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What changed in KIORA PHARMACEUTICALS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of KIORA PHARMACEUTICALS INC's 2023 and 2024 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 2024 report.

+315 added−288 removedSource: 10-K (2024-12-31) vs 10-K (2024-03-25)

Top changes in KIORA PHARMACEUTICALS INC's 2024 10-K

315 paragraphs added · 288 removed · 220 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+18 added−31 removed110 unchanged
Biggest changeThe key elements of this strategy are to: • Develop Core Assets – Continue clinical development of KIO-301 for which a Phase 2 clinical study is being planned in patients with mid to late-stage retinitis pigmentosa in collaboration with TOI. – Continue clinical development of KIO-104 for which a Phase 2 clinical study is being planned for the treatment of posterior non-infectious uveitis. • Increase Equity Value through Collaborations – Seek partnership for our KIO-101 and KIO-201 products to continue their development activities. – Pursue strategic collaborations to further the Company’s existing assets with respect to new indication potential and more detailed mechanism of action, which can result in new intellectual property.
Biggest changeThe key elements of this strategy are to: • Develop Core Assets – Continue clinical development of KIO-301 for which a Phase 2 clinical study is approved to initiate enrollment of patients with mid to late-stage retinitis pigmentosa in collaboration with TOI. – Continue clinical development of KIO-104 for which a Phase 2 clinical study is approved to initiate enrollment of patients with retinal inflammation due to diseases like diabetic macular edema and posterior non-infectious uveitis. • Increase Equity Value through Collaborations – Seek partnership for our KIO-101 product candidate to continue its development activities. – Pursue strategic collaborations to further our existing assets with respect to new indication potential and more detailed mechanism of action, which can result in new intellectual property. 4 Based on prevalence data from the Epidemiology of RMD study published in Rheumatology International (April 2017) 37:1551–1557. 6 Table of Contents Collaborations On January 25, 2024, we entered into an agreement with TOI, a sister company of Laboratories Théa, with respect to KIO-301.
Thus, steroid-sparing immunosuppressive therapy can play an important role for treating this disease. There are approximately 0.2 million cases of posterior non-infectious uveitis annually in the U.S., UK and EU. 1 Our Solution: KIO-104 KIO-104 is a third-generation small molecule DHODH inhibitor. DHODH is extensively exploited as potential drug targets for immunological disorders, oncology, and infectious diseases.
Thus, steroid-sparing immunosuppressive therapy can play an important role for treating this disease. There are approximately 0.2 million cases of posterior non-infectious uveitis annually in the U.S., UK and EU. 3 Our Solution: KIO-104 KIO-104 is a third-generation small molecule DHODH inhibitor. DHODH is extensively exploited as potential drug targets for immunological disorders, oncology, and infectious diseases.
When Phase 2 evaluations demonstrate that a dose range of the product appears to be effective and has an acceptable safety profile, trials are undertaken in large patient populations to further evaluate dosage, to obtain additional evidence of clinical efficacy and safety in an expanded patient population at multiple, geographically-dispersed clinical trial sites, to establish the overall risk-benefit relationship of the product, and to provide adequate information for the labeling of the product. • Phase 4 : In some cases, the FDA may conditionally approve an NDA for a product candidate on the sponsor’s agreement to conduct additional clinical trials to further assess the product’s safety and effectiveness after NDA approval.
When Phase 2 evaluations demonstrate that a dose range of the product appears to be effective and has an acceptable safety profile, trials are undertaken in large patient populations to further evaluate dosage, to obtain additional evidence of clinical efficacy and safety in an expanded patient population at multiple, geographically-dispersed 12 Table of Contents clinical trial sites, to establish the overall risk-benefit relationship of the product, and to provide adequate information for the labeling of the product. • Phase 4 : In some cases, the FDA may conditionally approve an NDA for a product candidate on the sponsor’s agreement to conduct additional clinical trials to further assess the product’s safety and effectiveness after NDA approval.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: 13 Table of Contents • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
Such post-approval trials are typically referred to as Phase 4 studies. The results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.
Such post-approval trials are typically referred to as Phase 4 studies. The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling, and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.
This agreement carries a collaborative approach to the continued development of KIO-301 (of which TOI is 100% responsible for direct costs of all research and development activities) and upon the achievement of certain clinical development, regulatory and commercial milestones, we may become eligible to receive up to $285 million in aggregate.
This agreement carries a collaborative approach to the continued development of KIO-301 (of which TOI is 100% responsible for direct costs of all research and development activities) and upon the achievement of certain clinical development, regulatory and commercial milestones, we will become eligible to receive up to $285 million in aggregate.
Patients with RA suffer from ocular signs and symptoms at a rate reported to be 2-3X that of the general population. Furthermore, in those OPRA+ patients, up to 50% report moderate to severe signs and symptoms. Today, there are approximately 1.8 million 2 RA patients in the U.S.
Patients with RA suffer from ocular signs and symptoms at a rate reported to be 2-3X that of the general population. Furthermore, in those OPRA+ patients, up to 50% report moderate to severe signs and symptoms. Today, there are estimated to be approximately 1.8 million 4 RA patients in the U.S.
Data from a Phase 1b/2a study, reported in October 2022, showed that a single injection of KIO-104 decreased intraocular inflammation and improved visual acuity for the duration of the study. Further, there is evidence of reduced Cystoid Macular Edema from baseline.
Data from a Phase 1b/2a study, reported in October 2022, showed that a single injection of KIO-104 decreased intraocular inflammation and improved visual acuity for the duration of the study. Further, there was evidence of reduced Cystoid Macular Edema from baseline.
Upon analyzing only the highest dose group (1,200 ng), a fundamental mean improvement of visual acuity is seen in the patients, which started within the first week post injection (Day 7) and lasted beyond the last study visit (Day 28).
Upon analyzing only the highest dose group (1,200 ng), a fundamental mean improvement of visual acuity was seen in the patients, which started within the first week post injection (Day 7) and lasted beyond the last study visit (Day 28).
Such perceived problems concerning safety or efficacy may arise in the context of clinical studies continued as a result of our post-marketing obligations, reports we or the FDA receive from patients and healthcare providers, or literature published by third parties regarding our products or similar products. 16 Table of Contents Third-Party Payor Coverage and Reimbursement Reimbursement is expected to use standard approaches for ophthalmology.
Such perceived problems concerning safety or efficacy may arise in the context of clinical studies continued as a result of our post-marketing obligations, reports we or the FDA receive from patients and healthcare providers, or literature published by third parties regarding our products or similar products. Third-Party Payor Coverage and Reimbursement Reimbursement is expected to use standard approaches for ophthalmology.
The results of pre-clinical tests, together with manufacturing information, analytical data, and a proposed clinical trial protocol and other information, are submitted as part of an IND to the FDA. Some pre-clinical testing may continue even after the IND is submitted.
The results of preclinical tests, together with manufacturing information, analytical data, and a proposed clinical trial protocol and other information, are submitted as part of an IND to the FDA. Some preclinical testing may continue even after the IND is submitted.
We intend to rely on third-party suppliers that we have used in the past for the manufacturing of various components that comprise our KIO-104, KIO-301 and other contemplated clinical trials. Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.
We intend to rely on third-party 10 Table of Contents suppliers that we have used in the past for the manufacturing of various components that comprise our KIO-104, KIO-301 and other contemplated clinical trials. Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.
This multi-site study was being conducted at The Royal Adelaide Hospital in Adelaide, South Australia as well as at a private ophthalmology clinic in Adelaide, South Australia. Study Results We completed the last patient dosing of the initial trial in September 2023 with topline results announced on November 4, 2023 at the American Academy of Ophthalmology retina sub-specialty day.
This multi-site study was being conducted at The Royal Adelaide Hospital in Adelaide, South Australia as well as at a private ophthalmology clinic in Adelaide, South Australia. 7 Table of Contents Study Results We completed the last patient dosing of the initial trial in September 2023 with topline results announced on November 4, 2023 at the American Academy of Ophthalmology retina sub-specialty day.
The CGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, extensive records and reports, and returned or salvaged products.
The CGMP regulations include requirements relating to 14 Table of Contents organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, extensive records and reports, and returned or salvaged products.
Under the New SentrX Agreement, SentrX is obligated to pay us a flat low single-digit royalty on net sales, and is effective until the last licensed patent terminates. On August 16, 2023, SentrX was acquired by Domes Pharma Group.
Under the New SentrX Agreement, SentrX is obligated to pay us a flat low single-digit royalty on net sales, and is effective until the last licensed patent terminates. On August 16, 2023, SentrX was acquired by Dômes Pharma Group.
