What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-30 compared with 2021-03-30 · 907 added, 1567 removed, 139 unchanged (95% of the section changed)

Corporate Information

We were organized as

a corporation under the laws of the State of Florida on March 12, 2014 under the name “PGP Holdings V, Inc.”

On May 5, 2014, we changed our name to Eyenovia, Inc.

On October 6, 2014, we reincorporated in the State of Delaware

by merging into Eyenovia, Inc., a Delaware corporation.

Our principal executive office is located at 295 Madison Avenue, Suite 2400,

New York, NY 10017, and our phone number is 917-289-1117.

We were organized as a corporation under the laws of the State of Florida on March 12, 2014 under the name “PGP Holdings V, Inc.” On May 5, 2014, we changed our name to Eyenovia, Inc.

On October 6, 2014, we reincorporated in the State of Delaware by merging into Eyenovia, Inc., a Delaware corporation.

Our principal executive office is located at 295 Madison Avenue, Suite 2400, New York, NY 10017, and our phone number is 917-289-1117.

Our website is www.eyenovia.com .

Information contained on, or

that can be accessed through, our website is not incorporated by reference into this report, and you should not consider information

on our website to be part of this report.

We are a clinical stage

ophthalmic company developing a pipeline of advanced therapeutics based on our proprietary microdose array print (MAP™) platform

We aim to achieve clinical microdosing of next-generation formulations of novel and existing ophthalmic pharmaceutical

agents using our high-precision targeted ocular delivery system, branded the Optejet®.

Optejet µ-therapeutics have the

potential to replace conventional eye dropper delivery and improve safety, tolerability, patient compliance and topical delivery

success for ophthalmic eye treatments.

In the clinic, the Optejet has demonstrated that our targeted horizontal microdose delivery

can achieve a significantly higher rate of successful ocular topical delivery compared to the established rate reported with traditional

eye drops (~ 90% vs.

Our technology is designed to achieve single-digit µl-volume physiologic drug delivery with

up to a 75% reduction in ocular drug and preservative topical dosing and has demonstrated significant improvement in the therapeutic

index in drugs used for mydriasis and IOP lowering through three Phase II and Phase III trials.

Conventional eye formulations lack

high-precision micro-volume delivery and expose the ocular surface to approximately 300% more medication and preservatives than

are physiologically indicated leading to clinically recognized ocular and non-ocular side effects.

Using the Optejet, we are developing

the next generation of smart ophthalmic therapeutics which target new indications or new combinations where there are currently

no comparable drug therapies approved by the U.S.

Information contained on, or that can be accessed through, our website is not incorporated by reference into this report, and you should not consider information on our website to be part of this report.

We are a clinical stage ophthalmic company developing a pipeline of advanced therapeutics based on our proprietary microdose array print (MAP™) platform technology.

We aim to achieve clinical microdosing of next-generation formulations of novel and existing ophthalmic pharmaceutical agents using our high-precision targeted ocular delivery system, branded the Optejet®.

Optejet µ-therapeutics have the potential to replace conventional eye dropper delivery and improve safety, tolerability, patient compliance and topical delivery success for ophthalmic eye treatments.

In the clinic, the Optejet has demonstrated that its targeted horizontal microdose delivery can achieve a significantly higher rate of successful ocular topical delivery compared to the established rate reported with traditional eye drops (~ 90% vs.

Our technology is designed to achieve single-digit µl-volume physiologic drug delivery with up to a 75% reduction in ocular drug and preservative topical dosing and has demonstrated significant improvement in the therapeutic index in drugs used for presbyopia, mydriasis and IOP lowering through six Phase II and Phase III trials.

Conventional eye formulations lack high-precision micro-volume delivery and expose the ocular surface to approximately 300% more medication and preservatives than are physiologically indicated leading to clinically recognized ocular and non-ocular side effects.

Using the Optejet, we are developing the next generation of smart ophthalmic therapeutics targeting new indications or new combinations where there are currently no or few drug therapies approved by the U.S.

Food and Drug Administration, or the FDA.

Our microdose therapeutics follow the

FDA-designated pharmaceutical registration and regulatory process.

Our products are classified by the FDA as drugs, and not medical

devices or drug-device combination products.

Our pipeline is currently

focused on the late-stage development of novel first-in-class therapeutic indications for an estimated over five million potential

patients with progressive myopia in the United States and estimated over one hundred million potential patients with age-related

near vision impairment, or presbyopia –

indications where there is tremendous unmet need and no known existing FDA-approved

We are also developing the first microdose fixed combination ophthalmic pharmaceutical for mydriasis to address the

estimated over 100 million annual comprehensive eye exams with pupil dilation.

MicroPine is our first-in-class

topical therapy for the treatment of progressive myopia, a back-of-the-eye ocular disease associated with pathologic axial elongation

and sclero-retinal stretching.

In the United States, myopia is estimated to affect approximately 25 million children, with up to

five million considered to be at risk for high myopia.

In February 2019, the FDA accepted our investigational new drug application,

or IND, to initiate a Phase III registration trial of MicroPine (the CHAPERONE study) to reduce the progression of myopia in children.

Our microdose therapeutics follow the FDA’s regulatory and approval process for combination products.

Our products are classified by the FDA as drug-device combination products with drug primary mode of action, meaning that the Center for Drug Evaluation and Research, or CDER, is designated as the lead center with primary jurisdictional oversight.

Accordingly, the product candidates are submitted to FDA CDER for premarket review and approval under new drug applications, or NDAs.

Our pipeline is currently focused on the late-stage development of novel first-in-class therapeutic indications for an estimated over 25 million potential pediatric patients with progressive myopia in the United States and estimated over 100 million potential patients with age-related near vision impairment, or presbyopia – indications for which there is tremendous unmet need and, to our knowledge, there exists only one known FDA-approved therapy, developed by Allergan.

We are also developing the first microdose fixed combination ophthalmic pharmaceutical for mydriasis to address the estimated over 100 million annual comprehensive eye exams with pupil dilation.

MicroPine is our first-in-class topical therapy for the treatment of progressive myopia, a back-of-the-eye ocular disease associated with pathologic axial elongation and sclero-retinal stretching.

In the United States, myopia is estimated to affect approximately 25 million children, with up to five million considered to be at risk for high myopia.

In February 2019, the FDA accepted our investigational new drug application, or IND, to initiate a Phase III registration trial of MicroPine (the CHAPERONE study) to reduce the progression of myopia in children.

We enrolled the first patient in the CHAPERONE study in June 2019.

Due to the COVID-19 pandemic, we previously experienced

delays in trial enrollment and initiation as a result of reduced clinical trial activities and operations at investigator sites.

However, we have since been able to resume enrollment in the CHAPERONE study.

On October 9,

2020, we entered into a License Agreement (the “Bausch License Agreement”) with a subsidiary of Bausch Health Companies

(“Bausch Health”) pursuant to which Bausch Health may develop and commercialize MicroPine in the United States

Under the terms of the Bausch License Agreement, we received an upfront payment of $10.0 million and we may receive

up to a total of $35.0 million in additional payments, based on the achievement of certain regulatory and launch-based milestones.

Bausch Health also will pay us royalties on a tiered basis (ranging from mid-single digit to mid-teen percentages) on gross profits

from sales of MicroPine in the United States and Canada, subject to certain adjustments.

Under the terms of the Bausch License

Agreement, Bausch Health is in the process of assuming oversight and has assumed the costs related to the ongoing CHAPERONE study.

MicroLine is our pharmacologic

treatment for presbyopia.

Presbyopia is a non-preventable, age-related hardening of the lens, which causes the gradual loss of

the eye’s ability to focus at near and impairs near visual acuity.

There currently are no known FDA-approved drugs for the

improvement of near vision in patients with presbyopia, although other companies have related therapies in their pipeline.

two planned Phase III VISION trials for MicroLine, and initiated the first of these trials in December 2020.

On August 10,

2020, we entered into a License Agreement (the “Arctic Vision License Agreement”) with Arctic Vision (Hong Kong) Limited

(“Arctic Vision”), pursuant to which Arctic Vision may develop and commercialize MicroPine and MicroLine in Greater

China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

Under the terms of the Arctic Vision License Agreement, we

received an upfront payment of $4.0 million before any payments to Senju Pharmaceutical Co., Ltd.

(“Senju”).

addition, we may receive up to a total of $41.75 million in additional payments, based on various development and regulatory milestones,

including the initiation of clinical research and approvals in Greater China and South Korea, and development costs.

Arctic Vision

also will purchase its supply of MicroPine and MicroLine from us or, for such products not supplied by us, pay us a mid-single

digit percentage royalty on net sales of such products, subject to certain adjustments.

We will pay a mid-double digit percentage

of such payments, royalties, or net proceeds of such supply to Senju pursuant to the Exclusive License Agreement with Senju dated

March 8, 2015, as amended by the License Amendment dated April 8, 2020, and a Letter Agreement dated August 10,

2020 (the “Senju License Agreement”).

MydCombi™

MicroStat) is our fixed combination formulation of phenylephrine-tropicamide for mydriasis, designed to be a novel approach for

the estimated over one hundred million office-based comprehensive and diabetic eye exams performed every year in the United States.

We have completed two Phase III trials for MydCombi and announced positive results from these studies, known as MIST-1 and MIST-2.

In March 2021, the FDA accepted our new drug application, or NDA, for MydCombi with an expected Prescription Drug User Fee

Act, or PDUFA, date of October 28, 2021.

The following summarizes

our product pipeline and anticipated milestones:

Due to the COVID-19 pandemic, there have been delays in trial enrollment as a result of supply chain issues with our third party suppliers

On October 9, 2020, we entered into a License Agreement (the “Bausch License Agreement”) with a subsidiary of Bausch Health Companies Inc.

(“Bausch Health”) pursuant to which Bausch Health may develop and commercialize MicroPine in the United States and Canada.

Under the terms of the Bausch License Agreement, we received an upfront payment of $10.0 million and we may receive up to a total of $35.0 million in additional payments, based on the achievement of certain regulatory and launch-based milestones.

Bausch Health also will pay us royalties on a tiered basis (ranging from mid-single digit to mid-teen percentages) on gross profits from sales of MicroPine in the United States and Canada, subject to certain adjustments.

Under the terms of the Bausch License Agreement, Bausch Health assumed sponsorship of the IND as well as oversight and the costs related to the ongoing CHAPERONE study.

MicroLine (or Apersure™) is our pharmacologic treatment for presbyopia.

Presbyopia is a non-preventable, age-related hardening of the lens, which causes the gradual loss of the eye’s ability to focus on near objects and impairs near visual acuity.

Allergan recently received FDA approval for and launch Vuity™, a pilocarpine solution for the treatment of presbyopia.

We are currently enrolling our second Phase III study, VISION-2, using the same molecule but with the advantages of our Optejet delivery system.

We anticipate top-line results from VISION-2 in mid-2022.

Mydcombi™ (or MicroStat) is our fixed combination formulation of tropicamide-phenylephrine for mydriasis, designed to be a novel approach for the estimated over 100 million office-based comprehensive and diabetic eye exams performed every year in the United States.

We have completed two Phase III trials for Mydcombi and announced positive results from these studies, known as MIST-1 and MIST-2, and have submitted an NDA to the FDA seeking approval to market the product in the U.S.

In October 2021, we received a Complete Response Letter (CRL) in response to our NDA, which in part, informed us that pre-filled or co-packaged ophthalmic drug dispenser products like Mydcombi have been reclassified as drug-device combination products.

This reclassification was based upon the U.S.

Court of Appeals for the D.C.

Circuit’s decision in Genus Medical Technologies v.

FDA , not involving Eyenovia, which ordered that products meeting the statutory definition of a device, but were previously classified by the FDA as drugs, must be regulated as devices.

Before this ruling, the FDA regulated pre-filled or co-packaged ophthalmic dispensers as part of the approved ophthalmic drug distributed and sold with the dispenser.

After the ruling, however, the dispenser must be considered as a distinct device constituent part of a drug-device combination product.

We are in the process of providing additional non-clinical device information and expect to file our NDA resubmission in the third quarter of 2022.

On August 10, 2020, we entered into a License Agreement (the “Arctic Vision License Agreement”), which was amended on September 14, 2021, with Arctic Vision (Hong Kong) Limited (“Arctic Vision”), pursuant to which Arctic Vision may develop and commercialize MicroPine, MicroLine and Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

Under the terms of the Arctic Vision License Agreement, we received an upfront payment of $4.25 million before any payments to Senju Pharmaceutical Co., Ltd.

In addition, we may receive up to a total of $43.75 million in additional payments, based on various development and regulatory milestones, including the initiation of clinical research and approvals in Greater China and South Korea, and development costs.

Arctic Vision also will purchase its supply of MicroPine, MicroLine and Mydcombi from us or, for such products not supplied by us, pay us a mid-single digit percentage royalty on net sales of such products, subject to certain adjustments.

We will pay between 30 and 40 percent of such payments, royalties, or net proceeds of such supply to Senju pursuant to the Exclusive License Agreement with Senju dated March 8, 2015, as amended by the License Amendment 2, executed on September 14, 2021.

See Note 2— Summary of Significant Accounting Policies—Arctic Vision License Agreement and Note 10—Related Party Transactions—Senju License Agreement to our audited financial statements included in this Annual Report on Form 10-K for further details.

The following summarizes our product pipeline and anticipated milestones:

Next Expected Milestones

Improvement in Near Vision in people with Presbyopia

Phase 3 VISION-1 Topline Results expected

Improvement in Near Vision (Presbyopia)

Phase 3 VISION-2 Topline Results expected 2Q 2022

Pediatric Myopia Progression (Near-Sightedness)

Phase 3 CHAPERONE Full Enrollment expected 4Q 2022

Pharmaceutical Mydriasis

(Pupil Dilation)

Expected PDUFA date October 28, 2021

Our goal is to become

a leading developer and provider of advanced ophthalmic pharmaceuticals based upon our microdose array print platform technology

and digital health platform for interactive patient care.

These unique therapeutics would be commercialized by us and/or our partners

Pharmaceutical Mydriasis (Pupil Dilation)

Expected Refiling of NDA 3Q 2022

Our goal is to become a leading developer and provider of advanced ophthalmic therapies based upon our MAP platform technology and digital health platform for interactive patient care.

These unique products would be commercialized by us and/or our partners globally.

The key elements of our strategy to achieve this goal are:

Establish a portfolio

of first-in-class piezo-print micro-therapeutic products for multiple eye treatments through the 505(b)(2) pathway with the

We are focused on integrating our next-generation technology with therapeutic compounds already well established in

the topical treatment of ophthalmic indications.

We believe that the 505(b)(2) registration pathway, which reduces development

risk compared to new molecular entity programs by working with known compounds with well-established safety and efficacy profiles,

will be available for our development pipeline.

We believe our pipeline of patented micro-therapeutic product candidates is highly

differentiated by our improved tolerability and enhanced compliance profile and that our late-stage development programs could

lead to additional NDA submissions in novel indications where the products can have unique dosing and therapeutic profiles.

believe that this could lead to favorable pricing and a reduced risk of generic substitution.

Improve clinical

outcomes and patient experiences while providing an improved tolerability profile with our microdose therapeutics.

the Optejet will allow for high precision targeted microdosing for multiple eye treatments, while eliminating ophthalmic over-dosing

and reducing ocular exposure to toxic preservatives and pharmacologic ingredients compared to conventional eye drop delivery mechanisms.

Our clinical trials have demonstrated similar efficacy to eye drops, improved side effect profile and enhanced patient experience

with the Optejet as compared to conventional eye drops.

electronic, smartphone-enabled “e-health”

technology to introduce and develop patient-specific compliance monitoring

The Optejet’s mobile e-health technology is designed to track when a patient administers treatments, allowing

physicians to monitor patient compliance more accurately.

We believe this could enhance patient compliance and improve compliance

monitoring by empowering patients and physicians with access to dynamic, real-time monitoring and compliance data for a more intelligent,

informed and personalized therapeutic paradigm.

Develop next-generation

targeted microdose treatments for other ophthalmic diseases independently or in collaboration with third parties.

also may be suitable for new molecular entities and applications.

Leveraging our existing platform technology, Eyenovia plans to

continue developing, either independently or through strategic relationships with third parties, other product candidates for various

eye diseases that can be administered using the Optejet and additional applications for the Optejet.

therapeutic solutions for ophthalmic conditions with high unmet needs and no approved therapy.

We plan to target chronic

ophthalmic conditions with a high unmet medical need.

By leveraging our piezo-print microdosing technology, we aim to reach conditions

where there are no approved drug therapies.

For example, our MicroPine program involves a proprietary formulation of low-dose atropine

intended to slow myopia progression in the pediatric population.

There are currently no commercially-available therapies in the

United States to treat this indication.

of Conventional Eye Therapies

Our microdosing

platform technology aims to address the following issues associated with conventional eye drop-based therapies:

administration and waste of medication

third-party studies have confirmed challenges with administering conventional eye drops, which include overdosing, poor compliance,

imprecise dosing, variability in drop size, and difficulty with self-administration.

One study in patients who were experienced

in using eye drops and undergoing treatment for glaucoma for at least six months documented that nine out of 10 patients were unable

to administer treatment correctly at the end of the six-month study.

Patients on average administered almost twice the necessary

number of drops with a mean number of drops instilled at 1.8 (+/1 1.2) and one patient administered up to eight drops at one time.

In addition, approximately 75% of patients risked bottle contamination or potential ocular trauma by having the eye drop container

touch their eyes.

Another larger study in 139 patients demonstrated that the proportion of patients who were able to correctly

administer their eye drops was only 22%–30%.

Similarly, other studies have demonstrated that the vast majority of patients

either overdose or do not administer the required therapy to the eye correctly, which leads to unnecessary waste of medication.

effects associated with conventional eye drop therapies

eye therapies are administered using traditional eye drop pipette approaches.

While average tear volume of the eye is 6–8

µL, current eyedrop therapies can involve administration of 30–50 µL of liquid containing preservatives and pharmaceutical

Thus, traditional drops can severely overdose the eye, which, depending on the ingredients, can be associated with

ocular side effects including hyperemia, or increased blood flow to the eye, redness, discomfort, stinging, blurred vision, burning,

itching, excessive tearing, eye pain, iris pigment changes, foreign body sensation, pigment discoloration, periorbital dermatitis

and sunken eye.

For some topical medications, there also can be cardiovascular side effects such as changes in heart rate and arrhythmia

that are caused when medications are absorbed into the circulation system from overdosing both through conjunctiva absorption and

when drugs flow into the nose through the naso-lacrimal duct and are absorbed into the systemic circulation or swallowed.

phenylephrine can cause cardiovascular adverse reactions including an increase in blood pressure, syncope, myocardial infarction,

tachycardia, arrhythmia and subarachnoid hemorrhage.

Severe respiratory reactions and cardiac reactions, including death due to

bronchospasm in patients with asthma, and rarely death in association with cardiac failure, have been reported following systemic

or ophthalmic administration of timolol maleate.

contains phenylephrine and tropicamide.

However, as demonstrated in our Phase III study for this product candidate, patients administering

MydCombi reported few ocular adverse events and no systemic adverse events when they administered our microdosed product candidate.

Compared with historical data for traditional eye drops, MydCombi appeared to be much better tolerated, with low systemic absorption

of phenylephrine alone.

Optejet platform technology, we believe that the known adverse event profile of pilocarpine, including headaches, also may be moderated

to make MicroLine the preferred choice for presbyopia over other potential pilocarpine drop options.

The same is true with MicroPine,

where we believe that microdosing may result in a better tolerated product for children using topical ophthalmic atropine.

Establish a portfolio of first-in-class piezo-print micro-therapeutic products for multiple eye treatments through the 505(b)(2) pathway with the FDA.

We are focused on integrating our next-generation technology with therapeutic compounds already well established in the topical treatment of ophthalmic indications.

We believe that the 505(b)(2) registration pathway, which reduces development risk compared to new molecular entity programs by working with known compounds with well-established safety and efficacy profiles, will be available for our development pipeline.

We believe our pipeline of patented micro-therapeutic product candidates is highly differentiated by our improved tolerability and enhanced compliance profile and that our late-stage development

programs could lead to additional NDA submissions in novel indications where the products can have unique dosing and therapeutic profiles.

We believe that this could lead to favorable pricing and a reduced risk of generic competition.

