribution of the product; • requirements to include additional warnings on the label; • requirements to create or enhance a medication guide outlining the risks to patients; • withdrawal of the product from the market; • voluntary or mandatory product recalls; • requirements to change the way the product is administered or for us to conduct additional clinical trials; 37 Table of Contents • fines, warning or untitled letters or holds on clinical trials; • refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us or our strategic partners, or suspension, variation or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; • injunctions or the imposition of civil or criminal penalties; and • harm to our reputation.
Our failure to repurchase the 2025 Notes and 2029 Notes or to pay the cash amounts due upon conversion of the 2025 Notes and 2029 Notes when required will constitute a default under the base and supplemental indentures that govern the 2025 Notes and 2029 Notes, which we refer to collectively as the “indenture.” We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the 2025 Notes and 2029 Notes.
Our failure to repurchase the 2025 Notes and 2029 Notes or to pay the cash amounts due upon conversion of the 2025 Notes and 2029 Notes when required will constitute a default under the base and supplemental indentures that govern the 61 Table of Contents 2025 Notes and 2029 Notes, which we refer to collectively as the “indenture.” We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the 2025 Notes and 2029 Notes.
The commercial success of our products depends on them being considered to be effective drugs with advantages over other therapies. The commercial success of our products FILSPARI, Thiola, Chenodal and Cholbam, and, if approved, sparsentan for the treatment of FSGS, depends on them being considered to be effective drugs with advantages over other therapies.
The commercial success of our products depends on them being considered to be effective drugs with advantages over other therapies. The commercial success of our products FILSPARI and Thiola, and, if approved, sparsentan for the treatment of FSGS, depends on them being considered to be effective drugs with advantages over other therapies.
For ANDAs that are filed (“received”) after the 29 Table of Contents listing of the patent in the Orange Book, if the patent holder commences a lawsuit within 45 days from receipt of the paragraph IV notice, the Hatch-Waxman Act provides a 30-month stay during which time the FDA cannot finally approve the generic’s application.
For ANDAs that are filed (“received”) after the listing of the patent in the Orange Book, if the patent holder commences a lawsuit within 45 days from receipt of the paragraph IV notice, the Hatch-Waxman Act provides a 30-month stay during which time the FDA cannot finally approve the generic’s application.
This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for our products. In addition, patients’ access to employer sponsored insurance coverage may be negatively impacted by economic factors that result in increased rates of unemployment.
This may result in managed care organizations influencing prescription decisions for a larger segment of the population and a corresponding constraint on prices and reimbursement for our products. 32 Table of Contents In addition, patients’ access to employer sponsored insurance coverage may be negatively impacted by economic factors that result in increased rates of unemployment.
Additionally, we are currently unable to predict what additional legislation or regulation, if any, relating to the healthcare industry may be enacted in the future or what effect recently enacted federal legislation or any such additional legislation or regulation would have on our business. 40 Table of Contents We face potential product liability exposure far in excess of our limited insurance coverage.
Additionally, we are currently unable to predict what additional legislation or regulation, if any, relating to the healthcare industry may be enacted in the future or what effect recently enacted federal legislation or any such additional legislation or regulation would have on our business. We face potential product liability exposure far in excess of our limited insurance coverage.
For example, as a result of the ongoing war between Ukraine and Russia, Russian officials have suggested that they may treat patents or patent applications owned by parties from certain countries, 37 Table of Contents including the United States, as unenforceable and/or provide for zero compensation compulsory licenses to such patents or patent applications.
For example, as a result of the ongoing war between Ukraine and Russia, Russian officials have suggested that they may treat patents or patent applications owned by parties from certain countries, including the United States, as unenforceable and/or provide for zero compensation compulsory licenses to such patents or patent applications.
We seek to 48 Table of Contents comply with the exceptions and safe harbors whenever possible, but our practices, such as our patient assistance programs and prompt pay discounts with certain customers, may not in all cases meet all of the criteria for protection from anti-kickback liability and may be subject to scrutiny.
We seek to comply with the exceptions and safe harbors whenever possible, but our practices, such as our patient assistance programs and prompt pay discounts with certain customers, may not in all cases meet all of the criteria for protection from Anti-Kickback liability and may be subject to scrutiny.
Furthermore, investor perceptions of our company may suffer as a result of the current material weakness or any future material weakness in our internal controls, and this could cause a decline in the market price of our stock.
Furthermore, investor perceptions of our company may suffer as a result of the previous material weakness or any future material weakness in our internal controls, and this could cause a decline in the market price of our stock.
Conducting clinical trials effectively in pursuit of regulatory approval requires significant resources, and the costs of conducting clinical trials varies depending on a number of factors, including the dosage of the study drug, trial size and duration.
Conducting clinical trials effectively in pursuit of regulatory approval requires significant resources, and the costs of conducting clinical trials varies depending on a number of factors, including the dosage of the study therapy, trial size and duration.
Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Disruptions at the FDA and other agencies may also slow the time necessary for new therapies to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
The applicable period is seven years in the United States and ten years in Europe or, in the case of orphan drugs for which a pediatric investigation plan has been completed, 12 years.
The applicable period is seven years in the United States and ten years in the EU or, in the case of orphan drugs for which a pediatric investigation plan has been completed, 12 years.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and China’s Personal Information Protection Law (“PIPL”) impose strict requirements for processing personal data.
For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (EU GDPR and UK GDPR, collectively "GDPR"), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and China’s Personal Information Protection Law (“PIPL”) impose strict requirements for processing personal data.
Further, the seven-year marketing exclusivity would not prevent competitors from obtaining approval of the same product candidate as ours for indications other than those in which we have been granted orphan drug designation, or for the use of other types of products in the same indications as our orphan product.
Further, the seven-year marketing exclusivity 41 Table of Contents would not prevent competitors from obtaining approval of the same product candidate as ours for indications other than those in which we have been granted orphan drug designation, or for the use of other types of products in the same indications as our orphan product.
In addition, our insurance coverage 53 Table of Contents may not be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices or that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
In addition, our insurance coverage may not be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices or that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
The FDC Act, Social Security Act, Public Health Service Act and other federal and state statutes and regulations govern to varying degrees the research, development, manufacturing and commercial activities relating to prescription pharmaceutical products, including nonclinical testing, clinical research, approval, production, labeling, sale, distribution, post-market surveillance, advertising, dissemination of information, promotion, marketing, and pricing to government purchasers and government health care programs.
The FDC Act, Social Security Act, Public Health Service Act and other federal and state statutes and regulations, and comparable foreign regulatory acts, govern to varying degrees the research, development, manufacturing and commercial activities relating to prescription pharmaceutical products, including nonclinical testing, clinical research, approval, production, labeling, sale, distribution, post-market surveillance, advertising, dissemination of information, promotion, marketing, and pricing to government purchasers and government health care programs.
Similarly, the positive nonclinical data we have seen from pegtibatinase (TVT-058) being tested in a mouse model of homocystinuria and the positive topline results we reported in December 2021 from the ongoing Phase 1/2 clinical trial of pegtibatinase (TVT-058) may not be replicated in future studies.
Similarly, the positive nonclinical data we have seen from pegtibatinase being tested in a mouse model of homocystinuria and the positive topline results we reported in December 2021 and May 2023 from the ongoing Phase 1/2 clinical trial of pegtibatinase may not be replicated in future studies.
Even if issued, patents issued to us or our licensors, including for example the 104 patent, may be challenged, narrowed, invalidated, held to be unenforceable or circumvented, which could limit our ability to stop competitors from marketing similar products or reduce the term of patent protection we may have for our products.
Even if issued, patents issued to us or our licensors may be challenged, narrowed, invalidated, held to be unenforceable or circumvented, which could limit our ability to stop competitors from marketing similar products or reduce the term of patent protection we may have for our products.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our therapies.
