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☑
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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27-4842691
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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RTRX
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The Nasdaq Global Market
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Large Accelerated Filer
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☑
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Accelerated Filer
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☐
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Non-Accelerated Filer
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☐
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Smaller Reporting Company
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☐
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Emerging growth Company
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☐
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Page
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our ability to produce, sustain and expand sales of our products;
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our ability to develop, acquire and/or introduce new products;
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our projected future sales, profitability and other financial metrics;
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our future financing plans;
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our anticipated needs for working capital;
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the anticipated trends in our industry;
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acquisitions of other companies or assets that we might undertake in the future;
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our operations in the United States and abroad, and the domestic and foreign regulatory, economic and political conditions; and
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competition existing today or that will likely arise in the future.
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Focal segmental glomerulosclerosis ("FSGS"), a leading cause of end-stage renal disease and nephrotic syndrome ("NS"). There are currently no United States Food and Drug Administration ("FDA") approved pharmacologic treatments for FSGS and off-label treatments are limited to ACE/ARBs, steroids, and immunosuppressant agents, which are effective in only a subset of patients. Every year approximately 5,400 patients are diagnosed with FSGS and we estimate that there are approximately 40,000 FSGS patients in the United States and a similar number in Europe with approximately half of them being candidates for sparsentan. Sparsentan has orphan drug designation in the United States and European Union. In 2016, we generated positive data from our Phase 2 DUET study in FSGS. In 2018, we announced the initiation of the Phase 3 DUPLEX study of sparsentan in FSGS. The Company continues to enroll patients with FSGS in the pivotal Phase 3 DUPLEX Study, a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in approximately 300 patients. The DUPLEX Study protocol provides for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as urine protein-to-creatinine ratio (Up/C) ≤1.5 g/g and a >40 percent reduction in Up/C from baseline, at week 36. While the confirmatory endpoint of the study is the change in slope of estimated glomerular filtration rate (eGFR) after 108 weeks of treatment, successful achievement of the interim 36-week proteinuria endpoint is expected to serve as the basis for submission of a New Drug Application (NDA) under the Subpart H accelerated approval pathway in the U.S. and Conditional Marketing Authorization ("CMA") consideration in Europe. Top-line data from the interim analysis are expected to become available in the first half of 2021.
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Immunoglobulin A nephropathy ("IgAN")is characterized by hematuria, proteinuria, and variable rates of progressive renal failure. With an estimated prevalence of more than 100,000 people in the United States and greater numbers in Europe and Asia, IgAN is the most common primary glomerular disease. Most patients are diagnosed between the ages of 16 and 35, with up to 40% progressing to end stage renal disease within 15 years. There are currently no FDA approved treatments for IgAN. The current standard of care is renin-angiotensin-aldosterone system (RAAS) blockade with immunosuppression also being commonly used for patients with significant proteinuria or rapidly progressive glomerulonephritis. In 2018, we announced that the first patient had been dosed in the PROTECT Study, a global, pivotal Phase 3 clinical trial evaluating the long-term nephroprotective potential of sparsentan for the treatment of IgAN. The PROTECT Study, a global, randomized, multicenter, double-blind, parallel-arm, active-controlled pivotal Phase 3 clinical trial evaluating the safety and efficacy of sparsentan in approximately 280 patients with IgAN, continues to enroll. The primary efficacy endpoint in the PROTECT Study is the change in proteinuria (urine protein-to-creatinine ratio) from baseline after 36 weeks of treatment. Successful achievement of this endpoint is expected to support submission of an NDA under the Subpart H accelerated approval pathway in the U.S., as well as an application for CMA consideration in Europe. Secondary efficacy endpoints include change in eGFR from baseline to four weeks post-cessation of randomized treatment, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment. Top-line data from the primary endpoint are expected to become available in the first half of 2022.
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Focus on developing products to treat rare diseases characterized by severe unmet medical needs. We believe that our research, development, and commercialization capabilities in rare disease represent distinct competitive advantages. We leverage our development capabilities in rare disease to focus on advancing therapeutic candidates with life-changing potential. Given these capabilities, the well-established regulatory model and the ability to demonstrate clinical effects in small clinical studies, we believe that we can successfully bring new therapies to patients living with severe unmet medical needs.
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Develop a sustainable pipeline by employing disciplined decision criteria in the evaluation of potential in-licensing candidates. We seek to build a sustainable product pipeline by employing multiple therapeutic approaches and by developing or acquiring orphan drug candidates. We seek to augment our internally developed pipeline projects by selectively and strategically acquiring pipeline assets that will add value to the portfolio. We intend to mitigate risk by employing rigorous decision criteria, favoring drug candidates that have undergone at least some clinical study. Our decision to acquire rights to a drug candidate also depends on the scientific merits of the available clinical data; the identifiable orphan patient population; the economic terms of any proposed acquisition of rights; the projected amount of capital required to develop the drug candidate; and the economic potential of the drug candidate, should it be commercialized. We believe this strategy minimizes our clinical development risk and allows us to accelerate the development and potential commercialization of current and future drug candidates.
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Evaluate the commercialization strategies on a product-by-product basis to maximize the value of each. As we move our drug candidates through development toward regulatory approval, we will evaluate several options for each drug candidate’s commercialization strategy. These options include utilizing or expanding our own internal sales force; entering into joint marketing partnerships with other pharmaceutical or biotechnology companies, whereby we jointly sell and market the product; and out-licensing our products, whereby other pharmaceutical or biotechnology companies sell and market our product and pay us a royalty on sales. Our decision will be made separately for each product and will be based on a number of factors including capital necessary to execute on each option, size of the market and terms of potential offers from other pharmaceutical and biotechnology companies.
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serve patients living with rare disease that have limited treatment options;
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drive optimum performance of our marketed products;
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educate and train healthcare providers about our products and the diseases for which they are approved to treat;
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support access to and reimbursement coverage for our products in the United States without significant restrictions; and
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minimize the number of patients who discontinue treatment or have low compliance with our products by providing patients with support services and disease education, to the extent and in the manner permitted under applicable laws, to help them maximize the benefits of treatment.
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completion of extensive pre-clinical laboratory tests, animal studies, and formulation studies in accordance with the FDA’s GLP regulations;
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submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin;
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performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices ("GCP") requirements to establish the safety and efficacy of the drug for each proposed indication;
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submission to the FDA of an NDA after completion of all pivotal clinical trials;
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satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the active pharmaceutical ingredient, or API, and finished drug product are produced and tested to assess compliance with current Good Manufacturing Practices ("cGMPs"); and
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FDA review and approval of the NDA prior to any commercial marketing or sale of the drug in the United States.
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more frequent meetings with FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval;
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more frequent written communication from FDA about such things as the design of the proposed clinical trials and use of biomarkers;
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eligibility for Accelerated Approval and Priority Review, if relevant criteria are met; and
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rolling Review, which means that a drug company can submit completed sections of its Biologic License Application (BLA) or NDA for review by FDA, rather than waiting until every section is completed before the entire application can be reviewed. BLA or NDA review usually does not begin until the drug company has submitted the entire application to the FDA.
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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
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fines, warning letters or holds on post-approval clinical trials;
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refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals;
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product seizure or detention, or refusal to permit the import or export of products; or
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injunctions or the imposition of civil or criminal penalties.
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our preclinical or nonclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect to be promising;
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regulators may require us to conduct studies of the long-term effects associated with the use of our product candidates;
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regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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the FDA or any non-United States regulatory authority may impose conditions on us regarding the scope or design of our clinical trials or may require us to resubmit our clinical trial protocols to institutional review boards for re-inspection due to changes in the regulatory environment;
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the number of patients required for our clinical trials may be larger than we anticipate or participants may drop out of our clinical trials at a higher rate than we anticipate;
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our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner;
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we might have to suspend or terminate one or more of our clinical trials if we, regulators or institutional review boards determine that the participants are being exposed to unacceptable health risks;
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regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;
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the cost of our clinical trials may be greater than we anticipate;
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the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate or we may not be able to reach agreements on acceptable terms with prospective clinical research organizations; and
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the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
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be delayed in obtaining, or may not be able to obtain, marketing approval for one or more of our product candidates;
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obtain approval for indications that are not as broad as intended or entirely different than those indications for which we sought approval; and
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have the product removed from the market after obtaining marketing approval.
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restrictions on the marketing, manufacturing, or distribution of the product;
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requirements to include additional warnings on the label;
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requirements to create or enhance a medication guide outlining the risks to patients;
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withdrawal of the product from the market;
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voluntary or mandatory product recalls;
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requirements to change the way the product is administered or for us to conduct additional clinical trials;
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fines, warning or untitled letters or holds on clinical trials;
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refusal by the FDA to approve pending applications or supplements to approved applications filed by us or our strategic partners, or suspension or revocation of product license approvals;
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product seizure or detention, or refusal to permit the import or export of products;
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injunctions or the imposition of civil or criminal penalties; and
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harm to our reputation.
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inability of sales personnel to obtain access to or convince adequate numbers of physicians to prescribe our products;
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inability to recruit, retain and effectively manage adequate numbers of effective sales personnel;
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lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies that have more extensive product lines; and
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unforeseen delays, costs and expenses associated with maintaining our sales organization.
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the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;
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the efficacy and potential advantages over alternative treatments;
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the pricing of our product candidates;
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relative convenience and ease of administration;
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the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
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the strength of marketing and distribution support and timing of market introduction of competitive products;
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publicity concerning our products or competing products and treatments; and
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sufficient third-party insurance coverage and reimbursement.
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regulatory authorities may require the addition of restrictive labeling statements;
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regulatory authorities may withdraw their approval of the product; and
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we may be required to change the way the product is administered or conduct additional clinical trials.
