アメリカ合衆国
証券取引委員会
ワシントンD.C.，20549
表：
1934年証券取引法第13条又は15(D)条に規定する四半期報告 |
本四半期末まで
1934 年証券取引所法第 13 条または第 15 条 （ d ） に基づく移行報告書 |
移行期間中から to
委員会ファイル番号 ：
(登録者の正確な氏名はその定款に記載)
| ||
(明またはその他の司法管轄権 （ 代表執行役員事務所の所在地 ） |
| (国際税務局雇用主身分証明書番号) (郵便番号) |
(
(登録者の電話番号、市外局番を含む)
同法第12(B)項に基づいて登録された証券：
クラスごとのタイトル | 取引コード | 登録された各取引所の名称 |
再選択マークは、登録者が、(1)過去12ヶ月以内(または登録者がそのような報告の提出を要求された短い期間内)に、1934年の証券取引法第13節または15(D)節に提出されたすべての報告書を提出したかどうか、および(2)過去90日以内にそのような提出要件に適合しているかどうかを示す。これは大きな問題です
登録者が、規則 S—t の規則 405 （ 本章 § 232.405 ） に従って提出する必要があるすべてのインタラクティブデータファイルを、以前の 12 ヶ月間 （ または登録者がそのようなファイルを提出する必要があったそれより短い期間 ） に電子的に提出したかどうかをチェックマークで示します。
登録者が大型加速申告会社，加速申告会社，非加速申告会社，小さな報告会社，あるいは新興成長型会社であることを再選択マークで示す。取引法第12 b-2条の規則における“大型加速申告会社”、“加速申告会社”、“小報告会社”、“新興成長型会社”の定義を参照されたい。
大規模データベース加速ファイルマネージャ | ↓ ↓ | 」と | ||
非加速ファイルサーバ | ↓ ↓ | 規模の小さい新聞報道会社 | ||
新興成長型会社 |
新興成長型企業である場合、登録者が、取引所法案第13(A)節に従って提供された任意の新しいまたは改正された財務会計基準を遵守するために、延長された移行期間を使用しないことを選択したか否かを再選択マークで示す↓ ↓
登録者が空殻会社であるか否かをチェックマークで示す(取引法第12 b-2条で定義されている)。*はい、違います
2024 年 10 月 31 日現在、
COHERUS BIOSCIENCES 株式会社
2024 年 9 月 30 日期第 10 四半期フォーム Q
目次ページ
| ページ | ||
|---|---|---|---|
3 | |||
5 | |||
5 | |||
| 5 | ||
6 | |||
7 | |||
8 | |||
10 | |||
11 | |||
38 | |||
54 | |||
55 | |||
56 | |||
56 | |||
56 | |||
112 | |||
112 | |||
112 | |||
113 | |||
114 | |||
114 | |||
116 | |||
ウデニカ ®， ウデニカ ® オンボディ™ LOQTORZI ® および LOQTORZI ® は、大文字または商標記号で表示されているかどうかにかかわらず、 Coherus 、その関連会社、関連会社、またはそのライセンス提供者または合弁パートナーの商標です。このフォーム 10—Q の四半期報告書に記載されている他の会社の商標および商号は、 Coherus の知識の範囲内、それぞれの所有者の財産です。 | |||
2
前向き陳述に関する警告説明
本四半期の報告書Form 10-Qには前向きな陳述が含まれています1933年証券法(改正)(“証券法”)と1934年“証券取引法”(改正)を受けて設立された安全港制約の将来事件と我々の将来結果について。本明細書に含まれる任意の陳述が、本四半期報告10-Qテーブルに含まれる歴史的事実の陳述でなければ、前向きな陳述と見なすことができる。場合によっては、“目標”、“予想”、“仮定”、“試み”、“信じ”、“考慮”、“継続”、“可能”、“満期”、“推定”、“予想”、“目標”、“意図”、“可能”、“目標”、“計画”、“予測”、“潜在”、“求める”、“すべき”などの言葉によって識別することができる。“努力”、“目標”、“将”、“将”および他の同様の表現は、将来のイベントおよび将来の傾向の予測または指示、またはこれらの用語または他の同様の用語の負の影響である。これらの前向きな陳述は、以下の態様に関する陳述を含むが、これらに限定されない
| ● | 私たちの製品の販売を維持したり増やしたりすることができるかどうか |
| ● | 候補製品の開発と商業化能力への期待; |
| ● | 私たちは私たちの製品に対する規制承認を維持することができ、承認されれば、私たちの候補製品に対する規制承認を得て維持することができます |
| ● | 私たちは政府と第三者支払者の保証と精算への期待を持っている |
| ● | 私たちは規制の要求に従って私たちの製品と候補製品を製造し、これらの製品の製造能力を拡大して商業供給のために能力を持っている |
| ● | 私たちは第三者契約メーカーに依存して製品候補と製品を提供してくれます |
| ● | 私たちは、私たちのラベルと包装契約製造組織(“CMO”)がUDENYCA生産を回復するのに要する時間の予想を回復し、私たちは流通ルートを再入荷し、最終的なUDENYCA製品ロットを顧客に出荷する予想を回復し、2024年末に大量のUDENYCA生産を完了する期待と、私たちの追加の包装とラベル製造組織(“CMO”)が最終的に販売可能な製品を製造し、UDENYCAの商業供給を開始する時間に対する期待； |
| ● | もし私たちの製品と候補製品が商業用途のために承認されたら、私たちは潜在的な市場規模と患者集団に対する期待 |
| ● | 私たちの将来の利息と元金の満期支払いに対する予想は、これらの利息と元金は私たちの債務と関係があります |
| ● | 私たちの財務業績は、私たちの予想される未来の業績、将来の現金備蓄、研究開発費、販売と一般行政費用を含むが、これらに限定されない |
| ● | 私たちの業務、製品、候補製品の戦略計画を実行します |
| ● | 未来の臨床前と臨床研究及び著者らの研究と開発計画の起動、時間、進展と結果 |
| ● | 当社が製品および製品候補をカバーする知的財産権について確立し維持できる保護の範囲 |
3
| ● | 第三者の知的財産権の範囲または執行可能性、または当社の製品および製品候補に対するそのような権利の適用可能性に関する当社の期待； |
| ● | 当社の製品および製品候補を含む訴訟のコスト、タイミングおよび結果 |
| ● | 当社の製品候補の臨床試験を実施するために第三者の契約研究機関に依存すること |
| ● | 当社の製品および製品候補を使用することの利点 |
| ● | 将来のサイバー攻撃やセキュリティインシデントによる潜在的なリスク、混乱、損失に関する期待 |
| ● | 当社の現在または将来の製品および製品候補の市場受容率と程度 |
| ● | 私たちはNeulastaや他の会社が生産している他の生物類似製品を含む現在競争製品を生産している会社と競争することができる |
| ● | 私たちの競争相手、市場機会、産業に関する発展と予測； |
| ● | t新冠肺炎とウクライナ戦争と中東紛争の持続的な持続は私たちの業務と将来性に潜在的な影響を与える。 |
私たちのこのような展望的な陳述は私たちの現在の未来の事件に対する期待に基づいている。これらの陳述は将来の業績の保証ではなく、予測困難なリスク、不確実性、仮説に関連している。様々な理由から、私たちの実際の結果は、第II部分11 Aのリスク要因で決定されたものと、本四半期報告でForm 10-Qの形で他の場所で議論されたものとを含む、これらの前向き陳述によって提案された結果と大きく異なる可能性がある。このような危険と不確実性を考慮して、あなたが前向きな陳述に過度に依存しないように注意します。本報告書に含まれている展望的な陳述は、本報告書の発表日にのみ行われる。連邦証券法および米国証券取引委員会(以下、“米国証券取引委員会”と略す)の規則および法規に別の要求がある限り、私たちは、新しい情報、未来の事件、仮説の変化、または他の理由による、本報告の発表後にその中の任意の展望的陳述または公開発表の任意の修正結果を更新するいかなる義務も、本報告書の発表後に更新することを特に拒否しない。我々の展望的陳述は、我々が行う可能性がある任意の将来の買収、合併、処置、合弁または投資の潜在的な影響を反映していないが、本明細書で説明した範囲内でSurfaceを買収することは除外される。
このForm 10-Q四半期報告書はまた、これらの市場の推定規模および特定の医療条件の発症率および流行率に関するデータを含む、私たちの業界、私たちの業務およびいくつかの疾患の市場の推定、予測、市場機会推定、および他の情報を含む。見積り，予測，予測，市場研究や類似方法に基づく情報自体は不確定要素の影響を受け，実際のイベントや状況はその情報に反映されるイベントや状況とは大きく異なる可能性がある.他に明確な説明がない限り、私たちは、報告、研究調査、研究、および市場研究会社および他の第三者によって準備された類似データ、業界、医療および一般出版物、政府データ、公開提出された報告および同様のソースから、当産業、商業、市場、および他のデータを取得する。
4
第1部：財務情報
項目 1 。 監査済み連結財務諸表
Coherus BioSciences 株式会社
簡明総合貸借対照表
(千単位で1株当たりおよび1株当たりのデータは含まれていない)
(未監査)
9 月 30 日 | 十二月三十一日 | |||||
| 2024 |
| 2023 | |||
資産 |
|
| ||||
流動資産： |
|
|
|
| ||
現金 · 現金同等物 | $ | | $ | | ||
有価証券への投資 | — | | ||||
売掛金純額 | |
| | |||
TSA 売掛金純 （ 注 6 ） | | — | ||||
在庫品 | |
| | |||
プリペイド製造 |
| |
| | ||
その他の前払金 · 経常資産 |
| |
| | ||
流動資産総額 |
| |
| | ||
財産と設備、純額 |
| |
| | ||
在庫、非経常 |
| |
| | ||
無形資産、純額 |
| |
| | ||
他の非流動資産 |
| |
| | ||
総資産 | $ | | $ | | ||
負債と株主赤字 |
|
|
|
| ||
流動負債： |
|
|
|
| ||
売掛金 | $ | | $ | | ||
未払いリベート、手数料、予約金 | |
| | |||
TSA 買掛金およびその他の未払い債務 （ 注 6 ） | | — | ||||
補償すべきである | |
| | |||
負債その他流動負債を計上しなければならない | |
| | |||
流動負債総額 | |
| | |||
定期ローン、非経常ローン | | | ||||
転換可能な手形 | | | ||||
非流動賃貸負債 | |
| | |||
他の非流動負債 | |
| | |||
負債総額 |
| |
| | ||
引受金及び又は有事項(付記9) |
|
|
|
| ||
株主赤字： |
|
|
|
| ||
優先株($ | — | — | ||||
普通株(普通株)$ |
| |
| | ||
追加実収資本 |
| |
| | ||
その他の総合損失を累計する |
| ( |
| ( | ||
赤字を累計する |
| ( |
| ( | ||
株主総損失額 |
| ( |
| ( | ||
総負債と株主赤字 | $ | | $ | | ||
添付の説明を参照してください。
5
Coherus BioSciences 株式会社
簡明総合業務報告書
(千単位で1株当たりおよび1株当たりのデータは含まれていない)
(未監査)
3か月まで | 9か月で終わる | |||||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
純収入 | $ | | $ | | $ | | $ | | ||||
コストと支出： |
|
|
|
| ||||||||
販売原価 |
| |
| |
| |
| | ||||
研究 · 開発 |
| |
| |
| |
| | ||||
販売、一般、行政 |
| |
| |
| |
| | ||||
総コストと費用 |
| |
| |
| |
| | ||||
運営損失 |
| ( |
| ( |
| ( | ( | |||||
利子費用 |
| ( |
| ( |
| ( |
| ( | ||||
売却取引純利益 （ 損失 ） （ 注 6 ） | ( | — | | — | ||||||||
債務返済損失 | — | — | ( | — | ||||||||
その他の収入，純額 |
| |
| |
| |
| | ||||
所得税前収入 |
| ( |
| ( |
| |
| ( | ||||
所得税支給 |
| — |
| ( |
| — |
| ( | ||||
純収益(赤字) | $ | ( | $ | ( | $ | | $ | ( | ||||
|
|
|
|
|
|
|
|
| ||||
1株当たり純収益(損失)： |
|
|
|
|
|
| ||||||
基本的な情報 | $ | ( | $ | ( | $ | | $ | ( | ||||
薄めにする | $ | ( | $ | ( | $ | | $ | ( | ||||
1 株当たり純利益 （ 損益 ） の計算に使用する加重平均株式数 ： | ||||||||||||
基本的な情報 | | | | | ||||||||
薄めにする |
| |
| |
| |
| | ||||
添付の説明を参照してください。
6
7
Coherus BioSciences 株式会社
連結株主赤字計算書 （ 縮約 ）
(千単位で1株当たりおよび1株当たりのデータは含まれていない)
(未監査)
積算 | |||||||||||||||||
その他の内容 | 他にも | 総額 | |||||||||||||||
普通株 | 支払い済み | 全面的に | 積算 | 株主の | |||||||||||||
|
| 株価 |
| 金額 |
| 資本 |
| 損 |
| 赤字.赤字 |
| 赤字.赤字 | |||||
2023 年 12 月 31 日残高 |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||
純収入 | — |
| — |
| — |
| — |
| |
| | ||||||
株式オプション行使時に普通株を発行する | |
| — |
| |
| — |
| — |
| | ||||||
制限付き株式の付与による普通株式の発行 | |
| — |
| — |
| — |
| — |
| — | ||||||
ATm オファリングによる普通株式の発行 （ 発行コストを差し引いた ） | | — | | — | — | | |||||||||||
RSU の純株式決済に関する納税額 | ( | — | ( | — | — | ( | |||||||||||
株に基づく報酬費用 | — |
| — |
| |
| — |
| — |
| | ||||||
その他総合損失、税引き後純額 |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
2024 年 3 月 31 日残高 |
| | | | ( | ( | ( | ||||||||||
純損失 |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
RSUに帰属するときに普通株式を発行する | |
| — |
| — |
| — |
| — |
| — | ||||||
普通株式の発行 —RSU における 2023 年ボーナスの一部支払 | | | | — | — | | |||||||||||
ATm オファーに関連するオファーコスト | — | — | ( | — | — | ( | |||||||||||
RSU の純株式決済に関する納税額 | ( | — | ( | — | — | ( | |||||||||||
従業員株式購入計画 （ 以下「 ESPP 」 ） に基づく普通株式の発行について |
| |
| — |
| |
| — |
| — |
| | |||||
株に基づく報酬費用 |
| — |
| — |
| |
| — |
| — |
| | |||||
2024 年 6 月 30 日残高 |
| | | | ( | ( | ( | ||||||||||
純損失 |
| — | — | — | — | ( |
| ( | |||||||||
RSUに帰属するときに普通株式を発行する | | — | — | — | — |
| — | ||||||||||
RSU の純株式決済に関する納税額 | ( | — | ( | — | — |
| ( | ||||||||||
株に基づく報酬費用 |
| — | — | | — | — |
| | |||||||||
その他総合損失、税引き後純額 |
| — | — | — | ( | — |
| ( | |||||||||
2024 年 9 月 30 日残高 |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||
8
Coherus BioSciences 株式会社
連結株主赤字計算書 （ 縮約 ）
(千単位で1株当たりおよび1株当たりのデータは含まれていない)
(未監査)
積算 | |||||||||||||||||
その他の内容 | 他にも | 総額 | |||||||||||||||
普通株 | 支払い済み | 全面的に | 積算 | 株主の | |||||||||||||
|
| 株価 |
| 金額 |
| 資本 |
| 損 |
| 赤字.赤字 |
| 赤字.赤字 | |||||
2022 年 12 月 31 日残高 |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||
純損失 |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
株式オプション行使時に普通株を発行する |
| |
| — |
| |
| — |
| — |
| | |||||
RSUに帰属するときに普通株式を発行する |
| |
| — |
| — |
| — |
| — |
| — | |||||
ATm オファリングによる普通株式の発行 （ 発行コストを差し引いた ） | | — | | — | — | | |||||||||||
RSU の純株式決済に関する納税額 | ( | — | ( | — | — | ( | |||||||||||
株に基づく報酬費用 |
| — |
| — |
| |
| — |
| — |
| | |||||
その他総合損失、税引き後純額 |
| — |
| — |
| — |
| ( |
| — |
| ( | |||||
2023 年 3 月 31 日残高 |
| | | | ( | ( | ( | ||||||||||
純損失 |
| — |
| — |
| — |
| — |
| ( |
| ( | |||||
株式オプション行使時に普通株を発行する |
| |
| — |
| |
| — |
| — |
| | |||||
RSUに帰属するときに普通株式を発行する | |
| — |
| — |
| — |
| — |
| — | ||||||
発行原価を差し引いた公募普通株式の発行 | | | | — | — | | |||||||||||
ATm 提供に関連する提供コスト | — | — | ( | — | — | ( | |||||||||||
RSU の純株式決済に関する納税額 | ( | — | ( | — | — | ( | |||||||||||
ESPP による普通株式の発行 |
| |
| — |
| |
| — |
| — |
| | |||||
株に基づく報酬費用 |
| — |
| — |
| |
| — |
| — |
| | |||||
その他総合損失、税引き後純額 | — | — | — | ( | — | ( | |||||||||||
2023 年 6 月 30 日の残高 |
| | | | ( | ( | ( | ||||||||||
純損失 |
| — | — | — | — | ( |
| ( | |||||||||
株式オプション行使時に普通株を発行する | | — | | — | — |
| | ||||||||||
RSUに帰属するときに普通株式を発行する | | — | — | — | — |
| — | ||||||||||
サーフェス買収に伴う普通株式の発行 ：(1) |
| ||||||||||||||||
サーフェス株主への買収発行 | | | | — | — |
| | ||||||||||
株式報酬の賦与加速 | | — | | — | — |
| | ||||||||||
株式報酬の純株式決済に伴う納税額 | ( | — | ( | — | — | ( | |||||||||||
ATm オファリングによる普通株式の発行 （ 発行コストを差し引いた ） | | | | — | — |
| | ||||||||||
RSU の純株式決済に関する納税額 | ( | — | ( | — | — | ( | |||||||||||
株に基づく報酬費用 |
| — | — | | — | — |
| | |||||||||
その他総合利益 （ 税抜 ） |
| — | — | — | | — |
| | |||||||||
2023 年 9 月 30 日の残高 |
| | $ | | $ | | $ | ( | $ | ( | $ | ( | |||||
| (1) | 詳細は注釈 6 を参照。 |
添付の説明を参照してください。
9
Coherus BioSciences 株式会社
キャッシュフロー表簡明連結報告書
(単位：千)
(未監査)
9か月で終わる | ||||||
9 月 30 日 | ||||||
| 2024 |
| 2023 | |||
事業活動 |
|
|
| |||
純収益(赤字) | $ | | $ | ( | ||
純収益(損失)と業務活動で使用される現金純額を調整する： |
|
| ||||
減価償却 · 償却 |
| |
| | ||
株に基づく報酬費用 |
| |
| | ||
ライセンス外資産の減損及び CVR 負債の再計量 （ 純 ） | | — | ||||
債務返済損失 | | — | ||||
販売取引利益 （ 注 6 ） | ( | — | ||||
在庫償却額、ネット | | | ||||
その他の非現金調整、純 | ( | | ||||
営業資産 · 負債の変動 |
|
| ||||
売掛金純額 |
| |
| ( | ||
在庫品 | ( |
| ( | |||
プリペイド製造 |
| |
| | ||
その他の前払金、経常資産、非経常資産 |
| ( |
| | ||
売掛金 |
| ( |
| | ||
未払いリベート、手数料、予約金 |
| ( |
| | ||
TSA 関連営業資産 · 負債 （ 純 ） （ 注 6 ） | | — | ||||
補償すべきである |
| ( |
| ( | ||
未払金その他の経常 · 非経常負債 |
| ( |
| | ||
経営活動のための現金純額 |
| ( |
| ( | ||
投資活動 |
|
|
|
| ||
市場有価証券への投資満期収益 |
| |
| | ||
市場有価証券への投資売却による収益 | | | ||||
CIMERLI セールによる受領金 （ 注 6 ） | | — | ||||
YUSIMRY セールからの現金受領 （ 注 6 ） | | — | ||||
サーフェス買収による現金及び現金同等物 | — | | ||||
準西バイオサイエンツへのマイルストーンベースライセンス料の支払 | ( | — | ||||
市場有価証券への投資購入 |
| — |
| ( | ||
その他の投資活動、純額 | | | ||||
投資活動が提供する現金純額 |
| |
| | ||
資金調達活動 |
|
|
|
| ||
2029 年タームローンからの収益 （ 債務割引 · 発行コストを差し引いた ） | | — | ||||
発行費用を差し引いた売買契約収益 | | — | ||||
ATm オファリングによる普通株式の発行収益 （ 発行費用を除いた ） | | | ||||
発行原価を差し引いた公募普通株式の発行収益 | — | | ||||
株式オプション行使時に普通株で得られた金を発行する |
| | | |||
従業員株式購入計画に基づく購入収益 |
| | | |||
純株式決済に関する納税額 |
| ( | ( | |||
2027 年期末ローンの返済、保険料、出口手数料 | ( | — | ||||
その他の融資活動 | ( | ( | ||||
融資活動が提供する現金純額 |
| ( |
| | ||
現金、現金等価物、および制限的現金純増加 |
| ( |
| | ||
期初現金、現金等価物、および限定現金 |
| |
| | ||
期末現金、現金等価物、および制限現金 | $ | | $ | | ||
非現金活動に関する補足開示 |
|
| ||||
普通株式で決済される非現金従業員ボーナス | $ | | $ | — | ||
買掛金の発行費用の融資 | $ | | $ | — | ||
添付の説明を参照してください。
10
Coherus BioSciences 株式会社
簡明合併財務諸表付記
(未監査)
1.中国会計基準組織および重大会計政策のまとめ
組織する
Coherus BioSciences，Inc.(“会社”あるいは“Coherus”)は商業段階の生物製薬会社であり、癌治療の革新的な免疫療法の研究、開発と商業化に集中している。同社は革新的な免疫腫瘍学的パイプラインを開発しており，腫瘍学的に検証された商業能力と協同作用すると信じている。同社の本社と実験室はそれぞれカリフォルニア州レイドウッド市とカリフォルニア州カマリロに設置されている
2024年1月2日、同社は、転移性または再発性局所末期鼻咽頭癌を治療するための第一線の治療のために、シスプラチンおよびゲムシタビンと組み合わせてLOQTORZIを発売し、白金含有化学療法中または後に再発した切除不能または転移性鼻咽頭癌の治療に単一療法として使用することを発表した。LOQTORZIは同社が上海君士生物科学有限会社(以下は君士生物科学と略称する)と協力して開発した新型PD-1阻害剤である。同社は米国でもUDENYCA(pegfilgratim−cbqv)を販売しており，長時間作用顆粒球コロニー刺激因子ニューラス塔に類似した生物学的薬剤である。
同社は2023年7月に米国でYUSIMRY(adalimumab−aqvh)を発売し，Humira(Adalimumab)生物に類似した薬剤である。当社は2024年6月26日、香港英友実業有限公司(“香港小輪”)と資産購入協定(“YUSIMRY購入協定”)を締結した。YUSIMRY購入プロトコルによると，会社はYUSIMRY(adalimumab-aqvh)特許経営権の売却(“YUSIMRY販売”)を完了し，前払い現金対価は$となる
同社の製品ラインには以下のものが含まれている
強固な基礎
付随する監査済み連結財務諸表には、コヘラスおよびその完全子会社の会計が含まれます。連結時にすべての会社間取引および残高を排除しました。監査済み連結財務諸表は、以下に従って作成されています。
11
米国は中期財務情報の会計原則(“米国公認会計原則”)を一般的に受け入れ、改正された1933年の証券法(“証券法”)S-X条例第10-Q条と第10-01条の規定に従って形成されている。したがって、それらは、米国公認会計基準によって要求される完全な財務諸表のすべての情報および付記を含まない。これらの監査されていない簡明な総合財務諸表は、正常な経常的な計算項目を含むすべての調整を反映しており、会社はこれらの調整はアメリカ公認会計原則に基づいて中期財務状況、会社の運営結果、現金流量を公平に陳述するために必要であると考えている。中期業績は必ずしも通年またはその後の任意の中期の業務結果やキャッシュフローを示すとは限らない。
添付されている監査されていない簡明総合財務諸表は、当社が米国証券取引委員会に提出した2023年12月31日現在の10-K表年次報告(“2023 10-K表”)に含まれる当社の監査済み財務諸表およびその付記とともに読まなければならない。
予算の使用
米国公認会計原則に従って財務諸表を作成することは管理層に判断、推定と仮定を要求し、これらの判断、推定と仮定は資産、負債、収入と費用及び関連開示の報告金額に影響を与える。経営陣の推定は、歴史的経験や様々な他の事情に基づいており、当時は合理的な仮定であったと考えられている。これらの見積りは，資産や負債の帳簿価値が他のソースから見えない場合には，これらの価値を判断するための基礎となる.各時期は、会社UDENYCAの第三者ラベルやパッケージCMOに関連する一時供給中断の推定影響および不確実性のような現在の情報を反映するために推定を評価して更新される。会計見積もりと判断は本質的に不確実であるため、実際の結果はこれらの見積もりとは異なる可能性がある。
現金、現金等価物、および限定現金
以下の表は、簡明合併貸借対照表で報告されている現金、現金等価物、および制限現金を照合し、これらの現金の合計は、簡明合併貸借対照表で報告されている金額である
(単位：千) | 1月1日 | |||||
期初に： |
| 2024 |
| 2023 | ||
現金 · 現金同等物 | $ | | $ | | ||
制限現金 | | | ||||
現金総額、現金等価物、および限定現金 | $ | | $ | | ||
9 月 30 日 | ||||||
期間終了時 ： | 2024 |
| 2023 | |||
現金 · 現金同等物 | $ | | $ | | ||
制限現金 |
| |
| | ||
現金総額、現金等価物、および限定現金 | $ | | $ | | ||
制限現金は、当社が特定のリース契約に基づく債務を担保するために提供した信用状のための預金で構成され、連結貸借対照表上の非流動資産に含まれています。
売掛金
貿易債権は、チャージバック引当、迅速な支払のための現金割引、信用損失を差し引いて計上されます。当社は、過去の経験、信用質、売掛金残高の年齢、影響を与える可能性のある経済情勢などの要因を考慮して、予想信用損失の引当額を見積もります。
12
顧客の支払い能力。信用損失が準備した相応の費用は販売、一般、行政費用に反映される。2024年9月30日と2023年12月31日まで、信用損失準備金は重要ではない。
収入購入販売協定
収入購入販売プロトコル(付記8.財務負債参照)には、収入購入販売プロトコルとは別に入金された基準(“特許料派生ツール負債”)に適合する埋め込み派生ツールが記載されている。特許権使用料は負債が収入購入販売協定を締結する際に公正価値で入金され、その後、各報告期間に公正価値によって再計量され、簡明総合経営報告書の純額の中で他の収入(支出)の公正価値の変動を確認する。収入購入販売プロトコルはモンテカルロシミュレーションモデルを用いて初期推定を行い，モンテカルロシミュレーションモデルを用いて再計測を行い，“有無”手法，すなわち埋め込みデリバティブを用いて収入購入販売プロトコルを推定し，派生商品を埋め込まずに推定する“有無”手法を実行する.価値間の差額は、特許使用料派生製品の推定公正価値として決定される。公正価値の詳細については、付記3.公正価値計量を参照されたい。
収入売買プロトコルは負債純額として入金され、割引には発行コストと分割を必要とする埋め込み派生ツールの公正価値が含まれる。当社は実際の金利法を用いてこの負債に関する利息支出を試算している。実金利は、負債が予定された予想期限内に全額返済できるようにした金利に基づいて計算される。利息支出は簡明総合経営報告書の見積もり期限内に確認します。この収入共有負債の金利は、実際および予測された純売上高レベルを含むいくつかの要因によって合意期間内に変化する可能性がある。当社は実際と予測した純売上高に基づいて、前向きな方法で金利を四半期評価しています。実際または予測純売上高の著しい増加または減少は、収入共有負債、利息支出、返済期限に大きな影響を与える可能性がある。
値段が合うかもしれない
または対価格とは，次の所持者に支払う可能性のある金のことである価値のある権利(“CVR”)これは企業と一部の第三者が製品開発や財務業績のマイルストーンを達成することにかかっている。業務合併入金としての取引については、当社が予想に応じて移転した対価は、買収の日に公正価値記録または対価があります。または、各報告期間に対価負債が再計量され、公正価値の後続変動が簡明総合経営報告書の販売、一般および行政費用で確認される。公正価値を計算する際に用いる仮説には，成功確率と割引率がある.または価格に関するいくつかの仮定があり、重大な判断が必要であり、実際の結果は推定額とは異なる可能性がある
株に基づく報酬
その会社の報酬計画には株ベースの報酬が含まれている。条件業績株式オプション以外の奨励については，公正価値は授権期間内に直線原則で補償費用として確認された。条件に基づく業績株式オプションについては，業績条件が実現可能であると考えられた場合にのみ費用を確認し，付与された日からマイルストーンに達するまでの時間帯で費用を確認する.関連コストは販売コスト，研究開発コスト，販売コスト，一般費用と行政費用(場合によっては)に計上される。当社は発生した没収行為を計算します。当社は、発行日の会社普通株の公正価値に基づいて、企業合併に関連して発行された株式を会計処理します。
最近の会計公告
13
以下は、同社がまだ採用していない最近の会計声明である
2023年11月、財務会計基準委員会(FASB)は、報告可能な支部情報開示に対する支部報告基準(主題280)の改善を行う会計基準更新(ASU)2023-07を発表した。今回の更新における改訂は、主に重大部門への支出の開示を強化することにより、報告可能部門への年度と中間開示要求を拡大した。新基準は2023年12月15日以降の会計年度と2024年12月15日以降の会計年度内の移行期間内に会社に有効である。早期通過を許可し，今回の更新における改訂は提出されたすべての時期にさかのぼって適用されるべきである.同社は現在、このASUがその財務諸表開示に及ぼす影響を評価している。
FASBは、2023-09“所得税”(主題740)：所得税開示を改善し、比率調整および支払い所得税開示の定性的および定量的な最新情報を提供して、統一されたカテゴリおよび税率内の情報をより大きく分解し、納付された所得税を司法管轄区域で分解することを含む所得税開示の透明性を向上させるために、ASU 2023-09“所得税”(主題740)を発表した。新基準は2024年12月15日以降の年間期間内に発効し、早期採用が許可されている。本ASUの修正案は展望的でなければならないが、遡及適用も許可されなければならない。同社は現在、このASUがその財務諸表開示に及ぼす影響を評価している。
当社は他の最近の会計声明を検討し、当該等の声明又は当該業務に適用されないと判断したり、将来このような声明を採用することが簡明総合財務諸表に重大な影響を与えないことを期待している
2.収入を増やし、収入を増やす
同社は2023年12月にLOQTORZI、2023年7月にYUSIMRY、2022年10月にCIMERLIを発売した。YUSIMRYとCIMERLIの販売純収入は実際にはそれぞれ2024年6月26日と2024年3月1日に会社の簡素化総合経営報告書で確認されなくなった(付記6.買収と処分参照)。すべての純製品収入は米国から来ており、同社の純収入は以下の通り
3か月まで | 9か月で終わる | |||||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
(単位：千) |
| 2024 | 2023 | 2024 |
| 2023 | ||||||
製品 | ||||||||||||
ウデニカ | $ | | $ | | $ | | $ | | ||||
シメルリ | ( | | | | ||||||||
ユシムリー | ( | | | | ||||||||
ロクトルツィ | | — | | — | ||||||||
総純製品収益 | | | | | ||||||||
その他の収入 |
| |
| |
| |
| | ||||
総純利益 | $ | | $ | | $ | | $ | | ||||
14
総製品売上高に占める主要顧客別総製品売上高の割合は以下の通りです。
| 3か月まで | 9か月で終わる |
| |||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
2024 |
| 2023 | 2024 |
| 2023 |
| ||||||
マケソン社 |
| | % | | % | | % | | % | |||
センコーラ （ 旧アメリカソース · ベルゲン社 ） |
| | % | | % | | % | | % | |||
枢機卿健康会社です。 |
| | % | | % | | % | | % | |||
製品販売割引と手当
前期間の販売に関する準備金の総額は#ドルです
販売取引において、当社はCIMERLIとYUSIMRYが2024年3月1日と2024年6月26日までに発生した販売割引と手当負債を保留し、引き続き担当する。当社が2024年3月にSandozとCIMERLIについて締結した過渡的サービス協定(“CIMERLI TSA”)及び当社と香港小輪が2024年6月にYUSIMRYについて締結した過渡的サービス協定(“YUSIMRY TSA”及びCIMERLI TSAとともに総称して“TSA”)に基づき、販売取引完了後に取引相手に関する販売割引及び手当を代表して取引相手に関する販売割引及び手当が反映されるTSA売掛金、純額とTSAは帳簿とその他の負債を払わなければならない監査されていない簡明総合貸借対照表では、これらの資産は次の表に含まれていない(付記6.買収および処分参照)。
可変対価を構成する重要割引と手当種別ごとの活動と期末準備金残高は以下のとおりである
2024 年 9 月 30 日までの 9 ヶ月間 | ||||||||||||
| チャージバック |
|
| その他の料金、 |
| |||||||
割引 | コペイ | |||||||||||
プロンプト | 援助する | |||||||||||
(単位：千) | 支払い | リベート | 返却 | 総額 | ||||||||
2023年12月31日の残高 | $ | | $ | | $ | | $ | | ||||
販売に関する規定 ： | ||||||||||||
現在期間 | | | | | ||||||||
前期 — 増加 （ 減少 ） | ( | | ( | | ||||||||
支払および顧客クレジットの発行 |
| ( | ( | ( | ( | |||||||
