8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 19, 2018

ALBIREO PHARMA, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33451	90-0136863
(State or other jurisdiction of incorporation)	(Commission FilNumber)	(IRS Employer Identification No.)
10 Post Office Square, Suite 502 South Boston, Massachusetts		02109
(Address of principal executive offices)		(Zip Code)

(857) 254-5555

Registrant’s telephone number, including area code

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition.

On January 19, 2018, Albireo Pharma, Inc. (the “Company”) issued a press release announcing among other things that Japan’s Ministry of Health, Labour and Welfare (“MHLW”) has approved the new drug application for elobixibat for the treatment of chronic constipation in Japan (the “Elobixibat Japan Approval Release”). In the Elobixibat Japan Approval Release, the Company disclosed that, at December 31, 2017, the Company had approximately $53.5 million in cash and cash equivalents. This amount is preliminary, unaudited and subject to the completion of the audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2017 (the “Audited 2017 Financial Statements”). As a result, this amount may differ from the amount that will be reflected in the Audited 2017 Financial Statements. Additional information and disclosures are required for a more complete understanding of the Company’s financial position and results of operations as of December 31, 2017.

Item 8.01 Other Events.

On January 24, 2018, the Company issued a press release (the “Offering Release”) announcing the commencement of an underwritten public offering of its common stock pursuant to a shelf registration statement on Form S-3 (File No. 333-220958) declared effective by the Securities and Exchange Commission on December 5, 2017. In connection with the offering, the Company also announced its intention to grant the underwriters an option for a period of up to 30 days to purchase up to an additional 15% of the number of shares of common stock sold in the offering on the same terms and conditions. The Elobixibat Japan Approval Release and the Offering Release are attached hereto as Exhibits 99.1 and 99.2, respectively, and incorporated by reference in this Item 8.01.

On January 24, 2018, the Company filed with the Securities and Exchange Commission a preliminary prospectus supplement to its effective shelf registration statement on Form S-3 pursuant to Rule 424 under the Securities Act of 1933, as amended (the “Securities Act”), relating to the proposed public offering of shares of the Company’s common stock noted above. The preliminary prospectus supplement contains an updated summary description of the Company’s business in the section entitled “Prospectus Supplement Summary,” which is attached hereto as Exhibit 99.3 and incorporated herein by reference, and contains supplemental risk factors in the section entitled “Risk Factors,” which is attached hereto as Exhibit 99.4 and incorporated herein by reference.

This Current Report on Form 8-K, including the exhibits hereto, shall not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company, which is being made only by means of a written prospectus meeting the requirements of Section 10 of the Securities Act, nor shall there be any sale of the Company’s securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Press release dated January 19, 2018, announcing the MHLW’s approval of the new drug application for elobixibat for the treatment of chronic constipation in Japan.
99.2	Press release dated January 24, 2018, announcing a proposed public offering of common stock.
99.3	“Prospectus Supplement Summary” included in Albireo Pharma, Inc.’s preliminary prospectus supplement dated January 24, 2018 to the Registration Statement on Form S-3 (File No. 333-220958).
99.4	Supplemental risk factors included in Albireo Pharma, Inc.’s preliminary prospectus supplement dated January  24, 2018 to the Registration Statement on Form S-3 (File No. 333-220958).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ALBIREO PHARMA, INC.
Date: January 24, 2018		/s/ Ronald H.W. Cooper
		Ronald H.W. Cooper
		President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Albireo to Receive More than $55 Million(1) in Nondilutive Cash Payments

— Elobixibat approved in Japan for the treatment of chronic constipation —

— Albireo innovation leads to world’s first approved ileal bile acid transporter (IBAT) inhibitor —

BOSTON, Jan. 19, 2018 (GLOBE NEWSWIRE) — Albireo Pharma, Inc. (Nasdaq:ALBO), a clinical-stage orphan pediatric liver disease company developing novel bile acid modulators, today announced that Japan’s Ministry of Health, Labor and Welfare (MHLW) has approved the new drug application for elobixibat for the treatment of chronic constipation in Japan.

The approval of elobixibat in Japan triggers payments to Albireo subsidiary Elobix AB from EA Pharma Co., Ltd. under the terms of a license agreement and from HealthCare Royalty Partners (HCR), subject to customary closing conditions, under the terms of a royalty monetization agreement announced earlier this year, which together total more than $55 million¹. At December 31, 2017, Albireo had approximately $53.5 million in cash and cash equivalents.

“The approval of elobixibat in Japan marks the first approval of an IBAT inhibitor anywhere in the world and provides additional validation of the innovative science on which Albireo was founded and of the promise for patients offered by bile acid modulation,” said Ron Cooper, President and Chief Executive Officer of Albireo. “Albireo’s lead product candidate, A4250, is also an IBAT inhibitor, and we expect to initiate a planned Phase 3 study of A4250 for the treatment of patients with progressive familial intrahepatic cholestasis (PFIC) by the spring of this year.”

Elobixibat is a first-in-class, once-daily, orally available IBAT inhibitor targeted to improve secretion and motility in the large bowel. In clinical trials in Japan, patients treated with elobixibat experienced statistically significant improvement from baseline in the frequency of both spontaneous bowel movements (SBMs) and complete SBMs. Elobixibat is indicated in Japan for use in patients with chronic constipation (excluding constipation caused by organic disease). With the MHLW approval, elobixibat becomes only the second branded product labeled for the treatment of chronic constipation in Japan.

EA Pharma, a subsidiary of the global pharmaceutical company Eisai Co., Ltd. and the exclusive licensee of elobixibat for the treatment of gastrointestinal disorders in Japan and other select countries in Asia, plans in Japan to co-market elobixibat with Mochida Pharmaceutical Co., Ltd., and to co-promote elobixibat with Eisai, under the trade name GOOFICE^®. In addition to elobixibat, EA Pharma markets in Japan RECTABUL^® (budesonide foam formulation), an ulcerative colitis treatment agent, and Pariet^® (proton pump inhibitor) as a maintenance therapy for proton pump inhibitor-resistant reflux esophagitis. EA Pharma was established in 2016 upon the integration of the GI business unit of Eisai with Ajinomoto Pharmaceuticals Co., Ltd.

About Elobixibat

Elobixibat is a first-in-class product approved in Japan for the treatment of patients with chronic constipation (excluding constipation caused by organic disease). The normal adult dose is 10 mg of elobixibat once daily orally before a meal. The dose can be increased or decreased depending on the symptoms, with a maximum daily dose of 15 mg. Elobixibat is an inhibitor of the ileal bile acid transporter (IBAT, and also sometimes referred to as the apical sodium-dependent bile acid transporter) in the terminal ileum to increase secretion and motility in the large bowel without negatively affecting important functions in the small intestine. Elobixibat will be marketed and sold in Japan under the trade name GOOFICE^®.

