Item 1. Business
Item 1.
Business.
Business Overview
We are a leading biomedical innovator, addressing significant unmet needs in women’s health worldwide, with a broad patent-protected portfolio of
disruptive, accessible, in-office therapeutic and diagnostic products. The Company is a U.S. manufacturer that has received global regulatory approvals for its product portfolio worldwide, which is currently being commercialized in the U.S.
and key international markets. FemaSeed ® Intratubal Insemination, a groundbreaking first-line infertility treatment delivering sperm directly to the site of conception, is U.S. FDA-cleared and approved in Europe, United Kingdom
(UK), Canada and Israel. Peer-reviewed publication of positive data from its pivotal clinical trial of FemaSeed demonstrated effectiveness and safety with high satisfaction from both patients and practitioners. FemVue ® , a companion
diagnostic for fallopian tube assessment via ultrasound, is U.S. FDA-cleared and approved in Europe, UK, Canada, Japan and Israel. FemCerv®, an endocervical tissue sampler for cervical cancer diagnosis, is U.S. FDA-cleared and approved in
Europe, UK, Canada and Israel. Our product candidate, FemBloc® permanent birth control, is a revolutionary first-of-its-kind non-surgical approach, that involves minimally-invasive placement of a patented delivery system for precise delivery
of our proprietary synthetic tissue adhesive (blended polymer) into both fallopian tubes simultaneously. Over time, the blended polymer fully degrades and produces nonfunctional scar tissue to permanently block the fallopian tubes in the
safest most natural approach. This is in stark contrast to centuries-old surgical sterilization with reported risks that include infection, minor or major bleeding, injury to nearby organs, anesthesia-related events, and even death. Along
with the various surgical risks, some patients may not qualify as good surgical candidates due to obesity or medical comorbidities. The FemBloc non-surgical approach has the potential to offer a safer, more accessible in-office alternative
with fewer risks, contraindications, and substantially lower cost. Peer-reviewed publication of positive data from its initial clinical trials of FemBloc have demonstrated compelling effectiveness and five-year safety with high satisfaction
from both patients and practitioners. In March 2025, we announced Conformité Européene (CE) mark certification under European Union Medical Device Regulation (EU MDR) as the first regulatory approval in the world for the FemBloc delivery
system for non-surgical female permanent birth control. For the FemBloc blended polymer, an integral part of the FemBloc permanent birth control, we have successfully completed an expedited G12 Special MDR Audit for Class III devices and the
Notified Body has recommended for CE mark approval pending the final stages of European Medical Agency (EMA) review, with potential approval expected mid-2025. In March 2025, we announced strategic distribution partnerships for FemBloc in
Spain. The pivotal clinical trial (clinicaltrials.gov: NCT05977751) is now enrolling participants for U.S. approval. FemCath® and FemChec®, companion diagnostic products for FemBloc’s ultrasound-based confirmation test, are U.S. FDA-cleared
and approved in Europe and Canada. The Company is a woman-founded and led company with an expansive, internally created intellectual property portfolio with approximately 200 issued patents globally, in-house chemistry, manufacturing, and
controls (CMC) and device manufacturing capabilities and proven ability to develop products with commercialization efforts underway. Our suite of products and product candidate addresses what we believe are multi-billion dollar global market
segments in which there has been little advancement for many years, helping women avoid pharmaceutical solutions, implants and surgery that can be expensive and expose women to harm.
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The following table summarizes our current products and product candidate pipeline:
FemaSeed – Our Artificial Insemination Therapeutic Solution and
FemVue – Our Companion Diagnostic for Tubal Evaluation . FemaSeed, our FDA-cleared innovative advancement in artificial insemination is designed to enhance fertilization by precisely delivering sperm into the fallopian tube, the
natural site of conception. It offers a safe, accessible and cost-effective first-line therapeutic option for infertile women, men and couples seeking pregnancy through insemination. FemaSeed offers a revolutionary alternative to intrauterine
insemination (IUI), enabling healthcare professionals to expand their practice services with a more effective approach as demonstrated in the pivotal trial (NCT0468847) for low male sperm count. It serves as an affordable, less burdensome and
lower-risk first step before IVF. FemaSeed is U.S. FDA-cleared and approved in Europe, UK, Canada and Israel. Our first-line therapeutic infertility solution, FemaSeed Intratubal Insemination (ITI), is complemented by our diagnostic companion
product, FemVue, the first FDA-cleared product that creates natural saline and air contrast for a safe, reliable, real-time evaluation of the fallopian tubes using ultrasound. When combined with a uterine cavity assessment, it provides a
comprehensive exam in the comfort of the gynecologist’s office. Since FemaSeed infertility treatment requires at least one open fallopian tube, FemVue is an essential companion diagnostic. FemVue is U.S. FDA-cleared with approvals in Europe,
UK, Canada, Japan and Israel. FemVue can be used with our FDA-cleared and marketed FemCath device, which allows for selective evaluation of the fallopian tube. We believe FemVue offers significant advantages over other existing approaches,
including being able to provide ultrasound evaluation of a woman’s fallopian tubes as part of an existing diagnostic infertility assessment.
In April 2021 we received an IDE approval from the FDA that allowed us to initiate a pivotal trial for the FemaSeed device. The first subject was enrolled in July 2021. In October 2022, we announced an updated
study design for the pivotal trial to focus on couples experiencing male factor infertility, an underserved patient segment. In April 2023 we received approval to sell FemaSeed in Canada. In September 2023 we announced 510(k) clearance from
the FDA for FemaSeed for ITI. The clinical trial was still ongoing at the time of receiving U.S. regulatory clearance from FDA, however, the study was concluded with enrollment completed in November 2023. Topline results of the clinical trial
were announced in March 2024. In November 2024, we announced a peer-review publication of positive data from its pivotal trial in the Journal of Gynecology & Reproductive Medicine (JGRM), a leading journal covering gynecology and
reproductive medicine. The publication entitled, “FemaSeed Directional Intratubal Artificial Insemination for Couples with Male- Factor or Unexplained Infertility Associated with Low Male Sperm Count,” includes positive data from the
pivotal trial ( Clinicaltrials.gov NCT04968847 ). The trial met its primary endpoint with a pregnancy rate per subject of 26.3% (95%CI: 13.4‒43. 1%; n=10/38) and 17.5%
per cycle (95%LCB: 7.6%, 95%CI: 5.7‒29.4%; n=10/57), which was significantly higher than the performance goal of 7% based on the historical control (one-sided P =0.041). Safety reports were consistent with IUI. The vast majority of subjects stated they would probably or definitely recommend FemaSeed, and investigator satisfaction was similarly high.
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Targeted intratubal insemination of washed spermatozoa using the FemaSeed ITI device is a safe artificial insemination technique that demonstrated
high effectiveness for couples with male-factor/unexplained infertility associated with low male sperm count. Delivery of washed spermatozoa directly into the utero-tubal ostium and fallopian tube without catheterization likely increases
sperm-oocyte interaction, suggestive of improved efficiency over conventional intrauterine insemination particularly for male-factor infertility. In March 2024, we announced the first commercial use of FemaSeed. In September 2024, we
announced the strategic distribution partnerships for FemaSeed and FemVue in Spain. In October and December 2024 and March 2025, we announced partnerships with prominent infertility center conglomerates, Boston IVF, HRC Fertility and CNY
Fertility, respectively.
FemBloc – Our Permanent Birth Control Solution and FemChec – Our
Companion Diagnostic for Tubal Occlusion Confirmation . FemBloc is our revolutionary first-of-its-kind non-surgical approach, that involves minimally-invasive placement of a patented delivery system for precise delivery of our
proprietary synthetic tissue adhesive (blended polymer) into both fallopian tubes simultaneously. Over time, the blended polymer fully degrades and produces nonfunctional scar tissue to permanently block the fallopian tubes in the safest most
natural approach. This is in stark contrast to centuries-old surgical sterilization with reported risks that include infection, minor or major bleeding, injury to nearby organs, anesthesia-related events, and even death. Along with the
various surgical risks, some patients may not qualify as good surgical candidates due to obesity or medical comorbidities. The FemBloc non-surgical approach has the potential to offer a safer, more accessible in-office alternative with fewer
risks, contraindications, and substantially lower cost. Our non-surgical permanent birth control solution, FemBloc, is complimented by our diagnostic companion product, FemChec, an FDA-cleared product that creates natural saline and air
contrast that is delivered in a controlled manner for a safe, reliable, real-time evaluation of the fallopian tubes using ultrasound for confirmation of procedure success often by the same healthcare practitioner. Since FemBloc requires both
fallopian tubes are blocked for use as permanent birth control, FemChec is an essential companion diagnostic. FemChec is U.S. FDA-cleared with approvals in Europe and Canada. FemChec can be used with our FDA-cleared and marketed FemCath
device, which allows for selective evaluation of each fallopian tube. Blocked fallopian tubes are necessary for successful permanent birth control, and FemChec offers significant advantages over other existing approaches, including use of
existing ultrasound.
In June 2023 we received an IDE approval from the FDA to allow us to initiate the pivotal trial for the FemBloc system followed by a confirmation test with FemChec (Clinicaltrials.gov NCT05977751). The first subject
was enrolled in August 2023. The FINALE [Prospective Multi-Center Trial for FemBloc INtratubal Occlusion for TranscervicAL PErmanent Birth Control] pivotal trial is a prospective, multi-center, open-label, single-arm study design with primary
endpoint of pregnancy rate, which is to be analyzed once 401 women have relied on FemBloc for one year for permanent birth control. In addition, the study is designed as a roll-in beginning with enrollment of 50 women for a clinical readout
primarily of preliminary safety data prior to enrolling the remaining subjects. An interim analysis of clinical data endpoints is planned once 300 women have relied on FemBloc. Subjects are currently being enrolled in the pivotal trial and we
expect to complete the enrollment of the first 50 patients in the second quarter of 2025.
In February 2025, we announced a peer-reviewed publication of positive data from our initial clinical trials of FemBloc permanent birth control in the Journal of Gynecology & Reproductive Medicine (JGRM), a
leading journal covering gynecology and reproductive medicine. The publication entitled, “FemBloc Non-Surgical Permanent Contraception for Occlusion of the Fallopian Tubes” includes positive data from three initial clinical trials
(Clinicaltrials.gov NCT03067272, NCT03433911, and NCT04273594). The pregnancy rate for FemBloc subjects, who met trial eligibility and were determined bilaterally occluded after a confirmation test with FemChec three months post-FemBloc was 0%
(95%UCB: 0.057; n=0/51). This is significantly lower than the performance goal of 6% based on the historical control, surgical sterilization (one-sided p-value=0.0426). Safety reports were consistent with those typically observed for
intrauterine transcervical procedures, with no on-going safety concerns through five years. There were no reports of serious adverse events (n=0/229). The vast majority of subjects stated they would probably or definitely recommend FemBloc, and
investigator satisfaction was similarly high.