2024 年 9 月 30 日残高 | $ | | $ | | $ | | $ | | ||||
2023 年 9 月 30 日までの 9 ヶ月間 | ||||||||||||
| チャージバック |
|
| その他の料金、 |
| |||||||
割引 | コペイ | |||||||||||
プロンプト | 援助する | |||||||||||
(単位：千) | 支払い | リベート | 返品 | 総額 | ||||||||
2022 年 12 月 31 日残高 | $ | | $ | | $ | | $ | | ||||
販売に関する規定 ： | ||||||||||||
現在の期間 |
| | | | | |||||||
前期 — 増加 （ 減少 ） | ( | | | | ||||||||
支払および顧客クレジットの発行 |
| ( |
| ( |
| ( |
| ( | ||||
15
2023 年 9 月 30 日の残高 | $ | | $ | | $ | | $ | |
3.公正価値計量の会計基準
金融商品の公正価値は公正価値計量に重要な意義がある最低投入レベルによって以下のカテゴリの一つに分類される
| ● | レベル1-アクティブ市場における同じ資産または負債の見積もり。 |
| ● | 第2レベル-第1レベル以外の直接的または間接的に観察可能な投入、例えば、同様の資産または負債のオファー、非アクティブ市場のオファー、または実質的に全体の資産または負債期間内に観察可能または観察可能な市場データによって確認される他の投入。 |
| ● | 第3レベル-市場活動が少ないか、または市場活動支援の観察できない投入がなく、資産または負債の公正な価値に大きな意義を持つ。 |
このような金融商品の短期的な性質により、現金等価物の公正価値はその帳簿価値に近い。
債務証券を売却可能な未実現損益は累積総合収益(損失)の構成要素として報告されているが，信用損失(ある場合)に関する未実現損失を除き，減値発生期間中の収益で確認されている。各報告期間内に、各セキュリティレベルで減値評価が行われる。売却可能な債務投資の公正価値が貸借対照表の日のコストよりも低い場合、減値が信用損失に関連しているかどうかを判断し、そうであれば、信用損失に関連する減値部分は純収益を計上することによって準備される。売却可能証券の実現済み損益(あれば)は、具体的な確認方法により簡明総合経営報告書における他の収入(費用)純額を計上する
2023年9月8日のSurface Oncology，Inc.(“Surface”)(付記6.買収と処分参照)について、会社は記録したCVRに関連しているか、または対価格負債がある。CVR負債の公正価値は、モンテカルロシミュレーションに基づくモデルを用いて現在値に割引して決定され、公正価値システム中の第3レベル計量を表す。計算に用いる仮定には，推定収入，割引率，様々な確率要因がある.異なる投入に対して異なる仮定が使用される場合、推定された公正価値は、会社によって決定された公正価値よりも著しく高いか、または下回る可能性がある。たとえば，割引率や支払い時間の増加は，低い公平価値計測を招く可能性がある.CVR債務を支払う条件が満たされる保証はない。2024年3月31日までの3ヶ月間、会社はノワール生物医学研究研究院(以下、ノファ研究院)(NZV 930)との歴史上の対外許可協力計画を欠陥し、純減価費用は$
2024年5月8日、会社は特許使用料由来負債を確認し、#ドルと推定した
16
収益のリスクと特定の事象の確率についてです2024 年 9 月 30 日現在、ロイヤリティ手数料デリバティブ負債の推定公正価値は、 $と変わっていません。
長期債務に関連する財務負債は、注釈 8 に要約しています。財務負債。その他の財務負債及び経常公正価値で計量される金融資産は、以下のとおりです。
公正価値測定 | ||||||||||||
2024 年 9 月 30 日 | ||||||||||||
(単位：千) |
| レベル一 |
| 2級 |
| 第3級 |
| 総額 | ||||
金融資産： |
|
|
|
|
|
|
| |||||
現金等価物(1) | $ | |
| $ | — |
| $ | — |
| $ | | |
総額 | $ | | $ | — | $ | — | $ | | ||||
財務負債： |
|
|
|
|
|
|
| |||||
ロイヤリティ手数料デリバティブ負債 | $ | — | $ | — | $ | | $ | | ||||
値段が合うかもしれない | — | — | | | ||||||||
総額 | $ | — | $ | — | $ | | $ | | ||||
公正価値測定 | ||||||||||||
2023年12月31日 | ||||||||||||
(単位：千) |
| レベル一 |
| 2級 |
| 第3級 |
| 総額 | ||||
金融資産： |
|
|
|
|
|
|
| |||||
現金等価物(1) | $ | | $ | | $ | — | $ | | ||||
市場債券 ： |
|
|
|
| ||||||||
アメリカ政府機関証券 | | — | — | | ||||||||
アメリカ国債 | | — | — | | ||||||||
商業用紙 · 企業ノート | — | | — | | ||||||||
プリペイド製造におけるプリペイド金融商品(2) | — | — | | | ||||||||
総額 | $ | | $ | | $ | | $ | | ||||
財務負債： | ||||||||||||
値段が合うかもしれない | $ | — | $ | — | $ | | $ | | ||||
| (1) | 現金等価額は、マネーマーケットファンド、米国国債、 90 日以内の商品紙および社債で構成されます。 |
| (2) | 2023 年の Form 10—k に記載されているオプション株式購入契約に関連しています。 |
投資タイプ別の原価、未実現損益、公正価値は以下の通りです。
|
| 2024 年 9 月 30 日 | ||||||||||
(単位：千) |
| 費用 |
| 未実現収益 |
| 未実現 （ 損失 ） |
| 公正価値 | ||||
貨幣市場基金 |
| $ | | $ | — | $ | — | $ | | |||
総額 |
| $ | |
| $ | — | $ | — | $ | | ||
17
|
| 2023年12月31日 | ||||||||||
(単位：千) |
| 費用 |
| 未実現収益 |
| 未実現 （ 損失 ） |
| 公正価値 | ||||
貨幣市場基金 |
| $ | | $ | — | $ | — | $ | | |||
アメリカ政府機関証券 |
| |
| — | ( | | ||||||
アメリカ国債 | | | — | | ||||||||
商業用紙 · 企業ノート | | — | ( | | ||||||||
総額 |
| $ | |
| $ | | $ | ( | $ | | ||
4. 在庫
在庫は以下のとおりです。
| 9 月 30 日 | 十二月三十一日 | ||||
(単位：千) | 2024 | 2023 | ||||
原料 | $ | | $ | | ||
Oracle Work in Process |
| |
| | ||
完成品 |
| |
| | ||
総額 | $ | | $ | | ||
2023年12月31日までの在庫はドルが含まれています
貸借対照表の発売日から12カ月を超える在庫は、簡明総合貸借対照表で在庫、非流動在庫に分類されることが予想される。在庫の非流動部分には、2024年9月30日と2023年12月31日現在、原材料と製品、2023年12月31日の一部の生産品が含まれている。以下の表に在庫貸借対照表の分類を示す：
| 9 月 30 日 | 十二月三十一日 | ||||
(単位：千) | 2024 | 2023 | ||||
在庫品 | $ | | $ | | ||
在庫、非経常 |
| |
| | ||
総額 | $ | | $ | | ||
$のプリペイド製造
18
5. バランスシートコンポーネント
財産と設備、純額
財産と設備、純額は：
| 9 月 30 日 | 十二月三十一日 | ||||
(単位：千) | 2024 |
| 2023 | |||
機械と設備 | $ | | $ | | ||
コンピュータ装置及びソフトウェア |
| |
| | ||
家具と固定装置 |
| |
| | ||
賃借権改善 |
| |
| | ||
ファイナンスリース資産の利用権 | — | | ||||
総資産と設備 |
| |
| | ||
減価償却累計と償却 |
| ( |
| ( | ||
財産と設備、純額 | $ | | $ | | ||
資産設備に関する減価償却費は、純 $
2024 年 9 月 30 日および 2023 年 12 月 31 日現在、ホスティング手配に関連するソフトウェア実装コストの純帳簿額は $
無形資産、純額
無形資産の純額は以下の通りです。
| 9 月 30 日 | 十二月三十一日 | ||||
(単位：千) | 2024 |
| 2023 | |||
有限寿命資産 （ 累積償却額を差し引いた ） | $ | | $ | | ||
無期限資産 — 進行中の研究開発 | | | ||||
グッドウィル |
| — |
| | ||
無形資産総額、純 | $ | | $ | | ||
有限寿命無形資産に関連する償却費用は $
Surface Acquisition の一環として取得された NZV 930 のノバルティス · インスティテュートへの独占ライセンスは、 2024 年 10 月 2 日にノバルティス · インスティテュートによって終了しました。その結果、当社は減損費用を計上しました。
19
残りの有限寿命資産の償却費用は、次の 5 会計年度ごとに $US であると予想されます。
発生 · その他経常債務
発生負債および経常負債は以下のとおりです。
| 9 月 30 日 |
| 十二月三十一日 | |||
(単位：千) | 2024 | 2023 | ||||
商業 · 研究開発製造の累計 | $ | | $ | | ||
共同開発費用とマイルストーン支払いの発生額 | | | ||||
課税税 | | | ||||
ロイヤリティ手数派生債務 （ 注 8 ） | | — | ||||
歳入参加負債、現在 （ 注 8 ） | | — | ||||
その他の措置を講じる |
| |
| | ||
賃貸負債、流動 | | | ||||
偶発的対価、現在の | — | | ||||
経常債務およびその他の経常債務合計 | $ | | $ | | ||
その他の負債、非経常
その他、非経常債務は以下のとおりです。
| 9 月 30 日 |
| 十二月三十一日 | |||
(単位：千) | 2024 | 2023 | ||||
偶発的対価、非現在の | $ | | $ | | ||
繰延税金負債 | | | ||||
収益参加負債、非経常 （ 注 8 ） | | — | ||||
他にも | — | | ||||
合計その他の非経常債務 | $ | | $ | | ||
6.資産の買収と処分
2024年処置
YUSIMRY販売
2024年6月26日、同社は、いくつかのYUSIMRY知的財産権、契約、YUSIMRY在庫、およびYUSIMRYの研究および開発に関連するすべての活動を含むYUSIMRY免疫特許経営権の販売を完了した。交換として、香港小輪会社は現金の対価を前払いします
20
YUSIMRYの売却に関連して、当社は香港小輪とYUSIMRY TSAを締結し、これにより、当社は香港小輪を代表していくつかの業務支援サービスを提供し、請求書、受取及びリベート送金を含め、患者及び顧客が2024年12月31日を超えないと予想される期間内に経営を継続することを確保しているYUSIMRY TSAによると、会社はその費用を#ドルとして補償する権利がある
CIMERLI販売
2024年3月1日、同社はその子会社Coherus OphthalmologyをSandozに売却することによりCIMERLI眼科特許経営権の売却を完了し、全現金対価格は$
CIMERLIの売却に関して、会社はSandozとCIMERLI TSAを締結し、この協定によると、会社はSandozに代わって、2024年12月31日以降の患者および顧客の業務連続性を保証するために、請求書、受取、およびバックオフ送金を含むいくつかの業務支援サービスを提供するCIMERLI TSAによると、会社は費用補償を受ける権利があり、記録されています発生したのは$
2023年買収
曲面採取
2023年9月8日(“買収日”)に，当社，Crimson Merger Sub I，Inc.(“Merge Sub I”)，Crimson Merger Sub II，LLC(“Merge Sub II”，Merge Sub I，“Merge Sub”)およびSurface間で2023年6月15日に締結された合併プロトコルおよび計画(“合併プロトコル”)により，当社はSurface買収を完了したSurfaceの買収は、同社のI-Oパイプを拡大したCHS-388CHS−114(前SRF 114)は，検討中のCCR 8標的抗体であり，現在1/2期研究中であり，末期固形腫瘍と頭頸部扁平上皮癌(HSNSCC)患者の単一療法として行われている。
買収日には、合併協議により、当社はSurface普通株式を発行したすべての保有者に普通株を発行します(一部の例外を除く)
21
了解です
| ● |
| ● |
| ● |
当社はすでに上記CVRプロトコル項目の潜在的支払いの公正価値について1つまたは有償負債を記録した。同社はCHS-114とCasdookitugの潜在的な特許使用料とマイルストーン支払いの一連の結果を見積もることができない。
次の表は、購入純資産による公正価値配分の購入価格を示している
(単位：千) | 取得日における認識金額 | ||
取得した資産 | |||
現金 · 現金同等物 | $ | | |
有価証券への投資 | | ||
前払金その他の資産 | | ||
現在行われている研究と開発 | | ||
アウトライセンス | | ||
総資産 | $ | | |
負債 | |||
負債その他流動負債を計上しなければならない | $ | | |
繰延税金負債 | | ||
負債総額 | | ||
買収した総純資産 | $ | | |
当社は、取得したすべての資産および引き受けた負債の識別を再評価した後でも、取得した識別可能な資産および引き受けた負債に完全に配分可能な価格でサーフェスを取得することができたと考えています。
22
特定可能な無形資産に配分された金額は以下のとおりです。
(単位：千) | 有用な寿命 |
| 取得時点の公正価値 | ||
プロセス中の研究開発 — casdozokitug | 適用されない | $ | | ||
プロセス中の研究開発 — CHS—114 | 適用されない | | |||
アウトライセンス — GSK | | ||||
アウトライセンス — ノバルティス研究所 | | ||||
無形資産総額が確認できます | $ | |
アウトライセンスの無形資産は、潜在的なマイルストーンおよびロイヤルティベースの支払いを表します。
監査されていない業務の予備的概要
次の表は，Surfaceの買収が2022年1月1日に発生したように，2023年9月30日までの3カ月と9カ月の未監査の予想運営概要を示している。買収が2022年1月1日に発生すれば、これらの予想情報は会社の実際の結果を代表するものではなく、今後のどの時期の予想結果も説明できない
3か月まで | 9か月で終わる | |||||
(単位：千) | 2023年9月30日 | 2023 年 9 月 30 日 | ||||
総収入 | $ | | $ | | ||
純損失 | $ | ( | $ | ( | ||
取得関連費用 $
7. コラボレーションおよびその他の取り決め
ライセンス内契約
準西バイオサイエンス
当社は、 2021 年 2 月 1 日に、 JUNSHI BIOSACIENCES との共同開発 · 商用化に関する独占ライセンス · 商用化契約 （ 以下、「協力契約」 ） を締結しました。 ロクトルツィ， Jinshi Biosciences の抗 PD—1 抗体を、米国とカナダで開発しました。
コラボレーション契約の条件の下で、当社は $を支払いました。
23
未開示の臨床前免疫腫瘍学候補薬。当社は君士生物科学会社に支払う義務があります
2022年3月に同社は$を支払いました
2024年3月に当社は協力協定第2号改正案(以下“2”と略す)を締結したnd改正案)君士生物科学社と改訂$
許可取引と選択権の行使は関連会計規則に基づいて資産購入入金とする。あったことがある
君士生物科学への応計特許使用料義務は$
Apotex
当社は2024年6月27日にApotex，Inc.(“Apotex”)と独占許可及び流通協定(“カナダ許可協定”)を締結し、これにより、当社はApotexに独占許可を付与し、Apotex社にカナダ国内でtoripalimabを販売する権利を付与した。カナダの許可契約によると、Apotexは会社に前払いしました$
24
カナダライセンス契約期間は、Toripalimabがカナダで初めて商業販売されてから10年目まで続くが、後続販売期間を延長しなければならない
生物等式
2019年11月4日、当社はBioeq AG(“Bioeq”)とライセンス契約(“Bioeqライセンス契約”)を締結し、Lucentis(Ranibizumab)の生物類似バージョンCIMERLIをボトルおよび事前充填シリンジで示されたいくつかの剤形で商業化した(“Bioeqライセンス製品”)。Bioeqライセンス契約により，Bioeqは同社に特許権使用料を独占的に徴収する許可を付与し，Bioeqが許可した製品を米国眼科(任意の他の承認されたラベル適応)の分野で商業化した
Bioeqに支払うべき印税は$
2024年1月19日、同社はSandozとCIMERLI購入契約を締結した。CIMERLI買収協定によると、会社は2024年3月1日にその付属会社Coherus眼科を売却することでCIMERLI眼科専門権の剥離を完了し、全現金前払い代償は$とした
Adimab開発とオプションプロトコル
SurfaceとAdimab LLC(“Adimab”)は、2018年10月、特許抗体を潜在的な候補治療製品として発見および最適化するために、Adimabと2014年7月に締結された改訂された開発および選択プロトコル(2020年12月16日、2022年6月1日、2022年7月18日の改正された“A&R Adimab協定”)を締結し、再説明した。A&R Adimabプロトコルによると，同社は生物標的を選択し，Adimabはその独自のプラットフォーム技術を用いて，双方で合意した研究計画を用いて抗体タンパク質を研究·開発する
Adimabは会社に独占選択権を付与し、Adimabのプラットフォーム特許と他のAdimab技術に基づいて、非独占的、全世界的、全額支払いの再許可可能な許可証を取得し、研究にのみ使用する
A & R Adimab 契約に基づき、当社は、研究オプションまたは商業化オプションの行使に際してマイルストーン支払いを行い、指定された手数料を支払う義務があります。発見期間中、当社はアディマブに最大 $を支払う義務があります。
25
7桁以下のオプション行権料を支払い、会社は$までのマイルストーン支払いを担当する可能性があります
Vaccinex許可プロトコル
2021年3月23日、SurfaceおよびVaccinex，Inc.(“Vaccinex”)は、製造、製造、使用、販売、提供、販売、輸入、およびいくつかの抗体を含むVaccinex知的財産権(各製品は“Vaccinex許可製品”)を他の方法で利用するために、製造、製造、使用、販売、販売、輸入、および何らかの抗体を含むVaccinex知的財産権(各製品は“Vaccinex許可製品”)を製造、製造、使用、販売、販売、輸入、および他の方法で利用する独占製品許可協定(“Vaccinexライセンス製品”)を締結した。Vaccinex許可協定によると、同社は商業的に合理的な努力を使用して、臨床テスト、監督管理許可、製造、マーケティング、商業化の少なくとも1つのVaccinex許可製品を開発、獲得する義務がある。
同社はこのような開発、製造、商業化のすべてのコストと費用を担当している。Vaccinexは総額$に達する資格があります
便宜上、当社はVaccinexライセンスプロトコルが規定する通知期間内にVaccinexライセンスプロトコルを終了することができます。どちらか一方が治癒していない実質的な違約によって合意を終了することができる。VaccinexはVaccinexライセンス契約を終了する可能性があり、もし私たちが合意項目の下でVaccinexのいかなる金額を不足している場合、もしVaccinexがその開発義務に深刻に違反し、救済できなかった場合、あるいはライセンス特許に関連するいくつかの訴訟を提起する。終了した場合、知的財産権を許可するすべての権利はVaccinexの所有になる。
Surface買収の一部として取得したアウトソーシング許可プロトコル
2023年9月8日、Surface買収終了時に、Surfaceのすべての資産、負債、権利、義務は同社の直接完全子会社Surface Oncology LLCが負担します。詳細は付記6.買収と処分を参照
グラクソ·スミスクライン協定
2020年12月，SurfaceはGSKプロトコルを締結した。グラクソ·スミスクライン·プロトコルによれば、Surfaceは、抗体GSK 4381562(“特許抗体”)を含むCD 112 R(PVRIGとも呼ばれる)に対する抗体を開発、製造および商業化するために、グラクソ·スミスクラインに世界的に独占的かつ再許可可能なライセンスを付与する。グラクソ·スミスクラインは特許抗体の開発、製造、商業化を担当し、情報共有を促進するための共同開発委員会を設立した。グラクソ·スミスクラインはこのような開発、製造、商業化のすべてのコストと支出を担当し、共同開発委員会を通じてその開発、製造、商業化活動の最新状況を会社に提供することが義務付けられている2022年3月、Surfaceは$
26
抗体は，高い桁数から10代程度まで様々である。薬品開発の不確実性および薬品開発に関する歴史的失敗率により、GSK協定により、当社はいかなるマイルストーン支払いやいかなる特許権使用料支払いも受けない可能性がある2024年9月30日までの3ヶ月と9ヶ月以内に、会社はGSKプロトコル項目でのライセンス関連収入を確認していない
事前に終了しない限り、GSKプロトコルは、より遅い時間を基準として、ライセンス製品および国/地域の満了に応じて満了する
8.債務負担と金融負債
会社の債務要約は、公正価値レベル(付記3.公正価値計量参照)中の債務レベルを以下のように含む
2024 年 9 月 30 日 | |||||||||||||
(単位：千) | 元金 | 未償却債務割引 · 債務発行費用 | ネットワークがあります | 推定数 |
| 水平 | |||||||
財務負債： |
|
|
|
|
| ||||||||
2029 タームローン | $ | | $ | ( | $ | | $ | | レベル 2 * | ||||
2026年の変換可能チケット | $ | | $ | ( | $ | | $ | | レベル 2 * * | ||||
2023年12月31日 | |||||||||||||
財務負債： |
|
|
|
|
|
| |||||||
2027年の定期ローン | $ | | $ | ( | $ | | $ | | レベル 2 * | ||||
2026年の変換可能チケット | $ | | $ | ( | $ | | $ | | レベル 2 * * | ||||
| * | 未払いの元本額は、 3 ヶ月間の SOFR に固定比率を加えた変動金利の対象となります。したがって、当社は、これらの債務の繰り越し額は、公正価値に近似すると考えています。 |
** | 公正価値は、金利、当社の株価および株価ボラティリティの影響を受け、市場取引で観察される価格によって決定されます。2026 年転換社債の取引市場はアクティブ市場とはみなされていないため、推定公正価値はレベル 2 の入力に基づいています。 |
2029 年タームローン
2024年5月8日(“2029年定期融資発効日”)に、当社は最高$を締結しました
2029年定期融資は、当社、代理人及び2029年融資者間で2029年定期融資発効日に発効する融資協定(“2029年融資合意”)によって管轄されています2029年の定期ローンが満期になります
27
二零二九年五月八日。2029年の定期ローンで借り入れた金額は利息に相当します
2029年の定期融資は、会社のほとんどの資産(知的財産権を含む)の留置権を担保としているが、慣例的な排除や例外に適合している。2029年ローン協定には、2029年の定期融資発効日から発効する財務契約を含む慣例的な陳述と担保、契約、契約が含まれており、この契約は、会社に一定レベルの現金および現金同等物を維持することを要求する2024年9月30日までに会社はこれらの条約を完全に遵守しています
その会社は$を生み出した
同社は前向きな方法で将来の現金支払いを会計処理している。前向き方法では、実金利は一定ではなく、期待キャッシュフローの任意の変化は、有効収益率の調整として前向きに確認されている
次の表は、2029年の定期ローンに関する利息支出の構成要素を示しています
| 3か月まで | 9か月で終わる | ||||
2024 年 9 月 30 日 | 2024 年 9 月 30 日 | |||||
契約利子 | $ | | $ | | ||
債務割引償却と債務発行コスト | | | ||||
利子費総額 | $ | | $ | | ||
2024 年 9 月 30 日現在、残高未償却債務割引および債務提供コストの合計は $
28
2024 年第 3 四半期の金利を仮定すると
12 月 31 日末年 （ 千単位 ） | |||
2024 年の残りの部分 — 利息のみ | $ | | |
2025 年 — 利息のみ |
| | |
2026 年 — 利息のみ |
| | |
2027 年 — 利息のみ | | ||
2028年以降--元金と利息 | | ||
最低支払総額 | | ||
利子に相当する額を差し引く |
| ( | |
2029年の定期ローン、毛額 |
| | |
未償却債務割引と債務発行コストを削減する |
| ( | |
2029年定期融資帳簿純額 | $ | |
収入購入販売協定
2024年5月8日、2029年の定期融資を発行するとともに、当社は行政代理であるCoduet Royalty Holdings，LLCおよび添付ファイルで指名された買い手1人(総称して“買い手グループ”と呼ぶ)と収入参加権売買プロトコル(“収入購入販売プロトコル”)を締結した。収入購入契約の条項に基づいて，買い手集団は会社に支払う$
収入購入および販売協定は、組織、許可およびいくつかの他の事項に関する陳述および保証、支払い、報告、知的財産権、進入許可、脱退許可およびいくつかの他の行動に関するいくつかの契約、およびそのような取引の賠償義務および他の慣用条項を含む様々な陳述および保証を含む。
♪the the the収入購入および販売プロトコルは、分岐および計算を行う基準を満たす埋め込み派生ツールを含む派生会計に制約された独立した派生ツールとして。埋め込みデリバティブに購入価格を割り当てることで$
29
収益参加負債の概要は以下のとおりです。
| 9 月 30 日 | ||
(単位：千) | 2024 | ||
収益参加責任 | $ | | |
未償却割引 · 発行コストを減らす |
| ( | |
総額 | $ | | |
連結バランスシートの分類は以下のとおりです。
| 9 月 30 日 | |||
(単位：千) | 貸借対照表分類 | 2024 | ||
収益参加負債、現在 | 負債その他流動負債を計上しなければならない | $ | | |
収益参加負債、非経常 | 他の非流動負債 | | ||
総額 | $ | | ||
2027年の定期ローン
当社は2022年1月にBioPharma及び2027年に貸手と融資協定(改訂後の“2027年融資協定”)を締結し、最高到達可能性を提供します$
2024年2月5日、当社は担保代理人及び2027年貸金人と2027年定期融資について同意、部分解除及び第3回改正(“同意及び改訂”)を締結した。同意及び改訂条項及び条件の規定の下で、その他の事項を除いて、(1)2027名の貸金人及び担保代理人は、聯昌国際購入協定で行われる取引を完了することに同意し、当社のいくつかの付属会社の債務及び当該等の取引に制約されたいくつかの資産を免除する；(2)2027名の貸金人及び担保代理人は、当社に2027年ローン契約項の下で融資元金の一部を償還しないよう要求し、金額は$とする
CIMERLI売却取引の完了により、会社は#ドルの一部を前払いした
30
次の表は、 2027 年期末ローンに関連する利子費用の構成要素を示しています。
| 3か月まで | 9か月で終わる | ||||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
(単位：千) | 2024 | 2023 | 2024 | 2023 | ||||||||
契約利子 | $ | — | $ | | $ | | $ | | ||||
債務割引償却と債務発行コスト | — | | | | ||||||||
利子費総額 | $ | — | $ | | $ | | $ | | ||||
2020 年 4 月、同社は $を発行し、販売しました。
満期日直前の第2の予定取引日営業終了前のいつでも、手形所持者は、その時点で適用された転換率に応じて、彼らの2026年変換可能手形を会社普通株の株に変換することができ、適用すれば、任意の断片的な株の代わりに現金を用いることもできる。設立以来、転換価格はずっと
2026年の転換可能手形には、“違約事件”の発生に関する慣例規定がある(2026年変換可能手形契約で定義されているように)。このような違約イベントの発生は、2026年の変換可能な手形項目の下で満了したすべての金額を加速させる可能性があります
当社は関連会計規則に基づいて2026年に交換可能な手形の内嵌特徴を評価し、内嵌特徴は分岐要求に適合しないため、権益成分として単独で入金する必要はないと考えている。
31
上限のコール取引
2026年の転換手形の定価について、同社は#ドルを支払いました
上限催促取引は2026年に交換可能な手形の中で独立取引入金として、権益ツールに分類されているため、このような取引は簡明総合貸借対照表に追加実収資本減値として入金されている。株式分類の条件を満たし続ける限り、上限のあるコールオプションを再評価することはない。
その会社は$を生み出した
2026年に転換可能な手形が2024年9月30日に転換されれば、2026年の転換可能な手形の所有者は総価値がドルの普通株式を得ることになる
次の表は、2026年の転換可能なチケットに関連する利息支出の構成要素を示しています
3か月まで | 9か月で終わる | |||||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
(単位：千) |
| 2024 | 2023 | 2024 |
| 2023 | ||||||
クーポン利息 | $ | | $ | | $ | | $ | | ||||
債務割引償却と債務発行コスト |
| |
| |
| |
| | ||||
利子費総額 | $ | | $ | | $ | | $ | | ||||
残りの償却されていない債務割引および 2026 年の可換社債に関連する債務提供コスト
2024 年 9 月 30 日時点の 2026 年転換社債の将来の支払額は以下のとおりです。
12 月 31 日末年 （ 千単位 ） |
| ||
2024 年の残りの部分 — 利息のみ | $ | | |
2025 年 — 利息のみ |
| | |
2026 年 — 元本と利息 |
| | |
最低支払総額 |
| | |
利子に相当する額を差し引く |
| ( | |
2026 年可換社債、元本額 |
| | |
未償却債務割引と債務発行コストを削減する |
| ( | |
2026 年転換社債の純保有額 | $ | |
32
9. コミットメントと偶発性
購買コミットメント
当社は、原材料を確保するために特定のベンダーと契約し、製品の供給を製造するために特定の CMO と契約しました。2024 年 9 月 30 日現在、当社の契約条件に基づく取消不可の購入コミットメントは以下のとおりです。
12 月 31 日末年 （ 千単位 ） |
| ||
2024 | $ | | |
2025 | | ||
2026 | | ||
2027 | | ||
債務総額 | $ | |
同社は正常業務過程において臨床前研究と臨床試験の契約研究機関および臨床試験材料を生産するCMOと契約を締結している。契約は一般的にキャンセルできますが、終了に関する条項は違います。特定のサプライヤーとの契約が終了した場合、会社は通常、会社が終了発効日に受信した製品またはサービス、および任意の適用可能なキャンセル費用のために義務を負う必要がある。YUSIMRYの売却について，香港小輪は$と仮定している
保証と補償
通常の業務過程において、会社は、各種陳述及び保証を含む契約及び協定を締結し、一般賠償を規定する。同社のこれらの合意下でのリスクは未知であり、将来同社にクレームを出す可能性があるが、まだクレームが出されていないことに関連しているからである。これまで、同社は何のクレームも支払っておらず、その賠償義務に関するいかなる訴訟も弁護されていない。しかし、このような賠償義務のため、会社は未来に費用を記録するかもしれない。当社は任意の不利な判決又は関連クレームの可能性、及び可能な損失範囲を評価する。会社が合理的な可能性又は可能な損失があると考えている場合には、会社は、可能性があれば推定範囲を含むクレームの事実及び状況を開示する。
法律訴訟その他の申索
当社は様々な法的手続きやクレームの一方であり、これらの訴訟やクレームは正常で定例の業務過程で発生しているが、まだ完全に解決されていない。このような法的手続きとクレームの結果は本質的に不確実だ。損失が可能であり合理的に見積もることができる範囲では，このような法的手続きやクレームのために請求項目を確認する.ある範囲内の損失の最適な推定は計算すべきであるが、その範囲内に他のいかなる推定よりも良い推定がない場合には、その範囲内の最小金額を計算すべきである。重大な損失が合理的であると判断され、損失または損失範囲を推定することができる場合、可能な損失が開示される。これらの事項の結果を決定することは不可能な場合があり、または、別の説明がない限り、結果(任意の計算対象を超える項目を含む)は実質的ではないと予想され、最大の潜在的リスクまたは可能な損失範囲は合理的に推定できない。2024年9月30日と2023年12月31日までの同社の課税費用は$
33
2022年4月下旬、当社は亜鉛健康サービス有限責任会社(“亜鉛”)から要求状を受け取り、亜鉛は約$を獲得する権利があると主張した
本付記9.承諾及び又は請求書に記載された事項に関連する事項を除いて、当社又はその任意の付属会社を契約者とし、又は当社又はその任意の付属会社の任意の財産が当社又はその任意の付属会社の財産に拘束されている業務に付随する通常の定例訴訟を除き、係属中の法的手続はない。
10.財政赤字が株主の赤字を増加させる
公開発行する
当社は2023年5月16日に、モルガン大通証券有限責任会社及びシティユニバーサル市場有限公司と引受契約(“引受契約”)を締結し、引受業者の代表(総称して“引受業者”と呼ぶ)とすることにより、当社が発行及び販売を合算している
今回の発売は、当社が2022年11月17日に発効を発表したS-3表保留登録声明(以下、“登録声明”という。)と、当社が米国証券取引委員会に提出した目論見書および関連募集説明書に基づいて作成されたものであり、この声明によると、当社は最大$を発売および販売することができる
2023年5月18日、当社は販売発行合計を完了しました
ATMサービス
2022年11月8日、会社は“登録説明書”を提出した。同じく2022年11月8日、当社はCowen and Company，LLC(“TD Cowen”)と販売契約(“販売契約”)を締結し、この合意により、当社は最高$まで発行·販売することができます
2023年5月15日、販売契約第1号改正案により、公開発売については、TD CowenのATM機との発売により発行·販売可能な株式金額を$減少させる
2023年9月11日，販売協定第2号改正案により，会社はTD CowenとのATM発行発行·販売可能株式金額に基づいて$を増加させた
34
以下の表は、 2024 年 9 月 30 日および 2023 年 9 月 30 日までの 3 ヶ月間および 9 ヶ月間の ATm オファリングに基づく決済に関する情報をまとめたものです。
| 9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | ||||||||||
(千単位で1株当たりおよび1株当たりのデータは含まれていない) | 2024 | 2023 |
| 2024 | 2023 | |||||||
期間の販売済普通株式数 | — | | | | ||||||||
加重平均1株当たり価格 | $ | — | $ | | $ | | $ | | ||||
総収益 | $ | — | $ | | $ | | $ | | ||||
少ない手数料と手数料 |
| — |
| ( |
| ( |
| ( | ||||
手数料 · 手数料後の純利益 | $ | — | $ | | $ | | $ | | ||||
2024 年 9 月 30 日現在、同社は約 $
11. 株式報酬
2024 年 4 月及び 2024 年 5 月に、当社はパフォーマンスベースストックオプションの購入を付与しました。
次の表は、会社とオプション(PSOを含む)および従業員と非従業員に付与された制限株式単位に関する簡明な合併運営報告書における株式ベースの報酬費用の分類をまとめた
| 3か月まで | 9か月で終わる | ||||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
販売原価(1) | $ | | $ | | $ | | $ | | ||||
研究 · 開発 |
| |
| |
| |
| | ||||
販売、一般、行政 |
| |
| |
| |
| | ||||
株価報酬費用 | $ | | $ | | $ | | $ | | ||||
|
|
|
|
|
|
|
| |||||
在庫に資本化された株式報酬費用 | $ | | $ | | $ | | $ | | ||||
| (1) |
(1)在庫に資本化された在庫報酬は、関連商品が販売された際に販売された商品の原価として認識されます。.