About Albireo

Albireo Pharma is a clinical-stage biopharmaceutical company focused through its operating subsidiary on the development of novel bile acid modulators to treat orphan pediatric liver diseases and other liver and gastrointestinal diseases and disorders. Albireo’s clinical pipeline includes a Phase 3 product candidate for the treatment of patients with the orphan pediatric liver disease known as progressive familial intrahepatic cholestasis, as well as a Phase 2

product candidate. In addition, Albireo’s elobixibat, approved in Japan for the treatment of chronic constipation, is the first IBAT inhibitor approved anywhere in the world. Albireo was spun out from AstraZeneca in 2008. Albireo Pharma is located in Boston, Massachusetts, and its key operating subsidiary is located in Gothenburg, Sweden. For more information on Albireo, please visit www.albireopharma.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements, other than statements of historical fact, regarding: any payments that EA Pharma or HealthCare Royalty Partners (HCR) may make to Albireo or its subsidiaries; the commercial prospects for elobixibat in Japan; EA Pharma’s plans to co-market elobixibat in Japan with Mochida Pharmaceutical Co., Ltd. or to co-promote elobixibat with Eisai; plans for A4250, including the timing for initiation of the planned Phase 3 clinical trial in patients with PFIC; or Albireo’s plans, expectations or future operations, financial position, revenues, costs or expenses. Albireo often uses words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “planned,” “continue,” “guidance,” and similar expressions to identify forward-looking statements. Actual results, performance or experience may differ materially from those expressed or implied by any forward-looking statement as a result of various risks and uncertainties, including, but not limited to, risks and uncertainties relating to: market acceptance and commercial success of elobixibat in Japan; the occurrence of any event, change or other circumstances that could give rise to the termination of the royalty monetization agreement with HCR without payment to Albireo or its subsidiaries; the significant control that EA Pharma has over the commercialization of elobixibat in Japan; the timing for initiation of the planned Phase 3 trial of A4250 in patients with PFIC; and whether changes made in the process of finalizing the protocol for the planned Phase 3 trial of A4250 in patients with PFIC result in a delay in its initiation. These and other risks and uncertainties that Albireo faces are described in greater detail under the heading “Risk Factors” in Albireo’s most recent Annual Report on Form 10-K and in other filings that it makes with the Securities and Exchange Commission. As a result of risks and uncertainties that Albireo faces, the results or events indicated by any forward-looking statement may not occur. Albireo cautions you not to place undue reliance on any forward-looking statement. In addition, any forward-looking statement in this press release represents Albireo’s views only as of the date of this press release and should not be relied upon as representing its views as of any subsequent date. Albireo disclaims any obligation to update any forward-looking statement, except as required by applicable law.

Investor Contact:

Hans Vitzthum                

LifeSci Advisors, LLC.                

212-915-2568                 

Media Contact:

Heather Anderson

6 Degrees

980-938-0260

handerson@6degreespr.com

¹ Based on a Euro:USD currency exchange rate of 1:1.2239 as of January 18, 2018, subject to change.

EX-99.2

Exhibit 99.2

Albireo Announces Proposed Public Offering of Common Stock

BOSTON — January 24, 2018 — Albireo Pharma, Inc. (Nasdaq: ALBO), a clinical-stage orphan pediatric liver disease company developing novel bile acid modulators, announced today that it has commenced an underwritten public offering of its common stock. In connection with the offering, Albireo intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the number of shares of common stock sold in the offering. All of the shares in the offering will be sold by Albireo. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed or as to the actual size or terms of the offering.

Cowen and William Blair are acting as joint book-running managers and representatives of the underwriters for the offering. Needham & Company, Wedbush PacGrow and Roth Capital Partners are acting as co-managers.

The offering will be made only by means of a written prospectus and related prospectus supplement forming part of a shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission (SEC) on October 13, 2017, amended on November 16, 2017 and declared effective by the SEC on December 5, 2017. A preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the offering will be filed with the SEC and will be available at the SEC’s website located at www.sec.gov, copies of which may be obtained, when available, from Cowen and Company, LLC, c/o Broadridge Financial Services, 1155 Long Island Avenue, Edgewood, NY 11717, Attn: Prospectus Department, or by telephone at 631-274-2806, and from William Blair & Company, L.L.C., Attention: Prospectus Department, 150 North Riverside Plaza, Chicago, IL 60606, or by telephone at 1-800-621-0687 or email at prospectus@williamblair.com.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Albireo

Albireo Pharma is a clinical-stage biopharmaceutical company focused through its operating subsidiary on the development of novel bile acid modulators to treat orphan pediatric liver diseases and other liver and gastrointestinal diseases and disorders. Albireo’s clinical pipeline includes a Phase 3 product candidate for the treatment of patients with the orphan pediatric liver disease known as progressive familial intrahepatic cholestasis, as well as a Phase 2 product candidate. In addition, Albireo’s elobixibat, approved in Japan for the treatment of chronic constipation, is the first IBAT inhibitor approved anywhere in the world. Albireo was spun out from AstraZeneca in 2008.

Albireo Pharma is located in Boston, Massachusetts, and its key operating subsidiary is located in Gothenburg, Sweden.

Investor Contact:

Hans Vitzthum    

LifeSci Advisors, LLC.    

212-915-2568    

Media Contact:

Heather Anderson

6 Degrees

980-938-0260

handerson@6degreespr.com

EX-99.3

Exhibit 99.3

Prospectus Supplement Summary

Overview

We are a biopharmaceutical company focused on the development and commercialization of novel bile acid modulators to treat orphan pediatric liver diseases and other liver or gastrointestinal, or GI, diseases and disorders. The initial target indication for our lead product candidate, A4250, is progressive familial intrahepatic cholestasis, or PFIC, a rare, life-threatening genetic disorder affecting young children for which there is currently no approved drug treatment. We have completed a Phase 2 clinical trial in children with chronic cholestasis and we plan to initiate a Phase 3 clinical trial in patients with PFIC by the spring of 2018. In addition to PFIC, we plan to consider conducting future clinical development of A4250 as a treatment for one or more other pediatric cholestatic liver diseases and disorders. Our clinical-stage product candidates in addition to A4250 include elobixibat, which has received regulatory approval in Japan for the treatment of chronic constipation and which we are considering conducting clinical development of as a treatment for nonalcoholic steatohepatitis, or NASH, and A3384, which is a product candidate to treat bile acid malabsorption, or BAM. We also have a preclinical program in NASH.

Bile acids are a component of bile, a key digestive liquid made in the liver, that play a critical role in dietary absorption and the regulation of metabolic processes. Specifically, bile acids are recycled from the small intestine to the liver as part of a process known as enterohepatic circulation. When the flow of bile from the liver stops or is disrupted, a condition known as cholestasis, bile acids accumulate in the liver and in the serum, which is a component of blood. Elevated bile acids in the liver and serum often leads to severe liver damage and other consequences, including itching, or pruritus. A4250 partially inhibits a protein known as ileal sodium dependent bile acid transporter, or IBAT, which is responsible for initiating the recirculation of bile acids from the small intestine to the liver. As an IBAT inhibitor, A4250 acts to reduce serum bile acids and to increase bile acids being excreted through the colon. Elobixibat is also an IBAT inhibitor.

A4250—our lead product candidate for PFIC and potentially other orphan pediatric liver diseases.    A4250 is a novel, minimally absorbed, orally administered IBAT inhibitor. Our initial target indication for A4250 is PFIC. We have completed an open label, dose finding Phase 2 clinical trial in children with chronic cholestasis and we plan to initiate a Phase 3 clinical trial in patients with PFIC by the spring of 2018. The Phase 2 trial included children with chronic cholestasis caused by any of a number of different liver conditions, including PFIC, biliary atresia or Alagille syndrome, or ALGS. These data showed a reduction in serum bile acids in a substantial majority of patients and improvement in pruritus that was significantly correlated with the reduction in serum bile acids. In addition, A4250 was generally well tolerated in the trial.