As a result, we may not be able to retain our existing employees or hire new employees quickly enough to meet our needs. 43 Table of Contents To induce valuable employees to remain at our company, in addition to salary, cash incentives and other employee benefits, we have provided stock options and restricted stock unit ("RSU") awards that vest over time.
As a result, we may not be able to retain our existing employees or hire new employees quickly enough to meet our needs. To induce valuable employees to remain at our company, in addition to salary, cash incentives and other employee benefits, we have provided stock options and restricted stock unit ("RSU") awards that vest over time.
We may experience delays in approval timelines attributable to, among other things, acquiring sufficient supply of our product to conduct clinical trials, identifying and resolving issues relating to chemistry, manufacturing and controls, or conducting additional nonclinical or clinical studies.
We may experience delays in approval timelines attributable to, 36 Table of Contents among other things, acquiring sufficient supply of our product to conduct clinical trials, identifying and resolving issues relating to chemistry, manufacturing and controls, or conducting additional nonclinical or clinical studies.
Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements. We also could become subject to government investigations and related subpoenas.
Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements. 51 Table of Contents We also could become subject to government investigations and related subpoenas.
Any drugs we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby harming our business.
Any therapies we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby harming our business.
Accordingly, the occurrence of a default under the 2025 Notes or 2029 Notes, unless cured or waived, may have a material adverse effect on our results of operations. 57 Table of Contents Provisions of the 2025 Notes and 2029 Notes could discourage an acquisition of us by a third party.
Accordingly, the occurrence of a default under the 2025 Notes or 2029 Notes, unless cured or waived, may have a material adverse effect on our results of operations. Provisions of the 2025 Notes and 2029 Notes could discourage an acquisition of us by a third party.
The likelihood of the long-term success of our company must be considered in light of the expenses, difficulties and delays frequently encountered in the development and commercialization of new drug products, competitive factors in the marketplace, as well as the regulatory environment in which we operate.
The likelihood of the long-term success of our company must be considered in light of the expenses, difficulties and delays frequently encountered in the development and commercialization of new therapeutics, competitive factors in the marketplace, as well as the regulatory environment in which we operate.
Our obligations related to data privacy and security are quickly changing in an increasingly stringent fashion, creating regulatory uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
Our obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing in an increasingly stringent fashion, creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
Because we are ultimately responsible for ensuring that our API and finished products are manufactured in accordance with cGMP regulations and similar regulatory requirements outside the United States, it is critical that we maintain effective management practices and oversight with respect to 30 Table of Contents our third-party manufacturers, including routine auditing.
Because we are ultimately responsible for ensuring that our API and finished products are manufactured in accordance with cGMP regulations and similar regulatory requirements outside the United States, it is critical that we maintain effective management practices and oversight with respect to our third-party manufacturers, including routine auditing.
For example, in October 2021 our distributor/exploitant in France for our previously marketed product Kolbam informed us that they had received a notice that the price previously paid for Kolbam during its period on the market in France had been recalculated by the agency responsible for pharmaceutical pricing in France, with such notice asserting amounts owed for repayment.
For example, in October 2021 our distributor/exploitant in France for our previously marketed product Kolbam (which has since been divested) informed us that they had received a notice that the price previously paid for Kolbam during its period on the market in France had been recalculated by the agency responsible for pharmaceutical pricing in France, with such notice asserting amounts owed for repayment.
Our operations, and those of our third-party manufacturers, CROs and other contractors and consultants, could be subject to disruptions resulting from earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, health epidemics or pandemics, wars and other geopolitical conflicts (including related to Russia's invasion of Ukraine), and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.
Our operations, and those of our third-party manufacturers, CROs and other contractors and consultants, could be subject to disruptions resulting from earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, health epidemics or pandemics, wars and other geopolitical conflicts, and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.
In addition, government funding of the SEC and other government agencies on which our 54 Table of Contents operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.
Factors affecting competition in the pharmaceutical and drug industries vary, depending on the extent to which a competitor is able to achieve a competitive advantage based on its proprietary technology and ability to market and sell drugs. The industry in which we compete is characterized by extensive research and development efforts and rapid technological progress.
Factors affecting competition in the pharmaceutical and therapeutic industries vary, depending on the extent to which a competitor is able to achieve a competitive advantage based on its proprietary technology and ability to market and sell therapeutics. The industry in which we compete is characterized by extensive research and development efforts and rapid technological progress.
If our risk mitigation plans are not successful in overcoming these challenges, our pegtibatinase program or other products and product candidates, could be delayed. 42 Table of Contents Risks Related to Our Business Our limited operating history makes it difficult to evaluate our future prospects, and our profitability in the future is uncertain.
If our risk mitigation plans are not successful in overcoming these challenges, our pegtibatinase program or other products and product candidates, could be delayed. Risks Related to Our Business Our limited operating history makes it difficult to evaluate our future prospects, and our profitability in the future is uncertain.
If we or any of our partners fail to comply or are perceived to have failed to comply with applicable obligations, we or they could be subject to a range of regulatory actions or litigation that could affect our or our partners' ability to commercialize our products and conduct necessary research and development, and could harm or prevent sales of the affected products, or could substantially increase the costs and expenses of commercializing and marketing our products.
If we or any of our partners fail to comply or are perceived to have failed to comply with applicable obligations, we or they could be subject to a range of regulatory actions, litigation (including class actions), or mass arbitration demands that could affect our or our partners' ability to commercialize our products and conduct necessary research and development, and could harm or prevent sales of the affected products, or could substantially increase the costs and expenses of commercializing and marketing our products.

… 286 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−1 removed0 unchanged
Biggest changeFor additional information regarding our lease agreements, see Note 18 of the Consolidated Financial Statements included in this report. 58 Table of Contents ITEM 3. LEGAL PROCEEDINGS The information required by this Item is incorporated herein by reference to the Legal Proceedings paragraph of Note 11 of the Consolidated Financial Statements included in this report. ITEM 4.
Biggest changeFor additional information regarding our lease agreements, see Note 18 of the Consolidated Financial Statements included in this report.
ITEM 2. PROPERTIES We lease the following locations to conduct our business: Location Address Lease Expiration Square Feet San Diego, California 3611 Valley Centre Drive, Suite 300 August 31, 2028 149,123 Dublin, Ireland 3 Mount Street Crescent, 2nd Floor September 30, 2027 1,960 We believe these facilities are adequate to conduct our business.
ITEM 2. PROPERTIES We lease the following locations to conduct our business: Location Address Lease Expiration Square Feet San Diego, California 3611 Valley Centre Drive, Suite 300 August 31, 2028 103,677 Dublin, Ireland 3 Mount Street Crescent, 2nd Floor September 30, 2027 1,960 We believe these facilities are adequate to conduct our business.
Removed
MINE SAFETY DISCLOSURES Not applicable. 59 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed7 unchanged
Biggest changeAs of February 21, 2023, the last reported sale price of our Common Stock as reported by the Nasdaq was $21.30. As of February 21, 2023, we had approximately 174 holders of record of our common stock.
Biggest changeAs of February 15, 2024, we had approximately 175 holders of record of our common stock.
The comparisons shown in the graph are based upon historical data and we caution that the stock price performance shown in the graph is not indicative of, nor intended to forecast, the potential future performance of our stock. 60 Table of Contents Dividends Since inception we have not paid any dividends on our common stock.
The comparisons shown in the graph are based upon historical data and we caution that the stock price performance shown in the graph is not indicative of, nor intended to forecast, the potential future performance of our stock. 65 Table of Contents Dividends Since inception we have not paid any dividends on our common stock.