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we or our licensors were the first to make the inventions covered by each of our pending patent applications;
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we or our licensors were the first to file patent applications for these inventions;
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others will not independently develop similar or alternative technologies or duplicate any of our technologies;
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any patents issued to us or our licensors that provide a basis for commercially viable products will provide us with any competitive advantages or will not be challenged by third parties;
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we will develop additional proprietary technologies that are patentable;
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we will file patent applications for new proprietary technologies promptly or at all;
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the claims we make in our patents will be upheld by patent offices in the United States and elsewhere;
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our patents will not expire prior to or shortly after commencing commercialization of a product; and
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the patents of others will not have a negative effect on our ability to do business.
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a covered benefit under its health plan;
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safe, effective and medically necessary;
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appropriate for the specific patient;
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cost-effective; and
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neither experimental nor investigational.
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reliance on the third party for regulatory compliance and quality assurance;
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limitations on supply availability resulting from capacity and scheduling constraints of the third parties;
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impact on our reputation in the marketplace if manufacturers of our products fail to meet the demands of our customers;
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the possible breach of the manufacturing agreement by the third party because of factors beyond our control; and
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the possible termination or nonrenewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.
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our inability to recruit and retain adequate numbers of effective sales and marketing personnel;
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the inability of sales personnel to obtain access to or educate adequate numbers of physicians to prescribe our products;
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the lack of complementary products to be offered by our sales personnel, which may put us at a competitive disadvantage against companies with broader product lines;
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unforeseen costs associated with expanding our own sales and marketing team for new products or with entering into a partnering agreement with an independent sales and marketing organization; and
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efforts by our competitors to commercialize competitive products.
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continue the open label portion of DUET and conduct the planned Phase 3 trials of sparsentan indications;
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continue the research and development of additional product candidates;
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expand our sales and marketing infrastructure to commercialize our current products and any new products for which we may obtain regulatory approval; and
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expand operational, financial, and management information systems and personnel, including personnel to support product development efforts and our obligations as a public company.
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the progress and results of our pre-clinical and clinical studies of sparsentan for FSGS and IgAN, Chenodal for CTX, and any other drug candidates;
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the costs, timing and outcome of regulatory review of our product candidates;
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debt service obligations on the 2025 Notes;
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the number and development requirements of other product candidates that we pursue;
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the costs of commercialization activities, including product marketing, sales and distribution;
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the emergence of competing technologies and other adverse market developments;
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the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property related claims;
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the extent to which we acquire or invest in businesses, products and technologies; and
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our ability to establish collaborations and obtain milestone, royalty or other payments from any such collaborators.
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results of clinical trials of our product candidates or those of our competitors;
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our entry into or the loss of a significant collaboration;
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regulatory or legal developments in the United States and other countries, including changes in the health care payment systems;
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our ability to obtain and maintain marketing approvals from the FDA or similar regulatory authorities outside the United States;
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variations in our financial results or those of companies that are perceived to be similar to us;
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changes in the structure of healthcare payment systems;
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market conditions in the pharmaceutical and biotechnology sectors and issuance of new or changed securities analysts’ reports or recommendations;
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general economic, industry and market conditions;
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results of clinical trials conducted by others on drugs that would compete with our product candidates;
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developments or disputes concerning patents or other proprietary rights;
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public concern over our product candidates or any products approved in the future;
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litigation;
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communications from government officials regarding health care costs or pharmaceutical pricing;
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future sales or anticipated sales of our common stock by us or our stockholders; and
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the other factors described in this “Risk Factors” section.
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integrating personnel, operations and systems, while maintaining focus on producing and delivering consistent, high quality products;
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coordinating geographically dispersed organizations;
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distracting employees from operations;
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retaining existing customers and attracting new customers; and
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managing inefficiencies associated with integrating the operations of the Company.
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decreased demand for any product candidates or products that we may develop;
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damage to our reputation;
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regulatory investigations that could require costly recalls or product modifications;
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withdrawal of clinical trial participants;
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costs to defend the related litigation;
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substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future;
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loss of revenue;
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the diversion of management’s attention from managing our business; and
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the inability to commercialize any products that we may develop.
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our failure to demonstrate to the satisfaction of the FDA or comparable regulatory authorities that a product candidate is safe and effective for a particular indication;
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the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable regulatory authorities for approval;
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our inability to demonstrate that a product candidate’s benefits outweigh its risks;
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our inability to demonstrate that the product candidate presents an advantage over existing therapies;
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the FDA’s or comparable regulatory authorities’ disagreement with the manner in which we interpret the data from preclinical studies or clinical trials;
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failure of the third-party manufacturers with which we contract for clinical or commercial supplies to satisfactorily complete an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; and
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a change in the approval policies or regulations of the FDA or comparable regulatory authorities or a change in the laws governing the approval process.
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make it more difficult for us to satisfy our obligations with respect to any other debt we may incur in the future;
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increase our vulnerability to general adverse economic and industry conditions;
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require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and related interest, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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increase our cost of borrowing;
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place us at a competitive disadvantage compared to our competitors that may have less debt; and
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limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes.
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failure to pay (for more than 30 days) interest when due;
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failure to pay principal when due;
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failure to deliver shares of common stock upon conversion of a 2025 Notes;
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failure to provide notice of a fundamental change;
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acceleration on our other indebtedness in excess of $10 million (other than indebtedness that is non-recourse to us); or
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certain types of bankruptcy or insolvency involving us.
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Location
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Address
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Lease Expiration
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Square Feet
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San Diego, California
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Various suites in 3721, 3661, 3611 & 3579 Valley Centre Drive
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July 31, 2024
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45,446
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For the year ended December 31,
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||||||||||||||||||
Consolidated Statement of Operations:
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2019
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|
2018
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2017
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2016
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2015
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||||||||||
Net product sales
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$
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175,338
|
|
|
$
|
164,246
|
|
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$
|
154,937
|
|
|
$
|
133,591
|
|
|
$
|
99,892
|
|
Total operating expenses
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312,699
|
|
|
244,286
|
|
|
208,728
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|
|
191,805
|
|
|
150,640
|
|
|||||
Operating loss
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(137,361
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)
|
|
(80,040
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)
|
|
(53,791
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)
|
|
(58,214
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)
|
|
(50,748
|
)
|
|||||
Total other income (expenses), net
|
(9,087
|
)
|
|
(21,827
|
)
|
|
(4,572
|
)
|
|
632
|
|
|
156,215
|
|
|||||
Income (Loss) before benefit (provision) for income taxes
|
(146,448
|
)
|
|
(101,867
|
)
|
|
(58,363
|
)
|
|
(57,582
|
)
|
|
105,467
|
|
|||||
Income tax benefit (provision)
|
21
|
|
|
(811
|
)
|
|
(1,368
|
)
|
|
9,679
|
|
|
11,770
|
|
|||||
Net income (loss)
|
$
|
(146,427
|
)
|
|
$
|
(102,678
|
)
|
|
$
|
(59,731
|
)
|
|
$
|
(47,903
|
)
|
|
$
|
117,237
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net Income (loss) per common share, basic
|
$
|
(3.46
|
)
|
|
$
|
(2.54
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
3.49
|
|
Net Income (loss) per common share, diluted
|
$
|
(3.46
|
)
|
|
$
|
(2.54
|
)
|
|
$
|
(1.54
|
)
|
|
$
|
(1.29
|
)
|
|
$
|
3.17
|
|
Weighted average common shares outstanding, basic
|
42,339,961
|
|
|
40,433,171
|
|
|
38,769,816
|
|
|
36,997,865
|
|
|
33,560,249
|
|
|||||
Weighted average common shares outstanding, diluted
|
42,339,961
|
|
|
40,433,171
|
|
|
38,769,816
|
|
|
38,288,012
|
|
|
37,581,439
|
|
|
As of December 31,
|
||||||||||||||||||
Balance Sheet data:
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
398,524
|
|
|
$
|
471,541
|
|
|
$
|
300,630
|
|
|
$
|
255,873
|
|
|
$
|
229,604
|
|
Working capital
|
333,615
|
|
|
391,057
|
|
|
240,139
|
|
|
249,090
|
|
|
214,951
|
|
|||||
Total assets
|
604,800
|
|
|
709,160
|
|
|
520,346
|
|
|
525,282
|
|
|
512,264
|
|
|||||
Long-term debt
|
204,861
|
|
|
195,091
|
|
|
45,077
|
|
|
44,422
|
|
|
43,766
|
|
|||||
Total stockholders’ equity
|
$
|
221,196
|
|
|
$
|
318,253
|
|
|
$
|
293,134
|
|
|
$
|
307,767
|
|
|
$
|
299,971
|
|
•
|
Focal segmental glomerulosclerosis ("FSGS"), a leading cause of end-stage renal disease and nephrotic syndrome ("NS"). There are currently no United States Food and Drug Administration ("FDA") approved pharmacologic treatments for FSGS and off-label treatments are limited to ACE/ARBs, steroids, and immunosuppressant agents, which are effective in only a subset of patients. Every year approximately 5,400 patients are diagnosed with FSGS and we estimate that there are approximately 40,000 FSGS patients in the United States and a similar number in Europe with approximately half of them being candidates for sparsentan. Sparsentan has orphan drug designation in the United States and European Union. In 2016, we generated positive data from our Phase 2 DUET study in FSGS. In 2018, we announced the initiation of the Phase 3 DUPLEX study of sparsentan in FSGS. The Company continues to enroll patients with FSGS in the pivotal Phase 3 DUPLEX Study, a global, randomized, multicenter, double-blind, parallel-arm, active-controlled clinical trial evaluating the safety and efficacy of sparsentan in approximately 300 patients. The DUPLEX Study protocol provides for an unblinded analysis of at least 190 patients to be performed after 36 weeks of treatment to evaluate the interim efficacy endpoint - the proportion of patients achieving a FSGS partial remission of proteinuria endpoint (FPRE), which is defined as urine protein-to-creatinine ratio (Up/C) ≤1.5 g/g and a >40 percent reduction in Up/C from baseline, at week 36. While the confirmatory endpoint of the study is the change in slope of estimated glomerular filtration rate (eGFR) after 108 weeks of treatment, successful achievement of the interim 36-week proteinuria endpoint is expected to serve as the basis for submission of a New Drug Application (NDA) under the Subpart H accelerated approval pathway in the U.S. and Conditional Marketing Authorization ("CMA") consideration in Europe. Top-line data from the interim analysis are expected to become available in the first half of 2021.