∎ PFIC.    We plan to conduct a Phase 3 clinical trial of A4250 in patients with PFIC, as well as an open label extension study to assess long-term safety and durability of response. We plan to initiate a Phase 3 clinical trial in patients with PFIC by the spring of 2018. We have chosen

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PFIC as the lead indication for A4250 because we believe there is an especially strong scientific rationale for the use of an IBAT inhibitor to prevent progressive liver disease caused by PFIC. Our planned Phase 3 PFIC trial, which we expect to commence by the spring of 2018, is designed to be a randomized, double blind, placebo controlled, multicenter, clinical trial designed to enroll approximately 60 patients with PFIC (type 1 or 2). Patients will be assigned to receive either 40 µg (microgram) per kg per day or 120 µg per kg per day of A4250, or placebo, for 24 weeks. The primary endpoint for U.S. Food and Drug Administration, or FDA, evaluation, and a key secondary endpoint for European Medicines Agency, or EMA, evaluation, will be an assessment of change in pruritus. The primary endpoint for EMA evaluation, and a key secondary endpoint for FDA evaluation, will be serum bile acid responder rate where a responder is a patient who achieves either a reduction in serum bile acid levels of 70% or more from baseline or a reduction of serum bile acid levels at least to an absolute level that is specified in between 50 and 100 micromoles (µmol) per liter. As designed, the trial provides at least 80% power to detect a positive outcome on both the change in pruritus endpoint and the serum bile acid responder rate endpoint, with a positive outcome defined as superiority for either the 40 µg/kg/day A4250 dose group or the 120 µg/kg/day A4250 dose group compared to the placebo dose group at a significance level of p £ 0.025. The trial will also have several additional secondary endpoints. The planned double blind Phase 3 trial, together with available data from the then-ongoing extension study, are expected to form the primary support for drug approval applications for A4250 in both the United States and European Union for the treatment of patients with PFIC.

The precise prevalence of PFIC is unknown, but PFIC has been estimated to affect between one in every 50,000 to 100,000 children born worldwide. Based on the estimated incidence and need for liver transplant, published birth rates, and estimates of the effect of pediatric liver transplant on life expectancy, we estimate the prevalence of PFIC to be approximately 10,000 patients in major pharmaceutical markets, including approximately 3,200 in the United States and 5,000 in the European Union. There are currently no drugs approved for the treatment of PFIC. First-line treatment for PFIC is typically off-label ursodeoxycholic acid, or UDCA, which is approved in the United States and elsewhere for the treatment of primary biliary cholangitis, or PBC. However, many PFIC patients do not respond well to UDCA, undergo partial external bile diversion, or PEBD, surgery and often require liver transplantation. PEBD surgery is a life-altering and undesirable procedure in which bile is drained outside the body to a stoma bag that must be worn by the patient 24 hours a day. Of all PFIC patients, we believe A4250 will primarily benefit those who have not yet undergone PEBD surgery or liver transplant, as well as those who have had or may have surgery to reverse the PEBD procedure. Accordingly, we estimate the addressable PFIC patient population for A4250 to be approximately 1,200 patients in the United States and approximately 1,900 patients in the European Union.

In September 2017, we announced that we had agreed on a pediatric investigation plan, or PIP, for A4250 in patients with PFIC with the EMA’s Paediatric Committee. The agreed PIP includes our planned double blind, placebo controlled, Phase 3 study of A4250 in patients with PFIC and our completed Phase 2 study of A4250 in children with cholestatic liver disease described above, as well as a small clinical trial in neonates with PFIC, which will be deferred until after completion of the planned Phase 3 trial, and the development of a liquid formulation.

∎ Other Indications Under Consideration.    We intend to conduct future clinical development of A4250 as a treatment for other pediatric cholestatic liver diseases and disorders in addition to PFIC. These indications may include one or more of biliary atresia, ALGS and sclerosing cholangitis and pediatric cholestatic pruritus.

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Biliary atresia is a partial or total blocking or absence of large bile ducts that causes cholestasis and resulting accumulation of bile that damages the liver. The estimated worldwide incidence of biliary atresia is 18.5 per 100,000 births. There are currently no drugs approved for the treatment of biliary atresia. The current standard of care is a surgery known as the Kasai procedure, or hepatoportoenterostomy, in which the obstructed bile ducts are removed and a section of the small intestine is connected to the liver directly. However, only an estimated 25% of those initially undergoing the Kasai procedure will survive to their twenties without need for liver transplantation.

ALGS is a genetic condition associated with liver, heart, eye and skeletal abnormalities. In particular, ALGS patients have fewer than normal bile ducts inside the liver, which leads to cholestasis and the accumulation of bile and causes scarring in the liver. The prevalence of ALGS has been estimated to be one in 70,000 newborns. There are currently no drugs approved for the treatment of ALGS. Current treatment for ALGS is generally in line with current treatments for PFIC as described above.

Sclerosing cholangitis refers to swelling (inflammation), scarring, and destruction of bile ducts inside and outside of the liver. The first symptoms are typically fatigue, itching and jaundice, and many patients with sclerosing cholangitis also suffer from inflammatory bowel disease. The estimated incidence of sclerosing cholangitis is 6.3 cases per 100,000 people. There are currently no drugs approved for the treatment of sclerosing cholangitis. First-line treatment is typically off-label UDCA, although UDCA has not been established to be safe and effective in patients with sclerosing cholangitis in well controlled clinical trials.

Pediatric cholestatic pruritus refers to pruritus symptoms in children suffering from any disease or condition characterized by chronic cholestasis. Severe pruritus is a debilitating symptom afflicting cholestatic patients and, although pruritus cannot reliably be relieved by scratching, patients often resort to destructive scratching behaviors that can cause bleeding and scarring. Cholestatic liver disease has been estimated to affect approximately one in 2,500 newborns worldwide, and, based on reported rates of pruritus across several different causes of pediatric cholestasis, we estimate pruritus to affect approximately 45% of all children with cholestatic liver disease. There are currently no drugs approved specifically for the treatment of pediatric cholestatic pruritus.

Other Product Candidates—Elobixibat and A3384.

∎ Elobixibat as a treatment for chronic constipation.    Elobixibat is another novel, minimally absorbed, orally administered IBAT inhibitor. We have granted commercial rights to elobixibat for the treatment of chronic constipation and other GI diseases in Japan and other select markets in Asia to EA Pharma Co., Ltd. (formerly known as Ajinomoto Pharmaceuticals Co., Ltd.), or EA Pharma, a company formed by a business combination between Ajinomoto Pharmaceuticals and the GI business of Eisai Co., Ltd. (Eisai). EA Pharma plans to co-market elobixibat in Japan with another company, Mochida Pharmaceutical Co., Ltd., and to co-promote elobixibat in Japan with Eisai.