Item 7. Management's Discussion & Analysis

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

95 edited+74 added−50 removed60 unchanged
Biggest changeThe following table provides information regarding revenue, including net product sales and license and collaboration revenue ( in thousands ): Year Ended December 31, Year Ended December 31, 2022 2021 Change 2021 2020 Change Bile acid products $ 102,558 $ 95,654 $ 6,904 $ 95,654 $ 89,438 $ 6,216 Tiopronin products 97,970 115,122 (17,152) 115,122 108,883 6,239 Total net product sales 200,528 210,776 (10,248) 210,776 198,321 12,455 License and collaboration revenue 11,490 16,714 (5,224) 16,714 — 16,714 Total revenue $ 212,018 $ 227,490 $ (15,472) $ 227,490 $ 198,321 $ 29,169 Net product sales Net product sales for the years ended December 31, 2022, 2021 and 2020 were $200.5 million, $210.8 million and $198.3 million, respectively, and consisted of sales of Chenodal and Cholbam ("Bile acid products") and Thiola ("Tiopronin products"). 67 Table of Contents The decrease in net product sales for the year ended December 31, 2022 as compared to the same period in 2021 was primarily due to a decrease in Thiola net sales, partially offset by an increase in net sales of our bile acid products.
Biggest changeRevenue For further background on our net product sales and license and collaboration revenue, see Revenue Recognition under our Critical Accounting Estimates. 72 Table of Contents The following table provides information regarding revenue, including net product sales and license and collaboration revenue ( in thousands ): Year Ended December 31, Year Ended December 31, 2023 2022 Change 2022 2021 Change Tiopronin products $ 98,329 $ 97,970 $ 359 $ 97,970 $ 115,122 $ (17,152) FILSPARI 29,208 — 29,208 — — — Total net product sales 127,537 97,970 29,567 97,970 115,122 (17,152) License and collaboration revenue 17,701 11,490 6,211 11,490 16,714 (5,224) Total revenue $ 145,238 $ 109,460 $ 35,778 $ 109,460 $ 131,836 $ (22,376) Net product sales The $29.6 million increase in total net product revenues for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due the launch of FILSPARI in February 2023 and subsequent sales throughout the year.
Overview We are a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare kidney, liver, and metabolic diseases. Our approach centers on advancing our innovative pipeline with multiple late-stage clinical programs targeting rare diseases with significant unmet medical needs.
Overview We are a biopharmaceutical company headquartered in San Diego, California, focused on identifying, developing and delivering life-changing therapies to people living with rare kidney and metabolic diseases. Our approach centers on advancing our innovative pipeline with multiple late-stage clinical programs targeting rare diseases with significant unmet medical needs.
FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways in the disease progression of IgAN (endothelin 1 and angiotensin-II) and is the first and only non-immunosuppressive therapy approved for the treatment of this condition. FILSPARI (sparsentan) is a dual endothelin angiotensin receptor antagonist (DEARA).
FILSPARI, a once-daily, oral medication is designed to selectively target two critical pathways in the disease progression of IgAN (endothelin 1 and angiotensin-II) and is the first and only non-immunosuppressive therapy approved for the treatment of this condition. FILSPARI is a dual endothelin angiotensin receptor antagonist (DEARA).
On March 11, 2022, coinciding with the issuance of the 2029 Notes, we completed our repurchase of $207.1 million aggregate principal amount of 2025 Notes for cash. After giving effect to the repurchase, the total remaining principal amount outstanding under the 2025 Notes as of December 31, 2022 was $68.9 million.
On March 11, 2022, coinciding with the issuance of the 2029 Notes, we completed our repurchase of $207.1 million aggregate principal amount of 2025 Notes for cash. After giving effect to the repurchase, the total remaining principal amount outstanding under the 2025 Notes as of December 31, 2023 was $68.9 million.
Beyond the next 12 months and over the foreseeable future, our known commitments and potential financial obligations will likely include ongoing operations funding, operating lease payments, interest payments on our outstanding debt, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, milestone and royalty payments associated with FILSPARI, pegtibatinase (TVT-058), and other developmental programs based upon the achievement of certain agreement-specific criteria, along with sales-based royalties and the repayment of principal on the outstanding 2025 Notes and 2029 Notes upon their respective maturities.
Beyond the next 12 months and over the foreseeable future, our known commitments and potential financial obligations will likely include ongoing operations funding, operating lease payments, interest payments on our outstanding debt, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, milestone and royalty payments associated with FILSPARI, pegtibatinase, and other developmental programs based upon the achievement of certain agreement-specific criteria, along with sales-based royalties and the repayment of principal on the outstanding 2025 Notes and 2029 Notes upon their respective maturities.
We are subject to generic competition, and if additional generic versions of Thiola, any generic versions of Thiola EC, any generic versions of FILSPARI following the expiration of patent or regulatory exclusivity for the product, or generic versions of Cholbam or Chenodal or any of our current or future products, are approved, sales of that product likely would be negatively impacted, which could have a material adverse impact on the recoverability of certain related intangible assets.
We are subject to generic competition, and if additional generic versions of Thiola and Thiola EC, any generic versions of FILSPARI following the expiration of patent or regulatory exclusivity for the product, or any of our current or future products, are approved, sales of that product likely would be negatively impacted, which could have a material adverse impact on the recoverability of certain related intangible assets.
We expect to use cash flows from operations and outside financings to meet our current and future financial obligations, including funding our operations, debt service and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which we cannot control.
We expect to use cash flows from operations and, when necessary, outside financings, to meet our current and future financial obligations, including funding our operations, debt service and capital expenditures. Our ability to make these payments depends on our future performance, which will be affected by financial, business, economic, regulatory and other factors, many of which we cannot control.
See Note 7 to Consolidated Financial Statements for further discussion. 73 Table of Contents Funding Requirements We believe that our available cash and short-term investments as of the date of this filing will be sufficient to fund our anticipated level of operations beyond the next 12 months.
See Note 7 to Consolidated Financial Statements for further discussion. 79 Table of Contents Funding Requirements We believe that our available cash and short-term investments as of the date of this filing will be sufficient to fund our anticipated level of operations beyond the next 12 months.
Factors that may affect financing requirements include, but are not limited to: • the timing, progress, cost and results of our clinical trials, preclinical studies and other discovery and research and development activities; • the timing and outcome of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; • the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution; • our ability to successfully commercialize FILSPARI for IgAN and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates; • increases or decreases in revenue from our marketed products, including decreases in revenue resulting from generic entrants or health epidemics or pandemics such as COVID-19; • debt service obligations on the 2025 Notes and 2029 Notes; • the number and development requirements of other product candidates that we pursue; • our ability to manufacture sufficient quantities of our products to meet expected demand; • the costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights, litigation costs and the results of litigation; • our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements; • the potential need to expand our business, resulting in additional payroll and other overhead expenses; • the potential in-licensing of other products or technologies; • the emergence of competing technologies or other adverse market or technological developments; and • the impacts of inflation and resulting cost increases.
Factors that may affect financing requirements include, but are not limited to: • the timing, progress, cost and results of our clinical trials, preclinical studies and other discovery and research and development activities; • the timing and outcome of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products; • the timing of, and costs involved in, commercial activities, including product marketing, sales and distribution; • our ability to successfully commercialize FILSPARI for IgAN, to obtain full regulatory approval for, and successfully commercialize, FILSPARI for the treatment of IgAN, and to obtain regulatory approval for, and successfully commercialize, sparsentan for FSGS and our other or future product candidates; • increases or decreases in revenue from our marketed products, including decreases in revenue resulting from generic entrants or health epidemics or pandemics; • debt service obligations on the 2025 Notes and 2029 Notes; • the number and development requirements of other product candidates that we pursue; • our ability to manufacture sufficient quantities of our products to meet expected demand; • the costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights, litigation costs and the results of litigation; • our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements; • the potential need to expand our business, resulting in additional payroll and other overhead expenses; • the potential in-licensing of other products or technologies; • the emergence of competing technologies or other adverse market or technological developments; and • the impacts of inflation and resulting cost increases.
