Item 1A. Risk Factors

You should carefully consider the risks described below, together with all of the other information included in or incorporated by reference into this Annual Report and in other documents we file with the SEC, before making an investment decision. The risks and uncertainties described below are not intended to be exhaustive and are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we do not currently believe are material to an investor may also harm our business, and it is not possible to predict the impact that any factor or combination of factors may have on our business, prospects, financial condition and results of operations. If any of the events, contingencies, circumstances or conditions described in the following risk factors actually occur, our business, financial condition or our results of operations could be materially and adversely affected, which may cause the trading price of our common stock to decline and you may lose part or all of the value of any of our shares that you hold.

Risks Related to the Commercialization and Continued Approval of Rezdiffra

Our prospects are highly dependent on the success of our only approved product, Rezdiffra, which was approved in the United States under the Subpart H accelerated approval pathway for new drugs for serious or life-threatening illnesses. If we are unable to successfully commercialize or maintain approval for Rezdiffra, our business, financial condition, results of operations and prospects and the value of our common stock will be materially adversely affected.

In March 2024, the FDA granted accelerated approval for Rezdiffra in conjunction with diet and exercise for the treatment of adults with noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). We have invested, and continue to invest, significant efforts and financial resources in the launch of Rezdiffra. We have never, as an organization, launched or commercialized any other product, and there is no guarantee that we will be able to successfully commercialize Rezdiffra.There are numerous examples of failures to meet high expectations of market potential, including by pharmaceutical companies with more experience and resources than us. We believe that the commercial success of Rezdiffra depends on many factors, including the following:

•our ability to effectively educate healthcare providers and patients on the risks of MASH and the potential clinical benefits of Rezdiffra, the first FDA-approved treatment in MASH;

•the efficacy, cost, approved use, and side-effect profile of Rezdiffra relative to competitive treatment regimens for the treatment of MASH;

•Rezdiffra may compete with the off-label use of currently marketed products and other therapies in development that may in the future obtain approval for MASH;

•the effectiveness of our commercial strategy for the marketing of Rezdiffra, including our pricing strategy and the effectiveness of our efforts to obtain adequate third-party reimbursements;

•developing, maintaining and successfully monitoring commercial manufacturing arrangements for Rezdiffra with third-party manufacturers to ensure they meet our standards and those of regulatory authorities, including the FDA, which extensively regulate and monitor pharmaceutical manufacturing facilities;

•our ability to negotiate and enter into any additional commercial, supply and distribution contracts to support commercialization efforts, and to hire and manage additional qualified personnel;

•our ability to meet the demand for commercial supplies of Rezdiffra at acceptable costs;

•the acceptance of Rezdiffra by physicians, patients and third-party payors;

•our ability to remain compliant with laws and regulations that apply to us and our commercial activities;

•the actual market-size, ability to identify targeted patients and the demographics of patients eligible for Rezdiffra, which may be different than what we currently expect;

•the occurrence of any side effects, adverse reactions or misuse, or any unfavorable publicity in these areas;

•our ability to obtain, maintain or enforce our patents and other intellectual property rights; and

•the effect of recent or potential health care legislation in the United States.

While we believe that Rezdiffra has a commercially competitive profile, we cannot accurately predict the amount of time needed to attain a commercially successful profile or theamount of revenue that would be generated from the sale

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of Rezdiffra. If we do not effectively commercialize Rezdiffra, we will not be able to execute our business plan and may not be able to achieve profitability. If our revenues, market share or other indicators of market acceptance of Rezdiffra do not meet the expectations of investors or public market analysts, the market price of our common stock would likely decline.

We obtained regulatory approval of Rezdiffra through the Subpart H accelerated approval pathway, and full approval will be contingent on successful completion of a confirmatory post-marketing trial. Failure to obtain full approval or otherwise meet our post-marketing requirements and commitments would have a material adverse effect on our business.

The FDA approved Rezdiffra under the accelerated approval pathway for new drugs for serious or life-threatening illnesses and was supported by 52-week data from the Phase 3 MAESTRO-NASH trial, which achieved both primary endpoints—MASH resolution with no worsening of fibrosis and an improvement in fibrosis by at least one stage with no worsening of the NAFLD activity score. In connection with the FDA's accelerated approval, we have agreed to certain post-marketing commitments, including completing our MAESTRO-NASH trial to demonstrate a clinical benefit of Rezdiffra on composite endpoints. Our MAESTRO-NASH trial is ongoing as a 54-month outcomes trial designed to generate confirmatory outcomes data that, if positive, is expected to verify a clinical benefit and support the full approval of Rezdiffra. Additionally, full approval could also be based on results from our MAESTRO-NASH OUTCOMES trial that will noninvasively measure progression to liver decompensation events in patients with compensated MASH cirrhosis. Positive data from our MAESTRO-NASH OUTCOMES trial is expected to support the full approval of Rezdiffra in noncirrhotic MASH and support approval for patients with compensated cirrhosis, expanding the eligible patient population. Failure to meet post-marketing commitments and requirements, including completion of enrollment of—and in particular, any failure to obtain positive data from—any confirmatory studies required by the FDA, could result in negative regulatory action from the FDA and/or withdrawal of such accelerated approval. The recently enacted Food and Drug Omnibus Reform Act has expanded FDA’s expedited withdrawal procedures for drugs approved through the accelerated approval pathway if a sponsor fails to conduct any required post-approval study with due diligence.

The commercial success of Rezdiffra will depend on the degree of market acceptance by physicians, patients, third-party payors and others in the health care community.

Despite receiving FDA approval of Rezdiffra, our product may not gain, or over time may not retain, market acceptance by physicians, patients, third-party payors or others in the health care community. Rezdiffra was the first product approved by the FDA for the treatment of MASH. Accordingly, we must educate healthcare providers and patients on the risks of MASH and the potential clinical benefits and appropriate use of Rezdiffra. If Rezdiffra does not achieve and maintain an adequate level of acceptance, it is likely that we will not generate significant revenue or become profitable. The degree of market acceptance of Rezdiffra, which we launched in the United States early in the second quarter of 2024, is also dependent on a number of additional factors, including the following:

•the willingness of physicians to prescribe, and our target patient population to use, Rezdiffra;

•the pricing of Rezdiffra;

•the efficacy and potential advantages of Rezdiffra compared to other treatment regimens;

•the ability of patients to tolerate Rezdiffra;

•sufficient third-party insurance coverage and reimbursement;

•the ability of the patient to pay out-of-pocket costs for Rezdiffra;

•the timing of market introduction of competitive products and treatments; and

•any publicity concerning Rezdiffra or any potential competitive products.

Our efforts to educate physicians, patients, third-party payors and others in the health care community on the potential benefits of Rezdiffra will require significant resources and may not be successful.

If the sales and marketing capabilities we have established for the commercialization of Rezdiffra are not effective, Rezdiffra may not be successfully commercialized.

While many of our officers and employees have experience commercializing drug products with prior companies, we have never as an organization engaged in commercial activities prior to the approval of Rezdiffra. We have hired and trained a commercial team and developed the organizational infrastructure we believe we need to support the commercial

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success of Rezdiffra, and we continue to invest time and financial resources in optimizing this infrastructure. Factors that may inhibit our efforts to maintain and further develop commercial capabilities include:

•an inability to retain an adequate number of effective commercial personnel;

•an inability to adequately train commercial personnel, who may have limited experience with our company or our product, to deliver a consistent message regarding Rezdiffra and be effective in educating physicians regarding its potential benefits;

•an inability to equip commercial field personnel with compliant and effective materials, including marketing literature to help them educate physicians and healthcare providers regarding Rezdiffra and educate payors on the safety, efficacy and effectiveness profile of Rezdiffra to support favorable coverage decisions; and

•unforeseen costs and expenses associated with maintaining and further developing an independent commercial organization.

If we are not successful in maintaining our commercial infrastructure, of if our commercial capabilities are not effective, we will encounter difficulty in achieving, maintaining or increasing projected sales of Rezdiffra, which would adversely affect our business and financial position.

We may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business.

Our ability to successfully commercialize Rezdiffra and any future product candidate will depend in part on the extent to which coverage and reimbursement for these drugs and drug candidates and related treatments will be available from government authorities, private health insurers and other organizations. See the section titled “Business—Government Regulation—Coverage and Reimbursement”in this Annual Report for more information.

In the United States and markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance. Our ability to successfully commercialize Rezdiffra and any additional products will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S. Department of Health and Human Services (“HHS”). CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. The availability of coverage and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford treatments. Sales of these or other products that we may identify will depend substantially, both domestically and abroad, on the extent to which the costs of our products will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors. If coverage and adequate reimbursement is not available, or is available only to limited levels, we may not be able to successfully commercialize Rezdiffra or any other future product candidate. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment.

A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular drugs. Net prices for drugs may also be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs. We cannot be sure that coverage will be available or maintained for Rezdiffra or any drug candidate that we commercialize and, if coverage is available, the level of reimbursement. Reimbursement may impact the demand for, or the price of, Rezdiffra or any future drug candidate for which we obtain marketing approval. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize Rezdiffra or any future drug candidate for which we obtain marketing approval. Many pharmaceutical manufacturers must also calculate and report certain price reporting metrics to the government, such as average sales price (“ASP”) and best price. Penalties may apply

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in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs.

There may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar regulatory authorities outside the United States. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower-cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Private third-party payors often rely upon Medicare coverage policy in setting their own reimbursement policies. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for Rezdiffra or any future approved drugs that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize drugs and our overall financial condition.

The pricing of pharmaceutical products has come under increasing scrutiny as part of a global trend toward healthcare cost containment. Resulting changes in healthcare law and policy, including recently enacted changes to Medicare, may impact our business in ways that we cannot currently predict, which could have a material adverse effect on our business and financial condition.

The United States and several foreign jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payers in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. We expect to experience pricing pressures in connection with the sale of any products that we develop due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative proposals. See the section titled “Business—Government Regulation—U.S. Healthcare Reform” in this Annual Report for more information.

