Theravance Biopharma (TBPH) risk factors, FY2024 10-K

Other

1. 01Summary of Principal Risks Associated with Theravance Biopharma’s Business

RISKS RELATING TO THE COMPANY

1. 02We may never achieve or sustain profitability from our operations
2. 03If YUPELRI’s acceptance by physicians, patients, third-party payors, or the medical community in general does not continue to grow, we may not receive significant additional revenues from sales of this product
3. 04In collaboration with Viatris, we are responsible for marketing and sales of YUPELRI in the US, which subjects us to certain risks
4. 05Any delay in commencing or completing clinical studies for product candidates or product and any adverse results from clinical or non-clinical studies or regulatory obstacles product candidates or product may face, would harm our business and the price of our securities could fall
5. 06If our product candidates are not approved by regulatory authorities, including the FDA, we will be unable to commercialize them
6. 07If our partners do not satisfy their obligations under our agreements with them, or if they terminate our partnerships with us, we may not be able to develop or commercialize our partnered product candidates as planned
7. 08Our ongoing drug development efforts might not generate additional approvable drugs
8. 09testing, enrollment, obtaining regulatory approvals, maintaining regulatory compliance, manufacturing, competition and costs and expenses that may exceed current estimates
9. 10Our strategic review process may not result in an executed or consummated transaction or other strategic alternative, and the process of reviewing strategic alternatives or its conclusion could adversely affect our business and our shareholders
10. 11We face substantial competition from companies with more resources and experience than we have, which may result in others discovering, developing, receiving approval for or commercializing products before or more successfully than we do
11. 12There is a single source of supply for our product candidate and for YUPELRI, and our business will be harmed if any of these single-source manufacturers are not able to satisfy demand and alternative sources are not available
12. 13regulations and similar foreign standards and we do not have control over compliance with these regulations by our manufacturers
13. 14We are subject to extensive and ongoing regulation, oversight and other requirements by the FDA and failure to comply with these regulations and requirements may subject us to penalties that may adversely affect our financial condition or our ability to commercialize any approved products
14. 15We and/or our collaboration partners and those commercializing products with respect to which we have an economic interest or right to receive royalties may face competition from companies seeking to market generic versions of any approved products in which we have an interest, such as YUPELRI
15. 16If we are unable to enter into future collaboration arrangements or if any such collaborations with third-parties are unsuccessful, we may be unable to fully develop and commercialize certain product candidates and our business will be adversely affected
16. 17We depend on third-parties in the conduct of our non-clinical and clinical studies for our product candidates
17. 18If there are any adverse developments or perceived adverse developments with respect to TRELEGY, we may not receive Milestone Payments or the revenue we expect from the Outer Years Royalty, which would harm our business and could cause the price of our securities to fall
18. 19We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments and receipt of the value we currently anticipate from the Outer Years Royalty will depend on, among other factors, GSK’s ability to further commercialize TRELEGY
19. 20If we lose key management, sales, clinical development or scientific personnel, or if we fail to attract and retain key employees, our ability to discover and develop our product candidates and commercialize our products will be impaired
20. 21Our business and operations would suffer in the event of significant disruptions of information technology systems or security breaches
21. 22Global economic, political, and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price
22. 23administration, including the potential use and effects of tariffs to address the administration’s policy goals, could materially impact the macroeconomic framework in which we operate
23. 24Our US operating subsidiary’s facility is located near known earthquake fault zones, and the occurrence of an earthquake, extremist attack or other catastrophic disaster could cause damage to our facilities and equipment, which could require us to cease or curtail operations
24. 25If sufficient capital is not available, we may have to further curtail operations or we could be forced to share our rights to commercialize our product candidates with third-parties on terms that may not be favorable to us
25. 26We may seek to obtain future financing through the issuance of debt or equity, which may have an adverse effect on our shareholders or may otherwise adversely affect our business
26. 27We may be treated as a US corporation for US federal income tax purposes
27. 28Future tax reform, including changes in tax rates and imposition of new taxes, could impact our results of operations and financial condition
28. 29Taxing authorities may challenge our structure and transfer pricing arrangements
29. 30We were a passive foreign investment company, or “PFIC,” for 2014, but we were not a PFIC from 2015 through 2024, and we do not expect to be a PFIC for the foreseeable future
30. 31If we are unable to maintain effective internal controls, our business, financial position, and results of operations could be adversely affected

RISKS RELATED TO LEGAL AND REGULATORY UNCERTAINTY

1. 32If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our current or future markets
2. 33Litigation to protect or defend our intellectual property or third-party claims of intellectual property infringement will require us to divert resources and may prevent or delay our drug development and commercialization efforts
3. 34Product liability and other lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our medicines
4. 35inability to obtain or maintain sufficient insurance coverage at an acceptable cost or to otherwise protect against potential product liability claims could prevent or inhibit the commercial production and sale of our products, which could adversely affect our business
5. 36If we fail to comply with data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and business
6. 37notification obligations on companies for breaches of certain health information contained in personal health records. The FTC has brought enforcement actions under both Section 5 of the FTC Act and the Health Breach Notification Rule
7. 38Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries
8. 39The coverage and reimbursement status of new or current products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue
9. 40reimbursement will be established even if coverage is available, or that the third-party payors’ reimbursement policies will not adversely affect the ability of manufacturers to sell products profitably
10. 41companies to ensure compliance. Criminal penalties, including imprisonment and criminal fines, are also possible for making or presenting a false, fictitious or fraudulent claim to the federal government
11. 42Our business and operations, including the use of hazardous and biological materials may result in liabilities with respect to environmental, health and safety matters

RISKS RELATING TO OUR ORDINARY SHARES

1. 43The market price for our shares has and may continue to fluctuate widely and may result in substantial losses for purchasers of our ordinary shares
2. 44Activist shareholders could negatively impact our business and cause disruptions
3. 45Concentration of ownership will limit your ability to influence corporate matters
4. 46Certain provisions in our constitutional and other documents may discourage our acquisition by a third-party, which could limit your opportunity to sell shares at a premium
5. 47In addition, in May 2018, our shareholders approved a resolution authorizing our board of directors to adopt a shareholder rights plan in the future intended to deter any person from acquiring more than 19.9% of our outstanding ordinary shares without the approval of our board of directors
6. 48Our shareholders may face difficulties in protecting their interests because we are incorporated under Cayman Islands law
7. 49difficulty in protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the US, due to the different nature of Cayman Islands law in this area
8. 50There is uncertainty as to shareholders’ ability to enforce certain foreign civil liabilities in the Cayman Islands
9. 51If securities or industry analysts cease coverage of us or do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our ordinary shares and trading volume could decline
10. 52Capital appreciation, if any, of our ordinary shares may be your sole source of gain for the foreseeable future
11. 53We are a smaller reporting company, and any decision on our part to comply only with reduced reporting and disclosure requirements applicable to such companies could make our ordinary shares less attractive to investors