Our business currently relies on the effectsales of transition of GLASSIA manufacturing to Takeda in 2021).

We rely heavily upon theKEDRAB, our Human Rabies Immune Globulin (HRIG), and CYTOGAM, our Cytomegalovirus Immune Globulin Intravenous (Human) (CMV-IGIV), as well as royalty income on sales of GLASSIA, our intravenous AAT intravenous product, and KEDRAB, the post-exposure prophylactic treatment of rabies.by Takeda. Revenue from sales of these products and royalties comprised approximately 53%23%, 58%12% and 60% and 14%, 13% and 10%11%, respectively (46% in total), of our total revenues for the yearsyear ended December 31, 2020, 2019 and 2018, respectively.2023.

With respect to a reduction in sales of GLASSIA due toIn the transfer of GLASSIA manufacturing to Takeda see “—With the cessation of production of GLASSIA for Takeda in 2021, our revenues and profitability will decrease.” Ifevent that KEDRAB or CYTOGAM were to lose significant sales or were to be substantially or completely displaced in the market, we would lose a significant and material source of our total revenues. Similarly, if these products were to become the subject of litigation and/or an adverse governmental action or ruling requiringcausing us to cease the manufacturing, export or sales of these products, our business and financial condition would be adversely affected.

We also rely heavilyare entitled to royalty payments from Takeda on GLASSIA sales in the United States which comprised approximately 63%, 66% and 66% of our total revenues for the years ended December 31, 2020, 2019 and 2018, respectively. If our U.S. sales were significantly impacted by material changes to government or private payor reimbursement, other regulatory developments, competition or other factors, then our business would be adversely affected.

With the cessation of production of GLASSIA for Takeda(as well as in 2021, our revenues and profitability will decrease.

We have a partnership arrangement with Takeda, pursuant to which Takeda is the sole distributor of GLASSIA in the United States, Canada, Australia and New Zealand. The partnership agreement was originally executed in 2010 with Baxter International Inc. (“Baxter”). During 2015, Baxter assigned all its rights underZealand, to the partnership agreement to Baxalta U.S. Inc. (“Baxalta”), an independent public company which spun-off from Baxter. In 2016, Shire plc (“Shire”) completed its acquisition of Baxalta, and as a result, all of Baxalta’s rights under the partnership agreement were assigned to Shire. In January 2019, Takeda completed its acquisition of Shire.

In 2021, Takeda will complete the technology transfer ofextent GLASSIA and pending FDA approval, will initiate its own production of GLASSIA for the U.S. market. After this transition, Takeda has no obligation to purchase any amount of GLASSIA from us. Based on our agreement with Takeda, we anticipate that sales of GLASSIA to Takeda during 2021 will be reduced to approximately $25 million, as compared to $64.9 million during 2020, which is Takeda’s minimum commitment for 2021 pursuant to our existing agreement. Based on the agreement between the companies, upon initiation ofapproved and sales of GLASSIA manufactured by Takeda, it will pay royalties to usbe generated in these other markets) at a rate of 12% on net sales through August 2025, and at a rate of 6% thereafter until 2040, with a minimum of $5 million annually, for each of the years from 2022 to 2040. BasedFor the year ended December 31, 2023 and the period between March and December 2022, we accounted for $16.1 million and $12.2 million, respectively, of sales-based royalty income from Takeda, and based on current GLASSIA sales in the United States and forecasted future growth, we project receiving royalties from Takeda in the range of $10 million to $20 million per year from 2022during 2024 to 2040. The transitionHowever, any reduction in sales of GLASSIA by Takeda or should Takeda reduce its manufacturing and marketing of GLASSIA for any reason (including but not limited to Takedainability to adequately or sufficiently manufacture GLASSIA, regulatory limitations, difficulties in marketing, reduction in market size, or changes in corporate focus), our future expected royalty income from Takeda’s sales of GLASSIA would be adversely impacted, which would have an adverse effect on our revenues and profitability.

A significant portion of our net revenue has been and will continue to be driven from sales of our proprietary products, and in our largest geographic region, the transitionUnited States. Any adverse market event with respect to some of our proprietary products or the United States would have a material adverse effect on our business.

A significant portion of our revenues has been, and will continue to be, derived from sales of our proprietary products, including those of KEDRAB, CYTOGAM, HEPGAM B, VARIZIG, WINRHO SDF and GLASSIA, as well as royalty income from GLASSIA sales by Takeda. Revenue from our Proprietary products comprised approximately 81%, 79% and 73% of our total revenues for the years ended December 31, 2023, 2022 and 2021, respectively. If some of our proprietary products were to lose significant sales or were to be substantially or completely displaced in the market, we would lose a significant and material source of our total revenues. Similarly, if these products were to become the subject of litigation and/or an adverse governmental action or ruling causing us to cease the manufacturing, export or sales of these products, our business and financial condition would be adversely affected.

A significant portion of our sales and income are generated in the United States and comprised approximately 52%, 50% and 48% of our total revenues for the years ended December 31, 2023, 2022 and 2021, respectively. If our sales or income generated in the United States were significantly impacted by material changes to government or private payor reimbursement, other regulatory developments, competition or other factors, then our business and financial condition would be adversely affected.

Our ability to maintain and expand sales of our commercial products portfolio in the U.S. and ex-U.S. markets is critical to our profitability and financial stability.

Our Proprietary commercial products portfolio, comprising of KEDRAB, CYTOGAM, WINRHO SDF, VARIZIG, HEPGAM B and GLASSIA, as well as KAMRAB, KAMRHO (D) and two types of equine-based anti-snake venom (ASV) products, are currently distributed in the U.S. market, where we market and distribute some of these products directly based on our sales and marketing personnel, and in approximately 30 additional ex-U.S. international markets, including the Middle East and North Africa (“MENA”) region, where we had little to no prior sales and operational experience prior to the consummation of the agreementacquisition of CYTOGAM, WINRHO SDF, VARIZIG, HEPGAM B from Saol in November 2021. While we intend to its royalties phase will resultleverage our existing strong international distribution network to grow our commercial revenue in a significant reductionthe existing markets in which we sell our products, we also plan to expand to geographic markets in which these products are not currently sold, and we may not be successful in developing additional markets for these products.

Our ability to successfully maintain and expand our recently established U.S. based commercial and distribution infrastructure, and maintain and expand ex-U.S. commercialization, is critical for our future growth, profitability and financial stability. Given our limited prior experience in some of the required activities and responsibilities, including operation of direct sales in the U.S. market, knowledge and experience in the MENA region, as well as other operational, technical, regulatory, financial and compliance challenges, we may not be able to continue to expand our existing commercial operation, which may materially adversely affect the operating results of our revenue and profitability.business as well as our financial condition.

We may have excess manufacturing plant capacity in our manufacturing facility, which may result in significanta reduction in operating profits, if not effectively managed..

Our revenues will decrease and our operating results may be materially and adversely impacted if we are unable to continue operating our manufacturing facility at its current capacity and/or level of profitability, or otherwise to reduce direct and indirect costs relating to our manufacturing facility in line with any reduction in demand or manufacturing level.

Following the transition of GLASSIA manufacturing to Takeda in 2021, we have been and may continue to be affected by reduced efficiency of our manufacturing facility, which resulted and may cause uscontinue to incurresult in increased manufacturing costs per vial, reduced gross profitability and potential operating losses. We plan to utilize the excess manufacturing capacity in our manufacturing plant to manufacture our proprietary products, including KEDRAB/KAMRAB, CYTOGAM and GLASSIA. We are also currently manufacturing at our plant small quantities of KAMRHO (D) and anti-snake venom products as well as clinical lots needed for the Inhaled AAT clinical study. In the future, we may potentially use the existing capacity for the manufacturing of HEPGAM B, VARIZIG and WINRHO SDF, which would be subject to a technology transfer and regulatory approvals and the execution of a new revised contract manufacturing agreement with Emergent. We may also consider utilizing our plant in the future for the manufacturing of products for other companies as a contract manufacturing organization (CMO). While we have the know-how and expertise to support the growthmanufacturing of additional products in our other existing proprietary products. Whilefacility, we may not be able to complete required technology transfers or obtain required regulatory approvals in the expected timeline, or at all. Further, while we are capable of increasing the manufacturing more of these products,capacity at our facility, there is no assurance that there will be increased market demand for these products at a profitable market price in the currently existing markets in which we distribute our products or other markets. The manufacturing of excess quantities of products, which may not be sold due to lower demands, may result in the need to write-down the value of inventories, which may result in significant operating losses.

The reduced plant utilization See also “—Manufacturing of new plasma-derived products in our manufacturing facility requires a lengthy and challenging development project and/or technology transfer project as well as the expected changeregulatory approvals, all of which may not materialize.”

While we would expect to implement staff reductions when needed in product sales mix driven by the expected reduction in sales of GLASSIAorder to Takeda, is anticipatedadjust to result in a continued decrease in the Propriety Products segment’s full-year gross margins.

We believelower plant utilization, the risk of not adequately adjusting to lower plant utilization could result in inefficiencies, reduced profitability or operating losses. In addition, these changesStaff reductions have in the past, and may in the future, require significant layoffs, which may be expensiveus to pay excess severance compensation and may lead to labor issuesdisputes and strikes, which could affect our ability to continue to manufacture products and may lead to increaseincreased costs, reduced profitability and operating losses. For labor related risk see “—We have entered into a collective bargaining agreement with the employees’ committee and the Histadrut (General Federation of Labor in Israel), and we have incurred and could in the future incur labor costs or experience work stoppages or labor strikes as a result of any disputes in connection with such agreement.”

Manufacturing of new plasma-derived products inFailure to adequately or timely adapt our manufacturing facility requires a lengthyvolume or the manufacturing volumes of our CMOs as needed, may lead to an inability to supply products, may have an adverse effect on our business and challenging development project and/or technology transfer projectcould cause substantial harm to our business reputation and result in breach of our sales agreements and the loss of future customers and orders.

We have invested, and intend to continue to invest, in expanding our U.S. plasma collection operations in order to reduce our dependency on third-party suppliers in terms of plasma supply needs as well as regulatory approvals, allto generate sales from commercialization of which may not materialize.

We are exploring opportunities to manufacture in our manufacturing plant other new plasma-derived products that we have not previously manufactured.

The manufacturing of other marketed or investigational plasma-derived products in our plant, including, our Anti-SARS-CoV-2 IgG investigational product as a potential treatment for COVID-19 and the hyper-immune globulin product for which we executed a 12-year contract manufacturing agreement with an undisclosed partner, requires a lengthy and challenging development project and/or technology transfer project through which we transfer the know-how and capabilities to manufacture the new product. Such projects are usually complex and involve investment of significant time (approximately two to four years) and resources. There is no assurance that such development and/or technology transfer projects will be successful and will allow us to manufacture the new product according to its required specifications.

Such development and/or technology transfer projects require regulatory approval by the FDA and/or EMA or other relevant regulatory agencies. Obtaining such regulatory approval may require activities such as the manufacturing of comparable batches and/or performing comparability non-clinical and/or clinical studies between the product manufactures by its existing manufacturer and the product manufactured at our manufacturing facility. There is no assurance that we will be able to provide supporting comparability results that meet all regulatory requirements needed to obtain the regulatory approval required to be able to commence commercial manufacturing of new plasma-derived products in our manufacturing plant.

If we are unable to adequately complete the required development and/or technology transfer projects or subsequently obtain the required regulatory approvals, we will not be able to utilize the excess capacity of our manufacturing plant and may suffer reduced profitability or operating losses.

We may not realize the anticipated benefits of our recent agreement for the acquisition of the plasma collection operations of B&PR, the purpose of which is to become less dependent on plasma supply from third parties and reduce costs associated withcollected normal source plasma, procurement.and our ability to successfully expand this operation is important to support our future growth and profitability.

As recently announced, in JanuaryIn March 2021, we entered into an agreement for the acquisition, subject to customary closing conditions, ofacquired the plasma collection center of B&PR in Beaumont, Texas, which specializes in the collection ofprimarily collects hyper-immune plasma used in the manufacture of Anti-D immunoglobulin products (“Anti-D products”)our KAMRHO (D). B&PR’s plasma collection center is one of the few FDA-licensed centers in the U.S. producing the raw materials required for these products. The acquisition of B&PR’s plasma collection center shall represent our entry into the U.S. plasma collection market and further our strategic goal of becoming a fully integrated specialty plasma company. We plan toIn 2023, we significantly expandexpanded our hyperimmune plasma collection capacity by investing in B&PR’sthis center through obtaining FDA approval for the collection of hyper-immune plasma at this center to be used in the manufacture of KAMRAB and KEDRAB and commenced collections of such plasma during 2023. In March 2023, we entered into a lease agreement for a new plasma collection center at Beaumont,in Uvalde, Texas and leveragingexpect to commence operations at this new center during 2024, following the completion of its FDA licenseconstruction and obtaining the required regulatory approvals. The new center is planned to opencollect normal source plasma to be sold for manufacturing by third parties, as well as hyper-immune specialty plasma required for manufacturing of our proprietary products. We intend to leverage our experience with plasma collection to establish additional plasma collection centers in the U.S.United States, with the intention of collecting normal source plasma to be sold for manufacturing by third parties, as well as hyper-immune specialty plasma required for manufacturing of our proprietary products.

We believe that the expansion of our plasma collection operations will allow us to better support our plasma needs and reduce our dependency on third-party suppliers as well as generate revenues through sales from commercialization of collected normal source plasma. However, given our limited prior experience in managing plasma collection operations, as well as the operational, technical, and regulatory challenges in establishing and maintaining plasma collection operations, as well as the challenges in screening locations, in negotiating the lease and other third party agreements required for the ongoing operations of the centers, the financial investment required to expand our collection capabilities and open new collection centers and the management of an expanded scope of plasma collection operations, we may not be able to realize our investment and the anticipated benefits of the acquisition. Wesuch activities. Further, we may not be able to adequately collect all sufficient quantities of plasma through our plasma collection operations to support our plasma sourcing needs, which will result in continued dependency on third party suppliers; and even if we are successful in collection sufficient quantities, there can be no assurance that we will be able to reduce the cost of plasma through our collection operations, as compared to costs associated with acquisition ofprocuring plasma from third parties.

In addition, there could be no assurance that we will be able to collect adequate quantities of normal source plasma as well as secure supply agreements with customers at adequate prices. See also “—We would become supply-constrained and our financial performance would suffer if we were unable to obtain adequate quantities of source plasma or plasma derivatives or specialty ancillary products approved by the FDA, the EMA, Health Canada or the regulatory authorities in Israel, or if our suppliers were to fail to modify their operations to meet regulatory requirements or if prices of the source plasma or plasma derivatives were to raise significantly”; and “—We may in the future engage in additional strategic transactions to acquire or sell assets, businesses, products or rights totechnologies or engage in in-license or out-license transactions of products product candidates or technologies or form collaborations or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership increase our debt, or cause us to incur debt or significant expense.”