The process required by the FDA before a new drug product may be marketed in the U.S. generally involves: • completion of pre-clinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP, regulation; • submission to the FDA of an Investigational New Drug or IND, for human clinical testing which must become effective before human clinical trials may begin in the U.S.; • approval by an independent Institutional Review Board or IRB, at each site where a clinical trial will be performed before the trial may be initiated at that site; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practices or GCP, to establish the safety and efficacy of the proposed product candidate for each intended use; • satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current Good Manufacturing Practice or CGMP regulations; • submission to the FDA of a new drug application or NDA, which must be accepted for filing by the FDA; • satisfactory completion of an FDA advisory committee review, if applicable; • payment of user fees, if applicable; and • FDA review and approval of the NDA. 13 Table of Contents The pre-clinical and clinical testing and approval process requires substantial time, effort, and financial resources.
The process required by the FDA before a new drug product may be marketed in the U.S. generally involves: • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP, regulation; • submission to the FDA of an Investigational New Drug or IND, for human clinical testing which must become effective before human clinical trials may begin in the U.S.; 11 Table of Contents • approval by an independent Institutional Review Board or IRB, at each site where a clinical trial will be performed before the trial may be initiated at that site; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practices or GCP, to establish the safety and efficacy of the proposed product candidate for each intended use; • satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current Good Manufacturing Practice or CGMP regulations; • submission to the FDA of a new drug application or NDA, which must be accepted for filing by the FDA; • satisfactory completion of an FDA advisory committee review, if applicable; • payment of user fees, if applicable; and • FDA review and approval of the NDA.
We operate in one geographic segment. 17 Table of Contents Our Corporate Information Kiora Pharmaceuticals, Inc. was formed in Delaware on December 28, 2004, under the name EyeGate Pharmaceuticals, Inc. On November 8, 2021, we completed a merger of our wholly-owned Delaware subsidiary, Kiora Pharmaceuticals, Inc.
We operate in one geographic segment. Our Corporate Information Kiora Pharmaceuticals, Inc. was formed in Delaware on December 28, 2004, under the name EyeGate Pharmaceuticals, Inc. On November 8, 2021, we completed a merger of our wholly-owned Delaware subsidiary, Kiora Pharmaceuticals, Inc.
The information on our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be a part of this Annual Report on Form 10-K. Our website address is included in this Annual Report on Form 10-K as an inactive technical reference only.
The information on our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be a part of this Annual Report on Form 10-K. Our website address is included in this Annual Report on Form 10-K as an inactive technical reference only. 16 Table of Contents
Manufacturing We do not have an in-house manufacturing capability for our products and as a result, we will depend heavily on third-party contract manufacturers to produce and package our products. We currently do not have any contractual relationships with third-party manufacturers.
Manufacturing We do not have an in-house manufacturing capability for our products and as a result, we will depend heavily on third-party contract manufacturers to source raw materials, produce and package our products. We currently do not have any contractual relationships with third-party manufacturers.
("SentrX"), a veterinary medical device company that develops and manufactures veterinary wound care products. Under the SentrX Agreement, we in-licensed the rights to trade secrets and know-how related to the manufacturing of KIO-201.
("SentrX"), a veterinary medical device company that develops and manufactures veterinary wound care products. Under the SentrX Agreement, we in-licensed the rights to trade secrets and 9 Table of Contents know-how related to the manufacturing of KIO-201.
By blocking the de novo pyrimidine synthesis pathway via DHODH inhibition, it is suggested that Aubagio ® reduces T-cell proliferation in the periphery. Arava ® and Aubagio ® are formulated as oral drugs and it is established that leflunomide will be metabolized in the liver to the active metabolite teriflunomide.
By blocking the de novo pyrimidine synthesis pathway via DHODH inhibition, it is suggested that Aubagio ® reduces T-cell proliferation in the periphery. Arava ® and Aubagio ® are formulated as oral drugs, and it has been established that leflunomide is metabolized in the liver to the active metabolite teriflunomide.
Data from this trial was presented in November 2023 at the American Academy of Ophthalmology Annual Meeting. The full data package triggered multiple discussions with various potential pharmaceutical partners. After assessing all available options, the Company chose to partner with Théa Open Innovation ("TOI"), a sister company of Laboratories Théa.
Data from this trial were presented in November 2023 at the American Academy of Ophthalmology Annual Meeting. The full data package triggered multiple discussions with various potential pharmaceutical partners. After assessing all available options, in January 2024, we chose to partner with Théa Open Innovation ("TOI"), a sister company of Laboratories Théa.
Our future performance depends significantly upon the continued service of our key scientific, technical, and senior management personnel and our continued ability to attract and retain highly skilled employees.
Our future performance depends significantly upon the 15 Table of Contents continued service of our key scientific, technical, and senior management personnel and our continued ability to attract and retain highly skilled employees.
Sales and Marketing If KIO-104 or KIO-301, are approved by the FDA for commercial sale, we may enter into additional agreements with third parties to sell KIO-104 or KIO-301, or we may choose to market these directly to physicians in the U.S. or globally through our own sales and marketing force and related internal commercialization infrastructure.
Sales and Marketing If KIO-104 or KIO-301 are approved by the FDA or regulatory bodies in other countries, for commercial sale, we may enter into additional agreements with third parties to sell KIO-104 or KIO-301 in countries not already partnered, or we may choose to market these directly to physicians in the U.S. or globally through our own sales and marketing force and related internal commercialization infrastructure.
On July 2, 2013, we (through our subsidiary, Kiora Pharmaceuticals, GmbH) entered into a patent and know-how assignment agreement with 4SC Discovery GmbH (4SC) transferring to us all patent rights and know-how to the compound KIO-101. We are responsible for paying royalties of 3.25% on net sales of KIO-101.
On July 2, 2013, we (through our subsidiary, Kiora Pharmaceuticals, GmbH) entered into a patent and know-how assignment agreement with 4SC Discovery GmbH (4SC) transferring to us all patent rights and know-how to the compound KIO-101. We are responsible for paying royalties of 3.25% on net sales of KIO-101, KIO-104, or any other therapeutic product that uses the compound.
Manufacturing Requirements We and our third-party manufacturers must comply with applicable FDA regulations relating to FDA CGMP regulations.
Manufacturing Requirements We and our third-party manufacturers must comply with applicable FDA regulations relating to FDA Current Good Manufacturing Practice or CGMP regulations.
Patent Portfolio Our patent portfolio includes patents covering KIO-101 and KIO-104 including composition-of-matter, formulations thereof and its therapeutic uses in the treatment of ocular disorders and diseases and more. In addition, we hold a patent portfolio covering KIO-201 consisting of composition-of-matter and methods of use patents. Our KIO-301 portfolio of patents covers composition-of-matter, methods of use, and formulations thereof.
Patent Portfolio Our patent portfolio includes patents covering KIO-101 and KIO-104 including composition-of-matter, formulations thereof and its therapeutic uses in the treatment of ocular disorders and diseases and more. Our 8 Table of Contents KIO-301 portfolio of patents covers composition-of-matter, methods of use, and formulations thereof.
In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing.
In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
Currently, two first generation DHODH inhibitors have been approved in the U.S. and abroad and are marketed by Sanofi as leflunomide (Arava ® ) and the active metabolite teriflunomide (Aubagio ® ). These oral tablets are approved for the treatment of rheumatoid and psoriatic arthritis and multiple sclerosis (MS), respectively. These diseases are autoimmune disorders.
Currently, two first generation DHODH inhibitors have been approved in the U.S. and abroad and are marketed by Sanofi S.A. as leflunomide (Arava ® ) and the active metabolite teriflunomide (Aubagio ® ). These oral tablets are approved for the treatment of rheumatoid and psoriatic arthritis and multiple sclerosis (MS), respectively. 1 Based on data from the American Diabetes Association.
Posterior Non-Infectious Uveitis Market Overview Noninfectious uveitis involving the posterior segment is an important and leading cause of vision loss. While oral corticosteroid therapy is the first-line approach, depending on its underlying cause, uveitis often cannot be 4 Table of Contents controlled after tapering of the steroid to a dose that is safe for chronic treatment.
Current treatments involve chronic steroid use or anti-VEGF treatments. Non-infectious uveitis involving the posterior segment is an important and leading cause of vision loss. While oral corticosteroid therapy is the first-line approach, depending on its underlying cause, uveitis often cannot be controlled after tapering of the steroid to a dose that is safe for chronic treatment.
None of our employees are represented by a collective bargaining agreement and we have never experienced any work stoppage. We believe that we maintain good relations with our employees. Our employees are highly skilled, and many hold advanced degrees and have experience with drug development.
Employees and Human Capital Resources As of December 31, 2024, we had twelve full-time employees. None of our employees are represented by a collective bargaining agreement, and we have never experienced any work stoppage. We believe that we maintain good relations with our employees. Our employees are highly skilled, and many hold advanced degrees and have experience with drug development.
RP affects about 1 in 3,500 people worldwide. Thus, with a population of about 330 million in the U.S. as of February 2021, about 96,250 people in the U.S. would be expected to have RP. With a worldwide population presently estimated at over 7.7 billion, it can be estimated that approximately 2.3 million people around the world have RP.