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In March 2025, we announced CE mark certification under EU MDR as the first regulatory approval in the world for the FemBloc delivery system for
non-surgical female permanent birth control. For the FemBloc blended polymer, an integral part of the FemBloc permanent birth control, we have successfully completed an expedited G12 Special MDR Audit for Class III devices and the Notified
Body has recommended for CE mark approval pending the final stages of EMA review, with potential approval expected mid-2025. If approved, we expect FemBloc to be the first and only non-surgical permanent birth control option, using a
minimally-invasive delivery system that locally instills a degradable blended polymer, which is designed to cause the fallopian tubes to close using the patient’s own nonfunctional scar tissue, resulting in permanent birth control for the
patient without a permanent implant. In March 2025, we announced strategic distribution partnerships for FemBloc in Spain. FemBloc has the potential to offer significant advantages over the only existing option, surgical sterilization (i.e.,
tubal ligation or “having her tubes tied”), including a significant cost savings at likely half the overall cost and a confirmation test to ensure procedure success. FemBloc is a procedure that can be completed in a healthcare practitioner’s
office, with no anesthesia, no incisions or cannulation, no specialty skill set or capital equipment and minimal pain and recovery time, and no residual implant remaining in the patient’s body after the tissue in-growth develops. We believe
there are also significant advantages over other temporary or reversible methods that women may be using in lieu of the surgical tubal ligation option, as FemBloc does not use hormones or leave a long-term implant behind.
Additional Women’s Health Solutions . Our FemCerv product, an endocervical tissue sampler for
cervical cancer diagnosis, is U.S. FDA-cleared and approved in Europe, UK, Canada, and Israel. FemCerv is a tissue sampling device for endocervical curettage that can be used to obtain a comprehensive sample of cervical cells and tissue
circumferentially with sample containment within the device to minimize contamination. We sponsored a post-market study of FemCerv where subjects found the procedure to be relatively pain-free and the sample obtained was complete for analysis,
which we believe may aid in reliable diagnosis. Our FemCerv product was made available to the United States market in September 2022, however, the focus of the commercial efforts remains the infertility line of products.
Our Team
We are a woman-founded, woman-led biomedical company, with a team of experienced biotechnology and medical device developers. Our founder and Chief Executive Officer, Kathy Lee-Sepsick has over 30 years of
entrepreneurial and executive experience in the medical technology field with approximately 200 patents issued globally. Dov Elefant, our Chief Financial Officer, has over 30 years of experience leading public and private biotech companies
throughout various stages of financing. Dr. James Liu, MD, our Chief Medical Officer, has over 40 years of practicing as a reproductive endocrinologist and expertise in medical affairs and clinical strategy development. Daniel Currie, our Chief
Operating Officer, has over 30 years of operational experience in the medical device industry, including assignments at early stage and large, established companies. Christine Thomas, our Chief Regulatory & Clinical Officer, has over 25
years of successful leadership including global regulatory strategy development and clinical operations for established medical device companies. Our experienced leadership team with concentrated development and execution expertise has an
unwavering commitment to advancing women’s health. We have raised over $130 million since inception from both institutional and strategic investors, including Medtronic and executives from leading life science companies and our initial public
offering, or IPO, in June 2021.
Our Intellectual Property and Production Capabilities
We have designed and developed the proprietary methods utilized in our women’s health solutions so that they are protected by patents, know-how, and trade secrets. Each product and product candidate in our portfolio
is covered by both design and utility patents in the U.S. and significant ex-U.S. markets. As of December 31, 2024, we owned 53 issued U.S. patents and 169 issued foreign patents, 18 pending U.S. patent applications and 41 pending foreign
patent applications. These issued patents, and any patents granted from such applications, are expected to expire between 2025 and 2046, without taking potential patent term extensions or adjustments into account.
All of our products are manufactured or assembled at our facility, and manufacturing activities are conducted to ensure compliance with the FDA and other international governing bodies, and good manufacturing
practices with significant CMC and device manufacturing infrastructure in compliance with QSR. We have passed numerous manufacturing audits, including those by the FDA and international notified bodies.
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Our Strategy
Our goal is to become a global leader in women’s health providing safe and effective solutions that have the potential to disrupt and grow the market segments for which they address. To achieve this goal and to
contribute to our future success and growth, we are pursuing the following strategies:
Address unmet clinical needs in multiple large markets for women. Our initial focus is on critical areas of unmet need in reproductive health, which is a growing challenge for
women that is not optimally addressed with existing therapies. Two ends of the spectrum (infertility treatment with artificial insemination and contraception with permanent birth control) represent large, growing total addressable market
opportunities. Patients who wish to control their risk of pregnancy are often utilizing temporary or reversible options or are choosing the only permanent option that bears surgical risk and expense. We believe our FemBloc system has the
potential to offer the first non-surgical, non-implant option performed exclusively in the providers’ office without the use of anesthesia, which would potentially allow a doctor to perform multiple procedures in the same room. We estimate that
the U.S. market for the FemBloc system may be over $20 billion with an immediate addressable market of over $3 billion annually. We consider those electing surgery for permanent birth control annually to be our immediately addressable market.
On the other end of the spectrum, patients who are struggling to become pregnant or are seeking assistance to become pregnant (e.g., same sex couples or single women) are often referred to highly specialized healthcare practitioners for
treatment with age-old technology. We believe our FemaSeed product has the potential to offer a first-line approach with local delivery of sperm directly to the fallopian tube where conception occurs. We estimate the immediately addressable
U.S. market for FemaSeed and FemVue, a companion diagnostic product, may be over $1 billion.
Execute on our clinical program to achieve FDA approval to advance our FemBloc system for use together with FemChec, our companion diagnostic device for ultrasound confirmation, as the
preferred option for permanent birth control for women. We have studied FemBloc in three earlier clinical trials each pursuant to an FDA-approved IDE evaluating safety in 228 subjects in total. In February 2025, we announced a
peer-reviewed publication of positive data from its initial clinical trials of FemBloc permanent birth control in the Journal of Gynecology & Reproductive Medicine (JGRM), a leading journal covering gynecology and reproductive medicine. The
publication entitled, “FemBloc Non-Surgical Permanent Contraception for Occlusion of the Fallopian Tubes” includes positive data from three initial clinical trials (Clinicaltrials.gov NCT03067272, NCT03433911, and NCT04273594). The pregnancy
rate for FemBloc subjects, who met trial eligibility and were determined bilaterally occluded after a confirmation test three months post-FemBloc was 0% (95%UCB: 0.057; n=0/51). This is significantly lower than the performance goal of 6% based
on the historical control, surgical sterilization (one-sided p-value=0.0426). Safety reports were consistent with those typically observed for intrauterine transcervical procedures, with no on-going safety concerns through five years. There
were no reports of serious adverse events (n=0/229). The vast majority of subjects stated they would probably or definitely recommend FemBloc, and investigator satisfaction was similarly high.
In June 2023 we received FDA approval of our IDE to evaluate the safety and efficacy of FemBloc, our non-surgical, non-implant, in-office solution
for permanent birth control in a pivotal clinical trial. In August 2023, we announced the initiation of enrollment in the FINALE [Prospective Multi-Center Trial for FemBloc INtratubal Occlusion for TranscervicAL PErmanent Birth Control]
pivotal trial. This prospective, multi-center, open-label, single-arm study design includes pregnancy rate as the primary endpoint, which will be analyzed once 401 women have used FemBloc for one year for permanent birth control. In addition,
the study is designed as a roll-in beginning with enrollment of 50 women for a clinical readout primarily of preliminary safety data prior to enrolling the remaining subjects. An interim analysis of clinical data endpoints is planned once 300
women have used FemBloc for permanent birth control for one year. Follow-up will continue annually for five years post-market. We expect to complete the enrollment of the first 50 patients in the second quarter of 2025
In March 2025, we announced CE mark certification under EU MDR as the first regulatory approval in the world for the FemBloc delivery system for
non-surgical female permanent birth control. For the FemBloc blended polymer, an integral part of the FemBloc permanent birth control, we have successfully completed an expedited G12 Special MDR Audit for Class III devices and the Notified
Body has recommended for CE mark approval pending the final stages of EMA review, with potential approval expected mid-2025. In March 2025, we announced strategic distribution partnerships for FemBloc in Spain.
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Execute on our commercial strategy to market our FemaSeed
product for use together with FemVue, our companion diagnostic, as the first-line option for infertility treatment and build a commercialization infrastructure with a specialized direct sales and marketing team . In April 2023 we
received approval to sell FemaSeed in Canada. In September 2023, we announced 510(k) clearance from the FDA for FemaSeed for Intratubal Insemination (ITI). We concluded the clinical trial that had been ongoing when we received 510(k)
clearance from the FDA, with enrollment completed in November 2023. In March 2024, topline data was announced, followed by the data published in the Journal of Gynecology & Reproductive Medicine (JGRM) in November 2024. The publication
titled, “FemaSeed directional intratubal artificial insemination for couples with male-factor or unexplained infertility associated with low male sperm count,” includes positive data from the pivotal trial ( Clinicaltrials.gov NCT04968847 ). The trial met its primary endpoint with a pregnancy rate per subject of 26.3% (95%CI: 13.4‒43.1%; n=10/38) and 17.5% per cycle (95%LCB:
7.6%, 95%CI: 5.7‒29.4%; n=10/57), which was significantly higher than the performance goal of 7% based on the historical control (one-sided P =0.041).
Safety reports were consistent with IUI. The vast majority of subjects stated they would probably or definitely recommend FemaSeed, and investigator satisfaction was similarly high. In March 2024, we announced the first commercial use of
FemaSeed. In September 2024, we announced the strategic distribution partnerships for FemaSeed and FemVue in Spain. In October and December 2024 and March 2025, we announced partnerships with prominent infertility center conglomerates,
Boston IVF, HRC Fertility, and CNY Fertility, respectively. FemVue is U.S. FDA-cleared with approvals in Europe, UK, Canada, Japan and Israel. In March 2024, we announced the first commercial use of FemaSeed. In September 2024, we announced
the strategic distribution partnerships for FemaSeed and FemVue in Spain. In October and December 2024 and March 2025, we announced partnerships with prominent infertility center conglomerates, Boston IVF, HRC Fertility, and CNY Fertility,
respectively.
Continuously innovate to introduce additional product offerings for women . We intend to continue to invest in research and development activities focused on improvements and
enhancements to our FemaSeed and FemBloc system and other existing products, and additional women-specific medical products. We have designed and developed proprietary methods utilized in our women’s health solutions and have protected these
internally conceived advancements by patents, know-how, and trade secrets. Our team has demonstrated the ability to achieve marketing authorizations and clearances in the U.S., Europe, Canada, Japan, UK and Israel, and to manufacture in
accordance with FDA and other international governing bodies. Availability of the additional product offerings will expand our suite of solutions for reproductive health and women’s health in general over time with the goal of addressing
aspects of care that have had negligible advancement over decades to create improved patient care and improved healthcare practitioner treatment options.