Improve clinical outcomes and patient experiences while providing an improved tolerability profile with our microdose therapeutics.

We believe the Optejet will allow for high precision targeted microdosing for multiple eye treatments, while eliminating ophthalmic over-dosing and reducing ocular exposure to toxic preservatives and pharmacologic ingredients compared to conventional eye drop delivery mechanisms.

Our clinical trials have demonstrated similar efficacy to eye drops, improved side effect profile and enhanced patient experience with the Optejet as compared to conventional eye drops.

Leverage our electronic, smartphone-enabled “e-health” technology to introduce and develop patient-specific compliance monitoring program.

The Optejet’s mobile e-health technology is designed to track when a patient administers treatments, allowing physicians to monitor patient compliance more accurately.

We believe this could enhance patient compliance and improve compliance monitoring by empowering patients and physicians with access to dynamic, real-time monitoring and compliance data for a more intelligent, informed and personalized therapeutic paradigm.

Develop next-generation targeted microdose treatments for other ophthalmic diseases independently or in collaboration with third parties.

The Optejet also may be suitable for new molecular entities and applications.

Leveraging our existing platform technology, Eyenovia plans to continue developing, either independently or through strategic relationships with third parties, other product candidates for various eye diseases that can be administered using the Optejet and additional applications for the Optejet.

Develop therapeutic solutions for ophthalmic conditions with high unmet needs and no approved therapy.

We plan to target chronic ophthalmic conditions with a high unmet medical need.

By leveraging our piezo-print microdosing technology, we aim to reach conditions where there are no approved drug therapies.

For example, our MicroPine program involves a proprietary formulation of low-dose atropine intended to slow myopia progression in the pediatric population.

There are currently no commercially-available medical therapies in the United States to treat this indication.

Limitations of Conventional Eye Therapies

Our microdosing platform technology aims to address the following issues associated with conventional eye drop-based therapies:

Dosing and ease of administration

Multiple third-party studies have confirmed challenges with administering conventional eye drops, which include overdosing, poor compliance, imprecise dosing, variability in drop size, and difficulty with self-administration.

One study in patients who were experienced in using eye drops and undergoing treatment for glaucoma for at least six months documented that nine out of 10 patients were unable to administer treatment correctly at the end of the six-month study.

Patients on average administered almost twice the necessary number of drops with a mean number of drops instilled at 1.8 (+/1 1.2) and one patient administered up to eight drops at one time.

In addition, approximately 75% of patients risked bottle contamination or potential ocular trauma by having the eye drop container touch their eyes.

Another larger study in 139 patients demonstrated that the proportion of patients who were able to correctly administer their eye drops was only 22%–30%.

Similarly, other studies have demonstrated that the vast majority of patients either overdose or do not administer the required therapy to the eye correctly, which may lead to additional side effects or lack of efficacy.

Side effects associated with conventional eye drop therapies

Topical eye therapies are administered using traditional eye drop pipette approaches.

While average tear volume of the eye is 6–8 µL, current eyedrop therapies can involve administration of 30–50 µL of liquid containing preservatives and pharmaceutical ingredients.

Thus, traditional drops can severely overdose the eye, which, depending on the ingredients, can be associated with ocular side effects including hyperemia, or increased blood flow to the eye, redness, discomfort, stinging, blurred vision, burning, itching, excessive tearing, eye pain, iris pigment changes, foreign body sensation, pigment discoloration, periorbital dermatitis and sunken eye.

For some topical medications, there also can be cardiovascular side effects such as changes in heart rate and arrhythmia that are caused when medications are absorbed into the circulation system from overdosing both through conjunctiva absorption and when drugs flow into the nose through the naso-lacrimal duct and are absorbed into the systemic circulation or swallowed.

For example, phenylephrine can cause cardiovascular adverse reactions including an increase in blood pressure, syncope, myocardial infarction, tachycardia, arrhythmia and subarachnoid hemorrhage.

Severe respiratory reactions and cardiac reactions, including death due to bronchospasm in

patients with asthma, and rarely death in association with cardiac failure, have been reported following systemic or ophthalmic administration of timolol maleate.

Mydcombi contains tropicamide and phenylephrine.

However, as demonstrated in our two Phase III studies for this product candidate, patients administering Mydcombi reported few ocular adverse events and no systemic adverse events when they administered our microdosed product candidate.

Compared with historical data for traditional eye drops, Mydcombi appeared to be much better tolerated, with low systemic absorption of phenylephrine alone.

With the Optejet platform technology, we believe that the known adverse event profile of pilocarpine, including headaches, also may be moderated to make MicroLine the preferred choice for presbyopia over other potential pilocarpine drop options.

The same is true with MicroPine, where we believe that microdosing may result in a better tolerated product for children using topical ophthalmic atropine.

Our Solution:

The Optejet dispenser

delivers doses of 6 – 8 µL, directly coating the corneal surface where 80% of intraocular drug penetration

We believe that microdosing may reduce drug and toxic preservative exposure by more than 75%, thus reducing ocular irritation,

and resulting in potentially gentler treatments without compromising the desired clinical effect.

Our approach could also reduce

inadvertent waste associated with poor administration of conventional macrodose drops.

We believe that we

are one of the only companies with clinical stage technology for targeted microdosing of ophthalmic investigational therapies having

fully completed the Phase III clinical studies needed and made an NDA submission.

The Optejet is based on MAP, which is also used

for pixel-sharp high-precision inkjet printing.

The technology is optimized for and applied in ophthalmic delivery to achieve microdosing

that can be many times more precise than conventional eye droppers.

In addition, our smart, electronic system provides the capability

to track when patients administer their medications and deliver this information to patients and physicians via Bluetooth connectivity.

The Optejet dispenser delivers doses of approximately 8 µL, directly coating the corneal surface where 80% of intraocular drug penetration occurs.

We believe that microdosing may reduce drug and toxic preservative exposure by more than 75%, thus reducing ocular irritation, and resulting in potentially gentler treatments without compromising the desired clinical effect.

We believe that we are one of the only companies with clinical stage technology for targeted microdosing of ophthalmic investigational therapies having fully completed the Phase III clinical studies needed and made an NDA submission.

The Optejet is based on MAP, which is also used for pixel-sharp high-precision inkjet printing.

The technology is optimized for and applied in ophthalmic delivery to achieve microdosing that can be many times more precise than conventional eye droppers.

In addition, our smart, electronic system provides the capability to track when patients administer their medications and deliver this information to patients and physicians via Bluetooth connectivity.

Thus, physicians can make decisions regarding therapeutic regimens with knowledge of patient compliance.

The FDA has provided

written feedback that our clinical development activities will be treated as drug development programs, because only the drug comes

into contact with the eye.

Consequently, we do not anticipate needing separate FDA approval for the Optejet dispenser or being

required to comply with FDA medical device regulations.

Microdose administration

of topical ophthalmic drugs with the Optejet has been tested in preclinical models and clinical trials and shown to provide many

advantages over administrations of eye drops.

The FDA has determined that our products will be treated as combination drug/device products, with CDER as the lead reviewing center.

As such, we do not anticipate needing separate FDA approval for the Optejet dispenser alone.

Microdose administration of topical ophthalmic drugs with the Optejet has been tested in preclinical models and clinical trials and shown to provide many advantages over administrations of eye drops.

Key advantages of the Optejet include:

Dose reduction:

Our microdose delivery technology is designed to achieve precise volumetric control at the microliter level to deliver 6–8

µL, which is the physiologic capacity of the tear film.

This compares favorably to the volume of an eye drop (30–50

µL), which can result in overdosing, ocular toxicity and systemic leaching into the plasma.

Targeted dose

instillation:

Our microdose delivery technology is designed to achieve precise volumetric control at the microliter level to deliver approximately 8 µL, which is the physiologic capacity of the tear film.

This compares favorably to the volume of an eye drop (30–50 µL), which can result in overdosing, ocular toxicity and systemic leaching into the plasma.

Targeted dose instillation:

The Optejet allows for targeted delivery to the ocular surface and cornea, avoiding the conjunctival cul-de-sac.

The micro-jet spray created by the piezo-electric vibrations is columnated and focused to provide accurate delivery to the corneal

surface where the majority of ocular penetration occurs.

Additionally, the Optejet is designed with an LED targeting mechanism

to facilitate proper positioning and objective alignment, thus increasing the likelihood of successful dose delivery.

The micro-jet spray created by the piezo-electric vibrations is columnated and focused to provide accurate delivery to the corneal surface where the majority of ocular penetration occurs.

Additionally, the Optejet is designed with an LED targeting mechanism to facilitate proper positioning and objective alignment, thus increasing the likelihood of successful dose delivery.

Speed of delivery:

Our piezo-print technology is similar to high-precision ink-jet printing.

Unlike a simple aerosolized mechanism, the Optejet is

designed with ejection control that creates a fast and targeted micro-jet delivery.

Solution is dispensed to the ocular surface

in less than 100 milliseconds between the time the first droplet hits the corneal surface to the completion of dose delivery, which

is faster than the average involuntary blink response time.

Unlike a simple aerosolized mechanism, the Optejet is designed with ejection control that creates a fast and targeted micro-jet delivery.

Solution is dispensed to the ocular surface in less than 100 milliseconds between the time the first droplet hits the corneal surface to the completion of dose delivery, which is faster than the average involuntary blink response time.

Smart electronics:

A key feature of the Optejet is the embedded electronic, smartphone enabled “e-health”

system, which we believe is

the first intelligent electronic delivery system for ophthalmic therapies.

Our electronic functions are designed to enable patients

and physicians to track when doses are administered.

We believe this technology will improve compliance and chronic disease management

by empowering patients and physicians with access to dynamic, real time monitoring and compliance data for a more intelligent and

personalized therapeutic paradigm.

A key feature of the Optejet is the embedded electronic, Bluetooth enabled “e-health” system, which we believe is the first intelligent electronic delivery system for ophthalmic therapies.

Our electronic functions are designed to enable patients and physicians to track when doses are administered.

We believe this technology will improve compliance and chronic disease management by empowering patients and physicians with access to dynamic, real time monitoring and compliance data for a more intelligent and personalized therapeutic paradigm.

Recent changes in payment codes now provide a way for healthcare providers to bill for this important service.

Clinical Trial Results

We have an established

platform for microdose administration of ophthalmic solutions.

Our preclinical and clinical studies suggest that a microdose of

approximately 8 µL of medication results in clinical efficacy comparable to that of traditional eye drops, with the advantages

of fewer ocular side effects and less systemic exposure.

We can use our platform technology with either new or existing molecular

We have an established platform for microdose administration of ophthalmic solutions.

Our preclinical and clinical studies suggest that a microdose of approximately 8 µL of medication results in clinical efficacy comparable to that of traditional eye drops, with the advantages of fewer ocular side effects and less systemic exposure.

We can use our platform technology with either new or existing molecular entities.

We have chosen the latter path for our initial pipeline product candidates.

Prior to initiation

of our Phase III clinical studies, we conducted multiple preclinical and early phase studies to validate our piezo-print microdose

delivery platform.

Data from a canine model of glaucoma demonstrated more than 40% IOP lowering effect at microdose of 8–9

µL latanoprost.

Another independent microdose study published in the Journal of Investigative Ophthalmology and Visual Science

in 2014 further demonstrated that 3 µL microdose with timolol 0.5% can reduce systemic plasma levels of the drug by a factor

Diurnal IOP Lowering Effect of a Microdose

of Latanoprost Delivered by Pipette vs.

Prior to initiation of our Phase III clinical studies, we conducted multiple preclinical and early phase studies to validate our piezo-print microdose delivery platform.

Data from a canine model of glaucoma demonstrated more than 40% IOP lowering effect at microdose of 8–9 µL latanoprost.

Another independent microdose study published in the Journal of Investigative Ophthalmology and Visual Science in 2014 further demonstrated that 3 µL microdose with timolol 0.5% can reduce systemic plasma levels of the drug by a factor of 17.

Diurnal IOP Lowering Effect of a Microdose of Latanoprost Delivered by Pipette vs.

Piezo-Print Dispenser in a Canine Model

IOP Lowering Effect of Micro-Therapeutic

Dose of Latanoprost in Canine Model

The Phase II EYN-1601

clinical trial compared the mydriatic effect of phenylephrine 10% microdosed (~7 µL in volume) with the Optejet (EYN) to

phenylephrine 10% (PE 10%) and phenylephrine 2.5% (PE 2.5%) eye drops (each ~32 µL in volume) in 24 eyes.

At 75-minute peak

dilation, our microdose provided similar mydriatic results (at approximately 1/4 of the dose exposure) to the 10% phenylephrine

drops, and superior activity compared to 2.5% phenylephrine drops.

Shown below is mean

pupil diameter change from baseline for the 24 eyes studied.

The asterisk at t=75 min indicates EYN is statistically better than

PE 2.5% (p=0.009).

Diameter, Increase from Baseline, MM

This study was also

informative with regard to systemic drug exposure of these topical treatments.

As shown below, microdosed phenylephrine 10% (EYN1)

demonstrated 35–40% lower plasma levels as compared with phenylephrine 10% eye drops (PE 10%).

As shown in the table

below, there were also fewer ocular adverse events in the microdosed group (EYN) suggesting an improvement in tolerability as compared

to 10% phenylephrine eye drops (PE 10%).

IOP Lowering Effect of Micro-Therapeutic Dose of Latanoprost in Canine Model

The Phase II EYN-1601 clinical trial compared the mydriatic effect of phenylephrine 10% microdosed (~7 µL in volume) with the Optejet (EYN) to phenylephrine 10% (PE 10%) and phenylephrine 2.5% (PE 2.5%) eye drops (each ~32 µL in volume) in 24 eyes.

At 75-minute peak dilation, our microdose provided similar mydriatic results (at approximately 1/4 of the dose exposure) to the 10% phenylephrine drops, and superior activity compared to 2.5% phenylephrine drops.

Shown below is mean pupil diameter change from baseline for the 24 eyes studied.

The asterisk at t=75 min indicates EYN is statistically better than PE 2.5% (p=0.009).

PUPIL DIAMETER, INCREASE FROM BASELINE, MM

This study was also informative with regard to systemic drug exposure of these topical treatments.

As shown below, microdosed phenylephrine 10% (EYN1) demonstrated 35–40% lower plasma levels as compared with phenylephrine 10% eye drops (PE 10%).

As shown in the table below, there were also fewer ocular adverse events in the microdosed group (EYN) suggesting an improvement in tolerability as compared to 10% phenylephrine eye drops (PE 10%).

OCULAR ADVERSE EVENTS BY TREATMENT

5 unchanged sentences

Subtotal by Treatment Group

The EYE-103 study investigated

a combination of phenylephrine and tropicamide microdose treatment administered using the Optejet compared to conventional eye

drops in 102 subjects (204 eyes).

In this study, microdosing produced equivalent pupil dilation to eye drops and 91% of participants

preferred medication administration with the Optejet versus eye drops (6% preferred eye drops, while 3% expressed no preference

[p < 0.0001]).

On a scale of 1 to 10, with 10 being most favorable, general satisfaction scores were higher with Optejet administration

versus eye drops (9.8 ±

0.6 for Optejet vs 5.8 ±

3.0 for eye drops).

Ocular comfort scores were nearly two times

better with the Optejet than with eye drops.

In 2018, Eyenovia completed

a third early phase trial (EYN-POC-PG-21) to extend the findings of the two previous trials evaluating Optejet administration of

mydriatic agents.

This study was a single-center, open-label, prospective, crossover design evaluating the usability, patient tolerability,

and proof-of-concept of microdose administration of commercial latanoprost 0.005% using the Optejet.

Thirty healthy volunteer subjects

(60 eyes) were evaluated for eligibility and consented to study participation.

Subsequently, at each of three treatment visits, IOP

was measured in the morning.

Afterwards, on Treatment Days 1 and 2, a single 8-µL microdose of latanoprost 0.005% ophthalmic

solution was administered to each eye using the Optejet.

On the morning of Treatment Day 3, each subject received 2 ×

Optejet microdoses (administered approximately 5 minutes apart) in one eye and the other eye received a single eye drop of latanoprost

0.005% ophthalmic solution.

For each treatment day, IOP was measured 1, 7, 12, and 24 hours after receiving medication and

a mean diurnal IOP (DIOP) was calculated from the four readings.

As shown below, mean DIOP after medication administration on Days

1 and 2 was lowered by 25.0% and 28.7%, respectively.

Mean bilateral DIOP and percent change

in DIOP in eyes dosed using the Optejet through

Treatment Day 2 (N = 29 pairs of eyes

from 29 evaluable subjects)

As shown below, on

Day 3, mean DIOP was 35.5% lower than baseline for eyes receiving microdose latanoprost 0.005% using the Optejet, and 35.0% lower

than baseline for eyes receiving a single drop of latanoprost 0.005%.

at Day 3 (N=29 Eyes of 29 Subjects per Treatment)

No clinically significant

changes were noted in slit lamp observations (including hyperemia) for any subjects who received study treatment and no adverse

events were reported.

The EYE-103 study investigated a combination of phenylephrine and tropicamide microdose treatment administered using the Optejet compared to conventional eye drops in 102 subjects (204 eyes).

In this study, microdosing produced equivalent pupil dilation to eye drops and 91% of participants preferred medication administration with the Optejet versus eye drops (6% preferred eye drops, while 3% expressed no preference [p < 0.0001]).

On a scale of 1 to 10, with 10 being most favorable, general satisfaction scores were higher with Optejet administration versus eye drops (9.8 ± 0.6 for Optejet vs 5.8 ± 3.0 for eye drops).

Ocular comfort scores were nearly two times better with the Optejet than with eye drops.

In 2018, Eyenovia completed a third early phase trial (EYN-POC-PG-21) to extend the findings of the two previous trials evaluating Optejet administration of mydriatic agents.

This study was a single-center, open-label, prospective, crossover design evaluating the usability, patient tolerability, and proof-of-concept of microdose administration of commercial latanoprost 0.005% using the Optejet.

Thirty healthy volunteer subjects (60 eyes) were evaluated for eligibility and consented to study participation.

Subsequently, at each of three treatment visits, IOP was measured in the morning.

Afterwards, on Treatment Days 1 and 2, a single 8-µL microdose of latanoprost 0.005% ophthalmic solution was administered to each eye using the Optejet.

On the morning of Treatment Day 3, each subject received 2 × 8-µL Optejet microdoses (administered approximately 5 minutes apart) in one eye and the other eye received a single eye drop of latanoprost 0.005% ophthalmic solution.

For each treatment day, IOP was measured 1, 7, 12, and 24 hours after receiving medication and a mean diurnal IOP (DIOP) was calculated from the four readings.

As shown below, mean DIOP after medication administration on Days 1 and 2 was lowered by 25.0% and 28.7%, respectively.

Mean bilateral DIOP and percent change in DIOP in eyes dosed using the Optejet through

Treatment Day 2 (N = 29 pairs of eyes from 29 evaluable subjects)

As shown below, on Day 3, mean DIOP was 35.5% lower than baseline for eyes receiving microdose latanoprost 0.005% using the Optejet, and 35.0% lower than baseline for eyes receiving a single drop of latanoprost 0.005%.

DIOP AT DAY 3 (N=29 EYES OF 29 SUBJECTS PER TREATMENT)

No clinically significant changes were noted in slit lamp observations (including hyperemia) for any subjects who received study treatment and no adverse events were reported.

Subjects reported no-to-negligible ocular discomfort after medication administration using the Optejet.

Investigator-administered

medication using the Optejet was evaluated in 60 eyes (1 spray/eye) on Days 1 and 2, and in 30 eyes (2 sprays/eye) on Day 3.

administration was successful on the first attempt in 172 of the 180 cases (96%).

Subject head movement and/or blinking and investigator

proficiency with Optejet use resulted in the need for additional administration in the remaining 4% of cases, the majority of

which (6/8) occurred on Day 1.

Investigator-administered medication using the Optejet was evaluated in 60 eyes (1 spray/eye) on Days 1 and 2, and in 30 eyes (2 sprays/eye) on Day 3.

Optejet administration was successful on the first attempt in 172 of the 180 cases (96%).

Subject head movement and/or blinking and investigator proficiency with Optejet use resulted in the need for additional administration in the remaining 4% of

cases, the majority of which (6/8) occurred on Day 1.

Administration success was achieved on the first attempt on all Day 3 cases.

There were no reports

of unintentional overdosing, tear fluid overflow, or the dispenser nozzle touching the eye.