RP affects about 1 in 3,500 people worldwide. Thus, with a population of about 341.5 million in the U.S. as of March 2025, about 97,571 people in the U.S. would be expected to have RP. With a worldwide population presently estimated at over 8.1 billion, it can be estimated that approximately 2.3 million people around the world have RP.
We have four wholly-owned subsidiaries: Jade Therapeutics, Inc., Kiora Pharmaceuticals, GmbH (formerly known as Panoptes Pharma GmbH), Bayon Therapeutics, Inc., and Kiora Pharmaceuticals Pty Ltd (formerly known as Bayon Therapeutics Pty Ltd). Our former subsidiary, EyeGate Pharma S.A.S. was dissolved effective December 31, 2020.
We were originally incorporated in 1998 under the name of Optis France S.A. in Paris, France. We have four wholly-owned subsidiaries: Jade Therapeutics, Inc., Kiora Pharmaceuticals, GmbH (formerly known as Panoptes Pharma GmbH), Bayon Therapeutics, Inc., and Kiora Pharmaceuticals Pty Ltd (formerly known as Bayon Therapeutics Pty Ltd). Our former subsidiary, EyeGate Pharma S.A.S. was dissolved effective December 31, 2020.
We are also planning to develop KIO-104 for the treatment of Posterior Non-Infectious Uveitis, a rare T cell-mediated, intraocular inflammatory disease. KIO-104 is a next-generation, non-steroidal, immuno-modulatory, small-molecule inhibitor of dihydroorotate dehydrogenase ("DHODH") formulated for intravitreal delivery, and is ideally suited to suppress overactive T-cell activity to treat the underlying inflammation.
We are also developing KIO-104 for the treatment of retinal inflammatory diseases, including Diabetic Macular Edema (DME) and Posterior Non-Infectious Uveitis, a rare T cell-mediated, intraocular inflammatory disease. KIO-104 is a novel and potent, non-steroidal small-molecule inhibitor of dihydroorotate dehydrogenase ("DHODH") formulated for intravitreal delivery, and is ideally suited to suppress overactive T-cell activity to treat the underlying inflammation.
We are considering strategic partnering for our KIO-101 asset, which focuses on treating the ocular manifestation of patients with autoimmune diseases, including rheumatoid arthritis and, as such, is termed the Ocular Presentation of Rheumatoid Arthritis and Other Autoimmune Diseases (OPRA+). KIO-101 uses the same active compound in KIO-104, but is formulated as an ophthalmic topical eye drop.
We are considering strategic partnering for our KIO-101 asset, which focuses on treating the ocular manifestation of patients with autoimmune diseases, including rheumatoid arthritis and, as such, is termed the Ocular Presentation of Rheumatoid Arthritis and Other Autoimmune Diseases (OPRA+).
Further, TOI is responsible for all research and development costs of KIO-301. On July 21, 2023, we entered into a Memorandum of Understanding with the Choroideremia Research Foundation ("CRF") to support strategic development of KIO-301 in Choroideremia ("CHM"). CHM is a rare, inherited retinal disease that causes blindness.
On July 21, 2023, we entered into a Memorandum of Understanding with the Choroideremia Research Foundation ("CRF") to support strategic development of KIO-301 in Choroideremia ("CHM"). CHM is a rare, inherited retinal disease that causes blindness. This collaboration could accelerate our development of KIO-301 for this indication, which also is included in the TOI partnership.
Pre-clinical tests include laboratory evaluation of product chemistry, formulation, manufacturing and control procedures, and stability, as well as animal studies to assess the toxicity and other safety characteristics of the product.
The preclinical and clinical testing and approval process requires substantial time, effort, and financial resources. Preclinical tests include laboratory evaluation of product chemistry, formulation, manufacturing and control procedures, and stability, as well as animal studies to assess the toxicity and other safety characteristics of the product.
Apart from improved visual acuity, improvements in vitreous haze and reduction in macular edema were observed in the patients treated with KIO-104. 9 Table of Contents Intellectual Property and Proprietary Rights Overview We are building an intellectual property portfolio for our active platforms, KIO-104 and KIO-301, and any other product candidates that we may develop, as well as other devices and product candidates for treatment of ocular indications in the U.S. and abroad.
Intellectual Property and Proprietary Rights Overview We are building an intellectual property portfolio for our active platforms, KIO-104 and KIO-301, and any other product candidates that we may develop, as well as other devices and product candidates for treatment of ocular indications in the U.S. and abroad.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, and establishing 12 Table of Contents clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
(incorporated in October 2021) into EyeGate Pharmaceuticals, Inc., which merger resulted in the amendment of our restated certificate of incorporation to change our name to “Kiora Pharmaceuticals, Inc.” effective November 8, 2021.
(incorporated in October 2021) into EyeGate Pharmaceuticals, Inc., which merger resulted in the amendment of our restated certificate of incorporation to change our name to “Kiora Pharmaceuticals, Inc.” In connection with the name change, we changed our symbol on the Nasdaq Capital Market to “KPRX”.
We are eligible to receive milestone payments totaling up to €155 million, upon and subject to, the achievement of certain specified developmental and commercial milestones. We have not received any milestones from 4SC.
We are eligible to receive milestone payments totaling up to €155 million, upon and subject to, the achievement of certain specified developmental and commercial milestones. We have not received any milestones from 4SC. In addition, we are eligible to receive royalties of 3.25% on net sales of any product commercialized by 4SC using the compound in KIO-101 and KIO-104.
We are obligated to pay royalties on net sales of 2% of the first $250 million of net sales, 1.25% of net sales between $250 million and $500 million, and 0.5% of net sales over $500 million. The agreement expires on the date of the last-to-expire patent included in the licensed patent portfolio which is January 2030.
We are obligated to pay royalties on net sales of 2% of the first $250 million of net sales, 1.25% of net sales between $250 million and $500 million, and 0.5% of net sales over $500 million.
Design KIO-104 was delivered as a single, intravitreal injection of 300, 600, and 1,200 ng per eye. The primary objective of the study assessed the safety, tolerability and pharmacokinetics ("PK") of ascending doses of KIO-104 in 12 patients. The secondary objectives assessed intraocular inflammation and visual acuity.
The primary objective of the study assessed the safety, tolerability and pharmacokinetics ("PK") of ascending doses of KIO-104 in 12 patients. The secondary objectives assessed intraocular inflammation and visual acuity.
In addition to the financial terms of this partnership, we have formed a joint steering committee with TOI for the continued development and potential commercialization of KIO-301. KIO-301 (formerly known as B-203) was acquired through the Bayon Therapeutics, Inc. ("Bayon") transaction which closed October 21, 2021.
In addition to the financial terms of this partnership, we have formed a joint steering committee with TOI for the continued development and potential commercialization of KIO-301.
KIO-301 is a potential vision-restoring small molecule that acts as a “photoswitch” specifically created to restore vision in patients with inherited and age-related degenerative retinal diseases, including RP.
We are developing KIO-301, with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (collectively including any and all sub-forms, "RP"). KIO-301 is a potential vision-restoring small molecule that acts as a “photoswitch” specifically created to restore vision in patients with inherited and age-related degenerative retinal diseases, including RP.
We and TOI will operate under a Joint Steering Committee for the strategic and operational components of KIO-301's continued development. In exchange, we received an upfront payment of $16 million and will be eligible to receive aggregate clinical development, regulatory and commercial milestone payments of up to $285 million and tiered commercial royalties up to the low twenty percents.
In exchange, we received an upfront payment of $16 million and will be eligible to receive aggregate clinical development, regulatory and commercial milestone payments of up to $285 million and tiered commercial royalties up to the low 20% on net sales. Further, TOI is responsible for all research and development costs of KIO-301.
We completed a Phase 2 clinical trial in patients with PCEDs and released full data in April 2023. Market Opportunity Retinitis Pigmentosa Market Overview More than 3.4 million patients globally are estimated to have an inherited retinal disease leading to significant or permanent vision loss. RP is the largest family of these inherited diseases.
As a further sign of safety, there were zero clinically significant laboratory findings observed in both healthy patients and those with ocular surface inflammation. Market Opportunity Retinitis Pigmentosa Market Overview More than 3.4 million patients globally are estimated to have an inherited retinal disease leading to significant or permanent vision loss. RP is the largest family of these inherited diseases.
Our Development Pipeline TOI – Théa Open Innovation ‡ Timing to be determined in collaboration with TOI partnership Clinical Development KIO-301: Retinitis Pigmentosa Phase 1b Study: In the fourth quarter of 2022, we initiated a first-in-human clinical trial of KIO-301, referred to as the ABACUS study.
