address any serious adverse events will require the dedication of
our time and capital, distract management from operating our
business, and may harm our reputation and financial results.
Our products,
once approved, may in the future be subject to product recalls. A
recall of our products, either voluntarily or at the direction of
the FDA, or the discovery of serious safety issues with our
products, could have a significant adverse impact on us.
If our products are approved for commercialization, the FDA and
similar foreign governmental authorities have the authority to
require the recall of commercialized products in the event of
material deficiencies or defects in design or manufacture. In the
case of the FDA, the decision to require a recall must be based on
an FDA finding that there is reasonable probability that the device
would cause serious injury or death. A government-mandated or
voluntary recall by us or one of our partners could occur as a
result of an unacceptable risk to health, component failures,
malfunctions, manufacturing errors, design or labeling defects, or
other deficiencies and issues. Recalls of any of our commercialized
products would divert managerial and financial resources and have
an adverse effect on our reputation, results of operations, and
financial condition, which could impair our ability to manufacture
our products in a cost-effective and timely manner in order to meet
our customers’ demands. We may also be subject to liability claims,
be required to bear other costs, or take other actions that may
have a negative impact on our future sales and our ability to
generate profits.
If we obtain
approval for our products, we may be subject to enforcement action
if we engage in improper marketing or promotion of our
products.
We are not permitted to promote or market our investigational
products. After approval, our promotional materials and training
methods must comply with FDA and other applicable laws and
regulations, including the prohibition of the promotion of
unapproved, or off-label, use. Surgeons may use our products
off-label, as the FDA does not restrict or regulate a surgeon’s
choice of treatment within the practice of medicine. However, if
the FDA determines that our promotional materials or training
constitutes promotion of an off-label use, it could request that we
modify our training or promotional materials or subject us to
regulatory or enforcement actions, including the issuance of an
untitled letter, a warning letter, injunction, seizure, civil fine,
or criminal penalties. It is also possible that other federal,
state, or foreign enforcement authorities might take action if they
consider our promotional or training materials to constitute
promotion of an off-label use, which could result in significant
fines or penalties under other statutory authorities, such as laws
prohibiting false claims for reimbursement. In that event, our
reputation could be damaged and adoption of the products could be
impaired. In addition, the off-label use of our products may
increase the risk of product liability claims. Product liability
claims are expensive to defend and could divert our management’s
attention, result in substantial damage awards against us, and harm
our reputation.
If we obtain
approval for our products, their commercial success will depend in
part upon the level of reimbursement we receive from third parties
for the cost of our products to users.
The commercial success of any product will depend, in part, on the
extent to which reimbursement for the costs of our products and
related treatments will be available from third-party payers such
as government health administration authorities, private health
insurers, managed care programs, and other organizations. Adequate
third-party insurance coverage may not be available for us to
establish and maintain price levels that are sufficient for us to
continue our business or for realization of an appropriate return
on investment in product development.
Legislative or
regulatory reform of the healthcare systems in which we operate may
affect our ability to commercialize our product candidates and
could adversely affect our business.
The government and regulatory authorities in the United States, the
European Union, and other markets in which we plan to commercialize
our product candidates may propose and adopt new legislation and
regulatory requirements relating to the approval, Conformité
Européenne (CE) or European Union marking, manufacturing,
promotion, or reimbursement of medical device and biologic
products. It is impossible to predict whether legislative changes
will be enacted or applicable regulations, guidance, or
interpretations changed, and what the impact of such changes, if
any, may be. Such legislation or regulatory requirements, or the
failure to comply with such, could adversely impact our operations
and could have a material adverse effect on our business, financial
condition, and results of operations.