In January 2018, the Japanese Ministry of Health, Labour and Welfare, or MHLW, approved a new drug application filed by EA Pharma for elobixibat for the treatment of chronic constipation. The MHLW approval triggers approximately $55 million in payments to us, including €9 million from EA Pharma under our 2012 license agreement and, subject to customary closing conditions, $45 million from HealthCare Royalty Partners III, L.P., or HCR, under a royalty interest acquisition agreement that we entered into in December 2017.

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Under the royalty interest acquisition agreement with HCR, we are eligible for a $15 million payment if a specified sales milestone is achieved for elobixibat in Japan, in addition to the $45 million payment described above. In return, we sold to HCR our right to receive all royalties and sales milestones for elobixibat in Japan that may become payable by EA Pharma pursuant to our license agreement with EA Pharma, up to a specified maximum amount equal to 175% of the amount paid by HCR to us under the agreement plus certain patent-related expenses (if such patent-related expenses become payable by HCR). If the maximum amount is reached, we will again become eligible to receive royalties and sales milestones for elobixibat from EA Pharma under the terms of the license agreement.

We have commercial rights to elobixibat in the United States, Europe, China and otherwise outside of the territories licensed to EA Pharma. We do not have any current plan to seek a license or other partnering transaction with a third party for elobixibat for chronic constipation in the United States or Europe. Whether or not we elect to seek such a transaction, we do not currently anticipate that we will conduct future clinical trials of elobixibat as a treatment for chronic constipation independently.

∎ Elobixibat as a treatment for NASH.    Based on findings on parameters relevant to NASH in clinical trials of elobixibat that we previously conducted in patients with chronic constipation and in patients with elevated cholesterol and findings on other parameters relevant to NASH from nonclinical studies that we previously conducted with elobixibat or a different IBAT inhibitor, we believe elobixibat has potential benefit in the treatment of NASH. In particular, in a clinical trial in dyslipidemia patients, elobixibat given for four weeks reduced low-density lipoprotein (LDL) cholesterol, with the occurrence of diarrhea being substantially the same as the placebo group. Also, in other clinical trials in constipated patients, elobixibat given at various doses and for various durations reduced LDL-cholesterol and, in one trial, increased levels of glucagon-like peptide 1 (GLP-1). Moreover, A4250 (an IBAT inhibitor) showed significant improvement (p < 0.05) on the nonalcoholic fatty liver disease activity score in an established model of NASH in mice known as the STAM™ model and improvement in liver inflammation and fibrosis in another preclinical mouse model. If our pending method of use patent for elobixibat in NASH issues in the United States, we may conduct a Phase 2 clinical trial of elobixibat in NASH. If we elect to conduct a Phase 2 clinical trial of elobixibat in NASH, we expect to initiate the trial by the first quarter of 2019.

∎ A3384.    A3384 is a proprietary formulation of cholestyramine that is designed to release cholestyramine directly in the colon. We may conduct either or both of a Phase 2 clinical trial of A3384 as a treatment for BAM, if our pending formulation-related patents for A3384 issue in the United States, or a clinical trial in healthy volunteers to assess A3384’s drug-drug interaction profile. If we elect to conduct a clinical trial of A3384, we expect to initiate the trial by the end of 2018. BAM, which is sometimes also called bile acid diarrhea, occurs when bile acids are overproduced or are not sufficiently reabsorbed in the small intestine, causing elevated levels of bile acids to instead reach the colon and leading to chronic watery diarrhea. Based on a reported estimate of the prevalence of irritable bowel syndrome with diarrhea, or IBS-D, and published third-party studies that suggest approximately one-third of IBS-D patients have BAM, we estimate the prevalence of BAM to be approximately 1.3 million people in the United States and approximately 2.2 million people in the European Union. There are currently no drugs approved in the United States for the treatment of BAM.

Cholestyramine, which is approved in some countries in Europe to treat diarrhea associated with certain GI conditions, is commonly prescribed off-label to treat BAM. Cholestyramine is a well characterized bile acid sequestrant, which is also known as a resin. The benefit of cholestyramine has historically been limited both because of poor tolerability and because of its negative effect on

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absorption of other medications and important fat soluble vitamins. We believe that a better tolerated formulation that is capable of delaying the activity of cholestyramine until it reaches the colon has potential to provide therapeutic benefit for patients with BAM.

In addition to our clinical-stage product candidates, we have a preclinical program in NASH.

Our Pipeline

The following table summarizes our most advanced product candidates and programs:

Our Strategy

Our goal is to be a leader in the development and commercialization of novel therapeutics for orphan pediatric cholestatic liver diseases and disorders where there is high unmet medical need, while also leveraging our expertise in bile acid modulation to treat other liver and GI diseases and disorders. To achieve our goal, we intend to pursue the following strategies.

∎ Rapidly develop A4250 to marketing approval to treat patients with PFIC.    It is our objective to conduct a single Phase 3 clinical trial in patients with PFIC that, together with available data from a then-ongoing long-term, open label extension study, forms the primary support for applications for marketing approval of A4250 in both the United States and European Union.

∎ Maximize the benefit and commercial potential of A4250 by considering expanding development to additional orphan pediatric cholestatic indications.    Although we have chosen PFIC as our lead indication for A4250, we also believe A4250 can benefit children suffering from other cholestatic diseases and disorders. We plan to consider conducting future clinical development of A4250 as a treatment for one or more of these other pediatric cholestatic liver diseases and disorders in addition to PFIC to help address these unmet medical needs and to maximize the commercial potential of A4250.

∎ Develop the capability to commercialize A4250 to treat orphan pediatric liver diseases, if approved, through a targeted sales force in the United States and Europe and collaborate selectively to commercialize A4250 outside of these regions.    If we receive marketing approval in the United States or Europe for A4250 to treat patients with PFIC or any other pediatric cholestatic liver disease or disorder, we plan to build the capabilities to effectively commercialize A4250 in the approved indication(s) in the applicable region. We believe that the required commercial organization would be modest in size and targeted to the

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relatively small number of specialists in the United States and Europe who treat children with cholestatic liver disease. If we receive marketing approval outside of the United States and Europe for A4250 to treat patients with PFIC or any other pediatric cholestatic liver disease or disorder, we plan to selectively utilize collaboration, distribution and other marketing arrangements with third parties to commercialize A4250 in the approved indication(s) in the regions outside the United States or Europe where we receive approval.

∎ Collaborate selectively to develop and commercialize product candidates targeting nonorphan indications, potentially including elobixibat, A3384 or any future product candidate to treat NASH.    We intend to selectively seek alliances and collaborations to assist us in furthering the development or commercialization of product candidates targeting large primary care markets that must be served by large sales and marketing organizations. These product candidates may include any or all of A3384, any potential future product candidate that arises from our preclinical program in NASH, and elobixibat.

Risks Relating to Our Business

We are a biopharmaceutical company, and our business and ability to execute our business strategy are subject to a number of significant risks of which you should be aware before you decide to buy shares of our common stock. Among these important risks are the following:

∎ We have incurred significant losses since our inception. We expect to continue to incur losses and may never generate profits from operations or maintain profitability.

∎ Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

∎ We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

∎ We depend heavily on the success of our lead product candidate, A4250, which we are developing initially for the treatment of patients with PFIC and potentially also for other pediatric cholestatic liver diseases and disorders. If we are unable to commercialize A4250 or experience significant delays in doing so, our business will be materially harmed.

