What changed in this filing

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Item 1. Financial Statements

2021-08-09 compared with 2021-05-10 · 78 added, 58 removed, 315 unchanged (30% of the section changed)

24 unchanged sentences

Preferred stock, par value $ 0.01 per share, 20,000,000 shares authorized;

none issued and outstanding at March 31, 2021 and December 31, 2020.

Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at March 31, 2021 and December 31, 2020;

62,252,012 and 61,671,231 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively.

none issued and outstanding at June 30, 2021 and December 31, 2020.

Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at June 30, 2021 and December 31, 2020;

62,490,940 and 61,671,231 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

Product sales, net

13 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

30 unchanged sentences

Our first drug product, OMIDRIA ® (phenylephrine and ketorolac intraocular solution) 1%/0.3% , is marketed in the United States (“U.S.”) for use during cataract surgery or intraocular lens replacement.

In December 2020, the Centers for Medicare & Medicaid Services (“CMS”) confirmed that OMIDRIA qualifies for separate payment when used on Medicare Part B patients in ambulatory surgery centers (“ASCs”), effective retroactively as of October 1, 2020.

OMIDRIA’s pass through status, which had allowed for separate payment when used on Medicare Part B patients in the ASC or hospital setting, had expired on October 1, 2020.

OMIDRIA qualifies for separate payment when used on Medicare Part B patients in ambulatory surgery centers under a policy adopted by the Centers for Medicare and Medicaid Services (“CMS”) in 2019 and directed to non-opioid pain management surgical drugs.

Our drug candidate narsoplimab is the subject of a biologics license application (“BLA”) under priority review by the U.S.

7 unchanged sentences

generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.

The information as of March 31,2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information.

The information as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information.

The Condensed Consolidated Balance Sheet at December 31, 2020 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP for audited annual financial information.

3 unchanged sentences

The COVID-19 pandemic and the responses to it by various governmental authorities, the medical community and others have had a significant impact on our business.

It is not possible to estimate precisely the future impact of COVID-19 on our business, operations or financial results due to the unknown magnitude, duration and outcome of the pandemic.

We have filed with FDA our narsoplimab BLA for HSCT-TMA, which has been granted priority review with an FDA action date of July 17, 2021 under the Prescription Drug User Fee Act.

We anticipate, but cannot guarantee, that narsoplimab will receive FDA approval and will launch in the U.S.

If approved, we cannot fully predict the timing or the magnitude of narsoplimab revenues, but we believe they will be significant.

Our sales and marketing

strategies for the launch of narsoplimab for HSCT-TMA include various milestones at which we commit to incremental spending, providing for flexibility in the timing of costs incurred should the approval of narsoplimab be delayed.

It is not possible to estimate precisely the future impact of the COVID-19 pandemic on our business, operations or financial results due to the unknown magnitude, duration and outcome of the pandemic.

We have filed with FDA our BLA for narsoplimab in HSCT-TMA, which has been granted priority review with an FDA action date of October 17, 2021 under the Prescription Drug User Fee Act (“PDUFA”).

We anticipate, but cannot guarantee, that narsoplimab will receive FDA approval and will commercially launch in the U.S.

Our sales and marketing strategies for the commercial launch of narsoplimab for HSCT-TMA include various milestones at which we

commit to incremental spending, providing for flexibility in the timing of costs incurred should the approval of narsoplimab be delayed.

If approved, we cannot fully predict the timing or the magnitude of narsoplimab revenues.

We plan to continue to fund our operations for the next twelve months with our cash and investments from sales of OMIDRIA and, if FDA approval is granted, from sales of narsoplimab for HSCT-TMA.

In addition, we may utilize funds available under our line of credit, which allows us to borrow up to 85 % of our available accounts receivable borrowing base, less certain reserves, or $ 50.0 million, whichever is less.

The line of credit matures August 2, 2022 .

We also entered into a sales agreement to sell shares of our common stock, from time to time, up to an aggregate offering amount of $ 150.0 million through an “at the market” equity offering program.

25 unchanged sentences

Right of Use Assets and Related Lease Liabilities

We record operating leases as right-of-use assets and recognize the related lease liabilities equal to the fair value of the lease payments using our incremental borrowing rate when the implicit rate in the lease agreement is not readily available.

We recognize variable lease payments when incurred.

Costs associated with operating lease assets are

recognized on a straight-line basis within operating expenses over the term of the lease.

Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

We record finance leases as a component of property and equipment and amortize these assets within operating expenses on a straight-line basis to their residual values over the shorter of the term of the underlying lease or the estimated useful life of the equipment.