35
12. 1 株当たり純利益 （ 損失 ）
1 株当たり基本純利益 （ 損失 ） は、当期純利益 （ 損失 ） を当該期間の発行普通株式の加重平均数で除算して算出します。 1 株当たり希釈純利益は、オプション、 PSO 、 RSU 、 ESPP の場合、財務株式法、および可換社債の場合換算法を用いて決定された、期間の未払い普通株式の加重平均数に加えて、期間の未払い潜在希釈普通株式を純利益で除算して算出されます。希釈ネット l1 株当たり OSS は、当期発行済普通株式の加重平均数で純損失を割って算出されます。
以下の表は、 1 株当たり基本利益および希釈純利益 （ 損益 ） の計算を示しています。
| 3か月まで | 9か月で終わる | ||||||||||
9 月 30 日 | 9 月 30 日 | |||||||||||
(千単位で1株当たりおよび1株当たりのデータは含まれていない) |
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
1株当たりの基本純収益 |
|
|
|
|
|
|
| |||||
分子： |
|
|
|
|
|
|
| |||||
純収益(赤字) | $ | ( | $ | ( | $ | | $ | ( | ||||
分母： |
|
|
|
|
|
|
| |||||
加重平均普通株式発行済み |
| |
| |
| |
| | ||||
1株当たりの基本純収益 | $ | ( | $ | ( | $ | | $ | ( | ||||
1株当たりの純利益 |
|
|
|
|
|
|
|
| ||||
分子： |
|
|
|
|
|
|
|
| ||||
純収益(赤字) | $ | ( | $ | ( | $ | | $ | ( | ||||
可換紙幣の利子費用 （ 税抜き ） を加算 | — | — | | — | ||||||||
1 株当たり希釈純利益 （ 損失 ） の分子 | $ | ( | $ | ( | $ | | $ | ( | ||||
分母： |
|
|
|
|
|
|
| |||||
1 株当たり基本純利益 （ 損益 ） の分母 |
| |
| |
| |
| | ||||
潜在希釈証券の追加効果 ： |
|
|
|
|
|
|
|
| ||||
ESPP 対象株式を含むストックオプション |
| — |
| — |
| |
| — | ||||
制限株式単位 |
| — |
| — |
| |
| — | ||||
転換証券の転換時に発行可能な株式 | — | — | | — | ||||||||
1 株当たり希釈純利益 （ 損益 ） の分母 |
| |
| |
| |
| | ||||
1株当たりの純利益 | $ | ( | $ | ( | $ | | $ | ( | ||||
以下の希釈潜在株式は、希釈効果を抑制するため、 1 株当たり希釈純利益 （ 損失 ） の算出から除外されました。
| 3か月まで | 9か月で終わる | ||||||
9 月 30 日 | 9 月 30 日 | |||||||
|
| 2024 |
| 2023 |
| 2024 |
| 2023 |
ESPP の対象となる株式を含むストックオプション、 PSO |
| |
| | |
| | |
制限株式単位 |
| |
| | |
| | |
2026 年可換社債の転換時発行株式 | | | — | | ||||
総額 |
| |
| | |
| | |
36
第二項：財務管理者の財務状況と経営成果の検討と分析
本四半期報告Form 10-Qに含まれる中間財務諸表と本経営陣の財務状況と経営成果の検討と分析は、2023年12月31日期の財務諸表と付記および2023年Form 10-kにおける関連経営陣の財務状況と経営成果の検討と分析とともに読まなければならない。歴史情報に加えて、本議論と分析には、証券法第27 A節と取引所法第21 E節の意味での前向きな陳述が含まれている。これらの展望性陳述は、第2部“その他の情報”の“リスク要素”と題する節で議論されたリスクと不確定性を含むリスクと不確定要素の影響を受け、これらのリスクと不確定性は、実際の結果が歴史的結果や予想結果と大きく異なることを招く可能性がある
概要
私たちはビジネス段階のバイオ製薬会社で、癌治療の革新的な免疫療法の研究、開発、商業化に専念しています。我々の商業製品の組み合わせは、我々の最初の製品UDENYCA、Neulastaに類似した生物学的長時間作用顆粒球コロニー刺激因子(“G-CSF”)およびLOQTORZI、新規PD-1阻害剤を含む。我々は革新的な免疫腫瘍学的パイプラインを開発しており，腫瘍学的に検証されたビジネス能力と協働すると信じている
UDENYCAは2019年1月に米国で商業化された。FDAは2023年3月3日にUDENYCA自動注射器(AI)プレゼンテーションの事前承認補充(PAS)を承認し、2023年5月22日にUDENYCA AIが商業販売に利用できることを発表した。2023年12月26日、FDAは、UDENYCA On-Bodyシリンジ(ONBODY)の3回目のpegfilgratimプレゼンテーションのためのPASを承認したことを発表しました。UDENYCA ONBODY™2024年第1四半期に商業使用を開始した
2023年10月27日、LOQTORZIは、FDAによって、成人転移性または再発の局所末期鼻咽頭癌の治療のためにシスプラチンおよびゲムシタビンと組み合わせて許可され、白金含有化学療法中または後に再発した切除不能成人鼻咽頭癌または転移性鼻咽頭癌の治療のための単一療法として使用されることを発表した。LOQTORZIは著者らが君士生物科学会社と協力して開発した抗PD-1抗体である。私たちは2024年1月2日にアメリカでLOQTORZIを発売することを発表した。また，我々と我々のパートナーは，複数の臨床研究においてLOQTORZIをさらに評価する予定である。
我々はまたLOQTORZIや他の免疫活性化剤を有する会社と協力して一連の早期臨床と臨床前免疫腫瘍学プロジェクトを開発する予定である。著者らの臨床段階の主要な候補製品はCasdothokitug(CHS-388、前身はSRF 388)であり、これはIL-27に対する研究拮抗薬抗体であり、IL-27は免疫調節サイトカインであり、あるいはある癌(肝細胞癌、肺癌と腎臓癌を含む)に過剰発現するタンパク質である。Casdookitugは2020年11月にFDAの孤児薬物の称号と快速チャンネルの称号を獲得し、肝細胞癌(肝細胞癌)の治療に用いられる。Casdookitugは現在2つの臨床研究を行っており、1つは末期固形腫瘍患者に対する1/2期研究であり、Toripalimabの併用による非小細胞肺癌の治療(Clinicaltrials.gov IDENTIFIER#NCT 04374877)を含み、もう1つは肝細胞癌に対する第2期研究(Clinicaltrials.gov IDENTIFIER#NCT 05359861)である。著者らは2024年第4四半期に肝細胞癌に対するランダムな第2段階研究を開始し、カル司ドジとトリパリマブとベバシズマブの連合応用を評価する予定である。
我々の第2の臨床段階候補製品CHS-114(従来のSRF 114)はCCR 8に対する研究におけるIgG 1抗体であり、CCR 8は腫瘍微小環境(TME)に高度に発現する制御性T細胞(Treg細胞)上のケモカイン受容体である。北米の進行固形腫瘍と頭頸部扁平上皮癌(“HNSCC”)患者を臨床試験に参加し，LOQTORZIの使用と使用しない場合のCHS−114の安全性と薬物動態(臨床試験.gov識別子#NCT 05635643)を評価している
有害なTMEをより有利なTMEに変換することによって、抗PD−1の臨床的利益を向上させることを目的としたヒトILT 4に対する抗体である早期開発候補薬CHS−1000がある。私たちの調査の新しいニュース
38
FDAは2024年第2四半期にCHS−1000の薬物申請(“IND”)の継続を許可し，現在最初のヒト臨床研究を行っているが，我々のポートフォリオ優先プログラムでさらなる評価が必要である。
さらに、GSK 4381562の候補製品があります。これはGSKが独占的に許可したものです。私たちはCVR協定が締結されてから10年以内に、GSKに許可された候補製品から実際に受け取ったマイルストーンと特許使用料に基づくすべての支払いの70%をCVR所持者に支払う予定で、この協定は2033年9月に満了される
私たちはアメリカで経験豊富で強力な腫瘍学市場参入、販売、大顧客管理と医療事務能力を持っており、これはUDENYCAがFDAによって許可された3つのプレゼンテーションの商業化、およびLOQTORZIの商業発売を支持した。われわれの免疫腫瘍学特許経営権の確立と発売を継続する際には，これらの能力をさらに利用したい。
私たちは主にアメリカで運営し、他の国で運営している会社と協力している。
商業動態
2024年9月13日、過剰な約束と生産能力制限のため、UDENYCAに提供された第三者ラベルとパッケージCMOがUDENYCAの生産を延期したと発表しました。これらの遅延によりUDENYCA供給が一時的に中断された。首席営業官は最近、生産が2024年11月4日遅くに再開されることを知らせてくれた。生産スケジュールによると、2024年末までに、相当数の単位がさらなる中断や遅延なしに完成する予定だ。最終製品ロットが完成した後に出荷して、迅速な方法でお客様の手元に到着することを確保したいので、できるだけ早く流通ルートの在庫を補充したいです。
私たちはまた私たちのラベルと包装資源を多様化するために努力して重要な進展を成し遂げた。もう1つの最終包装とラベルCMOは生産テストを開始しており，2024年末に販売可能な製品の生産を開始する予定である。FDAの認可によると、このCMOの商業供給は2025年第1四半期に開始される予定だ。我々は現在、我々2社のラベルとパッケージCMOのUDENYCA商業供給供給時間の推定は合理的であると考えているが、第三者のいかなる遅延もUDENYCA商業供給の遅延を招く。
製品と候補製品
私たちの製品の組み合わせは以下の製品と候補製品を含みます
腫瘍学
| ● | UDENYCAは長期効果のG-CSF Neulastaに類似した生物の薬物であり、2019年1月に米国で商業的に発売された。FDAは2023年3月3日にUDENYCA人工知能プレゼンテーションのPASを承認し、2023年5月22日にUDENYCA AIが商業販売に利用できることを発表した。我々は2023年12月26日に，FDAがPASを我々の3つ目のpegfilgratimプレゼンテーションUDENYCA ONBODYに承認したことを発表し，その設計で最初であり，pegfilgratim生物に類似した唯一の体内注射器小説である。UDENYCA ONBODYは2024年第1四半期に商業使用を開始した。 |
| ● | LOQTORZI開発の目的は，PD−1受容体上のFGループと結合することにより，PD−1とそのリガンドPD−L 1とPD−L 2の相互作用を阻止することである。PD−1とPD−L 1とPD−L 2の相互作用を遮断することは，免疫系が腫瘍細胞を攻撃·死滅させる能力を向上させるのに役立つと信じられている |
2023年10月27日、LOQTORZIは、転移性または再発性局所末期鼻咽頭癌の治療のためのシスプラチンおよびゲムシタビンとの併用をFDAによって承認され、再発切除不能成人鼻咽頭癌または転移性鼻咽頭癌合併疾患の治療のための単一療法として使用されることを発表した
39
白金含有化学療法の進展。LOQTORZIは著者らが君士生物科学会社と協力して開発した抗PD-1抗体である。私たちは2024年1月2日にアメリカでLOQTORZIを発売することを発表した。
2023年12月11日、著者らは、国家総合癌ネットワーク(NCCN)がNPC臨床実践ガイドラインを更新し、LOQTORZIをシスプラチンとゲムシタビンと併用する時、LOQTORZIを局部転移性或いは再発の局部末期鼻咽頭癌成人の第一選択の治療方案とすることを発表した。このガイドラインは，白金含有治療期間または後に病態が悪化すると，LOQTORZI単一療法が後続系治療における唯一の第一選択治療法であることを示唆している。
LOQTORZI計画は，我々と我々のパートナーが複数の臨床研究でさらに評価することである。駿実生物科学技術会社は現在、有限段階小細胞肺癌(“LS-SCLC”)におけるLOQTORZIと彼らが研究している抗BLTA抗体の治療効果を評価する多領域の3期臨床研究を行っている(臨床試験.gov識別子NCT 06095583)。Inovio製薬会社はINO-3112とToripalimabの局部末期、高リスクHPV 16/18+中咽頭扁平上皮癌に対してランダム3期研究を行う予定である。アジア網カリフォルニア州サンホセ10月23日電網癌研究所(“CRI”)はその“白金耐性高レベル漿液性卵巣癌免疫治療プラットフォーム研究”(Clinicaltrials.gov識別子NCT 04918186)と呼ばれる第2段階試験において、ENB治療会社の研究薬ENB-003を併用してtoripalimabを評価する予定である。2024年6月27日，我々はApotexとカナダライセンス契約を締結し，合意に基づき，ApotexにToripalimabの独占許可を付与し，カナダ国内で商業化した。
| ● | カストゾー388(CHS-388、前身はSRF 388)は免疫調節サイトカインIL-27に対する研究における組換えヒトIgG 1モノクロナル抗体であり、IL-27は肝細胞癌、肺癌と腎臓癌を含むいくつかの癌に過剰発現するタンパク質である。IL−27はマクロファージや抗原提示細胞から分泌されるサイトカインであり，免疫系を抑制する上で重要な生理的役割を果たしており，組織炎症を溶解する能力が証明されている。また，IL−27は妊娠期間中に高発現し，その発現は母胎耐性に関与している。その免疫調節性質のため、IL-27による癌の治療を抑制することは合理的であり、この方法は腫瘍を識別し、攻撃するために必要な多種の免疫細胞の活動に影響するからである。Casdookitugは2020年11月にFDAの孤児薬物称号と肝癌治療の迅速チャネル称号を獲得した。Casdookitugは現在2つの臨床研究を行っており，1つは末期固形腫瘍に関する1/2期研究(Clinicaltrials.gov IDENTIFIER#NCT 04374877)であり，もう1つは肝細胞癌に関する第2期研究(Clinicaltrials.gov IDENTIFIZER#NCT 05359861)である。著者らは2024年第4四半期に肝細胞癌に対するランダムな第2段階研究を開始し、カル司ドジとトリパリマブとベバシズマブの連合応用を評価する予定である |
| ● | CHS-114(従来のSRF 114)は研究中の高度に特異的なヒトFUFG 1モノクロナル抗体であり、CCR 8を選択的に標的とし、CCR 8はTME中のTreg細胞に高度に発現するケモカイン受容体である。CHS-114は細胞溶解抗体として設計され、以下の経路を通じて腫瘍内のTreg細胞の枯渇を招き、Treg細胞は免疫抑制と耐性の重要な調節因子である抗体依存性細胞毒性(“ADCC”)あるいは、あるいは抗体依存性細胞貪食作用(ADCP)どちらもありますCHS-114は、臨床前モデルにおいて、単一治療として、または抗PD-1抗体と組み合わせて使用される抗腫瘍活性を示している。我々は北米の末期固形腫瘍とHNSCC患者を臨床試験に参加し、LOQTORZIを使用および使用しないCHS-114の安全性と薬物動態(臨床試験.gov識別子#NCT 05635643)を評価している。 |
| ● | CHS-1000は、不利なTMEをより有利なTMEに変換することによって、抗PD-1の臨床的利益を向上させることを目的としたヒトILT 4に対する早期開発候補抗体である。CHS-1000に対するINDは2024年第2四半期にFDAによって許可され、現在最初のヒト臨床研究が行われており、著者らのポートフォリオ優先処理過程で更なる評価が必要である。 |
40
| ● | さらに、私たちはGSKが独占的に許可したGSK 4381562を持っている。GSK 4381562は、PPVRIGとも呼ばれるCD 112 Rに対する抗体であり、ナチュラルキラー細胞(NK)およびT細胞に発現する阻害タンパク質である。GSK 4381562は、CD 112 Rとその結合パートナーCD 112との相互作用を遮断することを意図しており、CD 112は腫瘍細胞に発現されている。GSK 4381562はNKとT細胞の活性化を促進することを目的とし、強力な抗腫瘍反応を誘導し、免疫記憶を促進する潜在力を有する。私たちはCVR協定を締結してから10年以内に、私たちまたは私たちの付属会社がGSKに許可された製品候補者から受け取ったマイルストーンと特許使用料に基づくすべての支払いの70%をCVR所持者に支払う予定で、この協定は2033年9月に満了する |
免疫学-YUSIMRYによる香港小輪への販売
| ● | Yussimry(adalimumab-aqvh)アダリマブ(Humira)の生物類似体であり，腫瘍壊死因子(TNF)に結合するモノクロナル抗体である。YUSIMRYはある炎症性疾患患者の治療に一定の治療効果を提供し、これらの炎症性疾患の特徴は体内腫瘍壊死因子の産生増加であり、関節リウマチ、青少年特発性関節炎、乾癬、強直性脊椎炎、クローン病、乾癬と潰瘍性大腸炎を含む。FDAは2021年12月、我々が2023年7月に米国で発売したYUSIMRYを承認した。 |
二零二四年六月二十六日、吾らは香港小輪と裕信瑞買協定を締結し、4，000万の現金代価及び香港小輪1，700万の在庫購入承諾を仮定し、裕信年傘下のフランチャイズ権の売却を完了した。我々とファイザーとの間の日付が2019年10月21日であるライセンスと和解協定(“ファイザーライセンス協定”)によれば、ファイザー(“ファイザー”)に付与された特定の特許の権利を保持する。
眼科-CIMERLIによるSandoz販売
| ● | Cimerli(ranibizumab-eqrn)CIMERLIは2022年8月2日にFDAによって新生血管(湿性)老年性黄斑変性、網膜静脈閉塞後の黄斑水腫、糖尿病黄斑水腫、糖尿病網膜症と近視性脈絡膜新生血管の治療に許可され、著者らは2022年10月3日にアメリカでCIMERLIを発売した。彼は言いました |
2024年1月19日、SandozとCIMERLI調達契約を締結しました。CIMERLI買収協定の条項と条件によると、2024年3月1日に、私たちはCIMERLI眼科専門権の剥離を完了し、私たちの子会社Coherus OphthalmologyをSandozに売却し、全現金対価格17000ドルと追加1780万ドルをCIMERLI製品在庫と製造資産のために前払いした。
駿石生物科学と許可合意に達しました
2021年2月1日、君実生物科学社と協力し、君士生物科学社の米国とカナダにおける抗PD−1抗体LOQTORZIを共同開発·商業化した。
本提携契約の条件に基づき、米国およびカナダにおける LOQTORZI の独占権、準西バイオサイエンスの抗 TIGIT 抗体 CHS—006 のこれらの地域におけるオプション、次世代工学 IL—2 サイトカインのこれらの地域におけるオプション、および未開示の 2 つの前臨床免疫腫瘍学薬候補に対する一定の交渉権について、当社は 15000万ドルを前払いしました。米国およびカナダにおける LOQTORZI のすべての商業活動を行う権利を取得しました。当社は、 LOQTORZI の純売上高に対して最大 20% のロイヤルティと、様々な規制および販売マイルストーンを達成するために最大 38000万ドルの 1 回限支払いを Jinshi Biosciences に支払う義務を負っています。 2024 年 6 月 27 日、私たちは入りました。 カナダライセンス契約に基づき、当社はアポテックスに、カナダ国内でトリパリマブを商業化するための当社の権利に基づく排他的ライセンスを付与しました。
41
2022年3月、私たちは許可CHS-006の選択権行使に3，500ドルの万ドルを支払った。その後、協力協定に適合した共同開発が開始された。2024年1月10日、協力協定に基づき、TIGIt計画(定義は協力協定参照)の終了通知を駿石生物科学社に提出したと発表した。協力協定によると、私たちは協力して楽拓および他の特許化合物を開発する権利を保持し、これらの共同開発活動の一部に許可化合物あたり年間最大2，500ドルの万ドルを支払う。また，LOQTORZIや他の許可化合物のいくつかの関連法規や技術移転費用を担当し，君士生物科学社のこのような費用を精算する。
私たちは関連会計規則に基づいて許可取引を資産買収として入金します。CHS-006ライセンス購入のための万3，500ドルは、2022年第1四半期の財務諸表に反映されています。2024年9月30日までに、君実生物科学に累計1，250ドルの万マイルストーンを支払い、2025年第1四半期に支払う予定であり、特許使用料義務の1，100ドル万元を予定しています。追加のマイルストーン支払いおよび特許権使用料は、将来のイベントに依存し、したがって、マイルストーンが達成される可能性があるとき、またはオプション費用または特許使用料が発生したときに記録される。
財務運営の概要
収益
我々の最初のFDA承認製品UDENYCAは2018年11月に承認され、2019年1月3日にアメリカでUDENYCAの販売を開始しました。FDAは2021年12月にYUSIMRYを承認し、2023年7月に米国で発売した。FDAは2022年8月2日、2022年10月に発売されたCIMERLIを承認しました。私たちはこれ以上受け入れません2024年3月1日にCIMERLI販売に関するCIMERLI販売を開始する。我々は2024年6月26日にYUSIMRY販売に関するYUSIMRY販売収入の徴収を中止した。Apotexは2024年6月27日、カナダ許可協定の条項に基づいて、2024年9月30日までの9ヶ月の簡明総合運営報告書の中で純収入に分類された630万の前金を支払った。総純収入は7，080ドルと7，460万ドルです2024年と2023年9月30日までの3ヶ月以内に2024年と2023年9月30日までの9ヶ月間で、それぞれ21280ドル万と16570ドル万だった。彼は言いました
販売原価
商品を販売するコストには、主に第三者の製造、流通、特許使用料、およびいくつかの間接コストが含まれる。2019年5月2日私たちは和解しました安進会社と安進アメリカ会社(総称して安進と呼ぶ)それは.そのため、販売商品コストは製品純収入の1桁中央値特許権使用料を反映しており、2019年7月1日から2024年7月1日まで続いている。また，2024年3月1日にCIMERLIが販売される前に，CIMERLIの米国販売毛利益の50%~50%をBioeqと共有した
研究開発費
研究開発費とは，研究を行うことによるコストであり，たとえば我々の候補製品の発見と開発である.私たちはそれらが発生したので、すべての研究と開発コストを確認した。我々は現在、外部研究開発費が候補製品で発生する研究開発コストのみを追跡している。私たちの対外研究開発費は主に
| ● | 協力者、コンサルタント、第三者契約研究組織(“CRO”)および私たちの大部分の臨床前研究とすべての臨床試験を行う研究地点との合意による費用 |
| ● | CMOSから発起者対照材料を獲得し、臨床前研究と臨床試験用品および他の材料を製造するコスト、および放出と安定性試験に関連するコスト； |
42
| ● | 規制承認を得ることが可能であるか、または承認される可能性があると考えられる前に製造された製造プロセス開発活動、分析活動、および操業前在庫に関するコスト； |
| ● | 許可と協力協定に関連した前払いと特定のマイルストーン支払い。 |
内部コストは我々の研究開発組織が展開している活動に関連しており，通常複数のプロジェクトに利益を与えている.このような費用は候補製品ごとに個別に割り当てられたものではない。未分配の内部研究開発コストは主に：
| ● | 給与、福祉、株式給与を含む人事関連費用 |
| ● | 施設およびその他の分配費用は、施設賃貸料およびメンテナンス、レンタル改善および設備、実験室および他の用品の減価償却および償却の直接および分配費用を含む。 |
必要な臨床研究を行い、監督部門の許可を得る過程は高価で時間がかかる。また、過去には、私たちは第三者と協力して、候補製品の開発と商業化に参加してきましたが、将来的にはより多くの協力を行うことができるかもしれません。第三者が候補製品の開発活動に大きな影響を与える場合、完成予定日は完全に我々のコントロール下にあるわけではない。例えば、許可地域での私たちのパートナーは、世界的な規制届出過程にかなりの影響を与えるかもしれない。したがって、私たちは、私たちの候補製品のこれらまたは他の現在または将来の臨床試験の持続時間および完了コストを任意の程度の確実性で予測することはできない。私たちは私たちのどんな候補パイプライン製品に対する規制部門の承認を得ることに絶対に成功しないかもしれない。また、他の候補製品と他の協力計画を達成する可能性があり、これは私たちの開発計画や資本要求に影響を与える可能性があります。
販売、一般、管理費用
販売、一般および行政費用は、主に、法律、保険、人的資源、外部マーケティング、広告、監査および会計サービス、買収関連コスト、およびUDENYCAおよびLOQTORZIの商業化およびCIMERLIおよびYUSIMRYの商業化をサポートするために、人員コスト、分配された施設コスト、および外部専門サービスの他の費用を含む。人件費には賃金、福祉、株式ベースの給与が含まれている
利子支出
利息支出には、主に私たちの未済債務、私たちの収入購入販売プロトコルによる利息、そして私たちの未返済債務合意に関連する債務割引と債務発行コストの償却に関する非現金利息が含まれています。
販売取引収益，純額
販売取引の収益(損失)、純額には、CIMERLI販売から受け取った現金収益、売却された資産(主にCIMERLI製品在庫および前払い製造資産)、確認された資産(営業権および無形資産)、関連取引コストの控除、留保ボーナスおよび生成された株式ベースの補償支出の純額、およびYUSIMRY販売、売却資産(主にYUSIMRY製品在庫および前払い製造資産)、終了確認された資産および負債(主に購入承諾および無形資産)および関連取引コストが含まれる
債務返済損失
債務返済損失には事前返済と関連した損失が含まれている。
43
その他の収入，純額
その他の純利益 （ 費用 ） は、主に現金および現金等価物に対する利子、流通有価証券への投資に対する割引の非現金増益、為替変動による為替利益 （ 損失 ） 、金融商品による利益 （ 損失 ） 、長期資産の処分による利益 （ 損失 ） 、 TSA サービスに対する収入です
経営成果
2024 年 9 月 30 日と 2023 年 9 月 30 日までの 3 ヶ月間の比較
収益
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
純収入 | $ | 70,774 | $ | 74,568 | $ | (3,794) | $ | 212,816 | $ | 165,720 | $ | 47,096 | ||||||
2023年9月30日までの3カ月と比較して、2024年9月30日までの3カ月の純収入が低下したのは、主にユシムリ免疫専門権とCIMERLI眼科専門権の販売によるものであり、2023年第3四半期に合計4，140ドルの純収入に貢献し、2024年第3四半期までに販売されたが、より多くのプレゼンテーションや市場シェアが発売されたため、2023年同期に比べてUDENYCAの純収入が3，310ドル増加し、市場シェアが増加し、2023年12月に発売された純売上高が5，80ドル増加し、両業務の影響を部分的に相殺した。
2023年9月30日までの9カ月と比較して、2024年9月30日までの9カ月間の純収入が増加したのは、主に追加展示と市場シェアの増加により、連合ニコンの純収入が6880ドル増加したが、一部は連合ニ華の単位平均純販売価格の低下によって相殺された。また，2024年9月30日までの9カ月間で，2023年12月に発売されたLOQTORZIと2023年7月に発売されたYUSIMRYの売上高は，それぞれ1160万と610万の純収入に貢献している。2024年9月30日までの9ヶ月間に、2024年6月27日にカナダ国内でtoripalimabを商業化する権利のための630ドルの万も含まれている。これらの有利な要因はCIMERLI眼科特許経営権の売却部分によって相殺され，2023年同期と比較して2024年9月30日までの9カ月間にCIMERLI眼科特許権の純収入は4，600ドル万減少した。我々の純収入と市場浸透率は引き続きpegfilgratim市場全体の定価傾向や競争動態の悪影響を受ける可能性がある
2024年第4四半期の純収入は2024年第3四半期を著しく下回ると予想されています。なぜなら、私たちの第三者CMOの包装とラベルへの過度な約束と生産能力制限によるUDENYCA供給の一時中断の影響により、UDENYCAのチャネル供給は2024年9月13日に一時的なUDENYCA供給中断後に大幅に枯渇し、UDENYCAの出荷を再開する前に販売を開始できなくなり、最終製品ロットの完成に伴い、UDENYCAは出荷を再開する予定です。
販売原価
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||||
販売原価 | $ | 20,741 | $ | 32,703 | $ | (11,962) | $ | 83,695 | $ | 74,425 | $ | 9,270 | ||||||||
毛利率 |
| 71 | % |
| 56 | % |
|
| 61 | % |
| 55 | % |
| ||||||
2024 年 9 月 30 日までの 3 ヶ月間の販売品のコストが前年同期と比較して減少したのは、主に 2023 年第 3 四半期の CIMERLI と YUSIMRY 関連のコスト 2410万ドルによるものです。
44
これらの資産は2024年上半期に剥離され，2024年7月1日に満期となったUDENYCA純製品収入が安進に支払う特許権使用料は160 UDENYCA万減少した。これらの減少は製品コストが970ドル増加したことによって部分的に相殺されたが，これは主にUDENYCAの販売量が増加し，LOQTORZI特許使用料が110万増加したことと，我々が2022年第3四半期に減額した後，UDENYCAは帳簿価値のない単位をいくつか販売し，原始コスト総額は240万であったためである。
前年同期と比較して、2024年9月30日までの9カ月間の販売コストが2，780ドル増加したのは、主にユニリーバとロッキーズ社が推進した販売台数が2，780ドル増加し、首席営業官契約変更に関する万が4，500ドル増加したこと、およびロックトルツィッターのライセンス使用料が250ドル増加したためである。これらの増加は、上記2024年上半期に剥離された製品に関する2，410ドル万の非日常的コストと、2023年第1四半期に我々のメーカーが生産ロットの300万を減少させる契約修正費用とによって部分的に相殺される
我々は2024年第4四半期のCOGSが2024年第3四半期を著しく下回ると予想しているが、これは、我々の第三者CMOがUDENYCAの包装とラベルチャネル供給に対する過剰な承諾と生産能力制限による一時的なUDENYCA供給中断の影響を受けており、2024年9月13日にUDENYCAの一時供給中断を発表した後、出荷UDENYCAを再開するまで販売が開始できず、最終製品ロットの完成に伴い、UDENYCAの供給が大幅に枯渇することが予想される。
研究開発費
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
研究 · 開発 | $ | 21,676 | $ | 25,647 | $ | (3,971) | $ | 72,101 | $ | 83,068 | $ | (10,967) | ||||||
2024年9月30日までの3カ月間で、研究·開発費は前の時期に比べて低下しており、主な原因は以下の通り
| ● | 2023年から米国toripalimabの開発計画の範囲を縮小し，2024年1月にTIGit計画の中止を発表したため，toripalimabとCHS−006の共同開発費は580万削減された |
| ● | 本四半期の開発万-1000の支出が減少したため、270万ドル減少した |
| ● | YUSIMRYに関連するコストは1億2千万ドル減少しました |
| ● | 主に従業員の減少により、人員と株式ベースの報酬支出は10，000ドル減少した |
減少幅は以下の項目の一部で相殺される
| ● | 470万ドル増加しました木造家屋の開発や |
| ● | CHS-114の開発に150万ドル増加しました |
2024年9月30日までの9カ月間で、研究·開発費は前の時期に比べて低下しており、主な原因は以下の通り
| ● | 従業員と株式ベースの報酬支出が1，310ドル減少したのは、主に2023年第1四半期のリストラによる360ドルの再編費用を含む従業員数の減少によるものである |
| ● | 優勝劣敗費用が640万ドル減少したのは、主に2023年第1四半期に研究を中止し、優勝劣敗に関連する支出が全体的に低いためである |
45
| ● | CHS—1000 の開発期間中の支出削減のために 380万ドル削減すること。 |
| ● | 米国におけるトリパリマブの開発計画の範囲を 2023 年から縮小し、 2024 年 1 月に発表された TIGIt プログラムの終了により、トリパリマブと CHS—006 の共同開発コストを 270万ドル削減しました。 |
減少幅は以下の項目の一部で相殺される
| ● | カドゾキタグの開発のために 1 億 770 万ドルの増資 |
| ● | CHS—114 の開発のために 500万ドル増額。 |
2024 年の研究開発費は、コスト抑制イニシアチブの影響と 2024 年 1 月の TIGIt プログラムの終了の推定により、 2023 年よりも低くなると予想しています。これらの減少は、パイプラインの支出によって一部相殺されると予想します。
販売、一般、管理費用
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
販売、一般、行政 | $ | 34,744 | $ | 48,224 | $ | (13,480) | $ | 126,441 | $ | 142,521 | $ | (16,080) | ||||||
2024年9月30日までの3ヶ月間、販売、一般、行政費用の減少は、主に専門サービス料が520万ドル減少したためであり、平均従業員数は450万ドルの従業員およびコンサルタントコストの減少を含む株式ベースの報酬は240万ドル、施設、用品、材料、その他のインフラ関連費用は120万ドル減少し、私たちの製品の商業インフラを支援している。
2024年9月30日までの9ヶ月間、販売、一般、行政費用の減少は、主に平均従業員数の減少によるものであり、従業員とコンサルタントコストの1，260万ドルの減少、株式ベースの報酬の600ドルの減少、万は450ドルの減少であった2023年9月までの9カ月間に発生した非日常的な地上購入費用に関連して、出張費用が120万万減少それは.この等の減額は680ドルの減価純費用部分によって相殺され、この減価費用の純額は無形資産帳簿純価値1，060ドル万台帳に関連し、NZV 930に関連する3，80万ドルのCVR負債を最終的にその公正価値ゼロに再計量する。
まだ完成していない買収や業務発展取引の潜在的な影響を除いて、2024年の販売、一般、行政費用は2023年を下回ると予想されています。これは主に販売取引、従業員数の減少、商業コストの低下によるものです。
利子支出
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
利子費用 | $ | 5,362 | $ | 10,268 | $ | (4,906) | $ | 21,812 | $ | 29,923 | $ | (8,111) | ||||||
2024 年 9 月 30 日に終了した 3 ヶ月間および 9 ヶ月間の利息費用の減少は、主に 2024 年 4 月 1 日に 2027 年期末ローンの元本 17500万ドルを前払いし、 2024 年 5 月 8 日に残りの 7500 万ドルを前払いしたことによるものです。2024 年 5 月 8 日に開始される 2029 年期間の 3870万ドルローンと収益売買契約の利子によって一部相殺されます。
主に、 2024 年第 2 四半期に 2027 年の定期ローンの元本 25000万ドルを全額返済した結果、 2024 年の利息費用は 2023 年と比較して低減すると予想しています。
46
販売取引の利益 （ 損失 ） 、純
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
販売取引収益，純額 | $ | (1,086) | $ | — | $ | (1,086) | $ | 176,646 | $ | — | $ | 176,646 | ||||||
2024 年 9 月 30 日に終了した 9 ヶ月間の販売取引の純利益 （ 損失 ） には、第 1 四半期 CIMERLI セールおよび第 2 四半期 YUSIMRY セールが含まれています。CIMERLI 売却の純利益 15380万ドルには、サンドズへの移転資産を差し引いた現金受領 18780万ドル、資産の認識解除、取引コスト 720万ドル、およびその他の関連する従業員移行費用が含まれています。HFk への YUSIMRY 売却の純利益 2290万ドルには、 HKF への移転資産を差し引いた 4000万ドル、資産 · 負債の認識解除、および取引コスト 100万ドルが含まれています。
債務返済損失
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
債務返済損失 | $ | — | $ | — | $ | — | $ | 12,630 | $ | — | $ | 12,630 | ||||||
T彼は 2024 年 9 月 30 日に終了した 9 ヶ月間の債務償却損失は、 2024 年 5 月の 2027 年期間のローンの返済によるもので、その費用は含まれています。 t彼は 償却の 残りの債務割引と債務発行コスト THE 前払いプレミアム手数料、 THE 利息の支払い、貸し手数料.