|
•
|
Immunoglobulin A nephropathy ("IgAN")is characterized by hematuria, proteinuria, and variable rates of progressive renal failure. With an estimated prevalence of more than 100,000 people in the United States and greater numbers in Europe and Asia, IgAN is the most common primary glomerular disease. Most patients are diagnosed between the ages of 16 and 35, with up to 40% progressing to end stage renal disease within 15 years. There are currently no FDA approved treatments for IgAN. The current standard of care is renin-angiotensin-aldosterone system (RAAS) blockade with immunosuppression also being commonly used for patients with significant proteinuria or rapidly progressive glomerulonephritis. In 2018, we announced that the first patient had been dosed in the PROTECT Study, a global, pivotal Phase 3 clinical trial evaluating the long-term nephroprotective potential of sparsentan for the treatment of IgAN. The PROTECT Study, a global, randomized, multicenter, double-blind, parallel-arm, active-controlled pivotal Phase 3 clinical trial evaluating the safety and efficacy of sparsentan in approximately 280 patients with IgAN, continues to enroll. The primary efficacy endpoint in the PROTECT Study is the change in proteinuria (urine protein-to-creatinine ratio) from baseline after 36 weeks of treatment. Successful achievement of this endpoint is expected to support submission of an NDA under the Subpart H accelerated approval pathway in the U.S., as well as an application for CMA consideration in Europe. Secondary efficacy endpoints include change in eGFR from baseline to four weeks post-cessation of randomized treatment, as well as the rate of change in eGFR over 52-week and 104-week periods following the first six weeks of randomized treatment. Top-line data from the primary endpoint are expected to become available in the first half of 2022.
|
|
For the Year Ended December 31,
|
||||||||||
|
|
|
(in thousands)
|
|
|
||||||
|
2019
|
|
2018
|
|
2017
|
||||||
External service provider costs:
|
|
||||||||||
Sparsentan
|
$
|
48,533
|
|
|
$
|
39,826
|
|
|
$
|
20,237
|
|
Fosmetpantotenate (discontinued)
|
31,193
|
|
|
21,330
|
|
|
16,571
|
|
|||
Censa (discontinued)
|
3,166
|
|
|
16,831
|
|
|
—
|
|
|||
Other product candidates
|
496
|
|
|
242
|
|
|
331
|
|
|||
General
|
19,638
|
|
|
16,258
|
|
|
15,827
|
|
|||
Total external service provider costs:
|
103,026
|
|
|
94,487
|
|
|
52,966
|
|
|||
Internal personnel costs:
|
37,937
|
|
|
29,270
|
|
|
25,202
|
|
|||
Total research and development
|
$
|
140,963
|
|
|
$
|
123,757
|
|
|
$
|
78,168
|
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Tiopronin products
|
$
|
95,638
|
|
|
$
|
89,176
|
|
|
$
|
6,462
|
|
|
$
|
89,176
|
|
|
$
|
82,311
|
|
|
$
|
6,865
|
|
Bile acid products
|
79,700
|
|
|
75,070
|
|
|
4,630
|
|
|
75,070
|
|
|
72,626
|
|
|
2,444
|
|
||||||
Total net product revenues
|
$
|
175,338
|
|
|
$
|
164,246
|
|
|
$
|
11,092
|
|
|
$
|
164,246
|
|
|
$
|
154,937
|
|
|
$
|
9,309
|
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Cost of goods sold
|
$
|
5,234
|
|
|
$
|
5,527
|
|
|
$
|
(293
|
)
|
|
$
|
5,527
|
|
|
$
|
3,605
|
|
|
$
|
1,922
|
|
Research and development
|
140,963
|
|
|
123,757
|
|
|
17,206
|
|
|
123,757
|
|
|
78,168
|
|
|
45,589
|
|
||||||
Selling, general and administrative
|
128,951
|
|
|
103,654
|
|
|
25,297
|
|
|
103,654
|
|
|
101,333
|
|
|
2,321
|
|
||||||
Change in fair value of contingent consideration
|
15,051
|
|
|
11,590
|
|
|
3,461
|
|
|
11,590
|
|
|
19,389
|
|
|
(7,799
|
)
|
||||||
Restructuring
|
—
|
|
|
(242
|
)
|
|
242
|
|
|
(242
|
)
|
|
3,608
|
|
|
(3,850
|
)
|
||||||
Legal fee settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,625
|
|
|
(2,625
|
)
|
||||||
Impairment of L-UDCA IPR&D intangible asset
|
25,500
|
|
|
—
|
|
|
25,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Write off of L-UDCA contingent consideration
|
(18,000
|
)
|
|
—
|
|
|
(18,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impairment of long-term investment
|
15,000
|
|
|
—
|
|
|
15,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
312,699
|
|
|
$
|
244,286
|
|
|
$
|
68,413
|
|
|
$
|
244,286
|
|
|
$
|
208,728
|
|
|
$
|
35,558
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
Change
|
||||||
Bile acid products
|
|
$
|
10,590
|
|
|
$
|
25,089
|
|
|
$
|
(14,499
|
)
|
L-UDCA
|
|
1,000
|
|
|
(5,700
|
)
|
|
6,700
|
|
|||
|
|
$
|
11,590
|
|
|
$
|
19,389
|
|
|
$
|
(7,799
|
)
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2018
|
|
2017
|
|
Change
|
||||||||||||
Other income (expense), net
|
$
|
(314
|
)
|
|
$
|
(474
|
)
|
|
$
|
160
|
|
|
$
|
(474
|
)
|
|
$
|
1,107
|
|
|
$
|
(1,581
|
)
|
Interest income
|
10,055
|
|
|
5,499
|
|
|
4,556
|
|
|
5,499
|
|
|
3,234
|
|
|
2,265
|
|
||||||
Interest expense
|
(18,828
|
)
|
|
(9,810
|
)
|
|
(9,018
|
)
|
|
(9,810
|
)
|
|
(4,422
|
)
|
|
(5,388
|
)
|
||||||
Loss on extinguishment of debt
|
—
|
|
|
(17,042
|
)
|
|
17,042
|
|
|
(17,042
|
)
|
|
—
|
|
|
(17,042
|
)
|
||||||
Change in fair value of derivative instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,491
|
)
|
|
4,491
|
|
||||||
|
$
|
(9,087
|
)
|
|
$
|
(21,827
|
)
|
|
$
|
12,740
|
|
|
$
|
(21,827
|
)
|
|
$
|
(4,572
|
)
|
|
$
|
(17,255
|
)
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Revenue
|
$
|
175,338
|
|
|
$
|
164,246
|
|
Net loss
|
(146,427
|
)
|
|
(102,678
|
)
|
||
Cash & cash equivalents
|
62,436
|
|
|
102,873
|
|
||
Short-term investments
|
336,088
|
|
|
368,668
|
|
||
Accumulated deficit
|
(416,444
|
)
|
|
(270,017
|
)
|
||
Stockholders' equity
|
221,196
|
|
|
318,253
|
|
||
Working capital
|
$
|
333,615
|
|
|
$
|
391,057
|
|
Working capital ratio
|
4.50
|
|
|
4.74
|
|
•
|
revenue growth of our marketed products;
|
•
|
the rate of progress and cost of our clinical trials, preclinical studies and other discovery and research and development activities;
|
•
|
the timing of, and costs involved in, seeking and obtaining marketing approvals for our products, and in maintaining quality systems standards for our products;
|
•
|
our ability to manufacture sufficient quantities of our products to meet expected demand;
|
•
|
the costs of preparing, filing, prosecuting, maintaining and enforcing any patent claims and other intellectual property rights, litigation costs and the results of litigation;
|
•
|
our ability to enter into collaboration, licensing or distribution arrangements and the terms and timing of these arrangements;
|
•
|
the potential need to expand our business, resulting in additional payroll and other overhead expenses;
|
•
|
the potential acquisition or in-licensing of other products or technologies; and
|
•
|
the emergence of competing products or other adverse market developments.