Penetrate the addressable markets by promoting patient and practice awareness . It is estimated in the U.S. alone over 10 million women
(https://www.cdc.gov/nchs/nsfg/key_statistics/i-keystat.htm) are infertile and approximately 40-50% of all infertility is attributed to male factor (Kumar et al, 2015) likely due to the over 50% decline in male sperm count worldwide (Levine et
al, 2023). Only a little over half of women proceed with some form of intervention and only a very small proportion undergo more advanced technologies. We believe the major factor that influences this light penetration of the market is the cost
and burden of the existing technologies despite the familiarity of intrauterine insemination and in-vitro fertilization (IVF) as options. We intend to increase healthcare practitioner awareness through engagement and continued publication of
scientific data in peer reviewed journals. Additionally, we intend to engage women and couples suffering from infertility or who wish to undergo insemination for pregnancy through direct patient outreach. On the other end of the spectrum, it is
estimated in the U.S. alone, approximately 1.2 million women elect surgical tubal ligation (Martinez, 2024) and 500,000 men elect vasectomy (Ostrowski, et al, 2018) annually for permanent birth control. There are another 12 million women who
utilize a non-permanent birth control option (Daniels, et al., 2020), many of whom we believe may prefer a permanent option if it were non-surgical. We believe the major factor that influences this light penetration of the market is the
limitations of the existing technology despite the likely familiarity of surgical tubal ligation as an option. Like our infertility portfolio, we plan to increase healthcare practitioner awareness prior to direct patient outreach.
From the outset, we spent significant time understanding the unmet needs of patients and healthcare practitioners through patient and healthcare practitioner surveys and early engagement of healthcare practitioners
and key opinion leaders to properly position our solutions. We have established an initial commercial infrastructure following the clearance of our FemaSeed product. Our already commercially available FemVue device is being marketed along with
the FemaSeed product to the same target healthcare practitioner: the reproductive endocrinologist. We intend to focus the significant majority of our sales and marketing efforts in North America since we believe that initially nearly 90% of the
potential annual global FemaSeed/FemVue sales would be generated in this market. Our priority in the U.S. is to target existing FemVue customers followed by reproductive endocrinologists in high volume areas. We have hired a specialty sales
force of 10 sales representatives for our infertility products and plan to increase the sales force as necessary for the FemBloc system, to the target healthcare practitioner: the gynecologist. Our already commercially available FemCerv device
will be marketed along with the FemBloc product to the same target healthcare practitioner: the gynecologist. In addition, we plan to continue to expand our in-house manufacturing capabilities as we scale to meet the demand and introduce new
products while evaluating potential suppliers to assess the viability of outsourcing portions of our manufacturing and assembly processes to ensure significant growth, profitability and operating leverage.
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Expand gynecologists’ practice capabilities by diversifying products and services to include artificial insemination with FemaSeed. There are a limited number of gynecological
practices performing infertility services and treatment today, but we believe this has the potential to grow over time, in particular with the introduction of FemaSeed. FemaSeed is designed to be an in-office infertility procedure that can be
done by a gynecologist or advanced practice provider (i.e., nurse, physician assistant) as applicable using his or her existing skillset, expanding the number of gynecological practices that can offer effective fertility services to their
patients without needing to refer them to an infertility specialist. We plan to use our gynecologic sales force for FemBloc, if approved, to introduce those healthcare practitioners to FemaSeed and broaden our sales force reach for our
infertility treatment and other companion products, such as FemVue, beyond our initial focus on reproductive endocrinologists.
The Current Market Landscape
For permanent birth control, tubal ligation, an invasive surgical procedure requiring implants, incisions, hospitalization and general anesthesia, has been offered for decades, so risks are known. It is performed
either immediately after cesarean delivery or via laparoscopic procedures, which has notable disadvantages and risk of complications. The most significant morbidity arising from surgical tubal ligation is associated with the use of electrical
energy and inadvertent thermal damage to the bowel. Introduction of surgical instruments into the abdominal cavity carries substantial risk of injury to intra-abdominal organs and blood vessels, with approximately 1% of all procedures resulting
in unintended further major surgery. In addition, anesthesia risk, bleeding, bowel damage, and long recovery times are inherent complication risks of surgical tubal ligation. Temporary and reversible contraceptive methods, such as birth control
and intrauterine devices (IUDs), are being used by women long-term as a compromise by women who are unwilling to undergo a surgical sterilization procedure because of the surgical risks, not wanting an incision, or to be exposed to risk of
anesthesia. Some may be contraindicated for surgical sterilization because of obesity or medical conditions. Long-term use of hormonal birth control, including IUDs, have drawbacks as well. Hormonal birth control is associated with health
risks, such as an increased risk of breast cancer and blood clots, and device-based birth control can result in uterine perforation and increased risks of pelvic inflammatory disease and ectopic pregnancy. Previously available non-surgical
methods utilizing permanent implants for closing the fallopian tubes have been removed from the market due to safety or intellectual property infringement issues, and thus the only currently available permanent birth control option is surgical
tubal ligation. For artificial insemination, traditional intrauterine insemination is an undirected procedure delivering sperm into the uterine cavity that has been offered for decades. IUI continues to be offered as a first-line treatment
option in spite of its low success rate due to its low cost and ease, with a short learning curve and minimal equipment requirements. Although current IUI devices address the unfavorable environment sperm would encounter in the vagina and
cervix by placing sperm into the uterine cavity, the biology of sperm transport is complex and of the millions of sperm inseminated in the uterus, almost all fail to reach the fallopian tubes. In contrast to the unfavorable environment of the
uterus, the fallopian tubes act as a reservoir for traveling sperm and is the location of conception. Sperm count is declining at an accelerated pace globally by greater than 50% with an increasing proportion of men having sperm counts below
any given threshold for sub-fertility or infertility. This substantial and persistent decline is now recognized as a significant public health concern. (Levine et al, 2023). In vitro fertilization (IVF) or intracytoplasmic sperm injection
(ICSI) are highly effective treatments with reported pregnancy rates of approximately 25% for male factor infertility, however, these approaches are associated with significant cost and clinical risks (Ravitsky et al, 2019). Many infertile
women and couples are unwilling to undergo treatment mostly due to financial reasons. IVF is extremely expensive, costing as much as $15,000 to $30,000 per IVF cycle according to Forbes Health, 2021 (with cycle effectiveness usually only around
25%), and often not covered by insurance. Genetic testing of the eggs or embryo, also known as preimplantation genetic testing (PGT), are often optional costs up to $10,000 or more if disorders are tested. IVF/ICSI is also physically and
emotionally demanding for the patient, with an increased risk of ectopic pregnancy and miscarriage. The American Society for Reproductive Medicine provided guidance (committee opinion, 2021) promoting singleton gestation to reduce the risk of
multiple pregnancies. There are over ten million women in the United States known to be infertile and only approximately 200,000 IVF cycles completed per year, indicating that IVF is not a realistic solution available to most women or couples.
Our FemaSeed product establishes a new category within artificial insemination: a localized, directional delivery of sperm directly into the fallopian tube (intratubal insemination), precisely where conception occurs. We believe this in-office,
cost-effective solution can become a first-line treatment for infertility, specifically when male factor is involved, increasing access to infertility treatment for women, couples and the LGBTQ community.
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The Reproductive Health Opportunity
There are an estimated 78 million reproductive aged women in the United States alone (World Health Organization, 2025). We intend to offer
comprehensive solutions for preventing pregnancy and achieving pregnancy for women, providing cost-effective and safe solutions while avoiding surgery. During their childbearing years, most women will want to control their risk of pregnancy.
Additionally, there are many women who wish to become pregnant that are unable to do so. According to a Centers for Disease Control and Prevention (CDC) report, the ability to plan when to be pregnant and how many pregnancies to initiate has
been called one of the ten great public health achievements in the twentieth century. Many women, who spend an average of three years seeking to become pregnant and thirty years avoiding pregnancy, are not satisfied with the current methods
for preventing unwanted pregnancies and achieving pregnancy (Gutttmacher Institute, 2019).
Approximately 1.2 million women undergo surgical tubal ligation each year in the United States alone (Martinez, 2024), with an average cost of approximately $6,000 per procedure (Planned Parenthood, 2019). However,
there are over an estimated 12 million women who remain on a non-permanent birth control option long-term (National Center for Health Statistics, 2015), which we believe is due to there being only a surgical permanent contraceptive option
available to women. In addition, 500,000 men undergo a vasectomy procedure every year (Ostrowski et al, 2018). While the 1.7 million women and their partners annually who want to permanently prevent pregnancy represent our initial near-term
market opportunity, we believe these numbers do not reflect the true demand for permanent birth control, as many do not want to submit to invasive surgical procedures such as vasectomies and tubal ligations. The market for female permanent
birth control is large and growing, and we believe the market opportunity in the U.S. alone could expand to exceed $20 billion with a safe and effective in-office option as women shift from temporary or reversible contraceptive alternatives to
more permanent solutions.
The overall decline in birth rates in the United States and globally has resulted in aging populations that present serious challenges for the global economy and economic stability. In the United States alone, it is
estimated by the Centers for Disease Control and Prevention that over ten million women desire pregnancy but are unable to achieve pregnancy (National Survey of Family Growth, 2019). Only a little over half of these women proceed with some form
of intervention, and only a very small proportion undergo more advanced assisted reproductive technologies such as IVF. Approximately 40-50% of infertility cases are due to a male factor (Kumar et al, 2015), which may be the result of the
greater than 50% decline worldwide in male sperm count (Levine et al, 2023). Although IUI, an artificial insemination option, is the oldest technique in reproductive medicine and a well-accepted first-line treatment method for couples with
unexplained infertility, mild male factor infertility, sexual dysfunction, and cervical factor infertility, its success rates remain relatively low. However, for couples with low total motile sperm count, treatment with highly effective IVF/
ICSI is advised given the comparatively reduced success rates for IUI. Alternative methods to IUI have not been advanced to meet the continuous demand for safe and effective first-line alternatives that are considerably less costly and less
invasive than more advanced assisted reproductive options. The market for assisted reproduction is large and growing, and we believe the market in the United States alone could exceed $2 billion with a safe and effective novel first-line
approach as women move to seek care for the treatment of infertility.
Clinical Development
Overview of Clinical Programs . We are developing a growing body of compelling clinical evidence for our intrauterine directional delivery product candidates.
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Our Permanent Birth Control Solution – FemBloc and ultrasound confirmation with FemChec
Clinical Trials
Prior to the trials pursuant to the IDE discussed below, we conducted a number of clinical trials in 93 patients to evaluate various aspects of the development program. With respect to blended polymer effectiveness,
we conducted a clinical trial on ten patients pending a planned hysterectomy procedure, which is not an indicated population for FemBloc. Patients received the FemBloc treatment with the blended polymer through the delivery system and returned
4 weeks post-treatment to receive a complete hysterectomy with subsequent histopathology analysis of the fallopian tubes for indications of progression towards tubal occlusion and associated tissue reactions of the blended polymer. Although it
is expected that three months is required to effect complete tubal occlusion and for the confirmation of effectiveness and reliability as permanent birth control, at 4 weeks, 30% of the fallopian tubes had either complete luminal occlusion
where the lumen was obstructed by a healing tissue response or there was narrowing of the fallopian tube by 50-90% by a similar healing tissue response. As expected, blended polymer remained in many of the fallopian tubes and the inflammatory
response observed appeared to generally correlate with the presence of foreign material. There were no serious adverse events reported.