その他の収入，純額
9 月 30 日までの 3 ヶ月間 | 9 月 30 日までの 9 ヶ月間 | |||||||||||||||||
(単位：千) |
| 2024 |
| 2023 |
| 変わる |
| 2024 |
| 2023 |
| 変わる | ||||||
その他の収入 （ 費用 ） 、純 | $ | 2,084 | $ | 2,253 | $ | (169) | $ | 6,420 | $ | 5,598 | $ | 822 | ||||||
その他の純利益 （ 費用 ） は、 2024 年 9 月 30 日に終了した 3 ヶ月間に 2023 年 9 月 30 日に終了した 3 ヶ月間に匹敵しました。2024 年 9 月 30 日までの 9 ヶ月間の純その他の利益 （ 費用 ） は、主に TSA 収益が 210万ドル増加し、為替利益が 110万ドル増加したことにより、前年同期と比較して好調に変化しました。
流動性と資本資源
当社の流動性及び資本資源に関する関連措置を以下のとおりまとめます。
9 月 30 日 | 十二月三十一日 | ||||||
(単位：千) |
| 2024 |
|
| 2023 | ||
金融資産 | |||||||
現金、現金等価物及び有価証券の合計 | $ | 97,690 | $ | 117,748 | |||
財務負債： |
|
| |||||
2029 年タームローン | $ | 36,618 | $ | — | |||
収益売買契約書 | 29,607 | — | |||||
2027 タームローン | — | 246,481 | |||||
2026 年可換紙幣 |
| 227,891 |
| 226,888 | |||
財務負債総額 | $ | 294,116 | $ | 473,369 | |||
47
我々の設立以来，2024年9月30日までの9カ月の純収益が7，920万ドルであったことを除いて，2024年3月と6月の販売取引，2020年の13220ドル万と2019年の8，980ドル万がすべての年に大きな運営損失を生じている。私たちは主に私たちの普通株を売却し、転換と定期債務を生成し、収入購入販売協定、販売取引と販売を通じて私たちの運営に資金を提供します。
2024年9月13日、過剰な約束と生産能力制限のため、UDENYCAに提供された第三者ラベルとパッケージCMOがUDENYCAの生産を延期したと発表しました。これらの遅延によりUDENYCA供給が一時的に中断された。首席営業官は最近、生産が2024年11月4日遅くに再開されることを知らせてくれた。生産スケジュールによると、2024年末までに、相当数の単位がさらなる中断や遅延なしに完成する予定だ。最終製品ロットが完成した後に出荷して、迅速な方法でお客様の手元に到着することを確保したいので、できるだけ早く流通ルートの在庫を補充したいです。私たちはまた私たちのラベルと包装資源を多様化するために努力して重要な進展を成し遂げた。もう1つの最終包装とラベルCMOは生産テストを開始しており，2024年末に販売可能な製品の生産を開始する予定である。FDAの認可によると、このCMOの商業供給は2025年第1四半期に開始される予定だ。我々は現在、我々2社のラベルとパッケージCMOのUDENYCA商業供給供給時間の推定は合理的であると考えているが、第三者のいかなる遅延もUDENYCA商業供給の遅延を招く我々の製品の製造および第三者への依存に関するリスクの検討については、“リスク要因”を参照されたい 製造やサプライチェーンに関するリスク“と”リスク要因−第三者依存に関するリスク“である
2024年6月27日、私たちはカナダライセンス契約を締結し、この協定に基づいて、ApotexにToripalimabのカナダ国内での商業化の独占許可を授与した。カナダの許可協定によると、Apotexは私たちに630万ドルを支払った。また、Apotexは、カナダToripalimabのいくつかの規制と販売マイルストーンの実現と関連して、ドルに相当する総額5，150カナダドルの万カナダドルをマイルストーンとして支払うことに同意した。最後に，ApotexはToripalimabの将来のカナダでの任意の純売上高の2桁より低い数百点を支払うことに同意し，その後，協力協定に基づいて君実生物科学社に支払いを行う
2024年6月26日、香港小輪とYUSIMRY購入協定を締結した。YUSIMRY購入契約に記載されている条項や条件によると、吾らはYUSIMRY免疫専門権をいくつかの資産を介して売却し、YUSIMRY、YUSIMRYに関する知的財産権、YUSIMRYに関するいくつかの契約、YUSIMRY在庫およびYUSIMRY研究開発に関するすべての活動をHKFに前払いし、現金コストは4，000万ドルであり、HKFの在庫購入承諾を$1700万と仮定した。私たちはファイザー許可協定に従ってファイザーに付与されたいくつかの特許の権利を保持している。
2024年5月8日、我々は2029年の定期融資を締結し、元金3870万の保証融資手配を提供し、元の発行割引後に3750万ドルの収益を得て、すべての未返済債務の全額返済の一部として使用し、2027年の定期融資でのすべての約束を終了した。
2024年5月8日、私たちは収入購入契約を締結した。我々は，買い手集団に権利を売却することにより，3，750ドルの万収益を獲得し，2024年5月8日から，UDENYCAの純売上高に適用する指定しきい値と，LOQTORZIの適用年度に適用される指定しきい値，およびUDENYCAとLOQTORZIがこの年度に指定された敷居を超えた米国の純売上高の0.5%に適用し，全額支払いを獲得した。得られたお金は、私たちがすべての未返済債務の全額返済の一部として使用され、2027年の定期融資のすべての約束を終了した。
2024年4月1日、現金と現金等価物の17500万ドルは、2027年の定期融資元金残高25000ドル万のうち17500ドル万の返済に使用され、詳細は以下の通り。
48
2024年1月19日、SandozとCIMERLI調達契約を締結しました。CIMERLI購入契約の条項と条件に基づき，2024年3月1日にCIMERLI眼科専用権のCIMERLI販売を完了し，我々の子会社コヘル眼科をSandozに売却し，前払い全現金代償は17000ドル万，CIMERLI製品在庫と製造資産のために1，780万ドルを追加した
2024年2月5日に、吾らは同意及び改訂を締結し、(1)聯昌国際購入協定項の下で行われる取引を完成することに同意し、吾などのいくつかの付属会社の責任及び当該等の取引制約を受けたいくつかの資産を免除することに同意した；(2)連昌国際購入協定で行われる取引を完了した後、前払い部分が返済されていない2027年の定期融資元金17500万を要求し、ただしいくつかの条件の制限を受けなければならない；及び(3)2027年の定期ローン項目での最低純販売契約のレベルを調整する。CIMERLIの売却完了後、17500万の未返済融資元金残高25000万ドルと、2027年の定期融資の場合の前払い保険料と包括支払い680万の返済が義務付けられており、2024年4月1日に支払います。
2023年9月8日、万買収の一部として、2，880ドルの現金、現金等価物、有価証券を取得しました。
2023年5月16日、吾らは引受業者と引受契約を締結し、これにより、吾らは合計11，764，706株の会社株を引受業者に売却した。また、引受契約の条項に基づいて、吾らは引受業者の自己引受契約日から30日間の選択権を付与し、最大1，764，705株の引受権株式を追加購入し、引受業者は全額行使を選択する。今回公開された価格は1株4.25ドル。引受業者は請負契約に基づいて1株3.995ドルで吾等に株式を購入することに同意した。
当社は2023年5月18日に、引受業者が株式購入の選択権を行使することを含む計13，529，411株の公開発売株式を完成させた。引受業者の割引と手数料、私たちが支払うべき要約費用を差し引いた後、約5360万ドルの純収益を得ました。
2022年11月8日、ATM機の発売に関する販売契約を締結し、この合意により、15000ドルまでの万普通株を随時発行·販売することができます。2023年5月15日には、販売契約第1号改正案及び公開発売に関連して、吾らはTD CowenのATM機発売により発行·販売可能な株式金額を8，620万に減らし、プロトコル項での総発行価格を15000万から6，380万に引き下げた。2023年9月11日、販売協定第2号改正案により、TD CowenとのATM発行·販売可能株式額を2，870万ドル増加させ、販売契約での総発行価格を6，380万ドルから9，250万ドルに増加させる。2024年9月30日までの3ヶ月間、株は何も売却されていない。2024年9月30日までの9ヶ月間に、ATMから発行された普通株650，005株を販売し、加重平均価格は1株2.44ドル、毛収入は160ドル万、純収益は150ドル万、手数料と費用を差し引いた純収益は10ドル万だった。2024年9月30日までのATM発行計画については，1株5.39ドルの加重平均価格で5，126，650株の普通株を売却し，毛収入は2，760ドル万，純収益は2，690ドル万，手数料と手数料を差し引いた純収益は70ドル万であった。2024年9月30日まで、約6，490ドルの普通株が万製品で売ることができます。ATM発行で私たちの普通株を売却することを時々選択することができ、私たちの財務柔軟性を高めることができます
2024年9月30日現在、私たちの累計赤字は15ドル、現金と現金等価物は9，770ドルです。私たちが今まで受け取った現金と現金等価物、製品販売、資産剥離、ATM機の発売、公開発売から得られた現金は、私たちの計画支出に資金を提供するのに十分であり、私たちの財務諸表が発表された日から少なくとも12ヶ月以内に私たちの義務を履行することができると信じています。
49
私たちは間違っていることが証明される可能性があるという仮定に基づいてこの推定をして、私たちは現在予想されているよりも早く私たちが利用できる資本資源を利用することができる。また、私たちの運営計画は変わる可能性があり、運営需要や製品開発と商業化の資本要求を満たすために追加の資金が必要かもしれません。我々の候補製品の開発や商業化に関連する多くのリスクや不確実性、およびその開発および商業化に参加するために第三者と追加協定を締結する可能性があるため、現在および予想されている研究開発活動および持続的かつ将来の許可および協力義務に関連する増加した資本支出および運営支出の金額を見積もることができない。私たちは未来にもっと多くの資金を集める必要があるかもしれない；しかし、このような努力が成功する保証はない、あるいは成功すれば、このような資金調達の条項と条件は有利になるだろう。私たちの未来の支出需要は多くの要素に依存するだろう
| ● | 製品販売の現金収益 |
| ● | 私たちの金融負債に関する利息、元金、特許使用料を支払う |
| ● | 私たちの製品を製造し流通しマーケティングするコストは |
| ● | 私たちの候補製品と製品のための臨床薬物供給品の製造と商業供給品の確立のコスト |
| ● | 私たちのパッケージとラベルCMOは、顧客の需要を満たすのに十分な数のUDENYCA製品を生産し、提供します |
| ● | 我々はFDAの許可を得てCMOの追加パッケージおよびラベル施設でUDENYCA製品を生産する時間と、私たちの追加パッケージおよびラベルCMOが顧客の需要を満たすのに十分な数のUDENYCA製品を提供する時間； |
| ● | 競争相手が生産した製品に変更せずに私たちの製品を買い続ける顧客の占める割合 |
| ● | 私たちが確立したか、または確立可能な任意の他の協力、許可、および他の手配の条項と時間； |
| ● | 将来承認される任意の候補製品の販売、利益共有または特許使用料の時間、収入、および金額 |
| ● | 私たちが求めている候補製品の数量と特徴は |
| ● | 私たちの臨床試験、臨床前試験とその他の関連活動の範囲、進捗、結果とコスト |
| ● | CMOSから発起者対照材料を獲得し、臨床前研究と臨床試験用品および他の材料を製造するコスト、および放出と安定性試験に関連するコスト； |
| ● | 承認の費用、時間、結果を規制する |
| ● | 任意の特許権利要件および他の知的財産権の費用の準備、提出、起訴、弁護、および実行； |
| ● | 私たちは事業、製品、技術に剥離、買収、投資しています |
| ● | 金利上昇と高インフレを含むが、これらに限定されないが、全体的な経済状況が私たちの業務に与える影響 |
| ● | 未来に発生する新冠肺炎の大流行あるいは未来の大流行による影響の代価。 |
当社の財務状況及び資本要求に関するリスクのさらなる検討については、“リスク要因−当社の財務状況及び資本要求に関するリスク”を参照されたい
50
融資手配
2027年の定期ローン
2024年第2四半期に、私たちは2027年の定期融資のすべての約束を全額返済し、終了した。2024年3月に受け取った剥離CIMERLI眼科特許権の収益は，2024年4月1日17500万の未償還元金，および合計680万の前払い保険料と全体金額の償還に用いられた。2024年5月8日、2027年の定期ローンの残り7，500ドルの元本残高と、合計350万ドルの前金保険料と全体の金額を、2029年の定期ローンと収入売買契約の収益で返済しました。
2029 年タームローン
2027年の定期融資を返済するとともに、2024年5月8日に2029年の定期融資を締結し、元金3，870ドルの担保融資手配を提供し、元の発行割引を差し引いた収益は3，750ドルである。2029年の定期ローンは2029年5月8日に満期になり、利息は年利8.0%に相当し、3ヶ月のSOFR金利を加え、満期前に四半期ごとに利息のみを支払うことに規定されている
2029年の定期融資は、私たちのほとんどの資産(知的財産権を含む)の留置権を保証していますが、慣例的な排除や例外に適合しています。2029年ローン協定には、2029年の定期融資発効日から発効する金融契約を含む慣例的な陳述と保証、契約、契約が含まれており、この契約は、一定のレベルの現金および現金等価物を維持することを要求している。2029年ローン協定には、費用返済や、代理人と2029年の貸主の利益のための補償権などの他の習慣条項も含まれています。詳細については、本四半期報告第I部表10-Q第1項に記載されている簡明総合財務諸表付記の財務負債を参照されたい.
収入購入販売協定
2024年5月8日、私たちは収入購入契約を締結した。収入購入契約の条項によると、買い手集団が吾等に3，750万ドルを支払う交換として、吾らは、2024年5月8日から、UDENYCAの純売上高に適用される指定しきい値と、LOQTORZIの適用年度における純売上高およびUDENYCAとLOQTORZIがこの年度に指定された敷居を超えた米国の純売上高の0.5%を適用し、買い手集団に全額支払いを受ける権利を買い手集団に売却する。買い手集団が収入支払いを得る権利は終了し，買い手グループが購入価格の2.25倍に相当する金額を受け取った後に買い手グループに収入支払いを支払う義務はない.吾らは，いくつかの条件をトリガし，購入価格で買い手集団に2.25倍の未払い部分を支払い，買い手集団が収入支払いを受け取る権利を購入することも可能である.買収価格で得られた金は、2027年の定期融資の全額返済の一部として使われています。
収入購入および販売協定は、組織、許可およびいくつかの他の事項に関する陳述および保証、支払い、報告、知的財産権、進入許可、脱退許可およびいくつかの他の行動に関するいくつかの契約、およびそのような取引の賠償義務および他の慣用条項を含む様々な陳述および保証を含む。
2026年の変換可能チケット
2024年9月30日まで、私たちの23000ドルの元金総額は優先二次手形に転換できる帳簿価値は22790ドルで、2026年に満期になります。2026年に発行された転換可能債券の利息年利率は1.5%で、半年ごとに配当され、それぞれ毎年4月15日と10月15日に満期になり、事前に買い戻ししたり、所持者の選択に応じて転換しなければならない。成立以来、転換価格は2026年に転換可能な手形元金は1，000ドルあたり51.9224株であり、転換価格を代表する
51
普通株1株当たり約19.26ドル。初期転換価格は、前回報告した2020年4月14日、すなわち2026年の転換可能債券発行日より、ナスダック世界市場で我々の普通株の1株14.82ドル、プレミアム約30.0%を販売している。換算率と換算価格は，あるイベントが発生したときに慣用的に調整される.2026年の転換手形は期限が切れるまで私たちの選択で償還することはできません。2026年に転換可能な手形が2024年9月30日に転換されれば、2024年9月30日までの終値1.04ドルによると、2026年の転換可能手形の所持者は総価値1，240ドル万の普通株式を獲得する。
2026年の交換可能手形の定価について、2026年に交換可能手形のいくつかの初期購入者と他の金融機関と私的に協議した上限コールオプション取引を行った。成立以来、上限価格は1株25.93ドルで、2020年4月14日に著者らの普通株の最終報告価格より1株14.82ドルの割増価格は約75.0%であり、上限コール取引の条項に基づいてある調整を行った。
一里塚がある
私たちは将来、いくつかの開発、規制、ビジネスマイルストーン(例えば、臨床試験成果の提出、BLA、FDA承認または製品発表)を実現する際に満期と支払うべきお金を第三者に支払う義務がある。これらのマイルストーン支払いおよび他の同様の費用は、未来のイベントに依存しているので、マイルストーンに達したり、他の適用基準を満たしたりする可能性が高い場合にのみ記録されます。2024年9月30日現在、これらのマイルストーンの実現はまだ承認のハードルに達していないため、このような事項やある事項は私たちの財務諸表に記録されていません。
以下は、2024年9月30日までの規制および販売マイルストーンを有する積極的なパートナーシップおよび連携の概要である
取引相手 | 説明する | 潜在的総マイルストーン金額 | ||
君士生物科学 | ロクトルツィ | 35500万ドル (1) | ||
アディマブ | カルドゾキツグ | 1，300万ドル | ||
Vaccinex | CHS-114 | 1，500万ドル |
| (1) | 29000ドルの万は販売マイルストーン、6，500ドルの万は現在私たちの臨床試験対象の適応の規制マイルストーンではなく、君実生物科学への2，500ドルのマイルストーンの支払いは含まれていません。その中で、2024年第2四半期に1，250ドル、2025年第1四半期に1，250ドルを支払う予定です。 |
あるいは価値のある権利
吾等はすでにCVR協定項の下で潜在的な支払いの公正価値について1つ又は有償負債を記録した表面採取。2023年9月8日以降の10年間、これらの潜在的な支払いは以下の場合にのみ満期になりますまず、いくつかのライセンスプロトコルに従ってマイルストーンまたは特許権使用料に基づく支払いを得るか、または前の米国ライセンスプロトコルに従って前金を取得する。支払い方法は、現金、株、または現金と株の組み合わせであってもよい。 グラクソ·スミスクラインおよびまたは対価関連CVR負債は、2024年9月30日現在の簡明総合貸借対照表に他の非流動負債を計上している詳細については，本四半期報告第I部分表10-Q第1項に記載されている簡明総合財務諸表付記における付記6.購入と処分を参照されたい.
他の約束
当社は、通常業務の過程で、臨床前研究および臨床試験、研究用品およびその他の業務目的のサービスおよび製品について、 CRO と契約を締結します。また、商用医薬品および製品候補の製造および臨床医薬品供給に関する契約をいくつかの CMO と締結しています。 2024 年 9 月 30 日時点の取消不可購入コミットメントは、注釈 9 に概説されているように、 6700万ドルでした。コミットメント
52
第 1 部第 1 号の連結財務諸表の注記に記載されている不測の事態及び不測の事態について。YUSIMRY セールに関連して、 HKF は YUSIMRY の在庫購入コミットメントを 1700万ドル引き受けました。 2024 年 9 月 30 日現在 1700万ドル残っている。. HKF が YUSIMRY 購入契約に基づく義務を履行しない場合、当社はこれらの購入コミットメントの未払い部分を支払う責任を負う可能性があります。
2024 年 9 月 30 日に終了した 9 ヶ月間のリース契約には、 2023 年のフォーム 10—k の議論と比較して、重要な変更はありません。
キャッシュフロー概要計算書
以下の表は、各期間のキャッシュ · フローをまとめたものです。:
9か月で終わる | ||||||
9 月 30 日 | ||||||
(単位：千) |
| 2024 |
| 2023 | ||
経営活動のための現金純額 | $ | (49,048) | $ | (161,947) | ||
投資活動が提供する現金純額 |
| 230,863 |
| 109,437 | ||
融資活動が提供する現金純額 | (187,205) | 69,234 | ||||
現金、現金等価物、および制限的現金純増加 | $ | (5,390) | $ | 16,724 | ||
経営活動のための現金純額
2024 年 9 月 30 日に終了した 9 ヶ月間の営業活動に使用された現金 4900万ドルは、主に株式報酬費用 2140万ドル、負債償却損失 1260万ドル、 CVR 負債再計上によるオフライセンスの純資産減損 680万ドルを含む非現金項目を調整した純利益 7920万ドルによるものです。その他の非現金調整額 620万ドルと営業資産 · 負債の変更額 140 万ドルは、売却取引の純利益 1766 0 万ドルによって一部相殺されました。
2023 年 9 月 30 日に終了した 9 ヶ月間の営業活動に使用された現金 16190万ドルは、主に株式報酬費用 3230万ドルおよびその他の非現金調整 720万ドルを含む非現金項目を調整した純損失 15820万ドルによるものです。
投資活動が提供する現金純額
2024年9月30日までの9カ月間，23090万の投資活動が提供した現金は，主にCIMERLI売却の現金収益18780ドル万，YUSIMRY販売の現金収益4，000万，有価証券売却投資870万，および有価証券投資満期日の収益620万により，一部は2に関する1，250万ドルマイルストーン支払いで相殺されたnd君士生物科学社との修正案。
2023年9月30日までの9カ月間，10940万ドルの投資活動が提供した現金は，主に10810万の有価証券投資満期収益，1，330万の有価証券投資の売却収益，Surface買収から得られた700万万現金であったが，一部は1，950万を購入した有価証券投資によって相殺された。
融資活動が提供する現金純額
2024年9月30日までの9カ月間で，融資活動に用いられた現金は18720万ドルであり，主に万が2027年の定期融資(経営活動列報としての利息を含まない)に全額返済した26040ドル万と，RSU株の純決済に関する250万ドルの税収によるものである。これらの支払いは
53
債務割引と発行コストを差し引いた2029年の定期融資収益3，700万、発行コストを差し引いた収入売買契約収益3，650万、及び発行コストを差し引いたATM発行収益150万、部分相殺。
2023年9月30日までの9カ月間で，6，920ドルの万融資活動が提供した現金は，主に公開発売された5，360ドル万収益(発行コスト控除)，1，820ドルの万発行収益(発行コスト控除)，特別ATM計画により購入された130ドル万収益からである。これらの部分は株式の純決済に関する330万ドルの税金で相殺されている。
重要な会計政策と重大な判断と見積もり
米国公認会計原則に基づいて簡明な総合財務諸表を作成する際には、総合財務諸表の日付の報告済み資産と負債額、あるいは有資産と負債の開示、および報告期間内に報告された収入と支出に影響を与えるために、推定と仮定を行う必要がある。私たちの推定は私たちの歴史的経験と私たちがこのような状況で合理的だと思う様々な他の要素に基づいている。これらの見積りは資産や負債の帳簿価値を判断する基礎を構成しているが，これらの資産や負債の帳簿価値は他のソースからは容易には見えない
2024年9月30日までの9ヶ月間、私たちのキー会計推定値は、2023年10-k表に記載されているキー会計推定値と比較して大きな変化はありません収入購入販売協定以下に述べる.2023年の10-kレポートで議論された重要な会計見積もり数は、これらの見積もり数がより重要な分野に関連し、経営陣の判断と仮定に関連するため、私たちの歴史と将来の業績を知るために意味があると信じています。
収入購入販売協定
収入購入販売プロトコルは、収入購入販売プロトコルとは別に入金された基準に適合する埋め込み派生ツールを含む。特許権使用料は負債が収入購入販売協定を締結する際に公正価値で入金され、その後、各報告期間に公正価値によって再計量され、簡明総合経営報告書の純額の中で他の収入(支出)の公正価値の変動を確認する。収入購入販売プロトコルは最初に推定を行い，“有無”の方法で再計測する.有無“方法は、既存の基準に従ってツール全体および埋め込み派生ツールを評価し、次いで、埋め込み派生ツールを含まない収入購入プロトコルを評価することを含む。埋め込み派生ツールを含むツール全体と埋め込み派生ツールを含まないツールとの間の差は、特許権使用料デリバティブツールの公正価値である。我々は，主に将来の収入の数と時間，これらの収入の推定変動性，収入リスクに対応した割引率，およびあるイベントの可能性を期待する第3段階の観察不可能な入力を用いるモンテカルロシミュレーションモデルを用いた
最近の会計公告
最近の会計声明の影響に関する説明は、本四半期報告表格10-Q第1項第1項に記載されている簡明合併財務諸表付記中の重要な会計政策の組織と要約を参照されたい。
三番目の項目：市場リスクの定量化と定性的開示に関する
私たちは金利の変化と関連した市場リスクに直面している。2024年9月30日まで、私たちは9，770ドルの現金と現金等価物万を持っている。私たちの現金等価物の一部つまり通貨市場基金は
54
金利リスクは、市場金利が上昇すれば、価値が低下する可能性がある。しかし，我々の現金等価物は主に短期的であるため，これらの投資に対する金利リスクの開放は大きくなく，市場金利1%の変動は我々のポートフォリオの総価値に大きな影響を与えないと考えられる
また、製品販売に関連する売掛金の信用リスクに直面しており、正常な業務過程で信用を獲得した顧客の信用状況を監視している。一般的に、顧客の担保には要求がありません。売掛金の受取面で、私たちは大きな損失に遭遇しなかった。
私たちは可変金利債務の金利リスクに直面している。2024年9月30日現在、私たちの2029年の定期ローンの未返済万本金は3，870ドル、年利率は8.0%、3カ月期SOFRを加え、下限は1.0%です。私たちは現在私たちの可変金利債務をヘッジしない。2024年第4四半期の金利は12.60%となる。仮に私たちの可変金利債務金利が100ベーシスポイント上昇したとすると、私たちが支払う年間利息支出が40ドル万に増加する可能性があります
2020年4月、元金総額23000ドルの2026年転換債券を発行し、固定金利は1.5%となった。手形の年利率は固定されているため、金利の変化に関する金融や経済金利の開放はありません。しかし、固定金利債務の公正価値は金利の変化によって変動するだろう。また、私たちの普通株の市場価格が変動した場合、2026年に転換可能な手形の公正価値が影響を受ける可能性がある。私たちは貸借対照表に額面から未償却割引と発行コストを引いて2026年の転換可能な手形に計上し、私たちはただ開示を要求する目的のために公正な価値を公表します。
私たちのほとんどの売上げはドルで計算されています。CIMERLIが販売される前に，CIMERLI在庫の購入とBioeqへのユーロ建ての特許使用料の支払いにより，ドルとユーロの為替レートに開きがある.そのため、ドルとユーロの為替レートの変動は私たちの簡明な総合経営報告書に影響を与えた。2024年1月19日、SandozとCIMERLI購入契約を締結しました。CIMERLI買収協定によると，我々は2024年3月1日に我々の子会社Coherus眼科を売却することによりCIMERLI眼科特許権の剥離を完了した。詳細については、付記6.取得と処置を参照されたい
四番目の項目：規制、統制、そして手続き
情報開示制御とプログラムの有効性評価
我々は、総裁、最高経営責任者、財務責任者の監督の下で評価を行い、本四半期報告Form 10-Qがカバーする期間が終了するまで、取引所法案規則13 a-15(E)および15 d-15(E)によって定義された開示制御およびプログラムの有効性を評価した。この評価に基づき、我々の総裁、最高経営責任者、財務責任者は、本四半期の報告Form 10-Qがカバーする期間が終了するまで、私たちの開示制御およびプログラムは設計および実行において有効であり、合理的な保証レベルにあると結論した。
我々は、我々の取引所法案報告において開示すべき情報が、米国証券取引委員会規則および表で指定された期間内に記録、処理、集計および報告され、これらの情報が蓄積されて、必要な開示に関する決定を迅速に行うために、我々の経営陣に伝達されることを保証するために、開示制御および手続きを維持する。
私たちは、私たちの開示制御とプログラムの設計と有効性を継続的に検討し、評価し、私たちが発見する可能性のある任意の重大な欠陥を是正するつもりです。私たちの目標は、私たちの経営陣が私たちの業務に影響を与える可能性のある重要な情報をタイムリーに得ることができるようにすることです。私たちの現在の開示制御およびプログラミングは、私たちの目標を効果的に達成していると信じていますが、将来的に私たちの業務に影響を与えるイベントは、私たちの開示制御やプログラムを修正することにつながるかもしれません。開示制御やプログラムを設計し評価する際には
55
経営陣は、どのような制御やプログラムが、どんなに設計や操作が良好であっても、予想される制御目標を達成するために合理的な保証を提供することしかできないことを認識し、管理者に、可能な制御とプログラムのコスト−収益関係を評価する際にその判断を適用することを要求する。
財務報告の内部統制の変化.