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by (used in) operating activities
|
$
|
(58,214
|
)
|
|
$
|
(24,958
|
)
|
|
$
|
7,403
|
|
Net cash provided by (used in) investing activities
|
19,863
|
|
|
(203,291
|
)
|
|
45,602
|
|
|||
Net cash provided by (used in) financing activities
|
(2,077
|
)
|
|
231,863
|
|
|
5,445
|
|
|||
Effect of exchange rate changes on cash
|
(9
|
)
|
|
(135
|
)
|
|
(58
|
)
|
|||
Net increase (decrease) in cash
|
(40,437
|
)
|
|
3,479
|
|
|
58,392
|
|
|||
|
|
|
|
|
|
||||||
Cash & cash equivalents, beginning of period
|
102,873
|
|
|
99,394
|
|
|
41,002
|
|
|||
Cash & cash equivalents, end of period
|
$
|
62,436
|
|
|
$
|
102,873
|
|
|
$
|
99,394
|
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Operating lease
|
$
|
12,226
|
|
|
$
|
2,958
|
|
|
$
|
5,046
|
|
|
$
|
4,222
|
|
|
$
|
—
|
|
Note payable, including contractual interest
|
335,338
|
|
|
9,000
|
|
|
18,000
|
|
|
18,000
|
|
|
290,338
|
|
|||||
Sales support services
|
1,804
|
|
|
416
|
|
|
833
|
|
|
555
|
|
|
|
|
|||||
Product supply contracts
|
8,791
|
|
|
5,317
|
|
|
1,610
|
|
|
1,257
|
|
|
607
|
|
|||||
Purchase order commitments
|
470
|
|
|
235
|
|
|
235
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
358,629
|
|
|
$
|
17,926
|
|
|
$
|
25,724
|
|
|
$
|
24,034
|
|
|
$
|
290,945
|
|
Exhibit No.
|
|
Description
|
|
|
|
1.1
|
|
|
2.1
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
4.4
|
|
|
5.1
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4+
|
|
|
10.5†
|
|
|
10.6†
|
|
|
10.7+
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11+
|
|
10.12+
|
|
|
10.13+
|
|
|
10.14+
|
|
|
10.15+
|
|
|
10.16
|
|
|
10.17+
|
|
|
10.18
|
|
|
10.19†
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24†
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
|
10.31†
|
|
|
10.32†
|
|
|
10.33†
|
|
|
10.34†
|
|
|
10.35†
|
|
|
10.36
|
|
|
10.37†
|
|
21.1
|
|
|
23.1
|
|
|
23.2
|
|
|
24.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
Taxonomy Extension Presentation Linkbase Document.
|
104
|
|
The cover page to this Annual Report on Form 10-K has been formatted in Inline XBRL.
|
+
|
|
We have received confidential treatment of certain portions of this agreement, which have been omitted and filed separately with the SEC pursuant to Rule 406 under the Securities Act of 1933, as amended, or Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|
†
|
|
Indicates management contract or compensatory plan.
|
Date: February 24, 2020
|
RETROPHIN, INC.
|
|
|
|
|
|
By:
|
/s/ Eric M. Dube
|
|
|
Name: Eric M. Dube
|
|
|
Title: Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Eric M. Dube
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
|
February 24, 2020
|
Eric M. Dube
|
|
|
|
|
|
|
|
|
|
/s/ Laura Clague
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
February 24, 2020
|
Laura Clague
|
|
|
|
|
|
|
|
|
|
/s/ Stephen Aselage
|
|
Director
|
|
|
Stephen Aselage
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ Roy D. Baynes
|
|
Director
|
|
|
Roy D. Baynes
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ Timothy Coughlin
|
|
Director
|
|
|
Timothy Coughlin
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ Gary Lyons
|
|
Director
|
|
|
Gary Lyons
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ Jeffrey A. Meckler
|
|
Director
|
|
|
Jeffrey A. Meckler
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ John A. Orwin
|
|
Director
|
|
|
John A. Orwin
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ Sandra E. Poole
|
|
Director
|
|
|
Sandra E. Poole
|
|
|
|
February 24, 2020
|
|
|
|
|
|
/s/ Ron Squarer
|
|
Director
|
|
|
Ron Squarer
|
|
|
|
February 24, 2020
|
|
Page
|
Financial Statements
|
|
•
|
Testing the design and operating effectiveness of certain controls over the development of the significant assumptions used in the valuation model, including controls over assumptions related to: (i) estimates in the forecasts of future net sales and (ii) discount rates applied to the forecasts.
|
•
|
Assessing the reasonableness of certain significant assumptions used in the valuation model, through: (i) reviewing the products’ historical performance, (ii) evaluating the reasonableness of significant assumptions (including revenue projections) against budgets and the current performance of the Company, and (iii) performing sensitivity analyses to test the potential effect of changes in certain assumptions on the valuation.
|
•
|
Utilizing professionals with specialized skills and knowledge to assist in evaluating the appropriateness of the valuation models utilized by management and to assess the reasonableness of certain estimates and assumptions used by management to develop the discount rates applied to the net sales forecasts.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
62,436
|
|
|
$
|
102,873
|
|
Marketable securities
|
336,088
|
|
|
368,668
|
|
||
Accounts receivable, net
|
18,048
|
|
|
12,662
|
|
||
Inventory, net
|
6,082
|
|
|
5,619
|
|
||
Prepaid expenses and other current assets
|
5,015
|
|
|
4,140
|
|
||
Prepaid taxes
|
1,395
|
|
|
1,716
|
|
||
Total current assets
|
429,064
|
|
|
495,678
|
|
||
Property and equipment, net
|
2,891
|
|
|
3,146
|
|
||
Other assets
|
14,709
|
|
|
7,709
|
|
||
Investment-equity
|
—
|
|
|
15,000
|
|
||
Intangible assets, net
|
157,200
|
|
|
186,691
|
|
||
Goodwill
|
936
|
|
|
936
|
|
||
Total assets
|
$
|
604,800
|
|
|
$
|
709,160
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
26,614
|
|
|
$
|
6,954
|
|
Accrued expenses
|
51,745
|
|
|
49,695
|
|
||
Other current liabilities
|
8,590
|
|
|
6,165
|
|
||
Business combination-related contingent consideration
|
8,500
|
|
|
19,350
|
|
||
Convertible debt
|
—
|
|
|
22,457
|
|
||
Total current liabilities
|
95,449
|
|
|
104,621
|
|
||
Convertible debt
|
204,861
|
|
|
195,091
|
|
||
Other noncurrent liabilities
|
20,894
|
|
|
17,545
|
|
||
Business combination-related contingent consideration, less current portion
|
62,400
|
|
|
73,650
|
|
||
Total liabilities
|
383,604
|
|
|
390,907
|
|
||
Stockholders' Equity:
|
|
|
|
|
|
||
Preferred stock $0.0001 par value; 20,000,000 shares authorized; 0 issued and outstanding as of December 31, 2019 and 2018, respectively
|
—
|
|
|
—
|
|
||
Common stock $0.0001 par value; 100,000,000 shares authorized; 43,088,921 and 41,389,524 issued and outstanding as of December 31, 2019 and 2018, respectively
|
4
|
|
|
4
|
|
||
Additional paid-in capital
|
636,910
|
|
|
589,795
|
|
||
Accumulated deficit
|
(416,444
|
)
|
|
(270,017
|
)
|
||
Accumulated other comprehensive income (loss)
|
726
|
|
|
(1,529
|
)
|
||
Total stockholders' equity
|
221,196
|
|
|
318,253
|
|
||
Total liabilities and stockholders' equity
|
$
|
604,800
|
|
|
$
|
709,160
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net product sales
|
$
|
175,338
|
|
|
$
|
164,246
|
|
|
$
|
154,937
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Cost of goods sold
|
5,234
|
|
|
5,527
|
|
|
3,605
|
|
|||
Research and development
|
140,963
|
|
|
123,757
|
|
|
78,168
|
|
|||
Selling, general and administrative
|
128,951
|
|
|
103,654
|
|
|
101,333
|
|
|||
Change in fair value of contingent consideration
|
15,051
|
|
|
11,590
|
|
|
19,389
|
|
|||
Restructuring
|
—
|
|
|
(242
|
)
|
|
3,608
|
|
|||
Legal fee settlement
|
—
|
|
|
—
|
|
|
2,625
|
|
|||
Impairment of L-UDCA IPR&D intangible asset
|
25,500
|
|
|
—
|
|
|
—
|
|
|||
Write off of L-UDCA contingent consideration
|
(18,000
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of long-term investment
|
15,000
|
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
312,699
|
|
|
244,286
|
|
|
208,728
|
|
|||
Operating loss
|
(137,361
|
)
|
|
(80,040
|
)
|
|
(53,791
|
)
|
|||
Other Income (expense), net:
|
|
|
|
|
|
|
|
|
|||
Other income (expense), net
|
(314
|
)
|
|
(474
|
)
|
|
1,107
|
|
|||
Interest income
|
10,055
|
|
|
5,499
|
|
|
3,234
|
|
|||
Interest expense
|
(18,828
|
)
|
|
(9,810
|
)
|
|
(4,422
|
)
|
|||
Loss on extinguishment of debt
|
—
|
|
|
(17,042
|
)
|
|
—
|
|
|||
Change in fair value of derivative instruments
|
—
|
|
|
—
|
|
|
(4,491
|
)
|
|||
Total other expense, net
|
(9,087
|
)
|
|
(21,827
|
)
|
|
(4,572
|
)
|
|||
Loss before benefit (provision) for income taxes
|
(146,448
|
)
|
|
(101,867
|
)
|
|
(58,363
|
)
|
|||
|
|
|
|
|
|
||||||
Income tax benefit (provision)
|
21
|
|
|
(811
|
)
|
|
(1,368
|
)
|
|||
|
|
|
|
|
|
||||||
Net loss
|
$
|
(146,427
|
)
|
|
$
|
(102,678
|
)
|
|
$
|
(59,731
|
)
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per common share:
|
$
|
(3.46
|
)
|
|
$
|
(2.54
|
)
|
|
$
|
(1.54
|
)
|
Basic and diluted weighted average common shares outstanding
|
42,339,961
|
|
|
40,433,171
|
|
|
38,769,816
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|||
Net loss
|
$
|
(146,427
|
)
|
|
$
|
(102,678
|
)
|
|
$
|
(59,731
|
)
|
Foreign currency translation gain (loss)
|
92
|
|
|
39
|
|
|
(339
|
)
|
|||
Unrealized gain (loss) on marketable securities
|
2,163
|
|
|
(553
|
)
|
|
(186
|
)
|
|||
Comprehensive loss
|
$
|
(144,172
|
)
|
|
$
|
(103,192
|
)
|
|
$
|
(60,256
|
)
|
|
Common Stock
|
|
Additional Paid in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated
Deficit |
|
Total
Stockholders' Equity |
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
BALANCE - DECEMBER 31, 2016
|
37,906,669
|
|
|
$
|
4
|
|
|
$
|
421,309
|
|
|
$
|
(490
|
)
|
|
$
|
(113,056
|
)
|
|
$
|
307,767
|
|
Adoption of ASU 2016-16 required de-recognition of intra-company deferred tax assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,868
|
)
|
|
(4,868
|
)
|
|||||
Share based compensation
|
—
|
|
|
—
|
|
|
26,645
|
|
|
—
|
|
|
—
|
|
|
26,645
|
|
|||||
Exercise of warrants and reclassification of derivative liability
|
607,481
|
|
|
—
|
|
|
14,866
|
|
|
—
|
|
|
—
|
|
|
14,866
|
|
|||||
Unrealized gain/(loss) on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
—
|
|
|
(186
|
)
|
|||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(339
|
)
|
|
—
|
|
|
(339
|
)
|
|||||
Issuance of common shares under the equity incentive plan and proceeds from exercise.