Our two leadingWe have several product development candidates, areincluding our Inhaled AAT for AATD and Anti-SARS-CoV-2 IgG as a potential therapy for COVID-19; and in addition, we havewell as several other early stageearly-stage development projects. There can be no assurance that the development activities associated with these products will materialize and result in the FDA, EMA or any other relevant agencies granting us marketing authorization for any of these products.

Our two leading productWe are engaged in research and development activities with respect to several pharmaceutical products candidates, areincluding Inhaled AAT for AATD, and Anti-SARS-CoV-2 IgG as a potential therapy for COVID-19; and in addition, we have several other early stagewhich is our lead product development projects.

candidate.

During December 2019, the first patient was randomized in Europe into our pivotal Phase 3 InnovAATe clinical trial evaluating the safety and efficacy of our proprietary inhaledInhaled AAT therapy for the treatment of AATD. The study was initiated following extensive discussions with both the FDA and EMA regarding the trial’s design as well a thorough analysis of a prior pivotal Phase 2/3 clinical trial for Inhaled AAT for AATD conducted in Europe, which did not meet its primary or other pre-defined efficacy endpoints.endpoints, and a prior Phase 2 clinical trial conducted in the U.S., which met its pharmacokinetic endpoint. In addition to the pivotal study and based on feedback received from the FDA regarding anti-drug antibodies (“ADA”) to Inhaled AAT, we also intend to concurrently conduct a sub-study in North America in which approximately 30 patients will be evaluated for the effect of ADA on AAT levels in plasma with Inhaled AAT and IV AAT treatments. ThereWe recently received positive scientific advice from the EMA regarding the ongoing pivotal Phase 3 InnovAATe trial for Inhaled AAT that reconfirms the overall design of the study and acknowledges the statistically and clinically meaningful improvement in lung function (FEV1) demonstrated in our previously completed Phase 2/3 European study. Further, in January 2024, during a meeting with the FDA regarding the progress of the ongoing InnovAATe study, the FDA reconfirmed the overall design of the study and endorsed the Data and Safety Monitoring Board (“DSMB”) unblinded positive safety assessment of 42 patients, accepting the DSMB’s recommendation to waive the need for an additional safety assessment point of 60 patients with at least six months of treatment. During the meeting, the FDA also accepted our plan to conduct an open label extension study, which is expected to be initiated mid-2024, and expressed willingness to potentially accept a P<0.1 alpha level in evaluating InnovAATe for meeting the efficacy primary endpoint for registration, which may allow for the acceleration of the program. As a result, we plan to present a revised statistical analysis plan (SAP) and study protocol for the InnovAATe study and to seek the FDA’s feedback by mid-2024. However, there can be no assurance that we will be able to complete this studythe InnovAATe clinical trial successfully or that the studytrial results will be sufficient for obtaining FDA and EMA approval. See also “As a result of the COVID-19 pandemic we have encountered delays in patient recruitment into our pivotal Phase 3 InnovAAT clinical study conducted at a first study site in Europe and it has impacted and may continue to impact our ability to open additional study sites in the United States and Europe.”

In response to the recent COVID-19 outbreak, in early 2020 we initiated the development of our Anti-SARS-CoV-2 IgG product as a potential treatment for COVID-19. In August 2020, we initiated a Phase 1/2 open-label, single-arm, multi-center clinical trial in Israel of our product; and in September 2020, we announced initial interim results for the Phase 1/2 clinical trial. We subsequently submitted a pre-Investigational New Drug (“IND”) information package to the FDA with our proposed U.S. clinical development plan. Following recent response from the FDA to our information package, we continue to evaluate the best suitable plan for the U.S. and/or EU Anti-SARS-CoV-2 IgG clinical program, and will advance the development of the product upon the conclusion of this review. There can be no assurance that we will be able to successfully complete the additional requirement for submission of an IND and thereafter initiate a clinical development program required as a basis for a potential approval of the product.

In addition, we are currently engaged in the early-stage development of other product candidates, including a recombinant AAT product candidate, as well as testingand in 2023, we made progress in our intravenous AATthree additional early-stage development programs, all of which are associated with plasma derived product for other indications such as organ preservation, and therecandidates. There can be no assurance that suchthe development activities associated with these products will progressmaterialize and obtainresult in the required regulatory approvals.

FDA, EMA or any other relevant agencies granting us marketing authorization for any of these products. For additional information, see — “Item 4. Information on the Company — Our Development Product Pipeline.” See also: “also “—Research and development efforts invested in our pipeline of specialty and other products may not achieve expected results” and “—If we are unable to successfully introduce new products and indications or fail to keep pace with advances in technology, our business, financial condition and results of operations may be adversely affected.”

We may in the future engage in additional strategic transactions to acquire or sell assets, businesses, products or rights totechnologies or engage in in-license or out-license transactions of products product candidates or technologies or form collaborations or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership increase our debt, or cause us to incur debt or significant expense.

As part of our business development strategy, we have in the past, and may in the future engage in strategic transactions to expand and diversify our product portfolio, including through the acquisition ofacquire or sell assets, businesses, or rightsproducts; or otherwise engage in in-licensing or out-licensing transactions with respect to products product candidates or technologiestechnologies; or throughenter into other strategic alliances or collaborations, such as the recent B&PR transaction.collaborations. We may not identify additional suitable strategic transactions, or complete such transactions in a timely manner, on a cost-effective basis, or at all. Moreover, we may devote resources to potential opportunities that are never completed, or we may incorrectly judge the value or worth of such opportunities. Even if we successfully execute a strategic transaction, we may not be able to realize the anticipated benefits of such transaction, may incur additional debt or assume unknown or contingent liabilities in connection therewith, and may experience losses related to our investments in such transactions.or dispositions. Integration of an acquired company or assets into our existing business or a transition of an asset to an acquirer or partner may not be successful and may disrupt ongoing operations, require the hiring of additional personnel and the implementation of additional internal systems and infrastructure, and require management resources that would otherwise focus on developing our existing business. Even if we are able to achieve the long-term benefits of a strategic transaction, our expenses and short-term costs may increase materially and adversely affect our liquidity. Any of the foregoing could have a material effect on our business, results of operations and financial condition.

In addition, strategic transactions, such as the recent B&PR transaction, may entail numerous operational, financial and legal risks, including:

If we are unable to successfully manage any strategic transaction in which we may engage, our ability to develop new products and continue to expand and diversify our product pipeline, increase our sales and profitability may be limited.

The COVID-19 pandemic may adversely impact our business, operating results and financial condition.

The novel coronavirus identified in late 2019, SARS-CoV-2, which causes the disease known as COVID-19, is an ongoing global pandemic that has resulted in public and governmental efforts to contain or slow the spread of the disease, including widespread shelter-in-place orders, social distancing interventions, quarantines, travel restrictions and various forms of operational shutdowns. The COVID-19 pandemic and the resulting measures implemented in response to the pandemic are adversely affecting, and is expected to continue to adversely affect, a number of our business activities (including our research and development, clinical trials, operations, supply chains, distribution systems, product development and sales activities) as well as those of our suppliers, customers, third-party payers and patients. Due to the impact of the pandemic and these measures, we have experienced, and expect to continue to experience, unpredictable reductions in demand for certain of our products, and in some cases, have experienced, and could continue to experience, unpredictable increases in demand for certain of our products. The outbreak and preventative or protective actions that governments, corporations, individuals or we have taken or may take in the future to contain the spread of COVID-19 may result in a period of reduced operations, reduced product demand or limit the ability of customers to perform their obligations to us, delays in clinical trials or other research and development efforts, business disruption for us and our suppliers, customers and other third parties with which we do business and potential delays or disruptions related to regulatory approvals.

While COVID-19 related disruption had various effects on our business activities, commercial operation, revenues and operational expenses, as a result of the actions we have taken to date, our overall results of operations for the year ended December 31, 2020 were not materially affected. However, a number of factors, including but not limited to, continued effect of the factors mentioned above as well as, continued demand for our products, including GLASSIA and KEDRAB in the U.S. market and our distributed products in Israel, financial conditions of our customers, distributors, suppliers and services providers, our ability to manage operating expenses, additional competition in the markets that we compete, delays in clinical trials or other research and development efforts, regulatory delays, professional and operational costs increase (including insurance costs), prevailing market conditions and the impact of general economic, industry or political conditions in the U.S., Israel or otherwise, may have an effect on our future financial position and results of operations.

The financial impact of these factors cannot be reasonably estimated at this time but may materially affect our business, financial condition and results of operations, and the trading prices of our ordinary shares were impacted by volatility in the financial markets resulting from the pandemic. The full extent to which the pandemic impacts our business, results or the trading price of our ordinary shares will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity and duration of the pandemic and actions to contain its spread or treat its impact, among others.

The COVID-19 pandemic and the volatile global economic conditions stemming from it may precipitate or amplify the other risks described in this “Risk Factors” section of this Annual Report, which could materially adversely affect our business, operations and financial conditions and results from operations.

Risks Related to Our Proprietary Products Segment

In our Proprietary Products segment, we rely on Kedrion for the sales of our KEDRAB product in the United States, and the development and expected sales of our investigational Anti-SARS-CoV-2 IgG product as a potential treatment for COVID-19 in the United States, Europe and additional countries, and any disruption to our relationships with Kedrion would have an adverse effect on our future results of operations and profitability.

Pursuant to the strategic distribution and supply agreement with Kedrion for the clinical development and marketing of KEDRAB in the United States, of KEDRAB, Kedrion is the sole distributor of KEDRAB in the United States. Sales to Kedrion accounted for approximately 14%23%, 13% and 10%12% of our total revenues in the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. We are dependent on Kedrion for its marketing and sales of KEDRAB in the United States. In December 2023, we entered into a binding memorandum of understanding with Kedrion for the amendment and extension of the distribution agreement between the parties, which represents the largest commercial agreement secured by us to date, according to which (among other things), the distribution agreement was extended until December 31, 2031, and Kedrion shall have the right to extend the agreement, by written notice no later than December 31, 2030, for an additional two years, until December 31, 2033. Under the terms of the binding memorandum of understanding, during fiscal years 2024 through 2027, Kedrion will purchase annual minimum quantities of KEDRAB, with aggregate revenues to us of approximately $180 million for such four-year period.

We currently also primarily depend upon KedPlasma,purchase from a subsidiary of Kedrion, for the supplyKedPlasma LLC (“Kedplasma”), a large portion of the hyper-immune plasma which is used for the production of KEDRAB to be sold in the United States and of KAMRAB to be sold in other markets.KEDRAB/KAMRAB. See “—We would become supply-constrained, and our financial performance would suffer if we were unable to obtain adequate quantities of source plasma or plasma derivatives or specialty ancillary products approved by the FDA, the EMA, Health Canada or the regulatory authorities in Israel, or if our suppliers were to fail to modify their operations to meet regulatory requirements or if prices of the source plasma or plasma derivatives were to raise significantly.”

In addition, pursuant to the global collaboration engagement that we entered into with Kedrion for the development, manufacturing and distribution of our investigational Anti-SARS-CoV-2 IgG product as a potential treatment for COVID-19, we are dependent on Kedrion for the supply of plasma, collected at its KedPlasma centers, from donors who have recovered from the virus, which shall be used as starting material for such product and, upon future receipt, based on the development plan, of regulatory approvals, Kedrion shall be the sole distributor of the product in the U.S., Europe, Australia, South Korea, United Kingdom, Switzerland and Norway.

If we fail todo not maintain ourthe distribution relationship with Kedrion, we could face significant costs in findingwould be required to assume the sales and marketing activities of KEDRAB, or we would need to engage a replacement distributor for the sales of KEDRABproduct in the United States andStates. Further, if we fail to maintain the plasma supply agreement with KedPlasma we would need to increase supply from other available sources and/or find a replacement supplier of the hyper-immune plasma which is used for the production of KEDRAB, as well as a replacement supplier of plasma for the development and manufacturing of our Anti-SARS-CoV-2 IgG product. Delays in establishingto manufacture KEDRAB/ KAMRAB. Establishing a relationship with a new distributor andor supplier or internalizing those activities could lead to a decrease in our KEDRABKEDRAB/ KAMRAB sales and a deterioration in our market share when compared with one or more of our competitors, or delays in the development, manufacturing and sales of our investigational Anti-SARS-CoV-2 IgG product.competitors. Any of the foregoing developments could have an adverse effect upon our sales, margins and profitability.

Sales of CYTOGAM, HEPGAM B, VARIZIG and WINRHO SDF in the U.S. market are critical in order to support future growth, future results of operations and profitability.

Sales of CYTOGAM, HEPGAM B, VARIZIG and WINRHO SDF in the U.S. market represented approximately 21% and 30% of our Proprietary Product segment sales for the years ended December 31, 2023 and 2022. Following the acquisition of these products in November 2021, we established a U.S. based commercial and sales team which gradually assumed the U.S. commercial responsibility for these products. Such activities included hiring employees with relevant U.S. commercial experience, engaging wholesalers, customers, and a U.S. third-party logistics (“3PL”) provider, and understanding market landscape and trends for these products through market research and discussions with physicians and key opinion leaders, as well as medical affairs activities which include educating physicians, supporting medical publications and collecting new clinical data associated with these products.

However, given our limited prior experience in directly managing U.S. commercial and medical operations and the operational, technical and regulatory challenges in maintaining such activity, as well as the significant costs involved in such operations, we may not be able to realize the anticipated benefits of such activities, and may not be able to adequately maintain or expand market demand and continued product sales, which may result in significant reduction in sales, increased operating costs and reduced profitability.

See “— Our ability to maintain and expand sales of our commercial products portfolio in the U.S. and ex-U.S. markets is critical to our profitability and financial stability.” See also – “Item 4. Information on the Company — Proprietary Products Segment.”

Continued availability of CYTOGAM is dependent on our ability to maintain continuous plasma supply and maintain our relationship with third-party contract manufacturers and suppliers.

As part of the acquisition of the four FDA approved plasma-derived hyperimmune commercial products from Saol, we acquired inventory of CYTOGAM which was sufficient to meet market demand through the second part of 2023. During December 2022, we submitted a prior approval supplement (“PAS”) to the FDA for approval to manufacture CYTOGAM. In May 2023, we received FDA approval to manufacture CYTOGAM at our facility in Beit Kama, Israel, and CYTOGAM manufactured at our Israeli facility is now available for commercial sale in the United States. A similar application to the Canadian health authorities was submitted in January 2023 and was approved in July 2023.