In February 2025, we announced a peer-reviewed publication of positive data from its initial clinical trials of FemBloc permanent birth control in the Journal of Gynecology & Reproductive Medicine (JGRM), a
leading journal covering gynecology and reproductive medicine. The publication entitled, “FemBloc Non-Surgical Permanent Contraception for Occlusion of the Fallopian Tubes” includes positive data from three initial clinical trials
(Clinicaltrials.gov NCT03067272, NCT03433911, and NCT04273594). The pregnancy rate for FemBloc subjects, who met trial eligibility and were determined bilaterally occluded after a confirmation test three months post-FemBloc was 0% (95%UCB:
0.057; n=0/51). This is significantly lower than the performance goal of 6% based on the historical control, surgical sterilization (one-sided p-value=0.0426). Safety reports were consistent with those typically observed for intrauterine
transcervical procedures, with no on-going safety concerns through five years. There were no reports of serious adverse events (n=0/229). The vast majority of subjects stated they would probably or definitely recommend FemBloc, and investigator
satisfaction was similarly high.
In March 2025, we announced CE mark certification under EU MDR as the first regulatory approval in the world for the FemBloc delivery system for
non-surgical female permanent birth control. For the FemBloc blended polymer, an integral part of the FemBloc permanent birth control, we have successfully completed an expedited G12 Special MDR Audit for Class III devices and the Notified
Body has recommended for CE mark approval pending the final stages of EMA review, with potential approval expected mid-2025. In March 2025, we announced strategic distribution partnerships for FemBloc in Spain.
In June 2023 we received FDA approval of our IDE to evaluate the safety and efficacy of FemBloc, our non-surgical, non-implant, in-office solution
for permanent birth control in a pivotal clinical trial. In August 2023, we announced the initiation of enrollment in the FINALE [Prospective Multi-Center Trial for FemBloc INtratubal Occlusion for TranscervicAL PErmanent Birth Control]
pivotal trial. This prospective, multi-center, open-label, single-arm study design includes pregnancy rate as the primary endpoint, which will be analyzed once 401 women have used FemBloc for one year for permanent birth control. In addition,
the study is designed as a roll-in beginning with enrollment of 50 women for a clinical readout primarily of preliminary safety data prior to enrolling the remaining subjects. An interim analysis of clinical data endpoints is planned once 300
women have used FemBloc for permanent birth control for one year. Follow-up will continue annually for five years post-market. Subjects are currently being enrolled in the pivotal trial and we expect to complete the enrollment of the first 50
patients in the second quarter of 2025.
Products
Our Artificial Insemination Solution.
510(k) Clearance for FemaSeed Intratubal Insemination Device
FemaSeed, our FDA-cleared innovative advancement in artificial insemination, is designed to enhance fertilization by precisely delivering sperm into the fallopian tube, the natural site of conception. It offers a
safe, accessible and cost-effective first-line therapeutic option for infertile women, men and couples seeking pregnancy through insemination. FemaSeed offers a revolutionary alternative to IUI, enabling healthcare professionals to expand their
practice services with a more effective approach as demonstrated in the pivotal trial (NCT0468847) for low male sperm count. It serves as an affordable, less burdensome and lower-risk first step before IVF. FemaSeed is U.S. FDA-cleared and
approved in Europe, UK, Canada and Israel.
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We have studied FemaSeed pursuant to an FDA-approved IDE received in April 2021 to evaluate safety and efficacy in the LOCAL [Prospective
Multi-Center LOCAL ized Directional Insemination Trial for Artificial Insemination] pivotal trial. In October 2022, we announced an updated study
design for the pivotal trial, which focused on couples experiencing male factor infertility. The clinical trial was still ongoing at the time of receiving U.S. regulatory clearance from FDA, however, the study concluded with enrollment
completed in November 2023. Topline results of the clinical trial were announced in March 2024. The data was published in the Journal of Gynecology & Reproductive Medicine (JGRM) in November 2024. The publication titled, “FemaSeed
directional intratubal artificial insemination for couples with male-factor or unexplained infertility associated with low male sperm count,” includes positive data from the pivotal trial ( Clinicaltrials.gov NCT04968847 ). The trial met its primary endpoint with a pregnancy rate per subject of 26.3% (95%CI: 13.4‒43.1%; n=10/38) and 17.5% per cycle (95%LCB: 7.6%, 95%CI:
5.7‒29.4%; n=10/57), which was significantly higher than the performance goal of 7% based on the historical control (one-sided P =0.041). Safety
reports were consistent with IUI. The vast majority of subjects stated they would probably or definitely recommend FemaSeed, and investigator satisfaction was similarly high. Targeted intratubal insemination of washed spermatozoa using the
FemaSeed ITI device is a safe artificial insemination technique that demonstrated high effectiveness for couples with male-factor/unexplained infertility associated with low male sperm count. Delivery of washed spermatozoa directly into the
utero-tubal ostium and fallopian tube without catheterization likely increases sperm-oocyte interaction, suggestive of improved efficiency over conventional intrauterine insemination particularly for male-factor infertility. In March 2024,
we announced the first commercial use of FemaSeed. In September 2024, we announced the strategic distribution partnerships for FemaSeed and FemVue in Spain. In October and December 2024 and March 2025, we announced partnerships with
prominent infertility center conglomerates, Boston IVF, HRC Fertility and CNY Fertility, respectively.
510(k) Clearance for Intrauterine Device for Selective Tubal Evaluation
FemCath Cornual Balloon Catheter, an innovative advancement in selective tubal evaluation, designed similar to FemaSeed but for a different indication, is authorized for marketing in the U.S., Europe and Canada. A
post-market study in 23 subjects (45 tubes) was conducted with the product and FemVue Saline-Air device to assess fallopian tubes selectively by infusion of saline-air contrast. 89% had contrast observed entering the proximal portion of the
fallopian tube combined with sustained flow or exit into the peritoneal cavity. This is the same intended location of delivery for the FemaSeed product. There were no serious adverse events reported. We began limited market release of the
FemCath product in December 2022 and it is being utilized in the pivotal trial for FemBloc, as part of the confirmation test with FemChec.
Post-Market Information
FemVue Saline - Air device, a contrast-generating product, is authorized for marketing in the United States, Europe, UK, Canada, Japan and Israel. There have been multiple publications and abstracts presented with
clinical evidence in support of FemVue, a diagnostic companion product to our artificial insemination solution. It has been concluded that tubal patency assessment with FemVue is comparable to fluoroscopic hysterosalpingogram (HSG), and it
appears to be a convenient and well-tolerable method that may be performed alongside conventional ultrasound and uterine cavity assessment as part of an infertility evaluation. Other publications have stated that FemVue is an accurate test for
diagnosing tubal occlusion, performs similarly to a fluoroscopic HSG and could potentially replace fluoroscopic HSG.
Our Endocervical Tissue Sampler.
Post-Market Information
FemCerv, a next generation endocervical tissue sampler for cervical cancer diagnosis, is U.S. FDA-cleared with approvals in Europe, UK, Canada and Israel. We sponsored a post-market study for FemCerv in 112 patients
undergoing further evaluation of an abnormal cervical tissue result. It was observed that FemCerv provided samples were reported as adequate when evaluated histologically in 94% of the patients. Healthcare practitioners reported that 95% of the
patients experienced mild or no discomfort during the FemCerv procedure and 92% of the healthcare practitioners reported the FemCerv device as easy to insert. There were no adverse events reported. We began limited market release in the U.S. in
September 2022, however, the commercial efforts are currently focused on the infertility portfolio.
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Manufacturing
We have developed and implemented the infrastructure required to manufacture and distribute finished medical devices, including a robust medical
device quality management system, which meets the requirements of the FDA Quality System Regulation, and is certified to Medical Device Single Audit Program (MDSAP) and International Organization for Standardization (ISO) 13485:2016. We
currently manufacture or assemble all products and product candidate and source components from contract suppliers. We believe that we currently have sufficient capacity to meet clinical program demands, product supply and launch requirements
for the FemaSeed product and believe that we will be able to scale up our capacity relatively quickly with modest capital investment. We believe our manufacturing capacity is sufficient to meet global market demand for our products for the
foreseeable future until potential approval by the FDA for the FemBloc system. While we plan to continue manufacturing our product and product candidate, if approved or granted marketing authorization, we will consider outsourcing
arrangements for certain sub-assemblies as needed as we scale our commercial production.
We employ a rigorous supplier assessment, qualification, and selection process targeted to suppliers that meet the requirements of the FDA and the
ISO and quality standards supported by internal policies and procedures. Our quality assurance process monitors and maintains supplier performance through qualification and periodic supplier reviews and audits. We are required to maintain ISO
13485 certification for medical devices sold in the European Economic Area (EEA) which requires, among other items, an implemented quality system that applies to component quality, supplier control, product design and manufacturing
operations. In June 2024, we announced that we received the European Union Medical Device Regulation (EU MDR) certificate, demonstrating Femasys’ compliance with the highest required regulatory standards.
We inspect, test, and assemble our products under strict manufacturing processes supported by internal policies and procedures with significant CMC and device manufacturing infrastructure. We perform our own final
quality control testing of each product and product candidate, and we have complete control over all aspects of the manufacturing process and are compliant with QSR good manufacturing practice regulations applicable to our products.
Our suppliers are managed through our supplier management program that is focused on reducing supply chain risk. Key aspects of this program include managing component inventory at the supplier and second sourcing
approaches for specific suppliers. Typically, our outside vendors produce components to our specifications and in many instances to our designs. Our suppliers are audited periodically by our quality department to ensure conformity with the
specifications, policies and procedures for our products. In addition, we and our suppliers are subject to periodic unannounced inspections by U.S. and international regulatory authorities to ensure compliance with quality regulations. We
believe that, if necessary, alternative sources of supply would be available in a relatively short period of time and on commercially reasonable terms.
We do not have long-term supply agreements and we purchase certain components for our products on a purchase order basis. We do not currently have arrangements in place for redundant supply of certain components of
our products. If our current third-party suppliers cannot perform as agreed, we may be required to replace those suppliers. Although we believe that there are several potential alternative suppliers who could provide these components, we may
incur added costs and delays in identifying and qualifying any such replacement.
Finally, for our products and product candidate, we utilize third-party sterilizers to ensure these single-use products are packaged and shipped
sterile for use. If our current contract sterilizer(s) cannot continue to perform as agreed, we may be required to identify and contract with another third-party contract sterilizer which may incur added costs and delays in identifying and
qualifying any such replacement.
Competition
The markets in which we compete are highly competitive and in limited areas are characterized by rapid and significant technological change. To
compete successfully, we need to continue to demonstrate the advantages of our products and product candidate compared to both well-established and new alternative procedures, products and technologies, and convince healthcare practitioners
and other healthcare decision makers of the advantages of our products and technologies.
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With respect to our permanent birth control solution, we expect to compete with surgical tubal ligation, vasectomies for women’s partners, other methods of non-permanent birth control, including devices such as IUDs,
prescription drugs such as the birth control pill and injectable and implantable contraceptives and patches, and other contraceptive and birth control methods. There is no directly competing non-surgical, non-implant permanent birth control
product currently on the market, or, to our knowledge, in development.
With respect to our artificial insemination solution, we expect to compete with IUI, IVF/ ICSI and fertility-enhancing pharmaceuticals currently in the market and those in clinical and preclinical development. While
there is no direct competitor in our segment of the product category of artificial insemination, there are alternatives, such as IUI and IVF/ ICSI. Leading companies that produce IUI devices include Cook Medical LLC, a subsidiary of Cook Group,
Inc., Cooper Surgical, Inc., MedGyn Products, Inc. and Rocket Medical LLC.