The continuing efforts of the government, insurance companies, managed care organizations and other payers of healthcare services to contain or reduce costs of healthcare may adversely affect:

•the demand for any of our product candidates, if approved;

•the ability to set a price that we believe is fair for any of our product candidates, if approved;

•our ability to generate revenues and achieve or maintain profitability;

•the level of taxes that we are required to pay; and

•the availability of capital.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical and biologic products. We cannot be sure whether additional legislative changes will be enacted, or whether FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In addition to the ACA, the U.S. government continues to seek to adopt healthcare policies and reforms intended to curb healthcare costs, such as federal or state controls on payment for drugs (including under Medicare, Medicaid, and commercial health plans). The IRA among other things, establishes Medicare Part B and Part D inflation rebate schemes. Failure to timely pay a Part B or Part D inflation rebate is subject to a civil monetary penalty. The IRA also creates a drug price negotiation program under which the prices for Medicare units of certain high Medicare spend drugs and biologics without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, starting in 2026. Failure to comply with requirements under the drug price negotiation program is subject to an excise tax and/or a civil monetary penalty. The IRA further makes changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs, and a change in manufacturer liability under a new discount program which could negatively affect the profitability of our product candidates. Failure to pay a discount under this new program will be subject to a civil monetary penalty. Congress continues to examine various policy proposals that may result in pressure on

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the prices of prescription drugs in the government health benefit programs. The IRA or other legislative changes could impact the market conditions for our product candidate.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates. There has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

We expect that the healthcare reform measures that have been adopted and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product and could seriously harm our future revenues. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.

Rezdiffra remains subject to ongoing regulatory review, and if we fail to comply with continuing regulations, we could lose our approval and the sale of Rezdiffra could be suspended.

Even though we received FDA accelerated approval for Rezdiffra, the manufacturing, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, sampling, and record keeping related to our product will remain subject to extensive regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations, and GCPs for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize Rezdiffra. As such, we and our contract manufacturers will be subject to periodic review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA or other marketing application and previous responses to inspection observations. For certain commercial prescription drug products, manufacturers and other parties involved in the supply chain must also meet chain of distribution requirements and build electronic, interoperable systems for product tracking and tracing and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or other products that are otherwise unfit for distribution in the United States. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control. The FDA may also require a REMS program as a condition of approval of Rezdiffra or any future product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

If we fail to comply with the regulatory requirements of the FDA and other applicable domestic and foreign regulatory authorities, or previously unknown problems with Rezdiffra, manufacturer, or manufacturing process are discovered, we could be subject to administrative or judicially imposed sanctions, including:

•restrictions on marketing or manufacturing of Rezdiffra;

•withdrawal of Rezdiffra from the market;

•holds on clinical trials;

•warning letters or untitled letters;

•civil or criminal penalties;

•fines;

•injunctions;

•product seizures or detentions;

•pressure to initiate voluntary product recalls;

•suspension or withdrawal of regulatory approvals; and

•refusal to approve supplements to approved applications.

If any of these events occur, our ability to sell Rezdiffra may be impaired, and we may incur substantial additional expense to comply with regulatory requirements, which could adversely affect our business, financial condition and results of operations.

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Rezdiffra could develop unexpected safety or efficacy concerns, which would likely have a material adverse effect on us.

Rezdiffra was granted accelerated approval from the FDA based on 52-week data from the MAESTRO-NASH trial and additional safety data from the Phase 3 MAESTRO-NAFLD-1 and MAESTRO-NAFLD-OLE extensions trials. In the United States, Rezdiffra will now be used by more patients, potentially for longer periods of time, and we and others (including regulatory agencies and private payors) will collect extensive information on the efficacy and safety of Rezdiffra by monitoring its use in the marketplace. In addition, we are generating confirmatory data regarding the longer-term use of Rezdiffra in two ongoing trials. New safety or efficacy data from both market surveillance and our clinical trials may result in negative consequences including the following:

•Suspension or withdrawal of regulatory approval;

•Modification to product labeling or promotional statements, such as additional boxed or other warnings or contraindications, or the issuance of additional “Dear Doctor Letters” or similar communications to healthcare professionals;

• Required changes in the dosing of Rezdiffra;

• Imposition of additional post-marketing surveillance, post-marketing clinical trial requirements, distribution restrictions or other risk management measures, such as a REMS or a REMS with elements to assure safe use;

• Suspension or termination of ongoing clinical trials or refusal by regulators to grant full approval or approve pending marketing applications or supplements to approved applications;

• Suspension of, or imposition of restrictions on, our operations, including costly new manufacturing requirements with respect to Rezdiffra; and

• Voluntary or mandatory product recalls or withdrawals from the market and costly product liability claims.

Any of the foregoing circumstances could negatively impact Rezdiffra's market acceptance and would likely materially adversely affect our business.

We operate in a highly competitive and changing environment, and if we are unable to adapt to our environment, we may be unable to compete successfully.

The biopharmaceutical industry has undergone and is likely to continue to experience rapid and significant change. Our future success will depend in large part on our ability to maintain a competitive position with respect to these technologies and to obtain and maintain protection for our intellectual property. Compounds, products or processes that we develop may become obsolete before we recover any expenses incurred in connection with their development. We face substantial competition from pharmaceutical, biotechnology and other companies, universities and research institutions with respect to MASH, and will face substantial competition with respect to future product candidates we may develop in MASH and other disease areas. Relative to us, many of these entities have substantially greater capital resources, research and development staffs, facilities and experience in conducting clinical studies, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products.

While Rezdiffra is currently the only FDA approved drug for the treatment of MASH, there are over 150 drugs in development for the potential treatment of MASH by companies ranging in size from private biotech companies to large pharma organizations. See the section titled “Business—Competition” in this Annual Report for more information.

Our ability to compete successfully will depend on, among other things, our ability to:

•effectively commercialize Rezdiffra;

•discover and/or in-license medicines that are differentiated from other products in the market;

•obtain required regulatory approvals;

•obtain patent and/or proprietary protection for our products and technologies; and

•attract and retain high-quality research, development and commercial personnel.

If we are unable to compete successfully, it will materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.

Rezdiffra was approved for treatment in a limited population of patients with MASH with moderate to advanced liver fibrosis, and additional clinical trials and regulatory applications will be required to expand its indication. We may not

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be successful in these trials or in obtaining such regulatory approval, which may materially adversely affect our prospects and the value of our common stock.

The FDA granted accelerated approval of Rezdiffra for the treatment of MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis). A key component to our corporate strategy is to expand the target patient population for Rezdiffra. We have fully enrolled our Phase 3 MAESTRO-NASH OUTCOMES trial. In this trial, we are evaluating progression to liver decompensation events in patients with compensated MASH cirrhosis treated with Rezdiffra versus placebo. A positive outcome is expected to support the full approval of Rezdiffra for noncirrhotic MASH and also expand the eligible patient population for Rezdiffra with an additional indication in patients with compensated MASH cirrhosis. We cannot guarantee positive results in this trial. If we are unable to expand the indication for use of Rezdiffra, our prospects and the value of our common stock may be materially adversely affected.

If we do not obtain regulatory approval of Rezdiffra in foreign jurisdictions, we will not be able to market Rezdiffra in other jurisdictions, which will limit our commercial revenues.

While Rezdiffra has been approved by the FDA for the treatment of noncirrhotic MASH with moderate to advanced liver fibrosis (consistent with stages F2 to F3 fibrosis), it has not been approved in any other jurisdiction for this indication or for any other indication. In order to market Rezdiffra for other indications or in other jurisdictions, we must obtain regulatory approval for each of those indications and in each of the applicable jurisdictions, and we may never be able to obtain such approval. While our MAA for resmetirom for the treatment of MASH with liver fibrosis has been validated and is now under evaluation with the CHMP, no guarantee can be made that we will receive requisite marketing approvals. In order to market any products outside of the United States, we must establish and comply with numerous and varying regulatory requirements of other countries regarding clinical trial design, safety and efficacy. Clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. Approval procedures vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approvals could result in significant delays, difficulties and costs for us and may require additional preclinical studies or clinical trials, which would be costly and time consuming. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our products in those countries. Satisfying these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays. In addition, our failure to obtain regulatory approval in any country may delay or have negative effects on the process for regulatory approval in other countries. If we fail to comply with regulatory requirements in international markets or to obtain and maintain required approvals, our target market will be reduced and our ability to realize the full market potential of Rezdiffra will be harmed.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.

If our products are approved in foreign jurisdictions, we will be subject to pricing and reimbursement policies in those jurisdictions. In some countries, including countries in the EU, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a drug. To obtain reimbursement or pricing approval in some countries, governmental authorities adopt a number of different methodologies for assessing drug costs and reimbursement levels. These include comparisons with currently available medicines for the same indication and/or cost effectiveness assessments as the basis for negotiation. If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business, and in particular our European expansion efforts, could be materially harmed.

If the FDA or other applicable regulatory authorities approve generic products that compete with Rezdiffra, the sales of Rezdiffra would be adversely affected.

Once an NDA or marketing authorization application outside the United States is approved, the product covered thereby becomes a “listed drug” that can, in turn, be cited by potential competitors in support of approval of an abbreviated new drug application in the United States or equivalent marketing authorization application outside the United States. Agency regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an abbreviated new drug application or other application for generic substitutes in the United States and in nearly every pharmaceutical market around the world. These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use, or labeling, as our product and that the generic product is bioequivalent to our product, meaning it is absorbed in the body at the same rate and to the same extent as our product. These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would

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be significantly less costly than our product to bring to market, and companies that produce generic equivalents are generally able to offer their products at lower prices. Thus, after the introduction of a generic competitor, a significant percentage of the sales of any branded product are typically lost to the generic product. Accordingly, competition from generic equivalents to Rezdiffra would materially adversely affect our future revenue, profitability and cash flows and substantially limit our ability to obtain a return on the investments we have made.

We currently rely on a limited number of specialty pharmacies for distribution of Rezdiffra in the United States, and the loss of one or more of these specialty pharmacies or their failure to effectively distribute Rezdiffra could materially harm our business.