|
819,573
|
|
|
—
|
|
|
8,087
|
|
|
—
|
|
|
—
|
|
|
8,087
|
|
|||||
ESPP stock purchase and expense
|
40,022
|
|
|
—
|
|
|
893
|
|
|
—
|
|
|
—
|
|
|
893
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,731
|
)
|
|
(59,731
|
)
|
|||||
BALANCE - DECEMBER 31, 2017
|
39,373,745
|
|
|
$
|
4
|
|
|
$
|
471,800
|
|
|
$
|
(1,015
|
)
|
|
$
|
(177,655
|
)
|
|
$
|
293,134
|
|
Adoption of ASU 2017-11 - reclassification of derivative liability of warrants with down round provisions
|
—
|
|
|
—
|
|
|
5,394
|
|
|
—
|
|
|
10,316
|
|
|
15,710
|
|
|||||
Share based compensation
|
—
|
|
|
—
|
|
|
19,494
|
|
|
—
|
|
|
—
|
|
|
19,494
|
|
|||||
Exercise of warrants
|
1,036,054
|
|
|
—
|
|
|
5,305
|
|
|
—
|
|
|
—
|
|
|
5,305
|
|
|||||
Unrealized gain/(loss) on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
(553
|
)
|
|
—
|
|
|
(553
|
)
|
|||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
|||||
Issuance of common shares under the equity incentive plan and proceeds from exercise.
|
892,713
|
|
|
—
|
|
|
10,588
|
|
|
—
|
|
|
—
|
|
|
10,588
|
|
|||||
ESPP stock purchase and expense
|
87,012
|
|
|
—
|
|
|
2,269
|
|
|
—
|
|
|
—
|
|
|
2,269
|
|
|||||
Convertible debt issue
|
—
|
|
|
—
|
|
|
74,945
|
|
|
—
|
|
|
—
|
|
|
74,945
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,678
|
)
|
|
(102,678
|
)
|
|||||
BALANCE - DECEMBER 31, 2018
|
41,389,524
|
|
|
$
|
4
|
|
|
$
|
589,795
|
|
|
$
|
(1,529
|
)
|
|
$
|
(270,017
|
)
|
|
$
|
318,253
|
|
Share based compensation
|
—
|
|
|
—
|
|
|
20,463
|
|
|
—
|
|
|
—
|
|
|
20,463
|
|
|||||
Unrealized gain/(loss) on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
2,163
|
|
|
—
|
|
|
2,163
|
|
|||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
92
|
|
|||||
Issuance of common shares under the equity incentive plan and proceeds from exercise.
|
272,730
|
|
|
—
|
|
|
1,618
|
|
|
—
|
|
|
—
|
|
|
1,618
|
|
|||||
ESPP stock purchase and expense
|
129,324
|
|
|
—
|
|
|
2,444
|
|
|
—
|
|
|
—
|
|
|
2,444
|
|
|||||
Convertible debt issue
|
1,297,343
|
|
|
—
|
|
|
22,590
|
|
|
—
|
|
|
—
|
|
|
22,590
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(146,427
|
)
|
|
(146,427
|
)
|
|||||
BALANCE - DECEMBER 31, 2019
|
43,088,921
|
|
|
$
|
4
|
|
|
$
|
636,910
|
|
|
$
|
726
|
|
|
$
|
(416,444
|
)
|
|
$
|
221,196
|
|
|
For the year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|||
Net loss
|
$
|
(146,427
|
)
|
|
$
|
(102,678
|
)
|
|
$
|
(59,731
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
20,408
|
|
|
18,668
|
|
|
17,804
|
|
|||
Deferred income tax
|
—
|
|
|
—
|
|
|
(6,425
|
)
|
|||
Settlement expense
|
—
|
|
|
—
|
|
|
2,625
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
17,042
|
|
|
—
|
|
|||
Impairment of intangible assets
|
25,500
|
|
|
—
|
|
|
—
|
|
|||
Loss on allowance for inventory
|
1,468
|
|
|
2,457
|
|
|
609
|
|
|||
Loss on impairment of long-term investment
|
15,000
|
|
|
—
|
|
|
—
|
|
|||
Accretion of notes receivable
|
—
|
|
|
—
|
|
|
(651
|
)
|
|||
Accretion of contingent consideration
|
1,485
|
|
|
1,357
|
|
|
1,723
|
|
|||
Amortization of debt discount and deferred financing costs
|
9,903
|
|
|
3,398
|
|
|
656
|
|
|||
Amortization of (discounts) premiums on investments
|
(788
|
)
|
|
382
|
|
|
1,338
|
|
|||
Share based compensation
|
21,105
|
|
|
19,774
|
|
|
26,874
|
|
|||
Change in estimated fair value of contingent consideration
|
(2,948
|
)
|
|
11,590
|
|
|
19,389
|
|
|||
Payments from change in fair value of contingent consideration
|
(5,661
|
)
|
|
(8,085
|
)
|
|
(3,949
|
)
|
|||
Change in estimated fair value of liability classified warrants
|
—
|
|
|
—
|
|
|
4,491
|
|
|||
Foreign currency transaction gain
|
112
|
|
|
464
|
|
|
(1,081
|
)
|
|||
Other operating activities
|
(51
|
)
|
|
(396
|
)
|
|
(83
|
)
|
|||
Changes in operating assets and liabilities, net of business acquisitions:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
(5,184
|
)
|
|
152
|
|
|
4,945
|
|
|||
Inventory
|
(1,958
|
)
|
|
(2,773
|
)
|
|
(1,706
|
)
|
|||
Prepaid expenses and other current assets
|
(7,931
|
)
|
|
(1,358
|
)
|
|
(2,702
|
)
|
|||
Prepaid income taxes
|
555
|
|
|
1,126
|
|
|
621
|
|
|||
Accounts payable
|
9,255
|
|
|
(2,708
|
)
|
|
2,060
|
|
|||
Accrued expenses and other current liabilities
|
7,943
|
|
|
16,630
|
|
|
596
|
|
|||
Net cash provided by (used in) operating activities
|
(58,214
|
)
|
|
(24,958
|
)
|
|
7,403
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|||
Purchase of fixed assets
|
(195
|
)
|
|
(727
|
)
|
|
(887
|
)
|
|||
Purchase of intangible assets
|
(15,370
|
)
|
|
(18,974
|
)
|
|
(13,122
|
)
|
|||
Investment - Equity
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|||
Proceeds from the sale/maturity of marketable securities
|
259,140
|
|
|
162,755
|
|
|
114,526
|
|
|||
Purchase of marketable securities
|
(223,712
|
)
|
|
(331,345
|
)
|
|
(102,415
|
)
|
|||
Proceeds from the maturity of notes receivable
|
—
|
|
|
—
|
|
|
47,500
|
|
|||
Net cash provided by (used in) investing activities
|
19,863
|
|
|
(203,291
|
)
|
|
45,602
|
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|||
Payment of acquisition-related contingent consideration
|
(3,388
|
)
|
|
(9,721
|
)
|
|
(4,099
|
)
|
|||
Payment of other liability
|
—
|
|
|
(1,000
|
)
|
|
(852
|
)
|
|||
Payment of guaranteed minimum royalty
|
(2,084
|
)
|
|
(2,000
|
)
|
|
(2,000
|
)
|
|||
Proceeds from exercise of warrants
|
—
|
|
|
5,305
|
|
|
3,645
|
|
|||
Proceeds from exercise of stock options
|
1,618
|
|
|
10,588
|
|
|
8,087
|
|
|||
Proceeds from issuance of 2025 convertible senior notes
|
—
|
|
|
276,000
|
|
|
—
|
|
|||
Repurchase of 2019 convertible senior notes including premium
|
—
|
|
|
(40,203
|
)
|
|
—
|
|
|||
Payment of debt issuance and financing costs
|
—
|
|
|
(8,820
|
)
|
|
—
|
|
|||
Other financing activities
|
1,777
|
|
|
1,714
|
|
|
664
|
|
|||
Net cash provided by (used in) financing activities
|
(2,077
|
)
|
|
231,863
|
|
|
5,445
|
|
|||
Effect of exchange rate changes on cash
|
(9
|
)
|
|
(135
|
)
|
|
(58
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(40,437
|
)
|
|
3,479
|
|
|
58,392
|
|
|||
Cash and cash equivalents, beginning of year
|
102,873
|
|
|
99,394
|
|
|
41,002
|
|
|||
Cash and cash equivalents, end of year
|
$
|
62,436
|
|
|
$
|
102,873
|
|
|
$
|
99,394
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
7,669
|
|
|
$
|
1,880
|
|
|
$
|
2,070
|
|
Cash paid for income taxes
|
$
|
656
|
|
|
$
|
218
|
|
|
$
|
7,172
|
|
Non-cash Investing and financing activities:
|
|
|
|
|
|
|
|
|
|||
Reclassification of derivative liability to equity due to exercise of warrants
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,221
|
|
Accrued royalty in excess of minimum payable to the sellers of Thiola
|
$
|
15,815
|
|
|
$
|
14,572
|
|
|
$
|
13,247
|
|
Term extension of current Thiola agreement
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,885
|
|
Adoption of ASU 2017-11 - reclassification of derivative liability of warrants with down round provisions
|
$
|
—
|
|
|
$
|
15,710
|
|
|
$
|
—
|
|
•
|
Focal segmental glomerulosclerosis ("FSGS") is a rare kidney disease characterized by proteinuria where the glomeruli become progressively scarred. FSGS is a leading cause of end-stage renal disease.