In a separate evaluation,

subjects were trained on Optejet self-administration with sterile water and then asked to demonstrate Optejet use in each eye during

the afternoon of each treatment day.

By the afternoon of Day 3, qualified Eyenovia representatives judged that almost 90% of subjects

were able to demonstrate accurate self-administration using the Optejet.

This study demonstrated

Optejet medication administration to be easy to perform, safe, and comfortable to study subjects.

Additionally, Optejet microdose

administration of 0.005% latanoprost resulted in mean DIOP reduction similar to reported literature for use of latanoprost 0.005%

ophthalmic solution administered as traditional eye drops.

Based on the results

of these studies further validating microdose delivery of ophthalmic medication, we initiated Phase III programs in mydriasis in

late 2018 and progressive myopia in 2019.

There were no reports of unintentional overdosing, tear fluid overflow, or the dispenser nozzle touching the eye.

In a separate evaluation, subjects were trained on Optejet self-administration with sterile water and then asked to demonstrate Optejet use in each eye during the afternoon of each treatment day.

By the afternoon of Day 3, qualified Eyenovia representatives judged that almost 90% of subjects were able to demonstrate accurate self-administration using the Optejet.

This study demonstrated Optejet medication administration to be easy to perform, safe, and comfortable to study subjects.

Additionally, Optejet microdose administration of 0.005% latanoprost resulted in mean DIOP reduction similar to reported literature for use of latanoprost 0.005% ophthalmic solution administered as traditional eye drops.

Based on the results of these studies further validating microdose delivery of ophthalmic medication, we initiated Phase III programs in mydriasis in late 2018, progressive myopia in 2019, and presbyopia in 2020.

Our Product Candidates

Eyenovia is currently

focused on three programs:

Eyenovia is currently focused on three programs:

MicroLine (for presbyopia), MicroPine (for progressive myopia) and Mydcombi (for mydriasis).

MicroLine is our proprietary

microdosed version of pilocarpine, a well understood ophthalmic medication that can dose-dependently induce miosis, or a contraction

of the pupil.

It is a direct acting cholinergic parasympathomimetic agent that stimulates muscarinic acetylcholine receptors present

on smooth muscles, including those in the iris and ciliary body.

As a result, pilocarpine causes contraction of the iris sphincter

muscle, which causes miosis.

Reducing pupil size

with pilocarpine has been shown to improve near visual acuity in individuals who have presbyopia.

In Benozzi et al, 2012, subjects

aged 45‒50 years who bilaterally self-administered both pilocarpine 1% and diclofenac 0.1% eyedrops every 6 hours during

the day for up to 5 years reported good improvement in near vision without compromising distance vision.

Thus, pilocarpine’s

miotic effect may be useful in treating the increasingly compromised near vision that parallels the development of presbyopia.

Background of

Presbyopia and Market Opportunity

Presbyopia is the gradual

decrease in the ability of the eye’s natural lens to accommodate in near vision, resulting in a loss of focus on near objects.

MicroLine (also known as Apersure™)

MicroLine is our proprietary microdosed version of pilocarpine, a well understood ophthalmic medication that can dose-dependently induce miosis, or a contraction of the pupil.

It is a direct acting cholinergic parasympathomimetic agent that stimulates muscarinic acetylcholine receptors present on smooth muscles, including those in the iris and ciliary body.

As a result, pilocarpine causes contraction of the iris sphincter muscle, which causes miosis.

Reducing pupil size with pilocarpine has been shown to improve near visual acuity in individuals who have presbyopia.

In Benozzi et al, 2012, subjects aged 45‒50 years who bilaterally self-administered both pilocarpine 1% and diclofenac 0.1% eyedrops every six hours during the day for up to five years reported good improvement in near vision without compromising distance vision.

Thus, pilocarpine’s miotic effect may be useful in treating the increasingly compromised near vision that parallels the development of presbyopia.

Background of Presbyopia and Market Opportunity

Presbyopia is the gradual decrease in the ability of the eye’s natural lens to accommodate in near vision, resulting in a loss of focus on near objects.

In general, onset is around age 40 and is almost universal in adults over the age of 60.

In the United States, there are approximately

113 million people with presbyopia;

In the United States, there are approximately 113 million people with presbyopia;

53 million of them are between the ages of 40 and 55.

For many people, presbyopia

is among the first overt signs of aging.

There are psychological factors accompanying the use of spectacles and bifocals for the

first time, as well as situational inconvenience for either not being able to see well or having to use a vision aiding device.

With MicroLine, we plan to introduce a pharmaceutical option for improving near vision that can work as a companion to spectacles,

for when patients wish not to use their reading glasses.

Our market research indicates the highest interest in the product concept

among people aged 40 to 55 years who otherwise have normal vision, representing a potential market of approximately 18 million

Phase III Clinical

Development Programs

We are evaluating whether

topical ocular microdosing of pilocarpine using the Optejet dispenser in presbyopic individuals can effectively improve near vision

without compromising distance vision and without causing the undesirable side effects of traditionally administered pilocarpine.

We have two Phase III studies, VISION-1 and VISION-2.

VISION-1 began enrolling in 2020.

The VISION studies will evaluate the safety,

tolerability, and efficacy of an Optejet-administered microdosing of pilocarpine as an ophthalmic spray versus placebo.

A key therapeutic program

for Eyenovia is our first-in-class topical treatment for progressive myopia, a back-of-the-eye disease.

Background of

Progressive Myopia and Market Opportunity

Myopia is an ocular

disorder that results in blurry vision when looking at distant objects.

This happens when the eyeball is too long or corneal curvature

is too steep causing light entering the eye to be incorrectly focused.

Myopia is one of the most common refractive errors seen

For many people, presbyopia is among the first overt signs of aging.

There are psychological factors accompanying the use of spectacles and bifocals for the first time, as well as situational inconvenience for either not being able to see well or having to use a vision aiding device.

With MicroLine, we plan to introduce a pharmaceutical option for improving near vision that can work as a companion to spectacles, for when patients wish not to use their reading glasses.

Our market research indicates the highest interest in the product concept among people aged 40 to 55 years who otherwise have normal vision and household income in the top half of the country, representing a potential market of approximately 18 million people.

Phase III Clinical Development Programs

We are evaluating whether topical ocular microdosing of pilocarpine using the Optejet dispenser in presbyopic individuals can effectively improve near vision without compromising distance vision and without causing the undesirable side effects of traditionally administered pilocarpine.

Our initial Phase III Study, VISION-1, showed that pilocarpine 2% provided a statistically superior improvement in functional near vision and an acceptable safety profile in presbyopic subjects with baseline distance-corrected near visual acuity better than 20/80.

Our second Phase III study, VISION-2 is currently enrolling with expected top-line results in mid-2022.

The VISION-2 study will evaluate the safety, tolerability, and efficacy of Optejet-administered microdosing of pilocarpine 2% as an ophthalmic spray versus placebo.

A key therapeutic program for Eyenovia is our first-in-class topical treatment for progressive myopia, a back-of-the-eye disease.

Background of Progressive Myopia and Market Opportunity

Myopia is an ocular disorder that results in blurry vision when looking at distant objects.

This happens when the eyeball is too long or corneal curvature is too steep causing light entering the eye to be incorrectly focused.

Myopia is one of the most common refractive errors seen in children.

Myopia that is present in young children tends to increase through the school years.

As myopia progresses, so does

the risk of retinal detachment, cataracts, myopia maculopathy and even blindness.

It is estimated that over 25 million children

in the United States suffer from progressive myopia, with approximately 5 million children being at high risk.

As myopia progresses, so does the risk of retinal detachment, cataracts, myopia maculopathy and even blindness.

It is estimated that over 25 million children in the United States suffer from progressive myopia, with approximately 5 million children being at high risk.

Examples of Retinal Changes Due to Myopia

Progressive Myopia with Retinal Atrophy

While currently there

are no FDA-approved therapies for myopia progression, there is growing evidence of the therapeutic benefit of topical atropine

ophthalmic solution, an anticholinergic agent used for pupil dilation and treatment of lazy eye, as a treatment to slow progression.

Academic groups have demonstrated that low dose atropine solution reduces myopia progression 60-70%, with sustained effect through

A recent therapeutic evidence assessment and review by the American Academy of Ophthalmology, indicates Level 1 (highest)

evidence of efficacy for low dose atropine for reduction of progressive myopia (Ophthalmology 2017;124:1857-1866;

Progressive Myopia with Retinal Atrophy Changes

While currently there are no FDA-approved therapies for myopia progression, there is growing evidence of the therapeutic benefit of topical atropine ophthalmic solution, an anticholinergic agent used for pupil dilation and treatment of lazy eye, as a treatment to slow progression.

Academic groups have demonstrated that low dose atropine solution reduces myopia progression 60-70%, with sustained effect through three years.

A recent therapeutic evidence assessment and review by the American Academy of Ophthalmology, indicates Level 1 (highest) evidence of efficacy for low dose atropine for reduction of progressive myopia (Ophthalmology 2017;124:1857-1866;

Ophthalmology 2016;

123(2) 391:399)).

While atropine 1% ophthalmic solution is FDA-approved and commercially available in the United States

for pupil dilation and treatment of lazy eye, commonly reported side effects such as burning and stinging during drop administration,

and blurred vision and light sensitivity associated with its use make it undesirable for the treatment of progressive myopia in

the pediatric population, thus impeding the drug’s clinical utility and adoption for myopia progression.

Our MicroPine program involves the development

of a micro-formulation (dilute and low volume) of atropine ophthalmic solution for reduction of myopia progression in children.

Phase III Clinical

Development Program

The FDA accepted Eyenovia’s

IND to initiate our single Phase III registration trial of MicroPine (the CHAPERONE study) to reduce the progression of myopia in children.

Eyenovia enrolled its first patient in the CHAPERONE study in June 2019 and expects enrollment to be completed in late 2021.

trial is a U.S.-based, multi-center, randomized, double-masked study enrolling more than 400 children and adolescents.

Participants will

be equally randomized to receive nightly treatment with either of two MicroPine treatment concentrations or a placebo control arm.

primary assessment of efficacy is based on reduction in myopia progression after 3 years of medication use.

If the primary objectives

of our Phase III study are met, we plan to submit an NDA based on this study as well as existing literature demonstrating the efficacy

of low-dose atropine to reduce the progression of myopia in children to the FDA for marketing approval of MicroPine to slow the progression

of myopia under the 505(b)(2) pathway.

MydCombi is a unique

fixed combination micro-formulation product candidate for mydriasis (eye dilation) intended to facilitate the over one hundred

million estimated office-based comprehensive and diabetic eye exams and four million ophthalmic surgical dilations performed every

year in the United States.

Our fixed combination product candidate has been developed to facilitate efficient pupil dilation with

the potential to reduce unintended effects of conventionally administered mydriatic agents.

We believe the market for MydCombi

exceeds $250 million in the United States alone.

Background of Mydriasis and Market

There are over an estimated

one hundred million topical mydriatic applications performed every year as a required part of the comprehensive dilated eye exam

and standard retina fundoscopy for diabetic retinopathy screening, macular degeneration evaluation, glaucoma optic disc evaluation

and many other back-of-the-eye conditions.

While atropine 1% ophthalmic solution is FDA-approved and commercially available in the United States for pupil dilation and treatment of lazy eye, commonly reported side effects such as burning and stinging during drop administration, and blurred vision and light sensitivity associated with its use make it undesirable for the treatment of progressive myopia in the pediatric population, thus impeding the drug’s clinical utility and adoption for myopia progression.

Our MicroPine program involves the development of a micro-formulation (dilute and low volume) of atropine ophthalmic solution for reduction of myopia progression in children.

Phase III Clinical Development Program

The FDA accepted Eyenovia’s IND to initiate our single Phase III registration trial of MicroPine (the CHAPERONE study) to reduce the progression of myopia in children.

Eyenovia enrolled its first patient in the CHAPERONE study in June 2019.

The trial is a U.S.-based, multi-center, randomized, double-masked study enrolling more than 400 children and adolescents.

Participants will be equally randomized to receive nightly treatment with either of two MicroPine treatment concentrations or a placebo control arm.

The primary assessment of efficacy is based on reduction in myopia progression after 3 years of medication use.

The IND and responsibility for the CHAPERONE study have been transferred to Bausch, who is responsible for the FDA filing strategy.

Mydcombi is a unique fixed combination micro-formulation product candidate for mydriasis (eye dilation) intended to facilitate the over 100 million estimated office-based comprehensive and diabetic eye exams and four million ophthalmic surgical dilations performed every year in the United States.

Our fixed combination product candidate has been developed to facilitate efficient pupil dilation with the potential to reduce unintended effects of conventionally administered mydriatic agents.

We believe the market for Mydcombi exceeds $250 million in the United States alone.

Background of Mydriasis and Market Opportunity

There are over an estimated one hundred million topical mydriatic applications performed every year as a required part of the comprehensive dilated eye exam and standard retina fundoscopy for diabetic retinopathy screening, macular degeneration evaluation, glaucoma optic disc evaluation and many other back-of-the-eye conditions.

There are an additional estimated four million applications for ocular surgery.

optometrist and ophthalmologist offices maintain bottles of both phenylephrine and tropicamide eyedrops and use the drops in combination.

Most optometrist and ophthalmologist offices maintain bottles of both phenylephrine and tropicamide eyedrops and use the drops in combination.

Each bottle is used on multiple patients, which carries a risk of contamination and ocular infection.

The bottles are purchased

directly from suppliers and are not subject to insurance reimbursement.

Our combination therapy, if approved, will allow the purchase

of one product for eye dilation.

Additionally, the Optejet does not come in direct contact with the eye, thus minimizing the risk

of infection.

Most dilated eye exams

require two separate topical pharmacologic agents/drops be administered sequentially (tropicamide, followed by phenylephrine).

All current mydriatic formulations use conventional macrodose drop delivery (30–50 µL), which can significantly overdose

the ocular surface whose physiologic capacity is only 6–8 µL.

Studies demonstrate that standard macrodosed pharmacologic

dilation is associated with significant ocular discomfort and mild-moderate eye pain.

On the standard visual analogue scale for

pain, such discomfort can exceed the levels of pain associated with a flu vaccine subcutaneous injection.

Additionally, there are

systemic safety concerns with mydriatic macrodosing for retinopathy of prematurity retinal screening and pediatric dilated eye

Studies comparing microdosed phenylephrine and cyclopentolate to traditional eye drops (30–50 µL drop size)

in premature babies and in full-term infants have shown equivalent pupil dilation with drop sizes ranging from 5–8 µL

while reducing systemic levels by more than 50%.

With millions of patients

exposed to mydriatic pharmacologic agents every year, we are developing a microdose alternative whereby the Optejet can be deployed

to reduce ocular and systemic exposure by more than 75%.

This potential improvement stems from lowering the dose from the 30–50

µL in standard drops to just 8 µL with MicroStat combined with targeted delivery to the ocular surface.

achieve similar mydriatic activity as drops without the high incidence of unwanted side effects.

The bottles are purchased directly from suppliers and are not subject to insurance reimbursement.

Our combination therapy, if approved, will allow the purchase of one product for eye dilation.

Additionally, the Optejet does not come in direct contact with the eye, thus minimizing the risk of infection.

Most dilated eye exams require two separate topical pharmacologic agents/drops be administered sequentially (tropicamide, followed by phenylephrine).

All current mydriatic formulations use conventional macrodose drop delivery (30–50 µL), which can significantly overdose the ocular surface whose physiologic capacity is only 6–8 µL.

Studies demonstrate that standard macrodosed pharmacologic dilation is associated with significant ocular discomfort and mild-moderate eye pain.

On the standard visual analogue scale for pain, such discomfort can exceed the levels of pain associated with a flu vaccine subcutaneous injection.

Additionally, there are systemic safety concerns with mydriatic macrodosing for retinopathy of prematurity retinal screening and pediatric dilated eye exams.

Studies comparing microdosed phenylephrine and cyclopentolate to traditional eye drops (30–50 µL drop size) in premature babies and in full-term infants have shown equivalent pupil dilation with drop sizes ranging from 5–8 µL while reducing systemic levels by more than 50%.

With millions of patients exposed to mydriatic pharmacologic agents every year, we are developing a microdose alternative whereby the Optejet can be deployed to reduce ocular and systemic exposure by more than 75%.

This potential improvement stems from lowering the dose from the 30–50 µL in standard drops to just 8 µL with MicroStat combined with targeted delivery to the ocular surface.

We expect to achieve similar mydriatic activity as drops without the high incidence of unwanted side effects.

Pharmacologic mydriasis:

dilated pupil

after application

dilated pupil after application

Phase III Clinical Development Program

We completed the Phase

III clinical trials of fixed-combination tropicamide 1% and phenylephrine 2.5% administered using the Optejet for mydriasis in

November 2019.

The MicroStat program

consisted of two Phase III randomized, controlled, cross-over clinical studies evaluating pupil dilation with our fixed combination

product (MicroStat) in comparison with the individual drug components (phenylephrine 2.5% and tropicamide 1%, respectively) (the

MIST-1 study), and with a placebo (the MIST-2 study).

The primary endpoint for each study was the mean change in pupil diameter

at 35 minutes post-drug administration.

The MIST-1 study was

a double-masked, active-controlled, three-period cross-over superiority study evaluating MicroStat ophthalmic solution versus the

two individual drug components contained in MicroStat (phenylephrine 2.5% and tropicamide 1% ophthalmic solutions).

All study drugs

were administered using the Optejet.

Volunteer participants

were evaluated for study eligibility during a screening visit and enrolled after providing study consent.

Subjects meeting all

inclusion/exclusion criteria were scheduled for three treatment visits, which occurred at least two days, but no more than seven

At each treatment visit, baseline measurements were taken, then one of the three study drugs was administered to both

eyes in two separate instances, approximately five minutes apart.

Afterwards, efficacy and safety assessments were performed at

specific time intervals, including pupil diameter measured by digital pupillometry in highly photopic conditions established by

using a fully-charged transilluminator at the brightest setting.

Subjects were equally randomized to receive all three treatments

according to one of the six possible sequences of study drug administration.

The MIST-1 study was

double-masked so that there were no differences in drug presentation.

Study drug administration was performed by seven different

trained personnel during the trial.

To maintain masking, personnel who administered study drug were not allowed to perform post-drug

administration ophthalmic assessments.

A total of 64 subjects

were randomized to receive the study drug.

We completed the Phase III clinical trials of fixed-combination tropicamide 1% and phenylephrine 2.5% administered using the Optejet for mydriasis in November 2019.

The MicroStat program consisted of two Phase III randomized, controlled, cross-over clinical studies evaluating pupil dilation with our fixed combination product (MicroStat) in comparison with the individual drug components (phenylephrine 2.5% and tropicamide 1%, respectively) (the MIST-1 study), and with a placebo (the MIST-2 study).

The primary endpoint for each study was the mean change in pupil diameter at 35 minutes post-drug administration.

The MIST-1 study was a double-masked, active-controlled, three-period cross-over superiority study evaluating MicroStat ophthalmic solution versus the two individual drug components contained in MicroStat (phenylephrine 2.5% and tropicamide 1% ophthalmic solutions).

All study drugs were administered using the Optejet.

Volunteer participants were evaluated for study eligibility during a screening visit and enrolled after providing study consent.

Subjects meeting all inclusion/exclusion criteria were scheduled for three treatment visits, which occurred at least two days, but no more than seven days apart.

At each treatment visit, baseline measurements were taken, then one of the three study drugs was administered to both eyes in two separate instances, approximately five minutes apart.

Afterwards, efficacy and safety assessments were performed at specific time intervals, including pupil diameter measured by digital pupillometry in highly photopic conditions established by using a fully-charged transilluminator at the brightest setting.

Subjects were equally randomized to receive all three treatments according to one of the six possible sequences of study drug administration.

The MIST-1 study was double-masked so that there were no differences in drug presentation.

Study drug administration was performed by seven different trained personnel during the trial.

To maintain masking, personnel who administered study drug were not allowed to perform post-drug administration ophthalmic assessments.

A total of 64 subjects were randomized to receive the study drug.

Two subjects withdrew after the first treatment visit;

therefore, the resulting per-protocol

analysis population consisted of 62 subjects (124 eyes).

Mean pupil diameter for each eye at baseline and at 35 minutes post-drug

administration is shown graphically below.

