Those forward-looking disclosures management reads at the beginning of presentations and the risk factors listed in their SEC filings are often viewed by investors as standard lawyer-speak to cover the company from potential lawsuits should something bad happen.

And, in large part, that’s exactly what they are. But when the different risk factors are compiled from many biotechs and looked at over multiple years, they can tell a story about what biotech companies are increasingly worried about.

In a report from BDO USA LLP, the consulting company analyzed the risk factors listed in the 10-Ks of the 100 largest companies on the Nasdaq Biotechnology Index. Being the third year of the BDO Life Sciences RiskFactor report allows for trends to be identified.

“It gives an investor some insight about what companies are thinking about and is an indicator of potential trends,” Ryan Starkes, partner and life sciences practice leader at BDO, told BioWorld Insight.

There was a three-way tie for first place, with all 100 of the companies listing “competition, consolidation, pressure on pricing,” “federal, state and/or local regulations” and “FDA approvals and compliance” as risk factors.

The first two you’d find listed as risk factors for most companies outside the biotech industry, and FDA regulation is an obvious risk factor for all companies developing drugs. Perhaps the only surprising thing is that FDA regulation was only listed in 94 percent of 10-Ks analyzed in the 2013 and 2014 reports.

Rounding out the top seven, “corporate copyright, intellectual property infringement,” “ability to commercialize and market products,” “supply chain issues” and “product liabilities” are also not particularly surprising, occurring in 98 to 99 percent of 10-Ks, and didn’t change particularly much from the previous report.

GETTING PAID

In last year’s report, reimbursement from third party payers was only listed in 85 percent of the 10-Ks surveyed, down from 87 percent in the prior year. But this year, the risk factor increased in prevalence, occurring in 96 percent of biotech’s 10-Ks and grabbing the eighth spot for what biotechs feel are the most pressing risks for their business.

Not surprisingly, Gilead Sciences Inc., of Foster City, Calif., was one of those 96 biotechs warning about reimbursement. “Our existing products are subject to reimbursement from government agencies and other third parties. Pharmaceutical pricing and reimbursement pressures may reduce profitability,” the biotech’s 10-K states.

In February, during its fourth quarter conference call, Gilead disclosed that it had to give steep discounts to payers to get onto formularies and expand access of its hepatitis C virus (HCV) products, Sovladi (sofosbuvir) and Harvoni (sofosbuvir/ledipasvir).

“We expect our 2015 growth to net adjustments for our HCV products in the United States to be approximately 46 percent or a little more than double of that where we ended 2014, which was around 22 percent,” Paul Carter, Gilead’s executive vice president of commercial operations, told investors on the call.

In addition to discounts to payers and pharmacy benefit managers, Gilead has to give mandatory larger discounts to patients receiving benefits from Medicaid and Veterans Affairs, which exceed 50 percent of the list price.

But it’s not just companies with products on the market that should be worried about reimbursements and discounts that the pharmacy benefit managers and others might want.

This month, pharmacy benefit manager Prime Therapeutics LLC, of St. Paul, Minn., took a stab at the two PCSK9 inhibitors – Praluent (alirocumab, Regeneron Pharmaceuticals Inc. and Sanofi SA) and Repatha (evolocumab, Amgen Inc.) – complaining about their potential burden on the health care system before the drugs have even been approved by the FDA.

And at several sessions at the BIO International Convention last week, experts warned that draconian measures that have been used to price drugs in the EU could be headed to the U.S. (See BioWorld Today, June 18, 2015.)

M&A

While it only registered as the 19th most concerning topic, the inability to manage or complete mergers and acquisitions jumped 14 percentage points, featuring in 83 percent of biotechs’ 10-Ks.

The increase in the number of companies listing M&A as a potential risk factor isn’t particularly surprising given the large amount of consolidation we’ve seen over the last few years.

Just last week, Dublin-based Allergan plc announced plans to buy Kythera Biopharmaceuticals Inc., of Westlake Village, Calif., in a cash-and-shares deal that values Kythera at $75 per share, or about $2.1 billion. (See BioWorld Today, June 18, 2015.)

GLOBALIZATION

A couple of seemingly unrelated categories, “maintaining internal controls, financial reporting, accounting standards” and “labor concerns,” may have both increased compared to the 2014 report for similar reasons.

Maintaining internal controls and accounting standards jumped from being included in 76 percent of the 10-Ks in last year’s report to 87 percent in this year’s report. Some of the concerns may be coming from a new revenue recognition standard that companies will have to follow when it goes into effect in a few years. But Starkes said he also believes the increase could have to do with companies becoming increasingly global, requiring the bean counters to follow accounting standards in jurisdictions beyond the U.S.

The same globalization also could be affecting the increasing reference to labor concerns as a risk factor, which nearly doubled in the number of 10-Ks it was found in, from 40 percent last year to 78 percent in this year’s report.

“Having the ability to attract and retain individuals on a global scale is important,” Starkes pointed out.