Rezdiffra is currently only available for distribution through a limited number of specialty pharmacies in the United States. These specialty pharmacies account for all of our revenue. A specialty pharmacy is a pharmacy that specializes in the dispensing of medications for complex or chronic conditions that often require a high level of patient education and ongoing management. The use of specialty pharmacies involves certain risks, including, but not limited to, risks that these specialty pharmacies:

•may not serve a significant portion of our expected patient population;

•may not provide us accurate or timely information regarding their inventories, the number of patients using Rezdiffra or complaints about Rezdiffra;

•reduce their efforts or discontinue to sell or support Rezdiffra, particularly if competing therapies enter the marketplace;

•do not devote the resources necessary to sell Rezdiffra or support patients;

•are be unable to satisfy financial obligations to us or others; or

•will cease operations.

If one or more of our specialty pharmacies do not fulfill their contractual obligations to us, or refuse or fail to adequately serve patients, or their agreements are terminated without adequate notice, shipments of Rezdiffra, and associated revenues, could be adversely affected. We expect that it would take a significant amount of time if we were required to replace one or more of our specialty pharmacies. In addition, if we determine to modify our distribution strategy, we may experience disruptions in the distribution of Rezdiffra, which could adversely impact our business.

If estimates of the size of the potential market for Rezdiffra is overstated or data we have used to identify physicians is inaccurate, our ability to earn revenue to support our business could be materially adversely affected.

We have relied on external sources, including market research funded by us and third parties, and internal analyses and calculations to estimate the potential market opportunities for Rezdiffra. The externally sourced information used to develop these estimates has been obtained from sources we believe to be reliable, but we have not verified the data from such sources, and their accuracy and completeness cannot be assured. With respect to Rezdiffra, our internal analyses and calculations are based upon management’s understanding and assessment of numerous inputs and market conditions. These understandings and assessments necessarily require assumptions subject to significant judgment and may prove to be inaccurate. As a result, our estimates of the size of these potential market for Rezdiffra could prove to be overstated, perhaps materially.

In addition, we are relying on third-party data to identify the physicians who treat the majority of MASH patients in the United States and to determine how to deploy our resources to market to those physicians; however, we may not be marketing to the appropriate physicians and may therefore be limiting our market opportunity.

In addition, our market opportunity could be reduced if a regulator limits the proposed treatment population for any future product candidate, similar to the limited population for which Rezdiffra was approved. In either circumstance, even if we obtain regulatory approval, we may be unable to commercialize the product on a scale sufficient to generate significant revenue from such product candidates, which could have a material adverse effect on our business, financial condition, results of operations and prospects and the value of our common stock.

Product liability lawsuits brought against us could cause us to incur substantial liabilities and could limit commercialization of Rezdiffra or any future product candidates that we may develop.

We face an inherent risk of product liability lawsuits related to the testing of any product candidates in human clinical trials and an even greater risk in connection with the commercialization of Rezdiffra. Product liability claims may be brought against us or our partners by participants enrolled in our clinical trials, patients, healthcare providers or others

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using, administering or selling any approved product. If we cannot successfully defend ourselves against any such claims, we may incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:

•decreased demand for Rezdiffra or any of our future approved products;

•injury to our reputation;

•withdrawal of clinical trial participants;

•termination of clinical trial sites or entire trial programs;

•significant litigation costs;

•substantial monetary awards to or costly settlements with patients or other claimants;

•product recalls or a change in the indications for which products may be used;

•loss of revenue;

•diversion of management and scientific resources from our business operations; and

•the inability to commercialize our product candidates.

We are highly dependent upon consumer perceptions of us and the safety and quality of Rezdiffra and any future product we commercialize. We could be adversely affected if we are subject to negative publicity. We could also be adversely affected if any of our products or any similar products distributed by other companies prove to be, or are asserted to be, harmful to patients. Also, because of our dependence upon consumer perceptions, any adverse publicity associated with illness or other adverse effects resulting from patients’ use or misuse of our products or any similar products distributed by other companies could have a material adverse impact on our results of operations.

Although we maintain product liability insurance coverage, it may not be adequate to cover all liabilities that we may incur. We anticipate that we may need to further increase our insurance coverage as we begin additional clinical trials or if we successfully commercialize additional drug candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Risks Related to Product Development and Regulatory Approval

Pharmaceutical research and development is very expensive, time-consuming and difficult to design and implement and involves uncertain outcomes. Furthermore, the results of preclinical studies and earlier clinical trials are not always predictive of future results. Any product candidate that we advance into clinical trials may not have favorable results in later clinical trials or receive regulatory approval.

Drug development is an expensive, high-risk, lengthy, complicated, resource intensive process. In order to successfully develop products, we must, among other things:

•identify potential product candidates;

•submit for and receive regulatory approval to perform clinical trials;

•conduct appropriate preclinical and clinical trials, including confirmatory clinical trials, according to good laboratory practices and good clinical practices and disease-specific expectations of the FDA and other regulatory bodies;

•select and recruit clinical investigators and subjects for our clinical trials;

•obtain and correctly interpret data establishing adequate safety of our product candidates and demonstrating with statistical significance that our product candidates are effective for their proposed indications, as indicated by the achievement of specified endpoints;

•receive regulatory approvals for marketing;

•manufacture the product candidates according to cGMP and other applicable standards and regulations.

We will be required to demonstrate through adequate and well-controlled clinical trials that our product candidates are safe and effective, with a favorable benefit-risk profile, for use in our target indications before we can seek regulatory approvals for commercial sale. Clinical trials are expensive, difficult to design and implement, can take many years to complete and are uncertain as to outcome. Delay or failure can occur at any stage of development, including after commencement of any of our clinical trials. In addition, success in early clinical trials does not mean that later clinical trials will be successful, because later-stage clinical trials may be conducted in broader patient populations and involve different study designs. Furthermore, our ongoing and future trials will need to demonstrate sufficient safety and efficacy in large

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patient populations for approval by regulatory authorities. Companies frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials have shown promising results, and we cannot be certain that we will not face similar setbacks. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products. In addition, only a small percentage of drugs under development result in the submission of an NDA to the FDA and even fewer are approved for commercialization.

We cannot be certain that any of our ongoing or future clinical trials will be successful, and any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications.

In addition, there are many other difficulties and uncertainties inherent in pharmaceutical research and development that could significantly delay or otherwise materially impair our ability to develop future product candidates, including the following:

•conditions imposed by regulators, ethics committees or institutional review boards for preclinical testing and clinical trials relating to the scope or design of our clinical trials, including selection of endpoints and number of required patients or clinical sites;

•restrictions placed upon clinical trials and clinical trial sites, including with respect to potential clinical holds or suspension or termination of clinical trials due to, among other things, potential safety or ethical concerns or noncompliance with regulatory requirements;

•failure by third-party contractors, contract research organizations, clinical investigators, clinical laboratories, or suppliers to comply with regulatory requirements or meet their contractual obligations in a timely manner; and

•greater than anticipated cost of our clinical trials.

Failure to successfully develop future product candidates for any of these reasons may materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.

If we fail to develop and commercialize other product candidates, we may be unable to grow our business.

We plan to evaluate the development and commercialization of therapies beyond Rezdiffra. We may choose to in-license or acquire other product candidates as well as commercial products to treat patients suffering from disorders with high unmet medical needs and limited treatment options. These other product candidates may require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any such products that are approved will be manufactured or produced economically, be successfully commercialized, be widely accepted in the marketplace, or be more effective than other commercially available alternatives.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more data become available, may be interpreted differently if additional data are disclosed, and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or topline data from our clinical trials, which may be based on a preliminary analysis of data in a summary or topline format, and the results and related findings may change as additional data become available, may be interpreted differently if additional data are disclosed at a later time and are subject to audit and verification procedures that could result in material changes in the final data. If additional results from our clinical trials are not viewed favorably, our ability to obtain approval for and commercialize our approved drug and drug candidates, our business, operating results, prospects, or financial condition may be harmed and our stock price may decrease.

We make assumptions, estimates, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the preliminary or topline results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been disclosed and/or are received and fully evaluated. Such data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we published. As a result, preliminary and topline data should be viewed with caution until the final data are available. We may also disclose interim data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient

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data become available. Differences between preliminary or interim data and final data could significantly harm our business prospects.

Further, other parties, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the particular program or commercialization of the particular drug candidate or product, and our business in general. In addition, in regards to the information we publicly disclose regarding a particular study or clinical trial, such as topline data, others may not agree with what we determine is the material or otherwise appropriate information to include in such disclosure, and any information we determine not to disclose, or to disclose at a later date, such as at a medical meeting may ultimately be deemed significant with respect to future decisions, conclusions, views, activities, or otherwise regarding a particular drug, drug candidate, or our business. If the topline data that we report differ from actual results or are interpreted differently once additional data are disclosed at a later date, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our drug candidates, our business, operating results, prospects, or financial condition may be harmed or our stock price may decline.

If clinical trials or regulatory approval processes are prolonged, delayed or suspended, we may be unable to advance the development of or commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay our receipt of any revenue from potential product sales.

We cannot predict whether we will encounter problems with any of our completed, ongoing or planned clinical trials that will cause us or any regulatory authority to delay, suspend, or terminate those clinical trials or delay the analysis of data derived from them. A number of events, including but are not limited to any of the following, could delay or impede completely the completion of our ongoing and planned clinical trials and negatively affect our ability to obtain regulatory approval for, and to market and sell, a particular product candidate:

•conditions imposed on us by the FDA or other regulatory authorities regarding the scope or design of our clinical trials;

•insufficient supply of our product candidates or other materials necessary to conduct and complete our clinical trials;

•slow enrollment and retention rate of subjects in our clinical trials;

•challenges in identifying or recruiting sufficient trial sites or investigators for clinical trials; and

•serious and unexpected drug-related side effects related to the product candidate being tested.

Commercialization of any future product candidates may be delayed by the imposition of additional conditions on our clinical trials by the FDA or any other applicable foreign regulatory authority or the requirement of additional supportive trials by the FDA or such foreign regulatory authority.

We do not know whether our ongoing clinical trials will need to be restructured, will enroll an adequate number of patients on time, or will be completed on schedule, if at all, or whether future clinical trials will begin as planned or have similar future challenges. Delays in the initiation, enrollment or completion of our clinical trials will result in increased development costs for our product candidates, and our financial resources may be insufficient to fund any incremental costs. In addition, if our clinical trials are delayed, our competitors may be able to bring products to market before we do and the commercial viability of our product candidates could be limited.

