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What changed in Opus Genetics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Opus Genetics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+721 added−831 removedSource: 10-K (2024-03-08) vs 10-K (2023-03-30)

Top changes in Opus Genetics, Inc.'s 2023 10-K

721 paragraphs added · 831 removed · 486 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

210 edited+104 added−198 removed181 unchanged
Biggest changeApplicable federal and state healthcare laws and regulations include: • The federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; • The federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • The federal Physician Payments Sunshine Act (part of the ACA), commonly known as the Sunshine Act or Open Payments, requires certain manufacturers of drugs, devices, biologics and medical supplies to disclose certain payments and financial relationships with healthcare providers directly to the Centers for Medicare & Medicaid Services (CMS).
Biggest changeApplicable federal and state healthcare laws and regulations include: • The federal Anti-Kickback Statute, which is a criminal law that prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid.
In-licensed patent applications directed to use of an APE1/REF-1 inhibitor, such as APX3330, in monotherapy or combination therapy to reduce neuronal sensitivity and/or treat other indications are pending in Europe, Japan, and Canada, whereby patents, if granted based on these applications, would expire in year 2038.
Patents, if granted, based on these applications would expire in year 2038. In-licensed patent applications directed to use of an APE1/REF-1 inhibitor, such as APX3330, in monotherapy or combination therapy to reduce neuronal sensitivity and/or treat other indications are pending in Europe, Japan, and Canada, whereby patents, if granted based on these applications, would expire in year 2038.
To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.
To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.
In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.
In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.
Based on published studies, approximately 1 million people have GA in the United States, and 5 million people have GA globally. In people with GA, photoreceptors, which are light sensitive cells, deteriorate in the macula, a central portion of the retina responsible for central vision and color perception. This damage starts as small spots that grow into larger patches.
Based on published studies, approximately 1 million individuals have GA in the United States, and 5 million individuals have GA globally. In people with GA, photoreceptors, which are light sensitive cells, deteriorate in the macula, a central portion of the retina responsible for central vision and color perception. This damage starts as small spots that grow into larger patches.
In addition, as a condition of approval, the FDA may require an applicant to develop a Risk Evaluation and Mitigation Strategies (REMS). REMS uses risk minimization strategies to ensure that the benefits of the product outweigh the potential risks. REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use, or ETASU.
In addition, as a condition of approval, the FDA may require an applicant to develop a Risk Evaluation and Mitigation Strategies (“REMS”). REMS uses risk minimization strategies to ensure that the benefits of the product outweigh the potential risks. REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use, or ETASU.
Additionally, the current treatment paradigm is for physicians to wait and monitor early-stage DR patients, with anti-VEGF or steroid injectable therapy or laser treatment reserved for patients who advance to proliferative DR or DME. In the Protocol S trial by the Diabetic Retinopathy Clinical Research Network, Lucentis was found to be noninferior to laser therapy in patients with PDR.
Additionally, the current treatment paradigm is for physicians to wait and monitor early-stage DR/NPDR patients, with anti-VEGF or steroid injectable therapy or laser treatment reserved for patients who advance to proliferative DR or DME. In the Protocol S trial by the Diabetic Retinopathy Clinical Research Network, Lucentis was found to be noninferior to laser therapy in patients with PDR.
Overview of Eye Disease Market Anterior (Front of the Eye) Segment Disease Market There are approximately 100 million eye dilations in the United States and this number is expected to go up with the increasing aging and diabetic population that requires more frequent eye exams and procedures. Millions of Americans also suffer from various refractive errors.
Anterior (Front of the Eye) Segment Disease Market There are approximately 100 million eye dilations in the United States and this number is expected to go up with the increasing aging and diabetic population that requires more frequent eye exams and procedures. Millions of Americans also suffer from various refractive errors.
The drug is initially introduced into healthy human patients or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage. • Phase 2 .
The drug is initially introduced into healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage. • Phase 2 .
Compared to frequent intravitreal anti-VEGF injections, associated with ocular complications, once or twice a day oral administration of APX3330 could be a convenient, new preventative therapeutic option or adjunctive treatment option for large number of patients with retinal diseases, if approved. • Upstream target implicated in two validated pathways.
Compared to frequent intravitreal anti-VEGF injections, associated with ocular complications, twice a day oral administration of APX3330 could be a convenient, new preventative therapeutic option or adjunctive treatment option for large number of patients with retinal diseases, if approved. • Upstream target implicated in two validated pathways.
An additional 750,000 patients suffer from diabetic macular edema (DME), one of the most common complications of diabetic retinopathy where the macula swells from fluid leaked from damaged blood vessels. The disease progression of both DR and DME involves abnormal vessel proliferation via VEGF signaling and inflammation.
An additional 750,000 patients suffer from diabetic macular edema (“DME”), one of the most common complications of diabetic retinopathy where the macula swells from fluid leaked from damaged blood vessels. The disease progression of both DR and DME involves abnormal vessel proliferation via VEGF signaling and inflammation.
Rather than inhibiting the action of VEGF protein, APX3330 has been shown in preclinical models to inhibit its formation; this is a key potential distinction of APX3330 from the drugs currently approved or under development for DR/DME such as Lucentis and EYLEA.
Rather than inhibiting the action of VEGF protein, APX3330 has been shown in preclinical models to inhibit its formation; this is a key potential distinction of APX3330 from the drugs currently approved or under development for DR such as Lucentis and EYLEA.
Additional Background As background, the patent term is typically 20 years from the date of filing a non-provisional application. In the United States, a patent’s term may be lengthened several ways. First, patent term adjustment (PTA) compensates a patentee for administrative delays by the USPTO in granting a patent.
Additional Patent Term Information As background, the patent term is typically 20 years from the date of filing a non-provisional application. In the United States, a patent’s term may be lengthened several ways. First, patent term adjustment (PTA) compensates a patentee for administrative delays by the USPTO in granting a patent.
There are two major types of DR: • Non-proliferative DR, or NPDR . NPDR is an earlier, more typical stage of DR and can progress into more severe forms of DR over time if untreated and if exposure to elevated blood sugar levels persists. • Proliferative DR, or PDR . PDR is a more advanced stage of DR than NPDR.
There are two major types of DR: • Non-proliferative DR, or NPDR . NPDR is an earlier stage of DR and can progress into more severe forms of DR over time if untreated and if exposure to elevated blood sugar levels persists. • Proliferative DR, or PDR . PDR is a more advanced stage of DR than NPDR.
The FDA’s Decision on an NDA On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter, or a complete response letter (CRL). An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.
The FDA’s Decision on an NDA On the basis of the FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter, or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.
Because inflammation and hypoxic signaling (VEGF production) play crucial roles in both vascular leakage and neovascularization of DR and DME, treatments that impinge upon both pro-inflammatory and hypoxic signaling offer a promising therapeutic strategy.
Because inflammation and hypoxic signaling (VEGF production) play crucial roles in both vascular leakage and neovascularization of DR, treatments that impinge upon both pro-inflammatory and hypoxic signaling offer a promising therapeutic strategy.
Only patent(s) applicable to an approved drug is eligible for the PTE and the application for the extension must be submitted prior to the expiration of the patent and within 60 days from market approval.
Only patent(s) applicable to an approved drug is (are) eligible for the PTE and the application for the extension must be submitted prior to the expiration of the patent and within 60 days from market approval.
This restoration period cannot be longer than 5 years for approval of a drug compound, and the total patent term, including the restoration period, must not exceed 14 years following FDA approval.
This restoration period cannot be longer than 5 years for approval of a drug, and the total patent term, including the restoration period, must not exceed 14 years following FDA approval.
Ocuphire is initially pursuing APX3330 for the DR indication as first-line therapy and may explore opportunities for clinical benefit as adjunctive therapy for other retinal indications such as DME, wAMD, and GA: • DR , the leading cause of vision loss in adults aged 20–74 years, which results from chronic elevations of glucose in the blood that leads to cell damage in the retina.
Ocuphire is initially pursuing APX3330 for the DR indication as first-line therapy and may explore opportunities for clinical benefit as monotherapy or adjunctive therapy for other retinal indications such as DME, wAMD, and GA: • DR , the leading cause of vision loss in adults aged 20–74 years, which results from chronic elevations of glucose in the blood that leads to cell damage in the retina.
APX3330’s potential ability to inhibit the activity of these two transcription factors may mitigate the need for frequent intravitreal anti-VEGF or steroid injections. APX3330 has a dual mechanism that decreases both abnormal angiogenesis and inflammation. APX3330 blocks pathways downstream of Ref-1. Blocking HIF-1α reduces VEGF signaling, and blocking NF-kB modulates VEGF, TNF-α and other inflammatory cytokine production.
APX3330’s potential ability to inhibit the activity of these two transcription factors may mitigate the need for frequent intravitreal anti-VEGF or steroid injections. APX3330 has a dual mechanism that decreases both abnormal angiogenesis and inflammation. APX3330 blocks pathways downstream of Ref-1. Blocking HIF-1α reduces VEGF signaling, and blocking NF-κB modulates VEGF, TNF-α and other inflammatory cytokine production.
In the same patent family, Ocuphire also has 1 pending U.S. patent application with additional claims to methods of improving visual performance using, for example, phentolamine mesylate, whereby a patent, if granted, based on this pending application would expire in year 2034. The patents and patent applications cover uses of the current clinical formulation for the Nyxol product.
In the same patent family, Ocuphire also has 1 pending U.S. patent application with additional claims to methods of improving visual performance using, for example, phentolamine mesylate, whereby a patent, if granted, based on this pending application would expire in year 2034. The patents and patent applications cover uses of the current clinical formulation for the PS product.
Nyxol was previously packaged in a single-use bottle with cap served as the container closure system for Phase 1 and 2 clinical trials. Ocuphire transitioned the container closure system to an industry standard, single-use preservative-free blow-fill-seal (“BFS”) container for Nyxol, which is being formulated and filled by a leading U.S. manufacturer.
PS was previously packaged in a single-use bottle with cap served as the container closure system for Phase 1 and 2 clinical trials. Ocuphire transitioned the container closure system to an industry standard, single-use preservative-free blow-fill-seal (“BFS”) container for PS, which is being formulated and filled by a leading U.S. manufacturer.
Form 10-K Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval inspections (PAIs) may cover all facilities associated with an NDA submission, including drug component manufacturing (such as active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.
Form 10-K Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval inspections (“PAIs”) may cover all facilities associated with an NDA submission, including drug component manufacturing (such as active pharmaceutical ingredients), finished drug product manufacturing, and control testing laboratories.
Orphan Drug Designation and Exclusivity Regulation 141/2000 provides that a drug shall be designated as an orphan drug if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Community when the application is made, or that the product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Community and that without incentives it is unlikely that the marketing of the drug in the European Community would generate sufficient return to justify the necessary investment.
Form 10-K Orphan Drug Designation and Exclusivity Regulation 141/2000 provides that a drug shall be designated as an orphan drug if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Community when the application is made, or that the product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the European Community and that without incentives it is unlikely that the marketing of the drug in the European Community would generate sufficient return to justify the necessary investment.
Pursuant to the Nyxol License Agreement, Ocuphire intends to transfer commercial manufacturing responsibilities for Nyxol to Viatris . Ocuphire does not have any long-term agreements but Ocuphire or its development partners intend to secure such arrangements for drug substances or drug products as appropriate, and currently uses purchase orders with multiple manufacturers.
Pursuant to the Viatris License Agreement, Ocuphire intends to transfer commercial manufacturing responsibilities for PS to Viatris. Ocuphire does not have any long-term agreements but Ocuphire or its development partners intend to secure such arrangements for drug substances or drug products as appropriate, and currently uses purchase orders with multiple manufacturers.
By inhibiting redox activity and not DNA repair, APX3330 has been shown in preclinical studies to reduce angiogenesis and inflammation via modulation of several important proangiogenic and proinflammatory transcription factors such as NF-κB and HIF-1a and its downstream target, VEGF (Vascular Endothelial Growth Factor).
By inhibiting redox activity and not DNA repair, APX3330 has been shown in preclinical studies to reduce angiogenesis and inflammation via modulation of several important proangiogenic and proinflammatory transcription factors such as NF-κB and HIF-1α and its downstream target, VEGF (Vascular Endothelial Growth Factor).
In November 2020, Private Ocuphire completed a reverse merger (the "Merger”) into Rexahn Pharmaceuticals, Inc. (“Rexahn”), a publicly-traded company that had ceased its business of drug development activities, and simultaneously raised $20 million through an offering of common shares and warrants to purchase common shares.
In November 2020, Private Ocuphire completed a reverse merger (the “Merger”) into Rexahn Pharmaceuticals, Inc. (“Rexahn”), a publicly-traded company that had ceased its business of drug development activities, and simultaneously raised $20 million through an offering of common shares and warrants to purchase common shares.
Unlike phentolamine, cholinergic agonists (such as pilocarpine, carbachol and aceclidine) work on the iris sphincter muscle to reduce the pupil diameter, and are associated with side effects given the engagement of the cilliary muscle such as headaches, brow aches and retinal detachments and have limited use in patients with high myopia.
Unlike phentolamine, cholinergic agonists (such as pilocarpine, carbachol and aceclidine) work on the iris sphincter muscle to reduce the pupil diameter, and are associated with side effects given the engagement of the ciliary muscle such as headaches, brow aches and retinal detachments and have limited use in patients with high myopia.
Patent Nos. 9,089,560; 9,789,088 and 11,000,509 contain claims directed to methods of improving visual performance using, for example, phentolamine mesylate and are scheduled to expire in year 2034. Counterpart patents have issued in Australia, Canada, Europe, and Japan, which are scheduled to expire in year 2034.
Patent Nos. 9,089,560; 9,789,088; 11,000,509 and 11,717,510 contain claims directed to methods of improving visual performance using, for example, phentolamine mesylate and are scheduled to expire in year 2034. Counterpart patents have issued in Australia, Canada, Europe, and Japan, which are scheduled to expire in year 2034.