As part of the initiation of the CYTOGAM technology transfer process, we engaged Prothya Biosolutions Belgium (“Prothya”) as a third-party contract manufacturer to perform certain manufacturing activities required for the manufacturing of CYTOGAM. In addition, CMV hyper-immune plasma for the manufacturing of CYTOGAM is supplied by CSL Behring Ltd. (“CSL Behring”), initially under a three-year supply agreement that we assumed from Saol, and in December 2023, we entered into a plasma supply agreement directly with CSL Behring that supersedes the assumed supply agreement and provides for the continued supply of required plasma for the manufacturing of the product for each of the years 2024-2026. If we fail to maintain our relationship with these entities, we could face supply shortages, which could adversely impact our ability to manufacture and supply CYTOGAM, and could incur increased costs in finding replacement vendors. Delays in establishing a relationship with new vendors could lead to a decrease in CYTOGAM sales and a deterioration in our market position when compared with one or more of our competitors. Any of the foregoing developments could have an adverse effect upon our sales, margins and profitability.

In our Proprietary Products segment, we currently relyearn royalties on Takeda forGLASSIA sales of GLASSIAby Takeda in the U.S. market,United States (and in the future may earn royalties on GLASSIA sales by Takeda in Canada, Australia and New Zealand, to the extent GLASSIA will be approved for sale and sales will be generated in these other markets), and any reduction in sales of GLASSIA by Takeda would have an adverse effect on our future expected royalty income results of operations and profitability.

BasedCommencing in March 2022, we have been entitled to royalty payments from Takeda on our manufacturing, supply and distribution agreement with Takeda, followingGLASSIA sales in the transition of manufacturing to Takeda, upon initiation ofUnited States (and in the future we may earn royalties on GLASSIA sales of GLASSIA manufactured by Takeda Takedain Canada, Australia and New Zealand, to the extent GLASSIA will pay royalties to usbe approved and sales will be generated in these other markets) at a rate of 12% on net sales through August 2025, and at a rate of 6% thereafter until 2040, with a minimum of $5 million annually, for each of the years from 2022 to 2040. BasedFor the year ended December 31, 2023, and the period between March and December 2022, we accounted for $16.1 million and $12.2 million, respectively, of sales-based royalty income from Takeda, and based on current GLASSIA sales in the United States and forecasted future growth, we project receiving royalties from Takeda in the range of $10 million to $20 million per year for 20222024 to 2040. However, any reduction in sales of GLASSIA by Takeda or should Takeda reduce its manufacturing and marketing of GLASSIA for any reason (including but not limited to inability to adequately or sufficiently manufacture GLASSIA, regulatory limitations, difficulties in marketing, reduction in market size, or changes in corporate focus), our future expected royalty income from Takeda’s sales of GLASSIA would be adversely impacted, which would have an adverse effect on our results of operations and profitability.

Continued availability of several of our products in the Proprietary Products segment is dependent on our ability to maintain existing engagements with contract manufacturing organizations to manufacture these products and any disruption to our relationship with such manufacturers would have an adverse effect on the availability of products, our future results of operations and profitability.

HEPAGAM B, VARIZIG and WINRHO SDF are currently manufactured by Emergent under a contract manufacturing agreement which was assigned to us from Saol following the consummation of the acquisition. We are dependent on Emergent to secure the supply of adequate quantities of plasma needed to timely manufacture these products and we rely on their manufacturing, quality and regulatory systems to ensure that the manufacturing process complies with current Good Manufacturing Practice (“cGMP”) standards and any other regulatory requirements and that each product manufactured meets its specifications and is appropriately released for human consumption.

If we fail to maintain our relationship with Emergent, or if Emergent fails to operate in compliance with cGMP and other regulatory requirements, we could face supply shortages and may not be able to supply these products. In addition, such failure may result in increased costs and delays in transferring the manufacturing of the products to our plant in Beit Kama, Israel, or in finding a replacement manufacturer for these products and we might be required to identify replacement supplier of the plasma which is used for the production of these products. Delays in internalizing the production or establishing a relationship with a new manufacturer could lead to a decrease in these products' sales and a deterioration in our market share when compared with one or more of our competitors. Any of the foregoing developments could have an adverse effect upon our sales, margins and profitability.

We have also engaged Prothya as a third-party contract manufacturer to perform certain manufacturing activities required for the manufacturing of CYTOGAM. If we fail to maintain our relationship with Prothya, or if Prothya fails to operate in compliance with cGMP and other regulatory requirements, we could face supply shortages, which could adversely impact our ability to manufacture and supply CYTOGAM and could incur increased costs in finding a replacement manufacturer for this product. Delays in establishing a relationship with a new manufacturer could lead to a decrease in this product sales and a deterioration in our market share when compared with one or more of our competitors. Any of the foregoing developments could have an adverse effect upon our sales, margins and profitability.

Certain of our sales in our Proprietary Products segment rely on our ability to win tender bids based on the price and availability of our products in public tender processes.

Certain of our sales in our Proprietary Products segment rely on our ability to win tender bids in certain markets, including those of the World Health Organization (WHO) and other similar health organizations. Our ability to win bids may be materially adversely affected by competitive conditions in such bid process. Our existing and new competitors may also have significantly greater financial resources than us, which they could use to promote their products and business. Greater financial resources would also enable our competitors to substantially reduce the price of their products or services. If our competitors are able to offer prices lower than us, our ability to win tender bids during the tender process will be materially affected and could reduce our total revenues or decrease our profit margins.

In our Proprietary Products segment, weWe rely in large part on third party distributorsparties for the sale, distribution and salesdelivery of our products, in ex-U.S. markets (other than the Israeli market), and any disruption to our relationships with these third party distributersthird-party distributors would have an adverse effect on our future results of operations and profitability.

We engage third party distributors in ex-U.S. markets to distribute and sell our Proprietary Products. Sales through distributorsProducts in ex-U.S. markets (other than the Israeli market), including CYTOGAM, HEPGAM B, VARIZIG and WINRHO SDF. Sales through such distributors accounted for approximately 10%26%, 8%25% and 10%17% of our total revenues in the years ended December 31, 2020, 20192023, 2022 and 2018, respectively.2021, respectively, and we expect such sales to increase in 2024 and beyond. We are dependent ofon these third parties for successful marketing, distribution and sales of our products in these markets. If such third parties were to breach, terminate or otherwise fail to perform under our agreements with them, our ability to effectively distribute our products would be impaired and our business could be adversely affected. Moreover, circumstances outside of our control, such as a general economic decline, market saturation or increased competition, may influence the successful renegotiation of our contracts or the securing of favorable terms.

In addition to distribution and sales, these third partythird-party distributors are, in mostsome cases, responsible for the regulatory registration of our products in the local markets in which they operate, as well as responsible for participation in tenders for sale of our products. Failure of the third partythese third-party distributors to obtain and maintain such regulatory approvals and/or win tenders or provide competitive prices to our products may adversely affect our ability to sell our Proprietary Products in these markets, which in turn will negatively affect our revenues and profitability. In addition, our inability to sell our Proprietary Products in these markets may reduce our manufacturing plant utilization and effectiveness and may lead to additional reduction of profitability.

In the U.S. market we utilize a 3PL provider in connection with the distribution of CYTOGAM, HEPGAM B, VARIZIG and WINRHO SDF, which provides complete order to cash services. If such 3PL provider were to breach, terminate or otherwise fail to adequately perform under our agreement with it, including inadequate inventory management, transportation delays and incorrect temperature control during storage and handling, fails to issue invoices correctly or on a timely basis and/or fails to collect payments due to us from our U.S. customers, our ability to effectively distribute such products would be impaired, which could negatively impact our business operations and financial performance.

Disputes with distributors have arisen in the past and disputes may arise in the future, that cause the delay or termination of the development, manufacturing, supply or commercialization of our product candidates, or could result in costly litigation or arbitration that diverts management’s attention and resources. In May 2022, we terminated a distribution agreement with a third-party engaged to distribute our propriety products in Russia and Ukraine (the “Distributor”) and a power of attorney granted in connection with such distribution agreement to an affiliate of the Distributor (the “Affiliate”). In July 2022, the Affiliate filed a request for a conciliation hearing with the court in Geneva relying on the terminated power of attorney and seeking damages for the alleged inability to sell the remaining product inventory previously acquired from the Company and compensation for the lost customer base. The conciliation hearing was held on March 17, 2023, and the Affiliate was granted authorization to proceed to file a Statement of Claim before the competent tribunal within three months. On June 13, 2023, the Affiliate filed its Statement of Claim with the tribunal of first instance in Geneva, seeking alleged damages in the total amount of $6.7 million. We were officially notified of such filing on November 17, 2023. We have filed a motion with the tribunal of first instance in Geneva challenging its jurisdiction over the Affiliate’s claims, submitting that such claims should have been brought before an arbitral tribunal, as contractually agreed between the parties. Until the tribunal of first instance in Geneva rules on the motion, the Affiliate’s claims will not be heard. At this time, it is not possible to assess the prospects of the claim against us and any potential liabilities and impact on our business. See “Item 4. Information on the Company — Legal Proceedings.”

Our Proprietary Products segment operates in a highly competitive market.

WeOur Proprietary Products compete with products distributed by well-established drugbiopharmaceutical companies, including two to fourseveral large competitors for each of our products in the Proprietary Products segment.plasma industry. These large competitors include CSL Behring, Ltd. (“CSL”), Takeda, and Grifols S.A. (“Grifols”), which acquired a previous competitor, Talecris Biotherapeutics, Inc. (“Talecris”) in 2011, Octapharma, Kedrion (other than for KEDRAB), Biotest AG and Kedrion.ADMA Biologics Inc. (“ADMA”). We compete against these companies for, among other things, licenses, expertise, clinical trial patients and investigators, consultants and third-party strategic partners. We also compete with these companies for market share for certain products in the Proprietary Products segment. Our large competitors have advantages in the market because of their size, financial resources, markets and the duration of their activities and experience in the relevant market, especially in the United States and countries of the European Union. As a result, they may be able to devote more funds to research and development and new production technologies, as well as to the promotion of their products and business. These competitors may also be able to sustain for longer periods a deliberateof substantial reduction in the price of their products or services. These competitors also have an additional advantage regarding the availability of raw materials, as they own companies that collector control multiple plasma collection centers and/or plants which fractionate plasma.plasma fractionation facilities.

In addition, our plasma-derived protein therapeutics face, or may face in the future, competition from existing or newly developed non-plasma products and other courses of treatments. New treatments, such as antivirals, gene therapies, small molecules, correctors, monoclonal or recombinant products, may also be developed for indications for which our products are now used, as well as courses of treatments such as subcutaneous treatment.

Our products generally do not benefit from patent protection and compete against similar products produced by other providers. Additionally, the development by a competitor of a similar or superior product or increased pricing competition may result in a reduction in our net sales or a decrease in our profit margins.

Our hyper-immune IgG products in the Proprietary Products segment face competition from several competing plasma derived products and non-plasma derived pharmaceuticals, mainly anti-viral.

KEDRAB/KAMRAB. We believe that there are two main competitors for KEDRAB/KAMRAB, our anti-rabies products worldwide: Grifols, whose product we estimate comprises the majority of the anti-rabies IgG market in the United States, and CSL Behring, which sells its anti-rabies product in Europe and elsewhere. Sanofi Pasteur, the vaccines division of Sanofi S.A., exited the U.S anti-rabies IgG market as well as some additional international markets, however, may still be competing in other markets or in the future could return to exited markets. BPL, which has an anti-Rabies IgG product for the UK market, has developed it also for the U.S. market, including performing a clinical trial; however, in light of the recent business combination of Kedrion and BPL, as well as the recent binding memorandum of understanding we entered into with Kedrion, we do not anticipate that BPL will continue to advance the development efforts for its anti-Rabies IgG product in the U.S. market. There are several local producers in other countries that make anti-rabies IgG products, mostly based on equine serum. Over the past several years, several companies have made attempts, and some are still in the process of developing monoclonal antibodies for an anti-rabies treatment. These products, if approved, may be as effective as the currently available plasma derived anti-rabies IgG and may potentially be significantly cheaper, and as such may result in loss of market share of KEDRAB/KAMRAB.

CYTOGAM. To our knowledge, CYTOGAM is the sole plasma derived CMV IgG product approved for sale in the United States and Canada. Based on available public information, the FDA approved the following antiviral drugs for the prevention of CMV infection and disease: Letermovir (Prevymis), developed by Merck & Co., and for treatment of refractory/resistant infection, Maribavir (Livtencity), developed by Takeda, which may result in the loss of market share for CYTOGAM. Currently, treatment guidelines state that combination therapy with standard antiviral can be considered for certain solid organ transplant recipients. The most commonly used antivirals are Ganciclovir (Cytovene-IV Roche) and Valganciclovir (Valcyte Roche). Patients treated with antiviral agents for a long time can develop resistance and will require a second-line treatment such as Foscarnet (Foscavir Pfizer) or Cidofovir (Gilead Sciences). In rest of the world (“ROW”) markets, Cytotec CP (Biotest), a plasma derived competing product is available. Despite the introduction of newer antiviral therapies for CMV in solid organ transplantation, there is a growing need to determine the optimal approach of CMV management when considering all available therapies, including CYOTGAM.

WINRHO SDF. In the United States, WINRHO SDF competes with corticosteroids (oral prednisone or high-dose dexamethasone) or intravenous immune globulin (“IVIG”) (Grifols, CSL Behring and Takeda are the main manufacturers and suppliers in the U.S.) as first line treatment of acute ITP, with IVIG or WINRHO SDF recommended for pediatric patients in whom corticosteroids are contraindicated. IVIG has similar efficacy to WINRHO SDF, and ITP is its labeled indication for IVIG. Rhophylac (CSL Behring) is also approved for ITP treatment, but we believe it is mostly used for Hemolytic Disease of the Newborn (“HDN”), due to its comparatively small vial size. For example, weHDN indication, the market is usually led by tenders, where key indicators are registration status and price, and the main multiple competitors in Canada and ROW countries are RhoGAM (Kedrion), Hyper RHO (Grifols), Rhophylac (CSL Behring) and our KAMRHO (D).

HEPAGAM B. To our knowledge, in the United States, HEPAGAM B is the only approved HBIG with an on-label indication for Liver Transplants. To our understanding, HEPAGAM B holds the majority market share for the indication, while another HBIG (Nabi-HB manufactured and supplied by ADMA) is being used off-label by some medical centers for the indication. In recent years, duration of treatment has been reduced by physicians. New generation antivirals are considered effective for preventing HBV reactivation post-transplant, hence limiting HBIG use. Post-exposure prophylaxis (“PEP”) indication in the United States is covered almost totally by Nabi-HB (ADMA) and HyperHEP (Grifols). In Canada, main competition in national tenders is HyperHEP. In ROW countries such as Turkey, Saudi-Arabia and Israel, HEPATECT and Zutectra (Biotest AG) represent the primary competition.

