What changed in this filing

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Item 1A. Risk Factors

2026-02-05 compared with 2025-03-03 · 359 added, 256 removed, 905 unchanged (40% of the section changed)

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As of December 31, 2025, we had an accumulated deficit of $1,157.0 million.

We have financed our operations primarily through private placements of our preferred stock, public offerings and private placements of our common stock, borrowings under credit facilities, the private placement of convertible notes, and sales of our products.

We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and clinical trials, and the commercialization of DEXTENZA.

We have financed our operations primarily through private placements of our preferred stock, public offerings and private placements of our common stock and pre-funded warrants to purchase our common stock, borrowings under credit facilities, private placements of convertible notes, and sales of our products.

We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and clinical trials for our product candidates, including AXPAXLI and to the commercialization of DEXTENZA.

Although we expect to continue to generate revenue from sales of DEXTENZA, we expect to continue to incur significant expenses and operating losses over the next several years.

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We anticipate we will incur substantial expenses if and as we:

● continue our ongoing clinical trials, including our two registrational Phase 3 clinical trials of AXPAXLI for the treatment of wet age-related macular degeneration, or wet AMD, which we refer to as the SOL-1 and SOL-R trials;

● initiate any additional clinical trials we might determine in the future to conduct for our product candidates, including any clinical trials that we might conduct for AXPAXLI for the treatment of patients with non-proliferative diabetic retinopathy, or NPDR, and diabetic macular edema, or DME;

● continue our ongoing registrational programs, including the SOL registrational program of AXPAXLI for the treatment of wet age-related macular degeneration, or wet AMD, and the HELIOS registrational program of AXPAXLI for the treatment of diabetic retinal disease, including non-proliferative diabetic retinopathy, or NPDR;

● initiate our planned SOL-X trial, our long-term extension study of AXPAXLI for the treatment of wet AMD;

● initiate any additional clinical trials we might determine in the future to conduct for our product candidates;

● scale up our manufacturing processes and capabilities to support sales of commercial products, clinical trials of our product candidates, including AXPAXLI, and commercialization of any of our product candidates for which we obtain marketing approval, and expand our facilities to accommodate this scale up and any corresponding growth in personnel;

● scale up our sales, marketing and distribution capabilities to prepare for commercialization of any product candidates for which we intend to obtain marketing approval;

● seek marketing approvals for any of our product candidates that successfully complete clinical development;

● continue to monitor subjects according to the applicable clinical trial protocols, or prepare submission documentation such as clinical study reports, for our clinical trials that have been completed;

● seek marketing approvals for any of our product candidates that successfully complete clinical development;

● continue to commercialize DEXTENZA in the United States;

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● there are any delays in receiving marketing approval of AXPAXLI or any of our other product candidates.

For us to become and remain profitable, we will need to continue to successfully commercialize DEXTENZA and to successfully develop and commercialize other products with significant market potential.

For us to become and remain profitable, we will need both to continue to successfully commercialize DEXTENZA and to successfully develop and commercialize other products with significant market potential such as AXPAXLI.

This will require us or our current or future collaborators to be successful in a range of challenging activities, including:

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We do not anticipate that revenue from sales of DEXTENZA for the treatment of ocular inflammation and pain following ophthalmic surgery and ocular itching associated with allergic conjunctivitis will be sufficient for us to become profitable for several years, if ever.

Even if we successfully complete development and obtain regulatory approval for AXPAXLI, we do not know whether revenues from AXPAXLI will be sufficient for us to become profitable for several years, if ever.

Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

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A decline in the value of our company could also cause our stockholders to lose all or part of their investment.

We will need substantial additional funding.

Depending on the outcome of our clinical programs, we will likely need additional funding to support future working capital needs and/or expansion of our operating plan.

If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or commercialization efforts.

We expect to devote substantial financial resources to our ongoing and planned activities, particularly if and as we advance our product candidate AXPAXLI for the treatment of wet AMD through clinical development and continue to commercialize DEXTENZA.

We expect to devote substantial financial resources as we conduct late-stage clinical trials for our product candidates, including the SOL-1 trial and the SOL-R trial, seek marketing approval for any such product candidate for which we obtain favorable pivotal clinical results, and commercialize any products for which we receive marketing approval.

In addition, we plan to devote significant financial resources to conduct research and development of our other product candidates.

Accordingly, we will need to obtain substantial additional funding to fully support our continuing and planned operations.

We expect to devote substantial financial resources to our ongoing and planned activities, particularly if and as we advance our product candidate AXPAXLI for the treatment of wet AMD and for the treatment of diabetic retinal disease through clinical development and continue to commercialize DEXTENZA.

We expect to devote substantial financial resources as we conduct late-stage clinical trials for our product candidates, including the SOL and the HELIOS registrational programs and the SOL-X trial, seek marketing approval for any such product candidate for which we obtain favorable pivotal clinical results, build inventory of such product candidates in preparation for potential launch and ultimately commercialize any products for which we receive marketing approval.

In addition, we may, in the future, devote significant financial resources to conduct research and development of our other product candidates.

Accordingly, we will likely need to obtain additional funding to fully support our continuing and planned operations.

If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or commercialization efforts.

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Based on our current operating plan, which includes estimates of anticipated cash inflows from DEXTENZA product sales and cash outflows from operating expenses and capital expenditures and reflects our observance of the minimum liquidity covenant of $20.0 million under the Barings Credit Agreement, we believe that our existing cash and cash equivalents as of December 31, 2025 will enable us to fund our planned operating expenses, debt service obligations and capital expenditure requirements into 2028.

Our planned operating expenses do not include the expenses necessary to conduct a clinical trial of AXPAXLI for NPDR and DME, or to build out our manufacturing capabilities beyond the buildout of our existing manufacturing facilities.

These estimates are subject to various assumptions, including assumptions as to the revenues and expenses associated with the commercialization of DEXTENZA, the pace of our research and clinical development programs, the timing of commencement of dosing and enrollment of our clinical trials, and other aspects of our business.

Although we believe our current and available cash resources are sufficient to get through potential approval of AXPAXLI for the treatment of wet AMD by the FDA, additional funding will likely be required to support the commercialization of AXPAXLI, if approved.

We have based our estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

● the progress, costs and outcome of our ongoing clinical trials of AXPAXLI for the treatment of wet AMD;

● the timing, scope, progress, costs and outcome of a potential registrational clinical program of AXPAXLI for the treatment of NPDR and DME;

● the progress, costs and outcomes of our ongoing SOL and HELIOS registrational programs of AXPAXLI for the treatment of wet AMD and for the treatment of diabetic retinal disease, including NPDR, respectively;

● the timing, scope, progress, costs and outcome of our planned SOL-X trial, our long-term extension study of AXPAXLI for the treatment of wet AMD;

● the costs, timing and outcome of regulatory review of AXPAXLI or our other product candidates by the FDA, the European Medicines Agency, or EMA, or other regulatory authorities;

● the scope, progress, costs and outcome of preclinical development and any additional clinical trials we might determine in the future to conduct for our other product candidates, including PAXTRAVA for the reduction of intraocular pressure, or IOP, in patients with primary open-angle glaucoma, or OAG, or ocular hypertension, or OHT;

intraocular pressure, or IOP, in patients with primary open-angle glaucoma, or OAG, or ocular hypertension, or OHT;

● the costs of developing, validating and scaling up our manufacturing processes and capabilities to support sales of commercial products, clinical trials of our product candidates, including AXPAXLI, and commercialization of any of our product candidates for which we may obtain marketing approval, including AXPAXLI, and of expanding our facilities to accommodate this scale up and any corresponding growth in personnel;

● the costs of sales, marketing, distribution and other commercialization efforts with respect to DEXTENZA and any of our product candidates for which we obtain or may obtain marketing approval in the future, such as AXPAXLI, including costs related to preparing for and implementing the potential marketing of AXPAXLI outside the United States;

● the level of product sales from DEXTENZA and any additional products for which we obtain marketing approval in the future and the level of third-party reimbursement of such products;

● the costs of sales, marketing, distribution and other commercialization efforts with respect to DEXTENZA and any of our product candidates for which we obtain marketing approval in the future, including cost increases due to inflation;

● the costs of scaling up our manufacturing processes and capabilities to support sales of commercial products, clinical trials of our product candidates, including AXPAXLI, and commercialization of any of our product candidates for which we obtain marketing approval, including AXPAXLI, and of expanding our facilities to accommodate this scale up and any corresponding growth in personnel;

● cost increases due to inflation;

● the extent of our debt service obligations and our ability, if desired, to refinance any of our existing debt on terms that are more favorable to us;

● the amounts we are entitled to receive, if any, as reimbursements for clinical trial expenditures, development, regulatory, and sales milestone payments, and royalty payments under our license agreement with AffaMed;

● the extent to which we choose to establish additional collaboration, distribution or other marketing arrangements for our products and product candidates;

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We may never generate the necessary data or results required to obtain regulatory approval of products with the market potential sufficient to enable us to generate significant revenues from the sale of such products.

Accordingly, we will need to obtain substantial additional financing to achieve our business objectives.

Accordingly, we will likely require additional financing to achieve our business objectives.

Adequate additional financing may not be available to us on acceptable terms, or at all.

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To the extent that we raise additional capital through the sale of equity, preferred equity or convertible debt securities, our securityholders’ ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing securityholders’ rights as holders or beneficial owners of our common stock.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as

incurring additional debt, making capital expenditures or declaring dividends.

Debt financing, such as our existing Barings Credit Facility, and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring

Our pledge of our assets as collateral to secure our obligations under the Barings Credit Facility pursuant to which we have a total borrowing capacity of $82.5 million, which has been fully drawn down, may limit our ability to obtain additional debt or other financing.

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If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

Our substantial indebtedness may limit cash flow available to invest in the ongoing needs of our business or otherwise affect our operations.

Our significant indebtedness may limit cash flow available to invest in the ongoing needs of our business or otherwise affect our operations.

Under the Barings Credit Facility, we have $82.5 million, net of unamortized discount and fees, of outstanding principal indebtedness.

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We could in the future incur additional indebtedness beyond this amount, including by potentially amending the Barings Credit Agreement.

Our substantial debt combined with our other financial obligations and contractual commitments could have significant adverse consequences, including:

Our significant debt combined with our other financial obligations and contractual commitments could have significant adverse consequences, including:

● requiring us to dedicate a substantial portion of cash and cash equivalents and marketable securities to the payment of interest on, and principal of, our debt and related fees such as the Royalty Fee, which collectively reduce the amounts available to fund operating expenditures, including working capital, and capital expenditures and other general corporate purposes and may also have the effect of delaying, deferring or preventing a change of control;

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We hold our cash and cash equivalents that we use to fund our operating expenses, debt service obligations, and capital expenditure requirements in deposit accounts that could be adversely affected if the financial institutions holding such funds fail.

We hold our cash and cash equivalents that we use to fund our operating expenses, debt service obligations, and capital expenditure requirements in deposit accounts at two financial institutions.

We hold our cash and cash equivalents that we use to fund our operating expenses, debt service obligations, and capital expenditure requirements in deposit accounts at three financial institutions.

The balances held in these accounts typically exceed the standard deposit insurance limit of the Federal Deposit Insurance Corporation, or FDIC.

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and the use of NOL carryforwards might become subject to annual limitations under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, and similar state provisions.

Changes in tax laws or in their implementation or interpretation could adversely affect our business and financial condition.

Income, sales, use or other tax laws, statutes, rules, or regulations could be enacted or amended at any time, which could affect our business or financial condition, including causing potentially adverse impacts to our effective tax rate, tax liabilities, and cash tax obligations.

For example, the IRA was signed into law in August 2022, and the OBBBA was signed into law in July 2025.

The IRA introduced new tax provisions, including a one percent excise tax imposed on certain stock repurchases by publicly traded companies.

The one percent excise tax generally applies to any acquisition of stock by the publicly traded company (or certain of its affiliates) from a stockholder of the company in exchange for

money or other property (other than stock of the company itself), subject to a de minimis exception.

Thus, the excise tax could apply to certain transactions that are not traditional stock repurchases.

The OBBBA contains numerous tax law changes including tax rate extensions and changes to the business interest deduction limitation, the expensing of domestic research and development expenditures (in contrast to the continued capitalization and amortization of foreign research and development expenditures), the bonus depreciation deduction rules, and the international tax framework;

we do not expect, however, that these changes will have a significant effect on our business or financial condition.

Regulatory guidance under the IRA, the OBBBA, and other tax-related legislation is and continues to be forthcoming, and such guidance could ultimately increase or lessen the impact of these laws on our business and financial condition.