In the same patent family, Ocuphire also has 1 pending U.S. patent application with additional claims to aqueous phentolamine mesylate formulations, whereby a patent, if granted, would expire in year 2034. The patents and patent applications cover the current clinical formulation for the Nyxol product. Ocuphire’s U.S.
In the same patent family, Ocuphire also has 1 pending U.S. patent application with additional claims to aqueous phentolamine mesylate formulations, whereby a patent, if granted, would expire in year 2034. The patents and patent applications cover the current clinical formulation for the PS product. Ocuphire’s U.S.
Manufacturing For Nyxol, APX3330, and for other product candidates that will be developed in the future, Ocuphire’s contract manufacturers are currently producing, and will produce, its bulk drug substances and drug products for use in Ocuphire’s preclinical studies and clinical trials, utilizing reliable and reproducible synthetic processes and common manufacturing techniques.
Manufacturing For APX3330, PS, and for other product candidates that will be developed in the future, Ocuphire’s contract manufacturers are currently producing, and will produce, its bulk drug substances and drug products for use in Ocuphire’s preclinical studies and clinical trials, utilizing reliable and reproducible synthetic processes and common manufacturing techniques.
All lots of drug substance phentolamine mesylate and Nyxol drug product used in clinical trials are manufactured under current good manufacturing practices (cGMP), a quality-system regulating manufacturing, with processes registered by the supplier with FDA in an active Drug Master File (DMF).
All lots of drug substance phentolamine mesylate and PS drug product used in clinical trials are manufactured under current good manufacturing practices (cGMP), a quality-system regulating manufacturing, with processes registered by the supplier with FDA in an active Drug Master File (DMF).
Form 10-K Within this framework, manufacturers may seek approval of hybrid medicinal products under Article 10(3) of Directive 2001/83/EC. Hybrid applications rely, in part, on information and data from a reference product and new data from appropriate pre-clinical tests and clinical trials.
Within this framework, manufacturers may seek approval of hybrid medicinal products under Article 10(3) of Directive 2001/83/EC. Hybrid applications rely, in part, on information and data from a reference product and new data from appropriate pre-clinical tests and clinical trials.
Nyxol eye drops in the BFS container are classified by FDA as a drug-device combination product. The current manufacturing process has been scaled to a commercial capacity. Nyxol has demonstrated stability at 5°C refrigerated for a minimum of two years.
PS eye drops in the BFS container are classified by FDA as a drug-device combination product. The current manufacturing process has been scaled to a commercial capacity. PS has demonstrated stability at 5°C refrigerated for a minimum of two years.
Patents 9,795,560; 10,278,918; 10,772,829 and 11,090,261 and counterpart Australian Canadian, European, and Japanese patents each contain composition of matter claims to aqueous phentolamine mesylate formulations and are scheduled to expire in year 2034.
Patents 9,795,560; 10,278,918; 10,772,829; 11,090,261 and 11,844,858 and counterpart Australian Canadian, European, and Japanese patents each contain composition of matter claims to aqueous phentolamine mesylate formulations and are scheduled to expire in year 2034.
Moreover, as a potential first-in-class, orally administered product candidate twice a day, it has the potential to be a more convenient option at an earlier stage of disease especially for DR than intravitreal anti-VEGF injections, which are burdensome to patients and have a significant side effect profile including cataract formation, increased intraocular pressure, intraocular infections, and retinal detachments.
Moreover, as a potential orally administered product candidate twice a day, it has the potential to be a more convenient option at an earlier stage of disease especially for DR than intravitreal anti-VEGF injections, which are burdensome to patients and have a significant side effect profile including cataract formation, increased intraocular pressure, intraocular infections, and retinal detachments.
Ocuphire believes that it is possible to reach a target 2 mm to 3 mm optimal pupil diameter by relaxing the dilator iris muscle with Nyxol and contracting the iris sphincter muscle with a muscarinic agonist such as a low dose pilocarpine.
Ocuphire believes that it is possible to reach a target 2 mm to 3 mm optimal pupil diameter by relaxing the dilator iris muscle with PS and contracting the iris sphincter muscle with a muscarinic agonist such as a low dose pilocarpine.
Ocuphire currently obtains the active pharmaceutical ingredient for Nyxol from a single supplier in Italy and is presently taking steps to develop a second source, but is working with Viatris to determine the long-term commercial manufacturing strategy.
Ocuphire currently obtains the active pharmaceutical ingredient for PS from a single supplier in Italy and is presently taking steps to develop a second source, but is working with Viatris to determine the long-term commercial manufacturing strategy.
Government Regulation and Product Approvals Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union (EU), extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products.
Form 10-K Government Regulation and Product Approvals Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union (EU), extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products.
Form 10-K Review and Approval of Drug Products in the European Union In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.
Review and Approval of Drug Products in the European Union In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.
Ocuphire’s APX3330 oral tablet recently completed a Phase 2 clinical trial for DR and has the potential to address this large DR and DME market with a novel, dual mechanism of action of inhibiting VEGF and inflammation. In addition, over 1 million patients in the United States suffer from wAMD.
Ocuphire’s APX3330 oral tablet recently completed a Phase 2 clinical trial for DR and has the potential to address this large DR market with a novel, dual mechanism of action of inhibiting VEGF, a modulator of angiogenesis, and inflammation. In addition, over 1 million patients in the United States suffer from wAMD.
As a systemic agent, APX3330 can be expected to treat bilateral binocular (both eyes) retinal vascular disease. • Stable, cost-effective oral tablet. APX3330 is formulated as an oral tablet with favorable stability characteristics, and its active pharmaceutical ingredient is a small molecule with the advantages of standardized, scalable, and lower-cost manufacturing processes.
As a systemic agent, APX3330 can be expected to treat bilateral binocular (both eyes) retinal vascular disease. • Oral tablet with scalable manufacturing process. APX3330 is formulated as an oral tablet with favorable stability characteristics, and its active pharmaceutical ingredient is a small molecule with the advantages of standardized, scalable, and lower-cost manufacturing processes.
Ocuphire is performing additional stability studies on lots of both the drug substance phentolamine mesylate and the drug product of Nyxol in order to establish expiry dating and to support regulatory submissions and commercial manufacturing.
Ocuphire is performing additional stability studies on lots of both the drug substance phentolamine mesylate and the drug product of PS in order to establish expiry dating and to support regulatory submissions and commercial manufacturing.
Ocuphire primarily protects its intellectual property through a combination of patents and patent applications on inventions, trademark protection on Ocuphire’s product name, and trade secret protection as Ocuphire deems appropriate. Ocuphire owns all of the worldwide rights to Nyxol for all indications, but has out-licensed certain rights to Nyxol pursuant to the Nyxol License Agreement.
Ocuphire primarily protects its intellectual property through a combination of patents and patent applications on inventions, trademark protection on Ocuphire’s product name, and trade secret protection as Ocuphire deems appropriate. Ocuphire owns all of the worldwide rights to PS for all indications, but has out-licensed certain rights to PS pursuant to the Viatris License Agreement.
Human Clinical Trials in Support of an NDA Clinical trials involve the administration of the investigational product to human patients under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research patients provide their informed consent in writing before their participation in any clinical trial.
Human Clinical Trials in Support of an NDA Clinical trials involve the administration of the investigational product to human patients or healthy volunteers under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research patients provide their informed consent in writing before their participation in any clinical trial.
The active pharmaceutical ingredient of Nyxol, phentolamine mesylate, is a non-selective alpha-1 and alpha-2 adrenergic antagonist that inhibits activation of the smooth muscle of the iris, reducing pupil diameter.
The active pharmaceutical ingredient of PS, phentolamine mesylate, is a non-selective alpha-1 and alpha-2 adrenergic antagonist that inhibits activation of the smooth muscle of the iris, reducing pupil diameter.
This same patent family includes one in-licensed U.S. patent directed to methods using APX3330 to treat inflammation and pain as part of a combination therapy. U.S. patents that Ocuphire has in-licensed to derivatives of APX3330 include U.S. patents 9,089,605; 9,193,700; 9,877,936; 10,154,973; and 11,160,770. These U.S. patents are schedule to expire from 2029 to 2032.
This same patent family includes one in-licensed U.S. patent directed to methods using APX3330 to treat inflammation and pain as part of a combination therapy. U.S. patents that Ocuphire has in-licensed to derivatives of APX3330 include U.S. patents 9,089,605; 9,193,700; 9,877,936; 10,154,973; 11,160,770; 11,648,226; and 11,723,886. These U.S. patents are schedule to expire from 2029 to 2032.
Form 10-K In the European Union, the advertising and promotion of approved products are subject to EU Member States’ laws governing promotion of medicinal products, interactions with clinicians, misleading and comparative advertising and unfair commercial practices. In addition, other legislation adopted by individual EU Member States may apply to the advertising and promotion of medicinal products.
In the European Union, the advertising and promotion of approved products are subject to EU Member States’ laws governing promotion of medicinal products, interactions with clinicians, misleading and comparative advertising and unfair commercial practices. In addition, other legislation adopted by individual EU Member States may apply to the advertising and promotion of medicinal products.
Furthermore, retinal diseases are initially or over time bilateral, and thus treatments that only treat one eye, leave the other eye to remain untreated. APX3330 Opportunity in DR and DME In addition to being characterized by abnormal increases in VEGF levels, recent scientific literature reports indicate that diabetic eye disease has an inflammatory component, unrelated to VEGF.
Form 10-K Furthermore, retinal diseases are initially or over time bilateral, and thus treatments that only treat one eye, leave the other eye to remain untreated. APX3330 Opportunity in DR In addition to being characterized by abnormal increases in VEGF levels, recent scientific literature reports indicate that diabetic eye disease has an inflammatory component, unrelated to VEGF.
Nyxol, either by directly antagonizing the alpha-1 agonist or by indirectly antagonizing the pupil dilation effect of muscarinic blocking, may expedite the reversal of mydriasis prior to natural reversal.
PS, either by directly antagonizing the alpha-1 agonist or by indirectly antagonizing the pupil dilation effect of muscarinic blocking, may expedite the reversal of mydriasis prior to natural reversal.
Form 10-K In August 2022 Ocuphire completed ZETA-1, a Phase 2b double-masked, randomized, placebo-controlled, multi-center trial in patients with DR and DME, which started in April 2021. 103 DR subjects were enrolled with 90% having NPDR (baseline DRSS of 47 or 53); mean baseline CST was 270 µm.
APX3330 Phase 2b Trial in DR/DME Patients (ZETA-1) (Completed) In August 2022 Ocuphire completed ZETA-1, a Phase 2b double-masked, randomized, placebo-controlled, multi-center trial in patients with DR and DME, which started in April 2021. 103 DR subjects were enrolled with 90% having NPDR (baseline DRSS of 47 or 53); mean baseline CST was 270 µm.
Form 10-K Abbreviated New Drug Applications for Generic Drugs In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized the FDA to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute.
Abbreviated New Drug Applications for Generic Drugs In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized the FDA to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute.
Summary of Nyxol and APX3330 Nyxol (phentolamine 0.75% ophthalmic solution) Nyxol, out-licensed to Viatris in 2022, is a once-daily, sterile, preservative-free eye drop formulation containing phentolamine mesylate, a reversible, non-selective alpha-1 and alpha-2 adrenergic antagonist that acts on the adrenergic nervous system and inhibits contraction of smooth muscle.
PS (phentolamine 0.75% ophthalmic solution) PS, out-licensed to Viatris in 2022, is a once-daily, sterile, preservative-free eye drop formulation containing phentolamine mesylate, a reversible, non-selective alpha-1 and alpha-2 adrenergic antagonist that acts on the adrenergic nervous system and inhibits contraction of smooth muscle.
APX3330’s target of Ref-1 (a protein associated with inflammation and immune response) may leverage this dual mechanism of action (MOA) to reduce the production and hence the quantity of VEGF while also preventing inflammatory damage.
APX3330’s target of Ref-1 (a protein associated with inflammation and immune response) may leverage this dual mechanism of action (or “MOA”) to reduce the production and hence the quantity of VEGF while also preventing inflammatory damage.
Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional 6 months to the term of any patent or regulatory exclusivity, including orphan exclusivity.
Form 10-K Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional 6 months to the term of any patent or regulatory exclusivity, including orphan exclusivity.
Form 10-K APX3330 – Ten Phase 1 and 2 Trials - Eisai (APX CLN 0001-0010) Under the sponsorship of Eisai Co., Ltd., 10 clinical trials were conducted involving healthy volunteers as well as patients with chronic hepatitis diseases (i.e., Type C, B, alcohol-induced) in Japan with the intent of developing a TNF-α blocking agent.
Form 10-K FIGURE 4: ZETA-1 Safety Overview APX3330 – Ten Phase 1 and 2 Trials - Eisai (APX CLN 0001-0010) Under the sponsorship of Eisai Co., Ltd., 10 clinical trials were conducted involving healthy volunteers as well as patients with chronic hepatitis diseases (i.e., Type C, B, alcohol-induced) in Japan with the intent of developing a TNF-α blocking agent.
Product Candidates-APX3330 APX3330 (E3330) is an oral formulation administered twice a day and is designed to target multiple pathways relevant to retinal and choroidal vascular diseases, such as diabetic retinopathy (DR) and diabetic macular edema (DME), which, if left untreated, may progress to permanent visual acuity loss and eventual blindness.
Product Candidates APX3330 APX3330 (E3330) is an oral formulation administered twice a day and is designed to target multiple pathways relevant to retinal and choroidal vascular diseases, such as DR and DME, which, if left untreated, may progress to permanent visual acuity loss and eventual blindness.