VARIZIG. In the United States, incidence of Varicella Zoster Virus (“VZV”) infection has decreased dramatically since the introduction of the varicella vaccine in 1995. Two vaccines containing varicella virus are licensed for use in the United States. Varivax is the single-antigen varicella vaccine. ProQuad is a combination measles, mumps, rubella, and varicella (MMRV) vaccine. Although the use of the vaccine has reduced the frequency of chickenpox, the virus, has not been eradicated. Moreover, incidence of Herpes Zoster, also caused by VZV, is increasing among adults in the United States. Suboptimal vaccination rates contribute to outbreaks and increased risk of VZV exposure. Immunocompromised population and other patient groups are at high risk for severe varicella and complications, after being exposed to VZV. In the U.S. market VARIZIG is the single FDA-approved product and recommended by the Centers for Disease Control (“CDC”) for post-exposure prophylaxis of varicella for persons at high risk for severe disease who lack evidence of immunity to varicella. Alternative, CDC recommendations include IVIG if VARIZIG is unavailable and some experts recommend using Acyclovir, Valacyclovir, although published data on the benefits of acyclovir as post-exposure prophylaxis among immunocompromised people is limited. In ROW markets, several plasma derived competitor products are available, such as VARITECT (Biotest) and others.

KAMRHO (D). We market KAMRHO (D) for HDN mainly in Israel, Argentina and Chile. Kedrion is one of our competitors for KAMRHO (D) in some of those international markets. We believe there are currently two additional main suppliers of competitive products, Grifols and CSL Behring. There are also local producers in other countries that make similar products mostly intended for local markets.

Our market share of the AAT product could be negatively impacted by new competitors or adoption of new methods of administration.

We believe that our two main competitors in the AAT market are Grifols and CSL.CSL Behring. We estimate that Grifols’ AAT by infusion product for the treatment of AATD, Prolastin A1PI, accounts for at least 50% market share in the United States and more than 70% of sales in the worldwide market for the treatment of AATD, which also includes sales of Prolastin in different European countries. To the best of our knowledge, since 2018, Grifols sell Prolastin Liquid, a ready-to-infuse solution of AAT, in the United States. Apart from its sales through Talecris’ historical business, Grifols is also a local producer of the product in the Spanish market and operates in Brazil. CSL’sCSL Behring’s intravenous AAT product, Zemaira, is mainly sold in the United States. In 2015, CSL’sCSL Behring’s intravenous AAT product, Respreeza, was granted centralized marketing authorization in Europe and CSL Behring has launched the product in a few European countries since 2016. There is another, smaller local producer in the French market, LFB S.A. In addition, we estimate that each of Grifols and CSL Behring owns approximately 200-250more than 300 operating plasma collection centers located across the United States.

Several of our competitors are conducting preclinical and clinical trials for the development of gene therapy, recombinant AAT, small molecule treatment or correctors for AATD. For example, in January 2024, Inhibrx and Sanofi announced that the companies have entered into a definitive agreement under which Aventis Inc., a subsidiary of Sanofi, will acquire all the assets and liabilities associated with INBRX-101, which was indicated to be in a registrational trial for the treatment of patients with alpha-1 antitrypsin deficiency. While these products are not yet in pivotal trial or in late stages of development, they may eventually be successfully developed and launched, and could adversely impact our revenue and growth of sales of GLASSIA or GLASSIA-related royalties as well as affect our ability to launch our Inhaled AAT product, if approved.

Similarly, if a new AAT formulation or a new route of administration with significantly improved characteristics is adopted (including, for example, aerosol inhalation)inhalation or self-administering by way of subcutaneous route of administration), the market share of our current AAT product, GLASSIA, could be negatively impacted. While we are in the process of developing Inhaled AAT for AATD, our competitors may also be attempting to develop similar products. For example, several of our competitors may have completed early stageearly-stage clinical trials for the development of an inhaled formulation of AAT for different indications. While these products are in the early stages of development, they may eventually be successfully developed and launched. Furthermore, even if we are able to commercialize Inhaled AAT for AATD prior to the development of comparable products by our competitors, sales of Inhaled AAT for AATD, subject to approval of such product by the applicable regulatory authorities, could adversely impact our revenue and growth of sales of GLASSIA or GLASSIA -related royalties.

In addition, our plasma-derived protein therapeutics face, or may face in the future, competition from existing or newly developed non-plasma products and other courses of treatments. New treatments, such as gene therapy, small molecules, correctors, monoclonal or recombinant products, may also be developed for indications for which our products are now used. Our competitors are attempting to develop similar products or products that could be a substitute for AAT product. For example, several of our competitors are conducting preclinical and clinical trials for the development of gene therapy or correctors for AATD. While these products are in the early stages of development, they may eventually be successfully developed and launched, and could adversely impact our revenue and growth of sales of GLASSIA or GLASSIA -related royalties as well as affect our ability to launch our Inhaled AAT product, if approved.

We believe that there are two main competitors for KamRAB/KEDRAB, our anti-rabies products, worldwide: Grifols, whose product we estimate comprises approximately 70%-80% of the anti-rabies market in the United States, and CSL, which sells its anti-rabies product in Europe and elsewhere. In addition, Sanofi Pasteur, the vaccines division of Sanofi S.A., has a product registered for the United States market, but the product is primarily sold in Europe and not currently sold in significant quantities in the United States. There are a number of local producers in other countries that make similar anti-rabies products, most of which are based on equine serum. Over the past several years, several companies have made attempts, and some are still in the process of developing monoclonal antibodies for an anti-rabies treatment. These products, if approved, may be as effective as the currently available plasma derived anti-rabies vaccine and may potentially be significantly cheaper, and as such may result in loss of market share of KamRAB/KEDRAB.

While Kedrion is our strategic partner for KEDRAB, it is also one of our competitors for KamRho(D). In addition to its sales in the United States, Kedrion also markets a competing product in several EU countries as well as other countries world-wide. We believe there are three additional main suppliers of competitive products in this market: Grifols, CSL and Saol Therapeutics. There are also local producers in other countries that make similar products mostly intended for local markets.

In the wake of the COVID-19 pandemic we, together with our partner Kedrion, initiated the development of our investigational Anti-SARS-CoV-2 IgG product as a potential therapy for COVID-19. In parallel, the CoVIg-19 Plasma Alliance partnership was formed of the world’s leading plasma companies, spanning plasma collection, development, production, and distribution with the goal to accelerate the development of a potential treatment and increase supply of the potential treatment. In addition to Biotest, BPL, CSL Behring, LFB, Octapharma, and Takeda which formed the Alliance, the following additional industry members are reported to have joined the Alliance: ADMA Biologics, BioPharma Plasma, GC Pharma, Liminal BioSciences, and Sanquin. The Alliance is developing a plasma derived hyperimmune therapy for COVID-19 which is based on plasma collected from convalescent COVID-19 patients, which is similar to our investigational product. In addition, the Alliance announced the initiation of the Inpatient Treatment with Anti-Coronavirus Immunoglobulin (the “ITAC”) Phase 3 clinical trial sponsored by the National Institute of Allergy and Infectious Diseases (“NIAID”), part of the National Institutes of Health (the “NIH”), which will evaluate the safety, tolerability and efficacy of an investigational anti-coronavirus hyperimmune intravenous immunoglobulin (H-Ig) medicine for treating hospitalized adults at risk for serious complications of COVID-19 disease. If successful, the Alliance’s product may become one of the treatment options for hospitalized COVID-19 patients. This product, if approved, may affect our ability to launch and/or market our Anti-SARS-CoV-2 investigational IgG product, if approved.

In addition, a number of companies are in the process of advanced development of monoclonal antibodies for an Anti-SARS-CoV-2 treatment, such as Regeneron’s casirivimab and imdevimab which form a novel monoclonal antibody cocktail being studied for its potential both to treat appropriate patients with COVID-19 and to prevent SARS-CoV-2 infection, and Eli Lilly’s investigational neutralizing antibody bamlanivimab (LY-CoV555) 700 mg. Bamlanivimab which received emergency use authorization from the FDA for the treatment of mild to moderate COVID-19 in adults and pediatric patients 12 years and older with a positive COVID-19 test, who are at high risk for progressing to severe COVID-19 and/or hospitalization. Moreover, the FDA issued an Emergency Use Authorization for convalescent plasma as a potential treatment for COVID–19. Convalescent plasma has played an important role in the immediate and intermediate response to the disease. These products, and similar others may be as effective as our plasma derived IgG product, may obtain approval from the FDA, EMA or other regulatory agencies sooner than our product and may potentially be significantly cheaper, and as such may affect our ability to launch and/or gain sufficient market share with our Anti-SARS-CoV-2 investigational IgG product, if approved.

Our products involve biological intermediates that are susceptible to contamination and the handling of such intermediates and our final products throughout the supply chain and manufacturing process requires clod-chaincold-chain handling, all of which could adversely affect our operating results.

Plasma and its derivatives such as fraction IV, are raw materials that are susceptible to damage and contamination and may contain microorganisms that cause diseases in humans, commonly known as human pathogens, any of which would render such materials unsuitable as raw material for further manufacturing. Almost immediately after collection from a donor, plasma and plasma derivatives must be stored and transported at temperatures that are at least -20 degrees Celsius (-4 degrees Fahrenheit). Improper storage or transportation of plasma or plasma derivatives by us or third-party suppliers may require us to destroy some of our raw material. In addition, plasma and plasma derivatives are also suitable for use only for certain periods of time once removed from storage. If unsuitable plasma or plasma derivatives are not identified and discarded prior to release to our manufacturing processes, it may be necessary to discard intermediate or finished products made from such plasma or plasma derivatives, or to recall any finished product released to the market, resulting in a charge to cost of goods sold and harm to our brand and reputation. Furthermore, if we distribute plasma-derived protein therapeutics that are produced from unsuitable plasma because we have not detected contaminants or impurities, we could be subject to product liability claims and our reputation would be adversely affected.

Despite overlapping safeguards, including the screening of donors and other steps to remove or inactivate viruses and other infectious disease-causing agents, the risk of transmissible disease through plasma-derived protein therapeutics cannot be entirely eliminated. If a new infectious disease was to emerge in the human population, the regulatory and public health authorities could impose precautions to limit the transmission of the disease that would impair our ability to manufacture our products. Such precautionary measures could be taken before there is conclusive medical or scientific evidence that a disease poses a risk for plasma-derived protein therapeutics. In recent years, new testing and viral inactivation methods have been developed that more effectively detect and inactivate infectious viruses in collected plasma. There can be no assurance, however, that such new testing and inactivation methods will adequately screen for, and inactivate, infectious agents in the plasma or plasma derivatives used in the production of our plasma-derived protein therapeutics. Additionally, this could trigger the need for changes in our existing inactivation and production methods, including the administration of new detection tests, which could result in delays in production until the new methods are in place, as well as increased costs that may not be readily passed on to our customers.

Plasma and plasma derivatives can also become contaminated through the manufacturing process itself, such as through our failure to identify and purify contaminants through our manufacturing process or failure to maintain a high level of sterility within our manufacturing facilities.

Once we have manufactured our plasma-derived protein therapeutics, they must be handled carefully and kept at appropriate temperatures. Our failure, or the failure of third parties that supply, ship, store or distribute our products, to properly care for our plasma-derived products, may result in the requirement that such products be destroyed.

While we expect small amounts of work-in-process inventories scraps in the ordinary course of business because of the complex nature of plasma and plasma derivatives, our processes and our plasma-derived protein therapeutics, unanticipated events may lead to write-offs and other costs in amounts materially in excess ofhigher than our expectations. We have, in the past, experienced situations that have caused us to write-off the value of our products.inventories. Such write-offs and other costs could materially adversely affect our operating results. Furthermore, contamination of our plasma-derived protein therapeutics could cause consumers or other third parties with whom we conduct business, to lose confidence in the reliability of our manufacturing procedures, which could materially adversely affect our sales and operating results.

Our ability to continue manufacturing and distributing our plasma-derived protein therapeutics depends on our continued adherence by us and contract manufacturers to current Good Manufacturing Practice regulations.

The manufacturing processes for our products are governed by detailed written procedures and regulations that are set forth current Good Manufacturing Practice standards (“cGMP”)in cGMP requirements for blood products, including plasma and plasma derivative products. Failure to adhere to established procedures or regulations, or to meet a specification set forth in cGMP requirements, could require that a product or material be rejected and destroyed. There are relatively few opportunities for us or contract manufacturers to rework, reprocess or salvage nonconforming materials or products. Any failure in cGMP inspection will affect marketing in other territories, including the U.S. and Israel.

OurThe adherence by us and our contract manufacturers to cGMP regulations and the effectiveness of ourapplicable quality control systems are periodically assessed through inspections of the manufacturing facility, including our manufacturing facility in Beit Kama, Israel, by the FDA, the IMOH and regulatory authorities of other countries. Such inspections could result in deficiency citations, which would require us or our contract manufacturers to take action to correct those deficiencies to the satisfaction of the applicable regulatory authorities. If serious deficiencies are noted or if we or our contract manufacturers are unable to prevent recurrences, we may have to recall products or suspend operations until appropriate measures can be implemented. The FDA could also stop the import of products into the United States if there are potential deficiencies. Such deficiencies may also affect our ability to obtain government contracts in the future. We are required to report certain deviations from procedures to the FDA. Even if we determine that the deviations were not material, the FDA could require us or our contract manufacturers to take certain measures to address the deviations. Since cGMP reflects ever-evolving standards, we regularly need to update our manufacturing processes and procedures to comply with cGMP. These changes may cause us to incur additional costs and may adversely impact our profitability. For example, more sensitive testing assays (if and when they become available) may be required or existing procedures or processes may require revalidation, all of which may be costly and time-consuming and could delay or prevent the manufacturing of a product or launch of a new product.

We may face manufacturing stoppages and other challenges associated with audits or inspections by regulatory bodies.agencies.

The regulatory authorities may, at any time and from time to time, following approval of a product for sale, audit the facilities in which the product isour products are manufactured. If any such inspection or audit of oursuch facilities identifies a failure to comply with applicable regulations, or if a violation of our product specifications or applicable regulations occurs independently of such an inspection or audit, the relevant regulatory authority may require remedial measures that may be costly or time consuming for us to implement and that may include the temporary or permanent suspension of commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us or with whom we contract, could materially harm our business.

Manufacturing of new plasma-derived products in our manufacturing facility requires a lengthy and challenging development project and/or technology transfer project as well as regulatory approvals, all of which may not materialize.