最近の財政四半期内に、財務報告の内部統制に大きな影響を与えていないか、または合理的に財務報告の内部統制に大きな影響を与える可能性のある変化が発生していません
制御とプログラムの有効性の制限
開示制御及びプログラムを設計·評価する際に、管理層は、任意の制御及びプログラムは、設計及び動作がどんなに良好であっても、予想される制御目標を達成するために合理的な保証を提供することしかできないことを認識している。また、開示制御およびプログラムの設計は、管理層に、そのコストに対する可能な制御およびプログラムの利点を評価する際に判断することが要求されるリソース制限が存在することを反映しなければならない。
第2部-その他の資料
1つ目：訴訟、法的手続き
本プロジェクトが提供することを要求する資料は、本明細書に付記9“簡明合併財務諸表付記中の引受金およびまたは有事項”の形態で組み込まれ、この付記は、本四半期報告表格10-Q第1部分第1項に記載されている。
プロジェクト1 A.第2項：リスク要因
リスク要因 概要
以下は，我々の普通株投資に投機的あるいはリスクを持たせる要因の概要である.この結論は私たちが直面しているすべての危険を解決していない。本リスク要因要約で概説されたリスクおよび我々が直面している他のリスクに関する他の議論は、以下の“リスク要因”というタイトルで見つけることができ、本四半期報告におけるForm 10-Qに関する他の情報とともによく考慮すべきである私たちの財務諸表とその付記も含めて私たちの普通株に投資決定を下す前に。
| ● | 私たちの利益の歴史は限られており、利益を維持していないし、再び利益を達成しない可能性もあり、2つの製品だけが承認されて発売されており、多くの製品が承認されておらず、まだ開発中である。 |
| ● | 当社の既存製品または将来の製品の商業的な成功は、処方医師、医療提供者、および当社の医薬品を処方する患者による市場での受容と採用の程度に依存します。さらに、国または地方の臨床ガイドライン / パスウェイへの掲載や、第三者の支払者フォームのカバレッジを取得することは、短期および長期の財務業績に影響を与える可能性があります。 |
| ● | LOQTORZI に対するライセンス開発または商業的権利があるため米国およびその他のライセンス地域での規制承認を通過するために、この製品候補を進めるために、協力者の事前臨床、臨床、規制、製造に関する専門知識に依存しています。. |
| ● | 当社の製品および製品候補は、承認された場合でも、規制当局の精査の対象となります。 |
56
| ● | 資金不足、政府の停止、または世界的な健康懸念によるFDAおよび他の政府機関の中断は、重要な指導部および他の人員の募集、保留または配置の能力、および製造施設を検査する能力、または新たなまたは修正された製品のタイムリーまたは根本的な開発、承認または商業化を阻止することを阻害する可能性があり、これは私たちの業務に負の影響を与える可能性がある。 |
| ● | 我々の生物類似製品は、基準製品および他の生物類似製品または薬物からの激しい競争に直面しており、これらの製品または薬物は、元の製品と同じ適応として承認されているロクトルツィ他の免疫腫瘍学生物製品からの激しい競争に直面している。もし私たちが効果的に競争できなければ、私たちは顕著な市場浸透と拡張を達成できないかもしれない。 |
| ● | 私たちは激しい競争と迅速な技術変革に直面しており、私たちの競争相手は私たちと似た、より先進的、あるいはより効果的な治療法を開発するかもしれません。これは私たちの財務状況と候補製品を商業化することに成功した能力に悪影響を及ぼすかもしれません。 |
| ● | Neulastaのようなオリジナル製品の改善バージョンが開発された場合、あるいはオリジナル製品の市場が大幅に低下すれば、私たちの生物類似製品の販売が影響を受ける可能性がある |
| ● | 2022年の“インフレ低減法案”(以下、“アイルランド共和軍”)を含む医療改革措置は、我々の製品の発売承認や商業化の難しさやコストを増加させ、私たちが設定する可能性のある価格に影響を与え、私たちの業務や運営結果に実質的な悪影響を及ぼす可能性がある。 |
| ● | 私たちは私たちの社長と最高経営責任者のデニス·M·ランダレを含む私たちの主要幹部と人員のサービスに強く依存しています。もし私たちがこれらの経営陣のメンバーを維持したり、より多くの管理、臨床、科学者を募集することができなければ、私たちの業務は影響を受けるでしょう |
| ● | 私たちは第三者に依存して私たちの非臨床と臨床研究を行い、他の任務を実行してくれます。もしこれらの第三者がその契約義務を成功的に履行できず、予想される期限までに規制要求を達成したり、遵守したりすることができなければ、規制部門の私たちの候補製品の承認を得られないか、商業化される可能性があり、私たちの業務は深刻な損害を受ける可能性がある |
| ● | 私たちは大量の製造リスクと、私たちの製品の販売量を正確に予測しないリスクに直面しています。私たちはまた、過剰または時代遅れの在庫を決定する必要があり、これらの在庫は重大な判断を行う必要があり、在庫減記、会社の調達承諾に関する費用、あるいは両方を招く可能性がある。私たちの製品と候補製品の製造運営に影響を与える不利な発展は、私たちのコストを大幅に増加させ、私たちの製品と候補製品の供給を制限する可能性があります。彼は言いました |
| ● | ロシア · ウクライナ間の戦争の継続 中東紛争と紛争 直面するリスクを悪化させる可能性があります |
| ● | 当社の製品または製品候補は、望ましくない副作用を引き起こしたり、規制当局の承認を遅らせたり妨げる可能性のあるその他の特性を有したり、承認されたラベルの商業的プロファイルを制限したり、承認された場合の販売承認後に重大な悪影響を及ぼす可能性があります。 |
| ● | 当社が第三者の知的財産権を侵害または侵害すると主張された場合、当社の事業に損害を与える可能性があります。第三者の知的財産権侵害の請求は、当社の開発および商業化の取り組みを妨げまたは遅らせる可能性があります。 |
| ● | 当社は、製品候補の開発、臨床的成功、規制当局の承認、商業的成功に大きく依存しています。当社の製品候補が、販売前に必要な規制当局の承認を受けることを保証することはできません。 |
57
リスク要因
生物製薬会社の普通株に投資するのは、重要な国際協力パートナーシップと多様な開発中の製品を持つ会社を含め、高い投機的な事業であり、大きなリスクに関連している。以下に説明するリスクおよび不確実性、ならびに本10-Q表の四半期報告書の他のすべての情報を慎重に考慮しなければなりません。以下のいずれかのリスクが発生すれば、私たちの業務、財務状況、経営業績、見通しは重大な悪影響を受ける可能性があります。以下に説明する危険は私たちが直面している唯一の危険ではない。私たちは現在知られていないか、または現在重要ではないと考えているリスクと不確実性は、私たちの任意のまたは複数の業務、私たちの財務状況、私たちの運営結果、または私たちの見通しに大きな悪影響を及ぼすかもしれない。
私たちの財務状況と資本要求に関連するリスク
私たちの利益の歴史は限られており、利益を維持していないし、再び利益を達成しない可能性もあり、2つの製品だけが承認されて発売されており、多くの製品が承認されておらず、まだ開発中である。
2024年9月30日までの9ヶ月で7，920ドル、2020年に13220ドル万、2019年に8，980ドル万が発生したほか、2024年9月30日までの四半期に純損失1，080ドル万が発生し、2010年9月成立から2023年12月31日まで毎年純損失が発生している。研究開発コストが高くリスクがあるため、私たちが今後しばらく利益を上げるかどうかはまだ確定していない。私たちの将来の純損失の金額または任意の未来の純収益は、私たちの将来の支出の金額が将来の製品の販売金額によって相殺されることに部分的に依存し、私たちの現在の製品または他の規制によって承認される可能性のある製品の販売を含む。バイオ製薬製品開発は投機性の強い仕事であり、大きなリスクに関連している。
例えば、2024年9月30日現在、私たちの累計赤字は15ドルです。損失と累積損失は主に著者らが識別、開発することができるかもしれない候補製品に大量の投資を行ったためであり、その中に分析表現、技術開発と製造、調合と臨床研究及びこれらの業務に一般と行政支持を提供することを含む。
私たちはLOQTORZIにいくつかの開発と商業費用を支払い続けることを予想しており、LOQTORZIは2021年に君実生物科学会社から許可を得た抗PD-1抗体であり、いくつかの規制承認を得るために9，000ドルまでの万を支払うことに同意し、特定の販売限界を達成するために29000ドルまでの万を支払うことに同意した。最近発売されたこの製品と将来臨床開発を通じて私たちの候補製品を推進する仕事は高価であり、将来的に純損失を経験し続ける可能性がある。
発売された製品UDENYCAおよびLOQTORZIについて、もし私たちが規制部門の承認を得て他の候補製品をマーケティングすれば、私たちの将来の収入は、私たちの候補製品が承認される可能性のある市場規模と、これらの市場で十分な市場受容度、定価、第三者支払者の補償、および私たちの候補製品(私たちが商業権を獲得したすべての候補製品を含む)の十分な市場シェアを得る能力に依存するだろう。しかし、我々の既存製品以外の他の候補製品が規制部門の承認を得て商業化されても、利益を上げることができない可能性がある。
私たちの支出は大幅に増加します
| ● | 販売、マーケティング、流通インフラを構築し、市場の承認を得る可能性のある任意の候補製品を商業化する |
| ● | 任意のライセンス契約に従って前払い、マイルストーン、特許権使用料、または他のお金 |
58
| ● | continue our nonclinical and clinical development of our product candidates; |
| ● | initiate additional nonclinical, clinical or other studies for our product candidates; |
| ● | expand the scope of our current clinical studies for our product candidates; |
| ● | advance our programs into more expensive clinical studies; |
| ● | change or add contract manufacturers, clinical research service providers, testing laboratories, device suppliers, legal service providers or other vendors or suppliers; |
| ● | seek regulatory approvals for our product candidates that successfully complete clinical studies; |
| ● | seek to identify, assess, acquire or develop other product candidates or products that may be complementary to our products; |
| ● | seek to create, maintain, protect and expand our intellectual property portfolio; |
| ● | engage legal counsel and technical experts to help us evaluate and avoid infringing any valid and enforceable intellectual property rights of third parties; |
| ● | engage in litigation, including patent litigation, and Inter Partes Review (“IPR”) proceedings with originator companies or others that may hold patents; |
| ● | seek to attract and retain skilled personnel; |
| ● | create additional infrastructure to support our operations as a public company and our product development and planned future commercialization efforts; and |
| ● | experience any delays or encounter issues with any of the above, including but not limited to failed studies, conflicting results, safety issues, manufacturing delays, litigation or regulatory challenges that may require longer follow-up of existing studies, additional major studies or additional supportive studies or analyses in order to pursue marketing approval. |
Further, the net loss or net income we achieve may fluctuate significantly from quarter-to-quarter and year-to-year such that a period-to-period comparison of our results of operations may not be a good indication of our future performance quarter-to-quarter and year-to-year due to factors including the timing of clinical trials, any litigation that we may initiate or that may be initiated against us as well as any settlements or judgments from such litigation, the execution of collaboration, licensing or other agreements and the timing of any payments we make or receive thereunder.
We continue to be dependent on the ability to raise funds. This additional funding may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development and commercialization efforts or other operations.
As of September 30, 2024, our cash, cash equivalents and marketable securities were $97.7 million. We expect that our existing cash and cash equivalents, investments and cash collected from our product sales will be sufficient to fund our current operations for the foreseeable future. We have financed our operations primarily through the sale of equity securities, convertible notes, credit facilities, license agreements and through recent product sales of our products.
However, our operating or investing plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. Our future funding requirements will depend on many factors, including but not limited to:
| ● | our ability to continue to successfully commercialize our products; |
| ● | our ability to resolve supply interruptions for the supply of our products, such as the ongoing temporary |
59
| UDENYCA supply interruption that we announced on September 13, 2024; |
| ● | the scope, rate of progress, results and cost of any clinical studies, nonclinical testing and other related activities; |
| ● | the cost of manufacturing clinical drug supplies and establishing commercial supplies of our product candidates and products; |
| ● | the timing for our packaging and labeling CMO to resume manufacturing and to make UDENYCA products available in a sufficient quantity to meet the demand from our customers; |
| ● | the timing for us to receive FDA authorization to produce UDENYCA product at our additional packaging and labeling CMO’s facility and the timing for our additional packaging and labeling CMO to make UDENYCA products available in a sufficient quantity to meet the demand from our customers; |
| ● | the percentage of customers that continue to purchase our products and that do not switch to products made by our competitors; |
| ● | the number and characteristics of product candidates that we pursue; |
| ● | the cost, timing and outcomes of regulatory approvals; |
| ● | the cost and timing of establishing sales, marketing and distribution capabilities; |
| ● | the terms and timing of any licensing or other arrangements to acquire intellectual property rights that we may establish, including any milestone and royalty payments thereunder; |
| ● | the timing of conversion in common shares or repayment in cash of our convertible debt, the timing of repayment in cash, whether due or not, of our long-term debt and the payment of interest, principal and royalties related to our financial liabilities; and |
| ● | the cost, timing and outcomes of any litigation that we may file against third parties or that may be filed against us by third parties. |
Any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our product candidates. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders, and the issuance of additional securities, whether equity or debt, by us or the possibility of such issuance may cause the market price of our shares to decline. The sale of additional equity or convertible securities, such as the sales from time to time through our Sales Agreement with TD Cowen pursuant to which we may issue and sell from time to time up to $150.0 million of our common stock through or to TD Cowen as our sales agent or principal in an ATM Offering, may dilute the share ownership of our existing stockholders. The incurrence of indebtedness could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as those contained in the 2029 Loan Agreement we entered into on May 8, 2024 with the Agent and the 2029 Lenders that provides for a senior secured term loan facility of up to $38.7 million, including limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business such as a financial covenant commencing on May 8, 2024, which requires us to maintain certain levels of cash and cash equivalents. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage or for a lower price than otherwise would be desirable and we may be required to relinquish rights to some of our technologies or product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or for specific strategic considerations.
60
If we are unable to obtain funding on a timely basis or at all, stay profitable or generate any net profits, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any products or product candidates or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our financial condition and results of operations.
Risks Related to Launch and Commercialization of our Products and our Product Candidates
We have a limited operating history in an emerging regulatory environment on which to assess our business.
We are a biopharmaceutical company with a limited operating history in an emerging regulatory environment of biosimilar and immuno-oncology products. Although we have received upfront payments, milestone and other contingent payments or funding for development from some of our collaboration and license agreements, our only approved products are UDENYCA and LOQTORZI which are approved for commercialization in the United States, and we have no products approved in any other territories.
One of the steps necessary for us to generate meaningful revenue is for us, alone or with strategic collaboration partners, to successfully market and sell our products, and to complete the development of, and obtain the regulatory approvals necessary to commercialize, one or more of our product pipeline candidates, which include:
| ● | CHS-1000; |
| ● | casdozokitug; |
| ● | CHS-114; and |
| ● | toripalimab in non-NPC indications. |
We may not be able to continue to generate meaningful revenue from product sales, as this depends heavily on our success in many areas, including but not limited to:
| ● | our ability to continue to successfully commercialize all three UDENYCA product presentations and LOQTORZI; |
| ● | competing against numerous current and future pegfilgrastim and adalimumab products with significant market share; |
| ● | healthcare providers, payers, and patients adopting our products and product candidates once approved and launched; |
| ● | our ability to procure and commercialize our biosimilar product; |
| ● | obtaining additional regulatory approvals for product candidates for which we complete clinical studies; |
| ● | obtaining adequate third-party coverage and reimbursements for our products; |
| ● | obtaining market acceptance of our products and product candidates as viable treatment options; |
| ● | completing nonclinical and clinical development of our product candidates; |
| ● | developing and testing of our product formulations; |
| ● | attracting, hiring and retaining qualified personnel; |
| ● | developing a sustainable and scalable manufacturing process for our products and any approved product candidates and establishing and maintaining supply and manufacturing relationships with third parties that can conduct the process and provide adequate (in amount and quality) products to support clinical development and the market demand for our products and product candidates, if approved; |
| ● | addressing any competing technological and market developments; |
61
| ● | identifying, assessing and developing (or acquiring/in-licensing on favorable terms) new product candidates; |
| ● | negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; |
| ● | maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and |
| ● | defending against any litigation including patent or trade secret infringement lawsuits, which may be filed against us, or achieving successful outcomes of IPR petitions that we have filed, or may in the future file, against third parties. |
Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs to commercialize any such product. Our expenses could increase beyond our expectations if we are required by the FDA, the European Medical Agency (the “EMA”), other regulatory agencies, domestic or foreign, or by any unfavorable outcomes in intellectual property litigation filed against us, to change our manufacturing processes or assays or to perform clinical, nonclinical or other types of studies in addition to those that we currently anticipate. In cases where we are successful in obtaining additional regulatory approvals to market one or more of our product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the number of biosimilar or immuno-oncology competitors in such markets, the accepted price for the product, the ability to get reimbursement at any price, the nature and degree of competition from originators and other biosimilar or immuno-oncology companies (including competition from large pharmaceutical companies entering the biosimilar market or possessing large established positions in the immuno-oncology market that may be able to gain advantages in the sale of biosimilar or immuno-oncology products based on brand recognition or existing relationships with customers and payers) and whether we own (or have partnered with companies owning) the commercial rights for that territory. If the market for our products and product candidates (or our share of that market) is not as significant as we expect, the price of our products is not what we project, the indication approved by regulatory authorities is narrower than we expect or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved. If we are unable to successfully complete development and obtain additional regulatory approval for our products, our business may suffer.
The commercial success of our existing products or any future products will depend upon the degree of market acceptance and adoption by prescribing physicians, healthcare providers and the patients to whom our medicines are prescribed. Additionally, obtaining placement on national or local clinical guidelines/pathways, as well as coverage on third-party payor formularies, can impact our short and long-term financial performance.
Even with the requisite approvals from the FDA and comparable foreign regulatory authorities, the commercial success of our products or product candidates, if approved, will depend in part on the medical community, patients and third-party payers accepting our products and product candidates as medically useful, cost-effective and safe. Any product that we bring to the market may not gain market acceptance by physicians, patients, third-party payers and others in the medical community. The degree of market acceptance of our product LOQTORZI, or any of our product candidates, if approved for commercial sale, will depend on a number of factors, including:
| ● | the safety and efficacy of the product, as demonstrated in clinical studies, and potential advantages over competing treatments; |
| ● | the prevalence and severity of any side effects and any limitations or warnings contained in a product’s approved labeling; |
| ● | the clinical indications for which approval is granted; |
| ● | for our immuno-oncology product candidates, our ability to compete in a competitive immuno-oncology market that may differ from the biosimilar market; |
62
| ● | inclusion, in either parity or better position, on commonly accepted clinical guidelines or pathways that influence prescribing patterns or affect reimbursement; |
| ● | relative convenience, ease of administration and any real or perceived benefit from administration at home as opposed to in the clinic; |
| ● | prevalence of the disease or condition for which the product is approved; |
| ● | the cost of treatment, particularly in relation to competing treatments; |
| ● | 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; |
| ● | the extent to which the product is approved for inclusion on formularies of hospitals, integrated delivery networks and managed care organizations; |
| ● | publicity concerning our products or competing products and treatments; |
| ● | the extent to which third-party payers (including government and national/regional commercial plans) provide adequate third-party coverage and reimbursement for our products and product candidates, if approved; |
| ● | the price at which we sell our products; |
| ● | the potential impact of the IRA on the pharmaceutical industry and the market for biosimilars; |
| ● | the actions taken by current and future competitors to delay, restrict or block customer usage of the product; and |
| ● | our ability to maintain compliance with regulatory requirements. |
Market acceptance of any future product candidates, if approved, will not be fully known until after they are launched and may be negatively affected by a potential poor safety experience and the track record of other biosimilar and immuno-oncology products and product candidates. Further, continued market acceptance of UDENYCA and LOQTORZI, and any future product candidates that may be approved, depends on our efforts to educate the medical community and third-party payers on the benefits of our products and product candidates and will require significant resources from us and we have significantly less resources compared to large, well-funded pharmaceutical entities. Given the resource disparity, our outreach may have little success or may never be successful. If our products or any future product candidates that are approved fail to achieve an adequate level of acceptance by physicians, patients, third-party payers and others in the medical community, we will not be able to generate sufficient revenue to sustain profitability.
The third-party coverage and reimbursement status of our products are uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.
Pricing, coverage and reimbursement of our products, or any of our product candidates, if approved, may not be adequate to support our commercial infrastructure. The prices required to successfully compete may not continue to be sufficient to recover our development and manufacturing costs, and as a result, we may not be profitable in the future. Accordingly, the availability and adequacy of coverage and reimbursement by governmental and commercial payers are essential to enable provider/patient access to our products and our patient support services must be sufficiently scaled to meet the needs of patients receiving our products. Sales will depend substantially, both domestically and abroad, on the extent to which the costs of our products will be paid for by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations or reimbursed by government authorities, private health insurers and other third-party payers. If coverage and reimbursement are not available, or are available only to limited levels, or
63
become unavailable, we may not be able to successfully commercialize our products or any of our product candidates, if approved. Even if coverage is provided, the approved reimbursement amount may not be adequate to allow us to establish or maintain pricing sufficient to realize a return on our investment.
There is significant uncertainty related to third-party coverage and reimbursement of newly approved products. In the United States, third-party payers, including private and governmental payers such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs and biologics will be covered and reimbursed. The Medicare program covers certain individuals aged 65 or older or those who are disabled or suffering from end-stage renal disease. The Medicaid program, which varies from state to state, covers certain individuals and families who have limited financial means. The Medicare and Medicaid programs increasingly are used as models for how private payers and other governmental payers develop their coverage and reimbursement policies for drugs and biologics. It is difficult to predict what third-party payers will decide with respect to the coverage and reimbursement for any newly approved product. In addition, in the United States, no uniform policy of coverage and reimbursement for biologics exists among third-party payers. Therefore, coverage and reimbursement for biologics can differ significantly from payer to payer. As a result, the process for obtaining favorable coverage determinations often is time-consuming and costly and may require us to provide scientific and clinical support for the use of our products to each payer separately, with no assurance that coverage and adequate reimbursement will be obtained.
Effective January 2019, U.S. Centers for Medicare & Medicaid Services (“CMS”) assigned a product specific Q-Code to UDENYCA, which is necessary to enable providers to separately bill for UDENYCA to have its own reimbursement rate with Medicare or other third-party payers. However, reimbursement is not guaranteed and rates may vary based on product life cycle, site of care, type of payer, coverage decisions, and provider contracts. Furthermore, while payers have adopted the Q-Code assigned by CMS for UDENYCA, there remains uncertainty as to whether such payers will continue to cover and pay providers for the administration and use of the product with each patient or may favor competing products. If our products or any of our future product candidates, are not covered or adequately reimbursed by third-party payers, including Medicare, then the cost of the relevant product may be absorbed by healthcare providers or charged to patients. If this is the case, our expectations of the pricing we expect to achieve for such product and the related potential revenue may be significantly diminished.
Outside of the United States, pharmaceutical businesses are generally subject to extensive governmental price controls and other market regulations. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits.
Increasing efforts by governmental and third-party payers in the United States and abroad to control healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products approved and, as a result, they may not cover or provide adequate payment for our products or any of our product candidates. While cost containment practices generally benefit biosimilars, severe cost containment practices may adversely affect our product sales. Furthermore, the impact of the IRA on our business and the pharmaceutical industry generally is currently unknown. We expect to experience pricing pressures in connection with the sale of our products and any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes.
Our products and our product candidates, even if approved, will remain subject to regulatory scrutiny.
Our products and our product candidates, even If approved, will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, conduct of post-
64
marketing studies and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities.
Manufacturers and manufacturers’ facilities are required to comply with extensive FDA, and comparable foreign regulatory authority, requirements, including ensuring that quality control and manufacturing procedures conform to current Good Manufacturing Practices (“cGMP”) regulations. As such, we and our contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA, original BLA submitted under Section 351(a) of the Public Health Service Act (“PHSA”), Section 351(k) BLA or MAA. Accordingly, we and others with whom we work must continue to spend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control.
Any regulatory approvals that we or our collaboration partners receive for our product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval or may contain requirements for potentially costly additional clinical trials and surveillance to monitor the safety and efficacy of the product candidate. We will be required to report certain adverse events and production problems, if any, to the FDA and comparable foreign regulatory authorities. Any new legislation addressing drug safety issues could result in delays in product development or commercialization or increased costs to ensure compliance. We will have to comply with requirements concerning advertising and promotion for our products. Promotional communications with respect to prescription drugs are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved label. As such, we may not promote our products for indications or uses for which they do not have approval. If our product candidates are approved, we must submit new or supplemental applications and obtain approval for certain changes to the approved products, product labeling or manufacturing process. We or our collaboration partners could also be asked to conduct post-marketing clinical studies to verify the safety and efficacy of our products in general or in specific patient subsets. If original marketing approval is obtained via an accelerated biosimilar approval pathway, we could be required to conduct a successful post-marketing clinical study to confirm clinical benefit for our products. An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval.
If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency or problems with the facility where the product is manufactured or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market. If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other possibilities:
| ● | issue warning letters; |
| ● | impose civil or criminal penalties; |
| ● | suspend or withdraw regulatory approval; |
| ● | suspend any of our ongoing clinical studies; |
| ● | refuse to approve pending applications or supplements to approved applications submitted by us; |
| ● | impose restrictions on our operations, including closing our contract manufacturers’ facilities; or |
| ● | seize or detain products or require a product recall. |
Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Any failure to comply with ongoing regulatory requirements may significantly and adversely affect our ability to commercialize and generate revenue from our products. If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.
65
The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.
We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States, China or other foreign countries.
Disruptions at the FDA and other government agencies caused by funding shortages, government shut-downs or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, and conduct inspections of manufacturing facilities, or otherwise prevent new or modified products from being developed, or approved or commercialized in a timely manner or at all, which could negatively impact our business.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, government shut-downs, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions. Average review times at the FDA have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies may also slow the time necessary for new drugs and biologics or modifications to approved drugs and biologics to be reviewed or approved by necessary government agencies, which would adversely affect our business. For example, over the last several years, the United States government has periodically shut down and certain regulatory agencies, such as the FDA, had to furlough critical FDA employees and stop critical activities.
Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points. If a prolonged government shutdown occurs, or if further global health concerns emerge, such events could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Risks Related to Competitive Activity
Our biosimilar product faces significant competition from the reference product and from other biosimilar products or pharmaceuticals approved for the same indication as the originator product. Our product LOQTORZI and product candidate CHS-114, if approved, will face significant competition from other immuno-oncology biologics. If we fail to compete effectively, we may not achieve significant market penetration and expansion.
We operate in highly competitive pharmaceutical markets. Successful competitors in the pharmaceutical market have demonstrated the ability to effectively discover molecules, obtain patents, develop, test and obtain regulatory approvals for products, as well as an ability to effectively commercialize, market and promote approved products. Numerous companies, universities and other research institutions are engaged in developing, patenting, manufacturing and marketing of products competitive with those that we are developing. Many of these potential competitors are large, experienced multinational pharmaceutical and biotechnology companies that enjoy significant competitive advantages, such as substantially greater financial, research and development, legal, governmental affairs, manufacturing, personnel, and marketing resources, with additional benefits of mergers and acquisitions.
LOQTORZI recently entered a competitive market in the United States where a number of anti-PD-1 or PD-L1 antibody drugs have been approved by the FDA, although not in NPC, including the following marketed products from several competitors: Keytruda® (pembrolizumab) from Merck & Company, Inc. (“Merck”), Opdivo® (nivolumab) from Bristol-Myers Squibb Company (“BMS”), Tecentriq® (atezolizumab) from Genentech, Imfinzi® (durvalumab) from AstraZeneca plc (“AstraZeneca”), Bavencio® (avelumab) from EMD Serono Inc. and Pfizer, Libtayo® (cemiplimab-rwlc)
66
from Regeneron Pharmaceuticals, Inc. (“Regeneron”), Jemperli (dostarlimab-gxly) from GlaxoSmithKline plc (“GlaxoSmithKline”) and TEVIMBRA® (tislelizumab-jsgr) from BeiGene, Ltd. In addition to LOQTORZI, multiple other competitors are seeking to develop and approve novel anti-PD-1 or PD-L1 antibody drugs in the United States in the coming years, including but not limited to camrelizumab from Elevar Therapeutics, Inc. (in collaboration with Jiangsu Hengrui Pharmaceuticals Co., Ltd.). As the only immunotherapy approved by the FDA for the treatment of NPC, we believe LOQTORZI addresses a potentially high unmet need.
CHS-114, if approved, faces competition from programs in development specifically targeting CCR8, including those by Bristol-Myers Squibb Company, Gilead/Jounce, Shionogi, AbbVie, Bayer, F. Hoffmann-La Roche Ltd, Amgen, LaNova and Immunophage;
UDENYCA faces competition in the United States from Amgen, Biocon Biologics Inc. (“Biocon”), Sandoz International GmbH (“Sandoz”), Pfizer, Spectrum Pharmaceuticals, Inc. (“Spectrum”), Amneal Pharmaceuticals, Inc. (“Amneal”) and Fresenius Medical Care AG & Co. KGaA (“Fresenius”).
These companies may also have greater brand recognition and more experience in conducting preclinical testing and clinical trials of product candidates, obtaining FDA and other regulatory approvals of products and marketing and commercializing products once approved.
Additionally, many manufacturers of originator products have increasingly used legislative, regulatory and other means, such as litigation, to delay regulatory approval and to seek to restrict competition from manufacturers of biosimilars. These efforts may include or have included:
| ● | settling, or refusing to settle, patent lawsuits with biosimilar companies, resulting in such patents remaining an obstacle for biosimilar approval; |
| ● | submitting Citizen Petitions to request the FDA Commissioner to take administrative action with respect to prospective and submitted biosimilar applications; |
| ● | appealing denials of Citizen Petitions in United States federal district courts and seeking injunctive relief to reverse approval of biosimilar applications; |
| ● | restricting access to reference brand products for equivalence and biosimilarity testing that interferes with timely biosimilar development plans; |
| ● | attempting to influence potential market share by conducting medical education with physicians, payers, regulators and patients claiming that biosimilar products are too complex for biosimilar approval or are too dissimilar from originator products to be trusted as safe and effective alternatives; |
| ● | implementing payer market access tactics that benefit their brands at the expense of biosimilars; |
| ● | seeking state law restrictions on the substitution of biosimilar products at the pharmacy without the intervention of a physician or through other restrictive means such as excessive recordkeeping requirements or patient and physician notification; |
| ● | seeking federal or state regulatory restrictions on the use of the same non-proprietary name as the reference brand product for a biosimilar or interchangeable biologic; |
| ● | seeking changes to the United States Pharmacopeia, an industry recognized compilation of drug and biologic standards; |
| ● | obtaining new patents covering existing products or processes, which could extend patent exclusivity for a number of years or otherwise delay the launch of biosimilars; and |
| ● | influencing legislatures so that they attach special patent extension amendments to unrelated federal legislation. |
67
Our products and our product candidates, if approved, could face price competition from other products or biosimilars of the same reference products for the same indication. This price competition could exceed our capacity to respond, detrimentally affecting our market share and revenue as well as adversely affecting the overall financial health and attractiveness of the market for the biosimilar.
Competitors in the biosimilar market have the ability to compete on price through PBMs, payers and their third-party administrators, IDNs and hospitals who exert downward pricing pressure on our product offerings. It is possible our biosimilar competitors’ compliance with price discounting demands in exchange for market share or volume requirements could exceed our capacity to respond in kind and reduce market prices beyond our expectations. There could be similar price competition in the immuno-oncology market that could adversely affect our results in the future. Such practices may limit our ability to increase market share and may also impact profitability.
We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are similar, more advanced, less costly, easier to administer or more effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product candidates.
Many of our competitors have substantially greater financial, technical and other resources, including larger research and development, marketing and manufacturing organizations. Additionally, mergers and acquisitions in the pharmaceutical industry may result in even more resources being concentrated in our competitors. As a result, these companies may obtain regulatory approval more rapidly than we are able to and may be more effective in selling and marketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Our competitors may succeed in developing, acquiring or licensing on an exclusive basis, products that are more effective or less costly than any product candidate that we may develop; they may also obtain patent protection that could block our products; and they may obtain regulatory approval, product commercialization and market penetration earlier than we do. Our competitors may have products that are easier to administer than our products, which could adversely affect our results. Biosimilar or immuno-oncology product candidates developed by our competitors may render our potential product candidates uneconomical, less desirable or obsolete, and we may not be successful in marketing our product candidates against competitors.
If other competitors to toripalimab (in indications besides NPC), casdozokitug, CHS-1000 and CHS-114 are approved and successfully commercialized before toripalimab (in indications besides NPC), casdozokitug, CHS-1000 and CHS-114, our business would suffer.
There are a number of companies that currently commercialize PD-1/PD-L1 blocking antibodies or are developing such compounds for commercialization in the United States. If other competitors to toripalimab (in indications besides NPC), casdozokitug, CHS-1000 and CHS-114 are successfully commercialized before toripalimab (in indications besides NPC), casdozokitug, CHS-1000 and CHS-114, we may never achieve meaningful market share for these products, our revenue would be reduced and, as a result, our business, prospects and financial condition could suffer.
If an improved version of an originator product, such as Neulasta, is developed or if the market for the originator product significantly declines, sales of our biosimilar product may suffer.
Originator companies may develop improved versions of a reference product as part of a life cycle extension strategy and may obtain regulatory approval of the improved version under a new or supplemental BLA submitted to the applicable regulatory authority. Should the originator company succeed in obtaining an approval of an improved biologic product, it may capture a significant share of the collective reference product market in the applicable jurisdiction and significantly reduce the market for the reference product and thereby the potential size of the market for our biosimilar product. In addition, the improved product may be protected by additional patent rights that may subject our follow-on biosimilar to claims of infringement.
68
Biologic reference products may also face competition as technological advances are made that may offer patients a more convenient form of administration or increased efficacy or as new products are introduced. External developments can also result in changing preferences for convenient forms of administration of products that may impact our business. As new products are approved that compete with the reference product to our biosimilar product, sales of the reference originator product may be adversely impacted or rendered obsolete. If the market for the reference product is impacted, we may lose significant market share for our biosimilar product. As a result of the above factors, our business, prospects and financial condition could suffer.
Any product candidates for which we intend to seek approval as original biologic products may face competition sooner than anticipated.
Our development of novel biologic product candidates, such as casdozokitug and CHS-114, subjects us to additional risks relating to biosimilar competition. In particular, under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.