Form 10-K Limitations of Existing Treatments for DR and DME In DR (especially NPDR), despite the approvals of anti-VEGF therapeutics in recent years, the use of injectables is not adopted in practice as preferred treatment as the disease is asymptomatic and patients are reluctant to undergo injections or laser therapy.
Limitations of Existing Treatments for DR In DR (especially NPDR), despite the approvals of anti-VEGF therapeutics in recent years, the use of injectables is not adopted in practice as preferred treatment as the disease is asymptomatic and patients are reluctant to undergo injections or laser therapy.
Competition There is intense competition within the pharmaceutical industry. While Ocuphire believes that its product candidates, APX3330 and Nyxol, are well positioned for development in each indication, Ocuphire or its development partners will face competition from both branded and generic pharmaceutical companies as well as products that are currently in development.
Competition There is intense competition within the pharmaceutical industry. While Ocuphire believes that RYZUMVI and its current product candidates, APX3330 and PS, are well-positioned for development in each indication, Ocuphire or its development partners will face competition from both branded and generic pharmaceutical companies as well as products that are currently in development.
If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.
Form 10-K If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.
Clinical Trial Approval in the European Union Requirements for the conduct of clinical trials in the European Union including Good Clinical Practice, or GCP, are set forth in the Clinical Trials Directive 2001/20/EC and the GCP Directive 2005/28/EC.
Form 10-K Clinical Trial Approval in the European Union Requirements for the conduct of clinical trials in the European Union including Good Clinical Practice, or GCP, are set forth in the Clinical Trials Directive 2001/20/EC and the GCP Directive 2005/28/EC.
A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived.
Form 10-K A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived.
Procedures Governing Approval of Drug Products in the European Union Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through national legislation of the member states.
Form 10-K Procedures Governing Approval of Drug Products in the European Union Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through national legislation of the member states.
(“Private Ocuphire”) was founded and subsequently merged in April 2018 with Ocularis Pharma, LLC, (the original innovator of phentolamine mesylate ophthalmic solution to treat DLD), and in January 2020 obtained from Apexian Pharmaceuticals, Inc. certain rights to its Ref-1inhibitor program, including APX3330 (see “Apexian Sublicense Agreement”).
(prior to the Merger with Rexahn, “Private Ocuphire”) was founded and subsequently merged in April 2018 with Ocularis Pharma, LLC, (the original innovator of phentolamine mesylate ophthalmic solution), and in January 2020 obtained from Apexian Pharmaceuticals, Inc. certain rights to its Ref-1inhibitor program, including APX3330 (see “Apexian Sublicense Agreement”).
APX3330’s Target Indications Diabetic Retinopathy (APX3330) Diabetic Retinopathy Overview Diabetic Retinopathy (“DR”) is an eye disease resulting from diabetes, affecting over 7 million patients in the U.S., in which chronically elevated blood sugar levels cause damage to blood vessels in the retina. It is the leading cause of vision loss in adults aged 20–74 years.
APX3330’s Target Indications Diabetic Retinopathy Diabetic Retinopathy Overview DR is an eye disease resulting from diabetes, affecting over 10 million patients in the U.S., in which chronically elevated blood sugar levels cause damage to blood vessels in the retina. It is the leading cause of vision loss in adults aged 20–74 years.
Further, to enter the wAMD injectable market, Ocuphire is considering the utility of an intravitreal or sustained delivery formulation of APX3330 and its second-generation analogs, APX2009 and APX2014. APX2009 and APX2014 data suggest improved efficacy against the Ref-1 target compared to APX3330 (as published in the Journal of Pharmacology and Experimental Therapeutics). 16 Table of Contents Ocuphire Pharma, Inc.
Further, to enter the wAMD injectable market, Ocuphire is considering the utility of an intravitreal or sustained delivery formulation of APX3330 and its second-generation analogs, APX2009 and APX2014. APX2009 and APX2014 data suggest improved efficacy against the Ref-1 target compared to APX3330 (as published in the Journal of Pharmacology and Experimental Therapeutics).
Form 10-K Retinal (Back of the Eye) Disease Market Retinal damage is one of the leading causes of blindness and continues to grow with aging and larger diabetic populations around the world. Diabetes is the leading cause of blindness among adults aged 20 – 74.
Overview of Eye Disease Market Retinal (Back of the Eye) Disease Market Retinal damage is one of the leading causes of blindness and continues to grow with aging and larger diabetic populations around the world. Diabetes is the leading cause of blindness among adults aged 20 – 74.
Currently, the United States Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act (the “ACA”) is the seminal legislation that has had, and continues to have, the most substantial impact on the healthcare industry.
Currently, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”) is the seminal legislation that has had, and continues to have, substantial impact on the healthcare industry.
Form 10-K A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.
A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.
Even if a compound is considered to be a new chemical entity and the sponsor is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company can complete a full MAA with a complete database of pharmaceutical test, preclinical tests and clinical trials and obtain marketing approval of its product.
Even if a compound is considered to be a new chemical entity and the sponsor is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company can complete a full MAA with a complete database of pharmaceutical test, preclinical tests and clinical trials and obtain marketing approval of its product. 37 Table of Contents Ocuphire Pharma, Inc.
According to the National Eye Institute, in the United States alone, over 7 million patients suffer from diabetic retinopathy (DR), a complication of diabetes in which chronically elevated blood sugar levels cause damage to blood vessels in the retina.
According to the National Eye Institute, in the United States alone, over 10 million patients suffer from DR, a complication of diabetes in which chronically elevated blood sugar levels cause damage to blood vessels in the retina.
Form 10-K Data and Market Exclusivity in the European Union In the European Union, new chemical entities qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity.
Data and Market Exclusivity in the European Union In the European Union, new chemical entities qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity.
Excessive activation of the complement cascade results in destruction of healthy cells, which can lead to the onset or progression of many diseases including GA. SYFOVRE® is the only FDA approved treatment for GA and requires monthly or every other month intravitreal injections.
Excessive activation of the complement cascade results in destruction of healthy cells, which can lead to the onset or progression of many diseases including GA. SYFOVRE ® and IZERVAY ® are the only FDA approved treatments for GA and requires monthly or every other month intravitreal injections.
While the timing and scope of any potential future legislation to repeal and replace ACA provisions is highly uncertain in many respects, it is also possible that some of the ACA provisions that generally are not favorable for the research-based pharmaceutical sector could also be repealed along with ACA coverage expansion provisions.
While the timing and scope of any potential future legislation to repeal and replace ACA provisions is highly uncertain in many respects, it is also possible that some of the ACA provisions that generally are not favorable for the research-based pharmaceutical sector could also be repealed along with ACA coverage expansion provisions. 39 Table of Contents Ocuphire Pharma, Inc.
If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the ANDA or 505(b)(2) application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the applicant is not seeking approval).
If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the ANDA or 505(b)(2) application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the applicant is not seeking approval). 33 Table of Contents Ocuphire Pharma, Inc.
Where the reference product was authorized via the decentralized procedure, a hybrid application may be accepted for consideration under the centralized procedure if the applicant shows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation, or the granting of a community authorization for the medicinal product is in the interest of patients at the community level.
Where the reference product was authorized via the decentralized procedure, a hybrid application may be accepted for consideration under the centralized procedure if the applicant shows that the medicinal product constitutes a significant therapeutic, scientific or technical innovation, or the granting of a community authorization for the medicinal product is in the interest of patients at the community level. 36 Table of Contents Ocuphire Pharma, Inc.
Healthcare Laws and Regulations There are other healthcare-related laws and regulations that extensively govern how pharmaceutical companies, like Ocuphire, are operated and regulate activities related to pharmaceutical products. These laws and regulations may require administrative guidance to implement.
Healthcare Frauds & Abuse and Compliance Laws and Regulations There are other healthcare-related fraud and abuse and compliance laws and regulations that extensively govern how pharmaceutical companies, like Ocuphire, are operated and regulate activities related to pharmaceutical products. These laws and regulations may require administrative guidance to implement.
If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision is binding on all member states. 55 Table of Contents Ocuphire Pharma, Inc.
If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision is binding on all member states.
As part of the pre-commercialization planning, Ocuphire has started market development activities which include engaging with Key Opinion Leaders as well as increased visibility and presence at retina, ophthalmology and optometry medical and industry conferences.
As part of the pre-commercialization planning, Ocuphire has started market development activities, which include engaging with key opinion leaders as well as increased visibility and presence at retina, ophthalmology and optometry medical and industry conferences. 21 Table of Contents Ocuphire Pharma, Inc.
Companies usually must complete some long-term preclinical testing, such as 6-month or longer toxicology studies, and must also develop additional information about the chemistry and physical characteristics of the investigational product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Companies usually must complete some long-term preclinical testing, such as long-term repeat-dose toxicology studies, and must also develop additional information about the chemistry and physical characteristics of the investigational product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeForm 10-K • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more attractive than ours; • a collaborator with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing or distribution of any such product candidate; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between us and collaborators that result in the delay or termination of research, development, or commercialization of our product candidates, or in litigation or arbitration that diverts management attention and resources; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborations may be terminated and such terminations may create a need for additional capital to pursue further development or commercialization of the applicable product candidates; • collaborators may learn about our discoveries and use this knowledge to compete with us in the future; • the results of collaborators’ preclinical or clinical studies could harm or impair other development programs; • there may be conflicts between different collaborators that could negatively affect those collaborations and potentially others; • the number and nature of our collaborations could adversely affect our attractiveness to potential future collaborators or acquirers; • collaboration agreements may not lead to development or commercialization of our product candidate in the most efficient manner or at all.
Biggest changeCollaborations involving product candidates pose the following risks to us: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more attractive than ours; • a collaborator with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing or distribution of any such product candidate; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to litigation; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between us and collaborators that result in the delay or termination of research, development, or commercialization of our product candidates, or in litigation or arbitration that diverts management attention and resources; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborations may be terminated and such terminations may create a need for additional capital to pursue further development or commercialization of the applicable product candidates; 69 Table of Contents Ocuphire Pharma, Inc.
Depending upon the timing, duration of regulatory review, and date of FDA marketing approval of our APX3330 or other product candidates, if any, one of such U.S. patents may be eligible for patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
Depending upon the timing, duration of regulatory review, and date of FDA marketing approval of our or other product candidates, if any, one of such U.S. patents may be eligible for patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
Once an NDA is approved, the product covered thereby becomes a “reference listed drug” in the FDA’s publication, “ Approved Drug Products with Therapeutic Equivalence Evaluations .” Manufacturers may seek approval of generic versions of reference listed drugs through submission of abbreviated new drug applications (“ANDAs”) in the United States.
Once an NDA is approved, the product covered thereby becomes a “reference listed drug” in the FDA’s publication, “Approved Drug Products with Therapeutic Equivalence Evaluations.” Manufacturers may seek approval of generic versions of reference listed drugs through submission of abbreviated new drug applications (“ANDAs”) in the United States.
The market price of our common stock may fluctuate significantly in response to factors, some of which are beyond our control, such as: • the announcement of new products or product enhancements by us or our competitors; • changes in our relationships with our licensors or other strategic partners; • developments concerning intellectual property rights and regulatory approvals; • variations in ours and our competitors’ results of operations; • substantial sales of shares of our common stock due to the release of lock-up agreements; • the announcement of clinical trial results; • the announcement of potentially dilutive financings; • changes in earnings estimates or recommendations by securities analysts; 102 Table of Contents Ocuphire Pharma, Inc.
The market price of our common stock may fluctuate significantly in response to factors, some of which are beyond our control, such as: • the announcement of new products or product enhancements by us or our competitors; • changes in our relationships with our licensors or other strategic partners; • developments concerning intellectual property rights and regulatory approvals; • variations in ours and our competitors’ results of operations; • substantial sales of shares of our common stock due to the release of lock-up agreements; • the announcement of clinical trial results; • the announcement of potentially dilutive financings; • changes in earnings estimates or recommendations by securities analysts; 82 Table of Contents Ocuphire Pharma, Inc.
A general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity.
Furthermore, a general slowdown in the global economy, including a recession, or in a particular region or industry, an increase in trade tensions with U.S. trading partners, inflation or a tightening of the credit markets could negatively impact our business, financial condition and liquidity.
If the FDA or a comparable foreign regulatory authority approves generic versions of our product candidates that receive marketing approval, or if such authorities do not grant our product candidates appropriate periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected.
If the FDA or a comparable foreign regulatory authority approves generic versions of RYZUMVI or our product candidates that receive marketing approval, or if such authorities do not grant our product candidates appropriate periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected.
If there is any delay or problem with the manufacture of these drug substances or if there is a delay in producing finished drug product from these drug substances, the development and possible approval of our product candidates and potential commercial launch may be delayed or otherwise adversely affected.
If there is any delay or problem with the manufacture of these drug substances or if there is a delay in producing finished drug product from these drug substances, the development and PS, the possible approval of our product candidates and potential commercial launch may be delayed or otherwise adversely affected.
These risks and difficulties include challenges in accurate financial planning as a result of: (a) accumulated losses; (b) uncertainties resulting from a relatively limited time period in which to develop and evaluate business strategies as compared to companies with longer operating histories; (c) compliance with regulations required to commence sales on future products; (d) reliance on third parties for clinical, manufacturing, analytical laboratory work, preclinical, regulatory, commercialization or other activities; (e) financing the business; and (f) meeting the challenges of the other risk factors described herein.
These risks and difficulties include challenges in accurate financial planning as a result of: (a) accumulated losses; (b) uncertainties resulting from a relatively limited time period in which to develop and evaluate business strategies as compared to companies with longer operating histories; (c) compliance with regulations required to commence sales on future products; (d) reliance on third parties for clinical, manufacturing, analytical laboratory work, nonclinical, regulatory, commercialization or other activities; (e) financing the business; and (f) meeting the challenges of the other risk factors described herein.