If we inadvertently fail to comply with foreign regulatory requirements governing human clinical trials and marketing approval for drugs, we could be prevented from selling our drug candidates in foreign markets, which may adversely affect our operating results and financial condition.

The requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement for marketing products outside the United States vary greatly from country to country and may require additional testing. We expect that our future clinical development of our drug candidates will involve a number of clinical trials in foreign jurisdictions, particularly in Europe. We have limited experience in obtaining foreign regulatory approvals. The time required to obtain approvals outside the United States may differ from that required to obtain FDA approval. We may not obtain foreign regulatory approvals on a timely basis, if at all. Approval by the FDA does not guarantee approval by regulatory authorities in other countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Failure to comply with these regulatory requirements or obtain required approvals could impair our ability to develop foreign markets for our drug candidates and may have a material adverse effect on our results of operations and financial condition.

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We depend on enrollment of patients in our clinical trials. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Identifying and qualifying patients to participate in clinical trials is critical to our success. We may not be able to initiate, continue, or complete clinical trials required by the FDA or foreign regulatory agencies if we are unable to locate, enroll and maintain a sufficient number of eligible patients to participate. The timing to conduct and complete clinical trials, is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages and disadvantages of the product candidate being studied in relation to other available therapies. Delays in patient enrollment for our clinical trials could increase costs and delay commercialization and sales, if any, of our products. With respect to our MAESTRO-NASH OUTCOMES trial, our inability to maintain a sufficient number of eligible patients enrolled in the trial could restrict our ability to commercialize Rezdiffra in a broader population of patients with noncirrhotic MASH. Once enrolled, patients may elect to discontinue participation in a clinical trial at any time. For example, patients in our ongoing MAESTRO-NASH trial may elect to discontinue their participation in the trial now that Rezdiffra is an approved product and is commercially available. If patients elect to discontinue participation in our clinical trials at a higher rate than expected, we may be unable to generate the data required by regulators for approval.

Breakthrough therapy or priority review by the FDA for any product candidate may not lead to faster development, regulatory review or approval processes, and it does not increase the likelihood that our product candidates will receive marketing approval.

We may seek breakthrough therapy designation or priority review for future product candidates if supported by the results of clinical trials. A breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Priority review is intended to speed the FDA marketing application review timeframe for drugs that treat a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

For drugs that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development. Sponsors of drugs that are breakthrough therapies may also be able to submit marketing applications on a rolling basis, meaning that the FDA may review portions of a marketing application before the sponsor submits the complete application to the FDA, if the sponsor pays the user fee upon submission of the first portion of the marketing application. For applications that receive priority review, the FDA's marketing application review goal is shortened to six months, as opposed to ten months under standard review.

Designation as a breakthrough therapy or priority review product is within the discretion of the regulatory agency. Accordingly, even if we believe one of our future product candidates meets the criteria for designation as a breakthrough therapy or priority review product, the agency may disagree and instead determine not to make such designation. In any event, the receipt of such a designation for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional regulatory procedures and does not assure ultimate marketing approval by the agency. In addition, regarding breakthrough therapies, the FDA may later decide that the products no longer meet the conditions for qualification as a breakthrough therapy or, for priority review products, decide that the period for FDA review or approval will not be shortened.

Risks Related to our Business Operations, Employee Matters and Managing Growth

We are dependent upon retaining and attracting key personnel, the loss of whose services could materially adversely affect our business, financial condition, results of operations, prospects and the value of our common stock.

We are highly dependent on principal members of our senior management team and our scientific, clinical, sales and medical staff. These executives and employees each have significant pharmaceutical industry experience. The loss of any senior member of our management team or scientific and commercial staff could have a material adverse effect on our business and stock price. Our management and other employees may voluntarily terminate their employment with us at any time. The loss of the services of these or other key personnel, or the inability to attract and retain additional qualified personnel, could result in delays to development or approval of any future product candidates, loss of sales of Rezdiffra or any future product, if approved, and diversion of management resources. Competition for qualified personnel is intense, and the process of hiring and integrating such qualified personnel is often lengthy. We may be unable to recruit such personnel on a timely basis, if at all, which would negatively impact our development and commercialization programs.

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Our employees, contractors, vendors and partners may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading laws, which could cause significant liability for us and harm our reputation.

We are exposed to the risk of fraud or other misconduct by our employees, contractors, vendors or partners. Misconduct by these parties could include failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with federal and state healthcare fraud and abuse laws and regulations, to report financial information or data timely, completely or accurately, or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Third-party misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a Code of Business Conduct and Ethics, but it is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent misconduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations. If any such actions are instituted against us resulting from this misconduct and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

We expect to continue to expand our development and commercialization capabilities, and as a result, we may encounter challenges in managing our growth, which could disrupt our operations.

We are in the process of expanding our commercial operations in Europe for Rezdiffra, if approved, and are seeking to expand our development pipeline. We expect to continue to experience growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs, quality, commercial compliance, medical affairs, and sales and marketing. For example, we plan to hire additional personnel to support the commercialization of Rezdiffra in Europe, subject to requisite regulatory approvals. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. The physical expansion of our operations may lead to significant costs and may divert our management and business development resources. We may not be able to effectively manage the expansion of our operations, which could delay the execution of our business plans or disrupt our operations.

Our failure to successfully in-license, acquire, develop and market additional product candidates or approved products could impair our ability to grow our business.

As part of our business strategy, we may effect acquisitions or licenses to obtain additional businesses, products, technologies, capabilities or personnel. The success of this strategy depends partly upon our ability to identify and select promising pharmaceutical product candidates, negotiate licensing or acquisition agreements with their current owners and finance these arrangements. The process of proposing, negotiating and implementing a license or acquisition of a product candidate is lengthy and complex. Other companies, including some with substantially greater financial and other resources, may compete with us for the license or acquisition of product candidates. Moreover, we may devote resources to potential acquisitions or licensing opportunities that are never completed, or we may fail to realize the anticipated benefits of such efforts. Additionally, we may not be able to acquire the rights to additional product candidates on terms that we find acceptable, or at all.

Any strategic transactions we enter into may not be clinically or commercially successful, and may require financing or a significant amount of cash, which could adversely affect our business.

Entering into strategic transactions involves a number of operational risks, including:

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•failure to achieve expected synergies;

•the possibility that our acquired technologies, products and product candidates may not be clinically or commercially successful;

•difficulty and expense of assimilating the operations, technology and personnel of any acquisition;

•the inability to maintain any acquired company’s relationship with key third parties, such as alliance partners; and

•diversion of our management’s attention from our core business.

We also may enter into collaborative relationships that would involve our collaborators conducting proprietary development programs. Disagreements with collaborators may develop over the rights to our intellectual property, and any conflict with our collaborators could limit our ability to obtain future collaboration agreements and negatively influence our relationship with existing collaborators. If we make one or more significant acquisitions or enter into a significant collaboration in which the consideration includes cash, we may be required to use a substantial portion of our available cash or need to raise additional capital, which could adversely affect our financial condition.

We may enter into out-licenses or pursue collaborative relationships with entities in foreign jurisdictions outside of the United States and Europe.

We may enter into out-licenses or agreements to collaborate with partners outside the United States and Europe for the development and commercialization of Rezdiffra and any other future product candidate. In order to access these markets, we may enter into licenses or other arrangements with third parties on terms that may be unfavorable to us. These arrangements may involve us relinquishing control and certain other valuable rights, such as development rights and future revenue streams, related to our technologies. These relationships may result in disagreements with our collaborators and partners which could delay development and commercialization activities and distract us from our ongoing business operations.

In addition, these relationships may subject us to certain risks related to intellectual property protection and enforcement. Less strict enforcement of intellectual property rights in some jurisdictions outside of the in the United States and Europe may lead to difficulties enforcing contractual terms intended to protect intellectual property rights in such jurisdictions. For this reason, if there are disputes with collaborators in certain jurisdictions over the interpretation of contractual provisions or with respect to rights to intellectual property developed as part of a collaboration program, we may not prevail and may therefore have less well-protected intellectual property rights than we would have foreseen in such jurisdiction. Less well-protected intellectual property rights may leave us at a competitive disadvantage or more readily allow the marketing of competing products in foreign jurisdictions.

Unfavorable geopolitical conditions may subject us to further risks with respect to out-licenses or collaborations with partners outside the United States. Geopolitical actions by the United States or foreign jurisdictions may result in new restrictions on our ability to out-license our technology to certain jurisdictions or engage in cross-border transfers. Geopolitical conflicts could have an adverse impact on collaborators located in jurisdictions involved in such conflicts, which could in turn disrupt or otherwise adversely impact the development of collaboration programs. Future geopolitical developments, including potential deterioration in bilateral relationships between the United States and other jurisdictions, could also have a negative impact on our ability to enter into or maintain agreements with collaborators located in certain jurisdictions outside of the United States.

We enter into various contracts in the normal course of our business in which we indemnify the other party to the contract. In the event we have to perform under these indemnification provisions, such performance could have a material adverse effect on our business, financial condition and results of operations.

In the normal course of business, we periodically enter into academic, commercial, service, collaboration, licensing, consulting and other agreements that contain indemnification provisions. With respect to our academic and other research agreements, we typically indemnify the institution and related parties from losses arising from claims relating to the products, processes or services made, used, sold or performed pursuant to the agreements for which we have secured licenses and from claims arising from our or our potential sublicensees’ exercise of rights under the agreements. With respect to our commercial agreements, we indemnify our vendors from any third-party product liability claims that could result from the production, use or consumption of our product, as well as for alleged infringements of any patent or other intellectual property right by a third party.

Should our obligation under an indemnification provision exceed applicable insurance coverage or if we are denied insurance coverage, our business, financial condition and results of operations could be adversely affected. Similarly, if we are relying on a collaborator to indemnify us and the collaborator is denied insurance coverage or the

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indemnification obligation exceeds the applicable insurance coverage, and if the collaborator does not have other assets available to indemnify us, our business, financial condition and results of operations could be adversely affected.