|
•
|
Immunoglobulin A nephropathy ("IgAN") is an immune-complex-mediated glomerulonephritis characterized by hematuria, proteinuria, and variable rates of progressive renal failure. IgAN is the most common primary glomerular disease.
|
•
|
Chenodal (chenodiol tablets) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal has been the standard of care for CTX patients for more than three decades.
|
•
|
Cholbam® (cholic acid capsules) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders.
|
•
|
Thiola® and Thiola EC® (tiopronin tablets) are approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria.
|
|
Vesting Term
|
Stock Options
|
3 to 4 years
|
Restricted Stock Units
|
1 to 4 years
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Raw material
|
$
|
2,713
|
|
|
$
|
2,883
|
|
Finished goods
|
3,369
|
|
|
2,736
|
|
||
Total inventory
|
$
|
6,082
|
|
|
$
|
5,619
|
|
Computers and equipment
|
3 years
|
Furniture and fixtures
|
7 years
|
Leasehold improvements
|
Shorter of length of lease or life of the asset
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Tiopronin products
|
$
|
95,638
|
|
|
$
|
89,176
|
|
|
$
|
82,311
|
|
Bile acid products
|
79,700
|
|
|
75,070
|
|
|
72,626
|
|
|||
Total net product revenue
|
$
|
175,338
|
|
|
$
|
164,246
|
|
|
$
|
154,937
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Marketable Securities:
|
|
|
|
||||
Commercial paper
|
$
|
17,152
|
|
|
$
|
59,255
|
|
Corporate debt securities
|
306,436
|
|
|
299,413
|
|
||
Securities of government sponsored entities
|
12,500
|
|
|
10,000
|
|
||
Total Marketable Securities:
|
$
|
336,088
|
|
|
$
|
368,668
|
|
|
Contractual Maturity (in years)
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Aggregate Estimated Fair Value
|
||||||||
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
Less than 1
|
|
$
|
17,136
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
17,152
|
|
Corporate debt securities
|
Less than 1
|
|
191,770
|
|
|
582
|
|
|
(10
|
)
|
|
192,342
|
|
||||
Total maturity less than 1 year
|
|
|
208,906
|
|
|
598
|
|
|
(10
|
)
|
|
209,494
|
|
||||
Corporate debt securities
|
1 to 2
|
|
113,799
|
|
|
351
|
|
|
(56
|
)
|
|
114,094
|
|
||||
Securities of government-sponsored entities
|
1 to 2
|
|
12,501
|
|
|
—
|
|
|
(1
|
)
|
|
12,500
|
|
||||
Total maturity 1 to 2 years
|
|
|
126,300
|
|
|
351
|
|
|
(57
|
)
|
|
126,594
|
|
||||
Total available-for-sale securities
|
|
|
$
|
335,206
|
|
|
$
|
949
|
|
|
$
|
(67
|
)
|
|
$
|
336,088
|
|
|
Contractual Maturity (in years)
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Aggregate Estimated Fair Value
|
||||||||
Marketable Securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
Less than 1
|
|
$
|
59,313
|
|
|
$
|
—
|
|
|
$
|
(58
|
)
|
|
$
|
59,255
|
|
Corporate debt securities
|
Less than 1
|
|
149,824
|
|
|
—
|
|
|
(604
|
)
|
|
149,220
|
|
||||
Total maturity less than 1 year
|
|
|
209,137
|
|
|
—
|
|
|
(662
|
)
|
|
208,475
|
|
||||
Corporate debt securities
|
1 to 2
|
|
150,813
|
|
|
18
|
|
|
(638
|
)
|
|
150,193
|
|
||||
Securities of government-sponsored entities
|
1 to 2
|
|
9,997
|
|
|
4
|
|
|
(1
|
)
|
|
10,000
|
|
||||
Total maturity 1 to 2 years
|
|
|
160,810
|
|
|
22
|
|
|
(639
|
)
|
|
160,193
|
|
||||
Total available-for-sale securities
|
|
|
$
|
369,947
|
|
|
$
|
22
|
|
|
$
|
(1,301
|
)
|
|
$
|
368,668
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
2.50% convertible senior notes due 2025
|
$
|
276,000
|
|
|
$
|
276,000
|
|
Unamortized debt discount
|
(65,963
|
)
|
|
(74,836
|
)
|
||
Unamortized debt issuance costs
|
(5,176
|
)
|
|
(6,073
|
)
|
||
Total 2025 Notes, net of unamortized debt discount and debt issuance costs
|
$
|
204,861
|
|
|
$
|
195,091
|
|
|
Twelve Months Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Contractual interest expense
|
$
|
6,900
|
|
|
$
|
2,108
|
|
Amortization of debt discount
|
8,874
|
|
|
2,582
|
|
||
Amortization of debt issuance costs
|
896
|
|
|
273
|
|
||
Total interest expense for the 2025 Notes
|
$
|
16,670
|
|
|
$
|
4,963
|
|
|
As of December, 2019
|
|
Fair Value Hierarchy at December 31, 2019
|
||||||||||||
|
Total carrying and
estimated fair value
|
|
Quoted prices in
active markets
(Level 1)
|
|
Significant other
observable inputs
(Level 2)
|
|
Significant
unobservable
inputs (Level 3)
|
||||||||
Asset:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
62,436
|
|
|
$
|
62,436
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities, available-for-sale
|
336,088
|
|
|
—
|
|
|
336,088
|
|
|
—
|
|
||||
Total
|
$
|
398,524
|
|
|
$
|
62,436
|
|
|
$
|
336,088
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business combination-related contingent consideration
|
$
|
70,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,900
|
|
Total
|
$
|
70,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,900
|
|
|
As of December, 2018
|
|
Fair Value Hierarchy at December 31, 2018
|
||||||||||||
|
Total carrying and
estimated fair value |
|
Quoted prices in
active markets (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
||||||||
Asset:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
102,873
|
|
|
$
|
62,978
|
|
|
$
|
39,895
|
|
|
$
|
—
|
|
Marketable securities, available-for-sale
|
368,668
|
|
|
—
|
|
|
368,668
|
|
|
—
|
|
||||
Total
|
$
|
471,541
|
|
|
$
|
62,978
|
|
|
$
|
408,563
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Business combination-related contingent consideration
|
93,000
|
|
|
—
|
|
|
—
|
|
|
93,000
|
|
||||
Total
|
$
|
93,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
93,000
|
|
|
Contingent Consideration (Level 3)
|
||||||
|
2019
|
|
2018
|
||||
Balance at January 1,
|
$
|
93,000
|
|
|
$
|
90,000
|
|
L-UDCA write-off
|
(18,000
|
)
|
|
—
|
|
||
Increase from revaluation of contingent consideration
|
15,051
|
|
|
11,590
|
|
||
Contractual Payments
|
(6,696
|
)
|
|
(6,373
|
)
|
||
Contractual Payments accrued at December 31
|
(12,253
|
)
|
|
(2,171
|
)
|
||
Foreign currency impact
|
(202
|
)
|
|
(46
|
)
|
||
Balance at December 31,
|
$
|
70,900
|
|
|
$
|
93,000
|
|
|
Useful Life
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book Value
|
||||||
Chenodal Product Rights
|
16
|
$
|
67,849
|
|
|
$
|
(24,451
|
)
|
|
$
|
43,398
|
|
Thiola License
|
15
|
85,824
|
|
|
(20,417
|
)
|
|
65,407
|
|
|||
Economic Interest - U.S. revenue Cholbam
|
10
|
75,900
|
|
|
(36,071
|
)
|
|
39,829
|
|
|||
Economic Interest - International revenue Cholbam
|
10
|
7,544
|
|
|
(3,585
|
)
|
|
3,959
|
|
|||
Ligand License
|
11
|
7,900
|
|
|
(3,555
|
)
|
|
4,345
|
|
|||
Manchester Customer Relationships
|
10
|
403
|
|
|
(232
|
)
|
|
171
|
|
|||
Manchester Trade Name
|
1
|
175
|
|
|
(175
|
)
|
|
—
|
|
|||
Internal use software
|
5
|
207
|
|
|
(116
|
)
|
|
91
|
|
|||
Total
|
|
$
|
245,802
|
|
|
$
|
(88,602
|
)
|
|
$
|
157,200
|
|
|
Useful Life
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net Book Value
|
||||||
Chenodal Product Rights
|
16
|
$
|
67,849
|
|
|
$
|
(20,213
|
)
|
|
$
|
47,636
|
|
Thiola License
|
15
|
70,009
|
|
|
(14,523
|
)
|
|
55,486
|
|
|||
Economic Interest - U.S. revenue Cholbam
|
10
|
75,900
|
|
|
(28,487
|
)
|
|
47,413
|
|
|||
Economic Interest - International revenue Cholbam
|
10
|
7,700
|
|
|
(2,890
|
)
|
|
4,810
|
|
|||
Economic Interest - L-UDCA (acquired IPR&D)
|
Indefinite
|
25,500
|
|
|
—
|
|
|
25,500
|
|
|||
Ligand License
|
11
|
7,900
|
|
|
(2,397
|
)
|
|
5,503
|
|
|||
Manchester Customer Relationships
|
10
|
403
|
|
|
(192
|
)
|
|
211
|
|
|||
Manchester Trade Name
|
1
|
175
|
|
|
(175
|
)
|
|
—
|
|
|||
Internal use software
|
5
|
207
|
|
|
(75
|
)
|
|
132
|
|
|||
Total
|
|
$
|
255,643
|
|
|
$
|
(68,952
|
)
|
|
$
|
186,691
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Research and development
|
$
|
1,158
|
|
|
$
|
976
|
|
|
$
|
327
|
|
Selling, general and administrative
|
18,549
|
|
|
17,052
|
|
|
17,004
|
|
|||
Total amortization expense
|
$
|
19,707
|
|
|
$
|
18,028
|
|
|
$
|
17,331
|
|
2020
|
$
|
20,773
|
|
2021
|
20,773
|
|
|
2022
|
20,739
|
|
|
2023
|
20,449
|
|
|
2024
|
19,543
|
|
|
Thereafter
|
54,923
|
|
|
Total
|
$
|
157,200