In addition, it would be required to make cash milestone payments totaling up to an aggregate $16.0 million upon the achievement of certain development and regulatory milestones, plus tiered royalty payments of less than 4% on future net sales of a product, if approved.
In addition, we would be required to make cash milestone payments totaling up to an aggregate $16.0 million upon the achievement of certain development and regulatory milestones, plus tiered royalty payments of less than 4% on future net sales of a product, if approved.
Under the Agreement, we also agreed to make contingent cash payments up to an aggregate of $427.0 million based on the achievement of certain development, regulatory and commercialization events as set forth in the Agreement, as well as additional tiered mid-single digit royalty payments based upon future net sales of any pegtibatinase products in the US and Europe, subject to certain reductions as set forth in the Agreement, and a contingent payment in the event a pediatric rare disease voucher for any pegtibatinase product is granted.
Under the Stock Purchase Agreement ("the Agreement"), we agreed to make contingent cash payments up to an aggregate of $427.0 million based on the achievement of certain development, regulatory and commercialization events as set forth in the Agreement, as well as additional tiered mid-single digit royalty payments based upon future net sales of any pegtibatinase products in the US and Europe, subject to certain reductions as set forth in the Agreement, and a contingent payment in the event a pediatric rare disease voucher for any pegtibatinase product is granted.
We remain responsible for the clinical development of sparsentan and will retain all rights to sparsentan in the United States and rest of world outside of the licensed territories, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.
We remain responsible for the clinical development of sparsentan in the applicable territories and we will retain all rights to sparsentan in the United States and rest of world outside of the territories licensed to CSL Vifor and Renalys, provided that CSL Vifor has a right of negotiation to expand the licensed territories into Canada, China, Brazil and/or Mexico.
License and collaboration revenue The decrease in license and collaboration revenue for the year ended December 31, 2022 as compared to the same period in 2021 was primarily due to the recognition of $12.0 million in license revenue upon entering into the CSL Vifor License Agreement in September 2021, offset by an increase in collaboration revenue associated with the CSL Vifor License Agreement.
The decrease in license and collaboration revenue for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was primarily due to the recognition of $12.0 million in license revenue upon entering into the CSL Vifor License Agreement in September 2021, offset by an increase in collaboration revenue associated with the CSL Vifor License Agreement.
After 36 weeks of treatment, patients receiving FILSPARI achieved a mean reduction in proteinuria from baseline of 49.8 percent, compared to a mean reduction in proteinuria from baseline of 15.1 percent for irbesartan-treated patients (p Per request from the FDA, the efficacy data contained in the FDA-approved label is a post-hoc sensitivity analysis that evaluates the first 281 randomized patients, a subset of the full trial population.
After 36 weeks of treatment, patients receiving FILSPARI achieved a mean reduction in proteinuria from baseline of 49.8 percent, compared to a mean reduction in proteinuria from baseline of 15.1 percent for irbesartan-treated patients (p Per request from the FDA, the efficacy data contained in the FDA-approved label under accelerated approval is a post-hoc sensitivity analysis that evaluates the first 281 randomized patients, a subset of the full trial population.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our discussion and analysis of our financial condition and results of operations for 2022 as compared to 2021 are discussed below, and should be read in conjunction with our audited Consolidated Financial Statements, including the notes thereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our discussion and analysis of our financial condition and results of operations for 2023 as compared to 2022 are discussed below and should be read in conjunction with our audited Consolidated Financial Statements, including the notes thereto.
Upon approval of any of our late-stage programs, we intend to leverage the skills of our talented commercial organization which has successfully identified, supported and treated patients prescribed our approved products over the last nine years.
Upon approval of any of our late-stage programs, we intend to leverage the skills of our talented commercial organization which has successfully identified, supported and treated patients prescribed our approved products over the last ten years.
We have experienced significant growth in recent years in the number of our employees and the scope of our operations.
We experienced significant growth in recent years in the number of our employees and the scope of our operations.
In February 2021, we announced that the ongoing Phase 3 DUPLEX Study achieved its pre-specified interim FSGS partial remission of proteinuria endpoint following the 36-week interim period. After 36 weeks of treatment, 42.0 percent of patients receiving sparsentan achieved FPRE, compared to 26.0 percent of irbesartan-treated patients (p=0.0094).
In February 2021, we announced that the ongoing Phase 3 DUPLEX Study achieved its pre-specified interim FSGS partial remission of proteinuria endpoint following the 36-week interim period. After 36 weeks of treatment, 42.0 percent of patients receiving sparsentan achieved FPRE, compared to 26.0 percent of irbesartan-treated 67 Table of Contents patients (p=0.0094).
As of December 31, 2022, our evaluation concluded that all such milestones associated with our collaboration and licensing agreements remained constrained and therefore no adjustment to the respective transaction price was necessary.
As of December 31, 2023, our evaluation concluded that all such milestones associated with our collaboration and licensing agreements remained constrained and therefore no adjustment to the respective transaction price was necessary.
For licenses that are not distinct from other promises, we apply judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or a point in time and, if over time, the 65 Table of Contents appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees.
For licenses that are not distinct from other promises, we apply judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees.
Collaboration and License Proceeds License and Collaboration Agreement with CSL Vifor On September 15, 2021, we entered into a License Agreement with CSL Vifor, pursuant to which we granted an exclusive license to CSL Vifor for the commercialization of sparsentan in the Licensed Territories.
Collaboration and License Proceeds License and Collaboration Agreement with CSL Vifor In September, 2021, we entered into a License Agreement with CSL Vifor, pursuant to which we granted an exclusive license to CSL Vifor for the commercialization of sparsentan in the Licensed Territories.
In 2022, there were no new collaboration and licensing agreements with customers which required an estimate of the stand-alone selling price for an underlying performance obligation.
In 2023, there were no new collaboration and licensing agreements with customers which required an estimate of the stand-alone selling price for an underlying performance obligation.
Research and development expenses Research and development costs include expenses related to sparsentan, pegtibatinase (TVT-058) and our other pipeline programs. We expense all research and development costs as they are incurred.
Research and development expenses Research and development costs include expenses related to sparsentan, pegtibatinase and our other pipeline programs. We expense all research and development costs as they are incurred.
Secondary efficacy endpoints include the rate of change in eGFR following the initiation of randomized treatment over 58-week and 110-week periods, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment in approximately 380 patients.
Secondary efficacy endpoints include the rate of change in estimated glomerular filtration rate (eGFR) following the initiation of randomized treatment over 58-week and 110-week periods, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment in approximately 380 patients.
For a discussion of our financial condition and results of operations for 2021 as compared to 2020, except as set forth below, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 202 1 Annual Report on Form 10-K , which discussion is incorporated by reference herein.
For a discussion of our financial condition and results of operations for 2022 as compared to 2021, except as set forth below, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 202 2 Annual Report on Form 10-K , which discussion is incorporated by reference herein.
The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on our stock price at the grant date.
The Black-Scholes option valuation model 71 Table of Contents requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on our stock price at the grant date.
The Company has the right to terminate the Agreements and return the shares for a nominal price at any time upon 60 days' notice, subject to survival of contingent obligations, if any. See Note 5 to Consolidated Financial Statements for further discussion.
We have the right to terminate the Agreements and return the shares for a nominal price at any time upon 60 days' notice, subject to survival of contingent obligations, if any. See Note 5 to Consolidated Financial Statements for further discussion.