With respect to our tissue sampling product, there are other procedures used in women’s health to evaluate the cervical canal, such as the Pap test, HPV test and colposcopy, which are well established and pervasive.
Companies such as Dysis Medical and Guided Therapeutics are also developing cervical tissue sampling product candidates.
Many of our competitors have access to greater resources required to develop and market a competitive product than we do. In addition, new
competition and products may arise due to consolidation within the industry and other companies may develop products that could compete with our products or product candidate, and there may be product candidates in early stages of development
of which we are not aware.
Sales & Marketing
FemaSeed – Our Artificial Intratubal Insemination Solution.
With the 510(k) clearance from the FDA and regulatory approval from Europe, UK, Canada and Israel for FemaSeed, we have recruited a direct sales force comprising approximately 10 sales representatives with strong
sales backgrounds and experience in medical device sales, and with possible existing relationships with reproductive endocrinologists and gynecologists for commercialization in the U.S. We intend to focus the significant majority of our direct
sales and marketing efforts in North America and continue to utilize distribution partners for international markets to generate revenue for FemaSeed and our companion product FemVue that has received regulatory FDA-clearance and approval in
Europe, UK, Canada, Japan and Israel. We have begun to target the approximately 1,700 reproductive endocrinologists at 450 practices, who are trained and have experience performing infertility procedures. Over 50% of the practices representing
approximately 60% of the assisted reproduction cycles performed are located in 8 states, which will be prioritized, along with the existing FemVue customers.
We plan to engage in awareness raising activities, highlighting the benefits of our FemaSeed product in jurisdictions where we are approved to market. We also intend to promote broader awareness of the FemaSeed
product as a first-line therapeutic option for infertility and those seeking artificial intratubal insemination for pregnancy among healthcare practitioners followed by patients.
FemBloc – Our Permanent Birth Control Solution.
In March 2025, we announced CE mark certification under EU MDR as the first regulatory approval in the world for the FemBloc delivery system for
non-surgical female permanent birth control. For the FemBloc blended polymer, an integral part of the FemBloc permanent birth control, we have successfully completed an expedited G12 Special MDR Audit for Class III devices and the Notified
Body has recommended for CE mark approval pending the final stages of EMA review, with potential approval expected mid-2025. In March 2025, we announced strategic distribution partnerships for FemBloc in Spain.
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We initially plan to expand our sales force for FemaSeed to introduce FemBloc, if approved, to those gynecologists performing infertility treatment with FemaSeed, a secondary target beyond our initial focus on
reproductive endocrinologists. If approved, we expect to recruit, hire and train additional sales representatives for our direct sales force in the United States for FemBloc. We will seek to recruit representatives with strong sales backgrounds
and experience in medical device sales, and preferably with relationships with gynecologists. We intend to focus the significant majority of our sales and marketing efforts in North America and continue to utilize distribution partners for
international markets. Through our specialized and dedicated direct sales organization, we plan to target the approximately 40,000 gynecologists who are trained and have experience performing gynecologic procedures and offering family planning.
Over 60% of the practices representing over 60% of reproductive-aged women are located in 13 states, which will be prioritized.
Based on our clinical experience to date, we believe that healthcare practitioners experienced in intrauterine procedures, such as IUD placement, will require minimal training to start utilizing our FemBloc system as
is the case for our FemaSeed product. Additional sonographic training will be required for the healthcare practitioners or sonographers who will support the ultrasound confirmation test. Based on our clinical experience to date, we believe the
healthcare practitioners and sonographers will require minimal training and it can be accomplished largely online. Those with FemVue experience will require minimal training for the confirmation test. We expect to begin building our sales
organization prior to potential FDA approval of the product candidate in the U.S.
We plan to engage in awareness raising activities, highlighting the benefits of our FemBloc system in jurisdictions where we are approved to market. We also intend to promote broader awareness of the FemBloc system as
the first non-surgical, non-implant option for permanent birth control among patients and healthcare practitioners.
Reimbursement
In the United States, we anticipate deriving the majority of our revenue from the sale of products in our infertility portfolio, including the
FemaSeed and FemVue products, to fertility practices. These fertility practices typically bill the patient directly. Sometimes, for patients that have the appropriate insurance coverage, the fertility practices will bill the third-party payors
– such as private insurance companies and health maintenance organizations – first. However, reimbursement for fertility products, such as FemaSeed and FemVue product, are most often billed directly to the patient from the provider.
When third-party payors are engaged in the United States, they often require healthcare practitioners and hospitals to identify the product and/or
service for which they are seeking reimbursement for by using Current Procedural Terminology ( CPT ) codes, a five-digit alphanumeric code used to facilitate accurate
reporting and billing. CPT codes are created and maintained by the American Medical Association (“AMA”). As such, long-standing and well-established procedures, such as intrauterine insemination, are ingrained in the medical community and have
well-known CPTs, allowing for those procedures to be swiftly approved by third-party payors. Newer procedures however, such as FemaSeed, do not currently have CPT codes. While these procedures can still be covered by private health insurance,
it simply makes the reimbursement process more time-consuming for the patient than if the procedure had a CPT code. Outside of the United States, reimbursement processes vary significantly by country and region. For countries and/or regions
that adhere to a single-payor system, direct patient payment is most common because the annual healthcare budget limits the number of fertility treatments covered by third-party payors. As clear from the foregoing, reimbursement can be obtained
from a variety of sources, including government-sponsored insurance plans, private health insurance plans, or a combination of both.
In the United States, we expect to derive revenue from the sale of our FemBloc system, if approved, from gynecology offices, which typically bill
various third-party payors, including Medicare, Medicaid, private insurance companies, health maintenance organizations and other healthcare-related organizations. In addition, we expect that any portion of the costs and fees associated with
our FemBloc system that are not covered by these third-party payors, such as deductibles or co-payments, will be billed directly to the patient by the provider. It is anticipated that the FemBloc system, upon approval as a permanent
contraceptive method, will be covered under the Affordable Care Act (“ACA”), qualifying for coverage without patient cost-sharing. According to HealthCare.gov., under the ACA, health insurance plans must cover contraceptives without charging a
copayment or coinsurance when these services are provided by an in-network provider, even if the patient has not yet met their deductible.
Our expectation is that we receive two Category I CPT codes assigned to our procedures. According to the AMA, the CPT requirements for Category I
codes include the documentation of clinical efficacy supported by peer-reviewed publications, typically involving up to five publications, with at least one study including a U.S. patient population and at least two studies involving different
patient populations. Physician reimbursement under Medicare is typically determined by the Medicare Physician Fee Schedule, where payment amounts reflect the relative value of the service rendered by the healthcare practitioner. Medicare
generally reimburses hospitals and ambulatory surgical centers for procedures such as surgical sterilization under one of two systems – the Hospital Outpatient Prospective Payment System (“OPPS”) and the Ambulatory Surgical Center (“ASC”)
Payment System. Under these payment systems, the hospital or ASC receives a bundled reimbursement amount intended to cover all facility-related costs for procedures performed in outpatient settings. Ambulatory Payment Classification (“APC”)
codes within OPPS are also widely used by commercial payers. The FemBloc procedure is anticipated to map to APC Level 4 gynecologic procedures, currently associated with a reimbursement rate of $2,498 (tubal ligation). Actual reimbursement
rates may vary based on several factors, including but not limited to the payor type, geographic location, procedure performed, contractual terms, and the facility in which the procedure occurred.
Outside the United States, reimbursement levels vary significantly by country and region, particularly depending on whether the country or region
utilizes a single-payor healthcare system. Annual healthcare budgets in single-payor systems often determine the number of permanent birth control procedures funded in any given year. Reimbursement is sourced from government-sponsored health
programs, private insurance plans, or combinations of both. In some countries or regions, additional clinical data collection might be required before coverage and reimbursement are granted for our FemBloc system. We intend to work with payors
in select countries and regions to secure appropriate coverage and reimbursement approvals where economically viable.
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Intellectual Property
Our success depends in part on our ability to obtain, maintain, protect and enforce our proprietary technology and intellectual property rights, in particular, our patent rights, preserve the confidentiality of our
trade secrets, and operate without infringing the valid and enforceable patents and other proprietary rights of third parties. We rely on a combination of patent, trademark, trade secret, copyright and other intellectual property rights and
measures to protect the intellectual property rights that we consider important to our business. We also rely on know-how and continuing technological innovation to develop and maintain our competitive position.
We seek to protect our proprietary rights through a variety of methods, including confidentiality agreements and proprietary information agreements with suppliers, employees, consultants and others who may have access
to our proprietary information. However, trade secrets and proprietary information can be difficult to protect. While we have confidence in the measures we take to protect and preserve our trade secrets and proprietary information, such
measures can be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets and proprietary information may otherwise become known or be independently discovered by competitors.
As of December 31, 2024, we owned 53 issued U.S. patents and 169 issued foreign patents, 18 pending U.S. patent applications and 41 pending
foreign patent applications. Our patent portfolio includes both utility and design patents and patent applications, both in the U.S. and overseas. Issued patents have a limited term for enforcement, and the termination dates differ for
utility and design patents, and from country to country. Expirations of our earlier-filed patents in the US or overseas are anticipated by several strategies. Some earlier-filed design patents were directed to devices that are no longer
used or marketed. Design patents with shorter enforcement periods generally have existing utility patents, still in enforcement periods, that continue to protect the subject matter of the device. Additionally, earlier-filed utility patents
may reach their termination dates, but these patents recite devices or methods of using the devices that have been supplanted by patents and patent applications for improved devices and methods of using the improved devices prior to the
expiration dates earlier-filed utility patents. As part of the evolving products offered by us, products covered by utility patents that have expiration dates in the next two to three years, which generally covered the first generation
devices, are being replaced by improved devices that are now protected by issued patents and patent applications, and design and manufacture efforts have developed improved devices that can be protected in a similar manner. These issued
patents, and any patents granted from such applications, are expected to expire between 2025 and 2046, without taking potential patent term extensions or adjustments into account. We believe that the patents expiring in 2025 are not
material to our business.
In the United States, our FemBloc patent portfolio includes two patent families. They include granted utility and design patents providing
protection until at least 2025 and 2030, including any eligible patent term adjustments and extensions. The utility patent family includes a pending patent application, which if granted, could result in a patent expiring in 2025, plus any
eligible patent term adjustments and extensions. We believe that the patent expiring in 2025 is not material to our business. Our blended polymer composition patent portfolio includes one patent family. The one patent family includes granted
utility and design patents providing protection until at least 2038, and a pending utility patent application, which if granted, could result in a patent expiring in 2038. In July 2023, we announced a new U.S. patent covering use of FemBloc for
female permanent birth control with an anticipated expiration in 2039 at the earliest. In January 2025, we announced two new European patents covering use of both components of FemBloc, the delivery system and blended polymer, with an
anticipated expiration in 2039 and 2038 respectively.