16 unchanged sentences

On January 1, 2021, we adopted ASU 2019-12, Income Taxes (Topic 740), which is intended to simplify various aspects of the income tax accounting guidance, including elimination of the exception to the incremental approach of intra-period tax allocation when there is a loss from continuing operations and income or gain from other items (for example, other comprehensive income).

We adopted the standard on a prospective basis and the impact to our consolidated financial statements for the three months ended March 31,2021 was immaterial.

We adopted the standard on a prospective basis and the impact to our consolidated financial statements for the three and six months ended June 30, 2021 was immaterial.

Note 3—Net Loss Per Share

1 unchanged sentence

Diluted earnings per share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.

Shares issuable under the unsecured convertible notes are calculated using the if-converted method and are excluded from the below table as their impact is anti-dilutive.

Shares of our common stock issuable under the unsecured convertible notes are calculated using the if-converted method and are excluded from the below table as their impact is anti-dilutive.

Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period.

1 unchanged sentence

Three Months Ended

Six Months Ended

Outstanding options to purchase common stock

8 unchanged sentences

Total accounts receivables, net

Trade receivables net of product return and chargeback allowances were $ 1.5 million and $ 1.2 million as of March 31, 2021 and December 31, 2020, respectively.

Trade receivables are net of product return and chargeback allowances of $ 1.9 million and $ 1.2 million as of June 30, 2021 and December 31, 2020, respectively.

Inventory consists of the following:

13 unchanged sentences

Total property and equipment, net

For the three months ended March 31, 2021 and 2020, depreciation and amortization expenses were $ 0.4 million.

For the three months ended June 30, 2021 and 2020, depreciation and amortization expenses were $ 0.4 million for each of the two periods.

For the six months ended June 30, 2021 and 2020, depreciation and amortization expenses were $ 0.7 million and $ 0.8 million, respectively.

Accrued Expenses

10 unchanged sentences

Note 5—Fair-Value Measurements

As of March 31, 2021, and December 31, 2020, all investments were classified as short-term and available-for-sale on the accompanying Condensed Consolidated Balance Sheets.

As of June 30, 2021, and December 31, 2020, all investments were classified as short-term and available-for-sale on the accompanying Condensed Consolidated Balance Sheets.

Investment income, which was included as a component of other income, consists of interest earned.

7 unchanged sentences

Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows:

March 31, 2021

June 30, 2021

(In thousands)

Money-market funds classified as non-current restricted investments

Money-market funds classified as short-term investments

Money-market funds classified as non-current restricted investments

December 31, 2020

(In thousands)

Money-market funds classified as non-current restricted investments

Money-market funds classified as short-term investments

Cash held in demand deposit accounts of $ 9.0 million and $ 10.5 million is excluded from our fair-value hierarchy disclosure as of March 31, 2021 and December 31, 2020, respectively.

There were no unrealized gains or losses associated with our investments as of March 31, 2021 or December 31, 2020.

Money-market funds classified as non-current restricted investments

Cash held in demand deposit accounts of $ 12.7 million and $ 10.5 million is excluded from our fair-value hierarchy disclosure as of June 30, 2021 and December 31, 2020, respectively.

There were no unrealized gains or losses associated with our investments as of June 30, 2021 or December 31, 2020.

The carrying amounts reported in the accompanying Condensed Consolidated Balance Sheets for receivables, accounts payable, other current monetary assets and liabilities approximate fair value.

4 unchanged sentences

Interest on amounts outstanding is payable monthly at the greater of 5.5 % or the prime rate.

The line of credit is secured by all our assets excluding intellectual property and development program inventories.

As of March 31, 2021 and December 31, 2020, no amounts were outstanding under the Line of Credit Agreement.

The line of credit matures August 2, 2022 and is secured by all our assets excluding intellectual property and development program inventories.

As of June 30, 2021 and December 31, 2020, no amounts were outstanding under the Line of Credit Agreement.

Note 7—Unsecured Convertible Senior Notes

On January 1, 2021, we early adopted ASU 2020-06 on a modified retrospective basis.

On January 1, 2021, we adopted ASU 2020-06 on a modified retrospective basis.

ASU 2020-06 removes the separate liability and equity accounting for our outstanding convertible senior notes.

2 unchanged sentences

The carrying value of the notes are reflective of their face value less unamortized debt issuance costs.

Interest expense recognized in future periods will be reduced as a result of accounting for the unsecured convertible notes wholly as a liability measured at amortized cost.