We currently have three Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials that are significant and changes in estimates could have a material impact on expenses we recognize.
We currently have one Phase 1/2 clinical trial and three Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials that are significant and changes in estimates could have a material impact on expenses we recognize.
Pegtibatinase is currently being evaluated in the Phase 1/2 COMPOSE Study, a double blind, randomized, placebo-controlled dose escalation study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU. In December 2021, we announced positive topline results from the Phase 1/2 COMPOSE Study.
In December 2021, we announced positive topline results from the Phase 1/2 COMPOSE Study, a double blind, randomized, placebo-controlled dose escalation study to assess its safety, tolerability, pharmacokinetics, pharmacodynamics and clinical effects in patients with classical HCU.
For the years ended December 31, 2022, 2021 and 2020, the Company recorded a net product revenue increase of $0.8 million, $0.4 million, and $0.4 million, respectively, related to performance obligations satisfied in previous periods.
For the years ended December 31, 2023, 2022 and 2021, the Company recorded a net product revenue increase of $0.4 million, $0.2 million, and $0.2 million, respectively, related to performance obligations satisfied in previous periods.
Impairment of Intangible Assets subject to amortization Intangible assets subject to amortization include certain license agreements and purchased technologies. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable and are also reviewed annually to determine whether any impairment is necessary.
Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable and are also reviewed annually to determine whether any impairment is necessary.
In light of global and macroeconomic conditions, including rising interest rates and volatility in the capital markets, we may not be able to successfully conduct financing or refinancing activity on favorable terms or at all.
In light of global and macroeconomic conditions, including rising interest rates, liquidity concerns at, and failures of, banks and other financial institutions, and volatility in the capital markets, we may not be able to successfully conduct financing or refinancing activity on favorable terms or at all.
Clinical-Stage Programs: Sparsentan for the treatment of FSGS Sparsentan has been granted Orphan Drug Designation for the treatment of FSGS in the U.S. and Europe. FSGS is a leading cause of end-stage kidney disease (ESKD) and nephrotic syndrome.
Clinical-Stage Programs: Sparsentan for the treatment of FSGS Sparsentan has been granted Orphan Drug Designation for the treatment of FSGS in the U.S. and the EEA. FSGS is a leading cause of kidney failure and nephrotic syndrome.
Over the next 12 months, our expected financial obligations include, but are not limited to, funding our operations, operating lease payments, interest payments on our outstanding debt, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, expenses associated with the potential launch of FILSPARI, including purchase commitments for manufactured product, and, if approved, related milestone payments.
Over the next 12 months, our expected financial obligations include, but are not limited to, funding our operations, operating lease payments, interest payments on our outstanding debt, anticipated milestone payments, royalties on sales of our existing commercialized products, research and development expenses pertaining to clinical and preclinical development activities across our pipeline, expenses associated with the launch of FILSPARI.
The following weighted average assumptions were used in the Black-Scholes options pricing model to estimate the fair value of stock options for the specified reporting periods: Year Ended December 31, 2022 2021 2020 Risk free rate 1.7 % 0.6 % 1.5 % Expected volatility 50 % 59 % 64 % Expected life (in years) 6.4 6.4 6.3 Expected dividend yield — — — Total non-cash stock-based compensation expense consisted of the following for the years ended December 31, 2022, 2021 and 2020: $39.2 million, $30.8 million and $23.6 million, respectively.
The following weighted average assumptions were used in the Black-Scholes options pricing model to estimate the fair value of stock options for the specified reporting periods: Year Ended December 31, 2023 2022 2021 Risk free rate 3.9 % 1.7 % 0.6 % Expected volatility 50 % 50 % 59 % Expected life (in years) 6.4 6.4 6.4 Expected dividend yield — — — For the years ended December 31, 2023, 2022 and 2021, non-cash stock-based compensation expense totaled $44.2 million, $38.1 million and $29.6 million, respectively.
Cash Flows from Financing Activities For the year ended December 31, 2022, cash provided by financing activities was $117.6 million compared to cash provided of $231.7 million for the year ended December 31, 2021.
Cash Flows from Financing Activities For the year ended December 31, 2023, cash provided by financing activities was $218.8 million compared to cash provided of $117.6 million for the year ended December 31, 2022.
We have expanded our sales and marketing, compliance and legal functions in addition to expansion of all functions to support a commercial organization, including by adding additional members to our sales force in anticipation of the commercialization of FILSPARI in the United States for the treatment of IgAN.
We also expanded our sales and marketing, compliance and legal functions in addition to expansion of all functions to support a commercial organization, including by adding additional members to our sales force in connection with the recent commercial launch of FILSPARI in the United States for IgAN.
See Note 5 to Consolidated Financial Statements for further discussion. Stock Purchase and Collaboration Agreement with PharmaKrysto On March 8, 2022, the Company entered into a Collaboration Agreement with PharmaKrysto Limited (“PharmaKrysto”), a privately held pre-clinical stage company related to PharmaKrysto's early-stage cystinuria discovery program, and concurrently therewith entered into a Stock Purchase Agreement with PharmaKrysto (together, the "Agreements").
Stock Purchase and Collaboration Agreement with PharmaKrysto On March 8, 2022, we entered into a Collaboration Agreement with PharmaKrysto Limited (“PharmaKrysto”), a privately held pre-clinical stage company related to PharmaKrysto's early-stage cystinuria discovery program, and concurrently therewith entered into a Stock Purchase Agreement with PharmaKrysto (together, the "Agreements").
The change was primarily due to loss on extinguishment of debt in connection with the partial repurchase in 2022 of the Convertible Senior Notes due 2025, offset by reduced interest expense due to adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06") as debt discount is no longer amortized.
The $6.1 million change in our total other income (expense), net for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to loss on extinguishment of debt in connection with the partial repurchase in 2022 of the Convertible Senior Notes due 2025, offset by reduced interest expense due to adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06") as debt discount is no longer amortized.
Our research and development costs are comprised of salaries and bonuses, benefits, non-cash share-based compensation, license fees, milestones under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, and develop drug materials and delivery methods, and associated overhead expenses and facilities costs. We charge direct internal and external program costs to the respective development programs.
Our research and development costs are comprised of salaries and bonuses, benefits, non-cash share-based compensation, license fees, milestones under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, and develop drug materials and delivery methods, manufacture drug product supplies to support clinical development, and associated overhead expenses and facilities costs.
Therefore, cash and short-term investments available to fund operations is $450.2 million as of December 31, 2022. Cash Flows from Operating Activities Operating activities used $186.3 million of cash during the year ended December 31, 2022 compared to $14.8 million of cash used for the year ended December 31, 2021.
Therefore, cash and short-term investments available to fund operations is $566.9 million as of December 31, 2023. Cash Flows from Operating Activities Operating activities used $280.0 million of cash during the year ended December 31, 2023 compared to $186.3 million of cash used for the year ended December 31, 2022.
In 2018, we announced the initiation of the Phase 3 DUPLEX study of sparsentan in FSGS. The DUPLEX Study is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in 371 patients.
In 2018, we announced the initiation of the Phase 3 clinical trial designed to serve as the basis for an NDA and MAA filing for sparsentan for the treatment of FSGS (the "DUPLEX Study"). The DUPLEX Study is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in 371 patients.
Liquidity and Capital Resources We have financed our operations through a combination of borrowings, sales of our equity securities, and revenues generated from our commercialized products, including Chenodal, Cholbam, Thiola and Thiola EC, along with proceeds from license and collaboration agreements.
Liquidity and Capital Resources We have financed our operations through a combination of borrowings, sales of our equity securities, and revenues generated from our commercialized products, along with proceeds from license and collaboration agreements and the divestiture of our bile acid business.