Because both Nyxol and APX3330 have been tested in relatively small patient populations, at a limited range of daily doses up to 0.75% Phentolamine Ophthalmic Solution (which is the same as 1.0% Phentolamine Mesylate Ophthalmic Solution) and up to 720 mg respectively, and for limited durations to date, it is possible that our clinical trials have or will indicate an apparent positive effect of Nyxol or APX3330 that is greater than the actual positive effect, if any, or that additional and unforeseen side effects may be observed as its development progresses.
Because both APX3330 and PS have been tested in relatively small patient populations, at a limited range of daily doses up to 720 mg and up to 0.75% Phentolamine Ophthalmic Solution (which is the same as 1.0% Phentolamine Mesylate Ophthalmic Solution) respectively, and for limited durations to date, it is possible that our clinical trials have or will indicate an apparent positive effect of APX3330 or PS that is greater than the actual positive effect, if any, or that additional and unforeseen side effects may be observed as its development progresses.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative penalties, damages, fines, exclusion from government funded healthcare programs such as Medicare and Medicaid, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations. 76 Table of Contents Ocuphire Pharma, Inc.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative penalties, damages, fines, exclusion from government funded healthcare programs such as Medicare and Medicaid, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations. 59 Table of Contents Ocuphire Pharma, Inc.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.
Furthermore, obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements.
While we do not have any material obligations under the license agreement between Eisai and Apexian, Apexian has certain confidentiality and payment obligations that, if not met, could result in breach of the Eisai license agreement.
While we do not have any material obligations under the license agreement between Eisai and Apexian, Apexian has certain confidentiality and payment obligations that, if not met, could result in breach of the Eisai license agreements.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; 98 Table of Contents Ocuphire Pharma, Inc.
Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; 77 Table of Contents Ocuphire Pharma, Inc.
Many of our competitors have significantly greater name recognition, financial resources, and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.
Many of our competitors have significantly greater name recognition, financial resources, and expertise in research and development, manufacturing, nonclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.
Competition that our product candidates would face from generic versions could materially and adversely impact our future revenue, profitability, and cash flows and substantially limit our ability to obtain a return on the investments we have made in any such product candidate. 82 Table of Contents Ocuphire Pharma, Inc.
Competition that our product candidates would face from generic versions could materially and adversely impact our future revenue, profitability, and cash flows and substantially limit our ability to obtain a return on the investments we have made in any such product candidate. 63 Table of Contents Ocuphire Pharma, Inc.
Further, Ocuphire’s product candidates may not be approved even if they achieve their respective primary endpoints in additional Phase 3 registration trials. The FDA or non-U.S. regulatory authorities may disagree with our trial designs or our interpretation of data from preclinical studies and clinical trials.
Further, Ocuphire’s product candidates may not be approved even if they achieve their respective primary endpoints in additional Phase 3 registration trials. The FDA or non-U.S. regulatory authorities may disagree with our trial designs or our interpretation of data from nonclinical studies and clinical trials.
In the future, we may plan to seek patent term extension for one or more of our patents related to our APX3330 or other product candidates. However, we may not be granted an extension because of, for example, failing to apply within the applicable deadline, expiration of relevant patents prior to obtaining approval, or otherwise failing to satisfy applicable requirements.
In the future, we may plan to seek patent term extension for one or more of our patents related to our RYZUMVI or other product candidates. However, we may not be granted an extension because of, for example, failing to apply within the applicable deadline, expiration of relevant patents prior to obtaining approval, or otherwise failing to satisfy applicable requirements.
Our future commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, third-party payors, and others in the medical community. Even if our product candidates receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors, or others in the medical community.
Our future commercial success depends upon attaining significant market acceptance of RYZUMVI and our product candidates, if approved, among physicians, patients, third-party payors, and others in the medical community. RYZUMVI and our product candidates, even if they do receive marketing approval, may nonetheless fail to gain sufficient market acceptance by physicians, patients, healthcare payors, or others in the medical community.
Many of our competitors for such promising product candidates may have significantly greater financial resources and more extensive experience in preclinical testing and clinical trials, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products, and thus, may be a more attractive option to a potential licensor than us.
Many of our competitors for such promising product candidates may have significantly greater financial resources and more extensive experience in nonclinical testing and clinical trials, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products, and thus, may be a more attractive option to a potential licensor than us.
A termination of a future license could result in our loss of the right to use the licensed intellectual property, which could adversely affect our ability to develop and commercialize a future product candidate, if approved, as well as harm our competitive business position and our business prospects. 66 Table of Contents Ocuphire Pharma, Inc.
A termination of a future license could result in our loss of the right to use the licensed intellectual property, which could adversely affect our ability to develop and commercialize a future product candidate, if approved, as well as harm our competitive business position and our business prospects. 50 Table of Contents Ocuphire Pharma, Inc.
The rights granted under the Apexian Sublicense Agreement are subject to various milestone payment, royalty, insurance or other obligations on us, and may be revocable under certain circumstances including if we cease to do business, fail to make the payments due thereunder, commit a material breach of the agreement that is not cured within a certain time period after receiving written notice or fail to meet certain specified development and commercial timelines.
The rights granted under sublicense agreements, such as the Apexian Sublicense Agreement, are and may be subject to various milestone payment, royalty, insurance or other obligations on us, and may be revocable under certain circumstances including if we cease to do business, fail to make the payments due thereunder, commit a material breach of the agreement that is not cured within a certain time period after receiving written notice or fail to meet certain specified development and commercial timelines.
We rely completely on third parties to supply and manufacture bulk drug substances and to formulate and package preclinical and clinical drug supplies of our product candidates as well as to conduct analytical testing of drug substances and products in the manufacturing processes and intend to rely on third parties to produce and test commercial supplies of our current and any future product candidates.
We rely completely on third parties to supply and manufacture bulk drug substances and to formulate and package nonclinical and clinical drug supplies of our product candidates as well as to conduct analytical testing of drug substances and products in the manufacturing processes and we intend to rely on third parties to produce and test commercial supplies of our current and any future product candidates.
We do not currently have, nor do we plan to acquire, the infrastructure or capability to internally manufacture our clinical drug supply of product candidates for use in the conduct of our preclinical studies and clinical trials. We lack the internal resources and the capability to manufacture any product candidates on a clinical or commercial scale.
We do not currently have, nor do we plan to acquire, the infrastructure or capability to internally manufacture our clinical drug supply of product candidates for use in the conduct of our nonclinical studies and clinical trials. We lack the internal resources and the capability to manufacture any product candidates on a clinical or commercial scale.
We are given an opportunity to respond to those rejections, but may not be able to overcome such rejections. In addition, the USPTO and comparable agencies in many foreign jurisdictions allow third parties opportunities to oppose pending trademark applications and to seek to cancel registered trademarks.
We are given an opportunity to respond to those rejections, but may not be able to overcome such rejections. In addition, the SPTO and comparable agencies in many foreign jurisdictions allow third parties opportunities to oppose pending trademark applications and to seek to cancel registered trademarks.
Defending against any such actions can be costly, time-consuming, and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. 75 Table of Contents Ocuphire Pharma, Inc.
Defending against any such actions can be costly, time-consuming, and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. 58 Table of Contents Ocuphire Pharma, Inc.
However, we cannot assure you that we will be able to obtain regulatory approval of our product candidates for any indication, or successfully commercialize our product candidates, if approved. If we do not receive regulatory approval for, or successfully commercialize, our product candidates for one or more of our targeted or other indications, our commercial opportunity will be limited.
However, we cannot assure you that we will be able to obtain regulatory approval of our product candidates for any other indication, or successfully commercialize our product candidates, following approval. If we do not receive regulatory approval for, or successfully commercialize, our product candidates for one or more of our targeted or other indications, our commercial opportunity will be limited.
If we cannot successfully defend ourselves against claims that our product candidate caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in: 83 Table of Contents Ocuphire Pharma, Inc.
If we cannot successfully defend ourselves against claims that our product candidate caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in: 64 Table of Contents Ocuphire Pharma, Inc.
It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may be ineffective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity, including employee compliance training, may be ineffective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.
Given the extensive period of time between patent filing and regulatory approval for a product candidate, the time during which we can market a product candidate under patent protection is limited, and our patent may expire before we obtain such approval.
Given the extensive period of time between patent filing and regulatory approval for a product candidate, the time during which we can market a product candidate under patent protection is listed, and our patent may expire before we obtain such approval.
Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical studies and clinical trials nonetheless have failed to obtain FDA approval.
Moreover, nonclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in nonclinical studies and clinical trials nonetheless have failed to obtain FDA approval.
We do not have total control over the preparation, filing, prosecution and maintenance of patents and patent applications covering the technology that we license under the Apexian Sublicense Agreement. Under the Sublicense Agreement, Indiana University Research and Technology Corp.
We do not have total control over the preparation, filing, prosecution and maintenance of patents and patent applications covering the technology that we license under sublicense agreements, including the Apexian Sublicense Agreement. Under the Sublicense Agreement, Indiana University Research and Technology Corp.
These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical trials, including previously unreported adverse events (“AEs”).
These setbacks have been caused by, among other things, nonclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical trials, including previously unreported adverse events (“AEs”).
We will rely on comparison of product specifications (identity, strength, quality, and potency) to demonstrate equivalence of the current drug substance and/or drug product to the drug substance and/or drug product used in previously completed preclinical and clinical testing.
We will rely on comparison of product specifications (identity, strength, quality, and potency) to demonstrate equivalence of the current drug substance and/or drug product to the drug substance and/or drug product used in previously completed nonclinical and clinical testing.
In addition, if we receive marketing approval for our product candidates and we or others later discover that they are less effective, or identify undesirable side effects caused by our product candidates: • regulatory authorities may withdraw their approval of the product; • we may be required to recall the product, change the way this product is administered, conduct additional clinical trials, or change the labeling or distribution of the product (including REMS); • additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product; • we may be subject to fines, injunctions, or the imposition of civil or criminal penalties; • we could be sued and held liable for harm caused to patients; • the product may be rendered less competitive and sales may decrease; or • our reputation may suffer generally among both clinicians and patients. 65 Table of Contents Ocuphire Pharma, Inc.
In addition, if we receive marketing approval for our product candidates and we or others later: • discover that they are less effective, or identify undesirable side effects caused by our product candidates: • regulatory authorities may withdraw their approval of the product; • we may be required to recall the product, change the way this product is administered, conduct additional clinical trials, or change the labeling or distribution of the product (including REMS); • additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the product; • we may be subject to fines, injunctions, or the imposition of civil or criminal penalties; • we could be sued and held liable for harm caused to patients; • the product may be rendered less competitive and sales may decrease; or • our reputation may suffer generally among both clinicians and patients.
Form 10-K If we raise funds through strategic collaborations or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
If we raise funds through strategic collaborations or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
Form 10-K If future collaboration partners fail to develop or effectively commercialize product candidates for any of these reasons, such product candidates may not be approved for sale and our sales of such product candidates, if approved, may be limited, which would have an adverse effect on our operating results and financial condition.
If future collaboration partners fail to develop or effectively commercialize product candidates for any of these reasons, such product candidates may not be approved for sale and our sales of such product candidates, if approved, may be limited, which would have an adverse effect on our operating results and financial condition.
Termination of the Apexian Sublicense Agreement may result in us having to negotiate a new or reinstated agreement, which may not be available to us on equally favorable terms, or at all, which may mean we are unable to develop or commercialize APX3330 and second-generation assets.
Termination of sublicense agreements, such as the Apexian Sublicense Agreement, may result in us having to negotiate a new or reinstated agreement, which may not be available to us on equally favorable terms, or at all, which may mean we are unable to develop or commercialize APX3330 and second-generation assets.
The collaboration with Viatris may not be successful due to several factors, including the following: • Viatris may not be able to obtain from us or manufacture our products in a timely or cost-effective manner; • Viatris may not timely perform its obligations under the Nyxol License Agreement; • Viatris may fail to effectively commercialize our products; • Viatris may not be able to sublicense Nyxol to one or more suitable parties outside the United States; or • Contractual disputes or other disagreements between us and Viatris , including those regarding the development, manufacture, sub licensure and commercialization of our products, interpretation of the Nyxol License Agreement, and ownership of proprietary rights.
The collaboration with Viatris may not be successful due to several factors, including the following: • Viatris may not be able to manufacture our products in a timely or cost-effective manner; • Viatris may not timely perform its obligations under the Viatris License Agreement; • Viatris may fail to effectively commercialize our products; • Viatris may not be able to sublicense RYZUMVI or PS to one or more suitable parties outside the United States; or • Contractual disputes or other disagreements between us and Viatris, including those regarding the development, manufacture, sub licensure and commercialization of our products, interpretation of the License Agreement, and ownership of proprietary rights.
There have been judicial and congressional challenges and amendments to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future, as well as efforts to repeal and replace it. In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
Form 10-K There have been judicial and congressional challenges and amendments to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future, as well as efforts to repeal and replace it. In addition, other legislative changes have been proposed and adopted since the ACA was enacted.
If we or our third-party manufacturers fail to comply with environmental or health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have an adverse effect on the success of our business.
Form 10-K If we or our third-party manufacturers fail to comply with environmental or health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have an adverse effect on the success of our business.
Form 10-K Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates. In 2011, the United States enacted wide-ranging patent reform legislation with the America Invents Act (“AIA”).
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates. In 2011, the United States enacted wide-ranging patent reform legislation with the America Invents Act (“AIA”).
While the Apexian Sublicense Agreement provides that Apexian must cooperate with us to remedy and cure Apexian’s breach of the license agreement with IURTC in order to prevent the termination of such license agreement, we cannot guarantee that such efforts will be successful in preventing the termination of the license agreement between Apexian and IURTC.
Form 10-K While the Apexian Sublicense Agreement provides that Apexian must cooperate with us to remedy and cure Apexian’s breach of the license agreement with IURTC in order to prevent the termination of such license agreement, we cannot guarantee that such efforts will be successful in preventing the termination of the license agreement between Apexian and IURTC.