|
|
|
2019
|
|
2018
|
||||
Compensation related costs
|
$
|
14,045
|
|
|
$
|
10,446
|
|
Research and development
|
16,067
|
|
|
16,515
|
|
||
Government rebate reserves
|
6,584
|
|
|
8,464
|
|
||
Selling, general and administrative
|
3,552
|
|
|
2,990
|
|
||
Royalty/contingent consideration
|
7,272
|
|
|
6,805
|
|
||
Miscellaneous accrued expenses
|
4,225
|
|
|
4,475
|
|
||
Total accrued expenses
|
$
|
51,745
|
|
|
$
|
49,695
|
|
|
Twelve Months Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Risk free rate
|
2.30
|
%
|
|
2.80
|
%
|
|
2.10
|
%
|
Expected volatility
|
68
|
%
|
|
68
|
%
|
|
70
|
%
|
Expected life (in years)
|
6.2
|
|
|
6.2
|
|
|
6.1
|
|
Expected dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
Weighted Average
|
|
|
||||||||
|
Shares Underlying
Options
|
|
Exercise
Price
|
|
Remaining
Contractual
Term (in years)
|
|
Aggregate
Intrinsic Value
(in thousands)
|
||||||
Outstanding at December 31, 2018
|
7,277,337
|
|
|
$
|
18.55
|
|
|
6.94
|
|
|
$
|
40,650
|
|
Granted
|
1,360,925
|
|
|
19.11
|
|
|
—
|
|
|
—
|
|
||
Forfeited and expired
|
(1,131,002
|
)
|
|
13.73
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(135,527
|
)
|
|
11.94
|
|
|
—
|
|
|
|
|
||
Outstanding at December 31, 2019
|
7,371,733
|
|
|
$
|
19.52
|
|
|
6.63
|
|
|
$
|
4,906
|
|
|
|
|
Weighted Average
|
|
|
|||||||
|
Shares Underlying
Options
|
|
Exercise
Price
|
|
Remaining
Contractual
Term (in years)
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||
2018
|
4,834,781
|
|
|
$
|
16.81
|
|
|
5.98
|
|
$
|
35,387
|
|
2019
|
4,936,995
|
|
|
$
|
18.93
|
|
|
5.62
|
|
$
|
4,490
|
|
|
Number of
RSUs
|
|
Weighted Average
Grant Date Fair Value
|
|||
Unvested December 31, 2018
|
400,426
|
|
|
$
|
24.95
|
|
Granted
|
559,815
|
|
|
17.15
|
|
|
Vested
|
(137,203
|
)
|
|
24.43
|
|
|
Forfeited/cancelled
|
(59,310
|
)
|
|
20.97
|
|
|
Unvested December 31, 2019
|
763,728
|
|
|
$
|
19.64
|
|
|
Number of
PSUs
|
|
Weighted Average
Grant Date Fair Value
|
|||
Unvested December 31, 2018
|
226,750
|
|
|
$
|
21.54
|
|
Granted
|
80,000
|
|
|
21.32
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited/cancelled
|
(73,250
|
)
|
|
23.33
|
|
|
Unvested December 31, 2019
|
233,500
|
|
|
$
|
20.90
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Selling, general and administrative expenses
|
$
|
14,195
|
|
|
$
|
13,550
|
|
|
$
|
17,924
|
|
Research and development expenses
|
6,910
|
|
|
6,224
|
|
|
8,950
|
|
|||
Total
|
$
|
21,105
|
|
|
$
|
19,774
|
|
|
$
|
26,874
|
|
|
Shares Issued
|
|
Cash Received
|
|
Derivative Liability Reclassified as Equity
|
|
Change in Fair Value Expense
|
|||||||
2017
|
607,481
|
|
|
$
|
3,645
|
|
|
$
|
11,221
|
|
|
$
|
3,033
|
|
2018
|
1,036,054
|
|
|
$
|
5,305
|
|
|
n/a
|
|
|
n/a
|
|
||
2019
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
For the year ended December 31,
|
|||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
|
Shares
|
|
Net loss
|
|
EPS
|
|
Shares
|
|
Net loss
|
|
EPS
|
|
Shares
|
|
Net Loss
|
|
EPS
|
|||||||||||||||
Basic and dilutive loss per share
|
42,339,961
|
|
|
$
|
(146,427
|
)
|
|
$
|
(3.46
|
)
|
|
40,433,171
|
|
|
$
|
(102,678
|
)
|
|
$
|
(2.54
|
)
|
|
38,769,816
|
|
|
$
|
(59,731
|
)
|
|
$
|
(1.54
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
(129,452
|
)
|
|
$
|
(87,573
|
)
|
|
$
|
(55,611
|
)
|
Foreign
|
(16,996
|
)
|
|
(14,294
|
)
|
|
(2,752
|
)
|
|||
Total
|
$
|
(146,448
|
)
|
|
$
|
(101,867
|
)
|
|
$
|
(58,363
|
)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(319
|
)
|
|
$
|
698
|
|
|
$
|
6,991
|
|
State
|
298
|
|
|
113
|
|
|
802
|
|
|||
|
(21
|
)
|
|
811
|
|
|
7,793
|
|
|||
Deferred
|
|
|
|
|
|
|
|
|
|||
Federal
|
—
|
|
|
—
|
|
|
(7,965
|
)
|
|||
State
|
—
|
|
|
—
|
|
|
1,540
|
|
|||
|
—
|
|
|
—
|
|
|
(6,425
|
)
|
|||
Total tax provision (benefit)
|
$
|
(21
|
)
|
|
$
|
811
|
|
|
$
|
1,368
|
|
|
2019
|
|
2018
|
|
2017
|
|||
Statutory rate - federal
|
(21.00
|
)%
|
|
(21.00
|
)%
|
|
(35.00
|
)%
|
State taxes, net of federal benefit
|
(4.35
|
)%
|
|
(4.44
|
)%
|
|
(3.30
|
)%
|
Change in FV of derivative liability (warrants)
|
—
|
%
|
|
—
|
%
|
|
2.82
|
%
|
Change in federal tax rate
|
—
|
%
|
|
—
|
%
|
|
23.29
|
%
|
Convertible Debt
|
—
|
%
|
|
21.77
|
%
|
|
—
|
%
|
Loss on extinguishment of debt
|
—
|
%
|
|
4.09
|
%
|
|
—
|
%
|
Other permanent differences
|
0.24
|
%
|
|
0.10
|
%
|
|
1.04
|
%
|
Tax credits
|
(15.17
|
)%
|
|
(11.86
|
)%
|
|
(5.79
|
)%
|
Return to provision adjustments and other true-ups
|
0.44
|
%
|
|
1.42
|
%
|
|
(3.48
|
)%
|
Other
|
2.32
|
%
|
|
1.06
|
%
|
|
1.25
|
%
|
Change in valuation allowance
|
37.50
|
%
|
|
9.79
|
%
|
|
21.62
|
%
|
Income tax provision (benefit)
|
(0.02
|
)%
|
|
0.93
|
%
|
|
2.45
|
%
|
|
2019
|
|
2018
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Net operating loss
|
$
|
27,747
|
|
|
$
|
9,700
|
|
Research and development and other tax credits
|
33,315
|
|
|
14,715
|
|
||
Contingent consideration
|
18,029
|
|
|
23,459
|
|
||
Other accrued expenses
|
4,319
|
|
|
3,710
|
|
||
Stock based compensation
|
19,458
|
|
|
16,761
|
|
||
Charitable Contributions
|
1,256
|
|
|
—
|
|
||
Other
|
—
|
|
|
555
|
|
||
|
104,124
|
|
|
68,900
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Intangible assets
|
(2,749
|
)
|
|
(14,288
|
)
|
||
Convertible Debt
|
(16,182
|
)
|
|
(18,419
|
)
|
||
Tax basis depreciation less than book depreciation
|
(448
|
)
|
|
—
|
|
||
|
(19,379
|
)
|
|
(32,707
|
)
|
||
|
|
|
|
||||
Net deferred tax assets before valuation allowance
|
84,745
|
|
|
36,194
|
|
||
Valuation allowance
|
(84,745
|
)
|
|
(36,194
|
)
|
||
Total deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
|
2018
|
||||
Balance as of January 1:
|
$
|
—
|
|
|
$
|
—
|
|
Increase in current period positions
|
235
|
|
|
—
|
|
||
Decrease in prior period positions
|
—
|
|
|
—
|
|
||
Increase in prior period positions
|
—
|
|
|
—
|
|
||
Balance as of December 31:
|
$
|
235
|
|
|
$
|
—
|
|
|
|
|
Weighted Average
|
|||||||
|
Warrants
|
|
Exercise Price
|
|
Grant Date
Fair Value
|
|||||
Outstanding at December 31, 2017
|
1,159,424
|
|
|
$
|
7.86
|
|
|
$
|
4.15
|
|
Issued
|
—
|
|
|
—
|
|
|
—
|
|
||
Canceled
|
554
|
|
|
5.99
|
|
|
3.33
|
|
||
Exercised
|
1,158,870
|
|
|
7.88
|
|
|
4.15
|
|
||
Outstanding at December 31, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Computers and equipment
|
$
|
577
|
|
|
$
|
506
|
|
Furniture and fixtures
|
1,251
|
|
|
1,150
|
|
||
Leasehold improvements
|
2,654
|
|
|
2,628
|
|
||
Construction-in-progress
|
249
|
|
|
—
|
|
||
|
4,731
|
|
|
4,284
|
|
||
Less: Accumulated depreciation
|
(1,840
|
)
|
|
(1,138
|
)
|
||
Total property and equipment, net
|
$
|
2,891
|
|
|
$
|
3,146
|
|
|
December 31, 2019
|
||
2020
|
$
|
2,613
|
|
2021
|
2,486
|
|
|
2022
|
2,561
|
|
|
2023
|
2,637
|
|
|
2024
|
1,584
|
|
|
Thereafter
|
—
|
|
|
Total undiscounted future minimum payments
|
11,881
|
|
|
Present value discount
|
(1,874
|
)
|
|
Total lease liability
|
10,007
|
|
|
Lease incentives
|
(1,463
|
)
|
|
Straight line lease expense in excess of cash payments
|
(1,549
|
)
|
|
Total ROU asset
|
$
|
6,995
|
|
|
December 31, 2019
|
||
Other current liabilities
|
$
|
2,613
|
|
Other non-current liabilities
|
7,394
|
|
|
Total lease liabilities
|
$
|
10,007
|
|
|
|
December 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flow for operating leases
|
|
$
|
1,710
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases1
|
|
$
|
11,717
|
|
|
Fourth
Quarter
|
|
|
Third
Quarter
|
|
|
Second Quarter
|
|
|
First
Quarter
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net product sales
|
$
|
46,688
|
|
|
|
$
|
44,373
|
|
|
|
$
|
44,707
|
|
|
|
$
|
39,570
|
|
|
||
Total operating expenses
|
74,855
|
|
|
|
78,810
|
|
1
|
|
|
81,236
|
|
|
|
77,798
|
|
2
|
|
||||
Operating loss
|
(28,167
|
)
|
|
|
(34,437
|
)
|
|
|
(36,529
|
)
|
|
|
(38,228
|
)
|
|
||||||
Total other expense, net
|
(2,060
|
)
|
|
|
(2,576
|
)
|
|
|
(2,103
|
)
|
|
|
(2,348
|
)
|
|
||||||
Loss before provision for income taxes
|
(30,227
|
)
|
|
|
(37,013
|
)
|
|
|
(38,632
|
)
|
|
|
(40,576
|
)
|
|
||||||
Income tax benefit (provision)
|
(32
|
)
|
|
|
523
