Based on additional data including the data from our Phase 3 clinical trials and assuming sufficient funds become
available, we plan to commence a clinical trial of vonapanitase in Europe for patients undergoing creation of radiocephalic fistulas.
Prior to enrolling our first patient in Europe, we plan to formally seek guidance from the EMA regarding its requirements for regulatory
approval. If a clinical trial of vonapanitase in Europe is necessary for regulatory approval, we expect results from this trial
to be available two to three years after the first patient is enrolled. If results of this European trial successfully meet its
primary endpoint and depending on the guidance obtained from the EMA, we would expect to submit a Marketing Authorization Application,
or MAA. Obtaining an approval is a lengthy and expensive process and the EMA has its own procedures for approval of product candidates.
Even if a product candidate is approved, the EMA may limit the indications for which the product may be marketed, require extensive
warnings on the product labeling or require expensive and time-consuming clinical trials or reporting as conditions of approval.
Regulatory authorities in countries outside of the United States and Europe also have requirements for approval of product candidates
with which we must comply prior to marketing in those countries. Obtaining foreign regulatory approvals and compliance with foreign
regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction
of vonapanitase or any additional product candidates in those countries.
Advertising and promotion of any
product candidate that obtains approval in the United States will be heavily scrutinized by the FDA, the Department of Justice,
the Department of Health and Human Services’ Office of Inspector General, state attorneys general, members of Congress and
While the FDA does
not restrict physicians from prescribing approved drugs and biologics for uses outside of the products’ approved labeling,
known as off-label use, pharmaceutical manufacturers are prohibited from promoting and marketing their products for such uses.
Violations, including promotion of our products for off-label uses, are subject to enforcement letters, inquiries, investigations,
civil and criminal sanctions by the government, corporate integrity agreements, debarment from government contracts, debarment
and exclusion from participation in federal healthcare programs. Additionally, comparable foreign regulatory authorities will heavily
scrutinize advertising and promotion of any product candidate that obtains approval outside of the United States.
In the United States,
engaging in the impermissible promotion of our products for off-label uses can also subject us to false claims litigation under
federal and state statutes, which can lead to civil and criminal penalties and fines, debarment from government contracts, exclusion
from participation in federal healthcare programs and corporate integrity agreements with governmental authorities that materially
restrict the manner in which a company promotes or distributes drug and biologic products. These false claims statutes include
the federal civil False Claims Act, which allows any individual to bring a lawsuit against a pharmaceutical company on behalf of
the federal government alleging submission of false or fraudulent claims, or causing to present such false or fraudulent claims,
for payment by a federal program such as Medicare or Medicaid. If the government decides to intervene and prevails in the lawsuit,
the individual will share in any fines or settlement funds. If the government does not intervene, the individual may proceed on
his or her own. Since 2004, these False Claims Act lawsuits against pharmaceutical companies have increased significantly in volume
and breadth, leading to several substantial civil and criminal settlements regarding certain sales practices promoting off-label
product uses involving fines that are as much as $3.0 billion.
This growth in litigation
has increased the risk that a pharmaceutical company will have to defend a false claim action, pay settlement fines or restitution,
agree to comply with burdensome reporting and compliance obligations, and be excluded from Medicare, Medicaid and other federal
and state healthcare programs. If we do not lawfully promote our approved products, we may become subject to such litigation and,
if we do not successfully defend against such actions, those actions may have a material adverse effect on our business, financial
condition, results of operations and prospects. The FDA’s policies may change and additional government regulations may be
enacted that could prevent, limit or delay marketing approval, and the sale and promotion of our product candidates. If we are
slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able
to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our
business, prospects and ability to achieve or sustain profitability.
If we are found in violation of federal
or state “fraud and abuse” laws or other healthcare laws and regulations, we may be required to pay a penalty and/or
be suspended from participation in federal or state healthcare programs, which may adversely affect our business, financial condition
and results of operation.
We may also be subject
to various federal and state laws pertaining to healthcare “fraud and abuse,” including anti-kickback laws and false
claims laws. Anti-kickback laws make it illegal for a prescription drug or biologic manufacturer to solicit, offer, receive or
pay any remuneration in exchange for, or to induce, the referral of business, including the purchase or prescription of a particular
drug or biologic. Other laws that we may be subject to include the civil False Claims Act, criminal False Claims Act, the HIPAA
fraud and abuse provisions, the Civil Monetary Penalties statute, Section 1927 of the Social Security Act, the Veterans Health
Care Act, the Foreign Corrupt Practices Act, federal and state statutes and regulations pertaining to payments made to physicians
and other health care providers, the HIPAA privacy and security provisions, and other analogous state laws. Due to the breadth
of the statutory provisions, it is possible that our practices might be challenged under anti-kickback, healthcare, or other fraud
and abuse laws. Moreover, recent healthcare reform legislation has strengthened these laws. For example, the recently enacted Patient
Protection and Affordable Care Act, or ACA, among other things, amends the intent requirement of the federal anti-kickback and
certain of the criminal healthcare fraud statutes to clarify that a person or entity does not need to have actual knowledge of
this statute or specific intent to violate it. In addition, the ACA clarifies that the government may assert that a claim that
includes items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim
for purposes of the civil False Claims Act. False claims laws prohibit anyone from knowingly presenting, or causing to be presented
for payment, to government third-party payors (including Medicare and Medicaid) claims for reimbursed drugs, or biologics or services
that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or
services. Liability may also arise from false certification of compliance with laws and regulations that are conditions of payment.
Our activities relating to the sale and marketing of our products may be subject to scrutiny under these laws. Violations of fraud
and abuse laws, and other healthcare statutes are punishable by criminal and civil sanctions, including fines and civil monetary
penalties, the possibility of exclusion from federal healthcare programs (including Medicare and Medicaid) and corporate integrity
agreements, which impose, among other things, rigorous operational and monitoring requirements on companies. We may further be
subject to such other actions as debarment from government contracts and future orders under existing contracts, refusal to allow
us to enter into supply contracts, including government contracts, reputational harm, diminished profits and future earnings and
the curtailment or restructuring of our operations, any of which could adversely affect our business.