Our employees or representatives may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements or engaging in insider trading, which could significantly harm our business. We are exposed to the risk of employee fraud or other misconduct.
Our employees or representatives may engage in misconduct or other improper activities, including violating applicable regulatory standards and requirements, which could significantly harm our business. We are exposed to the risk of employee fraud or other misconduct.
If we do not obtain protection under the Hatch-Waxman Act and similar foreign legislation by extending the patent terms and obtaining data exclusivity for our product candidate, our business may be materially harmed.
Form 10-K If we do not obtain protection under the Hatch-Waxman Act and similar foreign legislation by extending the patent terms and obtaining data exclusivity for our product candidate, our business may be materially harmed.
Form 10-K We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming, and unsuccessful. Competitors may infringe on our patents, the patents of our licensing partners, or other intellectual property rights.
We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time consuming, and unsuccessful. Competitors may infringe on our patents, the patents of our licensing partners, or other intellectual property rights.
Form 10-K • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our product candidates; • any of our pending patent applications will result in issued patents; • we will be able to successfully commercialize our product candidates, if approved, before our relevant patents expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe our patents; • any of our patents will be valid and enforceable; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
Form 10-K The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our product candidates; • any of our pending patent applications will result in issued patents; • we will be able to successfully commercialize our product candidates, if approved, before our relevant patents expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe our patents; • any of our patents will be valid and enforceable; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or product candidates that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
We have entered into the Nyxol License Agreement, and may form or seek additional strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to product candidates.
We have entered into and may form or seek additional strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to product candidates (such as the Viatris License Agreement).
Form 10-K Even if we obtain marketing approval for our product candidates, such product candidates could be subject to post-marketing, obligations, restrictions or withdrawal from the market, and we may be subject to substantial penalties if we fail to comply with regulatory requirements or experience unanticipated problems with a product following approval.
Even if we obtain further marketing approval for our product candidates, such product candidates could be subject to post-marketing, obligations, restrictions or withdrawal from the market, and we may be subject to substantial penalties if we fail to comply with regulatory requirements or experience unanticipated problems with a product following approval.
Furthermore, all of our contract manufacturers and analytical labs are engaged with other companies to supply and/or manufacture and/or test materials or products for such companies, which exposes our manufacturers to regulatory and sourcing risks for the production of such materials and products. To the extent practicable, our attempts to identify more than one supplier.
Furthermore, all of our contract manufacturers and analytical labs are engaged with other companies to supply and/or manufacture and/or test materials or products for such companies, which exposes our manufacturers to regulatory and sourcing risks for the production of such materials and products. To the extent practicable, we have attempted to identify more than one supplier.
Changes in regulatory requirements or FDA guidance, or unanticipated events during our clinical trials, may result in changes to clinical trial protocols or additional clinical trial requirements, which could result in increased costs to us or delays in development timelines.
Form 10-K Changes in regulatory requirements or FDA guidance, or unanticipated events during our clinical trials, may result in changes to clinical trial protocols or additional clinical trial requirements, which could result in increased costs to us or delays in development timelines.
Although we have a right to have our comments considered in connection with, and have agreed to bear the costs of, the prosecution and maintenance of the licensed patents, if IURTC fails to prosecute and maintain such patents, or loses rights to those patents or patent applications as a result of its control of the prosecution activities, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our product candidates that are the subject of such licensed rights could be adversely affected. 97 Table of Contents Ocuphire Pharma, Inc.
Although we have a right to have our comments considered in connection with, and have agreed to bear the costs of, the prosecution and maintenance of the licensed patents, if IURTC fails to prosecute and maintain such patents, or loses rights to those patents or patent applications as a result of its control of the prosecution activities, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our product candidates that are the subject of such licensed rights could be adversely affected.
For instance, we presently rely on one supplier in Italy for the drug substance for Nyxol, and one manufacturer in India for APX3330 drug substance.
For instance, we presently rely on one supplier in Italy for the drug substance for PS, and one manufacturer in India for APX3330 drug substance.
Form 10-K Healthcare providers and third-party payors will play a primary role in the recommendation and prescription of any product candidate for which we obtain marketing approval.
Healthcare providers and third-party payors will play a primary role in the recommendation and prescription of any product candidate for which we obtain marketing approval.
Form 10-K Our competitors may develop products that are more effective, safer, more convenient, or less costly than any that we are developing, or that would render our product candidates obsolete or non-competitive.
Our competitors may develop products that are more effective, safer, more convenient, or less costly than any that we are developing, or that would render our product candidates obsolete or non-competitive.
Form 10-K • the amount of revenue, if any, from commercial sales, should our product candidates receive marketing approval; • the costs associated with commercializing our product candidates, if we receive marketing approval, including the cost and timing of developing sales and marketing capabilities or entering into strategic collaborations to market and sell our product candidates; • the cost of manufacturing our product candidates or products we successfully commercialize; and • the costs associated with general corporate activities, such as the cost of filing, prosecuting and enforcing patent claims and making regulatory filings.
Form 10-K • the costs associated with commercializing our product candidates, if we receive marketing approval, including the cost and timing of developing sales and marketing capabilities or entering into strategic collaborations to market and sell our product candidates; • the cost of manufacturing our product candidates or products we successfully commercialize; and • the costs associated with general corporate activities, such as the cost of filing, prosecuting and enforcing patent claims and making regulatory filings.
Form 10-K Before obtaining regulatory approvals for the commercial sale of any product candidate for any target indication, we must demonstrate with substantial evidence gathered in preclinical studies and adequate and well-controlled clinical studies, and, with respect to approval in the United States, to the satisfaction of the FDA, that the product candidate is safe and effective for use for that target indication.
Before obtaining regulatory approvals for the commercial sale of any product candidate for any target indication, we must demonstrate with substantial evidence gathered in nonclinical studies and adequate and well-controlled clinical studies, and, with respect to approval in the United States, to the satisfaction of the FDA, that the product candidate is safe and effective for use for that target indication.
The discovery that either Nyxol (alone or with adjunctive LDP) or APX3330 lacks sufficient efficacy, or that they cause undesirable side effects (including side effects not previously identified in our completed clinical trials), could cause us or regulatory authorities to interrupt, delay, or discontinue clinical trials, and could result in the denial of regulatory approval by the FDA or other non-U.S. regulatory authorities for any or all targeted indications.
The discovery that either APX3330 or PS lacks sufficient efficacy, or that they cause undesirable side effects (including side effects not previously identified in our completed clinical trials), could cause us or regulatory authorities to interrupt, delay, or discontinue clinical trials, and could result in the denial of regulatory approval by the FDA or other non-U.S. regulatory authorities for any or all targeted indications.
While our reliance on these third parties for research and development activities will reduce our control over these activities, it will not relieve us of our responsibilities and requirements.
Form 10-K While our reliance on these third parties for research and development activities will reduce our control over these activities, it will not relieve us of our responsibilities and requirements.
Form 10-K If we register any of our trademarks, our trademarks or trade names may be challenged, infringed, circumvented, declared generic, or determined to infringe on other marks.
If we register any of our trademarks, our trademarks or trade names may be challenged, infringed, circumvented, declared generic, or determined to infringe on other marks.
If we experience delays completing, or if we terminate, any Phase 2 or Phase 3 trials, or if we are required to conduct additional clinical trials, the commercial prospects for our product candidates may be harmed and our ability to generate product revenues will be delayed.
If we experience delays completing, or if we terminate, any trials, or if we are required to conduct additional clinical trials, the commercial prospects for our product candidates may be harmed and our ability to generate product revenues may be delayed.
Furthermore, any unplanned event, such as flood, fire, explosion, tornadoes, earthquake, extreme weather condition, medical epidemics, power shortage, telecommunications failure, other natural or manmade accidents or incidents, or pandemics, that result in us being unable to fully utilize the facilities, may have an adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on its financial and operating conditions.
Furthermore, any unplanned event, such as flood, fire, explosion, tornadoes, earthquake, extreme weather condition, medical epidemics, power shortage, telecommunications failure, cybersecurity incidents, network security breaches, service interruptions, or data corruption other natural or manmade accidents or incidents, or pandemics, that result in us being unable to fully utilize the facilities, may have an adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on its financial and operating conditions.
If the FDA objects to any proposed proprietary drug name for any product candidate, we may be required to expend significant additional resources in an effort to identify a suitable substitute proprietary drug name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA. 96 Table of Contents Ocuphire Pharma, Inc.
If the FDA objects to any proposed proprietary drug name for any product candidate, we may be required to expend significant additional resources in an effort to identify a suitable substitute proprietary drug name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA.
If a present or future collaborator of us were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished, or terminated; and • collaborators may be unable to obtain the necessary marketing approvals. 88 Table of Contents Ocuphire Pharma, Inc.
If a present or future collaborator of us were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished, or terminated; and • collaborators may be unable to obtain the necessary marketing approvals.
For other indications, and for APX3330, before obtaining regulatory approval for the commercial sale of our product candidates for a particular indication, we must demonstrate through preclinical testing and clinical trials that the applicable product candidate is safe and effective for use in that target indication.
Before obtaining regulatory approval for the commercial sale of our product candidates for a particular indication, we must demonstrate through nonclinical testing and clinical trials that the applicable product candidate is safe and effective for use in that target indication.
If we fail to produce positive results in our clinical trials of any of our product candidates, the development timelines, regulatory approvals, and commercialization prospects for our product candidates, as well as Ocuphire’s business and financial prospects, would be adversely affected.
If we fail to produce adequate results reflecting adequate efficacy and safety in our clinical trials of any of our product candidates, the development timelines, regulatory approvals, and commercialization prospects for our product candidates, as well as Ocuphire’s business and financial prospects, would be adversely affected.
Our future capital requirements may be substantial and will depend on many factors including: • the scope, size, rate of progress, results, and costs of researching and developing our product candidates, and initiating and completing our preclinical studies and clinical trials; • the cost, timing and outcome of our efforts to obtain marketing approval for our product candidates in the United States and other countries, including to fund the preparation and filing of NDAs with the FDA for our product candidates and to satisfy related FDA requirements and regulatory requirements in other countries; • the number and characteristics of any additional product candidates we develop or acquire, if any; • our ability to establish and maintain collaborations on favorable terms, if at all; 69 Table of Contents Ocuphire Pharma, Inc.
Our future capital requirements may be substantial and will depend on many factors including: • the scope, size, rate of progress, results, and costs of researching and developing our product candidates, and initiating and completing our nonclinical studies and clinical trials; • the cost, timing and outcome of our efforts to obtain further marketing approval for our product candidates in the United States and other countries, including to fund the preparation and filing of NDAs with the FDA for our product candidates and to satisfy related FDA requirements and regulatory requirements in other countries; • the number and characteristics of any additional product candidates we develop or acquire, if any; • our ability to establish and maintain collaborations on favorable terms, if at all; • the amount of revenue, if any, from commercial sales, should our product candidates receive marketing approval; 53 Table of Contents Ocuphire Pharma, Inc.
If such product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and may not become profitable.
If RYZUMVI and our product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and may not become profitable.
The results from the prior preclinical studies and clinical trials for Nyxol and APX3330 discussed elsewhere in this Annual Report may not necessarily be predictive of the results of future preclinical studies or clinical trials.
The results from the prior nonclinical studies and clinical trials for APX3330 and PS discussed elsewhere in this Annual Report may not necessarily be predictive of the results of future nonclinical studies or clinical trials.
Outside parties may: • have staffing difficulties; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in ownership or management; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors. 85 Table of Contents Ocuphire Pharma, Inc.
Outside parties may have staffing difficulties; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in ownership or management; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors.
We may never succeed in these activities and, even if we does, we may never generate revenues that are significant or large enough to achieve profitability. If we do achieve profitability from our product candidates, we may not be able to sustain or increase profitability on an annual basis.
We are in the early stages of most of these activities. We may never succeed in these activities and, even if we do, we may never generate revenues that are significant or large enough to achieve profitability. If we do achieve profitability from our product candidates, we may not be able to sustain or increase profitability on an annual basis.
If we are unable to raise additional funds 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 product candidates that we would otherwise prefer to develop and market ourselves. This may reduce the value of our common stock.
If we are unable to raise additional funds 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 product candidates that we would otherwise prefer to develop and market ourselves.
Risks Related to Commercialization of Our Product Candidates We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than we do. The development and commercialization of new drug products is highly competitive.
Form 10-K Risks Related to Commercialization of Our Product Candidates We face substantial competition and rapid technological change, which may result in others discovering, developing, or commercializing products before or more successfully than we do. The development and commercialization of new drug products is highly competitive.
Moreover, the applicable time period or the scope of patent protection afforded could be shorter or less than what we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, our revenue could be reduced, possibly materially. 93 Table of Contents Ocuphire Pharma, Inc.
Moreover, the applicable time period or the scope of patent protection afforded could be shorter or less than what we request. If we are unable to obtain patent term extension or the term of any such extension is less than we request, our revenue could be reduced, possibly materially.
If we, or any licensor, is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business and results of operations may be adversely affected. 94 Table of Contents Ocuphire Pharma, Inc.
If we, or any licensor, is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business and results of operations may be adversely affected.
Furthermore, any of these regulatory authorities may also approve our product candidates for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials. 62 Table of Contents Ocuphire Pharma, Inc.
Furthermore, any of these regulatory authorities may also approve our product candidates for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials.
Our relationships with healthcare providers and third-party payors will be subject to applicable fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and diminished profits and future earnings, among other penalties and consequences. 74 Table of Contents Ocuphire Pharma, Inc.
Our relationships with healthcare providers and third-party payors will be subject to applicable fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, and diminished profits and future earnings, among other penalties and consequences.