Our FemaSeed patent portfolio includes three patent families. Two patent families include granted utility and design patents providing protection
until at least 2025 and 2044. We believe that the patents expiring in 2025 are not material to our business. In January 2025, we announced a new U.S. patent covering use of FemaSeed for female infertility treatment with an anticipated
expiration 2044 at the earliest.
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Our FemVue patent portfolio includes five patent families, including granted utility and design patents providing protection until at least 2026 and 2028. We believe
that the patents expiring in 2026 are not material to our business. The two utility patent families include pending patent applications, which if granted, could result in patents expiring in 2028, plus any eligible patent term adjustments and
extensions. Our FemVue Mini patent portfolio includes two patent families. The two patent families include granted design patents providing protection until at least 2034 and 2049. The utility patent
family include a pending patent application, which if it provides the priority for a granted patent, could result in patents expiring in 2044, plus any eligible patent term adjustments and extensions.
Our FemChec patent portfolio includes five patent families. The five patent families include granted utility and design patents providing protection until at least 2026, 2028, 2029 2032, and 2046. The utility patent
family includes a pending patent application, which if granted, could result in a patent expiring in 2028, plus any eligible patent term adjustments and extensions.
Our FemCerv patent portfolio includes two patent families. The two patent families include granted utility and design patents providing protection until at least 2027, 2032, and 2033. The utility patent family
includes a pending patent application, which if granted, could result in a patent expiring in 2033.
Our controlled delivery device patent portfolio includes one patent family. The patent family includes granted utility and design patents providing protection until at least expiring in 2035 and 2042. The utility
patent family includes a pending patent application, which if granted, could result in a patent expiring in 2040.
Our syringe lock patent portfolio includes two patent families. The patent families include granted design patents providing protection until at least 2038 and 2044, and pending design applications, that if granted,
could result in patents expiring in 2038 and later.
Our Varilock patent portfolio includes two patent families, including pending utility and design patent applications that if granted, could result in patents expiring in 2035 and later.
Our FemCath patent portfolio includes one patent family, including a design patent that expires in 2026, plus any eligible patent term adjustments and extensions.
There can be no assurance that the pending patent application will be granted. Our material international patents and patent applications include
granted design and utility patents, as applicable, with similar overview detail as with the U.S. patent application, including in Canada, China, Hong Kong, European Union, India, Japan, South Korea and Brazil.
The term of individual patents depends upon the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is 20 years from the earliest claimed
filing date of a nonprovisional patent application in the applicable country. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the
United States Patent and Trademark Office in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date. We
cannot be sure that our pending patent applications that we have filed or may file in the future will result in issued patents, and we can give no assurance that any patents that have issued or might issue in the future will protect our current
or future products, will provide us with any competitive advantage, and will not be challenged, invalidated, or circumvented.
For more information regarding the risks related to our intellectual property, please see the section titled “Risk Factors—Risks Related to Our Intellectual Property.”
Government Regulations
United States
Our products are medical devices subject to extensive and ongoing regulation by the FDA under the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations, as well as other federal and state
regulatory bodies in the United States and comparable authorities in other countries under other statutes and regulations. The laws and regulations govern, among other things, product design and development, preclinical and clinical testing,
manufacturing, packaging, labeling, storage, recordkeeping and reporting, clearance or approval, marketing, distribution, promotion, import and export and post-marketing surveillance. Failure to comply with applicable requirements may subject a
device and/or its manufacturer to a variety of administrative sanctions, such as issuance of warning letters, import detentions, civil monetary penalties and/or judicial sanctions, such as product seizures, injunctions and criminal prosecution.
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FDA’s Pre-market Review Requirements
Each medical device we seek to commercially distribute in the United States will require either a prior 510(k) clearance, unless it is exempt, a granted request for de novo classification, or a pre-market approval
from the FDA. Medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of control needed to provide reasonable assurance of
product safety and effectiveness. Class I devices are deemed to be low risk and are subject to the general controls of the FDCA, such as provisions that relate to: adulteration; misbranding; registration and listing; notification, including
repair, replacement, or refund; records and reports; and good manufacturing practices. Most Class I devices are classified as exempt from pre-market notification under section 510(k) of the FDCA, and therefore may be commercially distributed
without obtaining 510(k) clearance from the FDA. Class II devices are subject to both general controls and special controls, which include performance standards, post market surveillance, patient registries and guidance documents. For most
Class II devices, the manufacturer must submit to the FDA a pre-market notification requesting permission to commercially distribute the device. Devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life supporting or
implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k) device, are placed in Class III. A Class III device cannot be marketed in the United States unless the FDA approves the device after submission
of a PMA. However, there are some Class III pre-amendment devices for which the FDA has not yet called for a PMA. These devices require a PMA only after the FDA publishes a regulation calling for PMA submissions. Prior to the PMA effective
date, the manufacturer must submit a 510(k) pre-market notification and obtain clearance in order to commercially distribute these devices. The FDA can also impose sales, marketing or other restrictions on devices in order to ensure that they
are used in a safe and effective manner.
510(k) Clearance Pathway
When a 510(k) clearance is required, we must submit a pre-market notification to the FDA demonstrating that our proposed device is substantially equivalent to a predicate device, which may be a previously cleared and
legally marketed 510(k) device or a device that was in commercial distribution before May 28, 1976, or a device that that was de novo classified under section 513(f)(2) of the FDCA. To demonstrate substantial equivalence, the manufacturer must
show that the proposed device has the same intended use as the predicate device, and it either has the same technological characteristics, or different technological characteristics and the information in the pre-market notification
demonstrates that the device is as safe and effective as the predicate device and does not raise different questions of safety and effectiveness. Demonstrating substantial equivalence requires non-clinical performance data and, in some cases,
clinical data. If the FDA determines that the device is not substantially equivalent to a previously cleared device, the FDA will place the device into Class III.
There are three types of 510(k)s: traditional; special; and abbreviated. Special 510(k)s are for devices that are modified by the manufacturer legally authorized to market the device, and where performance data are
unnecessary, or if performance data are necessary, well-established methods are available to evaluate the change, and the performance data necessary to support substantially equivalent (SE) can be reviewed in a summary or risk analysis format.
Abbreviated 510(k)s are for devices that conform to a recognized standard. The special and abbreviated 510(k)s are intended to streamline review, and the FDA intends to process special 510(k)s within 30 days of receipt. The FDA also recently
established the Safety and Performance Based Pathway that is an expansion of the concept of the abbreviated 510(k) pathway for certain, well understood device types, and provides the option to use FDA-identified performance criteria to
demonstrate that a device is as safe and effective as a predicate device.
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De Novo Classification
Medical device types that the FDA has not previously classified as Class I, II or III are automatically classified into Class III regardless of the level of risk they pose. The Food and Drug Administration
Modernization Act of 1997 established a new route to market for low to moderate risk medical devices that are automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class
III Designation,” or the de novo classification procedure. This procedure allows a manufacturer whose novel device is automatically classified into Class III to request de novo classification of its
medical device into Class I or Class II on the basis that the device presents low or moderate risk, and that general controls alone, or general and special controls, provide reasonable assurance of safety and effectiveness for the intended use
and that the probable benefits of the device outweigh the probable risks.
The FDA has issued several guidance documents addressing the de novo classification process and the contents of de novo classification requests, but the FDA has not yet issued regulations governing the de novo
classification process. On December 7, 2018, the FDA published a proposed rule to establish regulations for the de novo classification process. The proposed regulations, if finalized, are intended to provide structure, clarity and transparency
on the de novo classification process, including requirements related to the format and content of de novo requests, as well as processes and criteria for accepting, granting, declining and withdrawing de novo requests.
Under the Food and Drug Administration Safety and Innovation Act (FDASIA), the FDA is required to issue an order classifying the device within 120 days following receipt of the de novo request, but in practice the
time for FDA review of de novo classification requests is significantly longer. Under the Food and Drug Administration Reauthorization Act (FDARA), Congress implemented user fees for de novo classification requests and the FDA committed to
performance goals for their review. If the manufacturer seeks de novo classification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide a reasonable assurance of the safety and
effectiveness of the medical device. In addition, the FDA may decline the de novo classification request if it identifies a legally marketed predicate device, or determines that general controls or general and special controls are insufficient
to provide reasonable assurance of safety and effectiveness of the device, or that the probable benefits of the device do not outweigh the probable risks. Devices that are classified into class I or class II in response to a de novo
classification request may be marketed and used as predicates for future premarket notification 510(k) submissions.
Pre-market Approval Pathway
A pre-market approval application must be submitted to the FDA for all Class III devices other than preamendment Class III devices for which the FDA has not yet required a PMA. The pre-market approval application
process is much more demanding than the 510(k) pre-market notification process. A pre-market approval application must be supported by extensive data, including but not limited to technical, preclinical and clinical trial data, and
manufacturing and labeling information to demonstrate to the FDA’s satisfaction a reasonable assurance of safety and effectiveness of the device.
Within 45 days after submission of a PMA application, the FDA will determine whether the application is sufficiently complete to permit a substantive review and thus whether the FDA will file the application for
review. The FDA has a performance goal of issuing a decision on original PMAs that do not require input from an advisory committee within 180 FDA Days, which exclude days during which an agency request for additional information is pending with
the applicant. The total time for FDA review of an application generally occurs over a significantly longer period of time and can take a year, or even longer. During this review period, the FDA may request additional information or
clarification of the information already provided. Also, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device.
Although the FDA is not bound by the advisory panel decision and may or may not accept the panel’s recommendations, the panel’s recommendations are important to the FDA’s overall decision-making process. In addition, the FDA may conduct a
preapproval inspection of the manufacturing facility to ensure compliance with the Quality System Regulation, or QSR. The agency also may inspect one or more clinical sites to assure compliance with the FDA’s regulations.
The FDA allows applicants to submit discrete sections (modules) of the PMA to the FDA for review soon after completing the testing and analysis. The FDA intends the modular review approach to provide a mechanism by
which applicants may submit preclinical data and manufacturing information for review while still collecting, compiling, and analyzing the clinical data. Therefore, a modular PMA is a compilation of sections or “modules” submitted at different
times that together become a complete application. Additionally, the modular approach allows the applicant to potentially resolve any deficiencies noted by the FDA earlier in the review process than would occur with a traditional PMA
application.
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During the PMA review, the FDA assesses whether the data and information in the PMA constitute valid scientific evidence to support a determination that there is a reasonable assurance that the device is safe and
effective for its intended use(s) based on the proposed labeling. Upon completion of the PMA review, the FDA may: (i) approve the PMA, which authorizes commercial marketing with specific prescribing information for one or more indications, and
which can be more limited than those originally sought; (ii) issue an approvable letter, which indicates the FDA’s belief that the PMA is approvable and states what additional information the FDA requires, or the post-approval commitments that
must be agreed to prior to approval; (iii) issue a not approvable letter, which outlines steps required for approval, but which are typically more onerous than those in an approvable letter, and may require additional clinical trials that are
often expensive and time consuming and can delay approval for months or even years; or (iv) deny the application. If the FDA issues an approvable or not approvable letter, the applicant has 180 days to respond, after which the FDA’s review
clock is reset. If the FDA issues a PMA approval, the approval may contain post approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and
distribution, and collection of long-term follow-up data from patients in the clinical trial that supported a PMA or requirements to conduct additional clinical trials post-approval.
Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which affect the safety or effectiveness
of the device, require submission and approval of a PMA supplement. Certain other changes to an approved device require the submission and approval of a new PMA, such as when the design change leads to a different intended use, mode of
operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the originally submitted data are not applicable to the change.
Clinical Trials
Clinical trials are almost always required to support pre-market approval, are often required for de novo classification, and are sometimes required for 510(k) clearance. In the United States, for significant risk
devices, these trials require submission of an IDE application to the FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing it is safe to test the device in humans and that the
testing protocol is scientifically sound. The IDE must be approved in advance by the FDA for a specific number of patients at specified study sites. During the trial, the sponsor must comply with the FDA’s IDE requirements for investigator
selection, trial monitoring, reporting and recordkeeping. The investigators must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of investigational devices and comply with
all reporting and recordkeeping requirements. Clinical trials for significant risk devices may not begin until the IDE application is approved by the FDA. An IDE application is considered approved 30 days after it has been received by the FDA,
unless the agency otherwise informs the sponsor via email prior to 30 calendar days from the date of receipt, that the IDE is approved, approved with conditions, or disapproved. In addition, the study must be approved by, and conducted under
the oversight of an Institutional Review Board (IRB). An IRB is an appropriately constituted group that has been formally designated to review and monitor medical research involving subjects and which has the authority to approve, require
modifications in, or disapprove research to protect the rights, safety and welfare of human research subjects. A nonsignificant risk device does not require FDA approval of an IDE; however, the clinical trial must still be conducted in
compliance with abbreviated IDE requirements such as monitoring of the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements, and be approved by an IRB at the clinical trial sites.
The FDA or the IRB at each site at which a clinical trial is being performed may withdraw approval of a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the benefits or a failure to
comply with FDA or IRB requirements. Even if a trial is completed, the results of clinical testing may not demonstrate the safety and effectiveness of the device, may be equivocal or may otherwise not be sufficient to obtain approval or
clearance of the product.
Sponsors of certain clinical trials of devices are required to register with clinicaltrials.gov, a public database of clinical trial information. Information related to the device, patient population, phase of
investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration.
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Ongoing Regulation by the FDA
Even after a device receives clearance, grant of a de novo classification request or approval and is placed on the market, numerous regulatory requirements apply. These include:
•
establishment registration and device listing;
•
the Quality System Regulation, or QSR, which requires manufacturers, including third-party contract manufacturers, to follow stringent design, testing, control, documentation and other quality assurance
procedures during all aspects of the manufacturing process;
•
labeling regulations and the FDA prohibitions against the promotion of products for uncleared or unapproved uses (“off-label” uses) and other requirements related to promotional activities, including the
advertising of restricted devices;
•
medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury, or if their device malfunctioned and the
device or a similar device marketed by the manufacturer would be likely to cause or contribute to a death or serious injury if the malfunction were to recur;
•
corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections or removals if undertaken to reduce a risk to health posed by a device or to remedy a
violation of the FDCA that may present a risk to health; and
•
post market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and efficacy data for the device.
After a device receives 510(k) clearance or is de novo classified, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, will
require a new clearance or possibly even a new de novo classification or PMA supplement. The FDA requires each manufacturer to make this determination initially, but the FDA can review any such decision and can disagree with a manufacturer’s
determination. If the FDA disagrees with our determination not to seek a new 510(k) clearance, the FDA may retroactively require us to seek 510(k) clearance or possibly de novo classification or PMA supplement. The FDA could also require us to
cease marketing and distribution and/or recall the modified device until 510(k) clearance, de novo classification, or pre-market approval is obtained. Also, in these circumstances, we may be subject to enforcement actions.
Some changes to an approved PMA device, including changes in indications, labeling or manufacturing processes or facilities, require submission and FDA approval of a new PMA or PMA supplement, as appropriate, before
the change can be implemented. Supplements to a PMA often require the submission of the same type of information required for an original PMA, except that the supplement is generally limited to that information needed to support the proposed
change from the device covered by the original PMA. The FDA uses the same procedures and actions in reviewing PMA supplements as it does in reviewing original PMAs.
FDA regulations require us to register as a medical device manufacturer with the FDA. Additionally, the California Department of Health Services, or CDHS, requires us to register as a medical device manufacturer
within the state. Our manufacturing processes are required to comply with the applicable portions of the QSR, which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality
assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use. As a manufacturer, our facilities, records and manufacturing processes are subject to periodic scheduled or unscheduled
inspections by the FDA and the CDHS. Our failure to maintain compliance with the QSR could result in the shutdown of, or restrictions on, our manufacturing operations and the recall or seizure of our products. We have undergone and expect to
continue to undergo regular QSR inspections in connection with the manufacture of our products at our facilities. Further, the FDA requires us to comply with various FDA requirements regarding labeling and promotion. Failure by us or by our
suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or state authorities, which may include any of the following sanctions:
•
warning or untitled letters, fines, injunctions, consent decrees and civil penalties; customer notifications, voluntary or mandatory recall or seizure of our products;
•
operating restrictions, partial suspension or total shutdown of production;
•
delay in processing submissions or applications for new products or modifications to existing products;
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•
withdrawing PMA approvals that have already been granted; and
•
criminal prosecution.
The Medical Device Reporting laws and regulations require us to provide information to the FDA when we receive or otherwise become aware of information that reasonably suggests our device may have caused or
contributed to a death or serious injury, or has malfunctioned and the device or a similar device that we market would be likely to cause or contribute to a death or serious injury if the malfunction were to recur. In addition, the FDA
prohibits an approved device from being marketed for off-label use. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted
off-label uses may be subject to significant liability, including substantial monetary penalties and criminal prosecution.
Newly discovered or developed safety or effectiveness data may require changes to a product’s labeling, including the addition of new warnings and contraindications, and also may require the implementation of other
risk management measures. Also, new government requirements, including those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory clearance or approval of our products
under development.
We are also subject to other federal, state and local laws and regulations relating to safe working conditions, laboratory and manufacturing practices.
European Union
Our products are regulated in the European Union as medical devices under 2017/745 Medical Device Regulation (MDR), which replaced the Medical
Devices Directive (MDD) and as of May 26, 2024, the requirements of the new MDR must be complied with by all medical devices regardless of their risk class. The Medical Devices Regulation envisages, among other items, stricter controls of
medical devices, including strengthening of the conformity assessment procedures, increased expectations as regards to clinical data for devices and pre-market regulatory review of high-risk devices. Under transitional provisions, medical
devices with notified body certificates issued under the Medical Devices Directive prior to May 26, 2021 may continue to be placed on the market for the remaining validity of the certificate, until May 27, 2024 at the latest. After the expiry
of any applicable transitional period, only devices that have been CE marked under the Medical Devices Regulation may be placed on the market in the EEA.
The Medical Devices Regulation requires medical devices meet the essential requirements which are enumerated in the Regulation. Compliance with these requirements is a prerequisite to be able to affix the Conformité
Européene, or CE, mark to our products, without which they cannot be sold or marketed in the EEA. To demonstrate compliance with the essential requirements we must perform a conformity assessment procedure, which varies according to the type of
medical device and its classification.
The European Union’s Medical Device Regulation (MDR) classifies medical devices into four classes and the classification is based on the device’s intended purpose and the risk it poses to patients. Class I is the
lowest risk class, for devices used in basic functions and non-invasive procedures; manufacturers can self-assess conformity to requirements. Class IIa is a moderate risk class, for devices like catheters and short-term devices; manufacturers
must receive a declaration of conformity from a notified body. Class IIb is a significant risk class, for devices that administer or remove medicinal products from the body. Class III is the highest risk class, for devices that support vital
functions, are implanted for long periods, or are used in critical procedures. Notified bodies consult expert panels before issuing a CE certificate. To determine the class of a medical device, we must follow the 22 classification rules in
Annex VIII of the MDR.
Depending on the relevant conformity assessment procedure, the notified body would typically audit and examine the technical file and the quality system for the manufacture, design and final inspection of our devices.
The notified body issues a certificate of conformity following successful completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the essential requirements.
This certificate entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity.
As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and
performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse
events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence. To commercialize medical devices in
the EU, we must have a CE marking that demonstrates compliance with the MDR.
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Other Regions
Most major markets have different levels of regulatory requirements for medical devices. Modifications to the cleared or approved products may require a new regulatory submission in all major markets. The regulatory
requirements, and the review time, vary significantly from country to country. Products can also be marketed in other countries that have minimal requirements for medical devices.
Fraud and Abuse and Other Healthcare Regulations
Federal and state governmental agencies and equivalent foreign authorities subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement efforts. These laws
constrain the sales, marketing and other promotional activities of medical device manufacturers by limiting the kinds of financial arrangements we may have with hospitals, healthcare practitioners and other potential purchasers of our products.
Federal healthcare fraud and abuse laws apply to our business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid or other federally-funded healthcare programs. Patient privacy statutes and
regulations by foreign, federal and state governments may also apply in the locations in which we do business. Descriptions of some of the U.S. laws and regulations that may affect our ability to operate follow below.
Federal Healthcare Anti-Kickback Statute
The federal healthcare Anti-Kickback Statute prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or paying any remuneration, directly or indirectly, overtly
or covertly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order of any good or service for which payment may be
made, in whole or in part, by federal healthcare programs, such as the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the
Anti-Kickback Statute without proving that a person or entity had actual knowledge of the law or a specific intent to violate it. In addition, the government may assert that a claim, including items or services resulting from a violation of the
Anti-Kickback Statute, constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. The Anti-Kickback Statute is subject to evolving interpretations and has been applied by government enforcement officials to a
number of common business arrangements in the medical device industry. There are a number of statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution under the Anti-Kickback Statute; however,
those exceptions and safe harbors are drawn narrowly, and there is no exception or safe harbor for many common business activities, such as reimbursement support programs, educational and research grants or charitable donations. The failure of
a transaction or arrangement to fit precisely within one or more applicable statutory exceptions or regulatory safe harbors does not necessarily mean that it is illegal or that prosecution will be pursued. However, conduct and business
arrangements that do not fully satisfy all requirements of an applicable safe harbor may result in increased scrutiny by government enforcement authorities and will be evaluated on a case-by-case basis based on a cumulative review of all facts
and circumstances.
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Federal Civil False Claims Act
The federal civil False Claims Act prohibits, among other things, persons or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly
making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation to pay money to the federal government. A claim including items or services resulting
from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Actions under the False Claims Act may be brought by the government or as a qui tam action by a private individual in
the name of the government. These individuals, sometimes known as “relators” or, more commonly, as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. The number of filings of qui tam actions
has increased significantly in recent years. Qui tam actions are filed under seal and impose a mandatory duty on the U.S. Department of Justice to investigate such allegations. Most private citizen actions are declined by the Department of
Justice or dismissed by federal courts. However, the investigation costs for a company can be significant and material even if the allegations are without merit. Various states have adopted laws similar to the False Claims Act, and many of
these state laws are broader in scope and apply to all payors, and therefore, are not limited to only those claims submitted to the federal government. Medical device manufacturers and other healthcare companies are also subject to federal
fraud and abuse laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs.