In addition, it is uncertain if and to what extent various states will conform to changes to federal tax legislation.

Risks Related to Product Development

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Some of our completed studies were conducted with small patient populations, making it difficult to predict whether the favorable results that we observed in such studies will be repeated in larger and more advanced clinical trials.

The sample size for later stage clinical trials, including for the SOL-1 and SOL-R trial, are determined based on certain assumptions regarding the efficacy of the product candidate under evaluation.

The sample size for later stage clinical trials, including for our SOL and HELIOS registrational trials, are determined based on certain assumptions regarding the efficacy of the product candidate under evaluation.

Even if a product candidate, such as AXPAXLI, is an effective treatment, a clinical trial may not meet its primary efficacy endpoint if the assumptions used to determine the trial sample size were not correct and therefore the trial is not adequately powered.

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Some of our clinical trials also were conducted with different formulations than those that we are currently evaluating.

For example, we are using a single optimized dose of AXPAXLI with a drug load of 450 µg of a more soluble form of axitinib in our SOL-1 and SOL-R trials, which is different than the formulation and dosage used in prior clinical trials for AXPAXLI, and intend to use the same formulation being used in the SOL-1 and SOL-R trials in future clinical trials of AXPAXLI.

For example, we are using a single optimized dose of AXPAXLI with a drug load of 450 µg of a more soluble form of axitinib in our SOL and HELIOS registrational trials, which is different than the formulation and dosage used in prior clinical trials for AXPAXLI, and intend to use the same formulation being used in the SOL and HELIOS registrational trials in future clinical trials of AXPAXLI, including our planned SOL-X trial.

As we have not evaluated this formulation in earlier trials, it may not demonstrate the efficacy or safety profile that we anticipate.

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Although the FDA may implicitly clear our clinical trial protocols or may provide comments regarding our development plans as part of a Special Protocol Assessment, or SPA, agreement or other request for formal feedback, final determinations for marketing application approval are made after a complete review of a marketing application and are based on the entirety of the data in the new drug application.

We are conducting our SOL-1 trial under an SPA agreement, as amended, agreed to by the FDA.

An SPA agreement indicates concurrence by the FDA with the adequacy and acceptability of specific critical elements of the overall protocol design for a clinical trial intended to support a future marketing application, but it does not indicate FDA concurrence on every protocol detail.

We are conducting our SOL-1 trial under a SPA agreement, as amended, agreed to with the FDA, and will conduct, if needed, the HELIOS-2 trial, under a SPA agreement agreed to with the FDA in 2025.

A SPA agreement indicates concurrence by the FDA with the adequacy and acceptability of specific critical elements of the overall protocol design for a clinical trial intended to support a future marketing application, but it does not indicate FDA concurrence on every protocol

If we determine to deviate from the terms of the SPA agreement without the FDA’s concurrence, or if the FDA determines that we have deviated from the terms of the SPA agreement, the SPA agreement could be invalidated.

Moreover, the FDA retains significant discretion in interpreting the terms of an SPA agreement and the data and results from any trial that is the subject of an SPA agreement.

An SPA agreement does not ensure the receipt of marketing approval by the FDA or other regulatory authorities, even if the clinical trial subject to the SPA agreement is successful or meets its primary endpoint, or that the approval process will be faster than conventional procedures.

Moreover, the FDA retains significant discretion in interpreting the terms of a SPA agreement and the data and results from any trial that is the subject of a SPA agreement.

A SPA agreement does not ensure the receipt of marketing approval by the FDA or other regulatory authorities, even if the clinical trial subject to the SPA agreement is successful or meets its primary endpoint, or that the approval process will be faster than conventional procedures.

Additionally, although the FDA has indicated a general openness to requiring only one pivotal clinical trial for approval of a product candidate, the FDA has not yet provided specific guidance on how that approach is to be implemented.

Our current plans call for the submission of an application for marketing approval of AXPAXLI for the treatment of wet AMD based on Week 52 data from the SOL-1 trial, prior to receipt of data from the SOL-R trial or SOL-X trial.

Through future interactions and/or guidance from the FDA, we may learn that the FDA would not permit such an approach or would not agree that such an approach would provide sufficient efficacy or safety data to the FDA for its evaluation of the application, which could cause us to delay submission of such application until such time as we have collected and prepared information we believe to be sufficient to satisfy the FDA’s requirements.

In the alternative, we may submit such an application and the FDA may refuse to accept the application for filing or, even if the FDA does accept such an application for filing, it may conclude that we have not provided sufficient efficacy or safety data and may not approve such application following its review.

Either of these outcomes would delay our receipt of marketing approval for AXPAXLI.

We have devoted a significant portion of our financial resources and business efforts to the development of DEXTENZA and our product candidates.

We are currently investing substantial resources to advance the development of AXPAXLI for the treatment of wet AMD.

We currently have several ongoing clinical trials, including our SOL-1 and SOL-R trials, and our Phase 2 clinical trial of PAXTRAVA.

We also continue to wind down our post-trial monitoring and surveillance obligations in the HELIOS trial, our Phase 1 clinical trial of AXPAXLI for the treatment of NPDR.

We are currently investing substantial resources to advance the development of AXPAXLI for the treatment of wet AMD and diabetic retinal disease.

We currently have multiple ongoing Phase 3 clinical programs, namely our SOL and HELIOS registrational programs.

We have, however, experienced the uncertainty of clinical trials in our own development programs.

In our Phase 2 clinical trial for our former product candidate OTX-CSI for the treatment of dry eye disease, for example, OTX-CSI did not meet the primary endpoint of the clinical trial.

The trial was designed to evaluate safety, tolerability, durability, and efficacy of two different formulations of OTX-CSI by measuring signs and symptoms of dry eye disease in 140 subjects treated in both eyes over approximately 16 weeks (a 12-week study period, with an additional 4-week safety follow-up).

The four groups evaluated in this study were:

OTX-CSI for a shorter duration, OTX-CSI for a longer duration, vehicle insert for a longer duration and vehicle insert for a very short duration.

The study did not show separation between the OTX-CSI treated subjects (both formulations) and the vehicle treated subjects (both formulations) for the primary endpoint of increased tear production at 12 weeks as measured by the Schirmer’s Test.

If clinical trials of AXPAXLI or any other product candidate that we develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or other regulatory authorities or do not otherwise produce clear or favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of such product candidate.

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We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize AXPAXLI or our other product candidates, including:

● clinical trials of AXPAXLI or our other product candidates may produce negative or inconclusive results, in particular if investigator physicians do not follow the clinical trial protocol, including utilizing appropriate masking and rescue procedures for both the SOL-1 and SOL-R trial, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

● clinical trials of AXPAXLI or our other product candidates may produce negative or inconclusive results, in particular if investigator physicians do not follow the clinical trial protocol, including utilizing appropriate masking and rescue procedures for the SOL and HELIOS registrational trials, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

● the number of subjects required for clinical trials of AXPAXLI or our other product candidates may be larger than we anticipate, in particular to establish clinically meaningful efficacy endpoints to a degree of statistical significance or to satisfy minimum FDA safety standards for AXPAXLI, including for repeat dosing;

● enrollment and randomization in clinical trials for AXPAXLI may be slower than we anticipate on account of clinical trial sites’ inability to locate subjects meeting the eligibility criteria or competition at clinical trial sites for subjects who might otherwise be eligible to participate in other ongoing clinical trials sponsored by third-parties or from other clinical trials sponsored by third parties in other retinal disease areas, or participants may drop out of these clinical trials at a higher rate than we anticipate;

parties or from other clinical trials sponsored by third parties in other retinal disease areas, or participants may drop out of these clinical trials at a higher rate than we anticipate;

● our third-party contractors may fail to comply with regulatory requirements or meet their obligations to us in a timely manner, or at all;

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● the supply or quality of AXPAXLI or our other product candidates or other materials necessary to conduct clinical trials of AXPAXLI or our other product candidates may be insufficient or inadequate.

From time to time, we may decide to conduct clinical trials to assess subjects’ clinical response to treatment and choose not to power such trials to measure the applicable efficacy endpoints with statistical significance, as we did in our Phase 2 clinical trials of our former product candidate OTX-TP for the treatment of OAG or OHT.

In addition, post-hoc analyses such as those that we performed on certain results of Phase 2 clinical trials of OTX-TP may not be predictive of success in future clinical trials, including as a result of differences in trial design.

In addition, post-hoc analyses of the data from these or other trials may not be predictive of success in future clinical trials, including as a result of differences in trial design.

Post-hoc analyses performed using an unlocked clinical trial database can also result in the introduction of bias and are given less weight by regulatory authorities than pre-specified analyses.

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For any of our product candidates for which we are seeking regulatory approval in the United States or the European Union, we cannot guarantee that we will be able to obtain a waiver or alternatively complete any required studies and other requirements in a timely manner, or at all, which could result in associated reputational harm and subject us to enforcement action.

Moreover, principal investigators for our future clinical trials may serve as scientific advisors or consultants to us and receive compensation in connection with such services.

Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities.

The FDA or a comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the study.

The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.

This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of one or more of our product candidates.

If we are required to conduct additional clinical trials or other testing of AXPAXLI or our other product candidates beyond those that we currently contemplate, such as the FDA’s requirement that we provide pediatric data for DEXTENZA for the treatment of post-surgical ocular inflammation and pain following cataract surgery prior and for the treatment of ocular itching associated with allergic conjunctivitis in connection with the approval of our NDA for DEXTENZA for those indications, if we are unable to successfully complete clinical trials of AXPAXLI or our other product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may:

If we are required to conduct additional clinical trials or other testing of AXPAXLI or our other product candidates beyond those that we currently contemplate, such as the FDA’s prior requirement that we provide post-approval pediatric data for DEXTENZA for the treatment of post-surgical ocular inflammation and pain following cataract surgery for the treatment of ocular itching associated with allergic conjunctivitis in connection with the approval of our NDA for DEXTENZA for those indications, if we are unable to successfully complete clinical trials of AXPAXLI or our other product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may:

● be delayed in obtaining or unable to obtain marketing approval for AXPAXLI or our other product candidates;

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● have the product removed from the market after obtaining marketing approval.

Our product development costs will also increase if we experience delays in testing or marketing approvals.

We do not know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all.

Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.

For example, following recent public statements from FDA leadership, pending the receipt of favorable topline results and planned interactions with the FDA, we intend to submit an NDA for AXPAXLI for the treatment of wet AMD based on Week 52 data from the SOL-1 trial.

As the FDA has historically required two adequate and well-controlled clinical trials to demonstrate the safety and efficacy of ophthalmic product candidates, the FDA could refuse to accept our submission of our NDA without clinical data from a second adequate and well-controlled trial or could accept it but review it differently or more slowly than we anticipate or could deny the application.

In addition, we may not be able to timely satisfy the FDA’s other requirements for regulatory approval of AXPAXLI, including the FDA’s Chemistry, Manufacturing and Controls requirements.

Furthermore, although patients in the SOL-1 have already been re-dosed at Week 52, data for the primary endpoint in SOL-1 is based on a single administration of AXPAXLI and therefore uncertainty remains as to what restrictions, if any, may be imposed on the label for AXPAXLI, if approved, pending the receipt of additional clinical data or otherwise.

Any of these outcomes could adversely affect our time to approval, time to profitability, cash runway and results of operations.

If we experience delays or difficulties in the enrollment and randomization of subjects in clinical trials of AXPAXLI or our other product candidates, our receipt of necessary regulatory approvals could be delayed or prevented.

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Although there is a significant prevalence of disease in the areas of ophthalmology in which we are focused, we may nonetheless experience unanticipated difficulty with subject enrollment and randomization.

For example, in the third quarter of 2017, we initiated a Phase 1 clinical trial of PAXTRAVA outside the United States.

For example, in the third quarter of 2017, we initiated a Phase 1 clinical trial of OTX-TIC outside the United States.

After several months, after not enrolling any subjects, we closed this trial in the second quarter of 2018.

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● the lack of adequate compensation for prospective clinical trial sites or subjects.

In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each phase 3 clinical trial or any other "pivotal study" of a new drug product.

These plans are meant to encourage enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.

In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for diversity action plans.

Unlike most guidance documents issued by the FDA, the diversity action plan guidance when finalized will have the force of law because FDORA specifically dictates that the form and manner for submission of DAPs are specified in FDA guidance.

On January 27, 2025, in response to an Executive Order issued by President Trump on January 21, 2025, on Diversity, Equity and Inclusion programs, the FDA removed this draft guidance from its website.