Compliance with applicable environmental and health and safety laws and regulations is expensive, and current or future environmental regulations may impair our research, development, and production efforts, which could harm our business, prospects, financial condition, or results of operations. 84 Table of Contents Ocuphire Pharma, Inc.
Compliance with applicable environmental and health and safety laws and regulations is expensive, and current or future environmental regulations may impair our research, development, and production efforts, which could harm our business, prospects, financial condition, or results of operations.
If we are unable to acquire or license additional promising product candidates, we may not be able to expand our product candidate pipeline.
If we are unable to acquire or license additional promising product candidates, raise additional capital, or shift capital resources, we may not be able to expand our product candidate pipeline.
Form 10-K • the issuance of our equity securities which would result in dilution to our stockholders; • assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel; • the diversion of management’s attention from our existing product candidates and initiatives in pursuing such an acquisition or strategic partnership; • retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and • our inability to generate revenue from acquired intellectual property, technology and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs.
Any acquisition or strategic partnership may entail numerous risks, including: • increased operating expenses and cash requirements; • the assumption of indebtedness or contingent liabilities; • the issuance of our equity securities which would result in dilution to our stockholders; • assimilation of operations, intellectual property, products and product candidates of an acquired company, including difficulties associated with integrating new personnel; • the diversion of management’s attention from our existing product candidates and initiatives in pursuing such an acquisition or strategic partnership; • retention of key employees, the loss of key personnel, and uncertainties in our ability to maintain key business relationships; • risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and • our inability to generate revenue from acquired intellectual property, technology and/or products sufficient to meet our objectives or even to offset the associated transaction and maintenance costs.
We are not permitted to market our product candidates in the United States until we receive approval of an NDA from the FDA or in any foreign countries until we receive the requisite approval from such countries. We have submitted an NDA to the FDA for Nyxol for the treatment of RM.
We are not permitted to market our product candidates in the United States until we receive approval of an NDA from the FDA or in any foreign countries until we receive the requisite approval from such countries.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our headquarters is currently located in Farmington Hills, Michigan, and consists of approximately 1,600 square feet of leased office space under a lease that expires on December 31, 2023.
Biggest changeITEM 2. PROPERTIES Our headquarters is currently located in Farmington Hills, Michigan, and consists of approximately 1,600 square feet of leased office space under a lease that expires on December 31, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our shares of common stock trade on the Nasdaq Capital Market under the symbol “OCUP”. Holders As of March 27, 2023, there were approximately 83 holders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our shares of common stock trade on the Nasdaq Capital Market under the symbol “OCUP”. Holders As of March 5, 2024, there were approximately 75 holders of record of our common stock.
Dividend Policy We have not paid any cash dividends on our common stock since our inception and do not anticipate paying any cash dividends in the foreseeable future. We plan to retain our earnings, if any, to provide funds for the expansion of our business. Recent Sales of Unregistered Securities None.
Dividend Policy We have not paid any cash dividends on our common stock since our inception and do not anticipate paying any cash dividends in the foreseeable future. We currently plan to retain our earnings, if any, to provide funds for the expansion of our business. Recent Sales of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeForm 10-K • contract to manufacture our product candidates; • maintain, expand and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan; • add operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts; • continue to operate as a public company; and • establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval; Our net income (loss) will likely continue to fluctuate significantly from quarter to quarter and year to year, depending on the timing of our preclinical studies, clinical trials, expenditures on other research and development activities (and reimbursement thereof), and from potential milestone payments received from and revenue earned under the Nyxol License Agreement or any other license and collaboration agreements that we enter into, and potential payments we that may become payable from time to time under the Apexian Sublicense Agreement.
Biggest changeFurthermore, we anticipate that our expenses will increase as we: • continue clinical trials for APX3330, PS and for any other product candidate in our future pipeline; • continue nonclinical studies for APX3330, APX2009 and APX2014, PS and for any other product candidate in our future pipeline; • develop additional product candidates that we identify, in-license or acquire; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • contract to manufacture our product candidates; • maintain, expand and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan; • add operational, financial and management information systems and personnel to support our product development and potential future commercialization efforts; • continue to operate as a public company; and • establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval. 87 Table of Contents Ocuphire Pharma, Inc.
We accrue for costs incurred as the services are being provided by monitoring the status of the study or project, and the invoices are received from our external service providers. We adjust our accrual as actual costs become known. Research and development activities are central to our business model.
We accrue for costs incurred as the services are being provided by monitoring the status of the study or project, and as the invoices are received from our external service providers. We adjust our accrual as actual costs become known. Research and development activities are central to our business model.
Other Expense, net During the year ended December 31, 2022, we had other expense, net of $14,000 stemming from net unrealized losses attributed to our short-term investments of $170,000 and realized currency losses of approximately $3,000, offset largely by interest income of $159,000 related to cash and cash equivalents.
During the year ended December 31, 2022, we had other expense, net of $14,000 stemming from net unrealized losses attributed to our short-term investments of $170,000 and realized currency losses of approximately $3,000, offset largely by interest income of $159,000 related to cash and cash equivalents.
We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Nyxol License Agreement and we may earn additional revenues from potential milestone and royalty payments from the agreements with Viatris, BioSense, Processa, or from other license agreements entered into the future; however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.
We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Viatris License Agreement and we may earn additional revenues from potential milestone and royalty payments from the agreements with Viatris , BioSense, Processa, or from other license agreements entered into the future; however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.
We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Nyxol License Agreement and we may earn additional revenues from future potential milestone and royalty payments from the agreements with Viatris, BioSense, Processa, or from other license agreements entered into the future; however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.
We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Viatris License Agreement and we may earn additional revenues from future potential milestone and royalty payments from the agreements with Viatris, BioSense, Processa, or from other license agreements entered into in the future; however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.
Cash Flow from Financing Activities Net cash provided by financing activities during the year ended December 31, 2022 was $3.8 million that consisted principally of proceeds received from the ATM, net of issuance costs, in the amount of $4.3 million, offset in part by payments made on the short-term loan of $0.5 million.
Net cash provided by financing activities during the year ended December 31, 2022 was $3.8 million that consisted principally of proceeds received from the ATM, net of issuance costs, in the amount of $4.3 million, offset in part by payments made on the short-term loan of $0.5 million.
Pre-Merger Financing Securities Purchase Agreement On June 17, 2020, Ocuphire, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended and restated, the “Securities Purchase Agreement”).
Pre-Merger Financing Securities Purchase Agreement On June 17, 2020, Private Ocuphire, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended and restated, the “Securities Purchase Agreement”).
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation costs, for personnel in functions not directly associated with research and administrative activities.
General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation costs, for personnel in functions not directly associated with research and development activities.
For additional information, see Note 4 — Commitments and Contingencies included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. Recent Accounting Pronouncements From time to time the FASB, or other standard-setting bodies, issue new accounting pronouncements. Where applicable, we adopt these new standards according to the specified effective dates.
For additional information, see Note 3 — Commitments and Contingencies included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. Recent Accounting Pronouncements From time to time the FASB, or other standard-setting bodies, issue new accounting pronouncements. Where applicable, we adopt these new standards according to the specified effective dates.
We cannot give any assurance that we will ever be profitable or generate positive cash flow from operating activities. Contractual Obligations and Commitments Facility Lease We lease a facility under a non-cancellable operating lease that expires on December 31, 2023, as amended, for a base rent in the amount of $3,000 per month.
We cannot give any assurance that we will ever be profitable or generate positive cash flow from operating activities. Contractual Obligations and Commitments Facility Lease We lease a facility under a non-cancellable operating lease that expires on December 31, 2024, as amended, for a base rent in the amount of $3,000 per month.
Pursuant to the Pre-Merger Financing, (i) Ocuphire issued and sold to the investors shares of common stock of Ocuphire Pharma, Inc. prior to the Merger (the “Initial Shares”) which converted pursuant to the exchange ratio in the Merger into an aggregate of 1,249,996 shares (the “Converted Initial Shares”) of common stock, (ii) Ocuphire deposited into escrow, for the benefit of the Investors, additional shares of common stock of Ocuphire Pharma, Inc. prior to the Merger (the “Additional Shares”) which converted pursuant to the exchange ratio in the Merger into an aggregate of 3,749,992 shares of common stock (the “Converted Additional Shares”), which Converted Additional Shares were delivered (or became deliverable) to the investors on November 19, 2020, and (iii) we agreed to issue to each investor on the tenth trading day following the consummation of the Merger (x) Series A Warrants representing the right to acquire shares of common stock equal to the sum of (A) the Converted Initial Shares purchased by the investor, (B) the Converted Additional Shares delivered or deliverable to the investor, without giving effect to any limitation on delivery contained in the Securities Purchase Agreement and (C) the initial number of shares of common stock, if any, underlying the Series B Warrants issued to the Investor and (y) additional warrants to purchase shares of common stock.
Pursuant to the Pre-Merger Financing, (i) Private Ocuphire issued and sold to the investors shares of common stock of Private Ocuphire (the “Initial Shares”), which converted pursuant to the exchange ratio in the Merger into an aggregate of 1,249,996 shares (the “Converted Initial Shares”) of common stock, (ii) Private Ocuphire deposited into escrow, for the benefit of the investors, additional shares of common stock of Private Ocuphire (the “Additional Shares”), which converted pursuant to the exchange ratio in the Merger into an aggregate of 3,749,992 shares of common stock (the “Converted Additional Shares”), which Converted Additional Shares were delivered (or became deliverable) to the investors on November 19, 2020, and (iii) we agreed to issue to each investor on the tenth trading day following the consummation of the Merger (x) Series A Warrants representing the right to acquire shares of common stock equal to the sum of (A) the Converted Initial Shares purchased by the investor, (B) the Converted Additional Shares delivered or deliverable to the investor, without giving effect to any limitation on delivery contained in the Securities Purchase Agreement and (C) the initial number of shares of common stock, if any, underlying the Series B Warrants issued to the investor and (y) additional warrants to purchase shares of common stock.
We expect to satisfy our short-term and long-term obligations through cash on hand, from future equity and debt financings, and from reimbursement payments, potential milestone and royalty payments under the Nyxol License Agreement and any future collaborations and license agreements, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever.
We expect to satisfy our short-term and long-term obligations through cash on hand, from future equity and debt financings, and from reimbursement payments, potential milestone and royalty payments under the Viatris License Agreement and any future collaborations and license agreements, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever.
At issuance, the Series B Warrants contained certain provisions that could have resulted in the issuance of additional Series B Warrants depending on the dollar volume-weighted average prices of a share of Common Stock during a 45-trading day Reset Period. Pursuant to the terms of the Waiver Agreements, those provisions are no longer in effect.
At issuance, the Series B Warrants contained certain provisions that could have resulted in the issuance of additional Series B Warrants depending on the dollar volume-weighted average prices of a share of Common Stock during a 45-trading day reset period. Pursuant to the terms of the Waiver Agreements, those provisions were no longer in effect.
Refer to Note 4 – Commitments and Contingencies included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report for further detail of our lease obligation and license agreements with regard to the timing of expected future payments.
Refer to Note 3 – Commitments and Contingencies included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report for further detail of our lease obligation and license agreements with regard to the timing of expected future payments.
Ocuphire Convertible Notes From May 2018 through March 2020, we issued convertible notes (the “Ocuphire convertible notes”) for aggregate gross proceeds of $8.5 million, inclusive of the promissory notes exchanged for Ocuphire convertible notes. The final closing of the Ocuphire convertible notes occurred on March 10, 2020. The Ocuphire convertible notes had an interest rate of 8% per annum.
Ocuphire Convertible Notes From May 2018 through March 2020, we issued the Ocuphire Convertible Notes for aggregate gross proceeds of $8.5 million, inclusive of the promissory notes exchanged for Ocuphire Convertible Notes. The final closing of the Ocuphire Convertible Notes occurred on March 10, 2020. The Ocuphire Convertible Notes had an interest rate of 8% per annum.
In connection with the 2021 Shelf, on March 11, 2021, we entered into a sales agreement with JonesTrading Institutional Services LLC (“JonesTrading”) under which we may offer and sell, from time to time at our sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of our common stock having an aggregate offering price of up to $40 million (the “ATM”).
On March 11, 2021, we entered into a sales agreement with JonesTrading Institutional Services LLC (“JonesTrading”) under which we may offer and sell, from time to time at our sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of our common stock having an aggregate offering price of up to $40 million (the “ATM”).
For discussions about the application of grant date fair value associated with our stock-based compensation, see Note 7 — Stock-based Compensation included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report.
For discussions about the application of grant date fair value associated with our stock-based compensation, see Note 6 — Stock-based Compensation included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report.
At issuance, the Series A Warrants contained certain provisions that could have resulted in a downward adjustment of the initial exercise price and an upward adjustment in the number of shares underlying the warrants if Ocuphire were to have issued or sold, or made an agreement to issue or sell, any shares of common stock for a price lower than the exercise price then in effect.
Form 10-K At issuance, the Series A Warrants contained certain provisions that could have resulted in a downward adjustment of the initial exercise price and an upward adjustment in the number of shares underlying the warrants if Ocuphire were to have issued or sold, or made an agreement to issue or sell, any shares of common stock for a price lower than the exercise price then in effect.
As of December 31, 2022, 1,538,461 RDO Warrants were still outstanding. The offering of the securities was made pursuant to our effective shelf registration statement on Form S-3.
As of December 31, 2023, 1,538,461 RDO Warrants were still outstanding. The offering of the securities was made pursuant to our effective shelf registration statement on Form S-3.
Form 10-K Our significant accounting policies are discussed in Note 1 — Company Description and Summary of Significant Accounting Policies, included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our reported financial results.
Our significant accounting policies are discussed in Note 1 — Company Description and Summary of Significant Accounting Policies, included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our reported financial results.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation, warrants, or other preferences that adversely affect your rights as a common stockholder.
Form 10-K To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation, warrants or other preferences that adversely affect your rights as a common stockholder.