The manufacturing of newly marketed or investigational plasma-derived products in our plant, including our Proprietary Products currently manufactured by third parties, requires a lengthy and challenging development project and/or technology transfer project through which we transfer the know-how and capabilities to manufacture the new product. Such projects are usually complex and involve investment of significant time (approximately three to four years) and resources. There is no assurance that such development and/or technology transfer projects will be successful and will allow us to manufacture the new product according to its required specifications.

Such development and/or technology transfer projects require regulatory approval by the FDA and/or EMA and/or Health Canada or other relevant regulatory agencies. Obtaining such regulatory approval may require activities such as the manufacturing of comparable batches and/or performing comparability non-clinical and/or clinical studies between the product manufactured by its existing manufacturer and the product manufactured at our manufacturing facility. There is no assurance that we will be able to provide supporting comparability results that meet all regulatory requirements needed to obtain the regulatory approval required to be able to commence commercial manufacturing of new plasma-derived products in our manufacturing plant.

If we are unable to adequately complete the required development and/or technology transfer projects or subsequently obtain the required regulatory approvals, we will not be able to meet commercial demand, utilize the excess capacity of our manufacturing plant, incur additional costs and may suffer reduced profitability or operating losses.

We would become supply-constrained and our financial performance would suffer if we were unable to obtain adequate quantities of source plasma or plasma derivatives or specialty ancillary products that meet the regulatory requirement of the FDA, EMA, Health Canada or the regulatory authorities in Israel, or if our suppliers were to fail to modify their operations to meet regulatory requirements or if prices of the source plasma or plasma derivatives were to raise significantly.

Our proprietary products depend on our access to U.S., European or other territories’ hyper-immune plasma or plasma derivatives, such as fraction IV. We purchase these plasma products from third-party licensed suppliers, some of which are also responsible for the plasma fractionation process, pursuant to multiple purchase agreements. We have entered into (and in connection with our acquired four FDA approved products, we assumed) a number of plasma supply agreements with various third parties in the United States and Europe. These agreements contain various termination provisions, including upon a material breach of either party, force majeure and, with respect to supply agreements with strategic partners, the failure or delay on the part of either party to obtain the applicable regulatory approvals or the termination of the principal strategic relationship. If we are unable to obtain adequate quantities of source plasma or fraction IV plasma that meet the regulatory requirements of the FDA, the EMA or the regulatory authorities in Israel from these providers, we may be unable to find an alternative cost-effective source.

In order for plasma and fraction IV plasma to be used in the manufacturing of our plasma-derived protein therapeutics, the individual centers at which the plasma is collected must be registered with and meet the regulatory requirements of the relevant regulatory authorities, such as the FDA and EMA. When a new plasma collection center is opened, and on an ongoing basis after its registration, it must be inspected by the FDA, the EMA or the regulatory authorities in Israel for compliance with cGMP and other regulatory requirements. An unsatisfactory inspection could prevent a new center from being established or lead to the suspension or revocation of an existing registration. If relevant regulatory authorities determine that a plasma collection center did not comply with cGMP in collecting plasma, we may be unable to use and may ultimately destroy plasma collected from that center, which may impact on our ability to timely meet our manufacturing and supply obligations. Additionally, if noncompliance in the plasma collection process is identified after the impacted plasma has been pooled with compliant plasma from other sources, entire plasma pools, in-process intermediate materials and final products could be impacted, such as through product destruction or rework. Consequently, we could experience significant inventory impairment provisions and write-offs, which could adversely affect our business and financial results.

In addition, the plasma supplier’s fractionation process must also meet standards of the FDA, the EMA or the regulatory authorities in Israel. If a plasma supplier is unable to meet such standards, we will not be able to use the plasma derivatives provided by such supplier, which may impact on our ability to timely meet our manufacturing and supply obligations.

If we were unable to obtain adequate quantities of source plasma or plasma derivatives that meet the regulatory standards of the FDA, the EMA, Health Canada or the regulatory authorities in Israel, we would be limited in our ability to maintain or increase current manufacturing levels of our plasma derivative products, as well as in our ability to conduct the research required to maintain our product pipeline. As a result, we could experience a substantial decrease in total revenues or profit margins, a potential breach of distribution agreements, a loss of customers, a negative effect on our reputation as a reliable supplier of plasma derivative products or a substantial delay in our production and strategic growth plans.

The ability to increase plasma collections may be limited, our supply of plasma and plasma derivatives could be disrupted or the cost of plasma and plasma derivatives could increase substantially, as a result of numerous factors, including a reduction in the donor pool, increased regulatory requirements, decreased number of plasma supply sources due to consolidation and new indications for plasma-derived protein therapeutics, which could increase demand for plasma and plasma derivatives and lead to shortages.

The plasma collection process is dependent on donors arriving in plasma collection centers and agreeing to donate plasma. Factors such as changes in reimbursement rates, competition for donors, and declining donor loyalty may lead to a decrease in the number of donors, which may negatively impact our ability to obtain adequate quantities of plasma. During major healthcare events (such as during the COVID-19 pandemic) the number of donors attending plasma collection centers decreases, which may adversely affect the availability of plasma and its derivatives. A significant shortage in plasma supply may adversely affect our ability to continue manufacturing our products, may result in shortages in our products in the market, and may result in reduced sales and profitability.

We are also dependent on a number of suppliers who supply specialty ancillary products used in the production process, such as specific gels and filters. Each of these specialty ancillary products is provided by a single, exclusive supplier. If these suppliers were unable to provide us with these specialty ancillary products, if our relationships with these suppliers deteriorate, if these suppliers fail to meet our vendors qualification processes, or if these suppliers’ operations are negatively affected by regulatory enforcement due to noncompliance, the manufacture and distribution of our products would be materially adversely affected, which would adversely affect our sales and results of operations. See “—If we experience equipment difficulties or if the suppliers of our equipment or disposable goods fail to deliver key product components or supplies in a timely manner, our manufacturing ability would be impaired and our product sales could suffer.”

Some of our required specialty ancillary products and other materials used in the manufacturing process are commonly used in the healthcare industry world-wide. If the global demand for these products increases due to healthcare issues, epidemics or pandemics, our ability to secure adequate supply at reasonable cost of such products may be negatively affected, which would materially adversely affect our ability to manufacture and distribute our products, which would adversely affect our sales and results of operations.

In addition, regulatory requirements, including cGMP regulations, continually evolve. Failure of our plasma suppliers to adjust their operations to conform to new standards as established and interpreted by applicable regulatory authorities would create a compliance risk that could impair our ability to sustain normal operations.

In addition, if the purchase prices of the source plasma or plasma derivatives that we use to manufacture our proprietary products were to rise significantly, we may not be able to pass along these increased plasma and plasma-derivative prices to our customers. Prices in many of our principal markets are subject to local regulation and certain pharmaceutical products, such as plasma-derived protein therapeutics, are subject to price controls. Any inability to pass costs on to our customers due to these factors or others would reduce our profit margins. In addition, most of our competitors have the ability to collect their own source plasma or produce their own plasma derivatives, and therefore their products’ prices would not be impacted by such a price rise, and as a result any pricing changes by us in order to pass higher costs on to our customers could render our products noncompetitive in certain territories.

Disruption of the operations of our current or any future plasma collection center due to regulatory impediments or otherwise would cause us to become supply constrained and our financial performance would suffer.

In March 2021, we completed the acquisition of the FDA licensed plasma collection center and certain related assets from the privately held B&PR based in Beaumont, Texas, which initially specialized in the collection of hyper-immune plasma used in the manufacture KAMRHO (D). In 2023, we significantly expanded our hyperimmune plasma collection in this center by obtaining FDA approval for the collection of hyper-immune plasma at this center to be used in the manufacture of KAMRAB and KEDRAB, and commenced collections of such plasma during 2023. In March 2023, we entered into a lease for a new plasma collection center in Uvalde, Texas and expect to commence operations at this new center in 2024, following the completion of its construction and obtaining the required regulatory approvals. During early 2024, we plan to lease a subsequent facility and initiate construction activities to establish our third plasma collection center. We intend to further leverage our experience with plasma collection to establish additional plasma collection centers in the United States, with the intention of collecting normal source plasma, as well as hyper-immune specialty plasma required for manufacturing of our Proprietary Products.

In order for plasma to be used in the manufacturing of our products, the individual centers at which the plasma is collected must be registered with and meet the regulatory requirements of the regulatory authorities, such as the FDA and the EMA, of those countries in which we sell our products. When a new plasma collection center is opened, it must be inspected on an ongoing basis after its approval by the FDA and the EMA for compliance with cGMP and other regulatory requirements, and these regulatory requirements are subject to change. An unsatisfactory inspection could prevent a new center from being established or risk the suspension or revocation of an existing registration. In order for a plasma collection center to maintain its governmental registration, its operations must continue to conform to cGMP and other regulatory requirements or recommendations which may be applicable from time to time (e.g., in January 2022, the FDA issued guidance providing recommendations to blood establishments on collection of convalescent plasma during the public health emergency).

If it would be determined that our plasma collection center did not comply with cGMP, or other regulatory requirements in collecting plasma, we may be unable to use and may ultimately be required to destroy plasma collected from that center, which would be recorded as a charge to cost of goods. Additionally, if noncompliance in the plasma collection process is identified after the impacted plasma has been pooled with compliant plasma from other sources, entire plasma pools, in-process intermediate materials and final products could be impacted. Consequently, we could experience significant inventory impairment provisions and write-offs if it was determined that our plasma collection center did not comply with cGMP in collecting plasma.

We plan to increase our supplies of plasma for use in our manufacturing processes through collections at our plasma collection centers and through the establishment of new plasma collection centers. This strategy is dependent upon our ability to successfully establish and register new centers, to maintain compliance with all FDA and other regulatory requirements in all centers and to attract donors to our centers.

Our ability to increase and improve the efficiency of plasma collection at our current or any future plasma collection center may be affected by: (i) changes in the economic environment and population in selected regions where we operate plasma collection centers; (ii) the entry of competitive centers into regions where we operate; (iii) our misjudging the demographic potential of individual regions where we expect to increase production and attract new donors; (iv) unexpected facility related challenges; (v) unexpected management challenges at select plasma collection centers; or (vi) changes to regulatory requirements.

The biologic properties of plasma and plasma derivatives are variable, which may impact our ability to consistently manufacture our products in accordance with the approved specifications.

While our manufacturing processes were developed to meet certain product specifications, variations in the biologic properties of the plasma or plasma derivatives as well as the manufacturing processes themselves may result in out of specification results during the manufacturing of our products. While we expect certain work-in-process inventories scraps in the ordinary course of business because of the complex nature of plasma and plasma derivatives, our processes and our plasma-derived protein therapeutics, unanticipated events may lead to write-offs and other costs in amounts that are materially in excess ofhigher than our expectations. We have, in the past, experienced situations that have caused us to write-off the value of our products. Such write-offs and other costs could materially adversely affect our operating results.

The biologic properties of plasma and plasma derivatives are variable, which may adversely impact our levels of product yield from our plasma or plasma derivative supply.

Due to the nature of plasma, there will be variations in the biologic properties of the plasma or plasma derivatives we purchase that may result in fluctuations in the obtainable yield of desired fractions, even if cGMP is followed. Lower yields may limit production of our plasma-derived protein therapeutics because of capacity constraints. If these batches of plasma with lower yields impact production for extended periods, we may not be able to fulfill orders on a timely basis and the total capacity of product that we are able to market could decline and our cost of goods sold could increase, thus reducing our profitability.

Usage of our products may lead to serious and unexpected side effects, which could materially adversely affect our business and may, among other factors, lead to our products being recalled and our reputation being harmed, resulting in an adverse effect on our operating results.

The use of our plasma-derived protein therapeutics may produce undesirable side effects or adverse reactions or events. For the most part, these side effects are known, are expected to occur at some frequency and are described in the products’ labeling. Known side effects of a number of ourseveral plasma-derived protein therapeutics include headache, nausea and additional common protein infusion related events, such as flu-like symptoms, dizziness and hypertension. The occurrence of known side effects on a large scale could adversely affect our reputation and public image, and hence also our operating results.

In addition, the use of our plasma-derived protein therapeutics may be associated with serious and unexpected side effects, or with less serious reactions at a greater than expected frequency. This may be especially true when our products are used in critically ill patient populations. When these unexpected events are reported to us, we typically make a thorough investigation to determine causality and implications for product safety. These events must also be specifically reported to the applicable regulatory authorities, and in some cases, also to the public by media channels. If our evaluation concludes, or regulatory authorities perceive, that there is an unreasonable risk associated with one of our products, we would be obligated to withdraw the impacted lot or lots of that product or, in certain cases, to withdraw the product entirely. Furthermore, it is possible that an unexpected side effect caused by a product could be recognized only after extensive use of the product, which could expose us to product liability risks, enforcement action by regulatory authorities and damage to our reputation.

We are subject to a number ofseveral existing laws and regulations in multiple jurisdictions, non-compliance with which could adversely affect our business, financial condition and results of operations, and we are susceptible to a changing regulatory environment, which could increase our compliance costs or reduce profit margins.

Any new product must undergo lengthy and rigorous testing and other extensive, costly, and time-consuming procedures mandated by the FDA and similar authorities in other jurisdictions, including the EMA and the regulatory authorities in Israel. Our facilities and those of our contract manufacturers must be approved and licensed prior to production and remain subject to inspection from time to time thereafter. Failure to comply with the requirements of the FDA or similar authorities in other jurisdictions, including a failed inspection or a failure in our reporting system for adverse effects of our products experienced by the users of our products, or any other non-compliance, could result in warning letters, product recalls or seizures, monetary sanctions, injunctions to halt the manufacture and distribution of products, civil or criminal sanctions, import or export restrictions, refusal or delay of a regulatory authority to grant approvals or licenses, restrictions on operations or withdrawal of existing approvals and licenses. Furthermore, we may experience delays or additional costs in obtaining new approvals or licenses, or extensions of existing approvals and licenses, from a regulatory authority due to reasons that are beyond our control such as changes in regulations or a shutdown of the U.S. federal government, including the FDA, or similar governing bodies or authorities in other jurisdictions. In addition, while we recently entered the U.S. plasma collection market with our recent acquisition of a plasma collection center in the United States, we continue to rely on, Kedrion, CSL Behring, Emergent, Takeda Kedrion and additional plasma suppliers, for plasma collection required for the manufacturing of KEDRAB, CYTOGAM, HEPGAM B, VARIZIG, WINRHO SDF, GLASSIA KEDRAB and other Proprietary products, and in the case of TakedaKedrion and KedrionTakeda, for the distribution of these products in the United States (and in the case of Takeda, also potentially in Canada, Australia and New Zealand). In performing such services tofor us, Takeda, Kedrion and additionalthese plasma suppliers are required to comply with certain regulatory requirements. Any failure by Takeda and/or Kedrion and/or additionalthese plasma suppliers to properly advise us regarding, or properly perform tasks related to, regulatory compliance requirements, could adversely affect us. Any of these actions could cause direct liabilities, a loss in our ability to market each of KEDRAB, CYTOGAM, HEPGAM B, VARIZIG, WINRHO SDF, GLASSIA and/or KEDRAB and/or other Proprietary products, or a loss of customer confidence in us or in GLASSIA and/or KEDRAB and/or otherour Proprietary products, which could materially adversely affect our sales, future revenues, reputation, and results of operations. Similarly, we rely on other third-party vendors, for example, in the testing, handling, and distributions of our products. If any of these companies incur enforcement action from regulatory authorities due to noncompliance, this could negatively affect product sales, our reputation and results of operations. In addition, we rely on other distributors of our other proprietary products, for purposes of our distribution relateddistribution-related regulatory compliance for the products they distribute in the territories in which they operate. Any failure by such distributors to properly advise us regarding, or properly perform tasks related to, regulatory compliance requirements, could adversely affect our sales, future revenues, reputation and results of operations.