This action raises questions about the applicability of statutory obligations to submit DAPs and the agency’s current thinking on best practices for clinical development.

If we are not able to adhere to these new requirements, to the extent they are adopted, our ability to conduct clinical trials may be delayed or halted.

In December 2022, with the passage of FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.

These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of

FDA-regulated products.

In June 2024, as mandated by FDORA, the FDA issued draft guidance outlining the general requirements for DAPs.

On January 27, 2025, in response to an executive order issued by President Trump on January 21, 2025, relating to Diversity, Equity and Inclusion programs, the FDA removed the draft DAP guidance from its website.

That action, along with similar actions by the Trump Administration to remove many other healthcare webpages, is currently the subject of ongoing litigation.

On July 3, 2025, the U.S.

District Court for the District of Columbia ruled that the Trump Administration’s actions to remove these webpages, including the draft DAP guidance, is unlawful under the Administrative Procedure Act.

The court ordered the restoration of many of these webpages.

In late July 2025, the FDA restored the draft DAP guidance to its website with a statement that “information on this page may be modified and/or removed in the future subject to the terms of the court’s order and implemented consistent with applicable law.” Accordingly, in light of these ongoing actions, there is considerable uncertainty surrounding the draft DAP guidance and how the FDA will consider DAPs in connection with its review of NDAs and BLAs.

Similarly, the regulatory landscape related to clinical trials in the European Union recently evolved.

The CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.

While the Clinical Trials Directive required a separate clinical trial application to be submitted in each member state, to both the competent national health authority and an independent ethics committee, the CTR introduces a centralized

process and only requires the submission of a single application to all member states concerned.

The EU Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.

If we are not able to fulfill these new requirements, our ability to conduct clinical trials may be delayed or halted.

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For example, enrollment in our Phase 3 clinical trial to evaluate DEXTENZA in pediatric subjects following cataract surgery, to fulfill FDA post-approval regulatory requirements, proceeded more slowly than we had anticipated due to the relative scarcity of pediatric cataract surgical subjects.

In addition, we may experience delays in enrollment and randomization due to the design of our trials.

For example, to qualify for randomization in the SOL-R trial, participants will only be eligible for randomization if they receive five aflibercept injections and have no significant retinal fluid fluctuations, in addition to satisfying other criteria.

Our inability to enroll and randomize a sufficient number of subjects in any of our clinical trials would result in significant delays, could require us to abandon one or more clinical trials altogether and could delay or prevent our receipt of necessary regulatory approvals.

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We have product candidates at mid- and late-stages of development based on ELUTYX and we may in the future explore the potential use of ELUTYX for other ophthalmic diseases and conditions.

AXPAXLI and any other product candidates that we may develop based on ELUTYX may not be suitable for continued preclinical or clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance.

If we do not successfully develop and commercialize products and product candidates that are based on ELUTYX beyond DEXTENZA, we will not be able to obtain substantial product revenues in future periods.

AXPAXLI and any other product candidates that we may develop based on ELUTYX may not be suitable for continued preclinical or clinical development for several reasons, including if such product candidates are shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing

approval and achieve market acceptance.

If we do not successfully develop and commercialize products and product candidates that are based on ELUTYX beyond DEXTENZA, we will not be able to obtain sufficient product revenues to ultimately become profitable.

We may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

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In addition, if we do not accurately evaluate the commercial potential of a target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

We are currently prioritizing the advancement of AXPAXLI through Phase 3 clinical development for the treatment of wet AMD.

We also intend to meet with the FDA in the first half of 2025 to discuss the design of a potential registrational clinical program for AXPAXLI for the treatment of NPDR and DME and then evaluate our next steps.

We are also focused on the continued commercialization of DEXTENZA and are determining our next steps for PAXTRAVA for the treatment of OAG or OHT.

We are currently prioritizing the advancement of AXPAXLI through Phase 3 clinical development for the treatment of wet AMD and for the treatment of diabetic retinal disease, as well as the scale-up of manufacturing operations and pre-commercialization activities to prepare for the potential commercial launch of AXPAXLI.

We are also focused on the continued commercialization of DEXTENZA and are determining our next steps for OTX-TIC for the treatment of OAG or OHT.

Although we believe our prioritization of resources is currently the best use of our resources, we may not be correct.

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We have conducted, and may in the future choose to conduct, one or more of our clinical trials outside the United States.

We are currently conducting the SOL-1 and SOL-R trials both inside and outside of the United States.

We have often conducted our initial and earlier-stage clinical trials for our product candidates outside the United States, including our Phase 1 clinical trial for our product candidate AXPAXLI for the treatment of wet AMD in Australia.

We are currently conducting the SOL-1, SOL-R, and HELIOS-3 trials both inside and outside of the United States.

Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to conditions imposed by the FDA.

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DEXTENZA or any of our product candidates that may receive marketing approval, including AXPAXLI, may fail to gain market acceptance by physicians, patients, third-party payors and others in the medical community.

We commercially launched DEXTENZA for the treatment of post-surgical ocular inflammation and pain in July 2019, and DEXTENZA for the treatment of ocular itching associated with allergic conjunctivitis in the first quarter of 2022, and we cannot yet accurately predict the extent to which DEXTENZA will gain broad market acceptance and become commercially successful, if at all.

The degree of market acceptance of any of our products, or any product candidate for which we may obtain marketing approval, will depend on a number of factors, including:

We commercially launched DEXTENZA for the treatment of post-surgical ocular inflammation and pain in July 2019, and for the treatment of ocular itching associated with allergic conjunctivitis in the first quarter of 2022, and we cannot accurately predict the extent to which DEXTENZA will retain or gain market share.

The degree of market acceptance of any of our products, or any product candidate for which we may obtain marketing approval, including AXPAXLI, will depend on a number of factors, including:

● the efficacy and potential advantages compared to alternative treatments;

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● timing of market introduction of competitive products;

● the availability of third-party coverage and adequate reimbursement;

● the price of the product, as well as the availability of third-party coverage and adequate reimbursement;

● the prevalence and severity of any side effects;

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ReSure Sealant was only used in a minority of cataract surgeries, and we only received limited revenues from this product.

In 2021, we suspended the production of ReSure Sealant.

In 2021, we suspended production of ReSure Sealant, and in 2025 we withdrew its marketing authorization.

Furthermore, because we have not conducted any clinical trials to date comparing the effectiveness of DEXTENZA directly to currently approved alternative treatments for post-surgical ocular inflammation and pain following cataract surgery or ocular itching associated with allergic conjunctivitis, market acceptance of DEXTENZA could be less than if we had conducted such trials, and we may not be able to achieve the market share we anticipate.

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To achieve commercial success for DEXTENZA and any product candidate for which we obtain marketing approval, including AXPAXLI, we will need to establish and maintain adequate sales, marketing and distribution capabilities, either ourselves or through collaborations or other arrangements with third parties.

We have built our own highly targeted, key account sales force for DEXTENZA that has focused primarily on ambulatory surgical centers, or ASCs, responsible for the largest volumes of cataract surgery.

We have built our own highly targeted, key account sales force for DEXTENZA that primarily focuses on ambulatory surgical centers, or ASCs, and their affiliates, as well as hospital outpatient departments, or HOPDs, that are collectively responsible for the largest volumes of cataract surgery in the United States.

We would expect to use a similar strategy for AXPAXLI in retina offices, although sufficient numbers of patients with diabetic retinal disease may not be currently seen by retina specialists, or might not be seen at a sufficient frequency by retina specialists to optimally introduce AXPAXLI, if approved.

We may need to expand our strategy and commercial footprint accordingly.

We believe that certain of our product candidates, if they are successfully developed and obtain marketing approval, would be used in ophthalmologists’ offices, similar to DEXTENZA for the treatment of allergic conjunctivitis.

We believe the office setting offers a unique set of potential challenges.

If we do not succeed in adapting our marketing efforts to include the office setting, our ability to commercialize DEXTENZA or AXPAXLI, if approved, to its fullest potential or any future product candidates used in the office setting would be adversely affected.

Because we have not historically evaluated whether to seek regulatory approval for any of our products or product candidates outside of the United States, pending potential receipt of regulatory approval for the applicable product candidate in the United States, at this time we cannot be certain when, if ever, we will recognize revenue from commercialization of our products or product candidates in any international markets.

If we decide to commercialize our products outside of the United States, we expect to utilize a variety of types of collaboration, distribution and other marketing arrangements with one or more third parties to commercialize any product of ours that receives marketing approval.

If we do not succeed in adapting our marketing

efforts to include the office setting, our ability to commercialize DEXTENZA or AXPAXLI, if approved, to its fullest potential or any future product candidates used in the office setting would be adversely affected.

We have historically focused our efforts for regulatory approval and commercialization of DEXTENZA in the United States and indirectly through our collaborator AffaMed in certain specified jurisdictions in Asia.

As such, we do not currently expect to recognize revenue from commercialization of DEXTENZA in any other international markets.

If we decide to commercialize our products or product candidates outside of the United States, we may utilize a variety of types of collaboration, distribution and other marketing arrangements with one or more third parties to commercialize any product of ours that receives marketing approval.

These may include independent distributors, pharmaceutical companies or our own direct sales organization.

For example, we intend to rely on AffaMed to commercialize DEXTENZA and PAXTRAVA, if approved for marketing, in specified jurisdictions in Asia in connection with our collaboration agreement with AffaMed.

There are risks involved with both establishing our own sales, marketing and distribution capabilities and with entering into arrangements with third parties to perform these services.

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Our product revenues and our profitability, if any, under third-party collaboration, distribution or other marketing arrangements may also be lower than if we were to sell, market and distribute a product ourselves.

On the other hand, recruiting and training a sales force is expensive and time-consuming and could delay any

product launch.

On the other hand, recruiting and training a sales force is expensive and time-consuming and could delay any product launch.

If the commercial launch of any product or product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses.

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We sell DEXTENZA in the United States primarily to a small number of specialty distributors, or SDs.

These customers then subsequently resell DEXTENZA to ASCs, hospital outpatient departments, or HOPDs, and physicians’ offices, which we refer to as in-market customers when purchasing through the SD channel.

These customers then subsequently resell DEXTENZA to ASCs, HOPDs, and physicians’ offices, which we refer to as in-market customers when purchasing through the SD channel.

We also sell DEXTENZA directly to a small population of ASCs and physicians’ offices, which we refer to as direct customers when purchasing through the direct sales channel.

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Many of these existing products have achieved widespread acceptance among physicians, patients and payors for the treatment of ophthalmic diseases and conditions.

In addition, many of these products are available on a generic basis, and our products and product candidates may not demonstrate sufficient additional clinical benefits to physicians, patients or payors to justify a higher price compared to generic products.

In many cases, insurers or other third-party payors, particularly Medicare, encourage the use of generic products.

In addition, many of these products are available on a biosimilar or generic basis, and our products and product candidates may not demonstrate sufficient additional clinical benefits to physicians, patients or payors to justify a higher price compared to biosimilar or generic products.

In many cases, insurers or other third-party payors, particularly Medicare, encourage the use of biosimilar, generic or off-label products.

As a result, our products face, and product candidates, if approved, will face, competition from drugs based on the same or similar active pharmaceutical ingredients but that are administered in a different manner, typically through eye drops or intravitreal injections.

Because the active pharmaceutical ingredients in our products and product candidates are primarily available on a generic basis, or are soon to be available on a generic basis, competitors will be able to offer and sell products with the same active pharmaceutical ingredient as our products so long as these competitors do not infringe the patents that we license or own.

For example, our licensed patents related to our intracanalicular insert products and product candidates largely relate to the hydrogel composition of the intracanalicular inserts and certain drug-release features of the inserts.

As such, if a third party were able to design around the formulation and process patents that we license or own and create a different formulation using a different production process not covered by our licensed patents or patent applications, we would likely be unable to prevent that third party from manufacturing and marketing its product.

Other companies have advanced into Phase 3 clinical development biodegradable, programmed-release drug delivery product candidates that could compete with our products and product candidates, including EyePoint Pharmaceuticals which initiated two Phase 3 trials of their product candidate DURAVYU for the treatment of wet AMD in 2024 and 4DMT which has announced plans to initiate two Phase 3 trials of their product candidate 4D-150 during 2025.

Regeneron has also developed a treatment for wet AMD that requires re-dosing in up to 16-week intervals, marketed in the United States under the brand name Eylea HD.