Pegtibatinase (TVT-058) Pegtibatinase (TVT-058) is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical homocystinuria (HCU). Classical HCU is a rare metabolic disorder characterized by elevated levels of plasma homocysteine that can lead to vision, skeletal, circulatory and central nervous system complications.
Pegtibatinase Pegtibatinase is a novel investigational human enzyme replacement candidate being evaluated for the treatment of classical homocystinuria (HCU). Classical HCU is a rare metabolic disorder characterized by elevated levels of plasma homocysteine that can lead to vision, skeletal, circulatory and central nervous system complications. It is estimated that there are approximately 7,000 to 10,000 people living with HCU globally.
Increases include combined employee compensation and stock compensation costs of $31.6 million, increases in commercial support expenses of $15.5 million and increases in various professional services expenses of $11.9 million. A combined increase in selling, general and administrative expenses of $7.2 million was primarily attributable to incremental increases in information technology expense, legal fees, travel expense, and depreciation and amortization.
Increases include combined employee compensation and stock compensation costs of $31.9 million, increases in commercial support expenses of $15.6 million and increases in various professional services expenses of $12.0 million. Incremental increases in information technology expense, legal fees, travel expense, and depreciation and amortization also contributed to the increase in selling, general and administrative expenses.
Additionally, in a dose-dependent manner in the study to date, methionine levels were substantially reduced and cystathionine levels were substantially elevated following treatment with pegtibatinase, suggesting that pegtibatinase acts in a manner similar to the native CBS enzyme. To date in the study, pegtibatinase has been generally well-tolerated , with no discontinuations due to treatment-related adverse events.
Additionally, in a dose-dependent manner in the study to date, methionine levels were substantially reduced and cystathionine levels were substantially elevated following treatment with pegtibatinase, suggesting that pegtibatinase acts in a manner similar to the native CBS enzyme.
("CSL Vifor"), with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the European Medicines Agency ("EMA") had accepted for review the conditional marketing authorization application of sparsentan for the treatment of IgAN in Europe. A review decision is expected in the second half of 2023.
("CSL Vifor"), with whom we entered into a license and collaboration agreement ("License Agreement") in September 2021, announced that the EMA had accepted for review the conditional marketing authorization ("CMA") application of sparsentan for the treatment of IgAN in the EU.
We are also entitled to receive tiered double-digit royalties of up to 40 percent of annual net sales of sparsentan in the Licensed Territories. See Note 4 to Consolidated Financial Statements for further discussion.
We are also entitled to receive tiered double-digit royalties of up to 40 percent of annual net sales of sparsentan in the Licensed Territories.
Thiola License Agreement In 2014, we entered into a license agreement with Mission Pharmacal ("Mission"), pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola.
See Note 9 to our unaudited Consolidated Financial Statements for further discussion. 78 Table of Contents Thiola License Agreement In 2014, we entered into a license agreement with Mission Pharmacal ("Mission"), pursuant to which we obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola.
Selling, general and administrative expenses increased by $70.3 million due to increased headcount as a result of operational growth, including rising labor costs, and commercial launch preparations in anticipation of the U.S. launch of FILSPARI.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 our selling, general and administrative expenses increased by $71.2 million due to increased headcount as a result of operational growth, including rising labor costs, and commercial launch preparations in anticipation of the U.S. launch of FILSPARI.
Pre-clinical data have shown that blockade of both endothelin type A and angiotensin II type 1 pathways in forms of rare chronic kidney disease, reduces proteinuria, protects podocytes and prevents glomerulosclerosis and mesangial cell proliferation. Sparsentan has been granted Orphan Drug Designation for the treatment of IgAN in the U.S. and Europe.
Pre-clinical data have shown that blockade of both endothelin type A and angiotensin II type 1 pathways in forms of rare chronic kidney disease, reduces proteinuria, protects podocytes and prevents glomerulosclerosis and mesangial cell proliferation.
We routinely engage vendors and service providers for scientific research, clinical trial, regulatory compliance, manufacturing and other consulting services. We also make grants to research and non-profit organizations to conduct research which may lead to new intellectual properties that we may subsequently license under separately negotiated license agreements. Such grants may be funded in lump sums or installments.
We also make grants to research and non-profit organizations to conduct research which may lead to new intellectual properties that we may subsequently license under separately negotiated license agreements. Such grants may be funded in lump sums or installments.
Under the Collaboration Agreement, the Company will fund all research and development expenses for the pre-clinical activities associated with the cystinuria program, which are estimated to be approximately $5.0 million.
The Agreements also require us to fund all research and development expenses for the pre-clinical activities associated with the cystinuria program, which are expected to be approximately $5.0 million.
See Note 9 to Consolidated Financial Statements for further discussion. 72 Table of Contents Acquisition of Orphan Technologies Limited In November 2020, we completed the acquisition of Orphan Technologies Limited (“Orphan”), including Orphan’s rare metabolic disorder drug pegtibatinase. We acquired Orphan by purchasing all of its outstanding shares.
Acquisition of Orphan Technologies Limited In November 2020, we completed the acquisition of Orphan Technologies Limited (“Orphan”), including Orphan’s rare metabolic disorder drug pegtibatinase. We acquired Orphan by purchasing all of its outstanding shares.
We believe that our available cash and short-term investments as of the date of this filing, together with anticipated cash generated from operations, will be sufficient to fund our anticipated level of operations beyond the next 12 months.
These restructuring adjustments are expected to result in an estimated annualized savings of approximately $25.0 million beginning in 2024. We believe that our available cash and short-term investments as of the date of this filing, together with anticipated cash generated from operations, will be sufficient to fund our anticipated level of operations beyond the next 12 months.
These generic versions of the original formulation of Thiola have impacted sales, and these or additional generic versions of either formulation could have a material adverse impact on sales.
These generic versions of the original formulation of Thiola have impacted our sales, and these or additional generic versions of either formulation could have a material adverse impact on sales. During 2023, two generic versions of Thiola EC (100 mg and 300 mg) were approved by the FDA.
Of the $100.0 million originally authorized for sale under the ATM Agreement, approximately $28.6 million were sold under our prior registration statement on Form S-3 (Registration Statement No. 333-227182).
Of the $100.0 million originally authorized for sale under the ATM Agreement, approximately $28.6 million were sold under our prior registration statement on Form S-3 (Registration Statement No. 333-227182). An additional $51.9 million were sold under our effective registration statement on Form S-3 (Registration Statement No. 333-259311), which included $20.1 million in the year ended December 31, 2022.
FILSPARI™ (sparsentan) On February 17, 2023, the FDA granted accelerated approval of FILSPARI™ (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally at UPCR ≥1.5 gram/gram. We expect FILSPARI to be available beginning the week of February 27, 2023, and will be providing a comprehensive patient support program throughout the patient’s treatment journey.
FILSPARI® (sparsentan) On February 17, 2023, the FDA granted accelerated approval of FILSPARI® (sparsentan) to reduce proteinuria in adults with primary IgAN at risk of rapid disease progression, generally a UPCR ≥1.5 gram/gram.
We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities. These consist of internal shared resources related to the development and maintenance of systems and processes applicable to all of our programs.
We charge direct internal and external program costs to the respective development programs. We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities.
Cash Flows The following table summarizes our cash flows for the periods set forth below ( in thousands ): Year Ended December 31, 2022 2021 2020 Net cash used in operating activities $ (186,291) $ (14,792) $ (42,743) Net cash used in investing activities (32,553) (137,623) (61,327) Net cash provided by financing activities 117,573 231,683 127,713 Effect of exchange rate changes on cash (2,794) 1,713 (1,307) Net (decrease) increase in cash and cash equivalents (104,065) 80,981 22,336 Cash and cash equivalents, beginning of year 165,753 84,772 62,436 Cash and cash equivalents, end of year $ 61,688 $ 165,753 $ 84,772 74 Table of Contents Management considers marketable debt securities to be available to fund current operations, and they are classified as available for sale and included within current assets in our Consolidated Balance Sheets.