At 35 minutes, the treatment group difference between MicroStat and tropicamide 1% was

0.440 mm (SE 0.1839), which was statistically significant (p = 0.0183).

The treatment group difference between MicroStat and phenylephrine

2.5% at the same timepoint was 3.638 mm (SE 0.1817), which was also statistically significant (p <0.0001).

Since the null hypothesis

was rejected for both sets of comparisons, the primary endpoint was met.

Pupil Diameter by Treatment at Baseline

and 35 Minutes

therefore, the resulting per-protocol analysis population consisted of 62 subjects (124 eyes).

Mean pupil diameter for each eye at baseline and at

35 minutes post-drug administration is shown graphically below.

At 35 minutes, the treatment group difference between MicroStat and tropicamide 1% was 0.440 mm (SE 0.1839), which was statistically significant (p = 0.0183).

The treatment group difference between MicroStat and phenylephrine 2.5% at the same timepoint was 3.638 mm (SE 0.1817), which was also statistically significant (p <0.0001).

Since the null hypothesis was rejected for both sets of comparisons, the primary endpoint was met.

Pupil Diameter by Treatment at Baseline and 35 Minutes

(PP Population)

Mean ±

Standard Deviation

Mean ± Standard Deviation

Tx A = phenylephrine 2.5%-tropicamide 1%;

1 unchanged sentence

Tx C = phenylephrine 2.5%.

As shown below, at

35 minutes post-drug administration, MicroStat achieved a clinically meaningful pupil diameter ≥

6.0 mm in 95.2% of right eyes

and 93.5% of left eyes compared to a lower proportion for tropicamide 1% (79.0% and 77.4% of right and left eyes, respectively)

and for phenylephrine 2.5% (1.6% for both right and left eyes).

MicroStat also achieved a pupil diameter ≥

7.0 mm in 67.7% of

right and left eyes compared to a lower proportion for tropicamide 1% (43.5% and 41.9% or right and left eyes, respectively) and

for phenylephrine 2.5% (0% for right and left eyes).

Proportion of Eyes Achieving Pupil Diameter

6.0 mm and ≥

7.0 mm at 35 Minutes

As shown below, at 35 minutes post-drug administration, Mydcombi achieved a clinically meaningful pupil diameter ≥ 6.0 mm in 95.2% of right eyes and 93.5% of left eyes compared to a lower proportion for tropicamide 1% (79.0% and 77.4% of right and left eyes, respectively) and for phenylephrine 2.5% (1.6% for both right and left eyes).

Mydcombi also achieved a pupil diameter ≥ 7.0 mm in 67.7% of right and left eyes compared to a lower proportion for tropicamide 1% (43.5% and 41.9% or right and left eyes, respectively) and for phenylephrine 2.5% (0% for right and left eyes).

Proportion of Eyes Achieving Pupil Diameter ≥ 6.0 mm and ≥ 7.0 mm at 35 Minutes

(PP Population)

3 unchanged sentences

Combined Visits

Pupil diameter ≥

Pupil diameter ≥ 6.0 mm

Pupil diameter ≥

Pupil diameter < 6.0 mm

The rate of treatment

emergent adverse events, or TEAEs, was low, and consistent with those observed with commercially available dilating eye drops (e.g.

Pupil diameter ≥ 7.0 mm

Pupil diameter < 7.0 mm

The rate of treatment emergent adverse events, or TEAEs, was low, and consistent with those observed with commercially available dilating eye drops (e.g.

blurry vision and stinging).

Two TEAEs were reported in the MicroStat eyes, while four TEAEs were reported in each of the other

two treatment groups.

Two TEAEs were reported in the MicroStat eyes, while four TEAEs were reported in each of the other two treatment groups.

All events were mild in nature.

No non-ocular adverse events were reported.

The MIST-2 Study was

a multi-center, double-masked, placebo-controlled, three-period crossover superiority study evaluating MicroStat ophthalmic solution

versus placebo.

The MIST-2 Study was a multi-center, double-masked, placebo-controlled, three-period crossover superiority study evaluating MicroStat ophthalmic solution versus placebo.

Both study drugs were administered using the Optejet.

Volunteer participants

were evaluated for study eligibility during a screening visit and enrolled after providing study consent.

Subjects meeting all

inclusion/exclusion criteria were scheduled for three treatment visits, which occurred at least two days, but no more than seven

Volunteer participants were evaluated for study eligibility during a screening visit and enrolled after providing study consent.

Subjects meeting all inclusion/exclusion criteria were scheduled for three treatment visits, which occurred at least two days, but no more

than seven days apart.

A two-sequence, three-period crossover design was used.

At each treatment visit, baseline measurements were taken,

then either the investigational drug or the placebo was administered to both eyes in two separate instances, approximately five

minutes apart.

Only one study drug was administered per treatment visit, and subjects were equally randomized to one of two sequences,

ABB and BAA, where A was the Eyenovia fixed combination and B was placebo.

Afterwards, efficacy and safety assessments were performed

at specific time intervals, including pupil diameter measured by digital pupillometry in highly photopic conditions established

by using a fully-charged transilluminator at the brightest setting.

Like MIST-1, this study

was double-masked so that there were no differences in drug presentation.

Study drug administration was performed by five different

trained personnel and, to maintain masking, personnel who administered study drug were not allowed to perform post-drug administration

ophthalmic assessments.

A total of 70 subjects

at two investigational sites were randomized to receive study drug.

At each treatment visit, baseline measurements were taken, then either the investigational drug or the placebo was administered to both eyes in two separate instances, approximately five minutes apart.

Only one study drug was administered per treatment visit, and subjects were equally randomized to one of two sequences, ABB and BAA, where A was the Eyenovia fixed combination and B was placebo.

Like MIST-1, this study was double-masked so that there were no differences in drug presentation.

Study drug administration was performed by five different trained personnel and, to maintain masking, personnel who administered study drug were not allowed to perform post-drug administration ophthalmic assessments.

A total of 70 subjects at two investigational sites were randomized to receive study drug.

One subject withdrew after the first treatment visit;

the resulting per-protocol analysis population consisted of 69 subjects (138 eyes).

Mean pupil diameter for each eye at baseline

and at 35 minutes post-drug administration is shown graphically below.

At 35 minutes, the treatment group difference between MydCombi

and placebo was 4.63 mm (SE 0.0544), which was highly statistically significant (p < 0.0001);

consequently, the null hypothesis

was rejected and the primary endpoint was met.

Pupil Diameter by Eye and Treatment at

Baseline and 35 Minutes

therefore, the resulting per-protocol analysis population consisted of 69 subjects (138 eyes).

Mean pupil diameter for each eye at baseline and at 35 minutes post-drug administration is shown graphically below.

At 35 minutes, the treatment group difference between Mydcombi and placebo was 4.63 mm (SE 0.0544), which was highly statistically significant (p < 0.0001);

consequently, the null hypothesis was rejected and the primary endpoint was met.

Pupil Diameter by Eye and Treatment at Baseline and 35 Minutes

(PP Population)

Mean ±

Standard Deviation

As shown in the table below, at 35 minutes

post-drug administration, MydCombi achieved a clinically meaningful pupil diameter ≥

6.0 mm in 92.8%% of right eyes and 94.2%

of left eyes and pupil diameter ≥

7.0 mm in 69.6% of right and 68.1% of left eyes.

None of the eyes in the placebo group achieved

similar dilation.

Proportion of Eyes Achieving Pupil Diameter

6.0 mm and ≥

7.0 mm at 35 Minutes

Mean ± Standard Deviation

As shown in the table below, at 35 minutes post-drug administration, Mydcombi achieved a clinically meaningful pupil diameter ≥ 6.0 mm in 92.8%% of right eyes and 94.2% of left eyes and pupil diameter ≥ 7.0 mm in 69.6% of right and 68.1% of left eyes.

None of the eyes in the placebo group achieved similar dilation.

Proportion of Eyes Achieving Pupil Diameter ≥ 6.0 mm and ≥ 7.0 mm at 35 Minutes

(PP Population)

1 unchanged sentence

Combined Visits (1, 2, 3)

Pupil diameter ≥

Pupil diameter ≥ 6.0 mm

Pupil diameter ≥

Pupil diameter < 6.0 mm

Two TEAEs (one event

of mild instillation site pain and one event of moderate photophobia) were reported in the MydCombi group, while none were reported

with the use of placebo.

Pupil diameter ≥ 7.0 mm

Pupil diameter < 7.0 mm

Two TEAEs (one event of mild instillation site pain and one event of moderate photophobia) were reported in the Mydcombi group, while none were reported with the use of placebo.

No non-ocular adverse events were reported.

Essentially pain-free mydriasis was achieved without the use

of a topical anesthetic, which is often the practice.

The outcomes of MIST-1

and MIST-2 are consistent.

As shown below, in both studies, MydCombi achieved a mean change in pupil size between 4.6 mm and 4.8

mm at 35 minutes post-dose.

In both studies, between 93% and 95% of eyes treated with the fixed combination mydriatic drug achieved

a pupil diameter ≥

6.0 mm at this same timepoint.

Additionally, in MIST-1, the median time to maximum post-baseline pupil diameter

1.0 mm increase from baseline for fixed combination solution was 73.0 minutes, while in MIST-2, it was 71.0 minutes.

Efficacy of MydCombi in MIST-1 and MIST-2

Studies (PP Populations)

Essentially pain-free mydriasis was achieved without the use of a topical anesthetic, which is often the practice.

The outcomes of MIST-1 and MIST-2 are consistent.

As shown below, in both studies, Mydcombi achieved a mean change in pupil size between 4.6 mm and 4.8 mm at 35 minutes post-dose.

In both studies, between 93% and 95% of eyes treated with the fixed combination mydriatic drug achieved a pupil diameter ≥ 6.0 mm at this same timepoint.

Additionally, in MIST-1, the median time to maximum post-baseline pupil diameter with ≥ 1.0 mm increase from baseline for fixed combination solution was 73.0 minutes, while in MIST-2, it was 71.0 minutes.

Efficacy of Mydcombi in MIST-1 and MIST-2 Studies (PP Populations)

Mean change in pupil diameter from baseline at 35 minutes

3 unchanged sentences

4.8 mm left eyes

Proportion of eyes with pupil diameter ≥

6.0 mm at 35 minutes

Proportion of eyes with pupil diameter ≥ 6.0 mm at 35 minutes

95.2% of right eyes

2 unchanged sentences

94.2% of left eyes

Median time to maximum post-baseline pupil diameter with ≥

1.0 mm increase from baseline

The consistency of

these results validates the robustness of the study designs and demonstrates the impressive treatment effect of MydCombi.

generally, these outcomes serve to further validate the bioavailability and efficacy of Optejet drug administration to the ocular

With the primary objectives

of our Phase III program met, in December 2020, we submitted an NDA to the FDA for marketing approval in the United States.

In March 2021, the FDA accepted our NDA with an expected PDUFA date of October 28, 2021.

Median time to maximum post-baseline pupil diameter with ≥ 1.0 mm increase from baseline

The consistency of these results validates the robustness of the study designs and demonstrates the impressive treatment effect of Mydcombi.

More generally, these outcomes serve to further validate the bioavailability and efficacy of Optejet drug administration to the ocular surface.

With the primary objectives of our Phase III clinical program met, in December 2020, we submitted an NDA to the FDA for marketing approval in the United States.

In October 2021, we received a CRL in response to our NDA, which in part informed us that pre-filled or co-packaged ophthalmic drug dispenser products like Mydcombi have been reclassified as drug-device combination products.

This reclassification was based upon the U.S.

Court of Appeals for the D.C.

Circuit’s decision in Genus Medical Technologies v.

FDA, not involving Eyenovia, which ordered that products meeting the statutory definition of a device but were previously classified by the FDA as drugs must be regulated as devices.

Before this ruling, the FDA regulated pre-filled or co-packaged ophthalmic dispensers as part of the approved ophthalmic drug distributed and sold with the dispenser.

After the ruling, however, the dispenser must be considered as a distinct device constituent part of a drug-device combination product.

As a result, we are in the process of providing additional non-clinical device information and expect to file our NDA resubmission for Mydcombi in the third quarter of 2022.

We conducted a Phase IV study (SPEED) during May - June 2021 to further understand the performance of an ophthalmologic fixed combination tropicamide-phenylephrine product (T-P OFTENO SOLUCIÓN) delivered by the Optejet dispenser.

The objective of the study was to evaluate the onset speed of dilation and compare effectiveness of one microdose spray (approximately 8 µl) with the Optejet® vs.

Sixty patients (120 eyes) were randomized with a mean age of 40.3 ± 14.2 years, 62% were female, and 98% were Hispanic or Latino.

At 15 minutes post-administration, a clinically meaningful pupil diameter (≥ 6.0 mm) was achieved in more than two thirds of patients with both one and two sprays.

No statistical difference in pupil dilation was found between one and two sprays administered at each observed timepoint.

No serious adverse events were reported in the study.

The SPEED study validates that there is no clinical difference in using one or two sprays, clinically relevant pupil diameters can be quickly achieved post-spray, and it offers users a well-tolerated and efficient way to administer topical ophthalmic medications.

The results of the SPEED study will be presented at the 2022 annual meeting of the American Society of Cataract and Refractive Surgery.

Our Technology

The Optejet comes in

The Optejet dispenser comes in two parts:

● the base contains the electronic components which enable generation of control signals designed to ensure consistent, accurate columnated arrays of micro-droplets, as well as dose tracking via Bluetooth connectivity;

the disposable cartridge which contains the drug formulation in a primary drug container, targeted dosing system and piezo-driven ejector nozzle, and comes in one-month doses.

For administration

of our product candidates, the patient receives both the base and the disposable cartridge.

For refills, the patient receives only

the disposable cartridge.

Patients deliver their dose by attaching the cartridge to the base, pressing an activation button which

loads a single drug dose, then, holding it between one and two inches from the eye while looking directly into an illuminated circle,

pressing a second button to emit the micro-droplet delivered medication.

The micro-droplets are emitted in a quickly repeating

array, that in aggregate form a micro-jet.

Solution is dispensed to the ocular surface in less than 100 milliseconds between the

time the first droplet hits the corneal surface to the completion of dose delivery, which is faster than the average involuntary

blink response time.

The patient feels a wet sensation on the eye, but does not experience any pain, as demonstrated in studies

Several acute clinical trials have been performed to date that demonstrate the Optejet’s usability.

and quick-delivered microdose, it does not drip down the face or drain down the naso-lacrimal duct thereby minimizing delivery

of extra product or preservatives to the eye.

The rechargeable base has intelligent power management and precision designed circuitry

that maximizes battery life allowing for infrequent recharging, while providing consistent dose delivery over the life of each

Our system is based

on piezo-driven printer technology, which is also used for high-precision ink jet printing.

In ink jet printing, piezo technology

enables ink to be sprayed with precision to form letters and numbers on paper.

Our patented system takes aspects of piezo driven

printer technology, and applies it to the delivery of therapeutics to the eye.

● the disposable cartridge which contains the drug formulation in a primary drug container, targeted dosing system and piezo-driven ejector nozzle, and may contain up to 90 binocular doses.

For administration of our product candidates, the office or patient receives both the base and the disposable cartridge.

For refills, the office or patient receives only the disposable cartridge.

Doses are delivered by attaching the cartridge to the base, pressing an activation button which loads a single drug dose, then, holding it between one and two inches from the eye while looking directly into an illuminated circle, pressing a second button to emit the micro-droplet delivered medication.

The micro-droplets are emitted in a quickly repeating array, that in aggregate form a directed mist.

The patient feels a mild, wet sensation on the eye.

Several acute clinical trials have been performed to date that demonstrate the Optejet’s usability.

As a precise and quick-delivered microdose, it does not drip down the face or drain down the naso-lacrimal duct, thereby minimizing delivery of extra product or preservatives to the eye.

The rechargeable base has intelligent power management and precision designed circuitry that maximizes battery life allowing for infrequent recharging, while providing consistent dose delivery over the life of each cartridge.

Our system is based on piezo-driven printer technology, which is also used for high-precision ink jet printing.

In ink jet printing, piezo technology enables ink to be sprayed with precision to form letters and numbers on paper.

Our patented system takes aspects of piezo-driven printer technology, and applies it to the delivery of therapeutics to the eye.

Sales and Marketing

We are taking a staged

approach to the commercialization of our products, retaining rights for MydCombi to potentially optimize the introduction of the

technology to the market, and establishing partnerships with licensees for products that require a larger investment in terms of

sales force and distribution.

Our management team and directors, which are leading the commercialization planning of our lead product

candidates in the United States, have substantial experience in the commercialization of ophthalmic therapeutics.

MydCombi is our first

expected commercial product.

MydCombi is a cash-pay pharmaceutical supply, administered and purchased by clinics and doctors for

in-office use.

The cost of the product is folded into the established reimbursement for the comprehensive eye exam and thus lends

itself to a single specialty-pharmacy distribution model without the need for formulary negotiations and contracting at the managed

As such, we estimate MydCombi sales and marketing costs will be significantly below that of a conventional prescription-based

pharmaceutical product.

As a highly differentiated product with meaningful benefits for both providers and patients, we anticipate

fast adoption, especially because part of our strategy is to maintain good economics for the practice.

Lastly, we believe that

we can be successful with a limited in-person sales force as there is no active competition in this space.

MicroLine is our second

expected product for commercialization.

Like MydCombi, MicroLine would also be “cash-pay,”

negating the need for infrastructure

focused on managed care reimbursement.

We currently have licensed MicroLine to Arctic Vision for development and commercialization

in Greater China and South Korea.

Unless we establish additional partnerships for MicroLine, we plan to expand our sales force

from approximately ten to fifty people in the United States and focus on promotion in the optometrist office.

We also plan to leverage

the experience that these offices have had with MydCombi to speed acceptance and prescribing of MicroLine to appropriate patients.

MicroPine is our third

expected product for commercialization.

MicroPine is a more standard therapeutic, likely reimbursed by payers after negotiating

for formulary position.

We have licensed MicroPine to Arctic Vision in Greater China and Korea, and to Bausch Health in the United

States and Canada.

We are taking a staged approach to the commercialization of our products, retaining rights for Mydcombi to potentially optimize the introduction of the technology to the market, and establishing partnerships with licensees for products that require a larger investment in terms of sales force and distribution.

Our management team and directors, which are leading the commercialization planning of our lead product candidates in the United States, have substantial experience in the commercialization of ophthalmic therapeutics.

Mydcombi is our first expected commercial product.

Mydcombi is a cash-pay pharmaceutical supply, administered and purchased by clinics and doctors for in-office use.

The cost of the product is folded into the established reimbursement for the comprehensive eye exam and thus lends itself to a single specialty-pharmacy distribution model without the need for formulary negotiations and contracting at the managed care level.

As such, we estimate Mydcombi sales and marketing costs will be significantly below that of a conventional prescription-based pharmaceutical product.

As a highly differentiated product with meaningful benefits for both providers and patients, we anticipate fast adoption, especially because part of our strategy is to maintain good economics for the practice.

Lastly, we believe that we can be successful with a limited in-person sales force as we are not aware of any active competition in this space.

MicroLine is our second expected product for commercialization.

Like Mydcombi, MicroLine would also be “cash-pay,” negating the need for infrastructure focused on managed care reimbursement.

We currently have licensed MicroLine as well as Mydcombi to Arctic Vision for development and commercialization in Greater China and South Korea.

Unless we establish additional partnerships for MicroLine, we plan to expand our sales force from approximately ten to fifty people in the United States and focus on promotion in the optometrist office.

We also plan to leverage the experience that these offices have had with Mydcombi to speed acceptance and prescribing of MicroLine to appropriate patients.

MicroPine is our third expected product for commercialization.

MicroPine is a more standard therapeutic, likely reimbursed by payers after negotiating for formulary position.

We have licensed MicroPine to Arctic Vision in Greater China and Korea, and to Bausch Health in the United States and Canada.

In both cases, our licensee will be responsible for commercialization within their own sales and marketing structures.

Manufacturing

For clinical supply,

we currently rely on a combination of limited internal manufacturing capacity and third-party manufacturers located in the United

States and abroad.

We manage such production with all our vendors on a purchase order basis.

Relationships with vendors of critical

components are governed by applicable service and supply agreements or purchase order terms.

We do not currently have long-term

agreements with these manufacturers or any other third-party suppliers.

We intend to procure quantities on a purchase order basis

for our clinical production.