Multiple companies are in early-stage development to explore alternative means to deliver anti- VEGF (anti- vascular endothelial growth factors) tyrosine kinase inhibitors, or TKI, products in an extended-delivery fashion to the back of the eye.

For example, in wet AMD and diabetic retinal disease, AXPAXLI will compete with anti- vascular endothelial growth factor, or anti-VEGF, compounds administered in their current formulation and prescribed for the treatment of wet AMD as these agents can in some instances deliver more than one or two months of therapeutic effect, as well as products based on gene therapy, if such products are approved.

Anti-VEGF products that are currently approved by the FDA for the treatment of wet AMD include Vabysmo (faricimab), Eylea HD (aflibercept 8 mg), Lucentis (ranibizumab), Eylea (aflibercept 2 mg), Beovu (brolicizumab), and Susvimo (ranibizumab Port Delivery System).

Biosimilars to ranibizumab and aflibercept 2 mg are commercially available as well.

Products that are currently approved by the FDA for the treatment of various diabetic retinal disease indications include Vabysmo, Eylea HD, Lucentis, Eylea, Beovu and Susvimo.

The FDA-approved labels for Vabysmo and Eylea HD contemplate dosing as infrequently as once every 16 weeks for a proportion of patients with wet AMD or diabetic retinal disease.

The cancer therapy Avastin (bevacizumab) is used off-label for the treatment of wet AMD and diabetic retinal disease as well.

Other companies have advanced into Phase 3 clinical development biodegradable, programmed-release drug delivery product candidates that could compete with our products and product candidates, including EyePoint Pharmaceuticals which initiated two Phase 3 trials of their product candidate DURAVYU for the treatment of wet AMD in 2024 and two Phase 3 trials of DURAVYU for the treatment of DME in 2025, and 4DMT which initiated two Phase 3 trials of their product candidate 4D-150 for the treatment of wet AMD in 2025.

Multiple companies are in early-stage development to explore alternative means to deliver anti-VEGF, tyrosine kinase inhibitors, or TKI, products in an

extended-delivery fashion to the back of the eye.

In addition, other companies are evaluating novel mechanisms of action for retinal diseases.

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Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

To the extent our patents and other intellectual property do not preclude a generic or other manufacturer from marketing a product similar or the same as ours, we may also face generic competition.

See “Risks Related to Our Intellectual Property – We may be unable to obtain and maintain patent protection for our technology and products, or the scope of the patent protection obtained may not be sufficiently broad, such that our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired.”

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do.

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Increasingly, third-party payors are requiring that drug and device companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.

In addition, third-party payors may implement step-therapy requirements where providers are required to prescribe and administer lower cost options, such as biosimilar anti-VEGF, prior to prescribing and administering higher-cost, more durable treatment options.

Coverage and reimbursement may not be available for DEXTENZA or any other product that we may commercialize after obtaining marketing approval, including AXPAXLI.

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There may be significant delays in obtaining coverage and reimbursement for newly approved drugs and devices, and coverage may be more limited than the indications for which the drug is approved by the FDA or similar regulatory authorities outside the United States.

Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution expenses.

distribution expenses.

Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services.

Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by 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.

Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs, including CMMI’s Global Benchmark for Efficient Drug Pricing Model for Medicare Part B drugs, referred to as GLOBE, and the Guarding U.S.

Medicare Against Rising Drug Costs for Medicare Part D drugs, referred to as GUARD, if implemented, the drug price negotiation mechanism for Medicare-covered drugs introduced by the IRA, or private payors and by 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 or greater reliance on “most-favored nation” or other reference pricing regimes.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies.

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Adverse pricing limitations may hinder our ability to recoup our investment in one or more products or product candidates, even if our product candidates obtain marketing approval.

DEXTENZA or any product candidate for which we may obtain marketing approval in the United States or in other countries, including AXPAXLI, may not be considered medically reasonable and necessary for a specific indication, may not be considered cost-effective by third-party payors, coverage and an adequate level of reimbursement may not be available, and reimbursement policies of third-party payors may adversely affect our ability to sell our

products and product candidates profitably.

DEXTENZA, for example, is currently considered a post-surgical product, in the same fashion as eye drops.

However, if DEXTENZA were instead categorized as an intra-operative product, it would not be subject to separate reimbursement in ASCs and hospital out-patient departments, or HOPDs, which could limit its market acceptance.

CMS evaluates the eligibility of products such as DEXTENZA for separate payment annually, and there can be no assurance that CMS will not change the criteria applicable to non-opioid pain management drugs for 2025 or beyond.

If DEXTENZA is no longer eligible for reimbursement separately from ophthalmic surgery in the ASC setting, due to the loss of pass-through status or otherwise, our net product revenues, which currently consist primarily of DEXTENZA sales in reliance on separate reimbursement through pass-through status, would decline significantly, and our ability to generate revenues from future sales of DEXTENZA for the treatment of post-surgical ocular inflammation and pain would be adversely affected.

DEXTENZA, for example, is currently separately reimbursed in ASC and HOPD settings as a non-opioid pain management drug, but changes that affect reimbursement for DEXTENZA, or its associated procedure code could limit its market acceptance.

CMS evaluates the eligibility of products such as DEXTENZA for separate payment annually, and there can be no assurance that CMS will not change the criteria currently applicable to non-opioid pain management drugs in any subsequent year.

If DEXTENZA were no longer eligible for reimbursement separately from ophthalmic surgery in the ASC and HOPD settings, our net product revenues, which currently consist primarily of DEXTENZA sales in reliance on separate reimbursement, would decline significantly, and our ability to generate revenues from future sales of DEXTENZA for the treatment of post-surgical ocular inflammation and pain would be adversely affected.

CMS has also established the fixed reimbursement amount for Category I Current Procedural Terminology, or CPT, code 68841, the procedure code for the insertion of DEXTENZA.

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If we fail to do so, we may not have sufficient quantities of our products or product candidates to meet our commercial and clinical trial requirements.

In order to meet our business plan, which contemplates our scaling up of our manufacturing processes to support the development and potential commercialization of our current and future product candidates, including AXPAXLI, and maintain the manufacturing capacity necessary to support the commercialization of DEXTENZA, we will need to upgrade and expand our existing manufacturing facilities, or relocate to one or more other manufacturing facilities;

In order to meet our business plan, to scale up of our manufacturing processes to support the development and potential commercialization of our current and future product candidates, including AXPAXLI, and maintain the manufacturing capacity necessary to support the commercialization of DEXTENZA, we will need to upgrade and expand our existing manufacturing facilities, or relocate to one or more other manufacturing facilities;

add manufacturing, quality and support personnel;

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In each of July 2016 and July 2017, we also received a Complete Response Letter, or CRL, from the FDA regarding our NDA for DEXTENZA pertaining to, among other things, the deficiencies in manufacturing processes, controls, and analytical testing identified during pre-NDA approval inspections of our manufacturing facility documented on Form 483s.

We may be subject to similar inspections, audits

and other requirements in connection with subsequent applications for other product candidates or in connection with periodic, routine surveillance for products for which we have received marketing authorization.

We may be subject to similar inspections, audits and other requirements in connection with subsequent applications for other product candidates or in connection with periodic, routine surveillance for products for which we have received marketing authorization.

The FDA or similar foreign regulatory authorities at any time also may implement new standards, or change their interpretation and enforcement of existing standards, for the manufacture, packaging or testing of our products.

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If our collaborations are not successful, we may not be able to capitalize on the market potential of these products or product candidates.

We have in the past entered into collaboration agreements with third parties, including our collaboration with AffaMed, and expect to utilize a variety of types of collaboration, distribution and other marketing arrangements with third parties to commercialize DEXTENZA, or any of our product candidates, including AXPAXLI, for which we may obtain marketing approval in markets outside the United States.

We have entered into collaboration agreements with third parties, including our collaboration with AffaMed, in the past and may in the future utilize a variety of types of collaboration, distribution and other marketing arrangements with third parties to commercialize DEXTENZA, or any of our product candidates, including AXPAXLI, for which we may obtain marketing approval in markets outside the United States.

We also may enter into arrangements with third parties to perform these services in the United States if we do not establish our own sales, marketing and distribution capabilities in the United States for such products or if we determine that such third-party arrangements are otherwise beneficial.

We also may seek additional third-party collaborators for development and commercialization of product candidates, including AXPAXLI and PAXTRAVA.

Our likely collaborators for any sales, marketing, distribution, development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies.

We also may seek additional third-party collaborators for development and commercialization of product candidates, including AXPAXLI and OTX-TIC.

Our likely collaborators for any sales, marketing, distribution,

development, licensing or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and biotechnology companies.

Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.

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If we are not able to establish additional collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected.

For some of our product candidates, we may decide to collaborate with pharmaceutical, biotechnology and medical device companies for the development and commercialization of one or more of our product candidates, such as our collaboration with AffaMed for the development and commercialization of DEXTENZA and PAXTRAVA in specified territories in Asia.

We face significant competition in seeking appropriate collaborators.

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Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to subjects, the potential of competing products, and industry and market conditions generally.

The collaborator may also consider

alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate.

The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a collaboration could be more attractive than the one with us for our product candidate.

We may also be restricted under current or future license and collaboration agreements from entering into agreements on certain terms with potential collaborators.

In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.

In addition, there have been a significant number of business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators.

If we are unable to reach agreements with suitable collaborators on a timely basis and on acceptable terms, we may have to curtail the development of a product candidate, reduce or delay one or more development programs, or limit potential commercialization activities.

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If we fail to enter into collaborations and do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may not be able to further develop our product candidates or bring them to market or continue to develop our product platform.

Although the majority of our clinical development is administered and managed by our own employees, we have relied, and may continue to rely, on third parties for certain aspects of our clinical development, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

Our employees have administered and managed most of our clinical development work to date.

However, we also utilize third parties, such as CROs, to conduct clinical trials of certain of our product candidates, including AXPAXLI for the treatment of wet AMD, NPDR, and DME and PAXTRAVA for the treatment of OAG or OHT, and we may continue to do so.

If we deem necessary, we may engage additional third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct or assist in our clinical trials or other clinical development work.

Although a significant portion of our clinical development is administered and managed by our own employees, we have relied, and may continue to rely, on third parties for certain aspects of our clinical development, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

Our employees have administered and managed a significant portion of our clinical development work to date.

However, we also utilize third parties, such as CROs, to conduct clinical trials of certain of our product candidates, including AXPAXLI for the treatment of wet AMD, NPDR, and DME and OTX-TIC for the treatment of OAG or OHT, and we may continue to do so.

If we deem necessary, we may also engage additional third parties, such as CROs, clinical data management organizations, medical institutions and clinical investigators, to conduct or assist in our clinical trials or other clinical development work.

If we are unable to enter into an agreement with a CRO or other service provider when required, our product development activities could be delayed.

Our reliance on third parties for research and development activities reduces our control over these activities but does not relieve us of our responsibilities.

For example, we remain responsible for ensuring that each of our clinical trials, including the SOL-1 and the SOL-R trials, is conducted in accordance with the general investigational plan and protocols for the trial.

For example, we remain responsible for ensuring that each of our clinical trials, including our SOL and HELIOS registrational trials, is conducted in accordance with the general investigational plan and protocols for the trial.

Moreover, the FDA requires us to comply with standards, commonly referred to as good clinical practices for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected, even if a third party is administering certain activities.

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In some circumstances, we do not have the right to control the preparation, filing and prosecution of patent applications, or to enforce or maintain the patents, covering technology that we license from third parties.

In particular, the license agreement that we have entered into with Incept LLC, or Incept, an intellectual property holding company, which covers a significant portion of the patent rights and the technology for DEXTENZA, ReSure Sealant and our product candidates, including AXPAXLI, provides that, with limited exceptions, Incept has sole control and responsibility for ongoing prosecution for certain patents covered by the license agreement.

In particular, the license agreement that we have entered into with Incept LLC, or Incept, an intellectual property holding company, which covers a portion of the patent rights and the technology for DEXTENZA, and may cover certain aspects of other hydrogel platform technology product candidates, such as OTX-TIC, to the extent they were invented prior to the September 2018 effective date of our latest amendment and restated license agreement with Incept, provides that, with limited exceptions, Incept has sole control and responsibility for ongoing prosecution for certain patents covered by the license agreement.

In addition, although we have a right under the Incept license to bring suit against third parties who infringe such licensed patents in our fields, other Incept licensees may also have the right to enforce these patents in their own respective fields without our oversight or control.

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The patent position of pharmaceutical, biotechnology and medical device companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights, including our licensed patent rights, are highly uncertain.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights, including our licensed patent rights,

are highly uncertain.