Risks Related to Our Dependence on Third Parties

If the third parties on which we rely for the conduct of our clinical trials and results do not perform our clinical trial activities in accordance with GCP and related regulatory requirements, we may be unable to obtain regulatory approval for our product candidates or commercialize our products.

We use third-party service providers to conduct and oversee our clinical trials and expect to continue to do so for the foreseeable future. We rely heavily on these parties for successful execution of our clinical trials. Nonetheless, we are responsible for confirming that each of our clinical trials is conducted in accordance with FDA requirements and our general investigational plan and protocol.

The FDA requires us and our third-party service providers to comply with GCP for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate, and that the trial participants are adequately protected. Our reliance on third parties that we do not control does not relieve us of these responsibilities and requirements.

Third parties may not complete activities on schedule or may not conduct our clinical trials in accordance with regulatory or GCP requirements or the respective trial plans and protocols. In addition, third parties may not be able to repeat their past successes in clinical trials. The failure of these third parties to carry out their obligations could delay or prevent the development and approval of our product candidates and commercialization of our products or result in enforcement action against us.

If our relationship with these third-party providers terminates, we may not be able to enter into arrangements with alternative providers or do so on commercially reasonable terms. Switching or adding additional third-party providers involves substantial cost and requires management time and focus, and could delay development and commercialization of our product candidates and approved products. Though we intend to carefully manage our relationships with our third-party providers, we may encounter challenges or delays in the future and any such delays or challenges may have a negative impact on our business and financial condition.

We have relied on, and expect to continue to rely on, third-party manufacturers to produce Rezdiffra and any future product candidates.

We do not own or operate manufacturing facilities for the production of clinical or commercial quantities of Rezdiffra or any future product candidates, and we lack the resources and the capabilities to do so. As a result, we currently rely, and expect to rely on third-party manufacturers to supply our product candidates for our clinical trials as well as our commercial supply of Rezdiffra. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured our product candidates or products ourselves. For example, if we do not maintain our key manufacturing relationships, we may fail to find replacement manufacturers or develop our own manufacturing capabilities, which could negatively impact our commercial operations or delay or impair our ability to obtain regulatory approval for our product candidates and substantially increase our costs or deplete profit margins, if any. If we do find replacement manufacturers, we may not be able to enter into agreements with them on terms and conditions favorable to us and there could be a substantial delay before new facilities could be qualified and registered with the FDA and other foreign regulatory authorities.

Even if we are able to establish and maintain arrangements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

•manufacturing delays if our third-party manufacturers give greater priority to the supply of other products over Rezdiffra or any other future product candidates or otherwise do not satisfactorily perform according to the terms of the agreement between us;

•limitations on supply availability resulting from capacity and scheduling constraints of third-parties, or as a result of economic or political developments, including the ongoing conflicts in Ukraine and the Middle East and global economic instability;

•the possible breach of manufacturing agreements by third-parties because of factors beyond our control;

•the possible termination or non-renewal of the manufacturing agreements by a third-party, at a time that is costly or inconvenient to us; and

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•the possible misappropriation of our proprietary information, including our trade secrets and know-how.

The FDA and other foreign regulatory authorities require manufacturers to register manufacturing facilities. The FDA and corresponding foreign regulators also inspect these facilities to confirm compliance with cGMPs. Contract manufacturers may face manufacturing or quality control problems that may cause drug substance production and shipment delays or may cause contractors not to be able to maintain compliance with the applicable cGMP requirements. Any failure to comply with cGMP requirements or other FDA, EMA, or comparable foreign regulatory requirements could adversely affect our clinical research activities and our ability to develop our product candidates and market our products following approval, including Rezdiffra.

Our current and anticipated future dependence upon others for the manufacture of Rezdiffra and any future product candidate may adversely affect our future profit margins, if any, and our ability to develop our product candidates and commercialize any products that receive regulatory approval on a timely basis.

If any third-party manufacturer of Rezdiffra or any other future product candidates is unable to increase the scale of its production of such product or product candidates or increase the product yield of its manufacturing, then our costs to manufacture such product or product candidate may increase and any commercialization may be delayed.

In order to produce sufficient quantities to meet the demand for our clinical trials and commercialization of Rezdiffra in the United States and any subsequent commercialization of Rezdiffra in other jurisdictions, if approved, or any other future product candidates that we may develop, our third-party manufacturers will be required to increase their production and optimize their manufacturing processes while maintaining the quality of the product. The transition to larger scale production could be difficult. In addition, if our third party manufacturers are not able to optimize their manufacturing processes to increase the product yield for Rezdiffra or any other future product candidates, or if they are unable to produce increased amounts of such product candidates while maintaining the quality of the product and compliance with cGMPs, then we may not be able to meet the demands of clinical trials or market demands, which could decrease our ability to generate profits and have a material adverse impact on our business and results of operation.

Risks Related to Our Financial Position and Need for Capital

We have a limited operating history and currently only have one commercial product, Rezdiffra in the United States, which may make it difficult to evaluate the prospects for our future viability.

We are still in the relatively early stages of our transition from a clinical-stage to a commercial-stage company. Our operations to date have been primarily limited to conducting research and development activities, including preclinical studies and clinical trials and, more recently, preparing for commercialization of and commercializing Rezdiffra. We have not yet demonstrated an ability to generate significant revenues on a long term sustained basis, or to conduct sales and marketing activities necessary for successful longer term product commercialization. Initial sales of Rezdiffra may not be predictive of long-term commercial results.

We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early commercial stage, especially pharmaceutical companies such as ours. Any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history with these activities.

We have a history of operating losses, expect to incur operating losses in the future and may never achieve or maintain profitability.

As of December 31, 2024, we had an accumulated deficit of $1,802.2 million. Losses have principally resulted from costs incurred from our commercialization efforts, in our preclinical studies and clinical trials, research and development programs and from our selling, general and administrative expenses. As of December 31, 2024, we had cash, cash equivalents, restricted cash and marketable securities of approximately $931.3 million. Despite our recent launch of Rezdiffra in the United States, we expect to continue to incur operating losses as we:

•support our sales and marketing efforts for Rezdiffra in the United States;

•fulfill our post-marketing commitments and clinical trials of Rezdiffra, as required by the FDA;

•initiate or continue clinical trials of any future product candidates;

•seek to acquire or in-license additional product candidates;

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•seek regulatory approvals and, if approved, commercialize Rezdiffra in foreign markets;

•add operational, financial and management information systems and personnel, including personnel to support commercialization of Rezdiffra and product candidate development and to help us comply with our obligations as a public company; hire and retain additional personnel, such as clinical, quality control, scientific, commercial and administrative personnel;

•maintain, expand and protect our intellectual property portfolio; and

•add equipment and physical infrastructure to support our research and development.

We may never achieve profitability. Furthermore, even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Because of the numerous risks and uncertainties associated with developing and commercializing Rezdiffra and any future product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if ever.

We have a limited history of recognizing revenue from product sales and may not be able to achieve or maintain long-term sustainable profitability.

Our ability to generate revenue and achieve profitability depends on our ability to successfully obtain and maintain the regulatory approvals necessary to commercialize our products, including our commercialization of Rezdiffra in the United States. Our ability to recognize revenues from product sales depends heavily on our success in:

•obtaining and delivering supply of Rezdiffra;

•satisfying post-marketing requirements;

•obtaining reimbursement for our product from private insurance or government payors;

•completing research, preclinical studies and clinical development of any future product candidates;

•seeking and obtaining full U.S. approvals and foreign marketing approvals for Rezdiffra and for other product candidates for which we may complete clinical trials;

•obtaining and maintaining market acceptance of our product and any product candidates, if approved;

•launching and commercializing product candidates for which we obtain marketing approval;

•addressing any competing technological and market developments;

•implementing additional internal systems and infrastructure;

•negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

•maintaining, defending, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

•attracting, hiring and retaining qualified personnel.

Other than Rezdiffra in the United States, we have not yet launched any other approved products for commercial sale. We anticipate continuing to incur significant costs associated with seeking full approval of Rezdiffra in the United States and the commercialization of Rezdiffra, and even if another product candidate we may develop is approved for commercial sale, we anticipate incurring significant costs associated the commercialization of any such approved product candidate. Even though we have begun to generate revenues from the sale of Rezdiffra, we may not be able to achieve or maintain long-term sustainable profitability unless Rezdiffra is fully approved in the United States and is approved in other jurisdictions or for additional indications or our future product candidates are approved. Because of the uncertainties and risks associated with these activities, we are unable to accurately and precisely predict the timing and amount of revenues, the extent of any future losses or if we might sustain profitability.

Our failure to remain profitable may depress the market price of our common stock and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. If we suffer losses as we have in the past, investors may not receive any return on their investment and may lose their entire investment.

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We may need to raise additional capital to fund our operations, but we face uncertainties with respect to our ability to access capital. If we are unable to raise capital if and when needed, we could be forced to delay, reduce or eliminate our drug development activities or commercialization efforts.

Our operations have consumed substantial amounts of capital since our inception and we may require additional working capital in the future. We expect to use substantial financial resources to, among other things, commercialize Rezdiffra, conduct additional trials and seek regulatory approvals, establish commercialization capabilities in Europe and fund potential strategic transactions. The amount and timing of any expenditure needed to fund our operations will depend on numerous factors, including:

•the costs associated with commercializing Rezdiffra in the United States;

•the type, number, scope, progress, expansion costs, results of and timing of our ongoing and future clinical trials or the need for additional clinical trials;

•the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;

•the timing and costs of maintaining marketing approvals for Rezdiffra in the United States;

•our ability to receive marketing approval for Rezdiffra in Europe;

•the number of other product candidates that we may pursue and such product candidates' development requirements;

•the timing of obtaining regulatory approval for any potential future product candidates;

•the costs and timing of obtaining or maintaining manufacturing for Rezdiffra;

•the costs and timing of building and maintaining our commercial infrastructure;

•the terms and timing of establishing and maintaining collaborations, license agreements and other strategic transactions;

•our headcount growth and associated costs as we expand our research and development efforts, increase our office space and establish a commercial infrastructure;

•costs associated with any new product candidates that we may develop, in-license or acquire;

•the effect of competing technological and market developments; and

•the ongoing costs of operating as a public company.