Future capital requirements will also depend on the extent to which we acquire or invest in additional complementary businesses, products and technologies. 80 Table of Contents Cash Flows The following table summarizes our cash flows for the periods set forth below ( in thousands ): Year Ended December 31, 2023 2022 2021 Net cash used in operating activities $ (280,021) $ (186,291) $ (14,792) Net cash provided by (used in) investing activities 55,776 (32,553) (137,623) Net cash provided by financing activities 218,752 117,573 231,683 Effect of exchange rate changes on cash 1,981 (2,794) 1,713 Net (decrease) increase in cash and cash equivalents (3,512) (104,065) 80,981 Cash and cash equivalents, beginning of year 61,688 165,753 84,772 Cash and cash equivalents, end of year 58,176 61,688 165,753 Marketable debt securities, at fair value 508,675 388,557 387,129 Total cash and cash equivalents and marketable debt securities $ 566,851 $ 450,245 $ 552,882 Management considers marketable debt securities to be available to fund current operations, and they are classified as available for sale and included within current assets in our Consolidated Balance Sheets.
It is estimated that there are at least 3,500 people living with HCU in the United States with similar numbers in Europe. Pegtibatinase has been granted Rare Pediatric Disease, Fast Track and Breakthrough Therapy designations by the FDA, as well as orphan drug designation in the United States and European Union.
Pegtibatinase has been granted Rare Pediatric Disease, Fast Track and Breakthrough Therapy designations by the FDA, as well as orphan drug designation in the United States and European Union.
FILSPARI is the first and only non-immunosuppressive therapy approved for this condition. At launch, we expect approximately 30,000 to 50,000 patients in the United States to be addressable under FILSPARI's accelerated approval indication statement.
Most patients are diagnosed between the ages of 16 and 35, with up to 40% progressing to kidney failure within 15 years. FILSPARI is the first and only non-immunosuppressive therapy approved for this condition. We estimate approximately 30,000 to 50,000 patients in the United States to be addressable under FILSPARI's accelerated approval indication statement.
Oral administration of CDCA has been shown to normalize primary bile acid synthesis in patients with CTX. 64 Table of Contents Critical Accounting Estimates Management makes certain judgments and uses certain estimates and assumptions when applying accounting principles generally accepted in the United States (“GAAP”) in the preparation of our Consolidated Financial Statements.
Critical Accounting Estimates Management makes certain judgments and uses certain estimates and assumptions when applying accounting principles generally accepted in the United States (“GAAP”) in the preparation of our Consolidated Financial Statements.
In 2021, we recognized $10.3 million in interest expense for the amortization of the debt discount in accordance with the previous accounting guidance. The increase in interest income was driven by the impact of increases in short-term interest rates on our interest-bearing security investments.
In 2021, we recognized $10.3 million in interest expense for the amortization of the debt discount in accordance with the previous accounting guidance.
The Agreements require the Company to purchase an additional 5% of the outstanding common shares for $1.0 million upon the occurrence of a specified pre-clinical milestone, and grant an option to the Company to purchase the remaining outstanding shares of PharmaKrysto for $5.0 million upon the occurrence of a subsequent pre-clinical milestone prior to expiration of the option on March 8, 2025.
In addition, the Agreements grant us an option to purchase the remaining outstanding shares of PharmaKrysto for $5.0 million upon the occurrence of a subsequent pre-clinical milestone prior to expiration of the option on March 8, 2025. If we elect to exercise the option, we would be required to perform commercially reasonable clinical diligence obligations.
See Note 18 to Consolidated Financial Statements for further discussion. Purchase Commitments Manufactured Product Certain of the Company's contractual arrangements with contract manufacturing organizations ("CMOs") require binding forecasts or commitments to purchase minimum amounts for the manufacture of drug product supply, which may be material to the Company's financial statements.
Purchase Commitments Manufactured Product Certain of our contractual arrangements with contract manufacturing organizations ("CMOs") require binding forecasts or commitments to purchase minimum amounts for the manufacture of drug product supply, which may be material to our financial statements. Royalties and Contingent Cash Payments Ligand License Agreement In 2012, we entered into an agreement with Ligand Pharmaceuticals, Inc.
Pending supportive data, we anticipate being in position to subsequently submit an NDA for a CTX indication. 63 Table of Contents Preclinical Programs: We are a participant in a Cooperative Research and Development Agreement (CRADA), which forms a multi-stakeholder approach to pool resources with leading experts, and incorporate the patient perspective early in the therapeutic identification and development process.
We acquired pegtibatinase as part of the November 2020 acquisition of Orphan Technologies Limited. Preclinical Programs: We are a participant in a Cooperative Research and Development Agreement (CRADA), which forms a multi-stakeholder approach to pool resources with leading experts and incorporate the patient perspective early in the therapeutic identification and development process.
For the years ended December 31, 2022 and 2021, we had the following balances and financial performance ( in thousands ): December 31, 2022 December 31, 2021 Revenue $ 212,018 $ 227,490 Net loss $ (278,482) $ (180,091) Cash and cash equivalents $ 61,688 $ 165,753 Marketable debt securities, at fair value $ 388,557 $ 387,129 Accumulated deficit $ (1,014,223) $ (765,966) Stockholders' equity $ 42,851 $ 302,112 Net working capital* $ 344,274 $ 458,739 Net working capital ratio** 3.42 4.70 * Current assets less current liabilities **Current assets divided by current liabilities As of December 31, 2022, we had cash and cash equivalents of $61.7 million and available-for-sale marketable debt securities of $388.6 million.
For the years ended December 31, 2023 and 2022, we had the following balances and financial performance ( in thousands ): 76 Table of Contents December 31, 2023 December 31, 2022 Cash and cash equivalents $ 58,176 $ 61,688 Marketable debt securities, at fair value $ 508,675 $ 388,557 Convertible debt $ 377,263 $ 375,545 Accumulated deficit $ (1,125,622) $ (1,014,223) Stockholders' equity $ 200,810 $ 42,851 Net working capital* $ 438,867 $ 344,274 Net working capital ratio** 3.47 3.42 * Current assets less current liabilities **Current assets divided by current liabilities As of December 31, 2023, we had cash and cash equivalents of $58.2 million and available-for-sale marketable debt securities of $508.7 million.
Research and development costs increased by $25.5 million due to increases in clinical trial expenses, chemistry manufacturing and control costs, and related expenses associated with the advancement of our programs in development. Internal personnel costs to support all programs increased by $15.2 million, reflecting increased headcount along with rising labor costs.
For the year ended December 31, 2022 compared to the year ended December 31, 2021, our research and development costs increased by $26.2 million due to increases in clinical trial expenses, chemistry manufacturing and control costs, and related expenses associated with the advancement of our programs in development.
It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the 61 Table of Contents safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available ACE or ARB therapy.
It is a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial that evaluated the safety and efficacy of 400mg of sparsentan, compared to 300mg of irbesartan, in 404 patients ages 18 years and up with IgAN and persistent proteinuria despite available ACE or ARB therapy, and is currently ongoing in the open label extension phase of the study. 66 Table of Contents The PROTECT Study protocol provided for an unblinded analysis of at least 280 patients to be performed after 36 weeks of treatment to evaluate the primary efficacy endpoint - the change in proteinuria (UPCR) at week 36 from baseline.