Our and our licensor’s pending and future patent applications may not result in patents being issued which protect our technology or products or which effectively prevent others from commercializing competitive technologies and products

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The availability of the PTAB as a lower-cost, faster and potentially more potent tribunal for challenging patents could therefore increase the likelihood that our own licensed and owned patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them.

Moreover, if such

challenges occur, as indicated above, we have no right to control the defense of our licensed portfolio.

Moreover, if such challenges occur, as indicated above, we have no right to control the defense of our licensed portfolio.

Instead, we would rely on our licensor to consider our suggestions and to defend such challenges, with the possibility that it may not do so in a way that best protects our interests.

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Although use of a product directed by off-label prescriptions may infringe our method-of-treatment patents, the practice is common across medical specialties, particularly in the United States, and such infringement is difficult to detect, prevent or prosecute.

In addition, patents that cover methods of use for a medical device cannot be enforced against the party that uses the device, but rather only against the party that makes them.

Such indirect enforcement is more difficult to achieve.

In certain circumstances, there can be a cause of action against the manufacturer of the approved product based on the activity of the prescriber under the theory of inducement of infringement, but such enforcement is more difficult to achieve.

In addition, patents that cover surgical procedures are generally unenforceable.

The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our licensed and owned patents may be challenged in the courts or patent offices in the United States and abroad.

Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.

These patents largely relate to the hydrogel composition and drug-release design scheme of our products.

As such, if a third party were able to design around the formulation and process patents that we license and own and create a different formulation using a different production process not covered by our patents or patent applications, we would likely be unable to prevent that third party from manufacturing and marketing its product.

If we are not able to obtain patent term extensions in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, thereby potentially extending the term of our marketing exclusivity for our product and product candidates, our business may be impaired.

Depending upon the timing, duration and specifics of FDA marketing approval of our product candidates, one of the U.S.

patents covering each of such product candidates or the use thereof may be eligible for up to five years of patent term restoration under the Hatch-Waxman Act.

The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA-approved product.

Patent term extension also may be available in certain foreign countries upon regulatory approval of our product candidates.

Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.

Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request.

Further, our license from Incept does not provide us with the right to control decisions by Incept or its other licensees on Orange Book listings or patent term extension decisions under the Hatch-Waxman Act.

Thus, if one of our important licensed patents is eligible for a patent term extension under the Hatch-Waxman Act, and it covers a product of another Incept licensee in addition to our own product candidate, we may not be able to obtain that extension if the other licensee seeks and obtains that extension first.

If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our

competitors may obtain approval of competing products following our patent expiration sooner, and our revenue could be reduced, possibly materially.

Because the active pharmaceutical ingredients in our products and product candidates are available off-patent, or are soon to be available off-patent, competitors will be able to offer and sell products with the same active pharmaceutical ingredient as our products so long as these competitors do not infringe the patents that we own or license.

For example, certain owned and licensed patents cover the composition of our products and product candidates and associated methods that relate to the hydrogel composition and drug-release features of the products and product candidates.

As such, if a third party were able to design around the formulation and method patents that we own or license and create a different formulation using a different production process not covered by our owned or licensed patents, we may be unable to prevent that third party from manufacturing and marketing its product.

We may become involved in lawsuits to protect or enforce our licensed and owned patents or other intellectual property, which could be expensive, time-consuming and unsuccessful.

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We also believe that such claims, if and to the extent they were asserted against our product candidates, would be subject to claims of invalidity.

We initiated legal proceedings against one of these patents and administrative proceedings against the other two patents in order to show that DEXTENZA does not infringe the claims of these patents or that these patents are invalid.

We initiated legal

proceedings against one of these patents and administrative proceedings against the other two patents in order to show that DEXTENZA does not infringe the claims of these patents or that these patents are invalid.

Legal proceedings related to one of these patents has been dismissed by agreement of the parties without prejudice.

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We continue to believe that DEXTENZA does not infringe the claims of these patents and that, if and to the extent it were asserted against DEXTENZA, such patent would be subject to a claim of invalidity.

We have become aware that the USPTO has

recently issued a patent filed by this third party related to intracanalicular inserts containing dexamethasone.

We have become aware that the USPTO has issued a patent filed by this third party related to intracanalicular inserts containing dexamethasone.

If this patent were asserted against DEXTENZA or other of our product candidates, we believe such patent would be non-infringed and subject to a claim of invalidity.

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Additionally, the field limit of the license and the requirement that we assign to Incept our rights in certain patent applications may restrict our ability to use certain of our licensed rights to expand our business outside of the specified fields.

If we determine to pursue a strategy of expanding the use of the hydrogel technology outside of the specified fields, we would need to negotiate and enter into an amendment to our existing license agreement with Incept or a new license agreement with Incept covering one or more additional such fields of use or utilize technologies that do not infringe on such licensed rights.

If we determine to pursue a strategy of expanding the use of the hydrogel technology outside of the

specified fields, we would need to negotiate and enter into an amendment to our existing license agreement with Incept or a new license agreement with Incept covering one or more additional such fields of use or utilize technologies that do not infringe on such licensed rights.

We may not be able to obtain any such required amendment or new license or to invent or otherwise access other technology on commercially reasonable terms or at all.

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Many of our employees were previously employed at universities or other biotechnology, medical device or pharmaceutical companies, including our competitors or potential competitors.

Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these employees or we have used or disclosed intellectual property, including trade secrets or other

proprietary information, of any such employee’s former employer.

Litigation may be necessary to defend against these claims.

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Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

Further, although we have governance procedures in place to vet the selection of specific software tools, the use of artificial intelligence solutions by us or any of our business partners may lead to the inadvertent disclosure of our confidential information and/or the loss of our trade secrets, proprietary information or other intellectual property.

Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable.

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Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference-listed drug and that the generic version is bioequivalent to the reference-listed drug, meaning it is absorbed in the body at the same rate and to the same extent.

Generic products may be significantly less costly to bring to market than the reference-listed drug and companies that produce generic products are generally able to offer them at lower

From time to time the FDA may issue product-specific bioequivalence guidance regarding RLDs to help clarify its expectations for the content of an ANDA.

The FDA issued what we believe was its first draft product-specific bioequivalence guidance for an intravitreally-administered drug in November 2025.

The FDA has also indicated that it plans to issue a draft product-specific bioequivalence guidance for DEXTENZA in February 2026.

The FDA may also meet confidentially with a generic manufacturer during its development process to provide guidance on such development.

Generic products may be significantly less costly to bring to market than the reference-listed drug and companies that produce generic products are generally able to offer them at lower prices.

Thus, following the introduction of a generic drug, a significant percentage of the sales of any branded product or reference-listed drug is typically lost to the generic product.

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Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate.

We have only received approval to market DEXTENZA and ReSure Sealant for specified indications in the United States.

We have not received approval to market DEXTENZA or ReSure Sealant in any jurisdiction outside the United States or to market any of our product candidates anywhere If we are unable to obtain a CE Certificate of Conformity for any of our products or product candidates for which we seek European regulatory approval, we will be prohibited from commercializing such product or products in the European Union and other places which require the CE Certificate of Conformity.

We have only received approval to market DEXTENZA for specified indications in the United States.

We have not received approval to market DEXTENZA in any jurisdiction outside the United States or to market any of our other product candidates

anywhere in the world.

If we are unable to obtain a CE Certificate of Conformity for any of our other products or product candidates for which we seek European regulatory approval, we will be prohibited from commercializing such product or products in the European Union and other places which require the CE Certificate of Conformity.

In such a case, the potential market to commercialize our products may be significantly smaller than we currently estimate.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive and may take many years, if approval is obtained at all.

The process of obtaining marketing approvals, both in the United States and abroad, is expensive, inherently uncertain, and may take many years, if approval is obtained at all.

Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and purity.

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Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities.

The FDA or a comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a

conflict of interest or otherwise affected interpretation of the study.

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The FDA, the EMA and regulatory authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other studies.

In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate.

In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate notwithstanding the existence of an SPA agreement.

Our regulatory strategy both in the United States and in other jurisdictions is dependent on several assumptions which may not be verified or verifiable until data are available and a full regulatory submission is received and reviewed by the relevant regulatory agency.

Any marketing approval we, or any current or future collaborator of ours, ultimately obtains may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.

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Once marketing approval has been granted, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulation.

Manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs applicable to drug and biologic manufacturers or quality assurance standards applicable to medical device manufacturers, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements.

records and documentation and reporting requirements.

We, any contract manufacturers we may engage in the future, our current or future collaborators and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to physicians, recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product such as the requirement to implement a risk evaluation and mitigation strategy.

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The studies were expensive, required extensive communication and coordination with the FDA, and took more than five years to complete.

The FDA also has required us to conduct a clinical trial of DEXTENZA for the treatment of post-surgical ocular inflammation and pain and for the treatment of ocular itching associated with allergic conjunctivitis in pediatric populations in accordance with the Pediatric Research Equity Act of 2003.

Certain endpoint data we hope to include in any approved product labeling also may not make it into such labeling, including exploratory or secondary endpoint data such as patient-reported outcome measures.

communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

The FDA also has required us to conduct a post-approval clinical trial of DEXTENZA for the treatment of post-surgical ocular inflammation and pain and for the treatment of ocular itching associated with allergic conjunctivitis in pediatric populations in accordance with the Pediatric Research Equity Act of 2003.

Certain endpoint data we seek to include in any approved product labeling also may not make it into such labeling, including exploratory or secondary endpoint data such as patient-reported outcome measures.

The FDA may limit the approved indication to a narrower subset of patients than we plan or intend based on the inclusion and exclusion criteria in our clinical trials or otherwise.

For example, our strategy for the development of AXPAXLI is to pursue a broad label in diabetic retinal disease based on the HELIOS registrational program.

Because the inclusion criteria for these trials specify patients with a defined diabetic retinopathy severity score, we will not be enrolling patients with proliferative diabetic retinopathy, the most severe form of the disease, at baseline.

Additionally, although we would expect a portion of patients who are enrolled would have non-CI DME, the trial does not require patients to have non-CI DME for them to enroll.

Furthermore, patients who have CI-DME at baseline will be excluded from the trial.

For these reasons, the HELIOS program will not enroll patients encompassing the entire spectrum of diabetic retinal disease for which we may seek an indication in the label and the FDA may limit the approved labeling indication accordingly.

The FDA may also require a Risk Evaluation and Mitigation Strategy, or REMS, program as a condition of approval of our product candidates, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

In addition, if the FDA, EMA or a comparable non-U.S.

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In addition, we are, or may become, subject to various U.S.

federal, state, and local laws, regulations, and recommendations relating to safe working conditions, laboratory and manufacturing practices, the experimental use of animals, and the use and disposal of hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research work.

federal, state, and local laws, regulations, and recommendations relating to safe working conditions, laboratory and manufacturing practices, the experimental use of

animals, and the use and disposal of hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research work.

If we fail to comply with the laws and regulations pertaining to our business, we may be subject to sanctions, including the temporary or permanent suspension of operations, product recalls, marketing restrictions, and civil and criminal penalties.

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The Court of Appeals for the Fifth Circuit declined to order the removal of mifepristone from the market but did hold that plaintiffs were likely to prevail in their claim that changes allowing for expanded access of mifepristone, which the FDA authorized in 2016 and 2021, were arbitrary and capricious.

In June 2024, the Supreme Court reversed that decision after unanimously finding that the plaintiffs (anti-

abortion doctors and organizations) did not have standing to bring this legal action against the FDA.

In June 2024, the Supreme Court reversed that decision after unanimously finding that the plaintiffs (anti-abortion doctors and organizations) did not have standing to bring this legal action against the FDA.

On October 11, 2024, the Attorneys General of three states (Missouri, Idaho and Kansas) filed an amended complaint in the district court in Texas challenging FDA’s actions.

On January 16, 2025, the district court agreed to allow these states to file an amended complaint and continue to pursue this challenge.

Thereafter, on September 30, 2025, the district court declined to dismiss the case and, instead, transferred it to federal district court in the Eastern District of Missouri.

Depending on the outcome of this litigation, our ability to develop new drug product candidates and to maintain approval of existing drug products could be delayed, undermined or subject to protracted litigation.

Finally, with the change in presidential administrations in 2025, there is substantial uncertainty as to how, if at all, the new administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates.

The impending uncertainty could present new challenges or potential opportunities as we navigate the clinical development and approval process for our product candidates.