Our Development * KIO-301 has been granted Orphan Disease Designation in the USA and EU Clinical Development KIO-301: Retinitis Pigmentosa Phase 1b Study: In the fourth quarter of 2022, we initiated a first-in-human clinical trial of KIO-301, referred to as the ABACUS study.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off label uses, and a company that is found to have improperly promoted off label uses may be subject to significant liability, both at the federal and state levels. 15 Table of Contents Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
These ocular presentations can include signs and symptoms similar to keratoconjunctivitis sicca (KCS), episcleritis, scleritis, peripheral ulcerative keratitis, anterior uveitis, as well as retinal vasculitis.
These ocular presentations can include signs and symptoms similar to keratoconjunctivitis sicca (KCS), episcleritis, scleritis, peripheral ulcerative keratitis, anterior uveitis, as well as retinal vasculitis. In patients with OPRA+, the surface of the eye often has significant irritation accompanied by symptoms of soreness, grittiness, light sensitivity, and dryness.
This collaboration could accelerate our development of KIO-301, which also is included in the TOI partnership. Under the collaboration, CRF will assist us with access to clinical 7 Table of Contents and scientific thought leaders to assist in further development of KIO-301 for CHM.
Under the collaboration, CRF will assist us with access to clinical and scientific thought leaders to assist in further development of KIO-301 for CHM. CRF will also provide aid in enrollment of patients for any future trials of KIO-301 for CHM.
Regarding key secondary efficacy endpoints, KIO-301 consistently demonstrated improvements in vision from baseline, including expansion of visual fields, improved visual acuity and light perception, higher success rates in multiple functional vision tests, increased neural activity within the primary visual cortex and improvements in quality of life. 8 Table of Contents KIO-104: Non-Infectious Posterior Uveitis Phase 1b/2a Study: A first-in-human clinical study to evaluate the safety of an intravitreal injection of KIO-104 in patients with chronic, non-infectious uveitis was conducted and the final study report was completed in 2021.
Regarding key secondary efficacy endpoints, KIO-301 consistently demonstrated improvements in vision from baseline, including expansion of visual fields, improved visual acuity and light perception, higher success rates in multiple functional vision tests, increased neural activity within the primary visual cortex and improvements in quality of life.
In each of these areas, as above, the applicable regulatory agency will have broad regulatory and enforcement powers, including, among other things, the ability to levy fines and civil penalties.
In each of these areas, as above, the applicable regulatory agency will have broad regulatory and enforcement powers, including, among other things, the ability to levy fines and civil penalties. Compliance with current or future environmental regulations may impair our research, development, and production efforts, which could harm our business, operating results, and financial condition.
As a significant portion of the ocular surface inflammation due to underlying autoimmune diseases is caused by over-active T-cells, it is believed that a DHODH inhibitor has the potential to positively impact this disease. Ocular Surgery Market Overview There are multiple surgical procedures involving the ocular surface that have long recovery, whereby acceleration of that period would benefit the patients.
As a significant portion of the ocular surface inflammation due to underlying autoimmune diseases is caused by over-active T-cells, it is believed that a DHODH inhibitor has the potential to positively impact this disease. Our Strategy Our goal is to develop products for treating disorders of the eye.
The agreement calls for payments to Photoswitch upon the achievement of certain development milestones and upon first commercial sale of the product. On January 25, 2024, we entered into an agreement with TOI to co-develop and commercialize KIO-301 globally (except for certain countries in Asia) in the field of ophthalmology.
These license agreements require us to pay or receive royalties or fees to or from the licensor based on revenue or milestones related to the licensed technology. On January 25, 2024, we entered into an agreement with TOI to co-develop and commercialize KIO-301 globally (except for certain countries in Asia) in the field of ophthalmology.
ITEM 1. BUSINESS Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing therapies for the treatment of orphan retinal diseases. We were formed as a Delaware corporation on December 28, 2004, under the name of EyeGate Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc. effective November 8, 2021.
We were formed as a Delaware corporation on December 28, 2004, under the name of EyeGate Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc. effective November 8, 2021 in connection with a merger of one of our wholly owned subsidiaries.
We also received an upfront payment from TOI of $16 million and have a tiered commercial royalty structure up to the low twenty percents.
We also received an up-front payment from TOI of $16 million and have a tiered commercial royalty structure up to the low 20% of net sales. On May 1, 2020, we, through our subsidiary Bayon, entered into an agreement with Photoswitch Therapeutics, Inc.
In the fourth quarter of 2021, we reported top-line safety and tolerability data from a Phase 1b proof-of-concept study evaluating KIO-101 in patients with ocular surface inflammation. As a further sign of safety, there were zero clinically significant laboratory findings (including liver enzymes) observed in both healthy patients and those with ocular surface inflammation.
KIO-101 uses the 3 Table of Contents same active compound in KIO-104, but is formulated as an ophthalmic topical eye drop. In the fourth quarter of 2021, we reported top-line safety and tolerability data from a Phase 1b proof-of-concept study evaluating KIO-101 in patients with ocular surface inflammation.
Once the submission is accepted for filing, the FDA begins an in-depth substantive review. 14 Table of Contents Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease.
Collaborations On January 25, 2024, we entered into an agreement with TOI, a sister company of Laboratories Théa, with respect to KIO-301. The agreement grants TOI the global rights (except for certain countries in Asia) to co-develop and commercialize KIO-301 in ophthalmology.
The agreement grants TOI the global rights (except for certain countries in Asia) to co-develop and commercialize KIO-301 in ophthalmology. We and TOI will operate under a Joint Steering Committee for the strategic and operational components of KIO-301's continued development.
In patients with OPRA+, the surface of the eye often has significant irritation accompanied by symptoms of soreness, grittiness, 1 Based on prevalence data from the International EyeCOPE Study published in Ophthalmology and Therapy (June 2021) Volume 10, pages 565–580. 5 Table of Contents light sensitivity, and dryness.
JAMA Ophthalmol. 2014;132(11):1334-1340. doi: 10.1001/jamaophthalmol.2014.2854. 3 Based on prevalence data from the International EyeCOPE Study published in Ophthalmology and Therapy (June 2021) Volume 10, pages 565–580. 5 Table of Contents These diseases are autoimmune disorders.
On March 17, 2022, we were granted an ODD by the FDA for the active ingredient in KIO-301. Currently, no therapeutics are approved to treat patients with RP. A possible market expansion beyond RP would be to evaluate KIO-301 in patients with geographic atrophy (GA), the late stage of age-related dry macular degeneration.
A possible market expansion beyond RP would be to evaluate KIO-301 in patients with geographic atrophy (GA), an advanced stage of age-related dry macular degeneration. Like RP, GA results in photoreceptor 4 Table of Contents degeneration while maintaining RGC viability. Thus, KIO-301 could benefit these patients who have lost vision.
See “Government Regulation — Patent Term Restoration and Marketing Exclusivity” below. Globally, we hold 46 active and valid patents. License Agreements We are a party to seven license agreements as described below. These license agreements require us to pay or receive royalties or fees to or from the licensor based on revenue or milestones related to the licensed technology.
See “Government Regulation — Patent Term Restoration and Marketing Exclusivity” below. Globally, we hold 34 active and valid patents that will expire between 2025 and 2035. We have applied for an additional 52 patents, which if approved will expire between 2035 and 2044. License Agreements We are a party to six license agreements as described below.
We agreed to pay a termination fee of $0.1 million, of which $50,000 was paid upon execution of the agreement, and $50,000 is payable on the one year anniversary of the termination. On September 26, 2018, we entered into an intellectual property licensing agreement (the “SentrX Agreement”) with SentrX Animal Care, Inc.
The agreement expires on the date of the last-to-expire patent included in the licensed patent portfolio which is currently January 2030, however if patents that are currently pending approval are issued, the license expiration would extend into 2041. On September 26, 2018, we entered into an intellectual property licensing agreement (the “SentrX Agreement”) with SentrX Animal Care, Inc.
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We were originally incorporated in 1998 under the name of Optis France S.A. in Paris, France. Our lead product is KIO-301, with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (collectively including any and all sub-forms, "RP").
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ITEM 1. BUSINESS Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing therapies for the treatment of retinal diseases. We were originally incorporated in 1998 under the name of Optis France S.A. in Paris, France.
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In a 14-day good laboratory practice ("GLP") intravenous ("IV") repeated dose toxicity study in rats, no adverse or test item related effects were observed in any of the tested parameters (mortality, clinical observations, ophthalmoscopy, body weight and food consumption, hematology and coagulation, clinical biochemistry, organ weight, pathology, and histopathology) at the highest doses tested (1.0 mg/kg).
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In July 2024, we were granted Orphan Medicinal Product Designation by the European Medicines Agency for KIO-301 for the treatment of non-syndromic, rod-dominant retinal dystrophies, which includes diseases like retinitis pigmentosa, choroideremia, Stargardt disease and others.
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We are also open to partnering our KIO-201 asset which is for patients with persistent corneal epithelial defects (PCED), an orphan disease. KIO-201 has also been evaluated for patients recovering from surgical wounds, such as those undergoing the laser vision correction procedure, photorefractive keratectomy ("PRK").