In addition, other expense, net includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and reimbursements in connection with grants and other sources when they occur.
Other Income (Expense), net Other income (expense), net includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and reimbursements in connection with grants and other sources when they occur.
Future Capital Requirements The development of APX3330 is subject to numerous uncertainties, and we have based these estimates on assumptions that may prove to be substantially different than what we currently anticipate and could result in cash resources being used sooner than what we currently expect.
The development of APX3330 is subject to numerous uncertainties, and we have based these estimates on assumptions that may prove to be substantially different than what we currently anticipate and could result in cash resources being used sooner than what we currently expect.
Other Commitments In the course of normal operations, we entered into cancellable purchase commitments with our suppliers for various key research, clinical and manufacturing services. The purchase commitments covered by these arrangements are subject to change based on our research and development efforts.
Form 10-K Other Commitments In the course of normal operations, we entered into cancellable purchase commitments with our suppliers for various key research, clinical and manufacturing services. The purchase commitments covered by these arrangements are subject to change based on our research and development efforts.
Form 10-K The Waiver Agreements provide for the permanent waiver of the full ratchet anti-dilution provisions, contained in the Series A Warrants (as certain of the anti-dilution provisions had previously caused liability accounting treatment for the Series A Warrants). Upon the effective date of the Waiver Agreement, the Series A Warrants were reclassified to equity.
The Waiver Agreements provide for the permanent waiver of the full ratchet anti-dilution provisions, contained in the Series A Warrants (as certain of the anti-dilution provisions had previously caused liability accounting treatment for the Series A Warrants). Upon the effective date of the Waiver Agreement, the Series A Warrants were reclassified to equity.
See “Part I, Item 1— Business—APX3330 Clinical Experience Summary —Ocuphire Clinical Development Plan —Potential Clinical Plans for APX3330—Future In-Licensing and Acquisition Opportunities—Manufacturing—Apexian Sublicense Agreement— Review and Approval of Drugs in the United States” in this Annual Report for a discussion of design, development, pre-clinical and clinical activities that we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.
See “Part I, Item 1— Business— Potential Clinical Plans for APX3330—PS Potential Clinical Plans—Future In-Licensing and Acquisition Opportunities—Manufacturing—Apexian Sublicense Agreement— Review and Approval of Drugs in the United States” of this Annual Report for a discussion of design, development, pre-clinical and clinical activities that we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.
As of December 31, 2022, our cash and cash equivalents were invested primarily in cash deposits and cash equivalent investments at two large financial institutions.
As of December 31, 2023, our cash and cash equivalents were invested primarily in cash deposits and cash equivalent investments at two large financial institutions.
Currently, a full valuation allowance has been provided on the net deferred tax assets as of December 31, 2022 and 2021 given the uncertainty of future taxable income and other related factors impacting the realizability or our remaining net deferred tax assets. 110 Table of Contents Ocuphire Pharma, Inc.
Currently, a full valuation allowance has been provided on the net deferred tax assets as of December 31, 2023 and 2022 given the uncertainty of future taxable income and other related factors impacting the realizability or our remaining net deferred tax assets. 90 Table of Contents Ocuphire Pharma, Inc.
Pursuant to the Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by directors of Ocuphire Pharma, Inc. prior to the Merger, and one director of Rexahn, upon closing of the Merger (the “Pre-Merger Financing”).
Pursuant to the Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by directors of Private Ocuphire, and one director of Rexahn, upon closing of the Merger (the “Pre-Merger Financing”).
Research and Development Expenses To date, our research and development expenses have related primarily to the clinical stage development of Nyxol and APX3330.
Research and Development Expenses To date, our research and development expenses have related primarily to the clinical stage development of APX3330 and PS.
We expect that Nyxol and APX3330 will have higher development costs during the later stages of clinical development, as compared to costs incurred during their earlier stages of development, primarily due to the increased size and duration of the later-stage clinical trials. We expect our research and development expenses to increase over the next several years.
We expect that APX3330 and PS will have higher development costs during the later stages of clinical development, as compared to costs incurred during their earlier stages of development, primarily due to the increased size and duration of the later-stage clinical trials and associated nonclinical studies. We expect our research and development expenses to increase over the next several years.
Form 10-K We agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes mellitus indication.
We agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes mellitus indication.
Through December 31, 2022, we have funded our operations primarily through equity financings that totaled $54.1 million in gross proceeds, of which $21.15 million was received in connection with the merger (“Merger”) with Rexahn Pharmaceuticals, Inc. (“Rexahn”) and through the issuance of convertible notes in private placements that totaled $8.5 million in gross proceeds net cash.
Through December 31, 2023, we have funded our operations primarily through equity financings that totaled $63.3 million in gross proceeds, of which $21.15 million was received in connection with the merger (“Merger”) with Rexahn Pharmaceuticals, Inc. (“Rexahn”) and through the issuance of convertible notes in private placements that totaled $8.5 million in gross proceeds net cash.
Revenue during 2022 was derived from the Nyxol License Agreement in the fourth quarter associated largely with the transfer of a perpetual, sub-licensable license to develop, manufacture, import, export and commercialize the Nyxol Products, and to a lesser extent, from the reimbursement of research and development services.
Revenue during calendar year 2022 was derived from the Viatris License Agreement in the fourth quarter associated largely with the transfer of a perpetual, sub-licensable license to develop, manufacture, import, export and commercialize the PS Products , and to a lesser extent, from the reimbursement of research and development services.
Pursuant to the Waiver Agreements, the Holders and Ocuphire agreed to waive certain rights, finalize the exercise price and number of Series A Warrants and Series B Warrants, eliminate certain financing restrictions, extend the term of certain leak-out agreements, and, in the case of certain Holders, grant certain registration rights for the shares underlying the warrants. 113 Table of Contents Ocuphire Pharma, Inc.
Pursuant to the Waiver Agreements, the Holders and Ocuphire agreed to waive certain rights, finalize the exercise price and number of Series A Warrants and Series B Warrants, eliminate certain financing restrictions, extend the term of certain leak-out agreements, and, in the case of certain Holders, grant certain registration rights for the shares underlying the warrants.
If we fail to complete the development of Nyxol, APX3330, or any other product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval, our ability to generate significant revenue would be compromised.
If we fail to complete the development of APX3330, PS or any other product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval for any of such product candidates, our ability to generate significant revenue would be compromised.
Pursuant to the Nyxol License Agreement, our budgeted research and development expenses related to the development of Nyxol are fully reimbursed by Viatris. However, all research and development costs, including those related to Nyxol, are expensed as incurred and costs incurred by third parties are expensed as the contracted work is performed.
Form 10-K Pursuant to the Viatris License Agreement, our budgeted research and development expenses related to the development of PS are fully reimbursed by Viatris. However, all research and development costs, including those related to PS, are expensed as incurred, and costs incurred by third parties are expensed as the contracted work is performed.
The Series B Warrants were initially exercisable for 665,836 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and ultimately became exercisable for 1,708,335 shares of common stock upon execution of the Waiver Agreements. As of December 31, 2022, 17,869 Series B Warrants were still outstanding.
The Series B Warrants were initially exercisable for 665,836 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and ultimately became exercisable for 1,708,335 shares of common stock upon execution of the Waiver Agreements. As of December 31, 2023, none of the Series B Warrants remained outstanding.
Historical Capital Resources Our primary source of cash to fund our operations has been various equity offerings in the amount of $54.1 million and the issuance of convertible notes in the amount of $8.5 million, inclusive of the promissory notes exchanged for Ocuphire convertible notes.
Historical Capital Resources Our primary source of cash to fund our operations has been various equity offerings in the amount of $63.3 million and the issuance of convertible notes in the amount of $8.5 million, inclusive of the promissory notes exchanged for Ocuphire convertible notes (the “Ocuphire Convertible Notes”).
On November 4, 2020, all of Ocuphire’s outstanding notes were converted into 977,128 shares of Ocuphire common stock in connection with the completion of the Merger. 114 Table of Contents Ocuphire Pharma, Inc.
On November 4, 2020, all of Ocuphire’s outstanding notes were converted into 977,128 shares of Ocuphire common stock in connection with the completion of the Merger.
Interest Expense Interest expense consists of interest costs on principal related to a short-term loan (related to financing an insurance policy) during the period it was outstanding. The short-term loan had an annual interest rate of 5.5%. The short-term loan was fully repaid in May 2022.
Interest Expense Interest expense consists of interest costs on principal related to a short-term loan (related to financing an insurance policy) during the period it was outstanding and which was fully repaid in May 2022.
We have not made any material changes to date, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described below.
We have not made any material changes to date, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described below. 98 Table of Contents Ocuphire Pharma, Inc.
Lastly, we also agreed to make royalty payments equal to a single-digit percentage of our net sales of products covered by the patents under the Apexian Sublicense Agreement. None of the milestone or royalty payments were triggered as of the date of this Annual Report.
Additionally, we also agreed to make royalty payments equal to a single-digit percentage of our net sales of products covered by the patents under the Apexian Sublicense Agreement. None of the milestone or royalty payments were triggered as of the date of this Annual Report. 97 Table of Contents Ocuphire Pharma, Inc.
In January 2023, we reported top-line efficacy and safety results from the ZETA-1 Phase 2 trial conducted in 103 subjects (51 treated with 600 mg daily dose of APX3330) in DR, including moderately severe non-proliferative DR (“NPDR”) and mild proliferative DR (“PDR”), as well as patients with DME without loss of central vision.
In January 2023, we reported top-line efficacy and safety results from the ZETA-1 Phase 2 trial conducted in 103 subjects (51 treated with 600 mg daily dose of APX3330) in DR, including moderately severe and severe NPDR and mild PDR, as well as patients with diabetic macular edema without loss of central vision.
Liquidity and Capital Resources Capital Resources As of December 31, 2022, our principal sources of liquidity consisted of cash and cash equivalents of $42.6 million. We believe that our cash on hand at the end of 2022 will be sufficient to fund our operations for at least twelve months beyond the date of this filing .
Form 10-K Liquidity and Capital Resources Capital Resources As of December 31, 2023, our principal sources of liquidity consisted of cash and cash equivalents of $50.5 million. We believe that our cash on hand at the end of 2023 will be sufficient to fund our operations for at least twelve months beyond the date of this filing .
Research and development expenses consist of costs incurred in performing research and development activities, including compensation and benefits for research and development employees and costs for consultants, costs associated with preclinical studies and clinical trials, regulatory activities, manufacturing activities to support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses.
Research and development expenses consist of costs incurred in performing research and development activities, including compensation, benefits and stock-based compensation costs for research and development employees and costs for consultants, costs associated with nonclinical studies and clinical trials, regulatory activities, manufacturing activities to support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses. 89 Table of Contents Ocuphire Pharma, Inc.
The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein). As of December 31, 2022, 5,665,838 Series A Warrants were still outstanding.
The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein). As of December 31, 2023, 5,665,838 Series A Warrants were still outstanding. 94 Table of Contents Ocuphire Pharma, Inc.
The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below. 117 Table of Contents Ocuphire Pharma, Inc.
The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.
The change in operating assets and liabilities was primarily attributable to our increase in our accounts receivable and contract asset associated with the Nyxol License Agreement of $8.3 million and to a lesser extent from the decrease in our accounts payable and accrued expenses and increases in our prepaid expenses associated with the fluctuations of Ocuphire’s operating expenses.
The change in operating assets and liabilities was primarily attributable to our increase in our accounts receivable and contract asset associated with the Viatris License Agreement of $4.9 million and to a lesser extent from the decrease in our accounts payable and accrued expenses and increases in our prepaid expenses in the aggregate of $0.7 million associated with the fluctuations of Ocuphire’s operating expenses.
Series B Warrants The Series B Warrants have an exercise price of $0.0001, were exercisable upon issuance and will expire on the day following the later to occur of (i) the Reservation Date (as defined therein), and (ii) the date on which the investor’s Series B Warrants have been exercised in full (without giving effect to any limitation on exercise contained therein) and no shares remain issuable thereunder.
Series B Warrants The Series B Warrants had an exercise price of $0.0001, were exercisable upon issuance and would have expired on the day following the later to occur of (i) the Reservation Date (as defined therein) or (ii) the date on which the investor’s Series B Warrants would have been exercised in full (without giving effect to any limitation on exercise contained therein).
For additional information, see Note 12 — Income Taxes included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. 118 Table of Contents Ocuphire Pharma, Inc. Form 10-K Contingencies We are subject to numerous contingencies arising in the ordinary course of business, including obligations related to certain license agreements.
For additional information, see Note 11 — Income Taxes included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. Contingencies We are subject to numerous contingencies arising in the ordinary course of business, including obligations related to certain license agreements.
At-The-Market Program On February 4, 2021, we filed a Form S-3 shelf registration under the Securities Act which was declared effective by the SEC on February 12, 2021 (the “2021 Shelf”) under which the Company may offer and sell, from time to time in our sole discretion, securities having an aggregate offering price of up to $125 million.
At-The-Market Program On January 10, 2024, we filed a Form S-3 shelf registration under the Securities Act which was declared effective by the SEC on January 23, 2024 under which the Company may offer and sell, from time to time in our sole discretion, securities having an aggregate offering price up to $175 million.
We recognize license and collaborations revenue by first allocating the transaction price of a contract to each performance obligation under the contract based on its stand-alone price.
We have entered into license and collaboration agreements which have revenue recognition implications. We recognize license and collaborations revenue by first allocating the transaction price of a contract to each performance obligation under the contract based on its stand-alone price.
License and Collaborations Revenue We account for license and collaborations revenue in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers . The guidance provides a unified model to determine how revenue is recognized. We have entered into license and collaboration agreements which have revenue recognition implications.
Form 10-K License and Collaborations Revenue We account for license and collaborations revenue in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers . The guidance provides a unified model to determine how revenue is recognized.