Accordingly, in connection with our currently approved products and assuming we, or any current or future collaborators, receive marketing approval for one or more of our product candidates, we, and any current or future collaborators, and our and their contract manufacturers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control.

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Further, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

Inadequate funding for the FDA, the SEC and other government agencies, including from government shut downs, or other disruptions to these agencies’ operations, could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

Disruptions at the FDA and other government agencies from funding cuts, personnel losses, regulatory reform, government shutdowns and other developments could hinder our ability to obtain guidance from the FDA regarding our clinical development programs and develop and secure approval of our product candidates in a timely manner, which would negatively impact our business.

The FDA and comparable regulatory agencies in foreign jurisdictions, such as the European Medicines Agency and Committee for Medicinal Products for Human Use, play an important role in the development of our product candidates by providing guidance on our clinical development programs and reviewing our regulatory submissions, including investigational new drug applications, requests for special designations and marketing applications.

If these oversight and review activities are disrupted, then correspondingly our ability to develop and secure timely approval of our product candidates could be impacted in a negative manner.

For example, the recent loss and retirement of FDA leadership and personnel could lead to disruptions and delays in FDA guidance, or review and approval of our product candidates.

Pursuant to President Trump’s E.O.

14210, “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative,” the Secretary of HHS announced on March 27, 2025, a reorganization and reduction in force across HHS of approximately 20,000 employees (82,000 to 62,000), with FDA’s workforce of approximately 20,000 to decrease by 3,500 full-time employees.

Subsequently, the FDA indicated that roughly a quarter of those employees who received reduction in force notices had been reinstated.

On July 14, 2025, following litigation reaching the U.S.

Supreme Court, the administration began to carry out these layoffs across HHS, including the FDA.

In November 2025, a Congressional Continuing Resolution ended the government shutdown, providing full-year funding for the FDA for FY 2026 through September 30, 2026, at approximately $7 billion with a slight increase in user fees for drug and device companies

Further, while the FDA’s review of marketing applications and other activities for new drugs and biologics is largely funded through the user fee program established under PDUFA, it remains unclear how the administration’s reduction in force and budget cuts will impact this program and the ability of the FDA to provide guidance and review our product candidates in a timely manner.

For example, while the FDA reduction in force did not reportedly specifically target FDA reviewers, many operations, administrative and policy staff that help support such reviews were affected and those losses could lead to delays in PDUFA reviews and related activities.

There have been several reports in which the FDA failed to meet a PDUFA goal date for approval of an NDA or BLA due to heavy workload and limited resources.

In addition, while currently unclear, there is a risk that the reduction in force and budget cutbacks could threaten the integrity of the PDUFA program itself.

That is because, for the FDA to obligate user fees collected under PDUFA in the first place, a certain amount of non-user fee appropriations must be spent on the process for the review of applications plus certain other costs during the same fiscal year.

There is also substantial uncertainty as to how regulatory reform measures being implemented by the Trump Administration across the government will impact the FDA and other federal agencies with jurisdiction over our activities.

For example, since taking office, President Trump has issued a number of executive orders that could have a significant impact on the manner in which the FDA conducts its operations and engages in regulatory and oversight activities.

These include E.O.

14192, “Unleashing Prosperity Through Deregulation,” January 31, 2025;

14212, “Establishing the President’s Make America Healthy Again Commission,” February 13, 2025;

14219, “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative,” February 21, 2025.

If these or other orders or executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.

For example, over the last several years the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities.

In addition, disruptions may result from events similar to the COVID-19 pandemic.

During the COVID-19 pandemic, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.

During the last several years the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities.

If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions and could impact our ability to access the public markets and obtain necessary capital to properly capitalize and continue our operations.

For example, the federal government shut down on October 1, 2025, and did not reopen for 43 days.

With the shutdown, the FDA issued a public notice stating that agency operations would continue to the extent permitted by law, such as activities necessary to address imminent threats to the safety of human life and activities funded by carryover user fee funds.

The FDA declared that, during the shutdown period, it did not have legal authority to accept user fees assessed for FY 2026 until an FY 2026 appropriation or Continuing Resolution for the FDA was enacted.

As a result, the FDA was not able to accept any regulatory submissions for FY 2026 that required a fee payment and that was submitted during the lapse period.

In addition, the FDA indicated that some of its regulatory science research, crucial for advancing product innovation, safety, and quality, would be curtailed during the lapse period.

At the same time, disruptions at the FDA and other government agencies may result from public health events similar to the COVID-19 pandemic.

For example, during the pandemic, a number of companies announced receipt of complete response letters due to the FDA’s inability to complete required inspections for their applications.

In the event of a similar public health emergency in the future, the FDA may not be able to continue its current pace and review timelines could be extended.

Regulatory authorities outside the United States facing similar circumstances may adopt similar restrictions or other policy measures in response to a similar public health emergency and may also experience delays in their regulatory activities.

Accordingly, if a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Future shutdowns or other disruptions could also affect other government agencies such as the SEC, which may also impact our business by delaying review of our public filings, to the extent such review is necessary, and our ability to access the public markets.

Regulatory authorities outside the United States facing similar circumstances may adopt

similar restrictions or other policy measures in response to a similar public health emergency and may also experience delays in their regulatory activities.

Accordingly, if any of the foregoing developments and others impact the ability of the FDA to provide us with guidance regarding our clinical development programs or delay the agency’s review and processing of our regulatory submissions, including INDs, NDAs, or BLAs, our business would be negatively impacted.

Further, any future government shutdown could impact our ability to access the public markets and obtain necessary capital to properly capitalize and continue our operations.

We may be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products.

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If we fail to comply with these requirements, we could have the marketing approvals for our products withdrawn by regulatory authorities and our ability to market any products could be limited, which could adversely affect our ability to achieve or sustain profitability.

For example, on September 9, 2025, the President issued a Memorandum directing HHS to “ensure transparency and accuracy in direct-to-consumer prescription drug advertising, including by increasing the amount of information regarding any risks associated with the use of any such prescription drug required to be provided in prescription drug advertisements.” The same day, the Make America Healthy Again Commission released a report declaring that the FDA, HHS, FTC and DOJ “will increase oversight and enforcement under current authorities for violations of direct-to-consumer (DTC) prescription drug advertising laws.” To that end, the FDA announced that it is initiating a rulemaking process “to eliminate the ‘adequate provision’ loophole that allows pharmaceutical advertisements to hide safety information by placing it in another format or location.” In this context, the FDA declared that it will no longer tolerate what it characterized as “deceptive practices” in prescription drug advertising and that the agency would “aggressively deploy” its available enforcement tools, with “heightened scrutiny” of fair balance and disclosures in social media promotions.

The FDA also issued a generic “notice letter” directing companies to “remove any noncompliant advertising and bring all promotional communications into compliance.” While we believe we maintain a robust compliance program and processes designed to ensure that all such activities are performed in a legal and compliant manner, given the administration’s enforcement position on these issues, we may be at increased risk that the FDA, DOJ and FTC will find our DTC and other digital campaigns, including social media activities, are not in compliance with fair balance requirements and anticipated rule changes at the FDA and possibly other agencies.

Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances.

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Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, the FDA, the Federal Trade Commission, or the FTC, and various state Attorneys General offices.

These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the of the Federal Food, Drug, and Cosmetic Act, or the FDCA, the False Claims Act, the Prescription Drug Marketing Act and anti-kickback laws and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement.

These investigations have alleged violations of various federal and state laws and regulations, including claims asserting antitrust violations, violations of the of the FDCA, the False Claims Act, the Prescription Drug Marketing Act and anti-kickback laws and other alleged violations in connection with the promotion of products for unapproved uses, pricing and Medicare and/or Medicaid reimbursement.

Many of these investigations originate as “ qui tam ” actions under the False Claims Act.

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and the marketing and promotion of authorized drugs, which are strictly regulated in the European Union.

and are also subject to EU Member State laws.

and are also subject to the laws of the respective member states of the European Union, or EU Member States.

The failure to comply with these and other requirements of the European Union can also lead to significant penalties and sanctions.

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The holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products.

Our relationships with healthcare providers, physicians and third-party payors will be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which, in the event of a violation, could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Our relationships with healthcare providers, physicians and third-party payors are currently and will continue to be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which, in the event of a violation, could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and third-party payors will play a primary role in the recommendation and prescription and use of our products and any product candidates for which we obtain marketing approval.

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Restrictions under applicable federal and state healthcare laws and regulations include the following:

reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

● the federal Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation or arranging of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid;

● the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment by a federal healthcare program or making a false statement or record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties;

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The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in other jurisdictions.

The provision of benefits or advantages to physicians is governed by the national anti-bribery laws of European Union Member States and the UK Bribery Act 2010.

Payments made to physicians in certain European Union Member States must be publicly disclosed and often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual European Union Member States.

The provision of benefits or advantages to physicians is governed by the national anti-bribery laws of EU Member States and the UK Bribery Act 2010.

Payments made to physicians in certain EU Member States must be publicly disclosed and often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization and/or the regulatory authorities of the individual EU Member States.

Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

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If reimbursement of our products is unavailable or limited in scope, our business could be materially harmed.

In March 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively, the ACA.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted.

In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress.

A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs.

These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031 under the CARES Act

The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

These laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our products or product candidates for which we may obtain regulatory approval or the frequency with which any such product is prescribed or used.

Under current legislation, the actual reductions in Medicare payments may vary up to 4%.

Since enactment of the ACA, there have been and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

For example, with enactment of the 2017 Tax Act, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019.

Further, on June 17, 2021,the U.S.

Supreme Court dismissed an action to challenge the constitutionality of the ACA after finding that the plaintiffs did not have standing to bring the legal action.

Litigation and legislation over the ACA are likely to continue, with unpredictable and uncertain results.

Further, since enactment of the Patient Protection and Affordable Care Act, or PPACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law.

For example, with enactment of the Tax Act, Congress repealed the “individual mandate.” In addition, under the OBBBA, Congress discontinued certain premium subsidy payments for PPACA plan participants and modified certain other aspects of the PPACA.

Litigation and legislation over the PPACA may continue, with unpredictable and uncertain results.

The American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Further, with passage of the IRA in August 2022, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars.

This provision is limited in terms of the number of pharmaceuticals whose prices can be negotiated in any given year and it only applies to drug

products that have been approved for at least 9 years and biologics that have been licensed for 13 years.

Drugs and biologics that have been approved for a single rare disease or condition are categorically excluded from price negotiation.

With the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, Congress extended this exemption to include drugs and biologics with more than one orphan designation and more than one approved indication.

In addition, the new legislation provides that if pharmaceutical companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to the government for the difference.

The IRA also capped Medicare out-of-pocket drug costs at an estimated $2,000 a year beginning in 2025.

We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product we might bring to market.

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Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop or commercialize product candidates.

Changes in and uncertainty surrounding U.S.

and international trade policies may adversely impact our business and operating results.

In the spring of 2025, the U.S.

government initiated a series of tariff-related actions against U.S.

trading partners.

On April 2, 2025, President Trump issued an executive order announcing a “baseline” reciprocal tariff of 10% on all U.S.

trading partners effective April 5, 2025, and higher individualized reciprocal tariffs on 57 countries (with certain product exemptions for pharmaceutical-related products, among others).

Previously, the Trump Administration had imposed a 25% tariff on Canada and Mexico for goods not covered by the United States-Mexico-Canada Agreement, or USMCA, and tariffs due to drug trafficking equaling 20% on imports from China.

In response, several countries threatened retaliatory measures, including Canada and China, which then imposed retaliatory tariffs.

Prior to when the country-specific reciprocal tariffs were scheduled to take effect, the Trump Administration delayed the effective date of such tariffs for all countries except China to August 1, 2025.

Later, the United States and China reached a framework agreement that ultimately resulted in the suspension of the higher reciprocal tariffs on China until November 10, 2025.

Shortly before that expiration date, the United States and China reached a one-year agreement with an expiration of November 10, 2026, that includes the continued suspension of the heightened reciprocal tariffs on China and delayed enforcement of new U.S.

export rules targeting affiliates of blacklisted firms.

Since the April reciprocal tariffs announcement, the European Union, Japan, South Korea, Switzerland and the United Kingdom, among others, have reached deals with the U.S.

that include reduced tariff rates to varying levels and other measures.

On July 31, 2025, President Trump issued an Executive Order detailing new reciprocal tariff rates for individual countries that took effect on August 7, 2025.

The new reciprocal rates, which are consistent with the rates reflected in the trade deals already announced, range from 10% to 41%.

The new rates do not apply to Canada, China, Mexico and a few other countries.