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In September 2024, the European Medicines Agency expanded our Orphan Medicinal Product Designation to also include syndromic, rod-dominant retinal dystrophies that include diseases like Usher's syndrome, which has non-ocular aspects of diseases in addition to retinal involvement.
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KIO-201 is a modified form of the natural polymer hyaluronic acid ("HA"), designed to protect the ocular surface to permit 3 Table of Contents re-epithelialization of the cornea and improve and maintain ocular surface integrity. KIO-201 has unique properties that help hydrate and protect the ocular surface.
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In October 2024, we, in collaboration with our partner TOI, announced that we received regulatory approval to initiate a Phase 2 clinical trial to investigate KIO-301 for vision restoration in patients with retinitis pigmentosa.
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Like RP, GA results in photoreceptor degeneration while maintaing RGC viability. Thus, KIO-301 could benefit these patients who have lost vision. There are about 1,000,000 patients in the U.S. with GA and to date, no therapeutics are approved to treat this disease.
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The ABACUS-2 trial is expected to be a 36 patient, multi-center, double-masked, randomized, controlled, multiple dose study enrolling patients with ultra-low vision or no light perception regardless of their underlying gene mutation associated with retinitis pigmentosa. Enrollment of the first patient is expected to begin in the first half of 2025 following validation of novel functional vision endpoints.
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PRK surgery is an efficacious alternative to patients seeking surgical correction of refractive errors who are not suitable candidates for Laser-Assisted In Situ Keratomileusis ("LASIK") due to inadequate corneal thickness, larger pupil size, history of KCS, or anterior basement membrane disease.
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These functional assessments may serve as approvable primary endpoints in subsequent registration studies in the United States, Europe and other major regions. KIO-301 (formerly known as B-203) was acquired through the Bayon Therapeutics, Inc. ("Bayon") transaction which closed October 21, 2021.
Removed
PRK surgery involves controlled mechanical removal of corneal epithelium with subsequent excimer laser photoablation of the underlying Bowman’s layer and anterior stroma, including the subepithelial nerve plexus. The military prefers PRK as a refractive procedure due to the stability of the PRK incision and the absence of risk for flap dislocation during military active duty.
Added
On March 17, 2022, we were granted an ODD by the FDA for the active ingredient in KIO-301. In July 2024, we were granted Orphan Medicinal Product Designation by the European Medicines Agency for KIO-301 for the treatment of non-syndromic, rod-dominant retinal dystrophies, which includes diseases like retinitis pigmentosa, choroideremia, Stargardt disease and others.
Removed
Although this procedure yields desirable visual acuity results, common complications of the procedure include post-operative pain secondary to the epithelial defects, risk of corneal infection prior to re-epithelization of the large epithelial defect, corneal haze formation, decreased contrast sensitivity, and slower visual recovery.
Added
In September 2024, the European Medicines Agency expanded our Orphan Medicinal Product Designation to also include syndromic, rod-dominant retinal dystrophies that includes diseases like Usher's syndrome, which has non-ocular aspects of diseases in addition to retinal involvement. Currently, no therapeutics are approved to treat patients with RP.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize KIO-104, KIO-301, or any other product candidates that we may develop, including: • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate; • any third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • we may decide, or regulators or institutional review boards may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; 24 Table of Contents • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, or institutional review boards to suspend or terminate the trials.
Biggest changeWe may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize KIO-104, KIO-301, or any other product candidates that we may develop, including: • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate; • any third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • we may decide, or regulators or institutional review boards may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, or institutional review boards to suspend or terminate the trials. 23 Table of Contents If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may: • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; or • have the product removed from the market after obtaining marketing approval.
If clinical trials of KIO-104, KIO-301, or any other product candidate that we develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or foreign regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be delayed or unable to complete, the development and commercialization of KIO-104, KIO-301, or any other product candidate.
If clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or foreign regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be delayed or unable to complete, the development and commercialization of KIO-104, KIO-301, or any other product candidate.
Risks Related to the Commercialization of Our Product Candidates Even if KIO-104, KIO-301, or any other product candidate that we develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community necessary for commercial success and the market opportunity for our product candidates may be smaller than we estimate.
Risks Related to the Commercialization of Our Product Candidates Even if KIO-104, KIO-301, or any other product candidate that we may develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community necessary for commercial success and the market opportunity for our product candidates may be smaller than we estimate.
The applicable federal, state, and foreign healthcare laws and regulations that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal 37 Table of Contents government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which imposes obligations, including mandatory contractual terms, on covered healthcare providers, health plans and healthcare clearinghouses, as well as their business associates, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The applicable federal, state, and foreign healthcare laws and regulations that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; 36 Table of Contents • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which imposes obligations, including mandatory contractual terms, on covered healthcare providers, health plans and healthcare clearinghouses, as well as their business associates, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The market price for our common stock may be influenced by many factors, including: • the success of competitive products or technologies; • results of clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop; • results of clinical trials of product candidates of our competitors; • regulatory or legal developments in the U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; 43 Table of Contents • the recruitment or departure of key scientific or management personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire, or in-license additional products, product candidates, or technologies for the treatment of ophthalmic diseases, the costs of commercializing any such products, and the costs of development of any such product candidates or technologies; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • reduction in stock price could indicate impairment of the goodwill and intangible assets; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • the success of competitive products or technologies; • the results of clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop; • the results of clinical trials of product candidates of our competitors; 40 Table of Contents • regulatory or legal developments in the U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key scientific or management personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire, or in-license additional products, product candidates, or technologies for the treatment of ophthalmic diseases, the costs of commercializing any such products, and the costs of development of any such product candidates or technologies; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • reduction in stock price could indicate impairment of the goodwill and intangible assets; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
The success of KIO-104 and KIO-301 will depend on several factors, including the following: • obtaining favorable results from clinical trials; • applying for and receiving marketing approvals from applicable regulatory authorities for KIO-104 and KIO-301; • making arrangements with third-party manufacturers for commercial quantities of KIO-104 and KIO-301 and receiving regulatory approval of our manufacturing processes and our third-party manufacturers’ facilities from applicable regulatory authorities; • establishing sales, marketing, and distribution capabilities and launching commercial sales of KIO-104 and KIO-301, if and when approved, whether alone or in collaboration with others; 23 Table of Contents • acceptance of KIO-104 and KIO-301, if and when approved, by patients, the medical community, and third-party payors; • effectively competing with other therapies, including the existing standard-of-care; • maintaining a continued acceptable safety profile of KIO-104 and KIO-301 following approval; • obtaining and maintaining coverage and adequate reimbursement from third-party payors; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity; and • protecting our rights in our intellectual property portfolio related to KIO-104 and KIO-301.
The success of KIO-104 and KIO-301 will depend on several factors, including the following: • obtaining favorable results from clinical trials; • applying for and receiving marketing approvals from applicable regulatory authorities for KIO-104 and KIO-301; • making arrangements with third-party manufacturers for commercial quantities of KIO-104 and KIO-301 and receiving regulatory approval of our manufacturing processes and our third-party manufacturers’ facilities from applicable regulatory authorities; • establishing sales, marketing, and distribution capabilities and launching commercial sales of KIO-104 and KIO-301, if and when approved, whether alone or in collaboration with others; • acceptance of KIO-104 and KIO-301, if and when approved, by patients, the medical community, and third-party payors; • effectively competing with other therapies, including the existing standard-of-care; • maintaining a continued acceptable safety profile of KIO-104 and KIO-301 following approval; • obtaining and maintaining coverage and adequate reimbursement from third-party payors; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity; and 22 Table of Contents • protecting our rights in our intellectual property portfolio related to KIO-104 and KIO-301.
If we raise additional funds through government or other third-party funding, collaborations, strategic alliances, licensing arrangements, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.
If we raise additional funds through government grants or other third-party funding, collaborations, strategic alliances, licensing arrangements, or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.
In the future, we plan to build sales and marketing infrastructure to market or co-promote KIO-104, KIO-301, and possibly other product candidates that we develop, if and when they are approved. There are risks involved with establishing our own sales, marketing, and distribution capabilities.
In the future, we plan to build sales and marketing infrastructure to market or co-promote KIO-104, KIO-301, and possibly other product candidates that we may develop, if and when they are approved. There are risks involved with establishing our own sales, marketing, and distribution capabilities.
If we do not establish sales, marketing, and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing KIO-101, KIO-104, KIO-201, KIO-301, or any other product candidates that we may develop.
If we do not establish sales, marketing, and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing KIO-101, KIO-104, KIO-301, or any other product candidates that we may develop.
Moreover, pre-clinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.
