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S-3
SEELOS THERAPEUTICS, INC. filed this Form S-3 on 02/01/2019
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  • restrictions on use in combination with other products;
  • availability of alternative treatments;
  • pricing and cost-effectiveness assuming either competitive or potential premium pricing requirements, based on the profile of Seelos' product candidates and target markets;
  • effectiveness of Seelos' or its partners' sales and marketing strategy;
  • Seelos' ability to obtain sufficient third-party coverage or reimbursement; and
  • potential product liability claims.

In addition, the potential market opportunity for Seelos' product candidates is difficult to precisely estimate. Seelos' estimates of the potential market opportunity for its product candidates include several key assumptions based on Seelos' industry knowledge, industry publications, third-party research reports and other surveys. Independent sources have not verified all of Seelos' assumptions. If any of these assumptions proves to be inaccurate, then the actual market for Seelos' product candidates could be smaller than Seelos' estimates of its potential market opportunity. If the actual market for Seelos' product candidates is smaller than Seelos expects, Seelos' product revenue may be limited, it may be harder than expected to raise funds and it may be more difficult for Seelos to achieve or maintain profitability. If Seelos fails to achieve market acceptance of Seelos' product candidates in the U.S. and abroad, Seelos' revenue will be limited and it will be more difficult to achieve profitability.

If Seelos fails to obtain and sustain an adequate level of reimbursement for its potential products by third-party payors, potential future sales would be materially adversely affected.

There will be no viable commercial market for Seelos' product candidates, if approved, without reimbursement from third-party payors. Reimbursement policies may be affected by future healthcare reform measures. Seelos cannot be certain that reimbursement will be available for its current product candidates or any other product candidate Seelos may develop. Additionally, even if there is a viable commercial market, if the level of reimbursement is below Seelos' expectations, Seelos' anticipated revenue and gross margins will be adversely affected.

Third-party payors, such as government or private healthcare insurers, carefully review and increasingly question and challenge the coverage of and the prices charged for drugs. Reimbursement rates from private health insurance companies vary depending on the company, the insurance plan and other factors. Reimbursement rates may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. There is a current trend in the U.S. healthcare industry toward cost containment.

Large public and private payors, managed care organizations, group purchasing organizations and similar organizations are exerting increasing influence on decisions regarding the use of, and reimbursement levels for, particular treatments. Such third-party payors, including Medicare, may question the coverage of, and challenge the prices charged for, medical products and services, and many third-party payors limit coverage of or reimbursement for newly approved healthcare products. In particular, third-party payors may limit the covered indications. Cost-control initiatives could decrease the price Seelos might establish for products, which could result in product revenues being lower than anticipated. Seelos believes its drugs will be priced significantly higher than existing generic drugs and consistent with current branded drugs. If Seelos is unable to show a significant benefit relative to existing generic drugs, Medicare, Medicaid and private payors may not be willing to provide reimbursement for Seelos' drugs, which would significantly reduce the likelihood of Seelos' products gaining market acceptance.

Seelos expects that private insurers will consider the efficacy, cost-effectiveness, safety and tolerability of Seelos' potential products in determining whether to approve reimbursement for such products and at what level. Obtaining these approvals can be a time consuming and expensive process. Seelos' business, financial condition and results of operations would be materially adversely affected if Seelos does not receive approval for reimbursement of its potential products from private insurers on a timely or satisfactory basis. Limitations on coverage could also be imposed at the local Medicare carrier level or by fiscal intermediaries. Medicare Part D, which provides a pharmacy benefit to Medicare patients as discussed below, does not require participating prescription drug plans to cover all drugs within a class of products. Seelos' business, financial condition and results of operations could be materially adversely affected if Part D prescription drug plans were to limit access to, or deny or limit reimbursement of, Seelos' product candidates or other potential products.

Reimbursement systems in international markets vary significantly by country and by region, and reimbursement approvals must be obtained on a country-by-country basis. In many countries, the product cannot be commercially launched until reimbursement is approved. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. The negotiation process in some countries can exceed 12 months. To obtain reimbursement or pricing approval in some countries, Seelos may be required to conduct a clinical trial that compares the cost-effectiveness of its products to other available therapies.

If the prices for Seelos' potential products are reduced or if governmental and other third-party payors do not provide adequate coverage and reimbursement of Seelos' drugs, Seelos' future revenue, cash flows and prospects for profitability will suffer.

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