∎ If clinical trials of A4250 or any of our other product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA or the EMA, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of the applicable product candidate.

∎ Favorable results seen to date in clinical trials of A4250, including our open label Phase 2 trial of A4250 in patients with cholestatic liver disease, may not be predictive of favorable results in our planned Phase 3 clinical trial of A4250 in patients with PFIC, which will be placebo controlled and involve different doses, treatment duration, number of patients and outcome measures and may have other differences in design or execution.

∎ We plan to use change in pruritus as the primary endpoint for purposes of FDA evaluation in our planned Phase 3 trial in PFIC patients. Because the assessment of pruritus relies on subjective patient or caregiver feedback, it is challenging to evaluate and measure consistently and, for any patient, a self-reported outcome may vary from a caregiver-reported outcome.

∎ The clinical trial designs, durations, endpoints and outcomes that will ultimately be required to obtain marketing approval of A4250 to treat PFIC patients are uncertain and, in any case, may vary among the FDA, EMA and other regulatory authorities outside of the United States and European Union. Based on feedback that we have received from the FDA and the EMA, we

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expect both regulatory authorities to place a greater emphasis on the totality of the data from our planned Phase 3 clinical trial, including secondary endpoints, than may generally be expected. As a result, there is risk that, even if the primary endpoint of our planned Phase 3 clinical trial of A4250 for FDA evaluation purposes or for EMA evaluation purposes is met with statistical significance, the applicable regulatory authority may not find the overall results of our planned Phase 3 trial to be sufficient to support marketing approval of A4250 to treat PFIC, a symptom of PFIC such as pruritus or any other indication, and we may never receive marketing approval. Similar risks also apply for A3384, which is a product candidate for the treatment of BAM.

∎ The design of our planned Phase 3 clinical trial of A4250 in patients with PFIC does not conform precisely in all respects to the recommendations or preferences expressed by either the FDA or EMA.

∎ If we experience delays or difficulties in the enrollment of patients in our planned Phase 3 clinical trial of A4250 in patients with PFIC, our receipt of marketing approval for A4250 could be delayed or prevented.

∎ If the commercial opportunity in PFIC is smaller than we anticipate, or if A4250 receives approval to treat only a specific subpopulation of patients with PFIC or only a specific symptom of PFIC such as pruritus, our future revenue from A4250 may be adversely affected and our business may suffer.

∎ If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell A4250 or any of our other current or potential future product candidates, we may not be successful in commercializing the applicable product candidate if it receives marketing approval.

∎ We face substantial competition, which may result in others discovering, developing or commercializing products to treat our target indications or markets before or more successfully than we do.

∎ We rely on EA Pharma for the successful commercialization of elobixibat to treat chronic constipation in Japan and other select markets in Asia. If EA Pharma does not successfully commercialize elobixibat in Japan, we may not receive any future payments under our royalty interest acquisition agreement with HCR or our license agreement with EA Pharma.

∎ We rely on third parties to conduct our clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such clinical trials.

∎ Use of third parties to manufacture our product candidates may increase the risk that we will not have sufficient quantities of our product candidates or products or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

∎ If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be adversely affected.

∎ Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

∎ Even if we complete the necessary clinical trials, the marketing approval process is expensive, time consuming and uncertain and may prevent us from obtaining approvals for the commercialization of some or all of our product candidates. If we are not able to obtain, or if there are delays in obtaining, required marketing approvals, we will not be able to commercialize our product candidates, and our ability to generate revenue will be materially impaired.

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For additional information about the risks we face, please see the information contained in or incorporated by reference under “Risk Factors” in this prospectus supplement and the accompanying prospectus.

Corporate Information

Prior to November 3, 2016, we were a specialty biopharmaceutical company known as Biodel Inc. that historically had been focused on the development and commercialization of innovative treatments for diabetes. Biodel was originally incorporated in the State of Delaware in December 2003 under the name “Global Positioning Group, Ltd.” and subsequently changed its name to “Biodel Inc.” Albireo Limited was formed in connection with a spinout transaction from AstraZeneca AB in 2008 in which AstraZeneca assigned to Albireo AB all of its rights in and to its portfolio of IBAT inhibitors, including elobixibat and A4250, as well as other preclinical assets.

On November 3, 2016, we completed a share exchange transaction, or the Transaction, pursuant to an Amended and Restated Share Exchange Agreement dated July 13, 2016 that we entered into with Albireo Limited and the shareholders and noteholders of Albireo Limited. In the Transaction, each holder of Albireo Limited shares or notes convertible into Albireo Limited shares sold their shares of Albireo Limited for newly issued shares of our common stock. As a result, Albireo Limited became a wholly owned subsidiary of Biodel, Biodel’s corporate name was changed to Albireo Pharma, Inc., the business of Albireo Limited became our business and we became a biopharmaceutical company focused on the development and commercialization of novel bile acid modulators to treat orphan pediatric liver diseases and gastrointestinal disorders.

Our corporate headquarters are located at 10 Post Office Square, Suite 502 South, Boston, Massachusetts 02109 and our telephone number is (857) 254-5555. We also have an office in Gothenburg, Sweden. We maintain a website at www.albireopharma.com, to which we regularly post copies of our press releases as well as additional information about us. The information contained on, or that can be accessed through, our website is not a part of this prospectus supplement or the accompanying prospectus. We have included our website address in this prospectus supplement solely as an inactive textual reference.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are available free of charge through the investor relations page of our internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

All brand names or trademarks appearing in this prospectus supplement and the accompanying prospectus are the property of their respective holders. Use or display by us of other parties’ trademarks, trade dress, or products in this prospectus supplement and the accompanying prospectus is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners.

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EX-99.4

Exhibit 99.4

Supplemental Risk Factors

Risks Related to Our Business

Favorable results seen to date in clinical trials of A4250, including our open label Phase 2 trial of A4250 in patients with cholestatic liver disease, may not be predictive of favorable results in our planned Phase 3 clinical trial of A4250 in patients with PFIC, which will be placebo controlled and involve different doses, treatment duration, number of patients and outcome measures and may have other differences in design or execution.

A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later-stage clinical trials, even after promising results in earlier trials or in preclinical studies. Similarly, companies have experienced disappointing outcomes in later phases of a multiphase clinical trial, even after promising results in an early phase of the trial. A4250 has been evaluated in an open label Phase 2 trial in children with chronic cholestasis and in an investigator-initiated Phase 2 clinical trial for the treatment of PBC. Data from our Phase 2 trial in children with chronic cholestasis showed a reduction in serum bile acids in a substantial majority of patients and improvement in pruritus that was significantly correlated with the reduction in serum bile acids. In addition, based on data from the PBC trial that we received from the investigator, nine patients with pruritus received A4250 and all of them reported a reduction in pruritus. If the favorable findings on pruritus and serum bile acids seen in these two Phase 2 trials are not replicated in our planned trial of A4250 in patients with PFIC or in any other future trial of A4250 in patients with PFIC or other pediatric cholestatic liver disease or disorder, we may not obtain marketing approval for A4250 to treat any indication, in which case our business would be materially and adversely affected.