License and collaborations revenue to date was derived from a one-time non-refundable payment of $35 million and expected reimbursement of expenses earned under the Nyxol License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc. (“Processa”) in connection with the Rexahn RX-3117 drug compound.
License and collaborations revenue inception to date was derived from a one-time non-refundable payment of $35 million, a milestone payment of $10 million and reimbursement and expected reimbursement of expenses earned under the Viatris License Agreement and, to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc.
Other Expense, net Other expense, net reflected in this line item includes payments made by us in connection with the Contingent Value Rights Agreement (the “CVR Agreement”) with former Rexahn shareholders.
In addition, other income (expense), net also includes payments when made by us in connection with the Contingent Value Rights Agreement (the “CVR Agreement”) with former Rexahn shareholders.
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until regulatory approval is obtained and commercialization begins for Nyxol or APX3330.
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until our partner, Viatris, commercializes RYZUMVI, or regulatory approval is obtained, and commercialization begins for APX3330 or PS for indications other than RM.
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until regulatory approval is obtained and commercialization begins for Nyxol or APX3330.
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until our partner, Viatris, commercializes RYZUMVI , or regulatory approval is obtained and commercialization begins for APX3330 or PS for indications other than RM.
Nyxol has been studied in a total of 12 clinical trials (3 Phase 1, 5 Phase 2 and 4 Phase 3) in a total of over 650 patients (with over 400 Nyxol-treated) and has demonstrated promising clinical data across the three targeted refractive indications.
PS has been studied in a total of 12 clinical trials (3 Phase 1, 5 Phase 2 and 4 Phase 3) in a total of over 1100 study participants (with over 650 PS-treated) and has demonstrated promising clinical data across the three targeted refractive indications. 86 Table of Contents Ocuphire Pharma, Inc.
If we fail to complete the development of Nyxol, APX3330, or any other product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval, our ability to generate significant revenue would be compromised.
If we fail to complete the development of APX3330, PS, or any other product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval, our ability to generate significant revenue would be compromised. Operating Expenses Ocuphire’s operating expenses are classified into two categories: general and administrative and research and development.
Form 10-K Financial Operations Overview License and Collaborations Revenue License and collaborations revenue to date was derived from a one-time non-refundable payment and reimbursement of expenses earned under the Nyxol License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc. (“Processa”) in connection with the Rexahn RX-3117 drug compound.
Financial Operations Overview License and Collaborations Revenue License and collaborations revenue to date was derived from a one-time non-refundable payment related to a license transfer, an additional milestone payment and reimbursement of expenses earned under the Viatris License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc.
Form 10-K Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): For the Year Ended December 31, 2022 2021 Net cash provided by (used in) operating activities $ 14,314 $ (19,370 ) Net cash used in investing activities — (100 ) Net cash provided by financing activities 3,786 27,605 Net increase in cash and cash equivalents $ 18,100 $ 8,135 Cash Flow from Operating Activities For the year ended December 31, 2022, cash provided by operating activities of $14.3 million was attributable to net income of $17.9 million, coupled with $2.0 million in non-cash operating expenses and offset by a net cash use of approximately $5.6 million resulting from the change in Ocuphire’s operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): For the Year Ended December 31, 2023 2022 Net cash (used in) provided by operating activities $ (1,112 ) $ 14,314 Net cash used in investing activities — — Net cash provided by financing activities 8,979 3,786 Net increase in cash and cash equivalents $ 7,867 $ 18,100 Cash Flow from Operating Activities For the year ended December 31, 2023, cash used by operating activities of $1.1 million was attributable to net loss of $10.0 million, partially offset by $4.8 million in non-cash operating expenses and offset by a net cash source of approximately $4.1 million resulting from the change in Ocuphire’s operating assets and liabilities.
Provision for Income Taxes Provision for income taxes consisted of federal and state income taxes in the United States in the amount of $315,000 for the year ended December 31, 2022 resulting from our net taxable income after the application of net operating loss carryforwards and research credits. There was no tax provision during the prior year period.
Provision for Income Taxes Provision for income taxes consisted of federal and state income taxes in the United States in the amount of $12,000 and $315,000 for the years ended December 31, 2023 and 2022, respectively, resulting from our net taxable income after the application of net operating loss carryforwards and research credits. 92 Table of Contents Ocuphire Pharma, Inc.
However, it is difficult for us to determine with certainty the duration, costs and timing to complete our current or future preclinical programs and clinical trials of Nyxol, APX3330, and other product candidates.
However, it is difficult for us to determine with certainty the duration, costs and timing to complete our current or future nonclinical programs and clinical trials of APX3330, PS, and other product candidates. Financing costs Financing costs consist of issuance costs attributed to an equity line financing with Lincoln Park discussed further below.
We do not have any products approved for sale, and we do not expect to consistently generate significant revenues, other than license and collaborations revenue, until, and unless, the FDA or other regulatory authorities approve Nyxol or APX3330 and we successfully commercialize our product candidates.
We have only one product, RYZUMVI, approved for sale that may generate royalties based on sales by Viatris, and we do not expect to consistently generate significant revenues, other than license and collaborations revenue, unless and until the FDA or other regulatory authorities approve, and we successfully commercialize, APX3330 or PS for other indications.
Recent Developments License and Collaboration Agreement with Viatris In November 2022, we entered into a license and collaboration agreement (the “Nyxol License Agreement”) with FamyGen Life Sciences, Inc. (acquired by Viatris, Inc.
RYZUMVI and Phentolamine Ophthalmic Solution 0.75% (PS) In November 2022, we entered into a license and collaboration agreement (the “ the Viatris License Agreement ”) with FamyGen Life Sciences, Inc. (acquired by Viatris, Inc.
Nyxol In January 2023, we announced the initiation of the VEGA-2 Phase 3 pivotal trial with the first patient enrolled in late December 2022. This is the first of two Phase 3 registration trials intended to support a presbyopia indication for Nyxol alone and Nyxol with LDP.
The FDA agreed this was an approvable registration endpoint at our EOP2 meeting. PS In January 2023, we announced the initiation of the VEGA-2 Phase 3 pivotal trial, the first of two Phase 3 registration trials intended to support a presbyopia indication for PS alone and PS with LDP.
In addition, during the fourth quarter of 2022,we received a one-time non-refundable cash payment of $35.0 million in connection with the Nyxol License Agreement.
In addition, we received a one-time non-refundable cash payment of $35.0 million during the fourth quarter of 2022, a $10.0 million milestone payment during the fourth quarter of 2023, and have received reimbursement for costs related to development since the fourth quarter of 2022, all in connection with the Viatris License Agreement.
General and administrative expenses included $1,060,000 and $1,116,000 in stock-based compensation expense during the years ended December 31, 2022, and 2021, respectively. Research and Development Research and development expenses for the year ended December 31, 2022 were $14.4 million compared to $15.2 million for the year ended December 31, 2021.
General and administrative expenses included $2.4 million and $1.1 million in stock-based compensation expense during the years ended December 31, 2023, and 2022, respectively.
Form 10-K Liquidity and Capital Resource Requirements As of December 31, 2022, we had cash and cash equivalents of $42.6 million.
Liquidity and Capital Resource Requirements As of December 31, 2023, we had cash and cash equivalents of $50.5 million.
The purchase agreement contains customary representations, warranties and agreements by the Ocuphire, customary conditions to closing, indemnification obligations of Ocuphire, other obligations of the parties and termination provisions. The RDO Warrants have an exercise price of $6.09 per share, are exercisable upon the initial issuance date of June 8, 2021, and will expire five years following the initial exercise date.
Form 10-K The RDO Warrants have an exercise price of $6.09 per share, are exercisable upon the initial issuance date of June 8, 2021, and will expire five years following the initial exercise date.
Net cash provided by financing activities during the year ended December 31, 2021 was $27.6 million relating principally to proceeds received in connection with both the Registered Direct Offering and ATM, net of issuance costs, in the amount of $27.0 million.
Cash Flow from Financing Activities Net cash provided by financing activities during the year ended December 31, 2023 was $9.0 million that consisted principally of proceeds received from the Purchase Agreement and ATM, net of issuance costs, in the amount of $4.3 million and $4.6 million, respectively.
Form 10-K Results of Operations The following table summarizes our operating results for the periods indicated (in thousands): For the Year Ended December 31, 2022 2021 Change License and collaborations revenue $ 39,850 $ 589 $ 39,261 Operating expenses: General and administrative 7,269 8,121 (852 ) Research and development 14,355 15,173 (818 ) Total operating expenses 21,624 23,294 (1,670 ) Income (loss) from operations 18,226 (22,705 ) 40,931 Interest expense (9 ) (2 ) (7 ) Fair value change in warrant liabilities — (33,829 ) 33,829 Other expense, net (14 ) (157 ) 143 Income (loss) before income taxes 18,203 (56,693 ) 74,896 Provision for income taxes (315 ) — (315 ) Net income (loss) $ 17,888 $ (56,693 ) $ 74,581 Comparison of Years Ended December 31, 2022 and 2021 License and Collaborations Revenue License and collaborations revenue was $39.8 million for the year ended December 31, 2022 compared to $0.6 million for the year ended December 31, 2021.
Form 10-K Results of Operations The following table summarizes our operating results for the periods indicated (in thousands): For the Year Ended December 31, 2023 2022 Change License and collaborations revenue $ 19,049 $ 39,850 $ (20,801 ) Operating expenses: General and administrative 11,959 7,269 4,690 Research and development 17,653 14,355 3,298 Total operating expenses 29,612 21,624 7,988 (Loss) income from operations (10,563 ) 18,226 (28,789 ) Financing costs (1,328 ) — (1,328 ) Interest expense — (9 ) 9 Fair value change in derivative liabilities 80 — 80 Other income (expense), net 1,837 (14 ) 1,851 (Loss) income before income taxes (9,974 ) 18,203 (28,177 ) Provision for income taxes (12 ) (315 ) 303 Net (loss) income $ (9,986 ) $ 17,888 $ (27,874 ) Comparison of Years Ended December 31, 2023 and 2022 License and Collaborations Revenue License and collaborations revenue was $19.0 million for the year ended December 31, 2023 compared to $39.8 million for the year ended December 31, 2022.
For the year ended December 31, 2021, cash used in operating activities of $19.4 million was attributable to a net loss of $56.7 million, partially offset by $37.1 million in non-cash operating expenses and a net change of $0.2 million in Ocuphire’s net operating assets and liabilities.
Form 10-K For the year ended December 31, 2022, cash provided by operating activities of $14.3 million was attributable to net income of $17.9 million, partially offset by $2.0 million in non-cash operating expenses and offset by a net cash use of approximately $5.6 million resulting from the change in Ocuphire’s operating assets and liabilities.
In addition, we recently received a one-time non-refundable licensee fee payment in connection with the Nyxol License Agreement of $35.0 million. Our net income was $17.9 million for the year ended December 31, 2022 as compared to a net loss of $56.7 million for the year ended December 31, 2021.
In addition, we have received license fee and milestone payments of $45.0 million in the aggregate and reimbursement for costs related to development, all in connection with the Viatris License Agreement. Our net loss was $10.0 million for the year ended December 31, 2023 as compared to a net income of $17.9 million for the year ended December 31, 2022.
Research and development expenses also included $0.7 million and $0.8 million in stock-based compensation expense during the years ended December 31, 2022 and 2021, respectively.
Pursuant to the Viatris License Agreement, our budgeted research and development expenses related to the development of the PS Products are fully reimbursed by Viatris. Research and development expenses included $1.1 million and $0.7 million in stock-based compensation expense during the years ended December 31, 2023 and 2022, respectively.
For discussion about the determination of license and collaborations revenue, see Note 10 — License and Collaboration Agreements included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report. Warrant Liabilities Following the Merger, we issued the Series A Warrants in connection with the Pre-Merger Financing, and assumed Rexahn warrants issued prior to the Merger.
We do not expect to have in the future, significant variable consideration adjustments related to our existing license and collaborations revenue recognized. For discussion about the determination of license and collaborations revenue, see Note 9 — License and Collaboration Agreements included in “Part II, Item 8 – Financial Statements and Supplementary Data” of this Annual Report.
Nyxol can potentially be used across multiple indications such as treatment of pharmacologically-induced mydriasis (“RM”) (dilation of the pupil), presbyopia (age-related blurry near vision) and dim light or night vision disturbances (“DLD”) (halos, glares and starbursts). Our management believes these multiple indications potentially represent a significant market opportunity.
PS can potentially be used across multiple indications such as treatment of pharmacologically-induced mydriasis (“RM”) (dilation of the pupil), presbyopia (age-related blurry near vision) and decreased vision under mesopic (low) light conditions after keratorefractive surgery.
Interest Expense Interest expense for the years ended December 31, 2022 and 2021 was $9,000 and $2,000, respectively, and was attributable to a short-term loan (related to financing an insurance policy). 111 Table of Contents Ocuphire Pharma, Inc.
Interest Expense Interest expense for the year ended December 31, 2022 of $9,000 was comprised of interest on principal related to a short-term loan (related to financing an insurance policy). We did not have any interest expense during the year ended December 31, 2023.
As part of its our strategy, we will continue to explore opportunities to acquire additional ophthalmic assets and seek strategic partners for late-stage development, regulatory preparation, and commercialization of drugs in key global markets. Strategic Outlook In November 2022, we entered into the Nyxol License Agreement.
Strategic Outlook We intend to continue to explore opportunities to acquire additional assets, expand current pipeline to other retinal indications with APX3330, APX2009 and APX2014, and to seek strategic partners for late-stage development, regulatory preparation and commercialization of APX3330 in key global markets.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is included in this Annual Report beginning on page F-1 and is incorporated herein by reference.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 99 Table of Contents Ocuphire Pharma, Inc. Form 10-K ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is included in this Annual Report beginning on page F-1 and is incorporated herein by reference.

Other IRD 10-K year-over-year comparisons