The decrease in cash provided was primarily due to the February 2021 issuance of stock through an underwritten public offering that provided $189.3 million, offset by net proceeds of $95.0 million from the March 2022 issuance of the 2029 Notes and repurchase of the 2025 Notes.
The increase in cash provided was due to the March 2023 issuance of common stock and pre-funded warrants through an underwritten public offering that provided $215.8 million in net proceeds, compared with net proceeds of $95.0 million from the March 2022 issuance of the 2029 Notes and repurchase of the 2025 Notes and $19.5 million in net proceeds from sales under the ATM Agreement in 2022.
The additional cohort was initiated to inform and refine formulation work for future development and commercial purposes and to further evaluate the dose response curve for pegtibatinase. In the fourth quarter of 2022, enrollment completed in the sixth and final cohort of the ongoing Phase 1/2 COMPOSE Study. We anticipate reporting additional data from COMPOSE in mid-2023.
In May 2023, we announced positive topline results from the sixth cohort of the Phase 1/2 COMPOSE Study, which was initiated to inform and refine formulation work for future development and commercial purposes and to further evaluate the dose response curve for pegtibatinase, and to further inform our pivotal development program to ultimately support potential approval of pegtibatinase for the treatment of HCU.
External service provider costs increased by $10.3 million, which included a $14.3 million increase in such costs for the development of pegtibatinase along with a $11.7 million increase in other general research and development costs, offset by a $15.8 million decrease in external service provider costs associated with the development of sparsentan as the program progresses through the development cycle.
External service provider costs increased by $11.0 million, which included a $14.3 million increase in such costs for the development of pegtibatinase along with a $12.5 million increase in other general research and development costs, offset by a $15.8 million decrease in external service provider costs associated with the development of sparsentan as the program progresses through the development cycle. 74 Table of Contents Selling, general and administrative expenses Selling, general and administrative expenses consist of salaries and bonuses, benefits, non-cash share-based compensation, legal and other professional fees, rent, depreciation and amortization, travel, insurance, business development, sales and marketing programs, and other operating expenses.
The license agreement will continue until neither party has any further payment obligations under the agreement and is expected to continue for approximately 10 to 20 years from the effective date.
For the year ended December 31, 2023, we capitalized $4.4 million to intangible assets for royalties owed on net sales of FILSPARI. The license agreement will continue until neither party has any further payment obligations under the agreement and is expected to continue for up to 20 years from the effective date.
Payments received under collaboration and licensing agreements may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements and royalties on the sale of products.
The calculation of the accrual for co-pay assistance is based on an estimate of claims and the estimated cost per claim associated with product that has been recognized as revenue. Payments received under collaboration and licensing agreements may include non-refundable fees at the inception of the arrangements, milestone payments for specific achievements and royalties on the sale of products.
With an estimated prevalence of up to 150,000 people in the United States and greater numbers in Europe and Asia, IgAN is the most common primary glomerular disease. Most patients are diagnosed between the ages of 16 and 35, with up to 40% progressing to end stage kidney disease within 15 years.
IgAN is characterized by hematuria, proteinuria, and variable rates of progressive renal failure. With an estimated prevalence of up to 150,000 people in the United States and greater numbers in Europe and Asia, IgAN is the most common primary glomerular disease.
As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million, including a $23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) that we plan to make in the first quarter of 2023, which was triggered upon the accelerated approval of FILSPARI in February 2023.
Through December 31, 2023, we have paid $41.4 million for contractual milestone payments under the Ligand License Agreement, which includes a $23.0 million milestone payment to Ligand (and Bristol-Myers Squibb Company ("BMS")) in March 2023 that was triggered upon the accelerated approval of FILSPARI in February 2023.
Additional sources of cash over this period include net revenues from sales of our products, the sale or maturity of investments in our portfolio of marketable debt securities, and certain earned and potential milestone payments associated with sparsentan in connection with our license and collaboration arrangement with CSL Vifor.
Sources of cash over this period include net revenues from sales of our products, the sale or maturity of investments in our portfolio of marketable debt securities, and certain earned and potential milestone payments. We anticipate achieving milestones with both FILSPARI and pegtibatinase that will result in us making net payments of approximately $50.0 million during the next 12 months.
Pending completion of the DUPLEX Study and data supportive of approval, we and CSL Vifor are targeting to submit by the end of 2023 a subsequent variation of sparsentan for the treatment of FSGS in Europe. If sparsentan receives marketing authorization in any of the licensed territories, CSL Vifor will be responsible for all commercialization activities in such licensed territories.
If sparsentan receives marketing authorization in any of the licensed territories covered by the exclusive license to CSL Vifor, CSL Vifor will be responsible for all commercialization activities in such licensed territories.
As of December 31, 2022, we have recognized approximately $7.5 million in research and development expenses related to the production of active pharmaceutical ingredient that could potentially support the commercial launch of FILSPARI.
Prior to the February 2023 FDA accelerated approval of FILSPARI (sparsentan), we recognized approximately $7.5 million in research and development expenses related to the production of active pharmaceutical ingredients to support the commercial launch of FILSPARI. For the year ended December 31, 2023, sales of FILSPARI primarily consisted of zero-cost inventories.

… 139 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−0 removed1 unchanged
Biggest changeGiven these policy restrictions and our emphasis on preserving capital and liquidity while enhancing overall returns, we have not experienced material credit-related losses with our securities holdings. We are also exposed to market risk related to changes in foreign currency exchange rates.
Biggest changeGiven these policy restrictions and our emphasis on preserving capital and liquidity while enhancing overall returns, we have not experienced material credit-related losses with our securities holdings. 81 Table of Contents We are also exposed to market risk related to changes in foreign currency exchange rates.
This exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term debt securities. Our marketable debt securities are subject to interest rate risk and will fall in value if market interest rates increase.
This exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term debt securities. Our marketable debt securities are subject to interest rate risk and will fall in value if market interest rates continue to increase.
Due to the short-term duration of our investment portfolio and the low risk profile of our investments, a change in interest rates of 100 basis points would have approximately a $2.5 million impact on our investments.
Due to the short-term duration of our investment portfolio and the low risk profile of our investments, a change in interest rates of 100 basis points would have approximately a $4.2 million impact on our investments.
Inflation generally affects us by increasing our salaries and fees paid to third-party contract service providers. Recent inflationary pressures have primarily impacted our operations through increased labor costs. While we continue to monitor the effects of macroeconomic factors, inflationary pressures have not affected our current outlook or business objectives.
Inflation generally affects us by increasing our salaries and fees paid to third-party contract service providers. Inflationary pressures have primarily impacted our operations through increased labor costs. While we continue to monitor the effects of macroeconomic factors, inflationary pressures have not affected our current outlook or business objectives. ITEM 8.
From time to time, we contract with vendors that are located outside of the United States, which are denominated in foreign currencies. We are subject to fluctuations in foreign currency rated in connection with these agreements. We do not currently hedge our foreign currency exchange rate risk.
From time to time, we enter into contracts with vendors that are located outside of the United States, which contracts are denominated in foreign currencies. We are subject to fluctuations in foreign currency rated in connection with these agreements. We do not currently hedge our foreign currency exchange rate risk.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary exposure to market risk is related to changes in interest rates. As of December 31, 2022, we had cash equivalents and marketable debt securities of approximately $450.2 million, consisting of money market funds, U.S. government agency debt, corporate debt and commercial paper.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our primary exposure to market risk is related to changes in interest rates. As of December 31, 2023, we had cash equivalents and marketable debt securities of approximately $566.9 million, consisting of money market funds, U.S. government agency debt, corporate debt and commercial paper.
Added
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements and supplementary data of Travere Therapeutics, Inc. required by this Item are described in Item 15 of this Annual Report on Form 10-K and are presented beginning on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Other TVTX 10-K year-over-year comparisons