Our planned Phase 3 trial of A4250 in patients with PFIC will involve a greater number of patients, different outcome measures, doses and treatment duration and may have other differences in trial design, in addition to the difference in patient population, compared with either the pediatric chronic cholestasis trial or the PBC trial. For example, our planned Phase 3 trial of A4250 in patients with PFIC will be a randomized, double blind, placebo controlled, multicenter, clinical trial designed to enroll approximately 60 patients with PFIC (type 1 or 2), with a treatment duration of 24 weeks. The primary endpoint for FDA evaluation, and a key secondary endpoint for EMA evaluation, will be an assessment of change in pruritus. The primary endpoint for EMA evaluation, and a key secondary endpoint for FDA evaluation, will be serum bile acid responder rate, where a responder is a patient who achieves either a reduction in serum bile acid levels of 70% or more from baseline or a reduction of serum bile acid levels at least to an absolute level that is specified in between 50 and 100 µmol/l. Although we have assessed the effects of A4250 on serum bile acids in prior clinical trials of A4250, we have not

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previously utilized this serum bile acid responder rate endpoint. Moreover, we do not have any prior data regarding the effect of a placebo in patients with PFIC on serum bile acid levels, pruritus or any other outcome variable to guide the planning for our planned Phase 3 PFIC trial, which increases the risk that the trial will not be powered adequately to show a statistically significant separation between A4250 and placebo.

Furthermore, the specific patient-reported or caregiver-reported measures used to assess change in pruritus can vary from trial to trial. For example, the pruritus scales that were used in the PBC trial are not the same as the scales used in our trial in children with chronic cholestasis, except that the visual analogue scale of itching, known as VAS-itch, is common to both trials. To assess change in pruritus in our planned Phase 3 trial of A4250 in patients with PFIC, we plan to use patient-reported and caregiver-reported outcome instruments that we have developed taking into account input from PFIC patients and their caregivers, which employ or rely on different questions or assessments, require a different outcome to establish a positive response or are otherwise different from the outcome instruments used in our Phase 2 trial in children with chronic cholestasis. The differences in these instruments may reduce the likelihood that data from the Phase 2 trials of A4250 in children with chronic cholestasis or in PBC patients will be predictive of favorable results in the planned Phase 3 PFIC trial.

In addition, the doses of A4250 to be evaluated in our planned Phase 3 trial for some PFIC patients may not be precisely the same as the weight-based doses that we evaluated in our Phase 2 trial of A4250 in children with chronic cholestasis. Although we expect that patients in the planned trial of approximately the same weight will receive the same total dose of A4250, any difference in relative weights between particular patients will result in a difference in weight-based doses between those patients. This may reduce the likelihood that weight-based data from the Phase 2 trial will be predictive of favorable results in our planned PFIC trial.

We plan to use change in pruritus as the primary endpoint for purposes of FDA evaluation in our planned Phase 3 trial in PFIC patients. Because the assessment of pruritus relies on subjective patient or caregiver feedback, it is challenging to evaluate and measure consistently and, for any patient, a self-reported outcome may vary from a caregiver-reported outcome.

The primary endpoint in our planned Phase 3 trial of A4250 in patients with PFIC, for FDA evaluation, and a key secondary endpoint for EMA evaluation, will be an assessment of change in pruritus. Because the assessment of pruritus relies on subjective patient or caregiver feedback, it is challenging to evaluate and measure consistently and, for any patient, a self-reported outcome may vary from a caregiver-reported outcome. The measure of pruritus can be influenced by factors outside of our control and can vary widely from measurement point to measurement point for a particular patient, from patient to patient and from site to site within a clinical trial. Moreover, patients given an inactive comparator, or placebo, in a clinical trial may perceive a change in pruritus that is greater than we anticipated when designing the trial or that is comparable to the change experienced by patients given A4250, which could obscure the effect of A4250 in the trial and reduce the likelihood that the trial will be successful. In addition, the FDA or EMA may determine that the patient-reported outcome instrument or the caregiver-reported outcome instrument that we use in our planned Phase 3 trial to assess pruritus is not adequately reliable or valid for use with PFIC patients, which would delay and potentially prevent our receipt of marketing approval for A4250.

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The clinical trial designs, durations, endpoints and outcomes that will ultimately be required to obtain marketing approval of A4250 to treat PFIC patients are uncertain and, in any case, may vary among the FDA, EMA and other regulatory authorities outside of the United States and European Union. Based on feedback that we have received from the FDA and the EMA, we expect both regulatory authorities to place a greater emphasis on the totality of the data from our planned Phase 3 clinical trial, including secondary endpoints, than may generally be expected. As a result, there is risk that, even if the primary endpoint of our planned Phase 3 clinical trial of A4250 for FDA evaluation purposes or for EMA evaluation purposes is met with statistical significance, the applicable regulatory authority may not find the overall results of our planned Phase 3 trial to be sufficient to support marketing approval of A4250 to treat PFIC, a symptom of PFIC such as pruritus or any other indication, and we may never receive marketing approval. Similar risks also apply for A3384, which is a product candidate for the treatment of BAM.

No product is currently approved for the treatment of either of PFIC or BAM in the United States or for the treatment of PFIC in the European Union or, to our knowledge, any other jurisdiction. There is limited clinical experience in PFIC and in BAM. Accordingly, there is not a well-established development path that, with positive outcomes in clinical trials, would be reasonably assured of receiving marketing approval for these indications.

Our planned Phase 3 PFIC program includes a single randomized, double blind, placebo controlled, multicenter clinical trial and an open label long-term extension study. The double blind trial is designed to enroll approximately 60 patients with PFIC (type 1 or 2), ages six months to 18 years, at sites in the United States, Canada, Europe, the Middle East and Australia. Patients will be assigned to receive either 40 µg/kg/day or 120 µg/kg/day of A4250, or placebo, for 24 weeks. Patients taking a stable dose of medication to manage pruritus when entering the trial will be permitted to continue such background medication during the trial, subject to specified exceptions. The trial will have a primary endpoint for U.S. purposes, a different primary endpoint for E.U. purposes, and several secondary endpoints, including progression to surgery, change in growth markers and liver biochemistry variables, and others. The primary endpoint for FDA evaluation, and a key secondary endpoint for EMA evaluation, will be an assessment of change in pruritus using a proprietary tool that we have developed. The trial’s primary endpoint for EMA evaluation, and a key secondary endpoint for FDA evaluation, will be serum bile acid responder rate, where a responder is a patient who achieves either a reduction in serum bile acid levels of 70% or more from baseline or a reduction of serum bile acid levels at least to an absolute level that is specified in between 50 and 100 µmol/l. Patients in the trial will have the opportunity to participate in the open label extension study to assess long-term safety and durability of response.

Based on feedback that we have received from the FDA and the EMA, we expect both regulatory authorities to place a greater emphasis on the totality of the data from our planned Phase 3 clinical trial, including secondary endpoints, than may generally be expected. As a result, there is risk that, even if the primary endpoint of our planned Phase 3 clinical trial of A4250 for FDA evaluation purposes or for EMA evaluation purposes is met with statistical significance, the applicable regulatory authority may not find the overall results of our planned Phase 3 trial to be sufficient to support marketing approval of A4250 to treat PFIC, a symptom of PFIC such as pruritus or any other indication, and we may never receive marketing approval.