If any of our existing third-party suppliers should become unavailable to us for any reason, we believe

that there are a number of potential replacements, although we might experience a delay in our ability to obtain alternately sourced

quantities of materials or services due to their unique and specialized nature.

We plan to use multiple

contract manufacturing organizations, or CMOs, for the potential commercialization of some of our product candidates, as we have

limited internal capacity to produce commercial supplies and might not be able to implement further manufacturing processes internally.

The biotechnology and

pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary

While we believe that our technologies, knowledge, experience and scientific resources provide us with competitive advantages,

we face potential competition from many different sources.

Any product candidates that we successfully develop and commercialize

may also compete with existing therapies and new therapies that may become available in the future.

Our potential competitors

include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic or biosimilar drug companies.

Many of our competitors have significantly greater financial and human resources and expertise in research and development, manufacturing,

preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.

and other early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with

large and established companies.

These third parties compete with us in recruiting and retaining qualified scientific and management

personnel, establishing clinical trial sites and patient enrollment for clinical trials, as well as in acquiring products, product

candidates or other technologies that we may target to in-license or acquire in pursuit of our updated business plan.

For MydCombi, we are

not aware of any micro-therapeutics nor of any existing FDA-approved phenylephrine-tropicamide topical fixed combination even in

standard macrodose.

There are competitive macrodose drop formulations of individual therapeutics such as phenylephrine and tropicamide

for mydriasis by companies such as Akorn, Alcon and others, as well as pharmacies that compound the combination on an individual

basis for physicians.

For MicroLine, we are

not aware of FDA-approved drugs for the improvement of near vision in patients with presbyopia.

There are other pharmaceutical

companies developing therapies for presbyopia, none of which makes use of microdosing technology or deliver medication as a spray.

We expect that both

MydCombi and MicroLine would be “cash pay”

products, as MydCombi is purchased directly by offices and used routinely

in eye exams, and MicroLine would be considered an “aesthetic”

prescription product not generally covered by third

party insurance.

For MicroPine, we are

not aware of any FDA-approved drugs to slow the progression of myopia.

There are other versions of traditional eye drop atropine

under development by other pharmaceutical companies for this indication.

There also are versions of compounded topical atropine

that have not been tested for their safety or efficacy that are dispensed on an individual basis to patients.

For clinical supply, Eyenovia relies on internal manufacturing capabilities along with third-party contract manufacturing organizations (CMOs) to produce the Optejet® cartridges and bases.

In order to streamline our manufacturing process and reduce costs, Eyenovia has invested in commissioning a facility located in Redwood City, CA.

The facility is dedicated to the fill and finish for Eyenovia’s proprietary primary closure container, which is used in its different therapies, as well as assembly and final packaging of cartridges.

Redwood City is expected to come on-line with the production of clinical materials in mid-2022.

Base units are manufactured by Eyenovia at its Reno, NV engineering center.

The drug products used in the Eyenovia devices are produced by domestic third-party manufacturers.

We expect to continue to rely upon CMOs for the manufacture of our clinical trial materials and to fulfill initial commercial product demand.

Critical vendor relationships are governed by specific agreements or purchase order terms.

If any of our existing third party suppliers should become unavailable to us for any reason, we believe that there are a number of potential replacements, although we might experience a delay in our ability to obtain alternatively sourced quantities of materials or services due to their unique and specialized nature.

We have also experienced supply chain delays due to the COVID-19 pandemic, which in some cases have resulted in the delay in the manufacturing of our products.

We believe that these delays may be resolved in 2022.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.

While we believe that our technologies, knowledge, experience and scientific resources provide us with competitive advantages, we face potential competition from many different sources.

Any product candidates that we successfully develop and commercialize may also compete with existing therapies and new therapies that may become available in the future.

Our potential competitors include large pharmaceutical and biotechnology companies, and specialty pharmaceutical and generic or biosimilar drug companies.

Many of our competitors have significantly greater financial and human resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.

Smaller and other early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient enrollment for clinical trials, as well as in acquiring products, product candidates or other technologies that we may target to in-license or acquire in pursuit of our updated business plan.

For Mydcombi, we are not aware of any micro-therapeutics nor of any existing FDA-approved tropicamide-phenylephrine topical fixed combination products even in standard macrodose.

There are competitive macrodose drop formulations of individual therapeutics for mydriasis such as tropicamide and phenylephrine marketed by companies such as Akorn, Alcon and others, as well as pharmacies that compound the combination on an individual basis for physicians.

For MicroLine, Allergan recently launched Vuity, a pilocarpine eye drop for the treatment of presbyopia.

Along with Allergan, there are other pharmaceutical companies developing therapies for presbyopia, none of which makes use of microdosing technology or deliver medication as a spray.

We expect that both Mydcombi and MicroLine would be “cash pay” products, as Mydcombi is purchased directly by offices and used routinely in eye exams, and MicroLine would be considered an “aesthetic” prescription product not generally covered by third party insurance.

For MicroPine, we are not aware of any FDA-approved drugs to slow the progression of myopia.

There are other versions of traditional eye drop atropine under development by other pharmaceutical companies for this indication.

There also are versions of compounded topical atropine that have not been tested for their safety or efficacy that are dispensed on an individual basis to patients.

Intellectual Property

Our success may depend

on our ability to obtain, maintain and enforce our proprietary rights related to our products and other technologies.

operate without infringing the valid, proprietary rights of others while preventing others from infringing our proprietary rights.

Our success may depend on our ability to obtain, maintain and enforce our proprietary rights related to our products and other technologies.

We must also operate without infringing the valid, proprietary rights of others while preventing others from infringing our proprietary rights.

We will seek to protect our proprietary position by, among other methods, filing U.S.

and foreign patent applications.

rely on trade secrets and know-how for some proprietary methods, methods of manufacture, and systems and devices.

We continue innovating

our technologies, and will file appropriate U.S.

We may also rely on trade secrets and know-how for some proprietary methods, methods of manufacture, and systems and devices.

We continue innovating our technologies, and will file appropriate U.S.

and foreign patent applications for our future innovations.

As of December 31,

2020, we owned nine U.S.

issued and allowed utility patents, one issued design patent, and nine pending U.S.

patent applications,

as well as 53 issued foreign patents, 35 pending foreign patent applications, and one pending international PCT application.

Patent coverage within

the portfolio includes issued and pending patent applications related to the following devices and methods:

The Company has filed three petitions for inter partes review (“IPR”) directed at patents owned by Sydnexis, Inc.

The IPRs are as follows:

IPR2022-00384, filed on December 29, 2021, challenging U.S.

IPR2022-00414, filed on January 7, 2022, challenging U.S.

and IPR2022-00415, filed on January 7, 2022, challenging U.S.

As of December 31, 2021, we owned thirteen U.S.

issued and allowed utility patents or design patents, and multiple pending U.S.

patent applications, as well as 84 issued foreign patents, and multiple pending foreign patent applications, and one pending international PCT application.

Patent coverage within the portfolio includes issued and pending patent applications related to the following devices and methods:

● A piezoelectric device configured to generate an ejected stream of droplets is the subject of one patent family.

21 unchanged sentences

The ejector produces a stream of droplets having a droplet diameter greater than 15 microns with the stream having low entrained airflow so that the pressure of the stream will be substantially imperceptible.

The expiry of any patent

depends upon the legal term for patents in that particular country.

In the United States, the patent term is generally 20 years

from the earliest claimed filing date of a non-provisional patent application.

In the United States, a patent’s term may

be lengthened by patent term adjustment which compensates a patentee for administrative delays by the United States Patent and

Trademark Office, or the USPTO, in examining and granting a patent.

A patent term may also be shortened if a patent is terminally

disclaimed over another patent or application.

The Drug Price Competition

and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the

expiration date of a U.S.

patent as partial compensation for the length of time the drug is under regulatory review while the patent

A patent term extension

cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable

to each regulatory review period may be extended and only those claims covering the approved drug, a method for using it or a method

for manufacturing it may be extended.

The expiry of any patent depends upon the legal term for patents in that particular country.

In the United States, the patent term is generally 20 years from the earliest claimed filing date of a non-provisional patent application.

In the United States, a patent’s term may be lengthened by patent term adjustment which compensates a patentee for administrative delays by the United States Patent and Trademark Office, or the USPTO, in examining and granting a patent.

A patent term may also be shortened if a patent is terminally disclaimed over another patent or application.

The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration date of a U.S.

patent as partial compensation for the length of time the drug is under regulatory review while the patent is in force.

A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to each regulatory review period may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended.

We cannot provide any assurance that any patent term extension with respect to any U.S.

will be obtained and, if obtained, the duration of such extension.

Similar patent term extension/reduction provisions are available

in the European Union and other jurisdictions.

In the future, if and when our product candidates receive approval by the FDA or

foreign regulatory authorities, we will apply for patent term extensions on issued patents covering our products to the extent

available under the applicable law, depending upon the length of any such clinical trials for any product and other factors.

expiration dates referred to above are without regard to potential patent term extension or other market exclusivity that may be

available to us.

However, we cannot provide any assurances that any such patent term extension of a foreign patent will be obtained

and, if obtained, the duration of such extension.

In Asia, we have been

granted a patent in each of China and South Korea and two patents in Japan that describe a piezoelectric device configured to generate

an ejected stream of droplets with a particular droplet diameter and ejection velocity.

We also have seven additional patents granted

in China, five additional patents granted in Japan, and four patents granted in Singapore, all related to aspects of the piezoelectric

device and methods of using the device.

Our products are marketed

under trademarks and service marks that are owned by us.

The following words are trademarks in our Company’s trademark portfolio

and are the subject of either registration, or application for registration, in the United States:

EYENOVIA®, OPTEJET™,

EYELATOVA™, EYETANO™.

In addition to the

trademarks noted above, we will file trademark applications for new trademarks registrations to protect our market positions in

the United States and other jurisdictions on an ongoing basis.

patent will be obtained and, if obtained, the duration of such extension.

Similar patent term extension/reduction provisions are available in the European Union and other jurisdictions.

In the future, if and when our product candidates receive approval by the FDA or foreign regulatory authorities, we will apply for patent term extensions on issued patents covering our products to the extent available under the applicable law, depending upon the length of any such clinical trials for any product and other factors.

The expiration dates referred to above are without regard to potential patent term extension or other market

exclusivity that may be available to us.

However, we cannot provide any assurances that any such patent term extension of a foreign patent will be obtained and, if obtained, the duration of such extension.

In Asia, we have been granted a patent in each of China and South Korea and two patents in Japan that describe a piezoelectric device configured to generate an ejected stream of droplets with a particular droplet diameter and ejection velocity.

We also have seven additional patents granted in China, five additional patents granted in Japan, and four patents granted in Singapore, all related to aspects of the piezoelectric device and methods of using the device.

Our product candidates are marketed under trademarks and service marks that are owned by us.

The following words are trademarks in our Company’s trademark portfolio and are the subject of either registration, or application for registration, in the United States:

APERSURE™, EYENOVIA®, OPTEJET®, EYELATOVA™, EYETANO™, MYDCOMBI™.

In addition to the trademarks noted above, we will file trademark applications for new trademarks registrations to protect our market positions in the United States and other jurisdictions on an ongoing basis.

Proprietary Technology

In addition to patents,

we may rely on trade secrets and proprietary know-how to protect our technology.

We endeavor to protect our proprietary technology

and processes in the appropriate manner to maintain their secrecy including confidentiality agreements when dealing with third

We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security

of our premises and physical and electronic security of our information technology systems.

We also require invention assignment

agreements with our employees, consultants, and contractors.

In addition to patents, we may rely on trade secrets and proprietary know-how to protect our technology.

We endeavor to protect our proprietary technology and processes in the appropriate manner to maintain their secrecy including confidentiality agreements when dealing with third parties.

We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

We also require invention assignment agreements with our employees, consultants, and contractors.

Government Regulation and Product Approvals

Government authorities

in the United States, at federal, state and local levels, and in other countries and jurisdictions, including the European Union,

extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging,

storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and

import and export of pharmaceutical products.

The processes for obtaining regulatory approvals in the United States and in foreign

countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities,

require the expenditure of substantial time and financial resources.

Review and Approval of Drugs in the

United States

In the United States,

the FDA regulates drug products under the Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations.

The process of obtaining

regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations

requires the expenditure of substantial time and financial resources.

The failure to comply with applicable requirements under

the FDCA and other applicable laws at any time during the product development process, approval process or after approval may subject

an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending

applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters,

voluntary product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals

of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the

FDA and the Department of Justice or other governmental entities.

An applicant seeking

approval to market and distribute a new drug product in the United States must typically undertake the following:

completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

Government authorities in the United States, at federal, state and local levels, and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products.

The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

Government Regulation

In the United States, the FDA regulates drug, biological, device and combination products under the Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.

The failure to comply with applicable requirements under the FDCA and other applicable laws at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by the FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, voluntary product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by the FDA and the Department of Justice or other governmental entities.

FDA Regulation of Prescription Drugs

An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

● submission to the FDA of an IND which must take effect before human clinical trials may begin;

3 unchanged sentences

● review of the product by an FDA advisory committee, where appropriate or if applicable;

satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

● satisfactory completion of FDA audits of selected clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;

2 unchanged sentences

Preclinical Studies

Preclinical studies

include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient

and the formulated drug or drug product, as well as in vitro and animal studies to assess the safety and activity of the

drug for initial testing in humans and to establish a rationale for therapeutic use.

The conduct of preclinical studies is subject

to federal regulations and requirements, including GLP regulations.

The results of the preclinical tests, together with manufacturing

information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are

submitted to the FDA as part of an IND.

Some long-term preclinical testing, such as animal tests of reproductive adverse events

and carcinogenicity, may continue after the IND is submitted.

The IND and IRB

An IND is an exemption

from the FDCA that allows an unapproved drug to be shipped in interstate commerce for use in an investigational clinical trial

and a request for FDA authorization to administer an investigational drug to humans.

Such authorization must be secured prior to

interstate shipment and administration of any new drug that is not the subject of an approved NDA.

In support of a request for

an IND, applicants must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the

FDA as part of the IND.

In addition, the results of the preclinical tests, together with manufacturing information, analytical

data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as

part of an IND.

The FDA requires a 30-day waiting period after the acceptance of each IND before clinical trials may begin.

waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable

health risks.

At any time during this 30-day period, the FDA may raise concerns or questions about the conduct of the clinical

trials as outlined in the IND and impose a clinical hold.

In this case, the IND sponsor and the FDA must resolve any outstanding

concerns before clinical trials can begin.

Following commencement

of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that clinical trial.

hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation.

Preclinical studies include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient and the formulated drug or drug product, as well as in vitro and animal studies to assess the toxicity, safety and activity of the drug for initial testing in humans and to establish a rationale for therapeutic use.

The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations.

The results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND.

Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after the IND is submitted.

The IND and IRB Processes

An IND is an exemption from the FDCA that allows an unapproved drug to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer an investigational drug to humans.

Such authorization must be secured prior to interstate shipment and administration of any new drug that is not the subject of an approved NDA.

In support of a request for an IND, applicants must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to the FDA as part of an IND.

The FDA requires a 30-day waiting period after receiving an IND before the corresponding clinical trial may begin.

This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects may be exposed to unreasonable health risks.

At any time during this 30-day period, the FDA may raise concerns or questions about the conduct of the clinical trials as outlined in the IND and impose a clinical hold.

In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin.

Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that clinical trial at any time.

A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation.

A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND.

For example, a specific

protocol or part of a protocol is not allowed to proceed, while other protocols may do so.

No more than 30 days after imposition

of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.

Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the

sponsor that the investigation may proceed.

The FDA will base that determination on information provided by the sponsor correcting

the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed.

A sponsor may choose,

but is not required, to conduct a foreign clinical study under an IND.

When a foreign clinical study is conducted under an IND,

all FDA IND requirements must be met unless waived.

When the foreign clinical study is not conducted under an IND, the sponsor

must ensure that the study complies with FDA certain regulatory requirements in order to use the study as support for an IND or

application for marketing approval.

Specifically, such studies must be conducted in accordance with good clinical practice, or

GCP, including review and approval by an independent ethics committee, or IEC, and informed consent from subjects.

The FDA’s

regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well

as the quality and integrity of the resulting data.

They further help ensure that non-IND foreign studies are conducted in a manner

comparable to that required for IND studies.

In addition to the

foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the

plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the

study at least annually.

The IRB must review and approve, among other things, the study protocol and informed consent information

to be provided to study subjects.

For example, a specific protocol or part of a protocol is not allowed to proceed, while other protocols may do so.

No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.

Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed.

The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND.

When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived.

When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with FDA certain regulatory requirements in order to use the study as support for an IND or application for marketing approval.

In particular, such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee, or IEC, and informed consent from subjects, and must meet other clinical trial requirements, such as sufficient patient population size and statistical powering.

The FDA must be able to validate the data through an onsite inspection, if deemed necessary by the FDA.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually.

The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects.

An IRB must operate in compliance with FDA regulations.

An IRB can suspend or terminate approval

of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance

with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Additionally, some

clinical trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety

monitoring board or committee.

This group provides authorization for whether or not a clinical trial may move forward at designated

check points based on access that only the group maintains to available data from the study.

Suspension or termination of development

during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable

Other reasons for suspension or termination may be made by us based on evolving business objectives and/or competitive

Information about certain

clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination

on its ClinicalTrials.gov website.

Human Clinical

Trials in Support of an NDA

Clinical trials involve

the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance

with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent

in writing before their participation in any clinical trial.

Clinical trials are conducted in accordance with written study protocols

detailing, among other things, study objectives, participant inclusion and exclusion criteria, the parameters to be used in monitoring

safety and the effectiveness criteria to be evaluated.

Human clinical trials

are typically conducted in three sequential phases, which may overlap or be combined:

The drug is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.

Progress reports detailing

the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events

An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee.

This group provides authorization for whether or not a clinical trial may move forward at designated check points based on access that only the group maintains to available data from the study.

Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk.

Other reasons for suspension or termination may be made by the clinical trial sponsor based on evolving business objectives and/or competitive climate.

Information about certain clinical trials, including details of the protocol and eventually study results, also must be submitted within specific timeframes to the National Institutes of Health for public dissemination on the ClinicalTrials.gov data registry.

Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

Sponsors are also obligated to disclose the results of their clinical trials after completion.

Disclosure of the results of these trials can be delayed in some cases for up to two years after the date of completion of the trial.

Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and may prevent the non-compliant party from receiving future grant funds from the federal government.

The NIH’s Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and the government has recently begun enforcing those requirements against non-compliant clinical trial sponsors.

Human Clinical Trials in Support of an NDA

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial.

Clinical trials are conducted in accordance with written study protocols detailing, among other things, study objectives, participant inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

A protocol for each phase of a clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

The product candidate is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

The product candidate is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

The product candidate is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.

Post-approval trials, sometimes referred to as Phase IV clinical trials, may be conducted after initial marketing approval.

These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-

term safety follow up.

In certain instances, the FDA may mandate the performance of Phase IV clinical trials as a condition of approval of an NDA.

Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

In addition, IND safety reports must be submitted to the FDA for any of the following:

serious and unexpected suspected

adverse reactions;

findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed

and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the

protocol or investigator brochure.

Phase I, Phase II and Phase III clinical trials might not be completed successfully within any

specified period, or at all.

Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various

grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.

Similarly, an IRB can

suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is

not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious

harm to patients.

The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of

the clinical data submitted.

Concurrent with clinical

trials, companies often complete additional animal studies and must also develop additional information about the chemistry and

physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance

with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the drug candidate

and, among other things, must develop methods for testing the identity, strength, quality, purity, and potency of the final drug.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the

drug candidate does not undergo unacceptable deterioration over its shelf life.

Submission of

an NDA to the FDA

Assuming successful

completion of required clinical testing and other requirements, the results of the preclinical studies and clinical trials, together

with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things,

are submitted to the FDA as part of an NDA requesting approval to market the drug product for one or more indications.

Under federal

law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2021 is $2.9 million for

an application requiring clinical data.

The sponsor of an approved NDA is also subject to an annual prescription drug program fee,

which for fiscal year 2021 is $0.3 million.

serious and unexpected suspected adverse reactions;

findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug;

and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.