Any changesChanges in our production processes for our products must be approvedmay require supplemental submissions or prior approval by the FDA and/or similar authorities in other jurisdictions. Failure to comply with any requirements as to production process changes dictated by the FDA or similar authorities in other jurisdictions could also result in warning letters, product recalls or seizures, monetary sanctions, injunctions to halt the manufacture and distribution of products, civil or criminal sanctions, refusal or delay of a regulatory authority to grant approvals or licenses, restrictions on operations or withdrawal of existing approvals and licenses.

Pursuant to the amendment to the GLASSIA license agreement with Takeda, entered into in March 2021, upon completion of the transition of GLASSIA manufacturing to Takeda, which was completed in November 2021, we transferred to Takeda the GLASSIA U.S. BLA. Following the effectiveness of such transfer, we will rely on Takeda to share with us any relevant information with respect to changes in the manufacturing of the product or its usage which may be applicable in order to update the products registration file in certain ROW markets in which it is currently registered and/or distributed or may be registered and/or distributed in the future.

In addition, changes in the regulation of our activities, such as increased regulation affecting quality or safety requirements or new regulations such as limitations on the prices charged to customers in the United States, Israel or other jurisdictions in which we operate, could materially adversely affect our business. In addition, the requirements of different jurisdictions in which we operate may become less uniform, creating a greater administrative burden and generating additional compliance costs, which would have a material adverse effect on our profit margins.

See also – “

We would become supply-constrained andRegulatory approval for our financial performance would suffer if we were unable to obtain adequate quantities of source plasma or plasma derivatives or specialty ancillary products approvedis limited by the FDA, EMA, the EMA or the regulatoryIMOH and similar authorities in Israel,other jurisdictions to those specific indications and conditions for which clinical safety and efficacy have been demonstrated, and the prescription or ifpromotion of off-label uses could adversely affect our suppliers were to fail to modify theirbusiness.”; and “—Laws and regulations governing the conduct of international operations to meet regulatory requirements or if pricesmay negatively impact our development, manufacture, and sale of products outside of the source plasma or plasma derivatives wereUnited States and require us to raise significantly.develop and implement costly compliance programs.” and “

Our proprietary products depend on our access—Uncertainty surrounding and future changes to U.S., European or other territories’ hyper-immune plasma or plasma derivatives, such as fraction IV. We purchase these plasma products from third-party licensed suppliers, including Takeda and Kedrion, some of which are also responsible for the plasma fractionation process, pursuant to multiple purchase agreements. We have entered into a number of plasma supply agreements with various third partieshealthcare law in the United States and Europe and with the IMOH in Israel (for the supply of plasma from convalescents COVID-19 patients required for our Anti-SARS-CoV-2 IgG product as a potential treatment for COVID-19) some of which are also strategic partners in the distribution of our proprietary products. These agreements contain various termination provisions, including upon a material breach of either party, force majeure and, with respect to supply agreements with strategic partners, the failure or delay on the part of either party to obtain the applicable regulatory approvals or the termination of the principal strategic relationship. If we are unable to obtain adequate quantities of source plasma or fraction IV plasma approved by the FDA, the EMA or the regulatory authorities in Israel from these providers, we may be unable to find an alternative cost-effective source.

In order for plasma and fraction IV plasma to be used in the manufacturing of our plasma-derived protein therapeutics, the individual centers at which the plasma is collected must be licensed and approved by the relevant regulatory authorities, such as the FDA, the EMA or the IMOH (for Anti SARS CoV2). When a new plasma collection center is opened, and on an ongoing basis after its licensure, it must be inspected by the FDA, the EMA or the regulatory authorities in Israel for compliance with cGMP and other regulatory requirements. An unsatisfactory inspection could prevent a new center from being licensed or lead to the suspension or revocation of an existing license. If relevant regulatory authorities determine that a plasma collection center did not comply with cGMP in collecting plasma, we may be unable to use and may ultimately destroy plasma collected from that center, which may impact on our ability to timely meet our manufacturing and supply obligations. Additionally, if noncompliance in the plasma collection process is identified after the impacted plasma has been pooled with compliant plasma from other sources, entire plasma pools, in-process intermediate materials and final products could be impacted, such as through product destruction or rework. Consequently, we could experience significant inventory impairment provisions and write-offs, which could adversely affect our business and financial results.

In addition, the plasma supplier’s fractionation process must also meet standards of the FDA, the EMA or the regulatory authorities in Israel. If a plasma supplier is unable to meet such standards, we will not be able to use the plasma derivatives provided by such supplier, which may impact on our ability to timely meet our manufacturing and supply obligations.

If we were unable to obtain adequate quantities of source plasma or plasma derivatives approved by the FDA, the EMA or the regulatory authorities in Israel, we would be limited in our ability to maintain or increase current manufacturing levels of our plasma derivative products, as well as in our ability to conduct the research required to maintain our product pipeline. As a result, we could experience a substantial decrease in total revenues or profit margins, a potential breach of distribution agreements, a loss of customers, a negative effect on our reputation as a reliable supplier of plasma derivative products or a substantial delay in our production and strategic growth plans.

The ability to increase plasma collections may be limited, our supply of plasma and plasma derivatives could be disrupted or the cost of plasma and plasma derivatives could increase substantially, as a result of numerous factors, including a reduction in the donor pool, increased regulatory requirements, decreased number of plasma supply sources due to consolidation and new indications for plasma-derived protein therapeutics, which could increase demand for plasma and plasma derivatives and lead to shortages.

Plasma collection process is dependent on donors arriving in plasma collection centers and agreeing to donate plasma. During major healthcare events, such as the recent COVID-19 pandemic, the number of donors attending plasma collection centers reduces, which may adversely affect the availability of plasma and its derivatives. A significant shortage in plasma supplyUnited States Government related mandates may adversely affect our ability to continue manufacturing our products, may result in shortages in our products in the market, and may result in reduced sales and profitability.business.”

We are also dependent on a number of suppliers who supply specialty ancillary products used in the production process, such as specific gels and filters. Each of these specialty ancillary products is provided by a single, exclusive supplier. If these suppliers were unable to provide us with these specialty ancillary products, if our relationships with these suppliers deteriorate, or these suppliers’ operations are negatively affected by regulatory enforcement due to noncompliance, the manufacture and distribution of our products would be materially adversely affected, which would adversely affect our sales and results of operations. See “—

If we experience equipment difficulties or if the suppliers of our equipment or disposable goods fail to deliver key product components or supplies in a timely manner, our manufacturing ability would be impaired, and our product sales could suffer.”

SomeFor certain equipment and supplies, we depend on a limited number of companies that supply and maintain our required specialty ancillary productsequipment and other materialsprovide supplies such as chromatography resins, filter media, glass bottles and stoppers used in the manufacture of our plasma-derived protein therapeutics. If our equipment were to malfunction, or if our suppliers stop manufacturing process are commonly usedor supplying such machinery, equipment or any key component parts, the repair or replacement of the machinery may require substantial time and cost and could disrupt our production and other operations. Alternative sources for key component parts or disposable goods may not be immediately available. In addition, any new equipment or change in supplied materials may require revalidation by us or review and approval by the healthcare industry world-wide. IfFDA, the global demand for these products increases due to healthcare issues, epidemicsEMA, the IMOH or pandemics, such as the recent coronavirus (COVID-19) pandemic, our ability to secure adequate supply at reasonable cost of such productsother regulatory authorities, which may be negatively affected, which would materially adversely affect our ability to manufacturetime-consuming and distribute our products, which would adversely affect our salesrequire additional capital and results of operations.

In addition, regulatory requirements, including cGMP regulations, continually evolve. Failure of our plasma suppliers to adjust their operations to conform to new standards as established and interpreted by applicable regulatory authorities would create a compliance risk that could impair our ability to sustain normal operations.

In addition, if the purchase prices of the source plasma or plasma derivatives that we use to manufacture our proprietary products were to raise significantly, weother resources. We may not be able to pass along these increased plasma and plasma-derivative prices to our customers. Pricesfind an adequate alternative supplier in manya reasonable time period, or on commercially acceptable terms, if at all. As a result, shipments of our principal markets are subject to local regulation and certain pharmaceuticalaffected products such as plasma-derived protein therapeutics, are subject to price controls. Anymay be limited or delayed. Our inability to pass costs onobtain our key source supplies for the manufacture of products may require us to our customers duedelay shipments of products, harm customer relationships and force us to these factors or others would reduce our profit margins. In addition, most of our competitors have the ability to collect their own source plasma or produce their own plasma derivatives, and therefore their products’ prices would not be impacted by such a price raise, and as a result any pricing changes by us in order to pass higher costs on to our customers could render our products noncompetitive in certain territories.curtail operations.

We have been required to conduct post-approval clinical trials of GLASSIA and KEDRAB as a commitment to continuing marketing such products in the United States, and we may be required to conduct post-approval clinical trials as a condition to licensing or distributing other products.

When a new product is approved, the FDA or other regulatory authorities may require post-approval clinical trials, sometimes called Phase 4 clinical trials. For example, the FDA has required that we conduct Phase 4 clinical trials of GLASSIA which began in 2015, and for KEDRAB, which began in 2017 and was completed in 2020 and its results were submitted for review by the FDA.KEDRAB. Such Phase 4 clinical trials are aimed at collecting additional safety data, such as the immune response in the body of a human or animal, commonly referred to as immunogenicity, viral transmission, levels of the protein in the lung, or epithelial lining fluid, and certain efficacy endpoints requested by the FDA. If the results of such trials are unfavorable and demonstrate a previously undetected risk or provide new information that puts patients at risk, or if we fail to complete such trials as instructed by the FDA, this could result in receiving a warning letter from the FDA and the loss of the approval to market the product in the United States and other countries, or the imposition of restrictions, such as additional labeling, with a resulting loss of sales. Furthermore, there can be no assurance that the FDA will accept the results of any post-marketing commitment study, such as the results of the KEDRAB study, and under certain circumstances the FDA may require a subsequent study. Other products we develop may face similar requirements, which would require additional resources and which may not be successful. We may also receive approval whichthat is conditionalconditioned on successful additional data or clinical development, and failure in such further development may require similar changes to our product label or result in revocation of our marketing authorization.

The nature of producing and developing plasma-derived protein therapeutics may prevent us from responding in a timely manner to market forces and effectively managing our production capacity.

The production of plasma-derived protein therapeutics is a lengthy and complex process. Our ability to match our production of plasma-derived protein therapeutics to market demand is imprecise and may result in a failure to meet the market demand for our plasma-derived protein therapeutics or potentially in an oversupply of inventory. Failure to meet market demand for our plasma-derived protein therapeutics may result in customers transitioning to available competitive products, resulting in a loss of segment share or distributor or customer confidence. In the event of an oversupply in the market, we may be forced to lower the prices we charge for some of our plasma-derived protein therapeutics, record asset impairment charges or take other action which may adversely affect our business, financial condition and results of operations.

Risks Related to Our Distribution Segment

Our Distribution segment is dependent on a few suppliers, and any disruption to our relationship with these suppliers, or their inability to supply us with the products we sell, in a timely manner, in adequate quantities and/or at a reasonable cost, would have a material adverse effect on our business, financial condition and results of operations.

Sales of products supplied by Bio Products Laboratories Ltd. (“BPL”) and Biotest A.G., Kedrion, Chiesi Farmaceutici S.p.A, BPL and Valneva SE, which are sold in our Distribution segment, together represented approximately 22%18%, 19%20% and 17%26% of our total revenues for the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively. While we have distribution agreements with each of our suppliers, these agreements do not obligate these suppliers to provide us with minimum amounts of our Distribution segment products. Purchases of our Distribution segment products from our suppliers are typically on a purchase order basis. We work closely with our suppliers to develop annual forecasts, but these forecasts are not obligations or commitments. However, if we fail to submit purchase orders that meet our annual forecasts or if we fail to meet our minimum purchase obligations, we could lose exclusivity or, in certain cases, the distribution agreement could be terminated.

These suppliers may experience capacity constraints that result in their being unable to supply us with products in a timely manner, in adequate quantities and/or at a reasonable cost. Contributing factors to supplier capacity constraints may include, among other things, industry or customer demands in excess of machine capacity, labor shortages, changes in raw material flows or shortages in raw materials, which may result from different market conditions including, but not limited to, shortages resulting from increased global demand for these raw materials due to global healthcare issues, epidemics and pandemics, such as the coronavirus (COVID-19) pandemic.pandemics. These suppliers may also choose not to supply us with products at their discretion or raise prices to a level that would render our products noncompetitive. Any significant interruption in the supply of these products could result in us being unable to meet the demands of our customers, which would have a material adverse effect on our business, financial condition and results of operations as a result of being required to pay of fines or penalties, be subject to claims of reach of contract, loss of reputation or even termination of agreement.

If our relationship with either distributor deteriorated, our distribution sales could be adversely affected. If we fail to maintain our existing relationships with these suppliers, we could face significant costs in finding a replacement supplier, and delays in establishing a relationship with a new supplier could lead to a decrease in our sales and a deterioration in our market share when compared with one or more of our competitors.

Additionally, our future growth in the Distribution segment is dependent on our ability to successfully engage other manufacturers for distribution in Israel of other products. Failure to engage new suppliers may have an adverse effect on our revenue growth and profitability.

Certain of our sales in our Distribution segment rely on our ability to win tender bids based on the price and availability of our products in annual public tender processes.

Certain of our sales in our Distribution segment rely on our ability to win tender bids during the annual tender process in Israel, as well as on sales made to health maintenance organizationsHealth Maintenance Organizations (HMOs), hospitals and to the IMOH. Our ability to win bids may be materially adversely affected by competitive conditions in such bid process. Our existing and new competitors may also have significantly greater financial resources than us, which they could use to promote their products and business. Greater financial resources would also enable our competitors to substantially reduce the price of their products or services. If our competitors are able to offer prices lower than us, our ability to win tender bids during the annual tender process will be materially affected and could reduce our total revenues or decrease our profit margins.

