Moreover, other legislative changes have
also been proposed and adopted in the United States since the Health Care Reform Law was enacted. On August 2, 2011, the Budget
Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit
Reduction, tasked with recommending a targeted deficit reduction of at least USD 1.2 trillion for the years 2013 through 2021,
was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.
This includes aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1,
2013. On January 2, 2013, former President Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which,
among other things, further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment
centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to
five years. These new laws may result in additional reductions in Medicare and other health care funding, which could have a material
adverse effect on our customers and accordingly, our financial operations.
Our business is subject to complex
and evolving U.S. and international laws and regulations regarding clinical trials reimbursement and privacy and data protection.
Many of these laws and regulations are subject to change and uncertain interpretation and could result in claims, changes to our
business practices, penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.
Regulatory authorities around the world
are considering a number of legislative and regulatory proposals concerning data protection, including measures to ensure that
encryption of users’ data does not hinder law enforcement agencies’ access to that data. In addition, the interpretation
and application of consumer and data protection laws in the U.S., Europe and elsewhere are often uncertain and in flux. It is possible
that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. These legislative and
regulatory proposals, if adopted, and such interpretations could, in addition to the possibility of fines, result in an order requiring
that we change our data practices, which could have an adverse effect on our business and results of operations. Complying with
these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse
to our business.
In the European Union, new clinical trial
regulations are scheduled to come into force in 2019. This new legislation will enforce the centralization of clinical trial applications
and approvals, which will eliminate redundancy, but in some cases this may extend timelines for clinical study approvals due to
potentially longer wait times. The new General Data Protection Regulation (GDPR), which became effective in May 2018 in all EU
Member States, has created a range of new compliance obligations for companies that process personal data of European Union residents.
Although it is expected that the GDPR will provide consistency across the territory of the EU, it imposes more onerous requirements
concerning consent and the obligations of sponsors of clinical trials (acting as Data Controllers), among other measures, which
may increase the costs and extend timelines of our product development efforts. Austerity measures in certain European nations
may also affect the prices we are able to seek if our products are approved, as discussed below. Furthermore, the decision of the
United Kingdom (UK) to withdraw from the European Union (EU) on March 29, 2019 will result in the relocation of the EMA in March
2019. While the EMA has developed and initiated a business continuity plan to deal with the uncertainty and workload implications
linked to the Agency’s relocation, it is likely that many of the Agency’s operations will be disrupted for a certain
period of time, resulting in reduced opportunities for scientific discussions on our product development plans and possible delays
for product approvals.
Both in the United States and in the European
Union, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional
activities for pharmaceutical products. We do not know whether additional legislative changes will be enacted, or whether the regulations,
guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates,
if any, may be.
We could be subject to liabilities under environmental,
health and safety laws or regulations, or fines, penalties or other sanctions, if we fail to comply with such laws or regulations
or otherwise incur costs that could have a material adverse effect on the success of our business.
We are subject to numerous environmental,
health and safety laws, regulations, and permitting requirements, including those governing laboratory procedures, decontamination
activities and the handling, transportation, use, remediation, storage, treatment and disposal of hazardous materials, human substances
and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials that
produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot
eliminate the risk of contamination or injury from these materials or wastes either at our sites or at third party disposal sites.
In the event of such contamination or injury, we could be held liable for any resulting damages, and any liability could exceed
our resources. We also could incur significant costs associated with civil or criminal fines and penalties. Although we maintain
workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting
from the use of hazardous materials, human substances or other work-related injuries, this insurance may not provide adequate coverage
against potential liabilities.