Some of these factors are outside of our control. These and other circumstances may cause us to delay certain research activities and related clinical expenses, but such delays will not alter our need to raise additional funding. As a result, we may need to raise substantial additional funds in the future. We may seek additional funding through future debt and equity financings, as well as potential additional collaborations or strategic partnerships with other companies or through non-dilutive financings. Additional funding may not be available to us on acceptable terms, or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders or have a potential restrictive effect on how we operate our business. In addition, market perception that we need to issue additional shares, the issuance of additional shares by us, or the possibility of such issuance, may cause the market price of our shares to decline.

If we are unable to obtain additional funding on a timely basis, our business may be materially and adversely affected. We also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to our product candidates or otherwise agree to terms unfavorable to us.

Our quarterly and annual operating results may fluctuate in the future. As a result, we may fail to meet or exceed the expectations of research analysts or investors, which could cause our stock price to decline and negatively impact our financing or funding ability, as well as negatively impact our ability to exist as a standalone company.

Our financial condition and operating results have varied in the past and will continue to fluctuate from quarter-to-quarter and year-to-year in the future due to a variety of factors, many of which are beyond our control, such that the results of any of our prior quarterly or annual periods should not be relied upon as indications of our future operating performance. Additionally, a period-to-period comparison of our results of operations may not be a good indication of our future performance. In any particular quarter or quarters, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

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Our Loan and Security Agreement contains restrictive and financial covenants that may limit our operating flexibility.

On May 6, 2022, we and our subsidiary, Canticle Pharmaceuticals, Inc. (“Canticle”) entered into a Loan and Security Agreement with Hercules Capital, Inc. (“Hercules”), as amended on February 3, 2023 and August 22, 2024 (as amended, the “Loan Agreement”), providing for an aggregate of $250.0 million in term loans that will be available to us in four tranches subject to the conditions set forth in the Loan Agreement (collectively, the “Term Loans”). Our obligations under the Loan Agreement are secured by a security interest in substantially all of our assets, other than intellectual property. Until we have repaid such indebtedness, the Loan Agreement subjects us to various terms, conditions and covenants. These include financial reporting obligations, and certain limitations on indebtedness, liens (including a negative pledge on intellectual property and other assets), investments, distributions (including dividends), collateral, investments, distributions, transfers, mergers or acquisitions, taxes, corporate changes, and deposit accounts. Additionally, the Loan Agreement contains affirmative and restrictive financial covenants, including maintenance of a minimum cash, cash equivalents and liquid funds covenant of $35.0 million, which may decrease in certain circumstances if the Company achieves both a certain FDA approval for resmetirom and a revenue milestone (the “Minimum Cash Covenant”). The Loan Agreement also includes a revenue-based covenant (the “Revenue Covenant”) that could apply commencing at or after the time that financial reporting became due for the quarter end September 30, 2024; however, the Revenue Covenant will be automatically waived pursuant to the terms of the Loan Agreement at any time in which we maintain, as measured monthly, (i) a certain level of cash, cash equivalents and liquid funds relative to the debt outstanding under the Loan Agreement or (ii) a market capitalization of at least $1.2 billion. Unless waived as a result of the foregoing, the Revenue Covenant requires the Company to achieve a minimum amount of trailing three-month net product revenue. Our business may be adversely affected by these restrictions on our ability to operate our business. If we raise any additional debt financing, as permitted by the Loan Agreement and if pursued and secured by the Company, the terms of such additional debt could further restrict our operating and financial flexibility.

We may not be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal and interest under the Term Loans. Furthermore, our future working capital, borrowings or equity financing could be unavailable to repay or refinance the amounts outstanding under the Term Loans. In the event of a liquidation, Hercules would be repaid all outstanding principal and interest prior to distribution of assets to unsecured creditors, and the holders of our common stock would receive a portion of any liquidation proceeds only if all of our creditors then existing, including Hercules, were first repaid in full.

Our failure to comply with the covenants or other terms of the Loan Agreement, including as a result of events beyond our control, could result in a default under the Loan Agreement that could materially and adversely affect our business.

We may be required to repay the outstanding indebtedness under the Loan Agreement if an event of default occurs under the Loan Agreement or, if applicable, any future debt facility. The Loan Agreement includes customary events of default, including payment defaults, breaches of covenants following any applicable cure period, the occurrence of certain events that could reasonably be expected to have a “material adverse effect” as set forth in the Loan Agreement and cross acceleration. We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay such indebtedness at the time any such event of default occurs. In this case, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant to others rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Our business, financial condition and results of operations could be materially adversely affected as a result of any of these events.

Risks Related to Government Regulation

Government healthcare reform could materially increase our costs, which could materially adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.

The pharmaceutical industry is highly regulated and changes in or revisions to laws and regulations that make gaining regulatory approval, reimbursement and pricing more difficult or subject to different criteria and standards may adversely impact our business, operations or financial results.

There have been a number of legal challenges and certain changes to the ACA since it was enacted. On January 28, 2021, an executive order was issued to initiate a special enrollment period from February 15, 2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including, among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. Further, on February 10, 2021, the federal government’s support for overturning the ACA was withdrawn. It is unclear how the Supreme Court ruling, other such litigation and the healthcare reform measures of the

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Biden Administration will impact the ACA. It is difficult to predict the future legislative landscape in healthcare and the effect on our business, results of operations, financial condition and prospects. Changes to the ACA, to the Medicare or Medicaid programs, or to the ability of the federal government to negotiate or otherwise affect drug prices, or other federal legislation regarding healthcare access, financing or legislation in individual states, could affect our business, financial condition, results of operations and prospects and the value of our common stock. We may face similar challenges to gaining regulatory approval and sufficient reimbursement and pricing due to government healthcare reform in the EU, and other jurisdictions. It remains unclear how any new legislation or regulation might affect the prices we may obtain for Rezdiffra or any future product candidates for which regulatory approval is obtained.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or other governmental pricing programs, we could be subject to additional rebate requirements, penalties, or other sanctions, which could have a material adverse effect on our business, financial condition, results of operations, and growth prospects.

A number of government pricing programs create certain price reporting obligations. Under the Medicaid Drug Rebate program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B. Those rebates are based on pricing data reported by the manufacturer on a monthly and quarterly basis to CMS. These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions. See the section titled “Business—Government Regulation—Pharmaceutical Price Reporting” in this Annual Report for more information.

Under the Medicaid Drug Rebate program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B. Those rebates are based on pricing data reported by the manufacturer on a monthly and quarterly basis to CMS. These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any wholesaler, retailer, provider, health maintenance organization, nonprofit entity, or governmental entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions. If we fail to pay the required rebate amount or report pricing data on a timely basis, we may be subject to civil monetary penalties and/or termination from the Medicaid Drug Rebate program. Additionally, civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we fail to submit the required price data on a timely basis, or if we misclassify or misreport product information. CMS could also decide to terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B for our covered outpatient drugs.

The ACA (addressed further above in the section titled “Business—Government Regulation—U.S. Healthcare Reform”) made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation to implement the changes to the Medicaid Drug Rebate Program under the ACA. CMS also issued a final regulation that modified prior Medicaid Drug Rebate Program regulations to permit reporting multiple best price figures with regard to value based purchasing arrangements; and provide definitions for “line extension,” “new formulation,” and related terms, with the practical effect of expanding the scope of drugs considered to be line extensions that are subject to an alternative rebate formula. Our failure to comply with these price reporting and rebate payment options, as well as pharmaceutical benefit manager “accumulator” programs, could negatively impact our financial results.

Federal law requires that a manufacturer also participate in the 340B Drug Pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. If we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for HRSA to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.

Further, the IRA established a Medicare Part D inflation rebate scheme and a drug price negotiation program, with the first negotiated prices to take effect in 2026. It also makes several changes to the Medicare Part D benefit, including the creation of a new manufacturer discount program in place of the current coverage gap discount program (beginning in 2025). Manufacturers may be subject to civil monetary penalties for certain violations of the negotiation and inflation rebate provisions and an excise tax during a noncompliance period under the negotiation program. Drug manufacturers may also be subject to civil monetary penalties with respect to their compliance with the new Part D manufacturer drug discount program.

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Pricing and rebate calculations are complex, vary across products and programs, and are often subject to interpretation by the manufacturer, governmental agencies, and courts. A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit corrected data up to three years after those data originally were due. Restatements and recalculations increase the costs for complying with the laws and policies governing the Medicaid Drug Rebate program and could result in an overage or underage in our rebate liability for past quarters. They also may affect the 340B ceiling price and therefore liability under the 340B program.

Finally, in order to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by the Department of Veterans Affairs (“VA”), Department of Defense (“DoD”), Public Health Service, and Coast Guard (the “Big Four agencies”) and certain federal grantees, a manufacturer is required to participate in the VA Federal Supply Schedule (“FSS”) pricing program, established under Section 603 of the Veterans Health Care Act of 1992. Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an FSS contract and charge a price to the Big Four agencies that is no higher than the Federal Ceiling Price (“FCP”), which is a price calculated pursuant to a statutory formula. The FCP is derived from a calculated price point called the “non-federal average manufacturer price” (“Non FAMP”), which the manufacturer calculates and reports to the VA on a quarterly and annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non FAMP filing can subject a manufacturer to significant penalties for each item of false information. The FSS contract also contains extensive disclosure and certification requirements. If we overcharge the government in connection with the FSS contract or Tricare Retail Pharmacy Rebate Program, whether due to a misstated FCP or otherwise, we will be required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations. Unexpected refunds to the government, and any response to government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Under Section 703 of the National Defense Authorization Act, a 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. The rebates are calculated as the difference between the annual Non FAMP and FCP for the calendar year that the product was dispensed. A manufacturer that overcharges the government in connection with the FSS contract or Tricare Retail Pharmacy Rebate Program, whether due to a misstated FCP or otherwise, is required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.