Certain of our products in both segments have historically been subject to price fluctuations as a result of changes in the production capacity available in the industry, the availability and pricing of plasma, development of competing products and the availability of alternative therapies. Higher prices for plasma-derived protein therapeutics have traditionally spurred increases in plasma production and collection capacity, resulting over time in increased product supply and lower prices. As demand continues to grow, if plasma supply and manufacturing capacity do not commensurately expand, prices tend to increase. Additionally, consolidation in plasma companies has led to a decrease in the number of plasma suppliers in the world, as either manufacturers of plasma-based pharmaceuticals purchase plasma suppliers or plasma suppliers are shut down in response to the number of manufacturers of plasma-based pharmaceuticals decreasing, which may lead to increased prices. We may not be able to pass along these increased plasma and plasma-derivative prices to our customers, which would reduce our profit margins.

Sales of our Distribution segment products are made through public tenders of Israeli hospitals and HMOs on an annual basis or in the private market based on detailing activity made by our medical representatives. The prices we can offer, as well as the availability of products, are key factors in the tender process. If our suppliers in the Distribution segment cannot sell us products at a competitive price or cannot guarantee sufficient quantities of products, we may lose the tenders.

Our Distribution segment is dependent on a few customers, and any disruption to our relationship with these customers, or our inability to supply, in a timely manner, in adequate quantities and/or at a reasonable cost, would have a material adverse effect on our business, financial condition and results of operations.

The Israeli market for drug products includes a relatively small number of HMOs and several hospitals. Sales to Clalit Health Services, an Israeli HMO, accounted for approximately 41%34%, 47%46% and 45%42% of our Distribution Segmentsegment revenues in the years ended December 31, 2020, 20192023, 2022 and 2018,2021, respectively.

If our relationship with any of our Israeli customers deteriorated, our distribution sales could be adversely affected. Failure to maintain our existing relationships with these customers could lead to a decrease in our revenues and profitability.

Before we may sell products in the Distribution segment, we must register the products with the IMOH and there can be no assurance that such registration will be obtained.

Before we may sell products in the Distribution segment in Israel, we must register the products, at our own expense, with the IMOH. We cannot predict how long the registration process of the IMOH may take or whether any such registration ultimately will be obtained. The IMOH has substantial discretion in the registration process, and we can provide no assurance of success of registration. Our business, financial condition or results of operations could be materially adversely affected if we fail to receive IMOH registration for the products in the Distribution segment.

Our Distribution segment is a low-margin business and our profit margins may be sensitive to various factors, some of which are outside of our control.

Our Distribution segment is characterized by high volume sales with relatively low profit margins. Volatility in our pricing may have a direct impact on our profitability. Prolonged periods of product cost inflation may have a negative impact on our profit margins and results of operations to the extent we are unable to pass on all or a portion of such product cost increases to our customers. In addition, if our product mix changes, we may face increased risks of compression of our margins, as we may be unable to achieve the same level of profit margins as we are able to capture on our existing products. Our inability to effectively price our products or to reduce our expenses due to volatility in pricing could have a material adverse impact on our business, financial condition or results of operations.

We may be subject to milestone payments in connection with our Distribution segment products irrespective of whether the commercialization is successful.

Certain of our agreements in the Distribution segment, including agreements for distribution of biosimilar product candidates, require us to make milestone payments in advance of product launch. In some cases, we may not be able to obtain reimbursement for such payments. To the extent that we are not ultimately able to recoup these payments, our business, financial position and results of operations may be adversely affected.

We may face significant competition in our Distribution segment.segment from companies with greater financial resources.

In the Distribution segment, we face competition for our distribution products that are marketed in Israel and compete for market share. We believe that there are a number ofseveral companies active in the Israeli market distributing the products of several manufacturers whose comparable products compete with ourthe products in thewe distribute as part of our Distribution segment. In the plasma area, these manufacturers include Grifols, Takeda and CSL Omrix Biopharmaceuticals Ltd. (a Johnson & Johnson company), while inBehring. In other specialties and biosimilar products, we may be competing againstcompete with products produced by some of the largest pharmaceutical manufacturers in the world, such as Novartis AG, AstraZeneca AB, Sanofi UK and GlaxoSmithKline. Each of these competitors sells its products through a local subsidiary or a local representative in Israel. Our existing and new competitors may have significantly greater financial resources than us, which they could use to promote their products and business or reduce the price of their products or services. If we are unable to maintain or increase our market share, we may need to reduce prices and may suffer reduced profitability or operating losses, which could have a material adverse impact on our business, financial condition or results of operations.

We recentlyIn recent years we entered into agreements for future distribution in Israel of several biosimilar product candidates, and the successful future distribution of these products is dependent upon several factors some of which are beyond our control.

We recentlyOver the past several years we entered into agreements with respect to planned distribution in Israel of certain biosimilar product candidates. Biosimilar products are highly similar to biological products already licensed for distribution by the FDA, EMA or any other relevant regulatory agency, notwithstanding minor differences in clinically inactive components, and that they have no clinically meaningful differences, as compared to the marketed biological products in terms of the safety, purity and potency of the products. The similar nature of a biosimilar and a reference product is demonstrated by comprehensive comparability studies covering quality, biological activity, safety and efficacy.

In order to launch biosimilar products in Israel, we would need to obtain IMOH marketing authorization, which will be subject to prior authorization by the FDA or the EMA that shouldto be obtained by the manufacturer of the biosimilar product candidate.from the FDA or the EMA. Even if an FDA or EMA authorization is provided, there can be no assurance that the IMOH will accept such authorization as a reference and will grant us the authorization to distribute such biosimilar products in the Israeli market. In the event we will not be able to obtain the necessary marking authorization to launch the products, we may not generate the expected sale and profitability from these products, which could have a material adverse impact on our business, financial condition or results of operations. Delays in the commercialization of such biosimilar products, including due to delays in obtaining marketing authorization, may expose us to increased competition, such as due to the entry of new competitors into the market, which may adversely impact our potential sales and profitability from these products.

Innovative pharmaceutical products are generally protected for a defined period by various patents (including those covering drug substance, drug product, approved indications, methods of administration, methods of manufacturing, formulations and dosages) and/or regulatory exclusivity, which are intended to provide their holders with exclusive rights to market the products for the life of the patent or duration of the regulatory data protection period. Biosimilar products are intended to replace such innovative pharmaceutical products upon the expiration or termination of their exclusivity period or in such markets whereby such exclusivity does not exist. The launch of a biosimilar product may potentially result in the infringement of certain IP rights and exclusivity and be subject to potential legal proceedings and restraining orders effectingaffecting its potential launch. Such intellectual property threats may preclude commercialization of such biosimilar product candidates, may result in incurring significant legal expenses and liabilities and we may not generate the expected sale and profitability from these products, which could have a material adverse impact on our business, financial condition or results of operations.

In addition, the commercialization of biosimilars includes the potential for steeper than anticipated price erosion due to increased competitive intensity, and lower uptake for biosimilars due to various factors that may vary for different biosimilars (e.g., anti-competitive practices, physician reluctance to prescribe biosimilars for existing patients taking the originator product, or misaligned financial incentives), all of which may affect our potential sales and profitability from these products which could have a material adverse impact on our business, financial condition or results of operations.

Risk

Risks Related to Development, Regulatory Approval and Commercialization of Product Candidates

Drug product development including preclinical and clinical trials is a lengthy and expensive process and may not result in receipt of regulatory approval.

Before obtaining regulatory approval for the sale of our product candidates, including Inhaled AAT for AATD, and our Anti-SARS-CoV-2 IgG product, or for the marketing of existing products for new indications, we must conduct, at our own expense, extensive preclinical tests to demonstrate the safety of our product candidates in animals and clinical trials to demonstrate the safety and efficacy of our product candidates in humans. We cannot predict how long the approval processes of the FDA, the EMA, the regulatory authorities in Israel or any other applicable regulatory authority or agency for any of our product candidates will take or whether any such approvals ultimately will be granted. The FDA, the EMA, the regulatory authorities in Israel and other regulatory agencies have substantial discretion in the relevant drug approval process over which they have authority, and positive results in preclinical testing or early phases of clinical studies offer no assurance of success in later phases of the approval process. The approval process varies from country to country and the requirements governing the conduct of clinical trials, product manufacturing, product licensing, pricing and reimbursement vary greatly from country to country.

Preclinical and clinical testing is expensive, is difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more of our clinical trials can occur at any stage of testing. For example, the Phase 2/3 clinical trial in Europe for Inhaled AAT for AATD did not meet its primary or secondary endpoints and we subsequently withdrew the MAAMarketing Authorization Application (“MAA”) in Europe for our Inhaled AAT for AATD.

While we have initiated the developmentEach inhaled formulation of our investigational Anti-SARS-CoV-2 IgG product in the wake of the COVID-19 pandemic, due to the lengthy development and required regulatory process as well as the dependency on continued collection and supply of plasma from COVID-19 convalescent patients, we may not be able to supply our product prior to the potential wind-down of the pandemic.

As a result of the COVID-19 pandemic we have encountered delays in patient recruitment into our pivotal Phase 3 InnovAAT clinical study conducted at a first study site in Europe and it has impacted and may continue to impact our ability to open additional study sites in the United States and Europe.

During December 2019, we announced that the first patient was randomized in Europe into our pivotal Phase 3 InnovAATe clinical trial, a randomized, double-blind, placebo-controlled, pivotal Phase 3 trial designed to assess the efficacy and safety of Inhaled AAT, in patients with AATD and moderate lung disease. Under the study design, up to 250 patients will be randomized 1:1 to receive either Inhaled AAT at a dose of 80mg once daily, or placebo, over two years of treatment. Enrolment into the trial continued through February 2020, however, thereafter was temporarily halted due to the impact of COVID-19 pandemic on healthcare systems. Although we recently resumed recruitment to the study, the COVID-19 pandemic has slowed down the rate of recruitment and the current pandemic situation mainly across Europe affects our ability to currently open new study sites. While we are exploring several alternative approaches to address the expected continuation of the pandemic and its effect on the study, there can be no assurance that we will be able to open additional site and significantly increase the rate of patient recruitment. This situation may cause a material delay in completing this study, or otherwise may require us to halt the study completely or reduce the overall size of the study which might not be acceptable by the FDA and/or EMA. These circumstances may affect our ability to complete the study successfully or may prevent us from having sufficient information to file for and obtain regulatory approval for this product by the FDA, EMA or any other relevant regulatory agency.

We may encounter unforeseen events that delay or prevent us from receiving regulatory approval for our product candidates.

We have experienced other unforeseen events that have delayed our ability to receive regulatory approval for certain of our product candidates, and may in the future experience similar or other unforeseen events during, or as a result of, preclinical testing or the clinical trial process that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates, including that:

If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we contemplate, if we are unable to successfully complete our clinical trials or other testing, if the results of these trials or tests are not positive or are only modestly positive or if safety concerns arise, we may:

Our ability to enroll patients in our clinical trials in sufficient numbers and on a timely basis is subject to a number of factors, including the size of the patient population, the time of year during which the clinical trial is commenced, the hesitance of certain patients to leave their current standard of care for a new treatment, and the number of other ongoing clinical trials competing for patients in the same indication and eligibility criteria for the clinical trial. During 2020, we encountered challenges to recruit patients to our ongoing pivotal Phase 3 InnovAAT clinical study as a result of the COVID-19 pandemic, resulting in significant delays in recruitment. In addition, patients may drop out of our clinical trials at any point, which could impair the validity or statistical significance of the trials.  Delays in patient enrollment or unexpected drop-out rates may result in longer development times.

Our product development costs will also increase if we experience delays in testing or approvals. There can be no assurance that any preclinical test or clinical trial will begin as planned, not need to be restructured or be completed on schedule, if at all. Because we generally apply for patent protection for our product candidates during the development stage, significant preclinical or clinical trial delays also could lead to a shorter patent protection period during which we may have the exclusive right to commercialize our product candidates, if approved, or could allow our competitors to bring products to market before we do, impairing our ability to commercialize our products or product candidates. For example, in the past, we have experienced delays in the commencement of clinical trials, such as a delay in patient enrollment (including as a result of the COVID-19 pandemic) for our clinical trials in Europe and the United States for Inhaled AAT for AATD.

Pre-clinical studies, including studies of our product candidates in animal models of disease, may not accurately predict the result of human clinical trials of those product candidates. In addition, product candidates studied in Phase 1 and 2 clinical trials may be found not to be safe and/or efficacious when studied further in Phase 3 trials. To satisfy FDA or other applicable regulatory approval standards for the commercial sale of our product candidates, we must demonstrate in adequate and controlled clinical trials that our product candidates are safe and effective. Success in early clinical trials, including Phase 1 and 2 trials, does not ensure that later clinical trials will be successful. Initial results from Phase 1 and 2 clinical trials also may not be confirmed by later analysis or subsequent larger clinical trials. A number of companies in the pharmaceutical industry, including us, have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials.

We may not be able to commercialize our product candidates in development for numerous reasons.

Even if preclinical and clinical trials are successful, we still may be unable to commercialize a product because of difficulties in obtaining regulatory approval for its production process or problems in scaling that process to commercial production. In addition, the regulatory requirements for product approval may not be explicit, may evolve over time and may diverge among jurisdictions and our third-party contractors, such as contract research organizations, may fail to comply with regulatory requirements or meet their contractual obligations to us.

Even if we are successful in our development and regulatory strategies, we cannot provide assurance that any product candidates we may seek to develop or are currently developing, such as Inhaled AAT for AATD, is being developed with a specific nebulizer produced by PARI, and the occurrence of an adverse market event or PARI’s non-compliance with its obligations would have a material adverse effect on the commercialization of any inhaled formulation of AAT.

We are dependent upon PARI GmbH (“PARI”) for the development and commercialization of any inhaled formulation of AAT, including our Anti-SARS-CoV-2 IgG product, will ever be successfully commercialized. We may not be able to successfully address patient needs, persuade physicians and payors of the benefit of our product, and lead to usage and reimbursement. If such products are not eventually commercialized, the significant expense and lack of associated revenue could materially adversely affect our business.

We may not be able to successfully build and implement a commercial organization or commercialization program, with or without collaborating partners. The scale-up from research and development to commercialization requires significant time, resources, and expertise, which will rely, to a large extent, on third partiesInhaled AAT for assistance to help us in our efforts. Such assistance includes, but is not limited to, persuading physicians and payors of the benefit of our product to lead to utilization and reimbursement, developing a healthcare compliance program, and complying with post-marketing regulatory requirements.

