Risks related to commercialization

The marketing and sale of filgotinib or future approved products may be unsuccessful or less successful than anticipated. We are heavily dependent on the success of filgotinib, which is approved for the treatment of RA and UC in Europe, and Japan.

The commercial success of filgotinib and of any future products, if approved, will depend upon the degree of market acceptance by physicians, healthcare payers, patients, and the medical community. Market acceptance will depend on a number of factors, many of which are beyond our control, but not limited to (i) the wording of the product label, (ii) changes in the standard of care for the targeted indications for any product and product candidate, (iii) acceptance by physicians, patients and healthcare payers of the product as safe, effective and cost-effective and (iv) sales, marketing and distribution support.

We have limited experience in the sale or marketing of pharmaceutical products and have build and continue to further develop a marketing and sales organization. We have established our own sales force in several European countries. We expect to continue to invest significant financial and management resources to continue to build these capabilities and to establish a European commercial infrastructure or to enter into collaboration arrangements with third parties to outsource the distribution or commercialization, such as SOBI, our distribution and commercialization partner in Eastern and Central Europe, Portugal, Greece, and the Baltic countries for filgotinib. Recruiting and training a sales force is expensive and costs of creating an independent sales and marketing organization and of marketing and promotion could be above those anticipated by us. To the extent any of our product candidates for which we maintain commercial rights is approved for marketing, if we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to market and sell any product effectively, or generate product revenues, which in turn would have a material adverse effect on our business, financial condition, and results of operation.

Further, to the extent that Gilead is commercializing filgotinib in one or more jurisdictions or a third party, such as Eisai, is commercializing filgotinib in one or more jurisdictions, we are significantly dependent on their successful accomplishment of commercialization efforts.

Coverage and reimbursement decisions by third-party payers may have an adverse effect on pricing and market acceptance. Legislative and regulatory activity, including enacted and future legislation, may exert downward pressure on potential pricing and reimbursement for any of our product candidates, if approved, that could materially affect the opportunity to commercialize.