|
|
|
|
(69
|
)
|
|
|
(401
|
)
|
|
||||||
Net income (loss)
|
$
|
(30,259
|
)
|
|
|
$
|
(36,490
|
)
|
|
|
$
|
(38,701
|
)
|
|
|
$
|
(40,977
|
)
|
|
||
Net Loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
$
|
(0.70
|
)
|
|
|
$
|
(0.85
|
)
|
|
|
$
|
(0.92
|
)
|
|
|
$
|
(0.99
|
)
|
|
||
For the year ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net product sales
|
$
|
43,771
|
|
|
|
$
|
40,706
|
|
|
|
$
|
41,337
|
|
|
|
$
|
38,432
|
|
|
||
Total operating expenses
|
48,756
|
|
|
|
76,289
|
|
3
|
|
62,897
|
|
|
|
56,344
|
|
|
||||||
Operating loss
|
(4,985
|
)
|
|
|
(35,583
|
)
|
|
|
(21,560
|
)
|
|
|
(17,912
|
)
|
|
||||||
Total other income (expense), net
|
(2,470
|
)
|
|
|
(18,518
|
)
|
4
|
|
(602
|
)
|
|
|
(237
|
)
|
|
||||||
Income (loss) before provision for income taxes
|
(7,455
|
)
|
|
|
(54,101
|
)
|
|
|
(22,162
|
)
|
|
|
(18,149
|
)
|
|
||||||
Income tax benefit (provision)
|
—
|
|
|
|
(415
|
)
|
|
|
(167
|
)
|
|
|
(229
|
)
|
|
||||||
Net income (loss)
|
$
|
(7,455
|
)
|
|
|
$
|
(54,516
|
)
|
|
|
$
|
(22,329
|
)
|
|
|
$
|
(18,378
|
)
|
|
||
Net loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic and diluted
|
$
|
(0.18
|
)
|
|
|
$
|
(1.34
|
)
|
|
|
$
|
(0.56
|
)
|
|
|
$
|
(0.46
|
)
|
|
(i)
|
Accuracy of the Company’s Representations and Warranties; Performance by the Company. The Company shall have delivered the certificate required to be delivered pursuant to Section 4(o) on or before the date on which delivery of such certificate is required pursuant to Section 4(o). The Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to such date, including, but not limited to, the covenants contained in Section 4(p), Section 4(q) and Section 4(r).
|
(ii)
|
No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.
|
(iii)
|
Material Adverse Changes. Except as disclosed in the Prospectus and the Time of Sale Information, (a) in the judgment of the Agent there shall not have occurred any Material Adverse Change; and (b) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” as such term is defined for purposes of Section 3(a)(62) of the Exchange Act.
|
(iv)
|
No Suspension of Trading in or Delisting of Common Shares; Other Events. The trading of the Common Shares (including without limitation the Shares) shall not have been suspended by the Commission, the Principal Market or FINRA and the Common Shares (including without limitation the Shares) shall have been approved for listing or quotation on and shall not have been delisted from the Nasdaq Stock Market, the New York Stock Exchange or any of their constituent markets. There shall not have occurred (and be continuing in the case of occurrences under clauses (i) and (ii) below) any of the following: (i) trading or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the Principal Market or trading in securities generally on either the Principal Market shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the FINRA; (ii) a general
|
(i)
|
Either party may terminate this Agreement prior to the end of the Agency Period, by giving written notice as required by this Agreement, upon notice to the other party; provided that, (A) if the Company terminates this Agreement after the Agent confirms to the Company any sale of Shares, the Company shall remain obligated to comply with Section 3(b)(v) with respect to such Shares and (B) Section 2, Section 6, Section 7 and Section 8 shall survive termination of this Agreement. If termination shall occur prior to the Settlement Date for any sale of Shares, such sale shall nevertheless settle in accordance with the terms of this Agreement.
|
1.
|
Annual Board Service Retainer:
|
|
a.
|
All Eligible Directors: $50,000
|
|
b.
|
Chairman of the Board Service Retainer (in addition to Eligible Director Service Retainer): $30,000
|
•
|
Audit Committee: an additional annual cash retainer of $10,000 for service as a member of the Audit Committee ($20,000 for service as the chairman of the Audit Committee)
|
•
|
Compensation Committee: an additional annual cash retainer of $7,500 for service as a member of the Compensation Committee ($15,000 for service as the chairman of the Compensation Committee)
|
•
|
Nominating/Corporate Governance Committee: $5,000 for service as a member of the Nominating / Corporate Governance Committee ($12,000 for service as the chairman of the Nominating / Corporate Governance committee)
|
•
|
Science and Medical Technology Committee: $5,000 for service as a member of the Science and Medical Technology Committee ($10,000 for service as the chairman of Science and Medical Technology Committee)
|
No.
|
|
Name
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1
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Retrophin Pharmaceutical, Inc.
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2
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Retrophin Therapeutics I, Inc.
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3
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Retrophin Therapeutics II, Inc.
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4
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Retrophin Europe Ltd
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5
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Retrophin International Holdings Ltd
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6
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RTRX International CV
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7
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Retrophin Therapeutics International LLC
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8
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US LLC 2
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9
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Retrophin Research Ltd
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10
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Retrophin US Holdings LLC
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11
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Manchester Pharmaceuticals LLC
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12
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Centurion Merger Sub, Inc.
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13
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[10-em856580]
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1.
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I have reviewed this Annual Report on Form 10-K of Retrophin, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 24, 2020
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/s/ Eric M. Dube
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Eric M. Dube
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Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of Retrophin, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 24, 2020
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/s/ Laura Clague
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Laura Clague
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Chief Financial Officer
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(Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report, fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 24, 2020
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/s/ Eric M. Dube
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Eric M. Dube
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Chief Executive Officer
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(Principal Executive Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report, fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 24, 2020
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/s/ Laura Clague
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Laura Clague
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Chief Financial Officer
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(Principal Financial Officer)
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