We believe that LOQTORZI and any of our future product candidates approved under an original BLA should qualify for the 12-year period of exclusivity. However, there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the FDA will not consider our product candidates to be reference products for competing products, potentially creating the opportunity for generic competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, could be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory factors that are still developing.
Risks Related to Our Ability to Hire and Retain Highly Qualified Personnel
We are highly dependent on the services of our key executives and personnel, including our President and Chief Executive Officer, Dennis M. Lanfear, and if we are not able to retain these members of our management or recruit additional management, product development and scientific personnel, our business will suffer.
We are highly dependent on the principal members of our management and scientific and technical staff. The loss of service of any of our management or key scientific and technical staff could harm our business. In addition, we are dependent on our continued ability to attract, retain and motivate highly qualified additional management, product development and scientific personnel. If we are not able to retain our management, particularly our President and Chief Executive Officer, Mr. Lanfear, and to attract, on acceptable terms, additional qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or grow.
Our future performance will also depend, in part, on our ability to successfully integrate newly hired executive officers into our management team and our ability to develop an effective working relationship among senior management. Our failure to integrate these individuals and create effective working relationships among them and other members of management could result in inefficiencies in the development and commercialization of our product candidates, harming future regulatory approvals, sales of our product candidates and our results of operations. Additionally, we do not currently maintain “key person” life insurance on the lives of our executives or any of our employees.
We will need to expand and effectively manage our managerial, scientific, operational, financial, commercial and other resources in order to successfully pursue our product development and commercialization efforts. Our success
69
also depends on our continued ability to attract, retain and motivate highly qualified management and technical personnel. We may not be able to attract or retain qualified management and scientific and product development personnel in the future due to the intense competition for qualified personnel among biotechnology, pharmaceutical and other businesses, particularly those located in the San Francisco Bay Area. We also use equity compensation as a part of a comprehensive compensation package for our personnel. The majority of our outstanding options have exercise prices that are above our current stock price. See the tables describing our outstanding stock options in Note 12. Stock-Based Compensation and Employee Benefits to our financial statements included in our Annual Report for the Fiscal Year ended December 31, 2023. If we are not able to attract, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
We may need to expand our organization, particularly due to employee turnover, and we may experience difficulties in managing this turnover, which could disrupt our operations.
As of September 30, 2024, we had 235 full-time and part-time employees. As our development and commercialization plans and strategies develop and evolve from time to time and as we experience turnover, we may need to hire additional people in the future. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these hiring activities. We may not be able to effectively manage during a period of employee turnover, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our current and potential future product candidates. If our management is unable to effectively manage our turnover, our expenses may increase more than expected, our ability to generate or grow revenue could be reduced. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.
Risks Related to Reliance on Third Parties
We rely on third parties, and in some cases a single third party, to manufacture nonclinical, clinical and commercial drug supplies of our products and product candidates and to store critical components of our products and product candidates for us. Our business could be harmed if those third parties fail to provide us with sufficient quantities of products and product candidates or fail to do so at acceptable quality levels or prices.
We do not currently have the infrastructure or capability internally to manufacture supplies of our product candidates for use in our nonclinical and clinical studies, and we lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale. We rely on third-party manufacturers to manufacture and supply us with our product candidates for our preclinical and clinical studies as well as to maintain commercial supplies of our product candidates. Successfully transferring complicated manufacturing techniques to contract manufacturing organizations and scaling up these techniques for commercial quantities is time consuming and we may not be able to achieve such transfer or do so in a timely manner. Moreover, the availability of contract manufacturing services for protein-based therapeutics is highly variable and there are periods of relatively abundant capacity alternating with periods in which there is little available capacity. If our need for contract manufacturing services increases during a period of industry-wide production capacity shortage, we may not be able to produce our product candidates on a timely basis or on commercially viable terms. Although we will plan accordingly and generally do not begin a clinical study unless we believe we have a sufficient supply of a product candidate to complete such study, any significant delay or discontinuation in the supply of a product candidate for an ongoing clinical study due to the need to replace a third-party manufacturer could considerably delay completion of our clinical studies, product testing and potential regulatory approval of our product candidates, which could harm our business and results of operations.
70
Reliance on third-party manufacturers entails additional risks, including reliance on the third party for regulatory compliance and quality assurance, the possible breach of the manufacturing agreement by the third party and the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. In addition, third-party manufacturers may not be able to comply with cGMP or similar regulatory requirements outside the United States. Our failure or the failure of our third-party manufacturers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our product candidates or any other product candidates or products that we may develop. Any failure or refusal to supply the components for our product candidates that we may develop could delay, prevent or impair our clinical development or commercialization efforts. If our contract manufacturers were to breach or terminate their manufacturing arrangements with us, the development or commercialization of the affected products or product candidates could be delayed, which could have an adverse effect on our business. Any change in our manufacturers could be costly because the commercial terms of any new arrangement could be less favorable and because the expenses relating to the transfer of necessary technology and processes could be significant.
On September 13, 2024, we announced that our third-party labeling and packaging CMO for UDENYCA delayed production of UDENYCA due to over-commitments and capacity constraints. These delays caused a temporary UDENYCA supply interruption. The CMO recently informed us that production will resume later in the week of November 4, 2024. An additional final packaging and labeling CMO has already started production testing and is expected to start manufacturing saleable product by the end of 2024. Commercial supply from that CMO is expected to commence in the first quarter of 2025, subject to FDA authorization. The length of the temporary UDENYCA supply interruption will depend on the number of future manufacturing slots scheduled by the CMOs and whether future manufacturing slots are successfully completed on schedule or at all. Although we believe that the steps that we have taken will help to lessen the impact of the temporary UDENYCA supply interruption, this manufacturing depends on third parties and we cannot make any assurances about the timing of the resolution of the issue. Similar circumstances could arise in the future that could result in supply disruption to our products and product candidates. Supply disruptions like this will have an adverse impact on our financial statements and reputation.
If any of our product candidates are approved, in order to produce the quantities necessary to meet anticipated market demand, any contract manufacturer that we engage may need to increase manufacturing capacity. If we are unable to build and stock our product candidates in sufficient quantities to meet the requirements for the launch of these candidates or to meet future demand, our revenue and gross margins could be adversely affected. We cannot be certain that we will be able to obtain long-term supply arrangements for our product candidates or materials used to produce them on acceptable terms, if at all. If we are unable to arrange for third-party manufacturing, or to do so on commercially reasonable terms, we may not be able to complete development of our product candidates or market them.
We rely on third parties to conduct our nonclinical and clinical studies and perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.
We have relied upon and plan to continue to rely upon third-party CROs to monitor and manage data for our ongoing nonclinical and clinical programs. We rely on these parties for execution of our nonclinical and clinical studies and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards and our reliance on the CROs does not relieve us of our regulatory responsibilities. We and our CROs and other vendors are required to comply with cGMP, GCP, and good laboratory practices (“GLP”), which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the EEA and comparable foreign regulatory authorities for all of our product candidates in clinical development. Regulatory authorities enforce these regulations through periodic
71
inspections or remote regulatory assessments (“RRAs”) of study sponsors, principal investigators, study sites and other contractors. If we, any of our CROs, service providers or investigators fail to comply with applicable regulations or GCPs, the data generated in our nonclinical and clinical studies may be deemed unreliable and the FDA, EMA or comparable foreign regulatory authorities may require us to perform additional nonclinical and clinical studies before approving our marketing applications. There can be no assurance that upon inspection or conclusion of an RRA by a given regulatory authority, such regulatory authority will determine that any of our clinical studies comply with GCP regulations. In addition, our clinical studies must be conducted with product generated under cGMP regulations. Failure to comply by any of the participating parties or ourselves with these regulations may require us to repeat clinical studies, which would delay the regulatory approval process. Moreover, our business may be implicated if our CROs or any other participating parties violate federal or state fraud and abuse or false claims laws and regulations or healthcare or data privacy and security laws.
If any of our relationships with these third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or do so on commercially reasonable terms. In addition, our CROs are not our employees, and except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our on-going nonclinical and clinical programs. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or for other reasons, our clinical studies may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. CROs may also generate higher costs than anticipated. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.
Switching or adding additional CROs involves additional cost and requires management time and focus. In addition, a transition period is necessary when a new CRO commences work, which can materially impact our ability to meet our desired clinical development timelines. Though we strive to carefully manage our relationships with our CROs, there can be no assurance that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, prospects and financial condition.
We are dependent on Junshi Biosciences and Orox / Laboratorio Gador S.A. for the commercialization of our product candidates in certain markets and we intend to seek additional commercialization partners for major markets, and the failure to commercialize in those markets could have a material adverse effect on our business and operating results.
We have an exclusive license from Junshi Biosciences to develop and commercialize LOQTORZI in the United States and Canada. Our licensors are responsible for supplying us with drug substance and final drug products.
Our exclusive licensee, Orox / Laboratorio Gador S.A., is responsible for commercialization of certain of our products and product candidates, including UDENYCA, in certain Caribbean and Latin American countries (excluding Brazil, and in the case of UDENYCA, also excluding Argentina).
Our licenses with Junshi Biosciences, Orox / Laboratorio Gador S.A., or other future license or collaboration agreements, may not result in positive outcomes. Factors that may affect the success of our licenses and collaborations include, but are not limited to, the following:
| ● | our existing and potential collaboration partners may fail to provide sufficient amounts of commercial products, including because of import restrictions, or they may be ineffective in doing so; |
| ● | our existing and potential collaboration partners may fail regulatory inspections or RRAs which may preclude or delay the delivery of commercial products; |
| ● | our existing and potential collaboration partners may fail to exercise commercially reasonable efforts to market and sell our products in their respective licensed jurisdictions or they may be ineffective in doing so; |
72
| ● | our existing and potential licensees and collaboration partners may incur financial, legal or other difficulties that force them to limit or reduce their participation in our joint projects; |
| ● | our existing and potential licensees and collaboration partners may terminate their licenses or collaborations with us, which could make it difficult for us to attract new partners or adversely affect perception of us in the business and financial communities; and |
| ● | our existing and potential licensees and collaboration partners may choose to pursue alternative, higher priority programs, which could affect their commitment to us. |
Moreover, any disputes with our licensees and collaboration partners could substantially divert the attention of our senior management from other business activities and may require us to incur substantial costs associated with litigation or arbitration proceedings. If we cannot maintain successful license and collaboration arrangements, our business, financial condition and operating results may be adversely affected.
There are risks and uncertainties associated with the CIMERLI TSA and YUSIMRY TSA, one or more of which could have a material adverse effect on our business, financial condition, results of operations, cash flows or stock price.
In connection with the CIMERLI Sale, we and Sandoz entered into the CIMERLI TSA pursuant to which we will provide certain business support services to Sandoz for a defined period not expected to extend beyond December 31, 2024. In connection with the YUSIMRY Sale, we and HKF entered into the YUSIMRY TSA pursuant to which we will provide certain business support services to HKF for a defined period not expected to extend beyond December 31, 2024. There are a number of risks and uncertainties associated with the CIMERLI TSA and YUSIMRY TSA, which could have a material adverse effect on our business, financial condition, results of operations, cash flows or stock price, including, among other things:
| ● | the need to expend employee time and attention on the CIMERLI TSA and YUSIMRY TSA that could be spent on other areas of our business; |
| ● | the need to provide significant support services under the CIMERLI TSA and YUSIMRY TSA on behalf of Sandoz and HKF, respectively, such as logistics, payments, accounting, payroll, commercial, regulatory and manufacturing; |
| ● | the exposure to the financial status of Sandoz and HKF for any payments due to us under the CIMERLI TSA and YUSIMRY TSA, respectively, which may be significant; and |
| ● | potential unanticipated costs to us under the CIMERLI TSA and YUSIMRY TSA. |
Risks Related to Manufacturing and Supply Chain
We are subject to a multitude of manufacturing risks and the risks of inaccurately forecasting sales of our products. We also need to make a determination of excess or obsolete inventory that requires significant judgment and may result in write-downs of inventory, charges related to firm purchase commitments, or both. Any adverse developments affecting the manufacturing operations of our products and product candidates could substantially increase our costs and limit supply for our products and product candidates.
The process of manufacturing our products and product candidates is complex, highly regulated and subject to several risks, including but not limited to:
| ● | product loss due to contamination, equipment failure or improper installation or operation of equipment or vendor or operator error; |
| ● | equipment failures, labor shortages, natural disasters, power failures and numerous other factors associated with the manufacturing facilities in which our product candidates are produced, and potentially exacerbated |
73
| by climate change; and |
| ● | disruption of supply chains for critical and specialized raw materials, delays in regulatory inspections of manufacturing and testing facilities, and reduced manufacturing capacities created by global events such as the COVID-19 pandemic and the ongoing conflict in Ukraine. |
We have experienced reduced production yields, product defects and other supply disruptions. For example, we have experienced failures with respect to the manufacturing of certain lots of each of our products and product candidates resulting in delays prior to our taking corrective action. Additionally, if microbial, viral or other contaminations are discovered in our products or product candidates or in the manufacturing facilities in which our products or product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
Any adverse developments affecting manufacturing operations for our products and product candidates, including due to sudden or long-term changes in weather patterns or conflicts in particular geographic areas, may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls or other interruptions in the supply of our products and product candidates. We also need to make a determination of excess or obsolete inventory that requires significant judgment and includes consideration of many factors, such as estimates of future product demand, current and future market conditions, product expiration information and potential product obsolescence, among others. Although we believe that the assumptions we use in estimating potential inventory write-downs are reasonable, if actual market conditions are less favorable than projected by us, write-downs of inventory, charges related to firm purchase commitments, or both may be required which would be recorded as cost of goods sold in our consolidated statements of operations. Adverse developments affecting our assumptions of the level and timing of demand for our products include those that are outside of our control such as the actions taken by competitors and customers, the direct or indirect effects of the COVID-19 pandemic, and other factors. We may have to take inventory write-downs and incur other charges and expenses, such as charges related to firm purchase commitments, for products that are manufactured in reliance on a forecast that proves to be inaccurate because we do not sell as many units as forecasted. For example, during the third quarter of 2022, we recorded a $26.0 million write-down of UDENYCA inventory that was at risk of expiration and during the fourth quarter of 2023, we recorded a $47.0 million charge for the write-down of slow moving YUSIMRY inventory and the related partial recognition of certain firm purchase commitments. Although we believe that the assumptions that we use in estimating inventory write-downs are reasonable, additional write-downs of inventory may be required in the future if actual market conditions are less favorable than our projections, which could materially and adversely impact our financial results. In addition to such write-downs, we may also have to incur charges and expenses related to firm purchase commitments or for product candidates that fail to meet specifications, undertake costly remediation efforts or seek costlier manufacturing alternatives.
On September 13, 2024, we announced that our third-party labeling and packaging CMO for UDENYCA delayed production of UDENYCA due to over-commitments and capacity constraints. These delays caused a temporary UDENYCA supply interruption. The CMO recently informed us that production will resume later in the week of November 4, 2024. An additional final packaging and labeling CMO has already started production testing and is expected to start manufacturing saleable product by the end of 2024. Commercial supply from that CMO is expected to commence in the first quarter of 2025, subject to FDA authorization. Although we currently believe that our estimates for the timing of UDENYCA commercial supply availability from our two labeling and packaging CMOs are reasonable, any delays from third parties would result in delays to UDENYCA commercial supply availability. The length of the temporary UDENYCA supply interruption will depend on the number of future manufacturing slots scheduled by the CMOs and whether future manufacturing slots are successfully completed on schedule or at all.
74
We currently engage single suppliers for manufacture, clinical trial services, formulation development and product testing of our product candidates. The loss of any of these suppliers or vendors could materially and adversely affect our business.
For our products and our product candidates, we currently engage a distinct vendor or service provider for each of the principal activities supporting our manufacture and development of these products, such as manufacture of the biological substance present in each of the products, manufacture of the final filled and finished presentation of these products, as well as laboratory testing, formulation development and clinical testing of these products. Because we currently have engaged a limited number of back-up suppliers or vendors for these single-sourced services, and although we believe that there are alternate sources that could fulfill these activities, we cannot make any assurances that identifying and establishing relationships with alternate suppliers and vendors would not result in significant delay in the development of our product candidates. Additional delays or cost increases could occur due to the direct or indirect effects of the COVID-19 pandemic and the ongoing conflict in Ukraine. Additionally, we may not be able to enter into arrangements with alternative service providers on commercially reasonable terms or at all. A delay in the development of our products and product candidates, or having to enter into a new agreement with a different third party on less favorable terms than we have with our current suppliers, could have a material adverse impact on our business.
For example, on September 13, 2024, we announced that our third-party labeling and packaging CMO for UDENYCA delayed production of UDENYCA due to over-commitments and capacity constraints. These delays caused a temporary UDENYCA supply interruption. The CMO recently informed us that production will resume later in the week of November 4, 2024. An additional final packaging and labeling CMO has already started production testing and is expected to start manufacturing saleable product by the end of 2024. Commercial supply from that CMO is expected to commence in the first quarter of 2025, subject to FDA authorization. Although we currently believe that our estimates for the timing of UDENYCA commercial supply availability from our two labeling and packaging CMOs are reasonable, any delays from third parties would result in delays to UDENYCA commercial supply availability. Sales of UDENYCA provided 93.4% of our net revenue in the three months ended September 30, 2024. The UDENYCA supply interruption will have a material adverse impact on our business, reputation and financial results based on the current expected time period until we can restore product availability and if the UDENYCA supply interruption takes longer than currently expected to resolve, the adverse impact is expected to greatly increase.
We and our collaboration partners and contract manufacturers are subject to significant regulation with respect to manufacturing our product candidates. The manufacturing facilities on which we rely may not continue to meet regulatory requirements or may not be able to meet supply demands.
All entities involved in the preparation of therapeutics for clinical studies or commercial sale, including our existing contract manufacturers for our product candidates, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in clinical studies must be manufactured in accordance with cGMP. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our product candidates that may not be detectable in final product testing. We, our collaboration partners, or our contract manufacturers must supply all necessary documentation in support of a Section 351(k) BLA, original BLA, NDA or MAA on a timely basis and must adhere to GLP and cGMP regulations enforced by the FDA and other regulatory agencies through their facilities inspection program. Some of our contract manufacturers may have never produced a commercially approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvals to do so. The facilities and quality systems of some or all of our collaboration partners and third-party contractors must successfully complete a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are completely dependent on, our contract
75
manufacturing partners for compliance with the regulatory requirements. If these facilities do not successfully complete a pre-approval plant inspection, regulatory approval of the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever.
The regulatory authorities also may, at any time following approval of a product for sale, inspect, audit or initiate an RRA of the manufacturing facilities of our collaboration partners and third-party contractors. If any such inspection, audit or RRA identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection, audit or RRA, we or the relevant regulatory authority may require remedial measures that may be costly or time consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or third parties with whom we contract could materially harm our business.
If we, our collaboration partners or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA or other applicable regulatory authority can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new product candidate, withdrawal of an approval or suspension of production. As a result, our business, financial condition and results of operations may be materially harmed.
Additionally, if a manufacturer cannot meet the supply demand, supply from an alternative manufacturer would require the submission of a BLA/NDA supplement or MAA Variation (or equivalent foreign regulatory filing) which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines. For example, there is currently a temporary UDENYCA supply interruption. An additional final packaging and labeling CMO has already started production testing and is expected to start manufacturing saleable product by the end of 2024. Commercial supply from that CMO is expected to commence in the first quarter of 2025, subject to FDA authorization. The length of the temporary UDENYCA supply interruption will depend on the number of future manufacturing slots scheduled by the CMOs and whether future manufacturing slots are successfully completed on schedule or at all. Although we believe that the steps that we have taken will help to lessen the impact of the temporary UDENYCA supply interruption, this manufacturing depends on third parties and we cannot make any assurances about the timing of the resolution of the issue.
These factors could cause us to incur additional costs and could cause the delay or termination of clinical studies, regulatory submissions, required approvals or commercialization of our product candidates. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical studies may be delayed or we could lose potential revenue.
The structure of complex proteins used in protein-based therapeutics is inherently variable and highly dependent on the processes and conditions used to manufacture them. If we are unable to develop manufacturing processes that achieve a requisite degree of biosimilarity to the originator drug, and within a range of variability considered acceptable by regulatory authorities, we may not be able to obtain regulatory approval for any biosimilar product candidate.
Protein-based therapeutics are inherently heterogeneous and their structures are highly dependent on the production process and conditions. Products from one production facility can differ within an acceptable range from those produced in another facility. Similarly, physicochemical differences can also exist among different lots produced within a single facility. The physicochemical complexity and size of biologic therapeutics create significant technical and scientific challenges in the context of their replication as biosimilar products.
The inherent variability in protein structure from one production lot to another is a fundamental consideration with respect to establishing biosimilarity to an originator product to support regulatory approval requirements. For example, the glycosylation of the protein, meaning the manner in which sugar molecules are attached to the protein
76
backbone of a therapeutic protein when it is produced in a living cell, is critical to therapeutic efficacy, half-life, efficacy and even safety of the therapeutic and is therefore a key consideration for biosimilarity. Defining and understanding the variability of an originator molecule in order to match its glycosylation profile requires significant skill in cell biology, protein purification and analytical protein chemistry. Furthermore, manufacturing proteins with reliable and consistent glycosylation profiles at scale is challenging and highly dependent on the skill of the cell biologist and process scientist.
There are extraordinary technical challenges in developing complex protein-based therapeutics that not only must achieve an acceptable degree of similarity to the originator molecule in terms of characteristics such as the unique glycosylation pattern, but also the ability to develop manufacturing processes that can replicate the necessary structural characteristics within an acceptable range of variability sufficient to satisfy regulatory authorities.
Given the challenges caused by the inherent variability in protein production, we may not be successful in developing any biosimilar product candidates if regulators conclude that we have not achieved a sufficient level of biosimilarity to the originator product, or that the processes we use are unable to generate our products within an acceptable range of variability.
Risks Related to Adverse Events
Our products or our product candidates may cause undesirable side effects or have other properties that could, as applicable, delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if granted.
As with most pharmaceutical products, use of our products or our product candidates could be associated with side effects or adverse events, which can vary in severity (from minor reactions to death) and frequency (infrequent or prevalent). Side effects or adverse events associated with the use of our product candidates may be observed at any time, including in clinical trials or when a product is commercialized. Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical studies and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities. Results of our studies could reveal a high and unacceptable severity and prevalence of side effects such as toxicity or other safety issues and could require us or our collaboration partners to perform additional studies or halt development or sale of these product candidates or expose us to product liability lawsuits, which will harm our business. In such an event, we may be required by regulatory agencies to conduct additional animal or human studies regarding the safety and efficacy of our product candidates, which we have not planned or anticipated or our studies could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny or withdraw approval of our product candidates for any or all targeted indications. There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any other regulatory agency in a timely manner, if ever, which could harm our business, prospects and financial condition.
Additionally, product quality characteristics have been shown to be sensitive to changes in process conditions, manufacturing techniques, equipment or sites and other such related considerations, hence any manufacturing process changes we implement prior to or after regulatory approval could impact product safety and efficacy.
Drug-related side effects could affect patient recruitment for clinical trials, the ability of enrolled patients to complete our studies or result in potential product liability claims. We currently carry product liability insurance and we are required to maintain product liability insurance pursuant to certain of our license agreements. We believe our product liability insurance coverage is sufficient in light of our current clinical programs; however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. A successful product liability claim or series of claims brought against us could adversely affect our results of operations and business. In addition, regardless of merit or eventual outcome, product liability claims may result in impairment of our business reputation, withdrawal of clinical study participants, costs due to related litigation, distraction of management’s attention from our primary business, initiation of investigations by regulators, substantial monetary
77
awards to patients or other claimants, the inability to commercialize our product candidates and decreased demand for our product candidates, if approved for commercial sale.
Additionally, if one or more of our product candidates receives marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including but not limited to:
| ● | regulatory authorities may withdraw approvals of such product; |
| ● | regulatory authorities may require additional warnings on the label; |
| ● | we may be required to create a REMS plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers or other elements to assure safe use; |
| ● | we could be sued and held liable for harm caused to patients; and |
| ● | our reputation may suffer. |
Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, results of operations and prospects.
If we receive approval for our product candidates, regulatory agencies including the FDA and foreign regulatory agencies, regulations require that we report certain information about adverse medical events if those products may have caused or contributed to those adverse events. The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event. We may fail to report adverse events we become aware of within the prescribed timeframe. We may also fail to appreciate that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we fail to comply with our reporting obligations, the FDA or foreign regulatory agencies could take action including criminal prosecution, the imposition of civil monetary penalties, seizure of our products or extended delay in approval or clearance of future products.
Adverse events involving an originator product, other biosimilars of such originator product or other anti-PD-1 or PD-L1 antibody product may negatively affect our business.
In the event that use of an originator product, other biosimilar for such originator product, or anti-PD-1 or PD-L1 antibody product results in unanticipated side effects or other adverse events, it is likely that our product will be viewed comparably and may become subject to the same scrutiny and regulatory sanctions as the originator product, other biosimilar, or other anti-PD-1 or PD-L1 antibody product, as applicable. Accordingly, we may become subject to regulatory supervisions, clinical holds, product recalls or other regulatory actions for matters outside of our control that affect the originator product, other biosimilar, or other anti-PD-1 or PD-L1 antibody product, as applicable, if and until we are able to demonstrate to the satisfaction of our regulators that our product is not subject to the same issues leading to the regulatory action as the originator product or other biosimilar, or other anti-PD-1 or PD-L1 antibody product, as applicable.
Risks Related to Intellectual Property
If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed. Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
Our commercial success depends in large part on avoiding infringement of the patents and proprietary rights of third parties. There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the pharmaceutical industry, including patent infringement lawsuits, interferences, oppositions and
78
reexamination proceedings before the USPTO and corresponding foreign patent offices. Numerous United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing product candidates. As the pharmaceutical industry expands and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties.
Our research, development and commercialization activities may infringe or otherwise violate or be claimed to infringe or otherwise violate patents owned or controlled by other parties. The company that originated the product for which we introduced a biosimilar version, such as Amgen, as well as other competitors (including other companies developing biosimilars) have developed, and are continuing to develop, worldwide patent portfolios of varying sizes and breadth, many of which are in fields relating to our business, and it may not always be clear to industry participants, including us, which patents cover various types of products or methods of use.
Third parties may assert that we are employing their proprietary technology without authorization. We are aware of third-party patents or patent applications with claims, for example, to compositions, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. While we have conducted freedom to operate analyses with respect to our products and our product candidates, including our in-licensed biosimilar candidates, as well as our pipeline candidates, we cannot guarantee that any of our analyses are complete and thorough, nor can we be sure that we have identified each patent and pending application in the United States and abroad that is relevant or necessary to the commercialization of our product candidates. Moreover, because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents covering our product candidates. With respect to products we are evaluating for inclusion in our future product pipeline, our freedom to operate analyses, including our research on the timing of potentially relevant patent expirations, are ongoing.
There may also be patent applications that have been filed but not published and if such applications issue as patents, they could be asserted against us. For example, in most cases, a patent filed today would not become known to industry participants for at least 18 months given patent rules applicable in most jurisdictions, which do not require publication of patent applications until 18 months after filing. Moreover, some United States patents may issue without any prior publication in cases where the patent applicant does not also make a foreign filing. We may also face claims from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may have no deterrent effect. In addition, coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. If we are sued for patent infringement, we would need to demonstrate that our product candidates, products or methods either do not infringe the patent claims of the relevant patent or that the patent claims are invalid or unenforceable, and we may not be able to do this. Proving that a patent is invalid or unenforceable is difficult. For example, in the United States, proving invalidity requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents. Also, in proceedings before courts in Europe, the burden of proving invalidity of the patent usually rests on the party alleging invalidity. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on us. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.
Third parties could bring claims against us that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial monetary damages. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit. Ultimately, we could be prevented from commercializing a product or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on commercially acceptable terms or at all. If, as a result of patent infringement claims or to avoid potential claims, we choose or are required to seek licenses from third parties, these licenses may not be available on acceptable terms or at all. Even if we are able to obtain a license, the license may obligate us to pay substantial license fees or royalties or both, and the rights granted to us might be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Parties making claims against us may obtain injunctive or
79
other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would likely involve substantial litigation expense and would likely be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may, in addition to being blocked from the market, have to pay substantial monetary damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
In addition to infringement claims against us, we may become a party to other patent litigation and other proceedings, including interference, IPR, derivation or post-grant proceedings declared or granted by the USPTO and similar proceedings in foreign countries, regarding intellectual property rights with respect to our current or future products. An unfavorable outcome in any such proceeding could require us to cease using the related technology or to attempt to license rights to it from the prevailing party or could cause us to lose valuable intellectual property rights. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms, if any license is offered at all. Litigation or other proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. We may also become involved in disputes with others regarding the ownership of intellectual property rights. For example, we jointly develop intellectual property with certain parties, and disagreements may therefore arise as to the ownership of the intellectual property developed pursuant to these relationships. If we are unable to resolve these disputes, we could lose valuable intellectual property rights.
Third parties may submit applications for patent term extensions in the United States or other jurisdictions where similar extensions are available or Supplementary Protection Certificates in the E.U. states and Switzerland seeking to extend certain patent protection, which, if approved, may interfere with or delay the launch of one or more of our products.
The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Patent litigation and other proceedings may fail, and even if successful, may result in substantial costs and distract our management and other employees. The companies that originated the products for which we intend to introduce biosimilar versions, as well as other competitors (including other biosimilar companies) may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace.
We do not know whether any of our pending patent applications will result in the issuance of any patents or whether the rights granted under any patents issuing from these applications will prevent any of our competitors from marketing similar products that may be competitive with our own. Moreover, even if we do obtain issued patents, they will not guarantee us the right to use our patented technology for commercialization of our product candidates. Third parties may have blocking patents that could prevent us from commercializing our own products, even if our products use or embody our own, patented inventions.
The validity and enforceability of patents are generally uncertain and involve complex legal and factual questions. Any patents that may be issued on our pending applications may be challenged, invalidated or circumvented, which could limit our ability to stop competitors from marketing products similar to ours. Furthermore, our competitors may develop similar or alternative technologies not covered by any patents that may issue to us.
For technologies for which we do not seek patent protection, we may rely on trade secrets to protect our proprietary position. However, trade secrets are difficult to protect. We seek to protect our technology and product candidates, in part, by entering into confidentiality agreements with those who have access to our confidential information, including our employees, consultants, advisors, contractors or collaborators. We also seek to preserve the integrity and confidentiality of our proprietary technology and processes by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these
80
individuals, organizations and systems, agreements or security measures may be breached and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, consultants, advisors, contractors and collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
We may be involved in lawsuits or IPR proceedings to protect or enforce our patents, which could be expensive, time consuming and unsuccessful.
We may discover that competitors are infringing our issued patents. Expensive and time-consuming litigation may be required to abate such infringement. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. If we or one of our collaboration partners were to initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including but not limited to lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could include an allegation that someone involved in the prosecution of the patent withheld relevant or material information related to the patentability of the invention from the USPTO or made a misleading statement during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Interference proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if we cannot obtain a license from the prevailing party on commercially reasonable terms. Third parties may request an IPR of our patents in the USPTO. An unfavorable decision may result in the revocation of our patent or a limitation to the scope of the claims of our patents. Our defense of litigation, interference or IPR proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties or enter into development partnerships that would help us bring our product candidates to market.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during any litigation we initiate to enforce our patents. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
We employ individuals, retain independent contractors and consultants and members on our board of directors or scientific advisory board who were previously employed at universities or other pharmaceutical companies, including our competitors or potential competitors. For example, our Chief Executive Officer, Dennis M. Lanfear is a former employee of Amgen. Mr. Lanfear was employed at Amgen during periods when Amgen’s operations included the development and commercialization of Neulasta. Senior members of our commercial team and medical affairs team who were responsible for the launch of additional presentations of UDENYCA formerly held positions at Amgen. Our board of directors and scientific advisory board include members who were former employees of Amgen and Abbott Laboratories. Although we have procedures in place to try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees or consultants have inadvertently or otherwise used or disclosed intellectual property, including trade
81
secrets or other proprietary information, of a former employer or other third parties. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
On March 3, 2017, Amgen filed an action against us, KBI Biopharma, our employee Howard S. Weiser and Does 1-20 in the Superior Court of the State of California, County of Ventura. The complaint, which was amended, alleged that we engaged in unfair competition and improperly solicited and hired certain former Amgen employees in order to acquire and access trade secrets and other confidential information belonging to Amgen. The complaint, as amended, sought injunctive relief and monetary damages. On May 2, 2019, we and Amgen settled the trade secret action brought by Amgen. The details of the settlement are confidential but we will continue to market UDENYCA and began paying a mid-single digit royalty to Amgen for five years starting on July 1, 2019 until July 1, 2024.
If we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
We are a party to certain non-exclusive intellectual property license agreements with certain vendors that are important to our business, and we expect to enter into additional license agreements in the future. Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty and other obligations on us. If we fail to comply with our obligations under these agreements or we are subject to a bankruptcy, we may be required to make certain payments to the licensor, we may lose the license or the licensor may have the right to terminate the license, in which event we would not be able to develop or market products covered by the license. Additionally, the milestone and other payments associated with these licenses will make it less profitable for us to develop our product candidates.