Our expenses will also increase if and as we: • seek marketing approval for KIO-104 and KIO-301, whether alone or in collaboration with third parties; • continue the research and development of KIO-104, KIO-301, and any of our other product candidates; • seek to develop additional product candidates; • in-license or acquire the rights to other products, product candidates, or technologies; • seek marketing approvals for any product candidates that successfully complete clinical trials; • establish sales, marketing, and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, quality control, scientific and management personnel; • expand our operational, financial and management systems, and personnel, including personnel to support our clinical development, manufacturing, and planned future commercialization efforts and our operations as a public company; and • increase our insurance coverage as we expand our clinical trials and commence commercialization of KIO-104 and KIO-301.
Our expenses will also increase if and as we: • seek marketing approval for KIO-104 and KIO-301, whether alone or in collaboration with third parties; • continue the research and development of KIO-104 and KIO-301; • seek to develop additional product candidates; • in-license or acquire the rights to other products, product candidates, or technologies; 18 Table of Contents • seek marketing approvals for any product candidates that successfully complete clinical trials; • establish sales, marketing, and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, quality control, scientific and management personnel; • expand our operational, financial and management systems, and personnel, including personnel to support our clinical development, manufacturing, and planned future commercialization efforts and our operations as a public company; and • increase our insurance coverage as we expand our clinical trials and commence commercialization of KIO-104 and KIO-301.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete pre-clinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome.
Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete, and is uncertain as to outcome.
We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. We expect to devote substantial financial resources to our ongoing and planned activities, particularly continuing the clinical development of our KIO-104 and KIO-301 products.
We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. We expect to devote substantial financial resources to our ongoing and planned activities, particularly continuing the clinical development of our KIO-104 and KIO-301 product candidates.
Our commercial revenues, if any, will be derived from sales of KIO-104, KIO-301, or any other products that we successfully develop, none of which we expect to be commercially available for several years, if at all. In addition, if approved, any product candidate that we develop or any product that we in-license may not achieve commercial success.
Our commercial revenues, if any, will be derived from sales of KIO-104, KIO-301, or any other product candidates that we successfully develop, none of which we expect to be commercially available for several years, if at all. In addition, if approved, any product candidate that we develop or any product that we in-license may not achieve commercial success.
Factors that may inhibit our efforts to commercialize product candidates on our own include: • our inability to recruit, train, and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe our products; 26 Table of Contents • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Factors that may inhibit our efforts to commercialize product candidates on our own include: • our inability to recruit, train, and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe our products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
In particular, during prosecution of any patent application, the issuance of any patents based on the application may depend upon our ability to generate additional pre-clinical or clinical data that support the patentability of our proposed claims. We may not be able to generate sufficient additional data on a timely basis, or at all.
In particular, during prosecution of any patent application, the issuance of any patents based on the application may depend upon our ability to generate additional preclinical or clinical data that support the patentability of our proposed claims. We may not be able to generate sufficient additional data on a timely basis, or at all.
There can be no assurance that our product candidates or any products that we may in-license, if they are approved for sale in the U.S. or in other countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-effective by third-party payors, that coverage and an 28 Table of Contents adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably.
There can be no assurance that our product candidates or any products that we may in-license, if they are approved for sale in the U.S. or in other countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-effective by third-party payors, that coverage and an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably.
Identifying potential product candidates and conducting pre-clinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales.
Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.
Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.
Significant pre-clinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.
Significant preclinical or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in 42 Table of Contents which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
We rely, and expect to continue to rely, on third parties to manufacture clinical and commercial supplies of KIO-104 and KIO-301, pre-clinical and clinical supplies of our other product candidates that we may develop, and commercial supplies of products if and when any of our product candidates receive marketing approval.
We rely, and expect to continue to rely, on third parties to manufacture clinical and commercial supplies of KIO-104 and KIO-301, preclinical and clinical supplies of our other product candidates that we may develop, and commercial supplies of products if and when any of our product candidates receive marketing approval.
Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. 29 Table of Contents Risks Related to Our Dependence on Third Parties We may enter into collaborations with other third parties for the development or commercialization of our product candidates.
Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Risks Related to Our Dependence on Third Parties We may enter into collaborations with other third parties for the development or commercialization of our product candidates.
If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. • Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. • Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability. • Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel. 18 Table of Contents • We depend heavily on the success of KIO-104 and KIO-301.
If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. • Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. • Our limited operating history may make it difficult for investors to evaluate the success of our business to date and to assess our future viability. • Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel. • We depend heavily on the future success of KIO-104 and KIO-301.
Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability. We are a clinical-stage company with a limited operating history.
Our limited operating history may make it difficult for investors to evaluate the success of our business to date and to assess our future viability. We are a clinical-stage company with a limited operating history.
If we are unable to successfully obtain marketing approval for KIO-104, or KIO-301, or experience significant delays in doing so, or if after obtaining marketing approvals, we fail to commercialize KIO-104 or KIO-301, our business will be materially harmed. • If clinical trials of KIO-104, KIO-301, or any other product candidate that we develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or foreign regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be delayed or unable to complete, the development and commercialization of KIO-104, KIO-301, or any other product candidate. • Even if KIO-104, KIO-301, or any other product candidate that we develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for our product candidates may be smaller than we estimate. • If we are unable to establish sales, marketing, and distribution capabilities, we may not be successful in KIO-104, KIO-301, or any other product candidates that we may develop if and when they are approved. • We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than we do. • Even if we are able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop, the products may become subject to unfavorable pricing regulations, third-party coverage or reimbursement practices, or healthcare reform initiatives which could harm our business. • We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials. • If we are unable to obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired. • We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming, and unsuccessful. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. • If we are not able to obtain required regulatory approvals, we will not be able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop; and our ability to generate revenue will be materially impaired. • We incur increasing costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices. • Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain. • If we identify a material weakness in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely meet requirements applicable to public companies, which may adversely affect investor confidence in us, and, as a result, the market price of our common stock. 19 Table of Contents Risk Factors The following factors should be reviewed carefully, in conjunction with the other information contained in this Annual Report on Form 10-K.
If we are unable to successfully obtain marketing approval for KIO-104, or KIO-301, or experience significant delays in doing so, or if after obtaining marketing approvals, we fail to commercialize KIO-104 or KIO-301, our business will be materially harmed. • If clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or foreign regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be delayed or unable to complete, the development and commercialization of KIO-104, KIO-301, or any other product candidate. • Even if KIO-104, KIO-301, or any other product candidate that we may develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for our product candidates may be smaller than we estimate. • If we are unable to establish sales, marketing, and distribution capabilities, we may not be successful in KIO-104, KIO-301, or any other product candidates that we may develop if and when they are approved. • We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than we do. • Even if we are able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop, the products may become subject to unfavorable pricing regulations, third-party coverage or reimbursement practices, or healthcare reform initiatives which could harm our business. • We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials. • If we are unable to obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired. 17 Table of Contents • We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming, and unsuccessful. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. • If we are not able to obtain required regulatory approvals, we will not be able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop; and our ability to generate revenue will be materially impaired. • We incur increasing costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices. • Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain. • If we identify a material weakness in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely meet requirements applicable to public companies, which may adversely affect investor confidence in us, and, as a result, the market price of our common stock.
Our foreign operations require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the U.S., which could limit our growth potential and increase our development costs.
Our foreign operations require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, 41 Table of Contents manufacturing, or selling certain products and product candidates outside of the U.S., which could limit our growth potential and increase our development costs.
We cannot accurately predict when or if KIO-104 or KIO-301 will prove effective or safe in humans or whether it will receive marketing approval. Our ability to generate product revenues, which may never occur, will depend heavily on our obtaining marketing approval for and commercializing KIO-104 and KIO-301.
We cannot accurately predict when or if KIO-104 or KIO-301 will prove effective or safe in humans or whether it will receive marketing approval. Our ability to generate product revenues, which may never occur, will depend heavily on obtaining marketing approval to commercialize KIO-104 and KIO-301.
Our operations to date have been limited to organizing and staffing our company, acquiring rights to intellectual property, business planning, raising capital, 22 Table of Contents developing our technology, identifying potential product candidates, undertaking preclinical studies, and conducting clinical trials of KIO-104 and KIO-301.
Our operations to date have been limited to organizing and staffing our company, acquiring rights to intellectual property, business planning, raising capital, developing our technology, identifying potential product candidates, undertaking preclinical studies, and conducting clinical trials of KIO-104 and KIO-301.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. 44 Table of Contents Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.
Our likely collaborators for any sales, marketing, distribution, development, licensing, or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies, and biotechnology companies. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.
Our likely collaborators for any sales, marketing, distribution, development, licensing, or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies, and biotechnology companies. Our ability to generate revenues from these 28 Table of Contents arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.
We do not currently have any contractual commitments for commercial supply of bulk drug substance for KIO-104, KIO-301, or fill-finish services. We also do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for KIO-104 and KIO-301, or for fill-finish services.