Furthermore, the FDA has informed us that showing a clinically meaningful effect only on pruritus could support approval for the treatment of pruritus associated with PFIC and has indicated to us that meaningful improvements on one or more additional clinical benefit endpoints and/or corroborative real- world clinical evidence would be required to support approval for the treatment of PFIC itself. Certain secondary endpoints that we expect to use in our planned Phase 3 trial may be considered clinical benefit endpoints, including progression to surgery and change in growth markers. The

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likelihood that a treatment duration of 24 weeks will be long enough for a placebo controlled trial to demonstrate an effect of A4250 on any particular clinical benefit endpoint is uncertain, and, if not, FDA approval of A4250 could be limited to the treatment of pruritus in PFIC patients, if A4250 is approved at all.

To support marketing approval of a drug, the FDA requires a demonstration of efficacy based on an endpoint reflecting clinical benefit. However, under Subpart H regulations, the FDA can grant accelerated approval based on a surrogate endpoint that is reasonably likely to predict clinical benefit. If we elect to seek accelerated approval under Subpart H, the FDA (or EMA under its regulations) may determine that the surrogate endpoint, or that the outcome shown in the planned trial on the surrogate endpoint, does not establish a reasonable likelihood of predicting clinical benefit or otherwise is not sufficient to support approval, even if the surrogate endpoint is met with statistical significance. For example, if we pursue an accelerated approval of A4250 under Subpart H and the results of the change in pruritus endpoint are not of a magnitude that will be clearly meaningful, it is possible that the FDA will not consider the result to be sufficient to support approval under the Subpart H pathway. If this occurs, our business would be materially harmed.

In addition, if we pursue an accelerated approval under Subpart H for A4250, we will be required to conduct a post-approval clinical outcomes trial to confirm its clinical benefit in PFIC. Whether our planned open label extension study will meet this requirement is uncertain. If not, and if we pursue accelerated approval under Subpart H, we would need to conduct an additional study, which is not currently planned. There can be no assurance that our open label extension study or any other post-approval trial that we conduct will confirm that the surrogate endpoint used for accelerated approval will show an adequate correlation with clinical outcomes. If a clinical outcomes confirmatory trial that we conduct fails to show such adequate correlation, we may not be able to maintain any previously granted marketing approval for A4250 in PFIC that we may obtain.

We have selected serum bile acid responder rate as the primary endpoint for purposes of EMA evaluation and as a key secondary endpoint for FDA evaluation. To support the clinical utility of reduction in serum bile acids in the treatment of patients with PFIC, we are supporting an independent study pooling and analyzing long-term PFIC patient data from a number of leading PFIC academic centers, which we refer to as the PFIC Study Group. Should the data that are being accumulated by the PFIC Study Group come to a different conclusion than we anticipate about the relationship of serum bile acids to beneficial clinical outcomes, the EMA or the FDA may determine the results of the Phase 3 PFIC study not to be adequate to support approval.

Also, it is possible that any marketing authorization we may receive in the future from the EMA for A4250 for the treatment of PFIC could be conditional on post-authorization studies and not be considered a full authorization. Our ability to obtain and maintain conditional marketing authorization in the European Union will be limited to specific circumstances and subject to several conditions and obligations, if obtained at all, including the completion of a clinical outcomes trial to confirm the clinical benefit of A4250 in PFIC. Conditional marketing authorizations based on incomplete clinical data may be granted for a limited number of listed medicinal products for human use, including products designated as orphan medicinal products under European Union law, if (1) the risk-benefit balance of the product is positive, (2) it is likely that the applicant will be in a position to provide the required comprehensive clinical trial data, (3) unmet medical needs will be fulfilled and (4) the benefit to public health of the immediate availability on the market of the medicinal product outweighs the risk inherent in the fact that additional data are still required. Specific obligations, including with respect to the completion of ongoing or new studies, and with respect to the collection of pharmacovigilance data, may be specified in the conditional marketing authorization. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions.

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The FDA and EMA generally require two pivotal clinical trials to support marketing approval of a drug. It is our objective to conduct a single Phase 3 clinical trial in patients with PFIC that, together with data from a long-term, open label extension study, forms the primary support for applications for marketing approval of A4250 in both the United States and European Union for treatment of patients with PFIC. If the FDA or EMA requires us to conduct additional clinical trials beyond the ones that we currently contemplate in order to support marketing approval of A4250 to treat patients with PFIC in the United States or European Union, it would result in a more expensive and potentially longer development program for A4250 than we currently contemplate, which could delay our ability to generate product revenues with A4250, interfere with our ability to enter into any potential licensing or collaboration arrangements with respect to this program, cause our value to decline, and limit our ability to obtain additional financing that may be necessary to complete the planned pivotal program. Even though it is our objective to conduct a single Phase 3 trial of A4250 as the basis, together with safety data from an extension study to evaluate long-term outcomes, for an application for marketing approval for A4250 in PFIC, either the FDA or the EMA may require that we meet the primary endpoint or endpoints in the trial at a higher level of statistical significance than would otherwise be required for a trial to be successful, which would reduce the likelihood of a positive trial.

Likewise, if we conduct any future clinical trial designed to support marketing approval of A3384 as a treatment for BAM, the FDA, EMA or any regulatory authority outside of the United States or the European Union may determine that the designs or endpoints of the trial, or that the outcomes shown on any particular endpoints in the trial, are not sufficient to establish a clinically meaningful benefit for A3384 in the treatment of BAM or otherwise to support marketing approval, even if the primary endpoint or endpoints of the trial is met with statistical significance.

The design of our planned Phase 3 clinical trial of A4250 in patients with PFIC does not conform precisely in all respects to the recommendations or preferences expressed by either the FDA or EMA.

Although the feedback on our proposed Phase 3 clinical trial in patients with PFIC that we have received from the FDA and EMA is generally consistent, it is not identical and the design of our planned Phase 3 clinical trial of A4250 in patients with PFIC does not conform precisely in all respects to the recommendations or preferences expressed by either regulatory authority. As a result, there is increased risk that, even if we view the results of our planned trial as favorable, the FDA or EMA may not find the overall results to be sufficient to support marketing approval of A4250 to treat PFIC, a symptom of PFIC such as pruritus or any other indication.

If the commercial opportunity in PFIC is smaller than we anticipate, or if A4250 receives approval to treat only a specific subpopulation of patients with PFIC or only a specific symptom of PFIC such as pruritus, our future revenue from A4250 may be adversely affected and our business may suffer.

If the size of the commercial opportunities in any of our target indications is smaller than we anticipate, we may not be able to achieve profitability and growth. We are developing A4250 initially as a treatment for patients with PFIC and potentially also as a treatment for patients with other pediatric cholestatic liver diseases and disorders. PFIC and these other diseases and disorders are each rare, with a limited patient population. Moreover, we expect that the addressable PFIC patient population for A4250 is only a subset of the overall patient population, specifically patients who have not yet received partial external biliary diversion, or PEBD, surgery or liver transplant surgery or patients who have had PEBD reversal surgery. We are not aware of any available patient registries for PFIC, and we rely on various estimates and assumptions to estimate the addressable PFIC population. In addition, there are different subtypes of PFIC and the beneficial effects of A4250 may vary among patients with different subtypes or among children of different ages. Our planned Phase 3 clinical trial will enroll patients with PFIC types 1 and 2, but not PFIC type 3. A4250 may ultimately receive regulatory approval, if at all, as

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a treatment for some but not all of the subtypes, or for children of some ages but not others. Moreover, we plan to use change in pruritus as the primary endpoint of our planned Phase 3 trial for purposes of FDA evaluation. The FDA has informed us that showing a clinically meaningful effect only on pruritus could support approval for the treatment of pruritus associated with PFIC and has indicated to us that meaningful improvements on one or more additional clinical benefit endpoints and/or corroborative real-world clinical evidence would be required to support approval for the treatment of PFIC itself. If the commercial opportunity in PFIC is smaller than we anticipate, whether because our estimates of the addressable patient population prove to be incorrect, because A4250 receives marketing approval, if at all, as a treatment for some but not all PFIC subtypes, for children of some ages but not others, for pruritus associated with PFIC but not PFIC itself or for any other reason, our future revenue from A4250 may be adversely affected and our business may suffer.

It is critical to our ability to grow and become profitable that we successfully identify patients with PFIC and any other rare cholestatic liver diseases and disorders that we may target in the future. Our projections of the number of people who have PFIC or our other potential target cholestatic liver diseases and disorders, as well as the subset who have the potential to benefit from treatment with A4250, are based on a variety of sources, including third-party estimates and analyses in the scientific literature, and may prove to be incorrect. Further, new information may emerge that changes our estimate of the prevalence of these diseases or the number of patient candidates for A4250. The effort to identify patients with PFIC or our other potential target indications is at an early stage, and we cannot accurately predict the number of patients for whom treatment might be possible. Additionally, the addressable patient population for A4250 may be limited or may not be amenable to treatment with A4250, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our results of operations and our business. Further, even if we obtain significant market share for A4250, we may never achieve profitability because the potential target patient population for A4250 is small.

We rely on EA Pharma for the successful commercialization of elobixibat to treat chronic constipation in Japan and other select markets in Asia. If EA Pharma does not successfully commercialize elobixibat in Japan, we may not receive any future payments under our royalty interest acquisition agreement with HCR or our license agreement with EA Pharma.

We entered into a license agreement with EA Pharma (formerly known as Ajinomoto Pharmaceuticals) for elobixibat in April 2012. In January 2018, the Japanese Ministry of Health, Labour and Welfare, or MHLW, approved a new drug application filed by EA Pharma for elobixibat for the treatment of chronic constipation. EA Pharma plans to co-market elobixibat in Japan with another company, Mochida Pharmaceutical Co., Ltd, or Mochida, and to co-promote elobixibat in Japan with Eisai Co., Ltd.

In December 2017, we entered into a royalty interest acquisition agreement, or RIAA, with HCR pursuant to which we sold to HCR our right to receive all royalties and sales milestones for elobixibat in Japan that may become payable by EA Pharma pursuant to the license agreement, up to a specified maximum amount, or cap amount, equal to 175% of the amount paid by HCR to us under the RIAA plus certain patent-related expenses (if such patent-related expenses become payable by HCR). Under the RIAA, the approval by the MHLW triggers a $45 million payment to us from HCR, subject to customary closing conditions, and we are eligible to receive an additional $15 million if a specified sales milestone is achieved for elobixibat in Japan. The RIAA further provides that, if the cap amount is reached, we will again become eligible to receive royalties and sales milestones for elobixibat from EA Pharma under the terms of the license agreement. If EA Pharma does not successfully commercialize elobixibat in Japan, we may not receive any future payments under our RIAA with HCR or our license agreement with EA Pharma.

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EA Pharma is responsible for all commercialization of elobixibat in its licensed field (namely, all prophylactic or therapeutic uses of a pharmaceutical product for gastrointestinal diseases and disorders, symptoms of constipation of all causes or postoperative ileus, in colonoscopy cleansing procedures and, in specified circumstances, select liver diseases) in Japan and for all future development and commercialization of elobixibat in its licensed field in Indonesia, Korea, Myanmar, Taiwan, Thailand and Vietnam, and has substantial control over the conduct and timing of development efforts with respect to elobixibat in these countries. We have little control over the amount and timing of resources that EA Pharma devotes, or Mochida devotes, to the commercialization of elobixibat in Japan or to the development of elobixibat in these other countries. If EA Pharma or, where applicable, Mochida fails to devote sufficient financial and other resources, the commercialization of elobixibat in Japan and the development and potential commercialization of elobixibat otherwise in EA Pharma’s licensed territory would be adversely affected. If this occurs but the cap amount under the RIAA were nevertheless reached, royalties that we could receive on any future elobixibat product sales could be delayed or reduced.

EA Pharma has the right to terminate the elobixibat agreement on a country-by-country basis or in its entirety for an uncured material breach by us or in specified bankruptcy or similar events. EA Pharma also has the right, with 180 days’ notice, to terminate the agreement in its entirety or on a country-by-country basis (except for Japan) for any reason.

If EA Pharma terminates the elobixibat agreement at any time, for any reason, it would negatively impact both the likelihood that we would receive any future payments under our RIAA with HCR or our license agreement with EA Pharma and the development of elobixibat in EA Pharma’s licensed territory, which would materially harm our business and could accelerate our need for additional capital. In particular, we would be required to seek a replacement licensee for Japan under the RIAA.

Raising additional capital may cause dilution to our investors, restrict our operations or require us to relinquish rights to our technologies or product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, licensing, collaboration or similar arrangements, grants and debt financings. We do not have any committed external source of funds. We filed a universal shelf registration statement on Form S-3 with the SEC, which was declared effective on December 5, 2017, pursuant to which we registered for sale up to $125 million of any combination of our common stock, preferred stock, debt securities, warrants, rights, purchase contracts and/or units from time to time and at prices and on terms that we may determine, including up to $50 million of our common stock available for issuance pursuant to an at-the-market offering program Sales Agreement that we entered into with Cowen and Company LLC, or Cowen, in October 2017. Pursuant to the Sales Agreement, we may offer and sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $50 million through Cowen as our sales agent. Under the Sales Agreement, Cowen may sell the shares by any method permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act of 1933, as amended, or the Securities Act. We may seek to raise additional capital at any time. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends or other distributions.

If we raise additional funds through licensing, collaboration or similar arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research and development programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed,

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we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

The recently passed comprehensive tax reform bill could adversely affect our business and financial condition.

On December 22, 2017, President Trump signed into law the “Tax Cuts and Jobs Act,” or TCJA, that significantly reforms the Internal Revenue Code of 1986, as amended, or the Code. The TCJA, among other things, includes changes to U.S. federal tax rates, imposes significant additional limitations on the deductibility of interest and net operating loss carryforwards, allows for the expensing of capital expenditures, and puts into effect the migration from a “worldwide” system of taxation to a territorial system. Our net deferred tax assets and liabilities will be revalued at the newly enacted U.S. corporate rate, and the impact, if any, will be recognized in our tax expense in the year of enactment. We continue to examine the impact this tax reform legislation may have on our business. The impact of this tax reform is uncertain and could be adverse. This prospectus does not discuss any such tax legislation or the manner in which it might affect purchasers of our common stock. We urge our stockholders, including purchasers of common stock in this offering, to consult with their legal and tax advisors with respect to such legislation and the potential tax consequences of investing in our common stock.

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