In the event we breach any of our obligations related to such agreements, we may incur significant liability to our licensing partners. Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:
| ● | the scope of rights granted under the license agreement and other interpretation-related issues; |
| ● | the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
| ● | the sublicensing of patents and other rights; |
| ● | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
| ● | the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and |
| ● | the priority of invention of patented technology. |
If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates and that could have a material adverse effect on our business.
We may not be successful in obtaining or maintaining necessary rights to our products and product candidates through acquisitions and in-licenses.
We currently have rights to certain intellectual property, through licenses from third parties and under patent applications that we own, to develop and commercialize our products and product candidates. Because we may find that our programs require the use of proprietary rights held by third parties, the growth of our business may depend in part
82
on our ability to acquire, in-license or use these proprietary rights. We may be unable to acquire or in-license compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, financial resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. We may also get into disputes or litigation with third parties from whom we license intellectual property rights necessary for the sale of our products.
If we are unable to successfully obtain required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of that program and our business and financial condition could suffer.
Our ability to market our biosimilar products in the United States may be significantly delayed or prevented by the BPCIA patent dispute resolution mechanism.
The BPCIA created an elaborate and complex patent dispute resolution mechanism for biosimilars that, if we choose to implement it, could prevent us from launching our product candidates in the United States or could substantially delay such launches. However, even if we elect not to implement this mechanism, the launch of our products in the United States could still be prevented or substantially delayed by intellectual property disputes with originator companies that market the reference products on which our biosimilar products are based.
The BPCIA establishes a patent disclosure and briefing process between the biosimilar applicant and the originator that is demanding and time-sensitive. While certain aspects of this process are still being tested in the federal courts, the United States Supreme Court, as discussed further below, ruled in 2017 that this process is not mandatory, such that a biosimilar applicant may elect to engage in this process, but is not required to do so. The following is an overview of the patent exchange and patent briefing procedures established by the BPCIA for biosimilar applicants that elect to employ them:
| 1. | Disclosure of the Biosimilar Application. Within 20 days after the FDA publishes a notice that its application has been accepted for review, a Section 351(k) biosimilar applicant may elect to provide a copy of its application to the originator if it chooses to engage in the BPCIA patent exchange mechanism. |
| 2. | Identification of Pertinent Patents. Within 60 days of the date of receipt of the application the originator must identify patents owned or controlled by the originator, which it believes could be asserted against the biosimilar applicant. |
| 3. | Statement by the Biosimilar Applicant. Following the receipt of the originator’s patent list, the biosimilar applicant must state either that it will not market its product until the relevant patents have expired or alternatively provide its arguments that the patents are invalid, unenforceable or would not be infringed by the proposed biosimilar product candidate. The biosimilar applicant may also provide the originator with a list of patents it believes the brand-name firm could assert against the reference product. |
| 4. | Statement by the Originator. In the event the biosimilar applicant has asserted that the patents are invalid, unenforceable or would not be infringed by the proposed follow-on product, the originator must provide the biosimilar applicant with a response within 60 days. The response must provide the legal and factual basis of the opinion that such patent will be infringed by the commercial marketing of the proposed biosimilar. |
| 5. | Patent Resolution Negotiations. If the originator provides its detailed views that the proposed biosimilar would infringe valid and enforceable patents, then the parties are required to engage in good faith negotiations to identify which of the discussed patents will be the subject of a patent infringement action. If the parties agree on the patents to be litigated, the brand-name firm must bring an action for patent |
83
| infringement within 30 days. |
| 6. | Simultaneous Exchange of Patents. If those negotiations do not result in an agreement within 15 days, then the biosimilar applicant must notify the originator of how many patents (but not the identity of those patents) that it wishes to litigate. Within five days, the parties are then required to exchange lists identifying the patents to be litigated. The number of patents identified by the originator may not exceed the number provided by the biosimilar applicant. However, if the biosimilar applicant previously indicated that no patents should be litigated, then the originator may identify one patent. |
| 7. | Commencement of Patent Litigation. The originator must then commence patent infringement litigation within 30 days. That litigation will involve all of the patents on the originator’s list and all of the patents on the follow-on applicant’s list. The follow-on applicant must then notify the FDA of the litigation. The FDA must then publish a notice of the litigation in the Federal Register. |
| 8. | Notice of Commercial Marketing. The BPCIA requires the biosimilar applicant to provide notice to the originator 180 days in advance of its first commercial marketing of its proposed follow-on biologic. The originator is allowed to seek a preliminary injunction blocking such marketing based upon any patents that either party had preliminarily identified but were not subject to the initial phase of patent litigation. The litigants are required to “reasonably cooperate to expedite such further discovery as is needed” with respect to the preliminary injunction motion. The federal courts have not yet settled the issue as to when, or under what circumstances, the biosimilar applicant must provide the 180-day notice of commercial marketing provided in the BPCIA. |
On June 12, 2017, the Supreme Court issued its decision in Amgen v. Sandoz, holding that (i) the “patent dance” is optional; and (ii) the 180-day pre-marketing notification may be given either before or after receiving FDA approval of the biosimilar product. The Supreme Court declined to rule whether a state injunctive remedy may be available to the originator and remanded that question to the Federal Circuit for further consideration. On December 14, 2017, the Federal Circuit decided that state law claims are preempted by the BPCIA on both field and conflict grounds.
A significant legal risk for a biosimilar applicant that pursues regulatory approval under the Section 351(k) regulatory approval route and also elects to engage in the above-described BPCIA patent exchange mechanism, is that the process could result in the initiation of patent infringement litigation prior to FDA approval of a Section 351(k) application, and such litigation could result in blocking the market entry of the biosimilar product. However, even if biosimilar applicants opt out of the BPCIA patent exchange process, originators will still have the right to assert patent infringement as a basis to enjoin a biosimilar product launch. Thus, whether or not we engage in the BPCIA patent exchange process, there is risk that patent infringement litigation initiated by originators could prevent us indefinitely from launching any biosimilar product.
The legal and strategic considerations weighing for or against a decision to voluntarily engage in the BPCIA patent exchange process are complex and will differ on a product-by-product basis. If we decide to engage in the BPCIA patent exchange process, preparing for and conducting the patent exchange, briefing and negotiation process outlined above will require extraordinarily sophisticated legal counseling and extensive planning, all under extremely tight deadlines. Moreover, it may be difficult for us to secure or retain such legal support if large, well-funded originators have already entered into engagements with highly qualified law firms or if the most highly qualified law firms choose not to represent biosimilar applicants due to their long-standing relationships with originators.
Under the complex, and uncertain rules of the BPCIA patent provisions, coupled with the inherent uncertainty surrounding the legal interpretation of any originator patents that might be asserted against us in this new process, we see substantial risk that the BPCIA process may significantly delay or defeat our ability to market our biosimilar product in the United States, or may result in us incurring substantial legal settlement costs.
84
Risks Related to the Discovery and Development of Our Product Candidates
We are heavily dependent on the development, clinical success, regulatory approval and commercial success of our product candidates. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.
We invest substantial efforts and financial resources to identify, acquire and develop our product candidates. Our future success is dependent on our ability to develop, obtain regulatory approval for, and then commercialize and obtain adequate third-party coverage and reimbursement for one or more of our product candidates. We currently have two approved products: UDENYCA and LOQTORZI.
Our product candidates are in varying stages of development and will require additional clinical development, management of nonclinical, clinical and manufacturing activities, regulatory approval, adequate manufacturing supplies, commercial organization and significant marketing efforts before we generate any revenue from product sales. Other than certain pharmacokinetic bridging studies, we have not initiated phase 3 clinical trials for other product candidates in our pipeline. It may be some time before we file for market approval with the relevant regulatory agencies for these product candidates.
We cannot be certain that any of our product candidates will be successful in clinical trials or receive regulatory approval. Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials. If we and our existing or future collaboration partners do not receive regulatory approvals for our product candidates, we may not be able to continue our operations.
We, together with our collaboration partners, generally plan to seek regulatory approval to commercialize our product candidates in the United States, the E.U., and additional foreign countries where we or our partners have commercial rights. To obtain regulatory approval, we and our collaboration partners must comply with numerous and varying regulatory requirements of such countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical studies, commercial sales, and pricing and distribution of our product candidates. Even if we and our collaboration partners are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions. If we and our collaboration partners are unable to obtain approval for our product candidates in multiple jurisdictions, our revenue and results of operations could be negatively affected.
The regulatory approval processes of the FDA, EMA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and the regulatory approval requirements for biosimilars are evolving. If we and our collaboration partners are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
The research, development, testing, manufacturing, labeling, packaging, approval, promotion, advertising, storage, marketing, distribution, post-approval monitoring and reporting and export and import of biologic and biosimilar products are subject to extensive regulation by the FDA and other regulatory authorities in the United States, by the EMA and EEA Competent Authorities in the European Economic Area (“EEA”), and by other regulatory authorities in other countries, where regulations differ from country to country. Neither we nor any existing or future collaboration partners are permitted to market our product candidates in the United States until we and our collaboration partners receive approval from the FDA, or in the EEA until we and our collaboration partners receive EC or EEA Competent Authority approvals.
The time required to develop new products or obtain approval for new products by the FDA and comparable foreign authorities is unpredictable, may take many years following the completion of clinical studies and depends upon numerous factors. Further, applications to the Human Genetic Resources Administration of China (HGRAC) required for any activities, including development activities and data sharing with our partners in China, may result in product development delays. In addition, approval policies, regulations or the type and amount of clinical data necessary to gain
85
approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the approval or the decision not to approve an application. Neither we nor any collaboration partner has obtained regulatory approval for any of our products and product candidates, other than UDENYCA, which has received approval from the FDA and EMA, and LOQTORZI, which has received approval from the FDA and is also approved for use in China, and it is possible that none of our other current or future product candidates will ever obtain additional regulatory approvals.
Applications for our product candidates could fail to receive regulatory approval for many reasons, including but not limited to the following:
| ● | the data collected from clinical studies of our product candidates may not be sufficient to support the submission of an original BLA, an NDA, a Section 351(k) BLA, a biosimilar marketing authorization under Article 6 of Regulation (EC) No. 726/2004 or Article 10(4) of Directive 2001/83/EC in the EEA or other submission or to obtain regulatory approval in the United States, the EEA or elsewhere; |
| ● | the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical studies; |
| ● | the FDA may determine that the population studied in the clinical program may not be sufficiently broad or representative to assure safety and efficacy in the full population for which we seek approval, or that conclusions of clinical trials conducted in a single country or region outside the United States may not be generalizable to the patient population in the United States; |
| ● | the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from analytical and bioanalytical studies, nonclinical studies or clinical studies; |
| ● | we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable; |
| ● | the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of our collaborators or third-party manufacturers with which we contract for clinical and commercial supplies; and |
| ● | the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. |
This approval process, as well as the unpredictability of the results of clinical studies, may result in our failure to obtain regulatory approval to market any of our product candidates, which would significantly harm our business. Any delays in the commencement or completion of clinical testing could significantly impact our product development costs and could result in the need for additional financing.
Clinical drug development involves a lengthy and expensive process and we may encounter substantial delays in our clinical studies or may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we or our collaboration partners, or both, as the case may be, must conduct clinical studies to demonstrate the safety and efficacy of the product candidates in humans.
Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the clinical study process. The results of preclinical studies and early clinical studies of our product candidates may not be predictive of the results of later-stage clinical studies. Product candidates that have shown promising results in early-stage clinical studies may still suffer significant setbacks in subsequent registration clinical studies. There is a high failure rate for product candidates proceeding through clinical studies, and product candidates in later stages of clinical studies may fail to show the desired safety and efficacy traits despite having
86
progressed through preclinical studies and initial clinical studies. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical studies due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier studies. Nonclinical and clinical data are also often susceptible to varying interpretations and analyses. We do not know whether any clinical studies we may conduct for our product candidates will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval. Furthermore, biosimilar clinical studies must use originator products as comparators, and such supplies may not be available on a timely basis to support such trials.
We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. A failure of one or more clinical studies can occur at any stage of testing, and our future clinical studies may not be successful. Events that may prevent successful or timely completion of clinical development include but are not limited to:
| ● | inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical studies; |
| ● | delays in reaching a consensus with regulatory agencies on study design; |
| ● | delays in reaching agreement on acceptable terms with prospective CROs, and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites; |
| ● | delays in obtaining required institutional review board (“IRB”) approval at each clinical study site; |
| ● | imposition of a clinical hold by regulatory agencies, after review of an IND or amendment or equivalent application or amendment, or an inspection of our clinical study operations or study sites or as a result of adverse events reported during a clinical trial; |
| ● | delays in recruiting suitable patients to participate in our clinical studies sponsored by us or our partners; |
| ● | difficulty collaborating with patient groups and investigators; |
| ● | failure by our CROs, other third parties or us to adhere to clinical study requirements; |
| ● | failure to perform in accordance with the FDA’s good clinical practices requirements or applicable regulatory guidelines in other countries; |
| ● | delays in patients completing participation in a study or return for post-treatment follow-up, or patients dropping out of a study; |
| ● | occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; |
| ● | changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; |
| ● | the cost of clinical studies of our product candidates being greater than we anticipate; |
| ● | clinical studies of our product candidates producing negative or inconclusive results, which may result in us deciding or regulators requiring us to conduct additional clinical studies or abandon product development programs; and |
| ● | delays in manufacturing, testing, releasing, validating, importing, exporting or distributing sufficient stable quantities of our product candidates and originator products for use in clinical studies or the inability to do any of the foregoing. |
87
Any inability to successfully complete nonclinical and clinical development could result in additional costs to us or impair our ability to generate revenue. In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional studies to bridge our modified product candidates to earlier versions.
If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials will depend, in part, on the speed at which we can recruit patients to participate in our trials, as well as completion of required follow-up periods. We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDA or other comparable regulatory authorities. Some of the conditions for which we may plan to evaluate our product candidates are rare diseases with limited patient pools from which to draw for clinical trials. The eligibility criteria of our clinical trials, once established, may further limit the pool of available trial participants.
Patient enrollment in clinical trials may be affected by other factors, including:
| ● | size and nature of the targeted patient population; |
| ● | severity of the disease or condition under investigation; |
| ● | availability and efficacy of approved therapies for the disease or condition under investigation; |
| ● | patient eligibility criteria for the trial in question as defined in the protocol; |
| ● | perceived risks and benefits of the product candidate under study; |
| ● | clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any products that may be approved for, or any product candidates under investigation for, the indications we are investigating; |
| ● | efforts to facilitate timely enrollment in clinical trials; |
| ● | patient referral practices of physicians; |
| ● | the ability to monitor patients adequately during and after treatment; |
| ● | proximity and availability of clinical trial sites for prospective patients; |
| ● | continued enrollment of prospective patients by clinical trial sites; and |
| ● | the risk that patients enrolled in clinical trials will drop out of such trials before completion. |
Additionally, other pharmaceutical companies targeting these same diseases are recruiting clinical trial patients from these patient populations, which may make it more difficult to fully enroll any clinical trials. We also rely on, and will continue to rely on, CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and preclinical studies. Though we have entered into agreements governing their services, we will have limited influence over their actual performance. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. Enrollment delays in our clinical trials may result in increased development costs for our product candidates and jeopardize our ability to obtain regulatory approval for the sale of our product candidates.
88
The development, manufacture and commercialization of biosimilar products under various global regulatory pathways pose unique risks.
We and our collaboration partners intend to pursue market authorization globally. In the United States, an abbreviated pathway for approval of biosimilar products was established by the BPCIA, enacted on March 23, 2010, as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”). The BPCIA established this abbreviated pathway under Section 351(k) of the PHSA. Subsequent to the enactment of the BPCIA, the FDA issued guidance documents regarding the demonstration of biosimilarity and interchangeability as well as the submission and review of biosimilar applications. Moreover, market acceptance of biosimilar products in the United States is unclear. Numerous states are considering or have already enacted laws that regulate or restrict the substitution by state pharmacies of biosimilars for originator products already licensed by the FDA. Market success of biosimilar products will depend on demonstrating to patients, physicians, payers and relevant authorities that such products are similar in quality, safety and efficacy as compared to the reference product.
We will continue to analyze and incorporate into our biosimilar development plans any final regulations issued by the FDA, pharmacy substitution policies enacted by state governments and other applicable requirements established by relevant authorities. The costs of development and approval will be dependent upon the application of any laws and regulations issued by the relevant regulatory authorities.
Biosimilar products may also be subject to extensive originator-controlled patent portfolios and patent infringement litigation, which may delay and could prevent the commercial launch of a product. Moreover, the BPCIA prohibits the FDA from accepting an application for a biosimilar candidate to a reference product within four years of the reference product’s licensure by the FDA. In addition, the BPCIA provides innovative biologics with 12 years of exclusivity from the date of their licensure, during which time the FDA cannot approve any application for a biosimilar candidate to the reference product.
Under current E.U. regulations, an application for regulatory approval of a biosimilar drug cannot be submitted in the E.U. until expiration of an eight-year data exclusivity period for the reference (originator) product, measured from the date of the reference product’s initial marketing authorization. Furthermore, once approved, the biosimilar cannot be marketed until expiration of a ten-year period following the initial marketing authorization of the reference product, such ten-year period being extendible to 11 years if the reference product received approval of an additional therapeutic indication, within the first eight years following its initial marketing authorization, representing a significant clinical benefit in comparison with existing therapies.
In Europe, the approval of a biosimilar for marketing is based on an opinion issued by the EMA and a decision issued by the EC. Therefore, the marketing approval will cover the entire EEA. However, substitution of a biosimilar for the originator is a decision that is made at the national level. Additionally, a number of countries do not permit the automatic substitution of biosimilars for the originator product. Therefore, even if we obtain marketing approval for the entire EEA, we may not receive substitution in one or more European nations, thereby restricting our ability to market our products in those jurisdictions.
Other regions, including Canada, Japan and South Korea, also have their own legislation outlining a regulatory pathway for the approval of biosimilars. In some cases, other countries have either adopted European guidance (Singapore and Malaysia) or are following guidance issued by the World Health Organization (Cuba and Brazil). While there is overlap in the regulatory requirements across regions, there are also some areas of non-overlap. Additionally, we cannot predict whether countries that we may wish to market in which do not yet have an established or tested regulatory framework could decide to issue regulations or guidance or adopt a more conservative viewpoint than other regions. Therefore, it is possible that even if we obtain agreement from one health authority to an accelerated or optimized development plan, we will need to defer to the most conservative view to ensure global harmonization of the development plan. Also, for regions where regulatory authorities do not yet have sufficient experience in the review and approval of a biosimilar product, these authorities may rely on the approval from another region (e.g., the United States
89
or the E.U.), which could delay our approval in that region. Finally, it is possible that some countries will not approve a biosimilar without clinical data from their population or may require that the biosimilar product be manufactured within their region, or some countries may require both.
If other biosimilars of pegfilgrastim (Neulasta) are determined to be interchangeable and our biosimilar product is not, our business could suffer.
The FDA or other relevant regulatory authorities may determine that a proposed biosimilar product is “interchangeable” with a reference product, meaning that the biosimilar product may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product, if the application includes sufficient information to show that the product is biosimilar to the reference product and that it can be expected to produce the same clinical result as the reference product in any given patient. If the biosimilar product may be administered more than once to a patient, the applicant must demonstrate that the risk in terms of safety or diminished efficacy of alternating or switching between the biosimilar product and the reference product is not greater than the risk of using the reference product without such alternation or switch. To make a final determination of interchangeability, regulatory authorities may require additional confirmatory information beyond what we plan to initially submit in our applications for approval, such as more in-depth analytical characterization, animal testing or further clinical studies. Provision of sufficient information for approval may prove difficult and expensive.
We cannot predict whether any of our biosimilar products and product candidates will meet regulatory authority requirements for approval not only as a biosimilar product but also as an interchangeable product in any jurisdiction. Furthermore, legislation governing interchangeability could differ by jurisdiction on a state or national level worldwide. For example, recent U.S. legislative proposals have sought to reduce or altogether eliminate the statutory and regulatory distinctions between interchangeable products and conventional biosimilars. Such efforts, if successful, could reduce or eliminate any competitive or regulatory advantages currently afforded to interchangeable products.
The labelling of “interchangeability” is important because, in the United States for example, the first biosimilar determined to be interchangeable with a particular reference, or originator, product for any condition of use is eligible for a period of market exclusivity that delays an FDA determination that a second or subsequent biosimilar product is interchangeable with that originator product for any condition of use until the earlier of: (1) one year after the first commercial marketing of the first interchangeable product; (2) 18 months after resolution of a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product, based on a final court decision regarding all of the patents in the litigation or dismissal of the litigation with or without prejudice; (3) 42 months after approval of the first interchangeable product, if a patent infringement suit instituted under 42 U.S.C. § 262(l)(6) against the applicant that submitted the application for the first interchangeable product is still ongoing; or (4) 18 months after approval of the first interchangeable product if the applicant that submitted the application for the first interchangeable product has not been sued under 42 U.S.C. § 262(l)(6). Thus, a determination that another company’s product is interchangeable with the originator biologic before we obtain approval of our corresponding biosimilar product candidates may delay the potential determination that our products are interchangeable with the originator product, which could materially adversely affect our results of operations and delay, prevent or limit our ability to generate revenue.
Failure to obtain regulatory approval in any targeted regulatory jurisdiction would prevent us from marketing our products to a larger patient population and reduce our commercial opportunities.
We are marketing LOQTORZI and UDENYCA in the United States, and subject to product approvals and relevant patent and settlement agreement expirations, we intend to market our other products in the United States and outside the United States on our own or with future collaboration partners. We entered into a distribution agreement with our licensee Orox / Laboratorio Gador S.A. for the commercialization of a biosimilar version of pegfilgrastim (Neulasta) in certain Caribbean and Latin American countries. We intend to market our products in the United States and may seek to partner commercially all products outside the United States, such as our Canada License Agreement with Apotex in Canada for LOQTORZI.
90
In order to market our products in the E.U., the United States and other jurisdictions, we and our collaboration partners must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The EMA is responsible for the centralized procedure for the regulation and approval of human medicines. This procedure results in a single marketing authorization that is valid in all E.U. countries, as well as in Iceland, Liechtenstein and Norway. The time required to obtain approval abroad may differ from that required to obtain FDA approval. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval and we may not obtain foreign regulatory approvals on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. We or our collaboration partners may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products in any market. Failure to obtain these approvals would materially and adversely affect our business, financial condition and results of operations.
We may not be successful in our efforts to identify, develop or commercialize additional product candidates.
Although a substantial amount of our effort will focus on the continued clinical testing, potential approval and commercialization of our existing product candidates, the success of our business also depends upon our ability to identify, develop and commercialize additional product candidates. Research programs to identify new product candidates require substantial technical, financial and human resources. We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. Our development efforts may fail to yield additional product candidates suitable for clinical development and commercialization for a number of reasons, including but not limited to the following:
| ● | we may not be successful in identifying potential product candidates that pass our strict screening criteria; |
| ● | we may not be able to overcome technological hurdles to development or a product candidate may not be capable of producing commercial quantities at an acceptable cost or at all; |
| ● | we may not be able to assemble sufficient resources to acquire or discover additional product candidates; |
| ● | our product candidates may not succeed in nonclinical or clinical testing; and |
| ● | competitors may develop alternatives that render our product candidates obsolete or less attractive or the market for a product candidate may change such that a product candidate may not justify further development. |
If any of these events occur, we may be forced to abandon our development efforts for a program or programs or we may not be able to identify, develop or commercialize additional product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations.
Risks Related to Our Compliance with Applicable Laws
Healthcare reform measures, including the IRA, may increase the difficulty and cost for us to obtain marketing approval for and commercialize our products, affect the prices we may set, and have a material adverse effect on our business and results of operations.
In the United States, there have been and continue to be a number of legislative initiatives to contain healthcare costs. For example, in March 2010, the ACA, was passed, which substantially changed the way health care is financed by both governmental and private insurers and has impacted and continues to impact the United States pharmaceutical industry. The ACA, among other things, modified the average manufacturer price (“AMP”) definition under the Medicaid Drug Rebate Program (“MDRP”) for drugs that are inhaled, infused, instilled, implanted or injected and not generally distributed through the retail channel; expanded rebate payments under the MDRP to include utilization by individuals enrolled in Medicaid managed care organizations; added a provision to increase the Medicaid rebate for line extension drugs; established annual fees and taxes on manufacturers of certain branded prescription drugs; expanded the entities
91
eligible for discounts under the Public Health Service 340B drug pricing program; and established the Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA. On June 17, 2021, the United States Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. These changes include the American Rescue Plan Act of 2021, which eliminated the statutory cap on the Medicaid drug rebate beginning January 1, 2024. The rebate was previously capped at 100% of a drug’s AMP.
Most significantly, on August 16, 2022, the IRA was signed into law. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. For that and other reasons, the impact of the IRA on our business and the pharmaceutical industry cannot yet be fully determined. If a product becomes subject to the IRA negotiation provision and related price cap, that may significantly alter the economic rationale for developing and commercializing a biosimilar. Additionally, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future.
The cost of prescription pharmaceuticals in the United States is likely to remain the subject of considerable discussion. There have been several Congressional inquiries and proposed and enacted legislation designed to, among other things, reform government program reimbursement methodologies. The likelihood of implementation of these and other reform initiatives is uncertain. In the coming years, additional legislative and regulatory changes could be made to governmental health programs that could significantly impact pharmaceutical companies and the success of our product candidates. We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates.
Individual states in the United States have also proposed and enacted legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure and other transparency measures, and, in some cases, measures designed to encourage importation from other countries and bulk purchasing. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures, such as a single reimbursement code for biosimilar products.
We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar
92
reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our product candidates.
In the E.U., similar political, economic and regulatory developments may affect our ability to profitably commercialize our product candidates, if approved. In addition to continuing pressure on prices and cost containment measures, legislative developments at the E.U. or member state level may result in significant additional requirements or obstacles that may increase our operating costs. The delivery of healthcare in the E.U., including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than E.U., law and policy. National governments and health service providers have different priorities and approaches to the delivery of health care and the pricing and reimbursement of products in that context. In general, however, the healthcare budgetary constraints in most E.U. member states have resulted in restrictions on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever-increasing E.U. and national regulatory burdens on those wishing to develop and market products, this could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to commercialize our product candidates, if approved. In markets outside of the United States and E.U., reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.
We may be subject, directly or indirectly, to federal and state healthcare laws, including fraud and abuse, false claims and physician payment transparency laws. If we are unable to comply or have not fully complied with such laws, we could face substantial penalties.
Our operations are directly or indirectly through our customers subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act and physician sunshine laws and regulations. These laws impact, among other things, sales, marketing and education programs. The laws that may affect our ability to operate include:
| ● | the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or in return for the purchase, recommendation, order or furnishing of an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation; |
| ● | federal civil and criminal false claims laws, including the False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presented claims for payment from Medicare, Medicaid or other third-party payers that are false or fraudulent and which may apply to entities that provide coding and billing advice to customers. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; |
| ● | federal civil monetary penalties laws, which impose civil fines for, among other things, the offering or transfer of remuneration to a Medicare or state healthcare program beneficiary if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state healthcare program, unless an exception applies; |
| ● | HIPAA, which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; |
93
| ● | federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; |
| ● | the federal physician “sunshine” requirements under the ACA, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value made by such manufacturers to physicians (defined to include doctors, dentists, optometrists, podiatrists, chiropractors, and certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, anesthesiologist assistants and certified nurse midwives)), and teaching hospitals and ownership and investment interests held by physicians and their immediate family members; and |
| ● | state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payer, including commercial insurers, state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information. |
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. In addition, recent health care reform legislation has strengthened these laws.
Efforts to ensure that our operations and business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. If we are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. Further, defending against any such actions can be costly, time-consuming and may require significant personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.
If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the United States, we could be subject to additional reimbursement requirements, penalties, sanctions and fines which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We participate in governmental programs that impose drug price reporting, payment, and other compliance obligations on pharmaceutical manufacturers. Medicaid is a joint federal and state program for low-income and disabled beneficiaries. Medicare is a federal program that is administered by the federal government covering individuals age 65 and over as well as those with certain disabilities. Medicare Part B reimburses physicians who administer our products. Under the MDRP, as a condition of having federal funds available for our covered outpatient drugs under Medicaid and under Medicare Part B, we must enter into, and have entered into, an agreement with the Secretary of Health and Human Services to pay a rebate to state Medicaid programs for each unit of our covered outpatient drugs dispensed to a Medicaid beneficiary and paid for by the state Medicaid program. Medicaid rebates are based on pricing data that we are required to report on a monthly and quarterly basis to CMS, the federal agency that administers the MDRP and Medicare programs. For the MDRP, these data include the AMP for each drug and, in the case of innovator products, the Best Price, which represents the lowest price available from us to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include
94
all applicable sales and associated rebates, discounts and other price concessions. In connection with Medicare Part B, we must provide CMS with ASP information on a quarterly basis. CMS uses this information to compute Medicare Part B payment rates, which consist of ASP plus a specified percentage. If we become aware that our MDRP submissions for a prior period were incorrect or have changed as a result of recalculation of the pricing data, we must resubmit the corrected data for up to three years after those data originally were due. Pursuant to the IRA, the AMP and ASP figures we report will also be used to compute rebates under Medicare Part D and Medicare Part B triggered by price increases that outpace inflation. If we fail to provide information timely or are found to have knowingly submitted false information to CMS, we may be subject to civil monetary penalties and other sanctions, including termination from the MDRP.
Federal law requires that any company that participates in the MDRP also participate in the Public Health Service’s 340B drug pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B program is administered by the HRSA and requires us to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered drugs when used in an outpatient setting. These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients. The 340B ceiling price is calculated using a statutory formula, which is based on the AMP and rebate amount for the covered outpatient drug as calculated under the MDRP. In general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price requirement. We must report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes them to 340B covered entities. HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B eligible drugs. HRSA has also finalized an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges.
In order to be eligible to have drug products paid for with federal funds under Medicaid and Medicare Part B and purchased by certain federal agencies and grantees, a pharmaceutical manufacturer must also participate in VA FSS pricing program. Under the VA FSS program, we must report the Non-Federal Average Manufacturer Price (“Non-FAMP” for our covered drugs to the VA and charge certain federal agencies no more than the Federal Ceiling Price, which is calculated based on Non FAMP using a statutory formula. These four agencies are the VA, the U.S. Department of Defense, the U.S. Coast Guard, and the U.S. Public Health Service (including the Indian Health Service). We must also pay rebates on products purchased by military personnel and dependents through the TRICARE retail pharmacy program. If a manufacturer participating in the FSS program fails to provide timely information or is found to have knowingly submitted false information, the manufacturer may be subject to civil monetary penalties.
Individual states continue to consider and have enacted legislation to limit the growth of healthcare costs, including the cost of prescription drugs and combination products. A number of states have either implemented or are considering implementation of drug price transparency legislation that may prevent or limit our ability to take price increases at certain rates or frequencies. Requirements under such laws include advance notice of planned price increases, reporting price increase amounts and factors considered in taking such increases, wholesale acquisition cost information disclosure to prescribers, purchasers, and state agencies, and new product notice and reporting. Such legislation could limit the price or payment for certain drugs, and a number of states are authorized to impose civil monetary penalties or pursue other enforcement mechanisms against manufacturers for the untimely, inaccurate, or incomplete reporting of drug pricing information or for otherwise failing to comply with drug price transparency requirements. If we are found to have violated state law requirements, we may become subject to penalties or other enforcement mechanisms, which could have a material adverse effect on our business.
Pricing and rebate calculations vary across products and programs, are complex, and are often subject to interpretation by us, governmental or regulatory agencies, and the courts, which can change and evolve over time. Such pricing calculations and reporting, along with any necessary restatements and recalculations, could increase costs for complying with the laws and regulations governing the MDRP and other governmental programs, and under the MDRP could result in an overage or underage in Medicaid rebate liability for past quarters. Price recalculations under the MDRP also may affect the ceiling price at which we are required to offer products under the 340B program. Civil monetary
95
penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we are found to have made a misrepresentation in the reporting of ASP, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price. CMS could also terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs. We cannot make any assurances that our submissions will not be found by CMS or other governmental agencies to be incomplete or incorrect.
Risks Related to Ownership of Our Common Stock
The market price of our common stock may be highly volatile, and purchasers of our common stock could incur substantial losses.