Unsecured convertible senior notes outstanding at March 31, 2021 and December 31, 2020 are as follows:

Balance as of March 31, 2021

Subsequent to the adoption date, interest expense is reduced as a result of accounting for the unsecured convertible notes wholly as a liability measured at amortized cost.

Unsecured convertible senior notes outstanding at June 30, 2021 and December 31, 2020 are as follows:

Balance as of June 30, 2021

(In thousands)

17 unchanged sentences

(2) Included in the Condensed Consolidated Balance Sheet within additional paid-in capital at December 31, 2020.

Upon early adoption of ASU 2020-06 on January 1, 2021, amounts were reclassified to unsecured convertible senior notes, net.

With adoption of ASU 2020-06 on January 1, 2021, amounts were reclassified to unsecured convertible senior notes, net.

2023 Unsecured Convertible Senior Notes

On November 15, 2018, we issued $ 210.0 million in aggregate principal amount of our 6.25 % convertible senior notes (the “2023 Notes”).

On November 15, 2018, we issued $ 210.0 million in aggregate principal amount of our 6.25 % convertible senior notes due 2023 (the “2023 Notes”).

The 2023 Notes accrue interest at an annual rate of 6.25 % per annum, payable semi-annually in arrears on May 15 and November 15 of each year.

The 2023 Notes mature on November 15, 2023 unless earlier purchased, redeemed or converted in accordance with their terms.

On August 14, 2020, we issued the 5.25 % convertible senior notes (the “2026 Notes”) and used approximately $ 125.6 million of the net proceeds to repurchase $ 115.0 million principal amount of the 2023 Notes (see “2026 Unsecured Convertible Senior Notes” below).

On August 14, 2020, we issued the 5.25 % convertible senior notes due 2026 (the “2026 Notes”) and used approximately $ 125.6 million of the net proceeds to repurchase $ 115.0 million principal amount of the 2023 Notes (see “2026 Unsecured Convertible Senior Notes” below).

The 2023 Notes are convertible into cash, shares of our common stock or a combination thereof, as we elect at our sole discretion.

The initial conversion rate is 52.0183 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 19.22 per share of common stock), subject to adjustment in certain circumstances.

To reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2023 Notes, we entered into a capped call transaction (the “2023 Capped Call”), which covers the number of shares of our common stock underlying the 2023 Notes when our common stock is trading between the initial conversion price of $ 19.22 per share and $ 28.84 per share.

To reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2023 Notes, we entered into a capped call transaction (the “2023 Capped Call”), which covers the number of shares of our common stock underlying the 2023 Notes when our common stock share price is trading between the initial conversion price of $ 19.22 and $ 28.84 .

In connection with the partial repurchase of the 2023 Notes, we entered into a capped call termination contract to unwind a proportionate amount of the 2023 Capped Call.

As of March 31, 2021, approximately 4.9 million shares remained outstanding on the 2023 Capped Call.

As of June 30, 2021, approximately 4.9 million shares remained outstanding on the 2023 Capped Call.

The following table sets forth total interest expense recognized in connection with the 2023 Notes:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Contractual interest expense

4 unchanged sentences

The 2026 Notes mature on February 15, 2026, unless earlier purchased, redeemed or converted in accordance with their terms.

The initial conversion rate is 54.0906 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 18.4875 per share of common stock), which equals approximately 12.2 million shares issuable upon conversion, subject to adjustment in certain circumstances.

The initial conversion rate is 54.0906 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 18.4875 per share of common stock), which equals approximately 12.2 million shares of common stock issuable upon conversion, subject to adjustment in certain circumstances.

The 2026 Notes are convertible at the option of the holders on or after November 15, 2025 at any time prior to the close of business on February 12, 2026.

6 unchanged sentences

Subject to the satisfaction of certain conditions, beginning August 15, 2023, we may redeem in whole or in part the 2026 Notes at our option at a cash redemption price equal to the principal amount of the 2026 Notes plus any accrued and unpaid interest.

In order to reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2026 Notes, we entered into capped call transactions (the “2026 Capped Calls”).

The 2026 Capped Calls will cover the number of shares of common stock underlying the 2026 Notes when our common stock is trading within the range of approximately $ 18.49 and $ 26.10 .

To reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2026 Notes, we entered into capped call transactions (the “2026 Capped Calls”).

The 2026 Capped Calls will cover the number of shares of our common stock underlying the 2026 Notes when our common stock share price is trading between the initial conversion price of $ 18.49 and $ 26.10 .

