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| PART I | | |
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| Item 1. | Business | 4 |
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| Item 1A. | Risk Factors | 39 |
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| Item 1B. | Unresolved Staff Comments | 90 |
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| Item 1C. | Cybersecurity | 90 |
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| Item 2. | Properties | 91 |
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| Item 3. | Legal Proceedings | 91 |
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| Item 4. | Mine Safety Disclosures | 92 |
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| PART II | | 92 |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 92 |
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| Item 6. | [Reserved] | 93 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 94 |
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| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 103 |
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| Item 8. | Financial Statements and Supplementary Data | 104 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 142 |
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| Item 9A. | Controls and Procedures | 142 |
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| Item 9B. | Other Information | 144 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 144 |
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| PART III | | 144 |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 144 |
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| Item 11. | Executive Compensation | 144 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 145 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 145 |
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| Item 14. | Principal Accountant Fees and Services | 145 |
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| PART IV | | 145 |
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| Item 15. | Exhibits and Financial Statement Schedules | 145 |
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| | Signatures | 150 |
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FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains statements indicating expectations about future performance and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties.We usually use words such as “may,” “will,” “would,” “should,” “could,” “expect,” “plan,” “anticipate,” “might,” “believe,” “estimate,” “predict,” “intend,” or the negative of these terms or similar expressions to identify these forward-looking statements. These statements appear throughout this Annual Report on Form 10-K andare statements regarding our current expectations, beliefs or intent, primarily with respect to our operations and related industry developments. Examples of these statements include, but are not limited to:ourbusiness and scientific strategies; risks and uncertainties associated with the commercialization and marketing of our products in the United States (US) and outside the US; risks that the US Food and Drug Administration (FDA), European Medicines Agency (EMA), the Medicines and Healthcare Products Regulatory Agency (MHRA) or other regulatory authorities may make adverse decisions regarding our products;the progress of our and our collaborators’ product development programs, including clinical testing, and the timing of results thereof; our corporate collaborations and revenues that may be received from our collaborations and the timing of those potential payments; our expectations with respect to obligations to entities party to commercial or licensing agreements with us and the timing of those obligations; our expectations with respect to regulatory submissions and approvals; our drug discovery technologies; our research and development expense; protection of our intellectual property and our intention to vigorously enforce our intellectual property rights; sufficiency of our cash and capital resources and the need for additional capital; our ability to successfully identify and acquire or in-license products or companies; our operations and legal risks; the effectiveness of our cybersecurity risk management process; and our acquisition of certain assets comprising rights to GAVRETO® (pralsetinib) in the US. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including as a result of the risks and uncertainties discussed in* “Part I, Item 1A, Risk Factors” of this Annual Report on Form 10-K.*Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by applicable law. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
RISK FACTOR SUMMARY
Investing in our securities involves a high degree of risk. Below is a summary of the material factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be found below under the heading “Part 1, Item 1A, Risk Factors” and should be carefully considered, together with other information in this Form 10-K and our other filings with the SEC, before making an investment decision regarding our common stock.
| ● | Our prospects are highly dependent on our existing commercial products, TAVALISSE® (fostamatinib disodium hexahydrate), REZLIDHIA® (olutasidenib), and GAVRETO® (pralsetinib). To the extent that the commercial success of our products in the US and respective territories outside of the US is diminished or halted, our business, financial condition and results of operations may be adversely affected, and the price of our common stock may decline. |
| ● | We may not be able to successfully develop or commercialize our product candidates if problems arise in the clinical testing and/or approval process. There is a high risk that drug discovery and development efforts might not generate successful product candidates. If the results of our clinical trials do not meet the primary efficacy endpoints, or if the top-line data from the results of our clinical trials may not ultimately meet the requirements for an NDA approval by the FDA and other regulatory authorities, the commercial prospects of our business may be harmed, and our ability to generate product revenues may be delayed or eliminated. |
| ● | Our strategy to expand our hematology and oncology pipeline on our own, or through acquisitions or in-licensing of early or late-stage products or companies, or through partnerships with pharmaceutical and biotechnology companies, as well as academic institutions and government organizations, may not be successful. |
| ● | Even if we, or any of our collaborative partners, are able to continue to commercialize our products or any product candidate that we, or they, develop, the product may become subject to unfavorable pricing regulations, unfavorable health technology assessments (HTA), third-party payor reimbursement practices or labeling restrictions, all of which may vary from country to country and any of which could harm our business. |
| ● | If we are unable to successfully market and distribute our products and retain experienced commercial personnel, our business will be substantially harmed. |
| ● | We are subject to stringent and evolving healthcare regulatory, privacy and information security laws, regulations, rules, policies and contractual obligations, and changes in such laws, regulations, rules, policies, contractual obligations and our actual or perceived failure to comply with such requirements could subject us to significant investigations, audits, fines, penalties, and claims, any of which may have a material adverse effect on our business, financial condition, results of operations or prospects. |
| ● | If manufacturers obtain approval for generic versions of our products, or of products with which we compete, our business may be harmed. |
| ● | Unforeseen safety issues could emerge with our products that could require us to change the prescribing information to add warnings, limit use of the product, and/or result in litigation. Any of these events could have a negative impact on our business. |
| ● | We rely and may continue to rely on third-party distribution facilities for the sale of our products and potential sale of any of our product candidates. If any or all of them become subject to adverse findings from inspections or face other difficulties to operate, then the distribution of our products may be interrupted or otherwise adversely affected. |
| ● | We lack the capability to manufacture compounds for clinical development and we intend to rely on third parties for commercial supply, manufacturing and distribution, if any, of our product candidates which receive regulatory approval and we may be unable to obtain required material or product in a timely manner, at an acceptable cost or at a quality level required to receive regulatory approval. |
| ● | Any product for which we have obtained regulatory approval, or for which we obtain approval in the future, is subject to, or will be subject to, extensive ongoing regulatory requirements by the FDA, EMA, MHRA and other comparable regulatory authorities, and if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, we may be subject to penalties, we may be unable to generate revenue from the sale of such products, our potential for generating positive cash flow may be diminished, and the capital necessary to fund our operations will be increased. Additionally, approval of a drug under the accelerated drug approval program may be withdrawn or the labeled indication of the drug changed if trials fail to verify clinical benefit or do not demonstrate sufficient clinical benefit to justify the risks associated with the drug. |
| ● | If our corporate collaborations or license agreements are unsuccessful, or if we fail to form new corporate collaborations or license agreements, our research and development efforts could be delayed. |
| ● | Our success is dependent on securing intellectual property rights and data exclusivity and other regulatory rights (such as orphan exclusivity, pediatric extensions and supplementary protection certificate) held by us and third parties, and our interest in such rights is complex and uncertain. |
| ● | If a dispute arises regarding the infringement or misappropriation of the proprietary rights of others, such dispute could be costly and result in delays in our research and development activities, partnering and commercialization activities. |
| ● | If our competitors develop technologies that are more effective than ours, our commercial opportunity will be reduced or eliminated. |
| ● | If product liability lawsuits are successfully brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products. |