If we are found in violation of federal or state “fraud and abuse” laws, we may be required to pay a penalty or may be suspended from participation in federal or state healthcare programs, which may adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.

In the United States, we are subject to various federal and state healthcare “fraud and abuse” laws, including anti-kickback laws, false claims laws and other laws intended to reduce fraud and abuse in federal and state healthcare programs. Although we seek to structure our business arrangements in compliance with all applicable requirements, these laws are broadly written, and it is often difficult to determine precisely how the law will be applied in specific circumstances. Accordingly, it is possible that our practices may be challenged under these laws. Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including fines or exclusion or suspension from federal and state healthcare programs such as Medicare and Medicaid and debarment from contracting with the U.S. government, and our business, financial condition, results of operations and prospects and the value of our common stock may be adversely affected. Our reputation could also suffer. In addition, private individuals have the ability to bring actions on behalf of the government under the federal False Claims Act as well as under the false claims laws of several states. See the section titled “Business—Government Regulation—Other Healthcare Laws” in this Annual Report for more information.

Under the ACA and certain state laws, we are required to report information on payments or transfers of value to any U.S. physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, or certified nurse-midwives (in each case who are not bona fide employees of the applicable manufacturer that is reporting the payment) and teaching hospitals, which is posted in searchable form on a public website. Failure to submit required information may result in civil monetary penalties.

Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state. In addition to the federal government, some states, as well as other countries, including France, require the disclosure of certain payments to healthcare professionals. The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), state, and foreign privacy laws may limit access to information identifying those individuals who may be prospective users or limit the ability to market to them. Some of these laws are new or ambiguous as to what is required to comply with their requirements, and we could be subject to penalties if it is determined that we have failed to comply with an applicable legal requirement.

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We are subject to anti-corruption laws and trade control laws, as well as other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures, legal expenses, and negative publicity which could adversely affect our business, financial condition, results of operations and prospects and the value of our common stock.

Our operations are currently subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”). In addition, if we expand sales of Rezdiffra to other jurisdictions, we'll be subject to anti-corruption or similar laws that apply in countries where we do business. The FCPA and these other laws generally prohibit us, our employees and our intermediaries from making prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security, the U.S. Department of Treasury’s Office of Foreign Assets Control, and various non-U.S. government entities, including applicable export control regulations, economic sanctions on countries and persons, customs requirements, currency exchange regulations and transfer pricing regulations (collectively, Trade Control laws).

We may not be effective in ensuring our compliance with all applicable anti-corruption laws, including the FCPA or other legal requirements, including Trade Control laws. If we are not in compliance with the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and prospects and the value of our common stock. Likewise, even an investigation by US or foreign authorities of potential violations of the FCPA other anti-corruption laws or Trade Control laws could have an adverse impact on our reputation, business, financial condition, results of operations and prospects and the value of our common stock.

Disruptions at the FDA and other government agencies caused by the change in presidential administration, funding shortages or potential funding shortages could hinder their ability to hire and retain key leadership and other personnel, delay or prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to operate, including to review and approve new products, provide feedback on clinical trials and development programs, meet with sponsors and otherwise review regulatory submissions can be affected by a variety of factors, including government budget and funding levels; ability to hire and retain key personnel and accept the payment of user fees; and statutory, regulatory, and policy changes, including as a result of shifting policy priorities of the current presidential administration and political appointees tasked to oversee the agency, among other factors. Average review times at the agency may fluctuate as a result. In addition, government funding of other government agencies on which our operations may rely is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies or to otherwise respond to regulatory submissions, which would adversely affect our business. Over the last several years, the U.S. government has shut down multiple times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees and stop critical activities. Currently, federal agencies in the United States are operating under a continuing resolution that is set to expire on March 14, 2025. Without appropriation of additional funding to federal agencies, our business operations related to our product development activities for the U.S. market could be impacted. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Failure to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, and could negatively affect our operating results and business.

We may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA imposes privacy and security obligations on covered entity health care providers, health plans, and health care clearinghouses, as well as their “business associates” – certain persons or covered entities that create, receive, maintain, or transmit protected health information in connection with providing a specified service or performing a function on behalf of a covered entity. We could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner

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that is not authorized or permitted by HIPAA. Failing to take appropriate steps to keep consumers’ personal information secure may also constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act (the “FTCA”), 15 U.S.C § 45(a). The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business and the cost of available tools to improve security and reduce vulnerabilities.

Further, certain state laws govern the privacy and security of personal information. For example, to the extent we collect California resident personal information, we may also be subject to the CCPA. The CCPA, created a comprehensive privacy framework which granted California residents several new rights with regard to their personal information. The CCPA was amended by the California Privacy Rights Act (“CPRA”) ballot initiative which as of January 1, 2023 has introduced significant amendments to the CCPA and established and funded a dedicated California privacy regulator, the California Privacy Protection Agency (“CPPA”). Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or statutory or actual damages. In addition, California residents have the right to bring a private right of action in connection with data breaches. These claims may result in significant liability and damages. Similar laws have been passed in numerous other states. Other states have proposed new privacy laws which, if enacted, may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies. These laws and regulations are evolving and may impose limitations on our business activities.

The existence of comprehensive privacy laws in different states in the country may make our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. There are also states that are specifically regulating health information. For example, Washington’s My Health My Data Act, which became effective on March 31, 2024, regulates the collection and sharing of health information and has a private right of action, which further increases the relevant compliance risk. Connecticut and Nevada have also passed similar laws regulating consumer health data. In addition, other states have proposed and/or passed legislation that regulates the privacy and/or security of certain specific types of information. For example, a small number of states have passed laws that regulate biometric data specifically. These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products. State laws are changing rapidly and there are discussions in the U.S. Congress of new comprehensive federal data privacy laws to which we could become subject to, if enacted.

All of these evolving compliance and operational requirements impose significant costs, such as costs related to organizational changes, implementing additional protection technologies, training employees and engaging consultants and legal advisors, which are likely to increase over time. The obligations to comply with new privacy laws may require us, among other things, to update our notices and develop new processes internally and with our third-party collaborators, service providers, contractors or consultants to facilitate consumer rights requests, and such laws may impose restrictions on our processing of personal information that may impact the way we operate our business. Any failure or perceived failure by us to comply with any applicable federal, state or foreign laws and regulations relating to data privacy and security could result in damage to our reputation, as well as proceedings or litigation by governmental agencies or other third parties, including class action privacy litigation in certain jurisdictions, which would subject us to significant fines, sanctions, awards, injunctions, penalties or judgments. We may be subject to fines, penalties, or private actions in the event of non-compliance with such laws. The CCPA, the CPRA or other domestic privacy and data protection laws and regulations may increase our compliance costs and potential liability. In addition, such requirements may require us to modify our data processing practices and policies, utilize management’s time and/or divert resources from other initiatives and projects. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations and prospects.

European data collection is governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.

Outside the United States, our clinical trial programs and operations implicate international data protection laws, including the EU General Data Protection Regulation including as implemented in the UK (collectively, “GDPR”). The GDPR increases our responsibility and liability in relation to the processing of personal data of individuals located in the EU. The GDPR, together with the national legislation of the EU member states governing the processing of personal data, places certain obligations on the processing of such personal data including ensuring the lawfulness of processing personal data, health data and samples from clinical trials and adverse event reporting. In particular, these obligations and restrictions concern the consent of the individuals to whom the personal data relates where applicable, the processing details disclosed to the individuals, the sharing of personal data with third parties, the transfer of personal data out of the EU, security breach notifications, as well as substantial potential fines for violations of the data protection obligations. Specifically regarding the transfer of personal data outside of the EU, while there are legal mechanisms available to

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lawfully transfer personal data outside of the EU, including to the United States, there are certain unsettled legal issues regarding such data transfers, the resolution of which may adversely affect our ability to transfer personal data or otherwise may cause us to incur significant costs to come into compliance with applicable data transfer impact assessments and implementation of legal data transfer mechanisms. On July 16, 2020, the European Court of Justice ruled the EU-U.S. Privacy Shield to be an invalid data transfer mechanism and confirmed that the Model Clauses remain valid, and in June 2021, the EC published updated versions of the Model Clauses, which must be incorporated into new and existing agreements within prescribed timeframes in order to continue to lawfully transfer personal data outside of the EU. Data protection authorities from the different European member states, as well as in the UK and Switzerland, have promulgated national privacy laws that impose additional requirements, which add to the complexity of processing and transferring EU personal data, with the UK and Switzerland following the EU with the publication of new Model Clauses to be incorporated in all applicable contracts within a specified timeframe in order to legitimize data transfers from those jurisdictions. The UK adopted versions of their Model Clauses during 2022. Our ability to continue to transfer personal data outside of the EU, the UK, or Switzerland may become significantly more expensive and may subject us to increased scrutiny and liability under the GDPR or similar local laws, and we may experience operating disruptions if we are unable to conduct these transfers in the future.

On December, 13 2022, the EC adopted a draft adequacy decision for the EU-U.S. Data Privacy Framework, which reflects the assessment by the EC of the U.S. legal framework. The draft decision concludes that the United States ensures an adequate level of protection for personal data transferred from the EU to U.S. companies. After an approval process, the EC is expected to adopt the final adequacy decision, which will allow data to flow freely from the EU to the United States between companies certified under the new framework.

Risks associated with operations outside of the United States could adversely affect our business.

A key component of our strategy is to expand our commercialization of Rezdiffra to Europe, pending the receipt of requisite regulatory approvals. International operations and business expansion plans are subject to numerous additional risks, including:

•multiple, conflicting and changing laws and regulations such as tax laws, privacy regulations, tariffs, export and import restrictions, employment, immigration and labor laws, regulatory requirements, and other governmental approvals, permits and licenses, compliance with which can increase in complexity as we enter into additional jurisdictions;

•difficulties in staffing and managing operations in diverse countries and difficulties in connection with assimilating and integrating any operations and personnel we might acquire into our company;

•risks associated with obtaining and maintaining, or the failure to obtain or maintain, regulatory approvals for the sale or use of our products in various countries;

•complexities associated with managing government payor systems, multiple payor-reimbursement regimes or patient self-pay systems;

•financial risks, such as longer payment cycles, difficulty obtaining financing in foreign markets, difficulty enforcing contracts and intellectual property rights, difficulty collecting accounts receivable and exposure to foreign currency exchange rate fluctuations;

•general political and economic conditions in the countries in which we operate, including inflation, political or economic instability, terrorism and political unrest and geopolitical events; and

•public health risks, including epidemics and pandemics, and related effects on new patient starts, clinical trial activity, regulatory agency response times, supply chain, travel and employee health and availability.