The market price of our common stock has been highly volatile since our Initial Public Offering (“IPO”) and the intraday sales price per share has ranged from $0.97 to $38.10 per share during the period from November 6, 2014 through September 30, 2024 and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. These factors include those discussed in the “Risk Factors” section of this Quarterly Report on Form 10-Q and others such as:
| ● | adverse results or delays in preclinical or clinical studies; |
| ● | the risk of deterioration in our financial conditions, such as reduced collection of cash and increased costs in the future; |
| ● | any inability to obtain additional funding; |
| ● | any delay in filing an IND, NDA, BLA, Section 351(k) BLA or other regulatory submission for any of our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of that IND, NDA, BLA, Section 351(k) BLA or other regulatory submission; |
| ● | the perception of limited market sizes or pricing for our products and product candidates; |
| ● | failure to successfully develop and commercialize our product candidates; |
| ● | post-marketing safety issues relating to our product candidates or biosimilars generally; |
| ● | failure to maintain our existing strategic collaborations or enter into new collaborations; |
| ● | failure by us or our licensors and strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights; |
| ● | changes in laws or regulations applicable to our products; |
| ● | future outbreaks of COVID-19 and other viral pandemics; |
| ● | any inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; |
| ● | adverse regulatory decisions; |
| ● | introduction of new products, services or technologies by our competitors; |
| ● | failure to meet or exceed financial projections we may provide to the public; |
| ● | failure to meet or exceed the financial projections of the investment community; |
| ● | the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; |
96
| ● | announcements of significant acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors; |
| ● | disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; |
| ● | additions or departures of key scientific or management personnel; |
| ● | lawsuits, including but not limited to complaints initiated by stockholders, customers and collaboration partners, and litigation filed by us or filed against us pertaining to patent infringement or other violations of intellectual property rights; |
| ● | the outcomes of any citizen petitions filed by parties seeking to restrict or limit the approval of biosimilar products; |
| ● | if securities or industry analysts do not publish research or reports about our business or if they issue an adverse or misleading opinion regarding our stock; |
| ● | changes in the market valuations of similar companies; |
| ● | general market or macroeconomic conditions, including rising interest rates and inflation; |
| ● | sales of our common stock by us or our stockholders in the future; |
| ● | trading volume of our common stock; |
| ● | issuance of patents to third parties that could prevent our ability to commercialize our product candidates; |
| ● | reductions in the prices of originator products that could reduce the overall market opportunity for our products that are biosimilars to such originator products; and |
| ● | changes in biosimilar regulatory requirements that could make it more difficult for us to develop our product candidates. |
In addition, biopharmaceutical companies in particular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
As of September 30, 2024, our executive officers, directors, five percent stockholders and their affiliates beneficially owned approximately 32.4% of our voting stock (assuming no exercise of outstanding options or conversion of our outstanding convertible notes). These stockholders have the ability to influence us through their ownership positions, which may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders.
Our indebtedness could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts and could divert our cash flow from operations for debt payments.
Our leverage and debt service obligations could adversely impact our business, including by:
| ● | impairing our ability to generate cash sufficient to pay interest or principal, including periodic principal payments; |
| ● | increasing our vulnerability to general adverse economic and industry conditions; |
97
| ● | increasing our need to meet minimum net sales requirements when our future sales are uncertain; |
| ● | requiring the dedication of a portion of our cash flow from operations to service our debt, thereby reducing the amount of our cash flow available for other purposes, including funds for clinical development or to pursue future business opportunities; |
| ● | requiring us to sell debt or equity securities or to sell some of our core assets, possibly on unfavorable terms, to meet payment obligations; |
| ● | limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete; and |
| ● | placing us at a possible competitive disadvantage with less leveraged competitors and competitors that may have better access to capital resources. |
Any of the foregoing factors could have negative consequences on our financial condition and results of operations.
This indebtedness could be due sooner upon the triggering of certain covenants in our debt agreements and or upon the occurrence of an event of default. If and when our indebtedness becomes due, if we do not have sufficient cash or access to capital to pay such indebtedness, we will default on our obligations which will adversely harm our business. We entered into the 2029 Loan Agreement that contains affirmative and negative covenants that restrict our operations, including, among other restrictions, the requirement to maintain certain levels of cash and cash equivalents. Further, the 2029 Loan Agreement includes certain other affirmative covenants and negative covenants, including, covenants and restrictions that among other things, restrict our ability to incur liens, incur additional indebtedness, make investments, engage in certain mergers and acquisitions or asset sales, and declare dividends or redeem or repurchase capital stock. We may need to request waivers from time to time with respect to the 2029 Loan Agreement and if we are unable to obtain a waiver that we need it could materially impact our business and financial results.
Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
If our existing stockholders sell or indicate an intention to sell substantial amounts of our common stock in the public market the market price of our common stock could decline. In addition, we may authorize our sales agent to sell our common stock from time to time as part of the ATM Offering. As of September 30, 2024, there were 115,213,407 million shares of common stock outstanding.
In addition, as of September 30, 2024, approximately 37.6 million shares of common stock that are either subject to outstanding options and restricted stock units or reserved for future issuance under our equity incentive plans were eligible or may become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules and Rule 144 and Rule 701 under the Securities Act. Certain of our outstanding options have exercise prices that are above our current stock price. See the tables describing our outstanding stock options in Note 12. Stock-Based Compensation and Employee Benefits to our financial statements included in our Annual Report for the Fiscal Year ended December 31, 2023. If these additional shares of common stock are sold or if it is perceived that they will be sold in the public market, the market price of our common stock could decline.
Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans and convertible notes, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
We have needed and anticipate we will need additional capital in the future to continue our planned operations. To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. Similar to prior or ongoing financing transactions like the ATM Offering or the exchange of our shares for shares of outstanding stock of Surface as part of the acquisition of Surface, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially
98
diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders. In addition, if we raise additional funds through licensing arrangements, it may be necessary to grant potentially valuable rights to our product candidates or grant licenses on terms that are not favorable to us.
Pursuant to our Amended and Restated 2014 Equity Incentive Award Plan (the “2014 Plan”), our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants. Any increase in the number of shares available for future grant under the 2014 Plan must be approved by our stockholders. Pursuant to our 2014 Employee Stock Purchase Plan (“ESPP”), eligible employees are able to acquire shares of our common stock at a discount to the prevailing market price, and an aggregate of 320,000 shares are initially available for issuance under the ESPP. The number of shares available for issuance under the ESPP were automatically increased on the first day of each fiscal year beginning in 2015 and ending in 2024, equal to 1% of the shares of common stock outstanding on the last day of the immediately preceding fiscal year or such smaller number of shares as determined by our board of directors. Pursuant to our 2016 Employment Commencement Incentive Plan (the “2016 Plan”), our management was authorized to grant stock options and other equity-based awards to our new employees, however in connection with the approval of the 2014 Plan in 2024, we agreed that we would not make any new awards under the 2016 Plan after the effective date of the 2014 Plan.
In April 2020, we issued and sold $230.0 million aggregate principal amount of our 1.5% senior convertible notes due April 2026 (the “2026 Convertible Notes”). The holders may convert their 2026 Convertible Notes at their option at any time prior to the close of business on the second scheduled trading day immediately before April 15, 2026. Upon conversion of the 2026 Convertible Notes by a holder, the holder will receive shares of our common stock, together, if applicable, with cash in lieu of any fractional share. Since inception, the conversion price has been 51.9224 shares of common stock per $1,000 principal amount of the 2026 Convertible Notes, which represents a conversion price of approximately $19.26 per share of common stock.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our business operations, financial condition, results of operations and prospects.
Our cash and cash equivalents are deposited or invested with several banks and other financial institutions. Actual events involving reduced or limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems. For example, in March 2023, Silicon Valley Bank was closed and taken over by the Federal Deposit Insurance Corporation (“FDIC”) and subsequently had all of its customer deposits and other liabilities and substantially all loans and other assets acquired by First-Citizens Bank & Trust Company. We had approximately $97.7 million of cash, cash equivalents and marketable securities as of September 30, 2024 with the majority held by custodians or in money market mutual funds that are not bank deposits. Our bank deposits are primarily held in accounts at three large banks that we believe to be stable at this time. Actual and perceived stability of banks can change from time to time and adverse perceptions by customers or investors about the banks where we deposit money could result in a material and adverse effect on our ability to access necessary cash. Investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources, could, among other risks, adversely impact our ability to access funds for our basic operating expenses, financial obligations, payroll or fulfill our other important obligations. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity, business operations, financial condition, results of operations and prospects.
99
We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock.
We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain any future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to any appreciation of their stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders or remove our current management.
Our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. Our amended and restated certificate of incorporation and bylaws include provisions that:
| ● | authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock; |
| ● | create a classified board of directors whose members serve staggered three-year terms; |
| ● | specify that special meetings of our stockholders can be called only by our corporate secretary pursuant to a resolution adopted by a majority of our board of directors; |
| ● | prohibit stockholder action by written consent; |
| ● | establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors other than nominations made by or at the direction of the board of directors or a committee of the board of directors; |
| ● | provide that our directors may be removed only for cause or without cause by the holders of 66 2/3% of the voting power of all then outstanding shares of voting stock; |
| ● | provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; |
| ● | specify that no stockholder is permitted to cumulate votes at any election of directors; |
| ● | expressly authorize our board of directors to modify, alter or repeal our amended and restated bylaws; and |
| ● | require holders of 66 2/3% of the voting power of all then outstanding shares of voting stock to amend specified provisions of our amended and restated certificate of incorporation except for the provision making it possible for our board of directors to issue “blank check” preferred stock, and amended and restated bylaws. |
These provisions, alone or together, could delay, deter or prevent hostile takeovers and changes in control or changes in our management.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us.
Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
100
General Risk Factors
The international aspects of our business expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
We currently have limited international operations of our own and have and may have in the future a number of international collaborations, including our significant collaboration with Junshi Biosciences in China. Doing business internationally involves a number of risks, including but not limited to:
| ● | multiple, conflicting and changing laws and regulations such as data privacy and security regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses, including those that affect our work with a collaboration partner in China; |
| ● | failure by us or our collaboration partners to obtain and maintain regulatory approvals for the use of our products in various countries; |
| ● | additional potentially relevant third-party patent rights; |
| ● | foreign CMOs may be subject to U.S. legislation, including the proposed BIOSECURE Act, sanctions, trade restrictions and other regulatory requirements which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material or have an adverse effect on our ability to secure commitments from governments to purchase our products; |
| ● | complexities and difficulties in obtaining protection and enforcing our intellectual property; |
| ● | difficulties in staffing and managing foreign operations by us or our collaboration partners; |
| ● | complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems by our collaboration partners; |
| ● | limits in our or our collaboration partners’ ability to penetrate international markets; |
| ● | financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; |
| ● | natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; |
| ● | certain expenses including, among others, expenses for travel, translation and insurance; |
| ● | expose us to sanctions, such as the sanctions levied by United States, E.U. and Russian regulatory bodies in connection with the war between Russia and Ukraine; and |
| ● | regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the United States Foreign Corrupt Practices Act, its books and records provisions or its anti-bribery provisions. |
101
Investors’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
There is an increasing focus from certain investors, employees, regulators and other stakeholders concerning corporate responsibility, specifically related to environmental, social and governance (or “ESG”) factors. Some investors and investor advocacy groups may use these factors to guide investment strategies and, in some cases, investors may choose not to invest in our company if they believe our policies relating to corporate responsibility are inadequate. Third-party providers of corporate responsibility ratings and reports on companies have increased to meet growing investor demand for measurement of corporate responsibility performance, and a variety of organizations currently measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. Investors, particularly institutional investors, use these ratings to benchmark companies against their peers and if we are perceived as lagging with respect to ESG initiatives, certain investors may engage with us to improve ESG disclosures or performance and may also make voting decisions, or take other actions, to hold us and our board of directors accountable. In addition, the criteria by which our corporate responsibility practices are assessed may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria. If we elect not to or are unable to satisfy such new criteria, investors may conclude that our policies with respect to corporate responsibility are inadequate. We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies. We also face significant costs from complying with new ESG regulations, for example, the SEC’s proposed climate disclosure rule would result in significant costs of compliance if it is approved as proposed in the future.
We may face reputational damage in the event our corporate responsibility initiatives or objectives do not meet the standards set by our investors, stockholders, lawmakers, listing exchange or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third-party rating services. A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our common stock from consideration by certain investors who may elect to invest with our competition instead. Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks. Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial condition, or results of operations, including the sustainability of our business over time.
Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Because we rely on third parties to develop and manufacture our product candidates, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaboration partners, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.
So called “submarine” patents may be granted to our competitors that may significantly alter our launch timing expectations, reduce our projected market size, cause us to modify our product or process or block us from the market altogether.
The term “submarine” patent has been used in the pharmaceutical industry and in other industries to denote a patent issuing from an application that was not published, publicly known or available prior to its grant. Submarine
102
patents add substantial risk and uncertainty to our business. Submarine patents may issue to our competitors covering our pipeline candidates and thereby cause significant market entry delay, defeat our ability to market our products or cause us to abandon development or commercialization of a molecule.
Examples of submarine patents include Brockhaus, et al., United States patents 8,063,182 and 8,163,522 (controlled by Amgen), which are directed to the fusion protein in Enbrel. On July 1, 2020, the United States Court of Appeals for the Federal Circuit issued a decision that affirmed the lower court’s decision upholding the validity of these patents. As a result, we discontinued the development of CHS-0214 (our etanercept (Enbrel) biosimilar candidate).
The issuance of one or more submarine patents may harm our business by causing substantial delays in our ability to introduce a biosimilar candidate into the United States market.
We may not identify relevant patents or may incorrectly interpret the relevance, scope or expiration of a patent, which might adversely affect our ability to develop and market our products.
We cannot guarantee that any of our patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete and thorough, nor can we be certain that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our products or pipeline molecules. We may incorrectly determine that our products are not covered by a third-party patent.
Many patents may cover a marketed product, including but not limited to the composition of the product, methods of use, formulations, cell line constructs, vectors, growth media, production processes and purification processes. The identification of all patents and their expiration dates relevant to the production and sale of an originator product is extraordinarily complex and requires sophisticated legal knowledge in the relevant jurisdiction. It may be impossible to identify all patents in all jurisdictions relevant to a marketed product. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our products.
Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our products.
If we are unable to obtain and maintain effective patent rights for our product candidates or any future product candidates, we may not be able to prevent competitors from using technologies we consider important in our successful development and commercialization of our product candidates, resulting in loss of any potential competitive advantage our patents may have otherwise afforded us.
While our principal focus in matters relating to intellectual property is to avoid infringing the valid and enforceable rights of third parties, we also rely upon a combination of patents, trade secret protection and confidentiality agreements to protect our own intellectual property related to our product candidates and development programs. Our ability to enjoy any competitive advantages afforded by our own intellectual property depends in large part on our ability to obtain and maintain patents and other intellectual property protection in the United States and in other countries with respect to various proprietary elements of our product candidates, such as, for example, our product formulations and processes for manufacturing our products and our ability to maintain and control the confidentiality of our trade secrets and confidential information critical to our business.
103
We have sought to protect our proprietary position by filing patent applications in the United States and abroad related to our products that are important to our business. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. There is no guarantee that any patent application we file will result in an issued patent having claims that protect our products. Additionally, while the basic requirements for patentability are similar across jurisdictions, each jurisdiction has its own specific requirements for patentability. We cannot guarantee that we will obtain identical or similar patent protection covering our products in all jurisdictions where we file patent applications.
The patent positions of biopharmaceutical companies generally are highly uncertain and involve complex legal and factual questions. As a result, the patent applications that we own or license may fail to result in issued patents with claims that cover our product candidates in the United States or in other foreign countries for many reasons. There is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found, considered or cited during patent prosecution, which can be used to invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if such patents cover our product candidates, third parties may challenge their validity, enforceability or scope, which may result in such patent claims being narrowed, found unenforceable or invalidated. Our patents and patent applications, even if they are unchallenged, may not adequately protect our intellectual property, provide exclusivity for our product candidates or prevent others from designing around our claims. Any of these outcomes could impair our ability to prevent competitors from using the technologies claimed in any patents issued to us, which may have an adverse impact on our business.
In addition, changes to United States patent laws provide additional procedures for third parties to challenge the validity of issued patents based on patent applications filed after March 15, 2013. If the breadth or strength of protection provided by the patents and patent applications we hold or pursue with respect to our current or future product candidates is challenged, then it could threaten our ability to prevent competitive products using our proprietary technology. Further, because patent applications in the United States and most other countries are confidential for a period of time, typically for 18 months after filing, we cannot be certain that we were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our patents or patent applications. Furthermore, for applications filed before March 16, 2013 or patents issuing from such applications, an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications and patents. As of March 16, 2013, the United States transitioned to a “first-to-file” system for deciding which party should be granted a patent when two or more patent applications claiming the same invention are filed by different parties. A third party that files a patent application in the USPTO before we do, could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by the third party. The change to “first-to-file” from ”first-to-invent” is one of the changes to the patent laws of the United States resulting from the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), signed into law on September 16, 2011. Among some of the other significant changes to the patent laws are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO. It is not yet clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.
Patents granted by the European Patent Office may be opposed by any person within nine months from the publication of their grant and, in addition, may be challenged before national courts at any time. If the breadth or strength of protection provided by the patents and patent applications we hold, license or pursue with respect to our product candidates is threatened, it could threaten our ability to prevent third parties from using the same technologies that we use in our product candidates.
In June 2023, the European Unitary Patent system and the European Unified Patent Court (“UPC”) were launched. European patent applications now have the option, upon grant of a patent, of becoming a Unitary Patent which is subject to the jurisdiction of the UPC. In addition, conventional European patents, both already granted at the time the new
104
system began and granted thereafter, are subject to the jurisdiction of the UPC, unless actively opted out. This was a significant change in European patent practice, and deciding whether to opt-in or opt-out of Unitary Patent practice entails strategic and cost considerations. The UPC provides third parties with a new forum to centrally revoke our European patents and makes it possible for a third party to obtain pan-European injunctions against us. It will be several years before we will understand the scope of patent rights that will be recognized and the strength of patent remedies that will be provided by the UPC. While we have the right to opt our patents out of the UPC over the first seven years of the court’s existence, doing so may preclude us from realizing the benefits of the UPC. Moreover, the decision whether to opt-in or opt-out of Unitary Patent status will require coordinating with co-applicants, if any, adding complexity to any such decision.
We have issued patents and have filed patent applications, which are currently pending, covering various aspects of our product candidates. We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened or infringed by third parties. Any successful actions by third parties to challenge the validity or enforceability of any patents, which may issue to us could deprive us of the ability to prevent others from using the technologies claimed in such issued patents. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced.
While our biosimilar business is based primarily on the timing of our biosimilar product launches to occur after the expiration of relevant patents and on avoiding infringing valid and enforceable rights of third parties, we have filed a number of patent applications seeking patents that cover various proprietary elements of our product candidates when we have believed securing such patents may afford a competitive advantage. Our patent portfolio includes pending patent applications and issued patents, in the United States and globally, covering our biosimilar product and methods of making it. We cannot guarantee that our proprietary technologies will avoid infringement of third-party patents. Moreover, because competitors may be able to develop their own proprietary technologies, it is uncertain whether any of our issued patents or pending patent applications would cover the products of any competitors. The product and patent landscape is highly uncertain and we cannot predict whether our patent filings will afford us a competitive advantage against third parties or if our products will avoid infringement of third-party patents.
We do not consider it necessary for us or our competitors to obtain or maintain a proprietary patent position in order to engage in the business of biosimilar development and commercialization. Hence, while our ability to secure patent coverage on our own proprietary developments may improve our competitive position with respect to the product candidates we intend to commercialize, we do not view our own patent filings as a necessary or essential requirement for conducting our business nor do we rely on our own patent filings or the potential for any commercial advantage they may provide us as a basis for our success.
Obtaining and maintaining our patent protection depends on compliance with various procedural requirements, document submissions, fee payment and other requirements imposed by governmental patent agencies. Our patent protection could be reduced or eliminated for non-compliance with these requirements.
The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting, defending and enforcing patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual
105
property rights to the same extent as federal and state laws in the United States. Further, licensing partners may choose not to file patent applications in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility of later obtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States or importing products made using our inventions into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but the ability to enforce our patents is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Governments of foreign countries may force us to license our patents to third parties on terms that are not commercially reasonable or acceptable to us. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
If we are unable to maintain effective (non-patent) proprietary rights for our product candidates or any future product candidates, we may not be able to compete effectively in our markets.
While we have filed patent applications to protect certain aspects of our own proprietary formulation and process developments, we also rely on trade secret protection and confidentiality agreements to protect proprietary scientific, business and technical information and know-how that is not or may not be patentable or that we elect not to patent. However, confidential information and trade secrets can be difficult to protect. Moreover, the information embodied in our trade secrets and confidential information may be independently and legitimately developed or discovered by third parties without any improper use of or reference to information or trade secrets. We seek to protect the scientific, technical and business information supporting our operations, as well as the confidential information relating specifically to our product candidates by entering into confidentiality agreements with parties to whom we need to disclose our confidential information, for example, our employees, consultants, scientific advisors, board members, contractors, potential collaborators and investors. However, we cannot be certain that such agreements have been entered into with all relevant parties. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems, but it is possible that these security measures could be breached. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. Our confidential information and trade secrets thus may become known by our competitors in ways we cannot prove or remedy.
Although we expect all of our employees and consultants to assign their inventions to us, and all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed. We cannot guarantee that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. For example, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and
106
may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. We cannot guarantee that our employees, former employees or consultants will not file patent applications claiming our inventions. Because of the “first-to-file” laws in the United States and the EU, such unauthorized patent application filings may defeat our attempts to obtain patents on our own inventions.
We may be subject to claims challenging the inventorship of our patent filings and other intellectual property.
Although we are not currently aware of any claims challenging the inventorship of our patent applications or ownership of our intellectual property, we may in the future be subject to claims that former employees, collaborators or other third parties have an interest in our patent applications or patents we may be granted or other intellectual property as an inventor or co-inventor. For example, we may have inventorship or ownership disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of or right to use valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
We or the third parties upon whom we depend on may be adversely affected by earthquakes or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
Our corporate headquarters and laboratory are located in the San Francisco Bay Area and in Southern California (Camarillo), respectively. These locations have in the past experienced severe earthquakes, floods, wildfires and other natural disasters. We do not carry earthquake insurance. Earthquakes or other natural disasters could severely disrupt our operations or those of our collaboration partners and have a material adverse effect on our business, results of operations, financial condition and prospects. 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. The disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business.
The continuation of the war in Ukraine and conflicts in the Middle East may exacerbate certain risks we face.
The war between Russia and Ukraine and the global response, including the imposition of sanctions by the United States and other countries, could create or exacerbate risks facing our business. Conflicts in the Middle East may also increase the risks facing our business. We have evaluated our operations and partner contracts, and we currently do not expect either conflict to directly have a significant effect on our financial condition or results of operations. However, if the war between Russia and Ukraine or conflicts in the Middle East escalate or expand, risks that we have identified in this Quarterly Report on Form 10-Q may be materially increased. For example, if our supply arrangements or clinical operations are disrupted due to expanded sanctions or involvement of, and adverse impacts on, countries where we have operations or relationships, our business could be materially disrupted. Further, the use of cyberattacks could expand as part of the ongoing conflicts, which could adversely affect our ability to maintain or enhance our cyber security measures. These and other risks are described more fully in this “Risk Factors” section.
We incur significant increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives. We may fail to comply with the rules that apply to public companies,
107
including Section 404 of the Sarbanes-Oxley Act of 2002, which could result in sanctions or other penalties that would harm our business.
We incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligations under the Securities Exchange Act, and regulations regarding corporate governance practices. The listing requirements of The Nasdaq Global Market require that we satisfy certain corporate governance requirements relating to director independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Our management and other personnel must devote a substantial amount of time to ensure that we maintain compliance with all of these requirements. Moreover, the reporting requirements, rules and regulations have increased our legal and financial compliance costs and make some activities more time consuming and costly. Any changes we have made, and may make in the future to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timely basis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, may also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
We are subject to Section 404 of The Sarbanes-Oxley Act of 2002 (“Section 404”), and the related rules of the SEC, which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. During the course of our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we have a material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall. In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from The Nasdaq Global Market or other adverse consequences that would materially harm our business.
Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may also lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate. For example, the SEC’s proposed climate disclosure rule would result in significant costs of compliance if final rules that are similar to the proposed rules are approved in the future. Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain our current levels of such coverage.
Our information technology systems, or those used by our third-party CROs or other contractors or consultants, may fail or suffer security breaches and geopolitical tensions or conflicts, such as the ongoing war in Ukraine or conflicts in the Middle East, may create a heightened risk of cyberattacks.
We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business. In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information, preclinical and clinical trial data, and personal information (collectively, “Confidential Information”) of customers and our employees and contractors. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such Confidential Information.
108
Despite the implementation of security measures, our information technology systems as well as those of our third-party collaborators, consultants, contractors, suppliers, and service providers, may be vulnerable to damage from physical or electronic break-ins, computer viruses, misconfigurations, “bugs” or other vulnerabilities, “phishing” attacks, malware, ransomware, denial of service and other cyberattacks or disruptive incidents that could result in unauthorized access to, use or disclosure of, corruption of, or loss of Confidential Information, and could subject us to significant liabilities and regulatory and enforcement actions, and reputational damage. In addition, geopolitical tensions or conflicts, such as the war between Russia and Ukraine or the conflicts in the Middle East, may create a heightened risk of cyberattacks. We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our Confidential Information. If we or any of our third-party collaborators or service providers were to experience any material failure or security breach, it could result in a material disruption of our development programs, reputation, and business operations. For example, the loss of clinical study data from completed or ongoing clinical studies could result in delays in any regulatory approval or clearance efforts and significantly increase our costs to recover or reproduce the data, and subsequently commercialize the product.
We and certain of our service providers are from time to time subject to cyberattacks and security incidents. While we do not believe that we have experienced any significant system failure, accident or security breach to date, if we or our third-party collaborators, consultants, contractors, suppliers, or service providers were to suffer an attack or breach, for example, that resulted in the unauthorized access to or use or disclosure of Confidential Information, we may have to notify individuals, collaborators, government authorities, and the media, and may be subject to investigations, civil penalties, administrative and enforcement actions, and litigation, any of which could harm our business and reputation. Likewise, we rely on our third-party CROs and other third parties to conduct clinical studies, and similar events relating to their computer systems could also have a material adverse effect on our business. There can also be no assurance that our and our service providers’ cybersecurity risk management program and processes, including policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems, networks and Confidential Information.
Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Further, the continued hybrid working environment has generally increased the attack surface available to criminals, as more companies and individuals work online and work remotely, and as such, the risk of a cybersecurity incident potentially occurring, and our investment in risk mitigations against such an incident, is increasing. Because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate or unauthorized access to or disclosure or use of Confidential Information, we could incur liability and suffer reputational harm, and the development and commercialization of our products could be delayed. Federal, state and international laws and regulations can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties, fines and significant legal liability, if our information technology security efforts fail. We may also be exposed to a risk of loss or litigation and potential liability, which could materially and adversely affect our business, results of operations or financial condition. Our insurance policies may not be adequate to compensate us for the potential losses arising from such disruptions, failure, or security breach. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, our insurance may not cover all claims made against us and defending a suit, regardless of its merit, could be costly, divert management attention, and harm our reputation.
109
We are subject to governmental regulation and other legal obligations related to privacy, data protection and information security. Compliance with these requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data, and the failure to comply with such requirements could have a material adverse effect on our business, financial condition or results of operations.
The global data protection landscape is rapidly evolving, and we are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, disclosure, retention, and security of personal information, such as information that we may collect in connection with clinical trials in the U.S. and abroad. Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business. This evolution may create uncertainty in our business, affect our ability to operate in certain jurisdictions or to collect, store, transfer use and share personal information, necessitate the acceptance of more onerous obligations in our contracts, result in liability or impose additional costs on us. Compliance with these privacy and data security requirements is rigorous and time-intensive and may increase our cost of doing business. Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, fines and penalties, litigation and reputational harm, which could materially and adversely affect our business, financial condition and results of operations.
In the United States, we and our partners may be subject to numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations, that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. In addition, we may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations (collectively, “HIPAA”). Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA.
Even when HIPAA does not apply, according to the Federal Trade Commission (“FTC”), failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. The FTC has authority to initiate enforcement actions against entities that make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers or that may violate Section 5(a) of the FTC Act. Additionally, federal and state consumer protection laws are increasingly being applied by the FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of personal information, through websites or otherwise, and to regulate the presentation of website content.
In addition, state laws govern the privacy and security of personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same requirements, thus complicating compliance efforts. By way of example, California enacted the California Consumer Privacy Act as amended by the California Privacy Rights Act (collectively, the “CCPA”), which requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf. Similar laws have passed in other states and are continuing to be proposed
110
at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. In the event that we are subject to or affected by HIPAA, the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our business and financial condition.
In addition, the regulatory framework for the receipt, collection, processing, use, safeguarding, sharing and transfer of personal data is rapidly evolving and is likely to remain uncertain for the foreseeable future as new global privacy rules are being enacted and existing ones are being updated and strengthened. For example, on May 25, 2018, the General Data Protection Regulation (“GDPR”) took effect. The GDPR is applicable in each EEA member state and applies to companies established in the EEA as well as companies that collect and use personal data to offer goods or services to, or monitor the behavior of, individuals in the EEA, including, for example, through the conduct of clinical trials. GDPR introduces more stringent data protection obligations for processors and controllers of personal data. Among other things, the GDPR requires the establishment of a lawful basis for the processing of data, includes requirements relating to the consent of the individuals to whom the personal data relates, including detailed notices for clinical trial subjects and investigators, as well as requirements regarding the security of personal data and notification of data processing obligations or security incidents to appropriate data protection authorities or data subjects. The GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States; and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain. Case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses - a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. On July 10, 2023, the European Commission adopted its Adequacy Decision in relation to the new EU-US Data Privacy Framework (“DPF”) rendering the DPF effective as a GDPR transfer mechanism to U.S. entities self-certified under the DPF. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue. In particular, we expect the DPF Adequacy Decision to be challenged and international transfers to the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames. Penalties and fines for failure to comply with GDPR are significant, including fines of up to €20 million or 4% of the total worldwide annual turnover of a non-compliant undertaking, whichever is higher. In addition to fines, a breach of the GDPR may result in regulatory investigations, reputational damage, orders to cease/ change our data processing activities, enforcement notices, assessment notices (for a compulsory audit) and/ or civil claims (including class actions).
Further, since the beginning of 2021, we have also been subject to the United Kingdom General Data Protection Regulation and Data Protection Act 2018, which collectively imposes separate but similar obligations to those under the GDPR and comparable penalties, including fines of up to £17.5 million or 4% of a noncompliant undertaking’s global annual revenue for the preceding financial year, whichever is greater. On October 12, 2023, the U.K. Extension to the DPF came into effect (as approved by the U.K. government), as a data transfer mechanism from the U.K. to U.S. entities self-certified under the DPF. Other foreign jurisdictions are increasingly implementing or developing their own privacy regimes with complex and onerous compliance obligations and robust regulatory enforcement powers. As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.
Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or our employees, representatives, contractors, consultants or other third parties to comply with such requirements or adequately address privacy and security concerns, even if unfounded,
111
could result in additional cost and liability to us, damage our reputation, and have a material adverse effect on our business, financial condition and results of operations.
We may be negatively impacted by continued inflation.
We may be adversely impacted by continued increases in inflation. Current and future inflation may be driven by the following factors: supply chain disruptions, increased costs of transportation, increased input costs such as the cost of fuel, shortages, and governmental stimulus or fiscal policies. Continuing increases in inflation could impact the overall demand for our products, our costs for labor and materials and the size of any margins we are able to realize on our revenues. This would have a material and adverse impact on our business, financial position, results of operations and cash flows. Inflation may also result in higher interest rates, which in turn would result in higher interest expense related to our variable rate indebtedness.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds. We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials. In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We cannot eliminate the risk of contamination, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly cleanup and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products. Although we believe that the safety procedures utilized by us and our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry biological or hazardous waste insurance coverage.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Equity Securities
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the third quarter ended September 30, 2024. A total of 8,163 shares were surrendered to us in the third quarter of 2024, to satisfy minimum tax withholding obligations in connection with the vesting or exercise of stock-based awards.
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Mine Safety Disclosures
Not applicable
112
113
ITEM 6. Exhibits
Reference is made to the Index to Exhibits included in this Quarterly Report on Form 10-Q.
INDEX TO EXHIBITS
Incorporated by Reference | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Exhibit |
| Description |
| Form |
| Exhibit |
| Date |
| Filed |
3.1 | 8-K | 3.1 | 11/13/2014 | |||||||
3.2 | 8-K | 3.1 | 11/18/2020 | |||||||
4.1 | Reference is made to exhibits 3.1 and 3.2. | |||||||||
4.2 | S-1/A | 4.2 | 10/24/2014 | |||||||
4.3 | 8-K | 4.1 | 4/17/2020 | |||||||
4.4 | Form of certificate representing the 1.5% Convertible Senior Subordinated Notes due 2026. | 8-K | 4.2 | 4/17/2020 | ||||||
4.5 | Notice of Successor Trustee to Indenture dated February 7, 2022. | 10-Q | 4.5 | 5/5/2022 | ||||||
31.1 | X | |||||||||
31.2 | X | |||||||||
32.1 | X | |||||||||
101 | The following materials from Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 formatted in iXBRL (Inline eXtensible Business Reporting Language) includes: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Stockholders’ Deficit, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Condensed Consolidated Financial Statements. | X | ||||||||
104 | Cover page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). | X | ||||||||
114
†† | Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment or pursuant to Regulation S-K, Item 601(b)(10). Such omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed. Additionally, schedules and attachments to this exhibit have been omitted pursuant to Regulation S-K, Item 601(a)(5). |
# | Indicates management contract or compensatory plan. |
115
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COHERUS BIOSCIENCES, INC. | |
Date: November 6, 2024 | /s/ Dennis M. Lanfear | |
Dennis M. Lanfear | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: November 6, 2024 | /s/ Bryan McMichael | |
Bryan McMichael | ||
Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | ||
116