AATD. We have initiatedan agreement with PARI, pursuant to which it is required to obtain the developmentappropriate clearance to market PARI’s proprietary eFlow® device, which is a device required for the administration of a recombinant AAT product candidate, however, we may not be able to successfully complete its development or commercialize such product candidates for numerous reasons.

We have begun developing recombinant versioninhaled formulation of AAT, through external services of a Contract Developmentfrom the EMA and Manufacturing Organization (“CDMO”), but we cannot be certain that such product will ever be approved or commercialized.FDA for use with Inhaled AAT for AATD. See “Item 4. Information on the Company — Our Product PipelineStrategic Partnerships — PARI.” Failure of PARI to achieve these authorizations, or to maintain operations in regulatory compliance, will have a material adverse effect on the commercialization of any inhaled formulation of AAT, including Inhaled AAT for AATD, which would harm our growth strategy.

Additionally, pursuant to the agreement, PARI is obligated to manufacture and Development Program — Recombinant AAT.” The main advantagesupply all of recombinantthe market demand for the eFlow device for use in conjunction with any inhaled formulation of AAT is its potentially wider availability, and ease of large-scale manufacturing. As a result, our product offerings may remain plasma-derived, even if our competitors offer competing recombinant or other non-plasma products or treatments.

If we are unablerequired to successfully introduce new products and indicationspurchase all of our volume requirements from PARI. Any event that permanently, or failfor an extended period, prevents PARI from supplying the required quantity of devices would have an adverse effect on the commercialization of any inhaled formulation of AAT, including Inhaled AAT for AATD.

Lastly, we rely on PARI to keep pace with advances in technology, our business, financial condition, and results of operationsensure that the eFlow device is not violating or infringing on any third party intellectual property or patents. PARI’s inability to ensure its freedom to operate may be adversely affected.

Our continued growth depends, tohave a certain extent,significant effect on our ability to develop and obtain regulatory approvals of new products, new enhancements and/or new indications for our products and product candidates. Obtaining regulatory approval in any jurisdiction, including fromcontinue the FDA, EMA or any other relevant regulatory agencies involves significant uncertainty and may be time consuming and require significant expenditures. See “—Research and development efforts invested in our pipeline of specialty and other products may not achieve expected results.”

The development of innovative products and technologies that improve efficacy, safety, patients’ and clinicians’ ease of use and cost-effectiveness, involve significant technical and business risks. The success of new product offerings will depend on many factors, including our ability to properly anticipate and satisfy customer needs, adapt to new technologies, obtain regulatory approvals on a timely basis, demonstrate satisfactory clinical results, manufacture products in an economic and timely manner, engage qualified distributors for different territories and establish our sales force to sell our products, and differentiate our products from those of our competitors. If we cannot successfully introduce new products, adapt to changing technologies or anticipate changes in our current and potential customers’ requirements, our products may become obsolete and our business could suffer.

Research and development efforts invested in our pipeline of specialty and other products may not achieve expected results.

We must invest increasingly significant resources to develop specialty products through our own efforts and through collaborations with third parties in the form of partnerships or otherwise. The development of specialty pharmaceutical products involves high-level processes and expertise and carries a significant risk of failure. For example, the average time from the pre-clinical phase to the commercial launch of a specialty pharmaceutical product can be 15 years or longer, and involves multiple stages: not only intensive preclinical, clinical and post clinical testing, but also highly complex, lengthy and expensive regulatory approval processes as well as reimbursement proceedings, which can vary from country to country. The longer it takes to develop a pharmaceutical product, the longer it may take for us to recover our development costs and generate profits, and, depending on various factors, we may not be able to ever recover such costs or generate profits.

During each stage of development, we may encounter obstacles that delay the development process and increase expenses, leading to significant risks that we will not achieve our goals and may be forced to abandon a potential product in which we have invested substantial amounts of time and money. These obstacles may include the following: preclinical-study failures; difficulty in enrolling patients in clinical trials; delays in completing formulation and other work needed to support an application for approval; adverse reactions or other safety concerns arising during clinical testing; insufficient clinical trial data to support the safety or efficacy of a product candidate; other failures to obtain, or delays in obtaining, the required regulatory approvals for a product candidate or the facilities in which a product candidate is manufactured; regulatory restrictions which may delay or block market penetration and the failure to obtain sufficient intellectual property rights for our products.

Accordingly, there can be no assurance that the continued development of our Inhaled AAT Anti-SARS-CoV-2 IgG product and any other product candidate will be successful and will result in an FDA and/or EMA approvable indication.

Because of the amount of time and expense required to be invested in augmenting our pipeline of specialty and other products, including the unique know-how which may be required for such purpose, we may seek partnerships or joint ventures with third parties from time to time, and consequently face the risk that some or all of these third parties may fail to perform their obligations, or that the resulting arrangement may fail to produce the levels of success that we are relying on to meet our revenue and profit goals.

as well as potentially commercializing it.

We rely on third parties to conduct our preclinical and clinical trials. The failure of these third parties to successfully carry out their contractual duties or meet expected deadlines could substantially harm our business because we may not obtain regulatory approval for, or commercialize, our product candidates in a timely manner or at all.

We rely upon third-party contractors, such as university researchers, study sites, physicians and contract research organizations (“CROs”), to conduct, monitor and manage data for our current and future preclinical and clinical programs. We expect to continue to rely on these parties for execution of our preclinical and clinical trials, and we control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol and legal, regulatory and scientific standards, and our reliance on such third-party contractors does not relieve us of our regulatory responsibilities. With respect to clinical trials, we and our CROs are required to comply with current Good Clinical Practices (“GCP”), which are regulations and guidelines enforced by the FDA, the EMA and comparable foreign regulatory authorities for all of our products in clinical development. Regulatory authorities enforce these GCP through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our CROs fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP requirements.

These third-party contractors are not our employees, we cannot effectively control whether or not they devote sufficient time and resources to our ongoing clinical, nonclinical and preclinical programs, and except for remedies available to us under our agreements with such third-party contractors, we may be unable to recover losses that result from any inadequate work on such programs. If such third-party contractors do not successfully carry out their contractual duties or obligations or meet expected deadlines or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our development efforts and clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our results of operations and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. To the extent we are unable to successfully identify and manage the performance of such third-party contractors in the future, our business may be adversely affected.

We have initiated the development of a recombinant AAT product candidate; however, any continued development of this product will be dependent on our ability to attract a suitable development/commercialization partner for this project, and we may not be able to successfully complete its development or commercialize such product candidate for numerous reasons.

During 2020, we initiated the development of a recombinant version of AAT, through external services of a contract development and manufacturing organization (“CDMO”). See “Item 4. Information on the Company — Our Development Product Pipeline — Recombinant AAT.”. The main advantage of recombinant AAT is its potentially wider availability, and ease of large-scale manufacturing. However, continued investment in the development of this product will be subject to identifying a suitable development partner, and we may not be able to identify such a suitable partner or be successful in entering into an agreement with any particular partner on acceptable terms or at all. Further, even if we are successful in entering into an arrangement with such a partner, we may not be able to successfully develop or commercialize a recombinant product for numerous reasons.

We may encounter unforeseen events that delay or prevent us from receiving regulatory approval for our product candidates.

We have experienced unforeseen events that have delayed our ability to receive regulatory approval for certain of our product candidates, and may in the future experience similar or other unforeseen events during, or as a result of, preclinical testing or the clinical trial process that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates, including the following:

If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we contemplate, if we are unable to successfully complete our clinical trials or other testing, if the results of these trials or tests are not positive or are only modestly positive, or if safety concerns arise, we may:

Our ability to enroll patients in our clinical trials in sufficient numbers and on a timely basis is subject to several factors, including the size of the patient population, the time of year during which the clinical trial is commenced, the hesitance of certain patients to leave their current standard of care for a new treatment, and the number of other ongoing clinical trials competing for patients in the same indication and eligibility criteria for the clinical trial. In addition, patients may drop out of our clinical trials at any point, which could impair the validity or statistical significance of the trials. Delays in patient enrollment or unexpected drop-out rates may result in longer development times.

Our product development costs will also increase if we experience delays in testing or approvals. There can be no assurance that any preclinical test or clinical trial will begin as planned, not need to be restructured or be completed on schedule, if at all. Because we generally apply for patent protection for our product candidates during the development stage, significant preclinical or clinical trial delays also could lead to a shorter patent protection period during which we may have the exclusive right to commercialize our product candidates, if approved, or could allow our competitors to bring products to market before we do, impairing our ability to commercialize our products or product candidates.

Pre-clinical studies, including studies of our product candidates in animal models of disease, may not accurately predict the result of human clinical trials of those product candidates. In addition, product candidates studied in Phase 1 and 2 clinical trials may be found not to be safe and/or efficacious when studied further in Phase 3 trials. To satisfy FDA or other applicable regulatory approval standards for the commercial sale of our product candidates, we must demonstrate in adequate and controlled clinical trials that our product candidates are safe and effective. Success in early clinical trials, including Phase 1 and 2 trials, does not ensure that later clinical trials will be successful. Initial results from Phase 1 and 2 clinical trials also may not be confirmed by later analysis or subsequent larger clinical trials. Several companies in the pharmaceutical industry, including us, have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials.

We may not be able to commercialize our product candidates in development for numerous reasons.

Even if preclinical and clinical trials are successful, we still may be unable to commercialize a product because of difficulties in obtaining regulatory approval for its production process or problems in scaling that process to commercial production. In addition, the regulatory requirements for product approval may not be explicit, may evolve over time and may diverge among jurisdictions and our third-party contractors, such as CROs, may fail to comply with regulatory requirements or meet their contractual obligations to us.

Even if we are successful in our development and regulatory strategies, we cannot provide assurance that any product candidates we may seek to develop or are currently developing, such as Inhaled AAT for AATD, will ever be successfully commercialized. We may not be able to successfully address patient needs, persuade physicians and payors of the benefit of our product, and lead to usage and reimbursement. If such products are not eventually commercialized, the significant expense and lack of associated revenue could materially adversely affect our business.

We may not be able to successfully build and implement a commercial organization or commercialization program, with or without collaborating partners. The scale-up from research and development to commercialization requires significant time, resources, and expertise, which will rely, to a large extent, on third parties for assistance to help us in our efforts. Such assistance includes, but is not limited to, persuading physicians and payors of the benefit of our product to lead to utilization and reimbursement, developing a healthcare compliance program, and complying with post-marketing regulatory requirements.

Research and development efforts invested in our pipeline of specialty and other products may not achieve the expected results.

We must invest increasingly significant resources to develop specialty products through our own efforts and through collaborations with third parties in the form of partnerships or otherwise. The development of specialty pharmaceutical products involves high-level processes and expertise and carries a significant risk of failure. For example, the average time from the pre-clinical phase to the commercial launch of a specialty pharmaceutical product can be 15 years or longer, and involves multiple stages: not only intensive preclinical, clinical and post clinical testing, but also highly complex, lengthy, and expensive regulatory approval processes as well as reimbursement proceedings, which can vary from country to country. The longer it takes to develop a pharmaceutical product, the longer it may take for us to recover our development costs and generate profits, and, depending on various factors, we may not be able to ever recover such costs or generate profits.

During each stage of development, we may encounter obstacles that delay the development process and increase expenses, leading to significant risks that we will not achieve our goals and may be forced to abandon a potential product in which we have invested substantial amounts of time and money. These obstacles may include the following: shortages in the supply of specialty pharmaceutical products for clinical trials; preclinical-study failures; difficulty in enrolling patients in clinical trials; delays in completing formulation and other work needed to support an application for approval; adverse reactions or other safety concerns arising during clinical testing; insufficient clinical trial data to support the safety or efficacy of a product candidate; other failures to obtain, or delays in obtaining, the required regulatory approvals for a product candidate or the facilities in which a product candidate is manufactured; regulatory restrictions which may delay or block market penetration and the failure to obtain sufficient intellectual property rights for our products.

Accordingly, there can be no assurance that the continued development of our Inhaled AAT and any other product candidate will be successful and will result in an FDA and/or EMA approvable indication.

Because of the amount of time and expense required to be invested in augmenting our pipeline of specialty and other products, including the unique know-how which may be required for such purpose, we may seek partnerships or joint ventures with third parties from time to time, and consequently face the risk that some or all of these third parties may fail to perform their obligations, or that the resulting arrangement may fail to produce the levels of success that we are relying on to meet our revenue and profit goals.

We may not obtain orphan drug status for our products, or we may lose orphan drug designations, which would have a material adverse effect on our business.

One of the incentives provided by an orphan drug designation is market exclusivity for seven years in the United States and ten years in the European Union for the first product in a class approved for the treatment of a rare disease. Although several of our products and product candidates, including Inhaled AAT for AATD, have been granted the designation of an orphan drug, we may not be the first product licensed for the treatment of particular rare diseases in the future or our approved indication may vary from that subject to the orphan designation.designation, or our products may not secure orphan drug exclusivity for other reasons. In such cases we would not be able to take advantage of market exclusivity and instead another sponsor would receive such exclusivity.

Additionally, although the marketing exclusivity of an orphan drug would prevent other sponsors from obtaining approval of the same drug compound for the same indication, such exclusivity would not apply in the case that a subsequent sponsor could demonstrate clinical superiority or a market shortage occurs and would not prevent other sponsors from obtaining approval of the same compound for other indications or the use of other types of drugs for the same use as the orphan drug. In the event we are unable to fill demand for any orphan drug, it is possible that the FDA or the EMA may view such unmet demand as a market shortage, which could impact our market exclusivity.

The FDA and the EMA may also, in the future, revisit any orphan drug designation that they have respectively conferred upon a drug and retain the ability to withdraw the relevant designation at any time. Additionally, the U.S. Congress has considered, and may consider in the future, legislation that would restrict the duration or scope of the market exclusivity of an orphan drug, and, thus, we cannot be sure that the benefits to us of the existing statute in the United States will remain in effect. Furthermore, some court decisions have raised questions about FDA’s interpretation of the orphan drug exclusivity provisions, which could potentially affect our ability to secure orphan drug exclusivity.

If we lose our orphan drug designations or fail to obtain such designations for our new products and product candidates, our ability to successfully market our products could be significantly affected, resulting in a material adverse effect on our business and results of operations.

The commercial success of the products that we may develop, if any, will depend upon the degree of market acceptance by physicians, patients, healthcare payors, opinion leaders, patients’ organizations, and others in the medical community that any such product obtains.

Any products that we bring to the market may not gain market acceptance by physicians, patients, healthcare payors, opinion leaders, patients’ organizations and others in the medical community. If these products do not achieve an adequate level of acceptance, we may not generate material product revenue and we may not sustain profitability. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, some of which are beyond our control, including: