AKAO 2017 Annual Report

50 Our third-party suppliers may not be able to meet our supply needs or timelines and this may negatively affect our business. A majority of the manufacturing process is operated internationally, and therefore may be subject to similar risks of the sort described by the risk factor entitled “ A variety of risks associated with international operations could materially adversely affect our business. ” The failure of third-party manufacturers or suppliers to perform adequately or the termination of our arrangements with any of them may adversely affect our business. A variety of risks associated with international operations could materially adversely affect our business. Certain existing suppliers we use are located outside of the United States, including our sole source supplier for sisomicin, a key raw material for the production of plazomicin, which is located in China, and for which we do not have a commercial supply agreement. Additionally, if plazomicin is approved for commercialization outside the United States, we will likely seek to enter into agreements with third parties to market plazomicin outside the United States. We are, or we expect that we will be, subject to additional risks related to these international business relationships, including: • different regulatory requirements for drug approvals in foreign countries; • differing U.S. and foreign drug import and export rules; • reduced protection for intellectual property rights in certain foreign countries; • unexpected changes in tariffs, trade barriers and regulatory requirements; • different reimbursement systems; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • potential liability resulting from development work conducted by these third parties; and • business interruptions resulting from geopolitical events, including war and terrorism, or natural disasters.