For China, the 10% baseline reciprocal tariff announced in April remains in effect, in addition to a minimum of a 10% tariff due to drug trafficking.

Regarding Canada and Mexico, the rate remains 25% for goods that are not covered by the USMCA for Mexico and, effective August 1, 2025, was increased to 35% on imports from Canada that are not covered by the USMCA.

President Trump also announced a further 10% increase on non-USMCA goods from Canada, but it is unclear when such increase will take effect.

The European Union, Japan, South Korea, Switzerland (and Liechtenstein), the United Kingdom and others have reached agreements with the U.S.

that cap pharmaceutical tariffs at 15%.

In addition, an agreement with Malaysia provides a zero percent tariff exemption for pharmaceutical products that are not patented in the U.S.

and are used in pharmaceutical applications, and an agreement with Switzerland and Lichenstein caps tariffs on pharmaceuticals imported from those two countries at 15 percent.

Finally, an agreement with Taiwan concluded on January 15, 2026, eliminates tariffs on generic pharmaceuticals and their active ingredients imported from Taiwan.

Sustained uncertainty about, or the further escalation of, trade and political tensions between the United States and China could result in a disadvantageous research and manufacturing environment in China, particularly for U.S.-based companies, including retaliatory restrictions that hinder or potentially inhibit our ability to rely on CMOs and other service providers that operate in China.

Separately, in April 2025, the Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 into the impact on U.S.

national security of the imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items.

On September 25, 2025, via a post on Truth Social, President Trump announced that, beginning October 1, 2025, all branded or patented drugs imported in the U.S.

would face a 100% tariff.

At the same time, President Trump indicated that these tariffs could be avoided by building pharmaceutical manufacturing facilities in the U.S.

Thereafter, President Trump delayed the October 1 st effective date of the tariffs on branded or patented pharmaceutical products announcing that the administration had now “begun preparing” tariffs on manufacturers that do not build in the U.S.

or enter into a most-favored-nation drug pricing agreement with the Trump Administration.

As a result of changes in tariffs that have been announced and/or implemented, and the underlying uncertainty currently surrounding international trade, we could experience a negative impact to our costs of materials and production processes, and supply chain disruptions and delays as a result of any new tariff policies or trade restrictions.

If we are unable to obtain necessary raw materials or product components in sufficient quantity and in a timely manner due to disruptions in the global supply chain caused by macroeconomic events and conditions, the development, testing and clinical trials of our product candidates may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

We cannot yet predict the effect of the U.S.

tariffs on imports, or the extent to which other countries will impose quotas, duties, tariffs, taxes or other similar restrictions upon imports or exports in the future, nor can we predict future trade policy or the terms of any renegotiated trade agreements and their impact on our business.

Further, some of our collaborators and suppliers are located in China.

Trade tensions and conflicts between the United States and China have been escalated in recent years and, as such, we are exposed to the possibility of product supply disruption and increased costs and expenses in the event of changes to the laws, rules, regulations and policies of the governments of the United States or China, or due to geopolitical unrest and unstable economic conditions.

The prices of prescription pharmaceuticals in the United States and foreign jurisdictions are subject to considerable legislative and executive actions and could impact the prices we obtain for our products, if and when licensed.

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In addition, in October 2020, the Department of Health and Human Services, or HHS, and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States.

Seven states (Colorado, Florida, Maine, New Hampshire, New Mexico, Texas and Vermont) have passed laws allowing for the importation of drugs from Canada.

Several states have passed laws allowing for the importation of drugs from Canada.

North Dakota and Virginia have passed legislation establishing workgroups to examine the impact of a state importation program.

As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had submitted Section 804 Importation Program proposals to the FDA and, on January 5, 2024, the FDA approved Florida’s plan for Canadian drug importation.

As of May 2024, five states (Colorado, Florida, Maine, New Hampshire and New Mexico) had submitted Section 804 Importation Program proposals to the FDA.

On January 5, 2024, the FDA approved Florida’s plan for Canadian drug importation.

That state now has authority to import certain drugs from Canada for a period of two years once certain conditions are met.

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The state will also need to relabel the drugs and perform quality testing of the products to meet FDA standards.

Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.

Pursuant to court order, the removal and addition of the aforementioned safe harbors were delayed and recent legislation imposed a moratorium on implementation of the rule until January 1, 2026.

On August 16, 2022, the Inflation Reduction Act, or IRA, was signed into law by President Biden.

The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage.

Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

On May 21, 2025, the FDA announced that it would offer individual states the opportunity to submit draft proposals for pre-review and meet with the agency to obtain initial feedback from FDA prior to formally submitting their Section 804 importation program (SIP) proposals.

The intent of these meetings is to assist states in developing their proposals by further clarifying requirements, enhancing the quality of proposals submitted to the agency and ultimately shortening the review timeline.

On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law by former President Biden.

The legislation requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation;

and replaces the Part D coverage gap discount program with a new discounting program.

The IRA permits the Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

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CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it does not apply to drugs and biologics that have been approved for a single rare disease or condition.

Nonetheless, since CMS may establish a maximum price for these products in price negotiations, we would be fully at risk of government action if our products were to become the subject of Medicare price negotiations.

Moreover, given the risk that could be the case, these provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.

This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years.

When originally enacted, the IRA explicitly excluded from price negotiation orphan drugs designated for only one rare disease or condition and for which the only active approved indication is for such disease or condition.

However, the One Big Beautiful Bill Act signed into law on July 4, 2025 amended the applicable statute to broaden the orphan drug exclusion to include products with more than one orphan designation and more than one approved indication.

These provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.

The first cycle of negotiations for the Medicare Drug Price Negotiation Program commenced in the summer of 2023.

On August 15, 2024, the HHS published the results of the first Medicare drug price negotiations for ten selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.

On August 15, 2024, the HHS published the results of the first Medicare drug price negotiations for 10 selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis.

The prices of these ten drugs will become effective January 1, 2026.

On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations by February 1, 2025.

While there had been some questions about the Trump Administration’s position on this program, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is

committed to considering opportunities to bring greater transparency in the negotiation program.

The second cycle of negotiations with participating drug companies will occur during 2025, and any negotiated prices for this second set of drugs will be effective starting January 1, 2027.

On January 17, 2025, CMS announced its selection of 15 additional drugs covered by Part D for the second cycle of negotiations and on November 25, 2025, CMS released negotiated prices for such products that will go into effect beginning January 1, 2027.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.

The legislation also requires manufacturers to pay rebates for drugs in Medicare Part D whose price increases exceed inflation.

The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in 2025, at $2,000 a year.

In addition, the IRA potentially raises legal risks with respect to individuals participating in a Medicare Part D prescription drug plan who may experience a gap in coverage if they required coverage above their initial annual coverage limit before they reached the higher threshold, or “catastrophic period” of the plan.

Individuals requiring services exceeding the initial annual coverage limit and below the catastrophic period, must pay 100% of the cost of their prescriptions until they reach the catastrophic period.

Among other things, the IRA contains many provisions aimed at reducing this financial burden on individuals by reducing the co-insurance and co-payment costs, expanding eligibility for lower income subsidy plans, and price caps on annual out-of-pocket expenses, each of which could have potential pricing and reporting implications.

On June 6, 2023, Merck & Co.

filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution.

Subsequently, a number of other parties, including the U.S.

Chamber of Commerce, Bristol Myers Squibb Company, the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.

There have been various decisions by the courts considering these cases since they were filed.

The HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry.

Certain of these cases are now on appeal and, on October 30, 2024, the Court of Appeals for the Third Circuit heard oral argument in three of these cases.

We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological 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.

The legislation also requires manufacturers to pay rebates for drugs in Medicare Part B and D whose price increases exceed inflation.

The law also capped Medicare beneficiary out-of-pocket drug costs at $4,000 per year in 2024 and, $2,000 a year from 2025 onwards.

While it remains to be seen how the drug pricing provisions imposed by the IRA will affect the broader pharmaceutical industry, several pharmaceutical manufacturers and other industry stakeholders have challenged the law, including through lawsuits brought against the HHS, the Secretary of the HHS, CMS, and the CMS Administrator challenging the constitutionality and administrative implementation of the IRA’s drug price negotiation provisions.

This litigation is ongoing and the results, and potential impacts on our business, are uncertain.

The current presidential administration has indicated that reducing prescription drug prices will be a focus, with CMS issuing a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater pricing transparency.

Moreover, President Trump has signed multiple executive orders addressing prescription drug pricing and access, including:

on April 15, 2025, outlining several actions the Secretary of the Department of HHS must take to optimize healthcare regulations that will provide access to prescription drugs at lower costs;

on May 5, 2025, aiming to promote domestic production of critical medicines;

and on May 12, 2025, aiming to establish a “most favored nation” drug pricing policy that would tie U.S.

drug prices to the prices paid for drugs in other countries.

Since the May 12, 2025 “most favored nation” executive order, the Trump administration has continued to exert pressure on drug manufacturers to implement “most favored nation” pricing, including by suggesting that the administration may impose significant tariffs on pharmaceuticals if such manufacturers do not reach agreements to implement “most favored nation” pricing.

Additionally, in November 2025, CMS announced a new voluntary payment initiative called the GENEROUS Model (GENErating cost Reductions for U.S.

Medicaid Model) where drug manufacturers may voluntarily offer supplemental rebates to participating state Medicaid programs that are intended to provide such Medicaid programs with a “most favored nation” price for participating manufacturers’ products.

On December 23, 2025, CMS, through its Center for Medicare and Medicaid Innovation, or CMMI, proposed two five-year pilot programs to implement a “reference pricing” model for drugs paid for under Medicare for 25% of covered beneficiaries.

The programs are referred to as the Global Benchmark for Efficient Drug Pricing Model for Medicare Part B drugs, referred to as GLOBE, and the Guarding U.S.

Medicare Against Rising Drug Costs for Medicare Part D drugs, referred to as GUARD.

Under the proposed rules, a manufacturer would owe rebates to Medicare if prices for their drugs exceeded the prices paid by other economically comparable reference countries, with an initial list of 19 reference countries included in the proposed rule.

Comments are due on the proposed pilot program rules on or before February 23, 2026, and the pilot programs are proposed to go into effect beginning October 1, 2026.

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.

This is increasingly true with respect to products approved pursuant to the accelerated approval pathway.

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Reporting and payment obligations under the Medicaid Drug Rebate Program and other governmental drug pricing programs are complex and may involve subjective decisions.

Any failure to comply with those obligations could subject us to penalties and sanctions.

Any failure to comply with those obligations or disagreement by regulators with the assumptions or methodologies we have used could subject us to penalties and sanctions.

As a condition of reimbursement by various federal and state health insurance programs, pharmaceutical companies are required to calculate and report certain pricing information to federal and state agencies.

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Such revisions could affect liability to federal and state payers and also adversely impact reported financial results of operations in the period of such restatement.

For example, CMS recently imposed new requirements for manufacturers that treat fees paid to channel partners as bona fide service fees, or BFSFs, that are excluded from the calculation of average sales price, or ASP.

These new requirements include the submission of reasonable assumptions that must include, among other things, a description of the fair market value, or FMV, used to determine if a fee is paid at FMV.

Manufacturers will also be required to obtain a certification from channel partners that any fee is not passed on to customers to be treated as a BFSF for all new contracts beginning January 1, 2026.

Uncertainty exists as new laws, regulations, judicial decisions, or new interpretations of existing laws, or regulations related to our calculations, price reporting or payments obligations increases the chances of a legal challenge, restatement or investigation.

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The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval.

In addition, in many countries outside

the United States, it is required that the product be approved for reimbursement before the product can be sold in that country.

In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be sold in that country.

Regulatory or pricing approval in foreign jurisdictions may require the provision of additional or long-term clinical data demonstrating different outcomes or efficacy measures than may be required for regulatory approval in the United States.

We or our collaborators may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.

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As of January 1, 2025, the Medicines and Healthcare Products Regulatory Agency, or MHRA, is responsible for approving all medicinal products destined for the United Kingdom market (i.e., Great Britain and Northern Ireland).

At the same time, a new international recognition procedure (“IRP”) will apply, which intends to facilitate approval of pharmaceutical products in the United Kingdom.

The IRP is open to applicants that have already received an authorization for the same product from one of the MHRA’s specified Reference Regulators (“RRs”).

The RRs notably include EMA and regulators in the EU/European Economic Area (“EEA”) member states for approvals in the European Union centralized procedure and mutual recognition procedure as well as the FDA (for product approvals granted in the United States).