We do not currently have any contractual commitments for commercial supply of bulk drug substance for KIO-104, KIO-301, or fill-finish services. We also do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for KIO-104 and KIO-301, or for fill-finish 30 Table of Contents services.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under 40 Table of Contents consulting or advisory contracts with other entities that may limit their availability to us.
In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.
The availability of qualified personnel in the markets in which we operate has declined in recent years and competition for such labor has increased. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
The availability of qualified personnel in the markets in which we operate has declined in recent years and competition for such labor has increased. We also experience competition for the hiring of scientific and clinical personnel from 39 Table of Contents universities and research institutions.
We may also enter into arrangements with third parties to perform these services in the U.S. if we do not establish our own sales, marketing, and distribution capabilities in the U.S., or if we determine that such third-party arrangements are otherwise beneficial.
We may also enter into arrangements with third parties to perform these 25 Table of Contents services in the U.S. if we do not establish our own sales, marketing, and distribution capabilities in the U.S., or if we determine that such third-party arrangements are otherwise beneficial.
We have invested a significant portion of our efforts and financial resources in the development of KIO-101 and KIO-201, and we expect to invest a significant portion of our efforts and financial resources in the development of KIO-104 and KIO-301 in the future. There remains a significant risk that we will fail to successfully develop either product candidate.
We have invested a significant portion of our efforts and financial resources in the development of KIO-104 and KIO-301, and we expect to invest a significant portion of our efforts and financial resources in the development of KIO-104 in the future. There remains a significant risk that we may fail to successfully develop either product candidate.
Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market KIO-104, KIO-301, or any other product candidate from regulatory authorities in any jurisdiction.
Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We 34 Table of Contents have not received approval to market KIO-104, KIO-301, or any other product candidate from regulatory authorities in any jurisdiction.
If we elect to fund and undertake development or commercialization activities on 30 Table of Contents our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all.
If we elect to fund and undertake development or commercialization activities on our own, we may need to obtain additional expertise and additional capital, which may not be available to us on acceptable terms or at all.
An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly.
An adverse result in any litigation proceeding could put one or more of our patents at 32 Table of Contents risk of being invalidated or interpreted narrowly.
We have only limited experience in filing and supporting the applications 35 Table of Contents necessary to gain marketing approvals and expect to rely on third-party CROs and consultants to assist us in this process.
We have only limited experience in filing and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs and consultants to assist us in this process.
Our expenses will increase if: • we are required by the FDA or foreign equivalents to perform studies or clinical trials in addition to those currently expected and 20 Table of Contents • there are any delays in enrollment of patients in or completing our clinical trials or the development of KIO-104, KIO-301, or any other product candidates that we may develop.
Our expenses will increase if: • we are required by the FDA or foreign equivalents to perform studies or clinical trials in addition to those currently expected, and • there are any delays in patient enrollment or in completing the clinical trials of KIO-104, KIO-301, or any other product candidates that we may develop.
With the current cash on hand, we believe we will have sufficient cash to fund planned operations into 2026, however, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
With the current cash and short-term investments on hand, we believe we will have sufficient cash to fund planned operations into 2027, however, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
We will remain an SRC until (a) the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $250 million or (b) in the event we have over $100 million in annual revenues, the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $700 million.
We will remain an SRC until (a) in the event we have more than $100 million in annual revenues, the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $250 million or (b) in the event we have less than $100 million in annual revenues, the aggregate market value of our outstanding common stock 43 Table of Contents held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $700 million.
Our future capital requirements will depend on many factors, including: • the progress, costs, and outcome of our clinical trials for our product candidates and of any clinical activities required for regulatory review of our product candidates outside of the U.S.; • the costs and timing of process development and manufacturing scale up and validation activities associated with our product candidates; • the costs, timing, and outcome of regulatory review of our product candidates in the U.S., and in other jurisdictions; • the costs and timing of commercialization activities for our product candidates if we receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution, and outsourced manufacturing capabilities; • subject to receipt of marketing approval, the amount of revenue received from commercial sales of our product candidates; • our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing, and distribution arrangements for our product candidates; • the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims; and 21 Table of Contents • the extent to which we in-license or acquire rights to other products, product candidates, or technologies for the treatment of ophthalmic diseases.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce, or eliminate our research and development programs or any future commercialization efforts. 19 Table of Contents Our future capital requirements will depend on many factors, including: • the progress, costs, and outcome of our clinical trials for our product candidates and of any clinical activities required for regulatory review of our product candidates outside of the U.S.; • the costs and timing of process development and manufacturing scale up and validation activities associated with our product candidates; • the costs, timing, and outcome of regulatory review of our product candidates in the U.S., and in other jurisdictions; • the costs and timing of commercialization activities for our product candidates if we receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution, and outsourced manufacturing capabilities; • subject to receipt of marketing approval, the amount of revenue received from commercial sales of our product candidates; • our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing, and distribution arrangements for our product candidates; • the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims; and • the extent to which we in-license or acquire rights to other products, product candidates, or technologies for the treatment of ophthalmic diseases.
In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that 34 Table of Contents we regard as our own.
Litigation may be necessary to defend against these claims. 33 Table of Contents In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
We, our contract manufacturers, our current and future collaborators, and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to physicians, recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product, such as the requirement to implement a risk evaluation and mitigation strategy. 36 Table of Contents We may be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products.
We, our contract manufacturers, our current and future collaborators, and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to physicians, 35 Table of Contents recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product, such as the requirement to implement a risk evaluation and mitigation strategy.
If our third-party manufacturers for KIO-104 or KIO-301 fail to fulfill our purchase orders or should become unavailable to us for any reason, we believe that there are a limited number of potential replacement manufacturers, and we likely would incur added costs and delays in identifying or qualifying such replacements. 31 Table of Contents We could also incur additional costs and delays in identifying or qualifying a replacement manufacturer for fill-finish services if our existing third-party manufacturer should become unavailable for any reason.
If our third-party manufacturers for KIO-104 or KIO-301 fail to fulfill our purchase orders or should become unavailable to us for any reason, we believe that there are a limited number of potential replacement manufacturers, and we likely would incur added costs and delays in identifying or qualifying such replacements.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
We do not maintain “key person” insurance for any of our executives or other employees. Recruiting and retaining qualified scientific, clinical, manufacturing, and sales and marketing personnel will also be critical to our success.
Tosca, they may terminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or other employees. Recruiting and retaining qualified scientific, clinical, manufacturing, and sales and marketing personnel will also be critical to our success.
Federal net operating losses generated as of December 31, 2017 and prior, will carry-forward until 2037 and net operating losses generated during the year ended December 31, 2018 and later will be carried forward indefinitely until utilized, but their utilization will be limited to 80% of taxable income.
These federal net operating loss carryforwards are from net operating losses generated during the year ended December 31, 2018 and later, and as such will be carried forward indefinitely until utilized, but their utilization will be limited to 80% of taxable income.
Foreign currency exchange rate fluctuations may have a negative impact on our financial results. We are subject to the risks of fluctuating foreign currency exchange rates, which could have an adverse effect on the costs and expenses of our foreign subsidiaries.
We are subject to the risks of fluctuating foreign currency exchange rates, which could have an adverse effect on the costs and expenses of our foreign subsidiaries.
We anticipate that our expenses will continue to be significant with the clinical trials for the ongoing development of our KIO-104 and KIO-301 products.
Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will continue to be significant with the clinical trials for the ongoing development of our KIO-104 and KIO-301 products.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases, not at all.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases, not at all.
If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. 29 Table of Contents If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies. If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
If we identify one or more material weaknesses in our internal control over financial reporting, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our consolidated financial statements. 45 Table of Contents A material amount of our assets represents intangible assets, and our net income would be reduced if our intangible assets become impaired.
If we identify one or more material weaknesses in our internal control over financial reporting, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our consolidated financial statements.
For some of our product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies for the development and potential commercialization of therapeutic products. We face significant competition in seeking appropriate collaborators.
If we are not able to establish additional collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected. For some of our product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies for the development and potential commercialization of therapeutic products. We face significant competition in seeking appropriate collaborators.
General Risk Factors Laws and regulations governing international operations may preclude us from developing, manufacturing, and selling certain products outside of the U.S. and require us to develop and implement costly compliance programs.
Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert management’s attention and resources. General Risk Factors Laws and regulations governing international operations may preclude us from developing, manufacturing, and selling certain products outside of the U.S. and require us to develop and implement costly compliance programs.
To obtain reimbursement or pricing approval in some countries, we may be 39 Table of Contents required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.
In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.
The in-licensing and acquisition of pharmaceutical products is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire products, product candidates, or technologies that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities.
The in-licensing and acquisition of pharmaceutical products is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire products, 27 Table of Contents product candidates, or technologies that we may consider attractive.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be harmed. If we are not able to establish additional collaborations, we may have to alter our development and commercialization plans and our business could be adversely affected.
