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Item 1A.
Risk Factors
We are substantially dependent on revenues from our principal products.
Our current revenues depend upon continued sales of our principal products, and, unless we develop or acquire
rights to new products and technologies, we will be substantially dependent on sales from our principal products for
many years. Further, following the completion of the spin-off of our hemophilia business, our revenues are further
reliant and concentrated on sales of our MS products in an increasingly competitive market, and revenues from
sales of our product for SMA. Any of the following negative developments relating to any of our principal products
may adversely affect our revenues and results of operations or could cause a decline in our stock price:
• safety or efficacy issues;
• the introduction or greater acceptance of competing products, including lower-priced
competing products;
• constraints and additional pressures on product pricing or price increases, including those resulting from
governmental or regulatory requirements, increased competition or changes in, or implementation of,
reimbursement policies and practices of payors and other third parties; or
• adverse legal, administrative, regulatory or legislative developments.
SPINRAZA has been approved by, among others, the FDA, the EC and the Japanese Ministry of Health, Labor
and Welfare, and is in the early stages of commercial launch in these and other markets. In addition to risks
associated with new product launches and the other factors described in these “Risk Factors,” our ability to
successfully commercialize SPINRAZA may be adversely affected due to:
• our limited marketing experience within the SMA market, which may impact our ability to develop relationships
with the associated medical
and scientific community;
• the lack of readiness of healthcare providers to treat patients with SMA;
• the effectiveness of our commercial strategy for marketing SPINRAZA; and
• our ability to maintain a positive reputation among patients, healthcare providers and others in the SMA
community, which may be impacted by pricing and reimbursement decisions relating to SPINRAZA.
If we fail to compete effectively, our business and market position would suffer.
The biopharmaceutical industry and the markets in which we operate are intensely competitive. We compete in
the marketing and sale of our products, the development of new products and processes, the acquisition of rights to
new products with commercial potential and the hiring and retention of personnel. We compete with biotechnology
and pharmaceutical companies that have a greater number of products on the market and in the product pipeline,
greater financial and other resources and other technological or competitive advantages. One or more of our
competitors may benefit from significantly greater sales
and marketing capabilities, may develop products that are
accepted more widely than ours or may receive patent protection that dominates, blocks or adversely affects our
product development or business.
Our products are also susceptible to increasing competition from generics and biosimilars in many
markets. Generic versions of drugs and biosimilars are likely to be sold at substantially lower prices than branded
products. Accordingly, the introduction of generic or biosimilar versions of our marketed products, as well as lower-
priced competing products, likely would significantly reduce both the price that we receive for such marketed
products and the volume of products that we sell, which may have an adverse impact on our results of operations.
In the MS market, we face intense competition as the number of products
and competitors continues to
expand. Due to our significant reliance on sales of our MS products, our business may be harmed if we are unable
to successfully compete in the MS market. More specifically, our ability to compete, maintain and grow our share in
the MS market may be adversely affected due to a number of factors, including:
• the introduction of more efficacious, safer, less expensive or more convenient alternatives to our MS products,
including our own products and products of our collaborators;
• the introduction of lower-cost biosimilars, follow-on products or generic versions of branded MS products sold
by our competitors, and the possibility of future competition from generic versions
or prodrugs of existing
therapeutics or from off-label use by physicians of therapies indicated for other conditions to treat MS patients;
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• patient dynamics, including the size of the patient population and our ability to attract new patients to our
therapies;
• damage to physician and patient confidence in any of our MS products or to our sales and reputation as a
result of label changes or adverse experiences or events that may occur with patients treated with our MS
products;
• inability to obtain appropriate pricing and reimbursement for our MS products compared to our competitors in
key international markets; or
• our ability to obtain and maintain patent, data or market exclusivity for our MS products.
Sales of our products depend, to a significant extent, on adequate coverage, pricing
and reimbursement from third-
party payors, which are subject to increasing and intense pressure from political, social, competitive and other sources.
Our inability to maintain adequate coverage, or a reduction in pricing or reimbursement, could have an adverse effect
on our business, revenues and results of operations and could cause a decline in our stock price.
Sales of our products are dependent, in large part, on the availability and extent of coverage, pricing and
reimbursement from government health administration authorities, private health insurers and other organizations.
When a new pharmaceutical product is approved, the availability of government and private reimbursement for that
product may be uncertain, as is the pricing and amount for which that product will be reimbursed.
Pricing and reimbursement for our products may be adversely affected
by a number of factors, including:
• changes in, and implementation of, federal, state or foreign government regulations or private third-party
payors’ reimbursement policies;
• pressure by employers on private health insurance plans to reduce costs;
• consolidation and increasing assertiveness of payors, including managed care organizations, health insurers,
pharmacy benefit managers, government health administration authorities, private health insurers and other
organizations, seeking price discounts or rebates in connection with the placement of our products on their
formularies and, in some cases, the imposition of restrictions on access or coverage
of particular drugs or
pricing determined based on perceived value; and
• our value-based contracting pilot program pursuant to which we aim to tie the pricing of our products to their
clinical values by either aligning price to patient outcomes or adjusting price for patients who discontinue
therapy for any reason, including efficacy or tolerability concerns.
Our ability to set the price for our products varies significantly from country to country and as a result so can
the price of our products. Certain countries set prices by reference to the prices in other countries where our
products are marketed. Thus, our inability to secure favorable prices in a particular country may not only limit the
revenues from our products within that country, but may also adversely affect our ability to obtain acceptable prices
in other markets. This may create the opportunity for third-party cross-border trade or influence our decision to sell
or not to sell a product, thus adversely affecting our geographic expansion plans and revenues.
Our failure to maintain adequate coverage, pricing or reimbursement for our products
would have an adverse
effect on our business, revenues and results of operations, could curtail or eliminate our ability to adequately fund
research and development programs for the discovery and commercialization of new products and could cause a
decline in our stock price.
Drug prices are under significant scrutiny in the markets in which our products are prescribed. We expect drug
pricing and other health care costs to continue to be subject to intense political and societal pressures on a global
basis. In addition, competition from current and future competitors may negatively impact our ability to maintain
pricing and our market share. New products or treatments brought to market by our competitors could cause
revenues for our products to decrease due to potential price reductions and lower sales volumes. As a result, our
business and reputation may be harmed, our stock price may be adversely impacted and experience periods of
volatility, and our results of operations may be adversely impacted.