On April 28, 2025, the U.K.

Parliament adopted amendments to improve and strengthen the U.K.’s clinical trials regulatory regime;

they will take effect on April 28, 2026.

These changes were needed since the current U.K.

requirements are based upon the now-repealed EU Clinical Trials Directive (2001/20/EC), which has been replaced by the European Clinical Trials Regulation (Regulation EU No 536/2014).

Since the U.K.

left the European Union prior to the date on which the EU CTR took effect, the UK legal framework did not benefit from the same revisions as occurred at EU level.

At the same time, a new international recognition procedure, or IRP, will apply, which intends to facilitate approval of pharmaceutical products in the United Kingdom.

The IRP is open to applicants that have already received an authorization for the same product from one of the MHRA’s specified Reference Regulators, or RRs.

The RRs notably include EMA and regulators in the member states of the European Union and the European Economic Area, or EEA, for approvals in the EU centralized procedure and mutual recognition procedure as well as the FDA (for product approvals granted in the United States).

However, the concrete functioning of the IRP is currently unclear.

Any delay in obtaining, or an inability to obtain, any marketing approvals may force us or our collaborators to restrict or delay efforts to seek regulatory approval in the United Kingdom for our product candidates, which could significantly and materially harm our business.

Any delay in obtaining,

or an inability to obtain, any marketing approvals may force us or our collaborators to restrict or delay efforts to seek regulatory approval in the United Kingdom for our product candidates, which could significantly and materially harm our business.

In addition, foreign regulatory authorities may change their approval policies and new regulations may be enacted.

For instance, the European Union pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.

For instance, the EU pharmaceutical legislation is currently undergoing a complete review process, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.

The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising the eligibility for expedited pathways, etc.) was published on April 26, 2023.

The proposed revisions remain to be agreed and adopted by the European Parliament and European Council and the proposals may therefore be substantially revised before adoption, which is not anticipated before early 2026.

The revisions may however have a significant impact on the pharmaceutical industry and our business in the long term.

On June 4, 2025, after almost two years of negotiations among the EU Member States, the Council of the European Union adopted its position on the proposed overhaul of the EU general pharmaceutical legislative framework, which is known as the new Pharma Package.

On December 11, 2025, the European Parliament and Council reached a provisional political agreement on the legislation which is expected to be adopted by mid-2026.

Key changes include updating regulatory data exclusivity to a new system with 8 years data exclusivity and reduced market exclusivity period to 1 year which can be extended if specific conditions are fulfilled, adding launch/supply obligations, incentivizing antibiotic innovation with transferable vouchers, and streamlining approval procedures in the European Union.

If the legislation is finalized in line with the provisional political agreement, it will have a significant impact on the pharmaceutical industry.

Moreover, outside the United States, the prevalence of regimes making use of “reference pricing”, where a specific country or payor pegs pricing or reimbursement to pricing levels in another country, may necessitate a sequential or staggered approach or ordering to commercial launch in order to obtain optimal pricing and reimbursement coverage, which may delay launch in countries where a product is otherwise approved or approvable.

Similarly, the risk of “most-favored-nation” or other “reference pricing” regimes in the United States, including through the GLOBE and GUARD programs, may result in the delay of launches in foreign jurisdictions or could otherwise affect whether products are marketed in foreign jurisdictions or whether pricing may be changed in such jurisdictions.

We expect that we will also be subject to additional risks in commercializing any of our product candidates that receive marketing approval outside the United States, including tariffs, trade barriers and regulatory requirements;

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The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR increases our obligations with respect to clinical trials

conducted in the EEA by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators.

In addition, the GDPR also imposes strict rules on the transfer of personal data to countries outside the European Union, including the United States and, as a result, increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States.

The GDPR increases our obligations with respect to clinical trials conducted in the EEA by expanding the definition of personal data to include coded data and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators.

data protection, such as the United States.

The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20 million Euros, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

In addition, the GDPR provides that European Union member states may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data.

In addition, the GDPR provides that EU Member States may make their own further laws and regulations limiting the processing of personal data, including genetic, biometric or health data.

Similar laws and regulations have been approved, or are expected to be approved, in several jurisdictions beyond the European Union.

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Privacy Shield framework, or Privacy Shield, one of the mechanisms used to legitimize the transfer of personal data from the EEA to the U.S.

While we were not self-certified under the Privacy Shield, this CJEU decision has lead to increased scrutiny on data transfers from the European Union to the United States generally and increase our costs of compliance with data privacy legislation as well as our costs of negotiating appropriate privacy and security agreements with our vendors and business partners.

While we were not self-certified under the Privacy Shield, this CJEU decision has led to increased scrutiny on data transfers from the European Union to the United States generally and increase our costs of compliance with data privacy legislation as well as our costs of negotiating appropriate privacy and security agreements with our vendors and business partners.

Following the CJEU decision, in October 2022, President Biden signed an executive order to implement the EU-U.S.

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The European Commission initiated the process to adopt an adequacy decision for the EU-U.S.

Data Privacy Framework (“DPF”) in December 2022, and has now adopted an adequacy decision to permit data transfers from the European Union to the United States going forward.

Data Privacy Framework , or DPF in December 2022, and has now adopted an adequacy decision to permit data transfers from the European Union to the United States going forward.

This development permits data transfers at this point under this framework and more broadly has made international data transfers more straightforward, but these provisions are being challenged in court.

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While the Data Protection Act of 2018 in the United Kingdom that “implements” and complements the GDPR has achieved Royal Assent on May 23, 2018 and is now effective in the United Kingdom, it is unclear whether transfer of data from the EEA to the United Kingdom will remain lawful under the GDPR.

government has already determined that it considers all European Union 27 and EEA member states to be adequate for the purposes of data protection, ensuring that data flows from the United Kingdom to the EU/EEA remain unaffected.

government has already determined that it considers all 27 EU Member States and EEA member states to be adequate for the purposes of data protection, ensuring that data flows from the United Kingdom to the EU/EEA remain unaffected.

In addition, a recent decision from the European Commission appears to deem the United Kingdom as being “essentially adequate” for purposes of data transfer from the European Union to the United Kingdom, although this decision may be re-evaluated in the future.

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HIPAA also imposes certain obligations on the business associates of covered entities that obtain protected health information in providing services to or on behalf of covered entities.

HIPAA may apply to us in certain circumstances and may also apply to our

business partners in ways that may impact our relationships with them.

HIPAA may apply to us in certain circumstances and may also apply to our business partners in ways that may impact our relationships with them.

Any clinical trials we conduct will be regulated by Subpart A of 45 CFR 46, also known as the Common Rule, which also includes specific privacy-related provisions.

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In addition to possible federal civil and criminal penalties for HIPAA violations, state attorneys general are authorized to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions.

In addition, state attorneys general (along with private plaintiffs) have brought civil actions seeking injunctions and damages resulting from alleged violations of HIPAA’s privacy and security rules.

In addition, state

attorneys general (along with private plaintiffs) have brought civil actions seeking injunctions and damages resulting from alleged violations of HIPAA’s privacy and security rules.

State attorneys general also have authority to enforce state privacy and security laws.

Moreover, new laws and regulations governing privacy and security may be adopted in the future as well.

In addition to potential enforcement by the HHS, we could also be potentially subject to privacy enforcement from the Federal Trade Commission (the “FTC”).

In addition to potential enforcement by the HHS, we could also be potentially subject to privacy enforcement from the Federal Trade Commission, or the FTC.

The FTC has been particularly focused on the unpermitted processing of health and genetic data through its recent enforcement actions and is expanding the types of privacy violations that it interprets to be “unfair” under Section 5 of the FTC Act, as well as the types of activities it views to trigger the Health Breach Notification Rule (which the FTC also has the authority to enforce).

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These shifts in enforcement priorities may also impact our business.

There are also increased restrictions at the federal level relating to transferring sensitive data outside of the United States to certain foreign countries.

For example, in 2024, Congress passed H.B.

815, which included the Protecting Americans’ Data from Foreign Adversaries Act of 2024.

This law creates certain restrictions for entities that disclose sensitive data (including potential health data) to countries such as China.

Failure to comply with these rules can lead to a potential FTC enforcement action.

Additionally, the Department of Justice recently finalized a rule implementing Executive Order 14117, which creates similar restrictions related to the transfer of sensitive US data to countries such as China.

These data transfer restrictions (and others that may pass in the future) may create operational challenges and legal risks for our business.

There are also increased restrictions at the federal level relating to transferring sensitive data (including certain kinds of clinical data) outside of the United States to certain foreign countries.

The DOJ recently finalized a rule implementing Executive Order 14117, which creates restrictions related to the transfer of sensitive United States data to countries such as China.

The “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern” regulations establish a new regulatory regime that may have a significant impact in connection with the transfer of sensitive United States personal data to “countries of concern” (i.e., China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and Venezuela).

This rule prohibits (1) United States data brokers from licensing or otherwise transferring a wide variety of sensitive United States persons data to China (among other locations) and (2) all United States persons from knowingly engaging in any “covered data transaction” with “countries of concern” or “covered persons” involving access to bulk human genomic, epigenomic, proteomic, or transcriptomic data, or with human biospecimens from which such data can be derived.

The rule defines six categories of “sensitive personal data”:

covered personal identifiers, precise geolocation data, biometric identifiers, human genomic data, personal health data, and personal financial data.

In addition, the Protecting Americans’ Data from Foreign Adversaries Act, or PADFA, which came into effect in 2025, prohibits data brokers from selling, licensing, transferring, disclosing, trading, or providing access to “personally identifiable sensitive data” of Americans to foreign adversaries, namely China, Russia, Iran, and North Korea, or entities controlled by a foreign adversary.

Although the DOJ’s rule and the PADFA share a common purpose, the PADFA focuses more on categories of data rather than transactions.

PADFA includes 16 categories of “sensitive data,” including biometric information, precise geolocation information, and genetic information.

Collectively, the DOJ’s rule and PADFA, as well as other similar provisions that may be passed in the future, may create both operational challenges and legal risks for our business.

New laws also are being considered at the state level.

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Some of the provisions of these laws may apply to our business activities.

There are also states that are strongly considering or have already passed comprehensive privacy laws during the 2024 legislative sessions that will go into effect in 2025 and beyond, including New Hampshire and New Jersey.

Other states will be considering these laws in the future, and Congress has also been debating passing a federal privacy law.

There are also states that are strongly considering legislation that will go into effect in 2026 and beyond.

Congress has also been debating passing a federal privacy law.

There are also states that are specifically regulating health information that may affect our business.

For example, Washington state passed a health privacy law in 2023 that regulates the collection and sharing of health information, and the law also has a private right of action, which further increases the relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering, such legislation in 2025.

Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation.

These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

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Despite the implementation of security measures, our internal information technology systems and those of third parties are vulnerable to damage from computer viruses, malware, computer hackers, malicious code, employee error, theft or misuse, denial-of-service attacks, sophisticated nation-state supported actors, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.

Such systems are also vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees, our collaborators, contractors, consultants, vendors, and other third parties, or from cyberattacks by malicious third parties over the Internet or through other mechanisms.

Cyberattacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect.

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We cannot guarantee that the measures we have taken to date, and actions we may take in the future, will be sufficient to prevent any future breaches.

While we have not experienced any such material system failure, accident, cyberattack or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs, clinical trials and business operations, whether due to a loss of our trade secrets or other proprietary or confidential information or other similar disruptions, in addition to possibly requiring substantial expenditures of resources to remedy.

While we have not experienced a material system failure, accident, cyberattack or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs, clinical trials and business operations, whether due to a loss of our trade secrets or other proprietary or confidential information or other similar disruptions, in addition to possibly requiring substantial expenditures of resources to remedy.

For example, the loss of clinical trial data from clinical trials could result in delays or termination of our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

In addition, as risks with respect to our information systems continue to evolve, we will incur additional costs to maintain the security of our information systems and comply with evolving laws and regulations pertaining to cybersecurity and related areas.

In addition, as risks with respect to our information systems continue to evolve, we will incur additional costs to maintain

the security of our information systems and comply with evolving laws and regulations pertaining to cybersecurity and related areas.

To the extent that any disruption or security breach were to result in a loss of, or damage to, our or our vendors’, collaborators’ or other contractors’ or consultants’ data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, including litigation exposure, penalties and fines, we could become the subject of regulatory action or investigation, enrollment in our clinical trials could be negatively affected, our competitive position and reputation could be harmed and the further development and commercialization of our product candidates could be delayed.

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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 1A. Risk Factors