Phase I, Phase II and Phase III clinical trials might not be completed successfully within any specified period, or at all.

Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, must develop methods for testing the identity, strength, quality, and purity of the final drug.

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

Traditional and Section 505(b)(2) NDAs

NDAs for most new drug products are based on two full, or pivotal, clinical trials that must contain substantial evidence of the safety and efficacy of the proposed new product.

These applications are submitted under Section 505(b)(1) of the FDCA.

The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA.

This type of application allows the applicant to rely, in part, on the FDA’s previous findings of safety and efficacy for a drug product previously approved under an NDA, published literature, or a combination of both.

Specifically, Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

If the 505(b)(2) applicant can establish that reliance on studies conducted for a previously-approved product or FDA’s previous findings regarding safety or effectiveness is appropriate, the applicant may eliminate the need to conduct certain pre-clinical studies or clinical trials of the new product.

Thus, Section 505(b)(2) often provides an alternate and potentially more expeditious pathway to FDA approval via NDA for new or improved formulations or new uses of previously approved products.

Unlike the abbreviated new drug, or ANDA, pathway used by developers of generic versions of innovator drugs, which does not allow applicants to submit new clinical data other than bioavailability or bioequivalence data, the 505(b)(2) NDA pathway does not preclude the possibility that a follow-on applicant would need to conduct additional clinical trials or nonclinical studies;

for example, a 505(b)(2) applicant may be seeking approval to market a new dosage form of a previously approved drug or for the treatment of a different patient population, which would require new clinical data to demonstrate safety or effectiveness.

The FDA will generally require companies to perform additional studies to support any differences from the previously approved product, called a listed drug.

The FDA may then approve the new drug candidate for all or some of the label indications for which the listed drug has been approved, or for any new indication sought by the 505(b)(2) applicant, as applicable.

Accordingly, a 505(b)(2) NDA is subject to the same patent certification requirements as an ANDA with respect to the previously-approved drug being referenced, and it may be eligible for the three-year period of marketing exclusivity based on the submission of new clinical data that are essential to the approval of the new 505(b)(2) drug product.

For more information, see section below entitled Hatch-Waxman Act and Marketing Exclusivity.

Submission of an NDA to the FDA

Assuming successful completion of required clinical testing and other requirements, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

Under federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 2022 exceeds $3.1 million for an application requiring clinical data.

The sponsor of an approved NDA is also subject to an annual prescription drug program fee, which for fiscal year 2022 exceeds $360,000.

Certain exceptions and waivers are available for some of these fees, such as an exception

from the application fee for drugs with orphan designation and a waiver for certain small businesses.

Eyenovia is currently eligible

for a waiver of the application fees under the small business provisions.

The FDA conducts a

preliminary review of an NDA within 60 days of its receipt and informs the sponsor by the 74th day after the FDA’s receipt

of the submission to determine whether the application is sufficiently complete to permit substantive review.

The FDA may request

additional information rather than accept an NDA for filing.

In this event, the application must be resubmitted with the additional

from the application fee for drugs with orphan designation and a waiver for certain small businesses submitting their first human drug applications for review.

Eyenovia is currently eligible for a waiver of the application fees under the small business provisions.

The FDA conducts a preliminary review of an NDA within 60 days of its receipt and informs the sponsor by the 74th day after the FDA’s receipt of the submission to determine whether the application is sufficiently complete to permit substantive review.

The FDA may request additional information rather than accept an NDA for filing.

In this event, the application must be resubmitted with the additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

Once the submission is

accepted for filing, the FDA begins an in-depth substantive review.

The FDA has agreed to certain performance goals in the review

process of NDAs.

Most such applications are meant to be reviewed within 10 months from the date of filing, and most applications

for “priority review”

products are meant to be reviewed within six months of filing.

For applications of drug products

that are not new molecular entities, FDA aims to conduct standard reviews within 10 months of receipt of the NDA and priority reviews

within six months of receipt of the NDA.

The review process may be extended by the FDA for three additional months to consider

new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following

the original submission.

Before approving an

NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured.

These pre-approval

inspections may cover all facilities associated with an NDA submission, including drug component manufacturing (such as active

pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.

The FDA will not approve an

application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate

to assure consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will

typically inspect one or more clinical sites to assure compliance with GCP.

In addition, as a condition

of approval, the FDA may require an applicant to develop a REMS.

REMS use risk minimization strategies beyond the professional

labeling to ensure that the benefits of the product outweigh the potential risks.

To determine whether a REMS is needed, the FDA

will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product,

expected duration of treatment, seriousness of known or potential adverse events, and whether the product is a new molecular entity.

REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use,

ETASU may include, but are not limited to, special training or certification for prescribing or dispensing, dispensing

only under certain circumstances, special monitoring, and the use of patient registries.

The FDA may require a REMS before approval

or post-approval if it becomes aware of a serious risk associated with use of the product.

The requirement for a REMS can materially

affect the potential market and profitability of a product.

The FDA may refer an

application for a novel drug to an advisory committee or explain why such referral was not made.

Typically, an advisory committee

is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation

as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory

committee, but it considers such recommendations carefully when making decisions.

The FDA’s

Decision on an NDA

On the basis of the

FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities,

the FDA may issue an approval letter or a complete response letter.

An approval letter authorizes commercial marketing of the product

with specific prescribing information for specific indications.

A complete response letter generally outlines the deficiencies

in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.

If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue

an approval letter.

The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information

Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy

the regulatory criteria for approval.

If the FDA approves

a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions

be included in the product labeling, require that post-approval studies, including Phase IV clinical trials, be conducted to further

assess the drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization,

or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, which can

materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product

based on the results of post-market studies or surveillance programs.

After approval, many types of changes to the approved product,

such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements

and FDA review and approval.

Post-Approval

Drugs manufactured

or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other

things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion

and reporting of adverse experiences with the product.

After approval, most changes to the approved product, such as adding new

indications or other labeling claims, are subject to prior FDA review and approval.

In addition, drug manufacturers

and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments

with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance

with cGMP requirements.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval before

being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and

documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is

granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems

occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events

of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may

result in revisions to the approved labeling to add new safety information;

imposition of post-market studies or clinical trials

to assess new safety risks;

Once the submission is accepted for filing, the FDA begins an in-depth substantive review.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA has agreed to certain performance goals in the review process of NDAs.

For most applications involving new molecular entities, the FDA has 10 months from the date of filing in which to complete its initial review of a standard application and respond to the applicant, and six months from the date of filing for an application with “priority review.” Even if the NDA is filed by the FDA, however, companies cannot be sure that any approval will be granted on a timely basis, if at all.

Moreover, the FDA does not always meet its PDUFA goal dates, and the review process for both standard and priority new drug applications may be extended by the FDA for various reasons, including for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured.

These pre-approval inspections may cover all facilities associated with an NDA submission, including drug component manufacturing (such as active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.

The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

The FDA may refer an application for a novel drug product to an advisory committee.

Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Fast Track, Breakthrough Therapy and Priority Review Designations

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition.

These programs are fast track designation, breakthrough therapy designation and priority review designation.

Specifically, the FDA may designate a product for fast track review if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.

For fast track products, sponsors may have more frequent interactions with the FDA and the FDA may initiate review of sections of a fast track product’s NDA before the application is complete.

This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast track product may be effective.

The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees.

However, the FDA’s time period goal for reviewing a fast track application does not begin until the last section of the NDA is submitted.

In addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

The FDA may grant breakthrough therapy designation to a drug or biologic meeting certain statutory criteria upon a request made by the IND sponsor.

A product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process;

providing timely advice to the product sponsor regarding development and approval;

involving more senior staff in the review process;

assigning a cross-disciplinary project lead for the review team;

and taking other steps to design the clinical trials in an efficient manner.

In addition, breakthrough therapies are eligible for accelerated approval of their respective marketing applications.

The FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

The FDA determines at the time that the marketing application is submitted, on a case- by-case basis, whether the proposed drug represents a significant improvement when compared with other available therapies.

Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.

A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months for an new molecular entity NDA from the date of filing.

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Furthermore, fast track designation, breakthrough therapy designation, and priority review do not change the scientific or medical standards for approval or the quality of evidence necessary to support approval but may expedite the development or review process.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination from well-controlled clinical trials that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.

The FDA may also grant accelerated approval for such a drug or biologic when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit.

As a result, a drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase IV or post-approval clinical trials to confirm the effect on the clinical endpoint.

Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the drug from the market on an expedited basis.

All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.

The FDA’s Decision on an NDA

The FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether its manufacturing is cGMP-compliant to assure and preserve the product’s identity, strength, quality and purity.

The approval process is lengthy and often difficult, and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and information.

On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a CRL.

An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.

A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form.

A CRL generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.

If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter.

The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.

Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase IV clinical trials, be conducted to further assess the drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, which can materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs.

The FDA may also require an applicant to develop a REMS as a condition of approval to ensure that the benefits of the product outweigh its risks and to assure its safe use.

REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks.

To determine whether

a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events, and whether the product is a new molecular entity.

REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use, or ETASU.

ETASU may include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries.

The FDA may require a REMS before approval or post-approval if it becomes aware of a serious risk associated with use of the product.

If the FDA concludes a REMS is needed as a condition of approval, the sponsor must submit a proposed REMS during the application review process;

the FDA will not approve the NDA without an approved REMS, if required.

The requirement for a REMS can materially affect the potential market and profitability of a product.

After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Post-Approval Requirements for Prescription Drugs

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

There also are continuing, annual program fee requirements for any marketed products, as well as new application fees for supplemental applications with clinical data.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements.

Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use.

Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;

imposition of post-market studies or clinical trials to assess new safety risks;

or imposition of distribution or other restrictions under a REMS program.

Other potential consequences

include, among other things:

Other potential consequences include, among other things:

● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

3 unchanged sentences

● injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates

marketing, labeling, advertising and promotion of products that are placed on the market.

Drugs may be promoted only for the approved

indications and in accordance with the provisions of the approved label.

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.

In addition, the distribution

of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution

of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors

by the states.

Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements

to ensure accountability in distribution.

Section 505(b)(2) NDAs

NDAs for most new drug

products are based on two full clinical trials which must contain substantial evidence of the safety and efficacy of the proposed

These applications are submitted under Section 505(b)(1) of the FDCA.

The FDA is, however, authorized to

approve an alternative type of NDA under Section 505(b)(2) of the FDCA.

This type of application allows the applicant

to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature.

Specifically,

Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe

for use and effective in use and relied upon by the applicant for approval of the application “were not conducted by or for

the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations

were conducted.”

Thus, Section 505(b)(2) authorizes

the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant.

NDAs filed under Section 505(b)(2) may

provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously

approved products.

If the Section 505(b)(2) applicant can establish that reliance on the FDA’s previous approval

is scientifically appropriate, the applicant may eliminate the need to conduct certain preclinical studies or clinical trials of

the new product.

The FDA may also require companies to perform additional studies or measurements to support the change from the

approved product.

The FDA may then approve the new drug candidate for all or some of the label indications for which the referenced

product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.

Abbreviated New

Drug Applications for Generic Drugs

In 1984, with passage

of the Hatch-Waxman Amendments to the FDCA, Congress authorized the FDA to approve generic drugs that are the same as drugs previously

approved by the FDA under the NDA provisions of the statute.

To obtain approval of a generic drug, an applicant must submit an

abbreviated new drug application, or ANDA, to the agency.

In support of such applications, a generic manufacturer may rely on the

preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed

drug, or RLD.

Specifically, in order

for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients,

the route of administration, the dosage form, and the strength of the drug.

At the same time, the FDA must also determine that

the generic drug is “bioequivalent”

to the innovator drug.

Under the statute, a generic drug is bioequivalent to an

RLD if 

“the rate and extent of absorption of the drug do not show a significant difference from the rate and extent

of absorption of the listed drug.”

Upon approval of an

ANDA, the FDA indicates whether the generic product is “therapeutically equivalent”

to the RLD in its publication Approved

Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book.

Clinicians and pharmacists consider

a therapeutic equivalent generic drug to be fully substitutable for the RLD.

In addition, by operation of certain state laws and

numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the

generic drug without the knowledge or consent of either the prescribing clinicians or patient.

Under the Hatch-Waxman

Amendments, the FDA might not approve an ANDA until any applicable period of non-patent exclusivity for the RLD has expired.

FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity.

For the purposes

of this provision, a new chemical entity, or NCE, is a drug that contains no active moiety that has previously been approved by

the FDA in any other NDA.

An active moiety is the molecule or ion responsible for the physiological or pharmacological action of

the drug substance.

In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration

of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its

application four years following the original product approval.

The FDCA also provides

for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability

or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application.

three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of

administration, combination or indication.

Three-year exclusivity would be available for a drug product that contains a previously

approved active moiety, provided the statutory requirement for a new clinical investigation is satisfied.

Unlike five-year NCE

exclusivity, an award of three-year exclusivity does not block the FDA from accepting ANDAs seeking approval for generic versions

of the drug as of the date of approval of the original drug product.

The FDA typically makes decisions about awards of data exclusivity

shortly before a product is approved.

Hatch-Waxman Patent Certification

and the 30-Month Stay

Upon approval of an

NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s

product or an approved method of using the product.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market, and we must comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, industry-sponsored scientific and educational activities, and promotional activities involving the internet, as well as the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”).

Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label.

Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses.

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.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration

and regulation of drug distributors by the states.

Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Furthermore, the Drug Supply Chain Security Act, or DSCSA, was enacted with the aim of building an electronic system to identify and trace certain prescription drugs distributed in the United States, including most biological products.

The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors, and dispensers over a 10 year period that is expected to culminate in November 2023.

From time to time, new legislation and regulations may be implemented that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA.

For example, FDA released proposed regulations in February 2022 to amend the national standards for licensing of wholesale drug distributors by the states;

establish new minimum standards for state licensing third-party logistics providers;

and create a federal system for licensure for use in the absence of a State program, each of which is mandated by the DSCSA.

It is impossible to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be.

Abbreviated New Drug Applications for Generic Drugs

In 1984, with passage of the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act, that established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs based on an innovator or “reference” product, Congress also enacted Section 505(b)(2) of the FDCA, which provides a hybrid pathway combining features of a traditional NDA and a generic drug application.

To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application, or ANDA, to the agency.

In support of such applications, a generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.

Specifically, in order for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form, and the strength of the drug.

At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug.

Under the statute, a generic drug is bioequivalent to an RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.”

Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book.

Clinicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD.

In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing clinicians or patient.

In contrast, Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

A Section 505(b)(2) applicant may eliminate the need to conduct certain preclinical or clinical studies, if it can establish that reliance on studies conducted for a previously-approved product is scientifically appropriate.

In addition, under the Hatch-Waxman Amendments, the FDA might not approve an ANDA or 505(b)(2) NDA until any applicable period of non-patent exclusivity for the RLD has expired.

These market exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications.

The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity.

For the purposes of this provision, a new chemical entity, or NCE, is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA.

An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance.

In cases where such NCE exclusivity has been granted, an ANDA or 505(b)(2) NDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity for an ANDA, 505(b)(2) NDA or supplement thereto if one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant are deemed by the FDA to be essential to the approval of the application.

This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.

The three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving follow-on applications for drugs containing the original active agent.

Five-year and three-year exclusivity also will not delay the submission or approval of a traditional NDA filed under Section 505(b)(1) of the FDCA.

However, an applicant submitting a

traditional NDA would be required to either conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Hatch-Waxman Patent Certification and the 30-Month Stay

Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product.

Each of the patents listed by the NDA sponsor is published in the Orange Book.

When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents

listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is

not seeking approval.

To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already

approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the

Orange Book to the same extent that an ANDA applicant would.

Specifically, the applicant

must certify with respect to each patent that:

the required patent information has not been filed;

When an ANDA applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval.

To the extent that the Section 505(b)(2) NDA applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.

Specifically, the applicant must certify with respect to each patent that:

the required patent information has not been filed by the original applicant;

the listed patent has expired;

the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration;

the listed patent is invalid, unenforceable or will not be infringed by the new product.

A certification that

the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable

is called a Paragraph IV certification.

If the applicant does not challenge the listed patents or indicates that it is not seeking

approval of a patented method of use, the ANDA application will not be approved until all the listed patents claiming the referenced

product have expired (other than method of use patents involving indications for which the ANDA applicant is not seeking approval).

If the ANDA applicant

has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to

the NDA and patent holders once the ANDA has been accepted for filing by the FDA.

The NDA and patent holders may then initiate

a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement

lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA

until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement

case that is favorable to the ANDA applicant.

To the extent that

the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required

to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA

applicant would.

As a result, approval of a Section 505(b)(2) NDA can be stalled until all the listed patents claiming

the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical

entity, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and

subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement

case that is favorable to the Section 505(b)(2) applicant.

Pediatric Studies

and Exclusivity

Under the Pediatric

Research Equity Act of 2003, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness

of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration

for each pediatric subpopulation for which the product is safe and effective.

With enactment of the Food and Drug Administration

Safety and Innovation Act, or FDASIA, in 2012, sponsors must also submit pediatric study plans prior to the assessment data.

plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives

and design, any deferral or waiver requests, and other information required by regulation.

The applicant, the FDA, and the FDA’s

internal review committee must then review the information submitted, consult with each other, and agree upon a final plan.

FDA or the applicant may request an amendment to the plan at any time.

The FDA may, on its

own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval

of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Additional requirements and

procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA.

Unless otherwise required

by regulation, the pediatric data requirements do not apply to products with orphan designation.

Pediatric exclusivity

is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional

six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent and orphan exclusivity.

This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from

the FDA for such data.

the listed patent is invalid, unenforceable or will not be infringed by the manufacture, use or sale of the new product.

If a Paragraph I or II certification is filed, the FDA may make approval of the application effective immediately upon completion of its review.

If a Paragraph III certification is filed, the approval may be made effective on the patent expiration date specified in the application, although a tentative approval may be issued before that time.

If an application contains a Paragraph IV certification, a series of events will be triggered, the outcome of which will determine the effective date of approval of the ANDA or 505(b)(2) application.

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.

If the follow-on applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the follow-on application in question has been accepted for filing by the FDA.

The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.

Alternatively, if the listed patent holder does not file a patent infringement lawsuit within the required 45-day period, the follow-on applicant’s ANDA or 505(b)(2) NDA will not be subject to the 30-month stay.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act or PREA, amendments to the FDCA, , an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

With enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, in 2012, PREA was made permanent and sponsors are required to submit pediatric study plans to the FDA prior to the assessment data.

In particular, a sponsor that is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan, or PSP, within 60 days of an end-of-Phase II meeting or, if there is no such meeting, as early as practicable before the initiation of the Phase III or Phase II/III study.

The initial PSP must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.

The FDA and the sponsor must reach an agreement on the PSP.

A sponsor can submit amendments to an agreed-upon

initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from preclinical studies, early phase clinical trials and/or other clinical development programs.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

The law now requires the FDA to send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation.

It further requires the FDA to publicly post the PREA Non-Compliance letter and sponsor’s response.

Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although FDA has recently taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease.

In addition, pediatric exclusivity is another type of non-patent marketing exclusivity in the United States that, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, or listed patents.

This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a Written Request from the FDA for such data.

The data do not need to show the product to be effective in the pediatric population studied;

the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.

If reports of

requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory

periods of exclusivity or patent protection cover the product are extended by six months.

This is not a patent term extension,

but it effectively extends the regulatory period during which the FDA cannot approve another application.

Patent Term Restoration

and Extension

A patent claiming a

new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Amendments, which permits a patent

restoration of up to five years for patent term lost during product development and the FDA regulatory review.

The restoration

period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA, plus the

time between the submission date of an NDA and the ultimate approval date.

Patent term restoration cannot be used to extend the

remaining term of a patent past a total of 14 years from the product’s approval date.

Only one patent applicable to an approved

drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of

the patent in question.

A patent that covers multiple drugs for which approval is sought can only be extended in connection with

one of the approvals.

The USPTO reviews and approves the application for any patent term extension or restoration in consultation

with the FDA.

rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.

If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months, including orphan drug exclusivity.

This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

The FDA’s issuance of a Written Request does not require the sponsor to undertake the described studies.

Patent Term Restoration and Extension

A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Amendments, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review.

The restoration period granted is typically one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the ultimate approval date.

Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date.

Only one patent applicable to an approved drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question.

A patent that covers multiple drugs for which approval is sought can only be extended in connection with one of the approvals.

The USPTO reviews and approves the application for any patent term extension or restoration in consultation with the FDA.

We cannot provide any assurance that any patent term extension with respect to any U.S.

patent will be obtained and,

if obtained, the duration of such extension, in connection with any of our product candidates.

The 21st Century

On December 13,

2016, President Obama signed the 21st Century Cures Act, or the Cures Act, into law.

The Cures Act is designed to modernize and

personalize healthcare, spur innovation and research, and streamline the discovery and development of new therapies through increased

federal funding of particular programs.

It authorizes increased funding for the FDA to spend on innovation projects.

also amends the Public Health Service Act, or the PHSA, to reauthorize and expand funding for the NIH.

The Act establishes the

NIH Innovation Fund to pay for the cost of development and implementation of a strategic plan, early stage investigators and research.

It also charges NIH with leading and coordinating expanded pediatric research.

Further, the Cures Act directs the Centers for Disease

Control and Prevention to expand surveillance of neurological diseases.

With amendments to

the FDCA and the PHSA, Title III of the Cures Act seeks to accelerate the discovery, development, and delivery of new medicines

and medical technologies.

To that end, and among other provisions, the Cures Act reauthorizes the existing priority review voucher

program for certain drugs intended to treat rare pediatric diseases until 2020;

creates a new priority review voucher program for

drug applications determined to be material national security threat medical countermeasure applications;

revises the FDCA to streamline

review of combination product applications;

requires FDA to evaluate the potential use of 

“real world evidence”

to help support approval of new indications for approved drugs;

provides a new “limited population”

approval pathway

for antibiotic and antifungal drugs intended to treat serious or life-threatening infections;

and authorizes FDA to designate a

drug as a “regenerative advanced therapy,”

thereby making it eligible for certain expedited review and approval designations.

Review and Approval of Drug Products

in the European Union

In order to market

any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other

countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing

authorization, commercial sales and distribution of products.

Whether or not it obtains FDA approval for a product, the company

would need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials

or marketing of the product in those countries or jurisdictions.

The approval process ultimately varies between countries and jurisdictions

and can involve additional product testing and additional administrative review periods.

The time required to obtain approval in

other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Regulatory approval

in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval

in one country or jurisdiction may negatively impact the regulatory process in others.

Procedures Governing

Approval of Drug Products in the European Union

Pursuant to the European

Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through national

legislation of the member states.

Under this system, an applicant must obtain approval from the competent national authority of

a European Union member state in which the clinical trial is to be conducted.

Furthermore, the applicant may only start a clinical

trial after a competent ethics committee has issued a favorable opinion.

Clinical trial application must be accompanied by an investigational

medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national

laws of the member states and further detailed in applicable guidance documents.

To obtain marketing

approval of a product under European Union regulatory systems, an applicant must submit a marketing authorization application,

or MAA, either under a centralized or decentralized procedure.

The centralized procedure provides for the grant of a single marketing

authorization by the European Commission that is valid for all European Union member states.

The centralized procedure is compulsory

for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal

products, advanced therapy products and products with a new active substance indicated for the treatment of certain diseases.

products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for

which a centralized process is in the interest of patients, the centralized procedure may be optional.

Under the centralized

procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established at the European Medicines Agency, or EMA,

is responsible for conducting the initial assessment of a product.

The CHMP is also responsible for several post-authorization

and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.

the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock

stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of

Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest

from the point of view of public health and in particular from the viewpoint of therapeutic innovation.

In this circumstance, the

EMA ensures that the opinion of the CHMP is given within 150 days.

The decentralized procedure

is available to applicants who wish to market a product in various European Union member states where such product has not received

marketing approval in any European Union member states before.

The decentralized procedure provides for approval by one or more

other, or concerned, member states of an assessment of an application performed by one member state designated by the applicant,

known as the reference member state.

Under this procedure, an applicant submits an application based on identical dossiers and

related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference

member state and concerned member states.

The reference member state prepares a draft assessment report and drafts of the related

materials within 210 days after receipt of a valid application.

Within 90 days of receiving the reference member state’s

assessment report and related materials, each concerned member state must decide whether to approve the assessment report and related

If a member state cannot

approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points

are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision is binding

on all member states.

Within this framework,

manufacturers may seek approval of hybrid medicinal products under Article 10(3) of Directive 2001/83/EC.

Hybrid applications

rely, in part, on information and data from a reference product and new data from appropriate preclinical tests and clinical trials.

Such applications are necessary when the proposed product does not meet the strict definition of a generic medicinal product, or

bioavailability studies cannot be used to demonstrate bioequivalence, or there are changes in the active substance(s), therapeutic

indications, strength, pharmaceutical form or route of administration of the generic product compared to the reference medicinal

In such cases the results of tests and clinical trials must be consistent with the data content standards required in

the Annex to the Directive 2001/83/EC, as amended by Directive 2003/63/EC.

Hybrid medicinal product

applications have automatic access to the centralized procedure when the reference product was authorized for marketing via that

Where the reference product was authorized via the decentralized procedure, a hybrid application may be accepted for

consideration under the centralized procedure if the applicant shows that the medicinal product constitutes a significant therapeutic,

scientific or technical innovation, or the granting of a community authorization for the medicinal product is in the interest of

patients at the community level.

Clinical Trial

Approval in the European Union

Requirements for the

conduct of clinical trials in the European Union including Good Clinical Practice, or GCP, are set forth in the Clinical Trials

Directive 2001/20/EC and the GCP Directive 2005/28/EC.

Pursuant to Directive 2001/20/EC and Directive 2005/28/EC, as amended, a

system for the approval of clinical trials in the European Union has been implemented through national legislation of the E.U.

member states.

Under this system, approval must be obtained from the competent national authority of each E.U.

member state in

which a study is planned to be conducted.

To this end, a clinical trial application is submitted, which must be supported by an

investigational medicinal product dossier, or IMPD, and further supporting information prescribed by Directive 2001/20/EC and Directive

2005/28/EC and other applicable guidance documents.

Furthermore, a clinical trial may only be started after a competent ethics

committee has issued a favorable opinion on the clinical trial application in that country.

In April 2014,

passed the new Clinical Trials Regulation, (EU) No 536/2014, which will replace the current Clinical Trials Directive

To ensure that the rules for clinical trials are identical throughout the European Union, the new E.U.

trials legislation was passed as a regulation that is directly applicable in all E.U.

member states.

All clinical trials performed

in the European Union are required to be conducted in accordance with the Clinical Trials Directive 2001/20/EC until the new Clinical

Trials Regulation (EU) No 536/2014 becomes applicable.

According to the current plans of EMA, the new Clinical Trials Regulation

will become applicable in 2019.

The Clinical Trials Directive 2001/20/EC will, however, still apply three years from the date of

entry into application of the Clinical Trials Regulation to (i) clinical trials applications submitted before the entry into

application and (ii) clinical trials applications submitted within one year after the entry into application if the sponsor

opts for old system.

The new Clinical Trials

Regulation aims to simplify and streamline the approval of clinical trial in the European Union.

The main characteristics of the

regulation include:

a streamlined application procedure via a single entry point, the E.U.

a single set of documents to

be prepared and submitted for the application as well as simplified reporting procedures that will spare sponsors from submitting

broadly identical information separately to various bodies and different member states;

a harmonized procedure for the assessment

of applications for clinical trials, which is divided in two parts (Part I is assessed jointly by all member states concerned,

and Part II is assessed separately by each member state concerned);

strictly defined deadlines for the assessment of clinical

trial applications;

and the involvement of the ethics committees in the assessment procedure in accordance with the national law

of the member state concerned but within the overall timelines defined by the Clinical Trials Regulation.

Periods of Authorization

Marketing authorization

is valid for five years in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation

of the risk-benefit balance by the EMA or by the competent authority of the authorizing member state.

To this end, the marketing

authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality,

safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before

the marketing authorization ceases to be valid.

Once renewed, the marketing authorization is valid for an unlimited period, unless

the European Commission or the competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with

one additional five-year renewal.

Any authorization which is not followed by the actual placing of the drug on the European Union

market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization

ceases to be valid (the so-called sunset clause).

Data and Market

Exclusivity in the European Union

In the European Union,

new chemical entities qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market

This data exclusivity, if granted, prevents regulatory authorities in the European Union from referencing the innovator’s

data to assess a generic (abbreviated) application for eight years, after which generic marketing authorization can be submitted,

and the innovator’s data may be referenced, but not approved for two years.

The overall 10-year period will be extended to

a maximum of 11 years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization

for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring

a significant clinical benefit in comparison with existing therapies.

Even if a compound is considered to be a new chemical entity

and the sponsor is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another

version of the product if such company can complete a full MAA with a complete database of pharmaceutical test, preclinical tests

and clinical trials and obtain marketing approval of its product.

Regulatory Requirements

after Marketing Authorization

As in the United States,

both marketing authorization holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight

by the EMA and the competent authorities of the individual E.U.

Member States both before and after grant of the manufacturing

and marketing authorizations.

The holder of an E.U.

marketing authorization for a medicinal product must, for example, comply with

pharmacovigilance legislation and its related regulations and guidelines which entail many requirements for conducting pharmacovigilance,

or the assessment and monitoring of the safety of medicinal products.

The manufacturing process for medicinal products in the European

Union is also highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.

Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements

set out in the applicable E.U.

laws, including compliance with E.U.

cGMP standards when manufacturing medicinal products and active

pharmaceutical ingredients.

In the European Union,

the advertising and promotion of approved products are subject to E.U.

Member States’

laws governing promotion of medicinal

products, interactions with clinicians, misleading and comparative advertising and unfair commercial practices.

In addition, other

legislation adopted by individual E.U.

Member States may apply to the advertising and promotion of medicinal products.

require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of

Product Characteristics, or SmPC, as approved by the competent authorities.

Promotion of a medicinal product that does not comply

with the SmPC is considered to constitute off-label promotion, which is prohibited in the European Union.

Pharmaceutical Coverage, Pricing and

Reimbursement

Our MydCombi and MicroLine

product candidates are intended as “cash pay”

and therefore are not likely subject to the significant uncertainty that

exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities.

of MicroPine, however, would likely depend in part on the extent to which third-party payors, including government health programs

in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage,

and establish adequate reimbursement levels for, such products.

The process for determining whether a payor will provide coverage

for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product

once coverage is approved.

Third-party payors are increasingly challenging the prices charged, examining the medical necessity,

and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs.

Third-party payors

may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products

for a particular indication.

In order to secure

coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic

studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required

to obtain FDA or other comparable regulatory approvals.

Nonetheless, product candidates might not be considered medically necessary

or cost effective.

Additionally, a payor’s decision to provide coverage for a drug product does not imply that an adequate

reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a drug product does not assure

that other payors will also provide coverage for the drug product.

Third-party reimbursement might not be sufficient to maintain

price levels high enough to realize an appropriate return on investment in product development.

The containment of

healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus

in this effort.

Governments have shown significant interest in implementing cost-containment programs, including price controls,

restrictions on reimbursement and requirements for substitution of generic products.

Adoption of price controls and cost-containment

measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a

company’s revenue generated from the sale of any approved products.

Coverage policies and third-party reimbursement rates

may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products for which a company

or its collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in

Outside the United

States, ensuring adequate coverage and payment for our product candidates will face challenges.

Pricing of prescription pharmaceuticals

is subject to governmental control in many countries.

Pricing negotiations with governmental authorities can extend well beyond

the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost

effectiveness of our product candidates or products to other available therapies.

The conduct of such a clinical trial could be

expensive and result in delays in our commercialization efforts.

In the European Union,

pricing and reimbursement schemes vary widely from country to country.

Some countries provide that drug products may be marketed

only after a reimbursement price has been agreed.

Some countries may require the completion of additional studies that compare

the cost-effectiveness of a particular drug candidate to currently available therapies.

For example, the European Union provides

options for its member states to restrict the range of drug products for which their national health insurance systems provide

reimbursement and to control the prices of medicinal products for human use.

European Union member states may approve a specific

price for a drug product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing

the drug product on the market.

Other member states allow companies to fix their own prices for drug products, but monitor and

control company profits.

The downward pressure on healthcare costs in general, particularly prescription drugs, has become intense.

As a result, increasingly high barriers are being erected to the entry of new products.

In addition, in some countries, cross-border

imports from low-priced markets exert competitive pressure that may reduce pricing within a country.

Any country that has price

controls or reimbursement limitations for drug products might not allow favorable reimbursement and pricing arrangements.

patent will be obtained and, if obtained, the duration of such extension, in connection with any of our product candidates.

FDA Regulation of Medical Devices

Medical devices are strictly regulated by the FDA in the United States.

Under the FDCA a medical device is defined as “an instrument, apparatus, implement, machine, contrivance, implant, -in vitro- reagent, or other similar or related article, including a component, part or accessory which is, among other things:

intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals;

or intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes.” This definition provides a clear distinction between a medical device and other FDA regulated products such as drugs.

If the primary intended use of a medical product is achieved through chemical action or by being metabolized by the body, the product is a drug or biologic.

If not, it is generally a medical device.

Unless an exemption applies, a new medical device may not be marketed in the United States unless and until it has been cleared through the premarket notification, or 510(k) process or approved by the FDA pursuant to a premarket approval application, or PMA.

The information that must be submitted to the FDA in order to obtain clearance or approval to market a new medical device varies depending on how the medical device is classified by the FDA.

Medical devices are classified into one of three classes on the basis of the controls deemed by the FDA to be necessary to reasonably ensure their safety and effectiveness.

Class I devices are those low risk devices for which reasonable assurance of safety and effectiveness can be provided by adherence to the FDA’s general controls for medical devices, which include applicable portions of the FDA’s Quality System

Regulation, or QSR;

facility registration and product listing;

reporting of adverse medical events and malfunctions;

and appropriate, truthful and non-misleading labeling, advertising and promotional materials.

Most Class I devices are exempt from premarket regulation;

however, some Class I devices require premarket clearance by the FDA through the 510(k) process.

Class II devices are moderate risk devices and are subject to the FDA’s general controls, and any other special controls, such as performance standards, post-market surveillance, and FDA guidelines, deemed necessary by the FDA to provide reasonable assurance of the devices’ safety and effectiveness.

Premarket review and clearance by the FDA for most Class II devices is accomplished through the 510(k) process, although some Class II devices are exempt from the 510(k) requirements.

To obtain 510(k) clearance, a sponsor must submit to the FDA a premarket notification demonstrating that the device is substantially equivalent to a device that is already legally marketed in the United States and for which a PMA was not required (i.e., a Class II device).

The device to which the sponsor’s device is compared for the purpose of determining substantial equivalence is called a “predicate device.” The FDA’s goal is to make a substantial equivalence determination within 90 days of FDA’s receipt of the 510(k) application, but it often takes longer if the FDA requests additional information.

Most 510(k)s do not require supporting data from clinical trials, but the FDA may request such data.

After a device receives 510(k) clearance, 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 a pre-market approval.

Premarket notifications are subject to user fees, unless a specific exemption applies.

Class III devices are deemed by the FDA to pose the greatest risk to patients, such as those for which reasonable assurance of the device’s safety and effectiveness cannot be assured solely by the general controls and special controls described above, and especially devices that are life-sustaining or life-supporting.

All Class III devices must be reviewed and approved by the FDA through the PMA process.

A PMA must be supported by extensive data including, but not limited to, technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device for its intended use.

After a PMA is sufficiently complete, the FDA will accept the application for filing and begin an in-depth review of the submitted information.

By statute, the FDA has 180 days to review the accepted application, although review of the application generally can take between one and three years.

During this review period, the FDA may request additional information or clarification of information already provided.

Also during the review period, 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, it considers such recommendations when making final decisions on approval.

In addition, the FDA will conduct a preapproval inspection of the manufacturing facility to ensure compliance with the QSR.

New premarket approval applications or premarket approval application supplements are also required for product modifications that affect the safety and efficacy of the device.

PMA (and supplemental PMAs) are subject to significantly higher user fees than are 510(k) premarket notifications.

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 ultimately pose to patients and/or users.

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 down-classification of its medical device into Class I or Class II based on a benefit-risk analysis demonstrating the device actually presents low or moderate risk, rather than requiring the submission and approval of a PMA application.

Prior to the enactment of FDASIA, a medical device could only be eligible for De Novo classification if the manufacturer first submitted a 510(k) premarket notification and received a determination from the FDA that the device was not substantially equivalent.

FDASIA streamlined the De Novo classification pathway by permitting manufacturers to request De Novo classification directly without first submitting a 510(k) premarket notification to the FDA and receiving a not substantially equivalent determination.

Under the most recent FDA premarket review goals, FDA will attempt to issue a decision on most De Novo classification requests within 150 days of receipt.

If the manufacturer seeks reclassification 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 reject the reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed.

De Novo reclassification requests are also subject to user fees, unless a specific exemption applies.

In October 2021, the FDA issued a final rule that would formally codify requirements for the medical device De Novo process and the procedures and criteria for product developers to file a De Novo classification request (86 Fed.

Over the twenty years preceding the final rule, the De Novo process has been implemented by the FDA pursuant to statutory authorities and somewhat organically through informal guidance and iterative changes by Congress.

Although the final rule does not affect marketed

products such as our marketed products, the FDA’s goals in promulgating the final rule are to create a predictable, consistent and transparent De Novo classification process for innovative medical device developers.

Post-Marketing Restrictions and Enforcement

After a device is placed on the market, numerous regulatory requirements apply.

These include, but are not limited to:

● submitting and updating establishment registration and device listings with the FDA;

● compliance with the QSR, which requires manufacturers to follow stringent design, testing, control, documentation, record maintenance, including maintenance of complaint and related investigation files, and other quality assurance controls during the manufacturing process;

● unannounced routine or for-cause device facility inspections by the FDA, which may include our suppliers’ facilities;

● labeling regulations, which prohibit the promotion of products for uncleared or unapproved (or “off-label”) uses and impose other restrictions relating to promotional activities;

● 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;

● 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 effectiveness data for the device.

● Under the FDA medical device reporting, or MDR, regulations, medical device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to death or serious injury if the malfunction of the device or a similar device of such manufacturer were to recur.

The decision to file an MDR involves a judgment by the manufacturer.

If the FDA disagrees with the manufacturer’s determination, the FDA can take enforcement action.

Additionally, the FDA has the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture.

The authority to require a recall must be based on an FDA finding that there is reasonable probability that the device would cause serious adverse health consequences or death.

Manufacturers may, under their own initiative, recall a product if any distributed devices fail to meet established specifications, are otherwise misbranded or adulterated, or if any other material deficiency is found.

The FDA requires that certain classifications of recalls be reported to the FDA within ten working days after the recall is initiated.

The failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions:

● warning letters, fines, injunctions or civil penalties;

● recalls, detentions or seizures of products;

● operating restrictions;

● delays in the introduction of products into the market;

● total or partial suspension of production;

● delay or refusal of the FDA or other regulators to grant 510(k) clearance or PMA approvals of new products;

● withdrawals of 510(k) clearance or PMA approvals;

● in the most serious cases, criminal prosecution.

To ensure compliance with regulatory requirements, medical device manufacturers are subject to market surveillance and periodic, pre-scheduled and unannounced inspections by the FDA, and these inspections may include the manufacturing facilities of subcontractors.

FDA Regulation of Combination Products

A combination product is a product composed of a combination of two or more FDA-regulated product constituent parts or products, e.g., drug-device or biologic-device.

Such products often raise regulatory, policy and review management challenges because they integrate constituent parts that are regulated under different types of regulatory requirements and by different FDA Centers, namely, the Center for Drug Evaluation and Research, or CDER, the Center for Devices and Radiological Health, or CDRH, or the Center for

Biologics Evaluation and Research, or CBER.

Differences in regulatory pathways for each constituent part can impact the regulatory processes for all aspects of product development and management, including preclinical testing, clinical investigation, marketing applications, manufacturing and quality control, adverse event reporting, promotion and advertising, and post-approval modifications.