Risks Related to Our Intellectual Property

Our success depends on our ability to protect our intellectual property and our proprietary technologies.

Our success depends on our ability to protect our intellectual property and our proprietary technologies. Our commercial success depends in part on our ability to obtain and maintain patent and/or trade secret protection for our product, product candidates, proprietary technologies, and their uses, as well as our ability to freely operate without infringing upon the proprietary rights of others.

We can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford sufficient protection against competitors with similar technologies, nor can

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we provide any assurance that the patents issued will not be infringed, designed around or invalidated by third parties. Even issued patents may later be found unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. This failure to properly protect the intellectual property rights relating to our product or product candidates could have a material adverse effect on our financial condition and results of operations. While we have licensed rights to issued patents in the United States and other jurisdictions for resmetirom and its use, we cannot be certain that the claims in issued patents will not be found invalid or unenforceable if challenged. We cannot be certain that the claims in owned and licensed patent applications covering our product and product candidates will be considered patentable by the United States Patent and Trademark Office (“USPTO”) and valid by courts in the United States or by the patent offices and courts in foreign jurisdictions. Even if we owned and licensed patent applications covering our product and product candidates, the patents may not be enforced against competitors. For example, a formulation patent may not be enforced against those making and marketing a product that has the same active pharmaceutical ingredient in a different formulation that is not claimed in the formulation patent. Method-of-use patents protect the use of a product for the specified method or for treatment of a particular indication. This type of patent may not be enforced against competitors making and marketing a product that has the same active pharmaceutical ingredient but is used for a method not claimed in the patent. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe, induce, or contribute to the infringement of method-of-use patents, the practice is common and such infringement may be difficult to prevent or prosecute.

Our composition-of-matter patent licensed from Roche relating to resmetirom is scheduled to expire in the United States in 2026. Our co-owned patents and pending patent applications that cover our particular solid form, dosage, method of manufacturing, and uses of resmetirom to treat various indications are scheduled to expire in 2033. Our exclusively-owned pending patent applications that cover companion diagnostics, various solid forms of resmetirom, combination therapy, method of use, and method of manufacturing, if issued, are expected to expire between 2037 and 2044. Our exclusively-owned pending patent application that covers other THR-β analogs and uses thereof, if issued, is expected to expire in 2043. While patent term adjustments or patent term extensions could result in later expiration dates for each of these patents, there can be no assurances that we will receive any patent adjustments or patent term extensions. The patent application process and patent maintenance and enforcement are subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future development partners will be successful in protecting our product and product candidates by obtaining and defending patents. These risks and uncertainties include the following:

•the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process and after a patent has issued. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case;

•patent applications may not result in any patents being issued;

•patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;

•we and our licensor(s) may not have been the first to make the inventions covered by pending patent applications or issued patents;

•we and our licensor(s) may not have been the first to file patent applications for our product or product candidates or the compositions developed, or for their uses;

•others may independently develop identical, similar or alternative products or compositions and uses thereof;

•we and our licensor(s)’ disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability;

•others may design around our owned and licensed patent claims to produce competitive products which fall outside of the scope of the patents;

•others may identify prior art or other bases which could invalidate our or our licensor(s)’ patents;

•our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where us and our licensor(s) do not have patent rights, and then use the information learned from such activities to develop competitive products for sale in major commercial markets;

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•there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

•countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market competing products.

In addition, we rely on the protection of our trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, we cannot provide any assurances that any of these parties would not breach the agreements to disclose any proprietary information, including trade secrets, and we may not be able to obtain adequate remedies for such breaches. Further, third parties may still obtain this information by other means, such as breaches of our physical or computer security systems. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. Moreover, third parties may come upon this or similar information lawfully and independently. We would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. Further, intellectual property rights have limitations and do not necessarily address all potential threats to our competitive position. If any of these events occurs or if we otherwise lose protection for our trade secrets or proprietary know-how, our business may be harmed.

Our rights to develop and commercialize our product are subject in part to the terms and conditions of a license to resmetirom granted to us by Roche.

Pursuant to the terms of the Roche Agreement, we assumed control of all development and commercialization of resmetirom and hold exclusive worldwide rights for all potential indications. Under the Roche Agreement, Roche exclusively licensed certain patent rights and know-how relating to resmetirom in exchange for consideration consisting of an upfront payment, milestone payments tied to the achievement of product development and regulatory milestones, and royalty payments based on net sales of products containing resmetirom, including Rezdiffra, or another licensed product, subject to certain reductions. The Roche Agreement will expire, unless earlier terminated pursuant to other provisions thereof, on the last to occur of (i) the expiration of the last valid claim of a licensed patent covering the manufacture, use or sale of products containing resmetirom, or (ii) ten years after the first sale of a product containing resmetirom. Under the Roche Agreement, Roche controls prosecution of the licensed patent rights, although we have a right to comment.

We do not have, nor have we had, any material disputes with Roche regarding the Roche Agreement. However, if there is any future dispute between us and Roche regarding the parties’ rights under the Roche Agreement, our ability to develop and commercialize resmetirom, or any other product candidate covered by the Roche Agreement, may be materially harmed. Any uncured, material breach under the Roche Agreement could result in our loss of exclusive rights to resmetirom and may lead to a complete termination of the Roche Agreement and force us to cease product development efforts for resmetirom.

We may fail to comply with any of our obligations under agreements pursuant to which we license rights or technology, which could result in the loss of rights or technology that are material to our business.

We may enter into license agreements from time to time. Licensing of intellectual property is important to our business and involves complex legal, business and scientific issues. Disputes may arise regarding intellectual property subject to a license agreement, including but not limited to:

•the scope of rights granted under the license agreement and other interpretation-related issues;

•the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

•the sublicensing of patent and other rights;

•our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

•the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by us and our licensors and collaborators; and

•the priority of invention of patented technology.

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If disputes over intellectual property and other rights that we have licensed or acquired from third parties prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product or product candidates.

If we do not obtain protection under the Hatch-Waxman Act and similar foreign legislation by extending the term of patents covering our product or product candidates, our business may be materially harmed.

Depending upon the timing, duration and conditions of FDA marketing approval of our products, one or more of our United States patents may be eligible for limited patent term extension under Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product may not extend beyond the current patent expiration dates and competitors may obtain approval to market competing products sooner. As a result, our revenue could be potentially materially reduced. Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

On September 16, 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”) was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first inventor to file” system in which the first inventor to file a patent application will be entitled to the patent. Third parties are allowed to submit prior art before the issuance of a patent by the USPTO, and a patent may become subject to post-grant proceedings including opposition, derivation, reexamination, inter partes review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position.

Claims by third parties that we infringe their proprietary rights may result in liability for damages or prevent or delay our developmental and commercialization efforts.

The biotechnology industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we have and are developing products and product candidates. As the biotechnology industry expands and more patents are issued, the risk increases that our product and product candidates may be subject to claims of infringement of the patent rights of third parties. Because patent applications are maintained in secrecy until the application is published, we may be unaware of third party patents that may be infringed by commercialization of resmetirom or our other product candidates. Moreover, because patent applications can take many years to issue, there may be currently-pending patent applications that may later result in issued patents that our product and product candidates may infringe. In addition, identification of third party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. Any claims of patent infringement asserted by third parties would be time consuming and could likely:

•result in costly litigation;

•divert the time and attention of our technical personnel and management;

•cause development delays;

•prevent us from commercializing resmetirom for MASH or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a court of law;

•require us to develop non-infringing technology, which may not be possible on a cost-effective basis; or

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•require us to enter into royalty or licensing agreements.

Although no third party has asserted a claim of patent infringement against us as of the filing date of this report, others may hold proprietary rights that could prevent resmetirom or our other product candidates from being marketed. Any patent-related legal action against us claiming damages and seeking to enjoin commercial activities relating to our product and product candidates or processes could subject us to potential liability for damages and require us to obtain a license to continue to manufacture or market resmetirom or our other product candidates. We cannot predict whether we would prevail in any such actions or that any license required under any of these patents would be made available on commercially acceptable terms, if at all. In addition, we cannot be sure that we could redesign our product or product candidates or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing resmetirom or our other product candidates, which could harm our business, financial condition and operating results.

Moreover, we may be subject to a third party preissuance submission of prior art to the USPTO or in addition to interference proceedings, may become involved in opposition, derivation, reexamination, inter partes review, post-grant review or other post-grant proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future products and product candidates.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time consuming, and unsuccessful. Further, our issued patents could be found invalid or unenforceable if challenged in court.

If we or any of our future development partners were to initiate legal proceedings against a third party to enforce a patent directed at our product or one of our product candidates, or one of our future product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or insufficient written description. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also raise similar claims before the USPTO, even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on such product or product candidate. Such a loss of patent protection would have a material adverse impact on our business

Interference proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development partnerships that would help us bring our product candidates to market.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

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We may not be successful in obtaining or maintaining necessary rights to our product and product candidates through acquisitions and in-licenses.

We currently have rights to the intellectual property, through licenses from third parties and under patents that we own or co-own, to develop and market our product and product candidates. Because our programs may require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license, or use these proprietary rights. For example, our product or product candidates may require specific formulations to work effectively and efficiently and the rights to these formulations may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third party intellectual property rights from third parties that we identify as necessary for our product or product candidates. The licensing and acquisition of third party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

We may collaborate with U.S. and foreign academic institutions and industry collaborators to accelerate our preclinical or clinical research. Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program.

If we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of that program and our business and financial condition could suffer.

Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

MDGL US Equity

MDGL · 10-K · period ended 2024-12-31

Item 1A. Risk Factors

MDGL US Equity☆

MDGL · 10-K · period ended 2024-12-31

Item 1A. Risk Factors

MDGL US Equity