However, should the market price of our common stock exceed the $ 26.10 cap, then the conversion of the 2026 Notes would have a dilutive impact or may require a cash expenditure to the extent the market price exceeds the cap price.

The following table sets forth interest expense recognized related to the 2026 Notes:

Three Months Ended

March 31, 2021

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Contractual interest expense

Amortization of debt issuance costs

Future minimum payments for the 2023 and 2026 Notes as of March 31, 2021 are as follows:

Future minimum payments for the 2023 and 2026 Notes as of June 30, 2021 are as follows:

(In thousands)

5 unchanged sentences

Three Months Ended

Six Months Ended

(In thousands)

Operating lease cost

4 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities is as follows:

Three Months Ended

Six Months Ended

(In thousands)

2 unchanged sentences

Note 9—Commitments and Contingencies

We have various agreements with third parties that would collectively require payment of termination fees if we cancelled work as of March 31, 2021.

Development Milestones and Product Royalties

1 unchanged sentence

These licenses may require milestone payments in connection with clinical development or commercial milestones as well as low single to low double-digit royalties on the net income or net sales of the product.

For the three months ended March 31, 2021 and 2020, development milestone expenses were insignificant.

We do not owe any royalties on OMIDRIA.

Should narsoplimab be approved, we would owe milestone payments to development partners and be obligated to pay low single-digit royalties on net sales of the product.

For the three and six months ended June 30, 2021 and 2020, development milestone expenses were insignificant.

not owe any royalties on OMIDRIA.

Should narsoplimab be approved for HSCT-TMA, we would be obligated to pay low single-digit royalties on net sales of the product.

Note 10—Shareholders’ Deficit

1 unchanged sentence

On March 1, 2021, we entered into a sales agreement to sell shares of our common stock having an aggregate offering price of up to $ 150.0 million, from time to time, through an “at the market” equity offering program.

As of March 31, 2021, we have not sold any shares under this program.

During the three months ended March 31, 2021, a cashless exercise was executed for 43,115 warrants, resulting in the issuance of 24,901 shares of our common stock.

As of March 31, 2021, 200,000 warrants remained outstanding with an exercise price of $ 23.00 per share.

As of June 30, 2021, we have not sold any shares under this program.

In March 2021, a cashless exercise was executed for 43,115 warrants, resulting in the issuance of 24,901 shares of our common stock.

As of June 30, 2021, 200,000 warrants remained outstanding with an exercise price of $ 23.00 per share.

The warrants expire on April 12, 2023.

Amendment of 2017 Omnibus Incentive Compensation Plan (the “Plan”)

At the June 11, 2021 annual meeting, shareholders approved the increase of the number of shares of common stock authorized for issuance under the Plan by 4,000,000 , to bring the total number of shares of common stock authorized to 12,600,000 .

Interim Condensed Consolidated Statements of Shareholders’ Deficit

2 unchanged sentences

Balance January 1, 2021

Exercise of stock options

Exercise of stock options and warrants

At the market offering costs

2 unchanged sentences

Balance March 31, 2021

Exercise of stock options

Stock-based compensation expense

Balance June 30, 2021

(In thousands)

3 unchanged sentences

Balance March 31, 2020

Exercise of stock options

Stock-based compensation expense

Balance June 30, 2020

Note 11—Stock-Based Compensation

Our stock option plans provide for the grant of incentive and non-qualified stock options, restricted stock awards, warrants and other stock awards to employees, non-employee directors and consultants.

In July 2021, annual stock option grants exercisable for a total of approximately 2.1 million shares of common stock were awarded to eligible participants for the 2020 annual performance period.

The options have an exercise price of $ 14.99 per share and vest monthly on a straight-line basis over four years .

Stock-based compensation expense is as follows:

Three Months Ended

Six Months Ended

(In thousands)

4 unchanged sentences

Three Months Ended

March 31, 2021

Six Months Ended

June 30, 2021

Estimated weighted-average fair value

8 unchanged sentences

Balance at December 31, 2020

Balance at March 31, 2021

Vested and expected to vest at March 31, 2021

Exercisable at March 31, 2021

As of March 31, 2021, there were 3.0 million unvested options outstanding that will vest over a weighted-average period of 2.5 years and 3.9 million shares were available to grant.

Balance at June 30, 2021

Vested and expected to vest at June 30, 2021

Exercisable at June 30, 2021

As of June 30, 2021, there were 2.6 million unvested options outstanding that will vest over a weighted-average period of 2.3 years.

The total estimated compensation expense yet to be recognized on outstanding options is $ 20.2 million.

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-Q

Item 1. Financial Statements