Specifically, under regulations issued by the FDA, a combination product may be:

● a product comprised of two or more regulated constituent parts that are physically, chemically, or otherwise combined or mixed and produced as a single entity;

● two or more separate products packaged together in a single package or as a unit and comprised of drug and device products;

● a drug or device packaged separately that according to its investigational plan or proposed labeling is intended for use only with an approved individually specified drug or device where both are required to achieve the intended use, indication, or effect and where upon approval of the proposed product the labeling of the approved product would need to be changed, e.g., to reflect a change in intended use, dosage form, strength, route of administration, or significant change in dose;

● any investigational drug or device packaged separately that according to its proposed labeling is for use only with another individually specified investigational drug, device, or biological product where both are required to achieve the intended use, indication, or effect.

The FDA’s Office of Combination Products, or OCP, was established to provide prompt determination of the FDA Center with primary jurisdiction over the review and regulation of a combination product;

ensure timely and effective premarket review by overseeing the timeliness of and coordinating reviews involving more than one center;

ensure consistent and appropriate post-market regulation;

resolve disputes regarding review timeliness;

and review/revise agreements, guidance and practices specific to the assignment of combination products.

OCP determines which Center will have primary jurisdiction for the combination product, referred to as the Lead Center, based on the combination product’s “primary mode of action,” or PMOA.

A mode of action is the means by which a product achieves an intended therapeutic effect or action.

The PMOA is the mode of action that provides the most important therapeutic action of the combination product, or the mode of action expected to make the greatest contribution to the overall intended therapeutic effects of the combination product.

The Lead Center has primary responsibility for the review and regulation of a combination product;

however a second Center is often involved in the review process, especially to provide input regarding the “secondary” component(s).

In most instances, the Lead Center applies its usual regulatory pathway.

For example, a drug-device combination product assigned to CDER will typically be reviewed through an NDA, while a drug-device combination product assigned to CDRH is typically reviewed through a 510(k), PMA, or De Novo classification request.

Often it is difficult for OCP to determine with reasonable certainty the most important therapeutic action of the combination product.

In those difficult cases, OCP will consider consistency with other combination products raising similar types of safety and effectiveness questions, or which Center has the most expertise to evaluate the most significant safety and effectiveness questions raised by the combination product.

A sponsor may use a voluntary formal process, known as a Request for Designation, when the product classification is unclear or in dispute, to obtain a binding decision as to which Center will regulate the combination product.

If the sponsor objects to that decision, the sponsor may request that OCP reconsider its decision.

Combination products are subject to FDA user fees based on the type of application submitted for the product’s premarket approval or clearance.

For example, a combination product for which an NDA is submitted is subject to the NDA fee under PDUFA.

Likewise, a combination product for which a PMA is submitted is subject to the PMA fee under the Medical Device User Fee and Modernization Act.

Since a combination product incorporates two or more constituent parts that have different regulatory requirements, a combination product manufacturer must comply with all cGMP and QSR requirements that apply to each constituent part.

The FDA has issued a combination product cGMP regulation, along with final guidance, describing two approaches a combination product manufacturer may follow to demonstrate compliance.

Under these two options, the manufacturer demonstrates compliance with:

(1) All cGMP regulations applicable to each separate regulated constituent part included in the combination product;

or (2) either the drug cGMP or the QSR, as well as with specified provisions from the other of these two sets of requirements (also called the “streamlined approach”).

FDA has stated that our Mydcombi product candidate is a drug-device combination product with a drug PMOA, and thus will be reviewed through an NDA by CDER as the Lead Center with consulting review on the device component provided by CDRH.

QSR will apply to all manufacturing of our device components and we may be subject to additional QSR requirements applicable to medical devices, such as management responsibility, design controls, purchasing controls, and corrective and preventive action.

Review and Approval of Drug Products in China and South Korea (Arctic Vision)

In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.

Whether or not it obtains FDA approval for a product, the company would need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions.

The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods.

The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Procedures Governing Approval of Drug Products in China

The National Medical Products Administration (NMPA) is the main regulatory authority responsible for drug registration, review, and approval in China.

NMPA’s Drug Evaluation Center (CDE) is responsible for the review of drug clinical trial applications and drug marketing authorization applications for overseas manufactured drugs.

After completing the pre-clinical studies and clinical studies supporting the drug registration, the applicant submits the drug marketing authorization application according to the requirements.

After the formal examination of the application materials, acceptance will be given if they meet the requirements.

Pharmaceutical, medical, and other technical personnel of the Drug Evaluation Center (CDE) review the accepted drug marketing authorization applications.

After a comprehensive review they issue a registration certificate of approval for drugs.

The validity period of the drug registration certificate is five years.

During the validity period the marketing authorization holder is responsible for the safety, effectiveness, and quality control of the approved drug and applies for drug re-registration six months prior to the expiration of the validity period.

Procedures Governing Approval of Drug Products in Korea

The Ministry of Food and Drug Safety (MFDS) is the main regulatory authority responsible for drug registration, review, and approval in South Korea.

Under the MFDS, the Pharmaceutical Safety Bureau, and the National Institute of Food and Drug Safety Evaluation (NIFDS) are responsible for the review, approval, and regulation of pharmaceutical products.

Pharmaceuticals that require data submission must submit safety and efficacy data for evaluation before receiving approval.

This includes drug products that have new effectiveness, composition, or route of administration.

The applicant will prepare the application dossier for drug approval.

Submit the application to MFDS Management Division for Drug Approval & Review.

The MFDS then conducts an initial assessment of the application, generates a report outlining the application dossier, and submits it to the MFDS Drug & Evaluation Department.

The Drug & Evaluation department conducts a review of the results of the initial assessment, technology, safety & efficacy data, product standards, clinical trial data, good manufacturing practice (GMP) data, Drug Master File (DMF) data, impacts on intrinsic (genetic) factors, and extrinsic (factors) etc.

If no further documentation or supplementary data is required, the MFDS issues the applicant a Certificate of Approval.

Pharmaceutical Coverage, Pricing and Reimbursement

Our Mydcombi and MicroLine product candidates are intended as “cash pay” and therefore are not likely subject to the significant uncertainty that exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities.

The sales of MicroPine, however, would likely depend in part on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage, and establish adequate reimbursement levels for, such products.

The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved.

Third-party payors are increasingly challenging the prices charged, examining the medical necessity, and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs.

Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication.

In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.

Patients and healthcare providers are unlikely to use our products unless third-party payor coverage is provided and reimbursement by such payor is adequate to cover a significant portion of the cost of our products.

Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other comparable government authorities.

Thus, even if a product candidate is approved, sales of the product will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage, and establish adequate reimbursement levels for, the product.

In the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors.

Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor.

Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication.

Moreover, for products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.

Additionally, separate reimbursement for the product itself may or may not be available.

Instead, the hospital or administering physician may be reimbursed only for providing the treatment or procedure in which our product is used.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals.

Obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our products on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.

Nonetheless, product candidates might not be considered medically necessary or cost effective.

A decision by a third-party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, our operations and financial condition.

Additionally, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product.

Third-party reimbursement might not be sufficient to maintain price levels high enough to realize an appropriate return on investment in product development.

In addition, prices for drugs may be reduced by mandatory discounts or rebates required by federal healthcare programs or discounts and rebates requested by private payors.

Any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States may also impact the pricing of drugs.

It is difficult to predict how Medicare coverage and reimbursement policies will be applied to products for which the company receives marketing approval in the future and coverage and reimbursement under different federal healthcare programs is not always consistent.

Further, private payors often follow the coverage and reimbursement policies established under Medicare.

If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products for which we receive marketing approval.

The containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort.

Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products.

Coverage policies and third-party reimbursement rates may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Outside the United States, ensuring adequate coverage and payment for our product candidates will face challenges.

Pricing of prescription pharmaceuticals is subject to governmental control in many countries.

Pricing negotiations with governmental authorities can extend well beyond the receipt of regulatory marketing approval for a product and may require us to conduct a clinical trial that compares the cost effectiveness of our product candidates or products to other available therapies.

The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts.

Healthcare Law and Regulation

Arrangements with healthcare

providers, pharmacists, consultants, third-party payors and customers are subject to broadly applicable healthcare laws and regulations

that may constrain our business and/or financial arrangements.

Applicable federal and state healthcare laws and regulations include

without limitation the following:

the federal Anti-Kickback Statute, which prohibits persons and entities from knowingly and willfully

soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, if one purpose of the remuneration

is to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service,

for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid;

the federal civil and criminal false claims laws, including the civil False Claims Act, and civil

monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be

presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease

or conceal an obligation to pay money to the federal government;

the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created

additional federal criminal laws that prohibit, among other things, knowingly and willingly executing, or attempting to execute,

a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

the Health Information Technology for Economic and Clinical Health Act and its implementing regulations,

which amended HIPAA to impose additional obligations, including mandatory contractual terms regarding the privacy, security and

transmission of individually identifiable health information;

the federal transparency requirements known as the federal Physician Payments Sunshine Act, under

the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or the

Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually

to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services,

information related to payments and other transfers of value to clinicians and teaching hospitals and clinician ownership and investment

analogous state and foreign laws and regulations, such as state anti-kickback and false claims

laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private

Some state laws require pharmaceutical

companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance

promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to

clinicians and other healthcare providers or marketing expenditures.

State and foreign laws also govern the privacy and security

of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted

by HIPAA, thus complicating compliance efforts.

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of drug products that are granted marketing approval.

Arrangements with healthcare providers, pharmacists, consultants, third-party payors and customers are subject to broadly applicable healthcare laws and regulations that may constrain our business and/or financial arrangements.

Applicable federal and state healthcare laws and regulations include without limitation the following:

● the federal Anti-Kickback Statute, or AKS, which prohibits persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, if one purpose of the remuneration is to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.

A person or entity does not need to have actual knowledge of the AKS or specific intent to violate it to have committed a violation.

In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA or federal civil money penalties statute;

● the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.

Manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payers if they are deemed to “cause” the submission of false or fraudulent claims.

The False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the False Claims Act and to share in any monetary recovery;

● the anti-inducement law, which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program;

● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willingly executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

● the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or the Affordable Care Act, which requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to payments and other transfers of value to physicians and teaching hospitals or to entities or individuals at the request of, or designated on behalf of, the physicians (defined broadly to include certain advanced practice health care professionals) and teaching hospitals as well as certain ownership and investment interests held by physicians and their immediate family members;

● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.

In November 2020, HHS finalized significant changes to the regulations implementing the Anti-Kickback Statute, as well as the Physician Self-Referral Law (Stark Law) and the civil monetary penalty rules regarding beneficiary inducements, with the goal of offering the healthcare industry more flexibility and reducing the regulatory burden associated with those fraud and abuse laws, particularly with respect to value-based arrangements among industry participants.

The majority of states also have statutes or regulations similar to the aforementioned federal laws, some of which are broader in scope and apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to clinicians and other healthcare providers or marketing expenditures.

Some states and local jurisdictions require the registration of pharmaceutical sales representatives.

State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Because of the breadth of these laws and the narrowness of their exceptions and safe harbors, it is possible that business activities can be subject to challenge under one or more of such laws.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.

Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.

Ensuring that business arrangements with third parties comply with applicable healthcare laws and regulations is costly and time consuming.

If business operations are found to be in violation of any of the laws described above or any other applicable governmental regulations a pharmaceutical manufacturer may be subject to penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from governmental funded healthcare programs, such as Medicare and Medicaid, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and curtailment or restructuring of operations, any of which could adversely affect a pharmaceutical manufacturer’s ability to operate its business and the results of its operations.

Changes in the Healthcare Marketplace

A primary trend in

healthcare industry and elsewhere is cost containment.

There have been several federal and state proposals during the

last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for

drugs and other medical products, government control, and other changes to the healthcare system in the United States.

The Patient Protection

and Affordable Care Act of 2010, or ACA, included provisions related to the coverage of and payment for prescription drugs under

government healthcare programs.

With regard to pharmaceutical products, among other things, the ACA was designed to expand and

increase industry rebates for drugs covered under Medicaid programs, impose an annual fee on branded pharmaceutical manufacturers

and make changes to the coverage requirements under the Medicare Part D program.

Although the ACA continues to be the subject

of various and ongoing repeal efforts, cost containment for prescription drugs will likely remain a priority under the incoming

administration as efforts to curb drug prices enjoy relatively high levels of political support.

Among the provisions of the ACA

of importance to our potential drug candidates are:

an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription

drugs and biologic products, apportioned among these entities according to their market share in certain government healthcare

programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;

expansion of eligibility criteria for Medicaid programs by, among other things, allowing states

to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially

increasing a manufacturer’s Medicaid rebate liability;

expanded manufacturers’

rebate liability under the Medicaid Drug Rebate Program by increasing

the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,”

or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability

to prescriptions for individuals enrolled in Medicare Advantage plans;

addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate

Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

The United States and some foreign jurisdictions are considering enacting or have enacted a number of additional legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our product candidates profitably, if approved.

For example, in December 2016, the 21st Century Cures Act (the “Cures Act”) was signed into law.

The Cures Act, among other things, was intended to modernize the regulation of drugs and devices and to spur innovation, but its ultimate implementation is uncertain.

Legislative proposals continue to be discussed in the U.S.

Congress as potentially leading to a future “Cures 2.0” bill that is expected to have bipartisan support.

In addition, in August 2017, the FDA Reauthorization Act was signed into law, which reauthorized the FDA’s user fee programs and included additional drug product provisions.

The next legislative reauthorization must be completed in 2022, which has the potential to make further changes to FDA authorities or policies pertaining to biopharmaceutical products.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

In addition, the containment of healthcare costs has become a priority of federal and state governments and the prices of therapeutics have been a focus in this effort.

government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription drugs, respectively.

In recent years, the U.S.

Congress has considered reductions in Medicare reimbursement levels for drugs administered by physicians.

The Centers for Medicare and Medicaid Services, CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs.

Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products we may market in the future.

While Medicare regulations apply only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.

Therefore, any reduction in reimbursement that results from federal legislation or regulation may result in a similar reduction in payments from private payors.

In March 2010, the United States Congress enacted the Affordable Care Act, which, among other things, included changes to the coverage and payment for products under government health care programs.

The Affordable Care Act included provisions of importance to our potential product candidate that:

● created an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs products, apportioned among these entities according to their market share in certain government healthcare programs;

● expanded eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 138% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;

● expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices;

● addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

● expanded the types of entities eligible for the 340B drug discount program;

established the Medicare Part D coverage gap discount program by requiring manufacturers to

provide a 50% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their

coverage gap period as a condition for the manufacturers’

outpatient drugs to be covered under Medicare Part D;

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct

comparative clinical effectiveness research, along with funding for such research;

the Independent Payment Advisory Board, or IPAB, which has authority to recommend certain changes

to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs.

the IPAB implementation has been not been clearly defined.

The ACA provided that under certain circumstances, IPAB recommendations

will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings;

established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment

and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

Pharmaceutical pricing

was a focus of the Trump administration, which also continued efforts to repeal the ACA.

It remains to be seen, however, what direction

the new Biden administration will take, and what impact it will have on the availability and cost of healthcare goods and services.

The elimination of the ACA’s individual mandate, which imposed penalties to individuals who failed to obtain insurance coverage,

could ultimately result in fewer individuals having health insurance coverage, which changes to the ACA’s minimum coverage

requirements may lead to policies with less generous benefits.

While the timing and scope of any potential future legislation to

repeal and replace ACA provisions is highly uncertain in many respects, it is also possible that some of the ACA provisions that

generally are not favorable for the research-based pharmaceutical industry could also be repealed along with ACA coverage expansion

As of March 29, 2021, we

had 31 full-time and 3 part-time employees.

● established the Medicare Part D coverage gap discount program by requiring manufacturers to provide point-of-sale-discounts off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;

● created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the Affordable Care Act.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the Affordable Care Act brought by several states without specifically ruling on the constitutionality of the Affordable Care Act.

It is unclear how other healthcare reform measures of the Biden administration or other efforts, if any, to challenge, repeal or replace the Affordable Care Act will impact the Affordable Care Act or our business.

The Biden Administration has indicated that lowering prescription drug prices is a priority.

For example, in July 2021, President Biden issued a sweeping executive order on promoting competition in the American economy that includes several mandates pertaining to the pharmaceutical and healthcare insurance industries.

Among other things, the executive order directs the FDA to work towards implementing a system for importing drugs from Canada (following on a Trump administration notice-and-comment rulemaking on Canadian drug importation that was finalized in October 2020).

The Biden order also called on HHS to release a comprehensive plan to combat high prescription drug prices, and it includes several directives regarding the Federal Trade Commission’s oversight of potentially anticompetitive practices within the pharmaceutical industry.

The drug pricing plan released by HHS in September 2021 in response to the executive order makes clear that the Biden Administration supports aggressive action to address rising drug prices, including allowing HHS to negotiate the cost of Medicare Part B and D drugs, but such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

It is unclear how other healthcare reform measures of the Biden administration will impact healthcare laws and regulations or our business.

Other legislative changes have been proposed and adopted since passage of the ACA that affect healthcare expenditures.

These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and will remain in effect through 2030 unless additional Congressional action is taken.

However, due to COVID-19 pandemic relief legislation, the 2% Medicare sequester reductions were suspended from May 1, 2020 through June 30, 2021 (a 1% sequester will apply from April 1, 2022 through June 30, 2022), and the sequester was extended in order to offset the added expense of the 2020 suspension.

Further legislative and regulatory changes under the ACA remain possible, although the new administration under President Biden has signaled that it plans to build on the ACA and expand the number of people who are eligible for health insurance subsidies under it.

President Biden indicated that he intends to use executive orders to undo changes to the ACA made by the former administration and would advocate for legislation to build on the ACA.

It is unknown what form any such changes or any law would take, and how or whether it may affect the pharmaceutical industry as a whole or our business in the future.

that changes or additions to the ACA, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices, and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry in the United States.

There has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries, presidential executive orders and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for pharmaceutical products.

Government authorities and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions in Medicare and other healthcare funding and applying new payment methodologies.

In addition to the sweeping reforms contained in the ACA, other legislative changes have been proposed and adopted in the United States that may affect healthcare expenditures.

For example, the 2020 Consolidated Appropriations Act (P.L.

116-94) included a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act, or the CREATES Act.

The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers have improperly restricted the distribution of their products, including by invoking the existence of a REMS program for certain products, to deny generic product developers access to samples of brand products.

Because generic product developers need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as a cause of delay in the entry of generic products.

To remedy this concern, the CREATES Act establishes a private cause of action that permits a generic product developer to sue the brand manufacturer to compel it to furnish the necessary samples on “commercially reasonable, market-based terms.” Whether and how generic product developments will use this new pathway, as well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential effects on our future commercial products are unknown.

At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

We expect that federal, state and local governments in the United States, as well as foreign governments, will continue to consider legislation directed at lowering the total cost of healthcare.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize any product that is ultimately approved, if approved.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

It is also possible that additional governmental action is taken in response to the COVID-19 pandemic.

Human Capital Resources

As of March 15, 2022, we had 45 total employees, including 43 full-time and 2 part-time employees.

We also engage various consultants and contractors.

We consider our relations with our employees to be good.

To successfully commercialize our product candidates, we must be able to attract and retain highly skilled personnel.

We anticipate hiring a number of additional employees during 2022.

We continually evaluate the business need and opportunity and balance in-house expertise and capacity with outsourced expertise and capacity.

Currently, we outsource substantial clinical trial work to clinical research organizations and manufacturing to contract manufacturers.

We believe that our future success largely depends upon our continued ability to attract and retain highly skilled employees.

Biotechnology and pharmaceutical companies both large and small compete for a limited number qualified applicants to fill specialized positions.

To attract qualified applicants, we offer a total rewards package potentially consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation.

Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility.

Actual bonus payout is based on performance.

Much of our success is rooted in the diversity of our teams and our commitment to inclusion.

We value diversity at all levels.

We believe that our business benefits from the different perspectives a diverse workforce brings, and we pride ourselves on having a strong, inclusive and positive culture based on our shared mission and values.

Available Information

Our Annual Reports

on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed

or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge on our website

at www.eyenovia.com as soon as reasonably practicable after electronically filing or furnishing such material to the SEC.

maintains a website (www.sec.gov) that includes our reports, proxy statements and other information.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are available free of charge on our website at www.eyenovia.com as soon as reasonably practicable after electronically filing or furnishing such material to the SEC.

The SEC maintains a website (www.sec.gov) that includes our reports, proxy statements and other information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business