Healthcare Fraud Statute
The Health Insurance Portability and Accountability Act (HIPAA), along with related federal criminal statutes (primarily 18 U.S.C §§ 1347 and 1035),
enforce regulations prohibiting fraudulent practices within healthcare benefit programs. Such rules and regulations prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud healthcare
benefit programs. This includes intentional falsification, concealment, or covering up of material facts, knowingly making materially false or fraudulent statements, or using false documentation related to healthcare services, items or
benefits. Such offenses are prosecuted by the Department of Justice, often in collaboration with other agencies like the Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“HHS”).
Federal Physician Payments Sunshine Act
The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance
Program to report annually with certain exceptions to CMS information related to payments or other transfers of value made to a healthcare practitioner or teaching hospital, or to a third party at the request of a healthcare practitioner or
teaching hospital, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by healthcare practitioners and their immediate family members. Beginning in 2022,
applicable manufacturers also are required to report information regarding payments and transfers of value provided to advanced practice providers, including physician assistants, nurse practitioners, clinical nurse specialists, certified nurse
anesthetists and certified nurse-midwives.
Patient Data Privacy
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH Act), and their implementing regulations impose obligations on covered entities, such as health plans, healthcare
clearinghouses and certain healthcare providers, as well as business associates that provide services involving the use or disclosure of personal health information to or on behalf of covered entities. These obligations, such as mandatory
contractual terms, relate to safeguarding the privacy and security of protected health information. Many states also have laws governing the privacy and security of health information in certain circumstances, many of which differ from each
other in significant ways and often are not preempted by HIPAA.
Other State Laws
Certain states also mandate implementation of commercial compliance programs, impose restrictions on device manufacturer marketing practices and/or require tracking and reporting of gifts, compensation and other
remuneration to healthcare professionals and entities.
State and federal regulatory and enforcement agencies continue to actively investigate violations of healthcare laws and regulations, and the U.S.
Congress continues to strengthen the arsenal of enforcement tools. For example, the Bipartisan Budget Act (“BBA”) of 2018 increased the criminal and civil penalties that can be imposed for violating certain federal healthcare laws, including
the Anti-Kickback Statute. Enforcement agencies also continue to pursue novel theories of liability under these laws, such as indirect remuneration, off-label promotion, HIPAA noncompliance and violations of the Sunshine Act.
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Enforcement and Penalties for Noncompliance with Fraud and Abuse Laws and Regulations
Compliance with these federal and state laws and regulations requires substantial resources. If our operations are found to be in violation of any of the laws described above or any other governmental regulations that
apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from participation in government healthcare programs such as the Medicare and Medicaid programs,
reputational harm, administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations. Companies settling federal civil False Claims Act, Anti-Kickback Statute and other fraud and abuse cases
also may be required to enter into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General in order to avoid exclusion from participation (i.e., loss of coverage for their products) in
federal healthcare programs such as Medicare and Medicaid. Corporate Integrity Agreements typically impose substantial costs on companies to ensure compliance.
For additional information regarding obligations under federal healthcare statutes and regulations, please see the section titled “Risk Factors—If we fail to comply with U.S. federal and state fraud and abuse laws and
regulations, including those relating to kickbacks and false claims for reimbursement, we could face substantial penalties and our business operations and financial condition could be adversely affected.”
United States Healthcare Reform
There have been and continue to be proposals by the federal government, state governments, regulators and third-party payors to control or manage the increased costs of healthcare and, more
generally, to reform the U.S. healthcare system.
For example, in the United States, in March 2010, the ACA was enacted. The ACA contains a number of significant provisions, including those governing enrollment in federal healthcare programs, reimbursement changes
and fraud and abuse measures, all of which will impact existing government healthcare programs and will result in the development of new programs.
Certain provisions of the ACA have faced judicial and Congressional challenges, with Congress previously considering, but not passing, comprehensive
legislation to repeal or replace the ACA. While Congress has not passed comprehensive repeal legislation, two legislative actions affecting ACA-related taxes have been signed into law. Notably, the Tax Cuts and Jobs Act of 2017 (“Tax Act”),
reduced the tax-based shared responsibility payment – commonly referred to as the “individual mandate” – to zero dollars ($0). On December 14, 2018, a federal district court in Texas ruled the individual mandate is a critical and inseverable
feature of the ACA, and therefore, because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well. On December 18, 2019, the Fifth Circuit U.S. Court of Appeals held that the individual mandate is
unconstitutional and remanded the case to the lower court to reconsider its earlier invalidation of the full ACA. On March 2, 2020, the United States Supreme Court granted the petitions for writs of certiorari to review this case and held oral
arguments on November 10, 2020. In June 2021, the United States Supreme Court held that the individual plaintiffs and states lacked standing to challenge the constitutionality of the ACA. Consequently, this ruling left the ACA intact, fully
operational, and legally valid.
On January 22, 2018, President Trump (in his first administration) signed into law a continuing resolution on appropriations for fiscal year 2018,
temporarily delaying certain ACA-mandated fees. These fees included the “Cadillac tax” (a tax on certain high-cost employer-sponsored health insurance plans), the annual fee imposed on certain health insurance providers based on market share,
and the excise tax on non-exempt medical devices. Subsequently, on December 20, 2019, President Trump (in his first administration) signed the Further Consolidated Appropriations Act (H.R. 1865) into law, permanently repealing the Cadillac tax,
the health insurance provider tax, and the medical device excise tax. Other legislative changes impacting the ACA have also been enacted since its passage. For example, the BBA amended the ACA to close the coverage gap, commonly known as the
“donut hole,” in most Medicare prescription drug plans.
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In December 2018, CMS published a final rule permitting the continued collections of, and payments to, certain ACA qualified health plan and health
insurance issuers under the ACA risk adjustment program – addressing issues raised previously in federal district court litigation over CMS’ method for calculating risk adjustment payments. Since that ruling, CMS has updated the payment
parameters for the ACA risk adjustment program annually. In addition, CMS published another final rule, that became effective in 2020, which granted states greater flexibility in establishing benchmark plans for insurers in the individual and
small group marketplaces. The increased flexibility has ultimately allowed states to offer marketplace plans with variations in coverage, compared to the original mandates of the ACA.
In addition, other legislative changes have been proposed and adopted since the passage of the ACA. For example, the Budget Control Act of 2011,
signed into law on August 2, 2011, introduced automatic across-the-board spending reductions, including a 2% annual reduction in Medicare payments to healthcare providers. These payment cuts, known as Medicare sequestration, began on April 1,
2013 and, due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2030, unless further Congressional action modifies or ends them. Another example includes the American Taxpayer Relief Act of
2012, signed into law on January 2, 2013, which, among other things, reduced Medicare reimbursement rates to healthcare providers, including hospitals. The Act also extended the statute of limitations for the government to recover overpayments
made to providers from three years to five years. Providers now face a longer period during which the government can audit claims and demand repayment of alleged overpayments.
There has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed, and enacted
federal and state legislation designed to bring transparency to product pricing and reduce the cost of products and services under government healthcare programs. Additionally, regional healthcare authorities and individual hospitals are
increasingly using bidding procedures to determine what products to purchase and which suppliers will be included in their healthcare programs.
The results of the 2024 presidential and congressional elections, and potential subsequent developments further increase the uncertainty related to the healthcare regulatory environment, particularly given the Trump
administration’s stated commitment to significantly reduce government spending through cuts to federal healthcare programs and reductions in the workforces of key government agencies, such as HHS and FDA. In addition, on June 28, 2024, the U.S.
Supreme Court issued an opinion holding that courts reviewing agency action pursuant to the Administrative Procedure Act (APA) “must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because a
statute is ambiguous.” The decision will have a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by FDA and other agencies with significant oversight of the healthcare industry. The
new framework is likely to increase both the frequency of such challenges and their odds of success by eliminating one way in which the government previously prevailed in such cases. As a result, significant regulatory policies may be subject
to increased litigation and judicial scrutiny. Any resulting changes in regulation may result in unexpected delays, increased costs, or other negative impacts that are difficult to predict but could have a material adverse effect on our
business and financial condition.
Employees and Human Capital Resources
As of December 31, 2024, we employed 69 full-time employees and two part-time employees. None of our employees are represented by a collective bargaining agreement and we have never experienced a work stoppage. We
believe our employee relations are good.
We recognize that attracting, motivating and retaining talent at all levels is vital to our continued success. Our employees are a significant asset and we aim to create an equitable, inclusive and empowering
environment in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our current pipeline and future business goals. By focusing on employee retention and
engagement, we also improve our ability to support our clinical trials, our pipeline, our platform technologies, business and operations, and also protect the long-term interests of our stakeholders. Our success also depends on our ability to
attract, engage and retain a diverse group of employees. Our efforts to recruit and retain a diverse and passionate workforce include providing competitive compensation and benefits packages and ensuring we listen to our employees.
We value innovation, passion, data-driven decision making, persistence and honesty, and are building a diverse environment where our employees can thrive and be inspired to make exceptional contributions to bring
novel and proprietary diagnostic and device solutions to disrupt the approaches to women’s health worldwide.
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Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, motivating and integrating our existing and future employees. The principal purposes of our equity incentive plans are
to attract, retain and motivate selected employees, consultants and directors through grants of stock-based compensation awards and payments of cash-based performance bonus awards, in order to increase stockholder value and the success of our
company by motivating our employees to perform to the best of their abilities and achieve our objectives. We are committed to providing a competitive and comprehensive benefits package to our employees. Our benefits package provides a balance
of protection along with the flexibility to meet the individual health and wellness needs of our employees. We plan to continue to refine our efforts related to optimizing our use of human capital as we grow, including improvements in the way
we hire, develop, motivate, and retain employees.
Facilities
We produce all of our products and product candidates in-house at our facility in Suwanee, Georgia which, together with our research and development, controlled environment room and office space, currently totals
approximately 41,000 square feet. We believe that our Georgia facility meets our current needs and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.
Legal Proceedings
We are not currently a party to any legal proceedings the outcome of which we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, operating
results or financial condition. We have received, and may from time to time receive, letters from third parties alleging patent infringement, violation of employment practices or trademark infringement, and we may in the future participate in
litigation to defend ourselves. We cannot predict the results of any such disputes, and despite the potential outcomes, the existence thereof may have an adverse material impact on us due to diversion of management time and attention as well as
the financial costs related to resolving such disputes.
About Us and Available Information
Femasys Inc. was incorporated in Delaware on February 19, 2004 and is headquartered in Suwanee, Georgia.
We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains annual, quarterly and current reports, proxy statements and other
information that issuers (including us) file electronically with the SEC. The SEC’s website is www.sec.gov .
Our website is www.femasys.com . We make available, free of charge, through our website: our annual reports on Form 10-K; quarterly reports on Form 10-Q; current reports on
Form 8-K; Forms 3, 4 and 5 filed on behalf of directors and executive officers; and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably
practicable after such material is electronically filed with, or furnished to, the SEC. We also make available, through our website, our Corporate Governance Guidelines, the charters of the Audit Committee, Nominating and Corporate Governance
Committee and the Compensation Committee of our board of directors, our Code of Business Conduct and Ethics and other information and materials. The information on our website is not incorporated by reference into this Form 10-K.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.