If one of our collaborators terminates its agreement with us, we may find it more difficult to attract new collaborators and our perception in the business and financial communities could be harmed. We are dependent on TOI for the successful co-development and commercialization of KIO-301.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. The pricing of prescription pharmaceuticals is also subject to governmental control outside the U.S. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. 38 Table of Contents The pricing of prescription pharmaceuticals is also subject to governmental control outside the U.S.
Strem, our Chief Executive Officer, as well as the other principal members of our management, scientific, and clinical team and a number of third-party consultants. Although we have entered into an employment agreement with Dr. Strem, he may terminate his employment with us at any time.
Strem, our Chief Executive Officer, Eric Daniels, our Chief Development Officer, Melissa Tosca, our Chief Financial Officer, as well as the other principal members of our management, scientific, and clinical team and a number of third-party consultants. Although we have entered into employment agreements with Dr. Strem, Dr. Daniels and Ms.
In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to in-license or acquire the rights to the relevant product, product candidate, or technology on terms that would allow us to make an appropriate return on our investment.
We also may be unable to in-license or acquire the rights to the relevant product, product candidate, or technology on terms that would allow us to make an appropriate return on our investment. Furthermore, we may be unable to identify suitable products, product candidates, or technologies within our area of focus.
Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.
Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products.
Inadequate reimbursement may adversely affect the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining and maintaining adequate reimbursement for our products may be difficult. We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies.
Coverage and reimbursement may not be available for our product candidates and, even if they are available, the level of reimbursement may not be satisfactory. Inadequate reimbursement may adversely affect the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining and maintaining adequate reimbursement for our products may be difficult.
As of December 31, 2023, intangible assets, net, represented approximately $8.8 million, or 64% of our total assets. Indefinite-lived intangible assets are subject to an impairment analysis at least annually based on fair value.
A material amount of our assets represents intangible assets, and our net income would be reduced if our intangible assets become impaired. As of December 31, 2024, intangible assets, net, represented approximately $6.7 million, or 18% of our total assets. Indefinite-lived intangible assets are subject to an impairment analysis at least annually based on fair value.
Our and our licensors’ pending and future patent applications may not result in patents being issued which protect our technology or products, or which effectively prevent others from 32 Table of Contents commercializing competitive technologies and products. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S.
As a result, the issuance, scope, validity, enforceability, and commercial value of our and our licensors’ patent rights are highly uncertain. Our and our licensors’ pending and future patent applications may not result in patents being issued which protect our technology or products, or which effectively prevent others from commercializing competitive technologies and products.
We are still in the development stage of our product candidates and we have not completed development of any drugs. We expect to continue to incur significant expenses and operating losses for the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year.
We have devoted substantially all of our financial resources and efforts to research and development, including preclinical studies and, beginning in 2008, clinical trials. We are still in the development stage of our product candidates, and we have not completed development of any drugs. We expect to continue to incur significant expenses and operating losses for the foreseeable future.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. 33 Table of Contents Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
While the MMA applies only to product benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.
While the MMA applies only to product benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in 37 Table of Contents reimbursement that results from the MMA or other healthcare reform measures may result in a similar reduction in payments from private payors.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed. 42 Table of Contents Provisions in our corporate charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development of our product candidates could be delayed.
The patent position of pharmaceutical, biotechnology, and medical device companies generally is highly uncertain, involves complex legal and factual questions, and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability, and commercial value of our and our licensors’ patent rights are highly uncertain.
As a result, it is possible that we and our licensors will fail to maintain such patents thereby reducing the rights of our portfolio. 31 Table of Contents The patent position of pharmaceutical, biotechnology, and medical device companies generally is highly uncertain, involves complex legal and factual questions, and has in recent years been the subject of much litigation.
If any of the events or circumstances described in the following risk factors occur, our business operations, performance, and financial condition could be adversely affected and the trading price of our common stock could decline. Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant operating losses since our inception.
These risks include those described below and may include additional risks and uncertainties not presently known to us or that we currently deem immaterial. If any of the events or circumstances described in the following risk factors occur, our business operations, performance, and financial condition could be adversely affected and the trading price of our common stock could decline.
Maintaining patents in the U.S. is an expensive process and it is even more expensive to maintain patents and patent applications in foreign countries. As a result, it is possible that we and our licensors will fail to maintain such patents thereby reducing the rights of our portfolio.
Maintaining patents in the U.S. is an expensive process and it is even more expensive to maintain patents and patent applications in foreign countries.
Furthermore, we may be unable to identify suitable products, product candidates, or technologies within our area of focus. If we are unable to successfully obtain rights to suitable products, product candidates or technologies, our ability to pursue this element of our strategy could be impaired.
If we are unable to successfully obtain rights to suitable products, product candidates or technologies, our ability to pursue this element of our strategy could be impaired. Product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we develop.
Accordingly, we will need to obtain substantial additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.
Accordingly, we will need to obtain substantial additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
As of December 31, 2023, we had federal net operating loss carryforwards of approximately $90.2 million, state net operating loss carryforwards of approximately $63.6 million, and aggregate federal and state research and development tax credit carryforwards of approximately $2.5 million and $0.5 million, respectively, available to reduce future taxable income.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2024, we had federal net operating loss carryforwards of approximately $31.7 million, no state net operating loss carryforwards, and no federal and state research and development tax credit carryforwards available to reduce future taxable income.
These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites, and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. 27 Table of Contents Even if we are able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop, the products may become subject to unfavorable pricing regulations, third-party coverage or reimbursement practices, or healthcare reform initiatives, which could harm our business.
Even if we are able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop, the products may become subject to unfavorable pricing regulations, third-party coverage or reimbursement practices, or healthcare reform initiatives, which could harm our business.
The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock. Our stock price may be volatile.
As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future. The price of our common stock may be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock. Our common stock is thinly traded and hence the price may be volatile.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+3 added−0 removed14 unchanged
Biggest changeWe have engaged an IT Managed Service Provider who assists in the oversight of our corporate-wide data security, including developing, implementing and enforcing security policies to manage our overall cybersecurity risks. The senior executives regularly meet with our IT Managed Service Provider during the course of the year to review and discuss cybersecurity issues.
Biggest changeBoth executives have experience overseeing the information technology function and implementing and overseeing internal controls frameworks in our industry. We have engaged an IT Managed Service Provider 45 Table of Contents who assists in the oversight of our corporate-wide data security, including developing, implementing and enforcing security policies to manage our overall cybersecurity risks.
Our process also includes regular monitoring of risk related to third parties on a periodic basis or when services or product purchases expand beyond their original scope or intended use. 47 Table of Contents
Our process also includes regular monitoring of risk related to third parties on a periodic basis or when services or product purchases expand beyond their original scope or intended use.
ITEM 1C. CYBERSECURITY Overview Our IT and related systems are critical to the efficient operation of our business and essential to our ability to perform day to day processes.
ITEM 1C. CYBERSECURITY Overview 44 Table of Contents Our IT and related systems are critical to the efficient operation of our business and essential to our ability to perform day to day processes.
The Board meets with the senior executives, specifically the Chief Development Officer, Chief Executive Officer, and Executive Vice President of Finance on at least an annual basis to discuss cybersecurity posture. The Board also periodically receives targeted briefings related to cybersecurity and reviews our incident response capabilities.
The Board meets with the senior executives, specifically the Chief Executive Officer, and Chief Financial Officer on at least an annual basis to discuss cybersecurity posture. The Board also periodically receives targeted briefings related to cybersecurity and reviews our incident response capabilities.
In addition, our online employees are required to participate in cyber, information security, and privacy training at least annually. We also maintain insurance coverage that is intended to address certain aspects of cybersecurity risks.
In addition, our online employees are required to participate in cyber, information security, and privacy training at least annually. We also maintain insurance coverage that is intended to address certain aspects of cybersecurity risks. To date, there have not been any known cybersecurity threats that have materially affected the Company.
To date, there have not been any cybersecurity threats that have materially affected the Company. 46 Table of Contents Governance Board Oversight of Cybersecurity Matters Assessing and managing information security matters is the responsibility of our full Board of Directors.
Governance Board Oversight of Cybersecurity Matters Assessing and managing information security matters is the responsibility of our Board of Directors. The Board of Directors’ Audit Committee is responsible for overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.
Added
The Audit Committee receives regular reports from management concerning our significant cybersecurity threats and risk and the processes we have implemented to address them. The Audit Committee also receives various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
Added
Our Chief Executive Officer is responsible for helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our Chief Financial Officer is responsible for preparing budgets, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
Added
The senior executives regularly meet with our IT Managed Service Provider during the course of the year to review and discuss cybersecurity issues.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeWe conduct our operations using third-party manufacturing facilities and trial sites. We believe our current facilities are adequate for our needs for the foreseeable future. ITEM 3.
Biggest changeWe conduct our operations using third-party manufacturing facilities and trial sites. We believe our current facilities are adequate for our needs for the foreseeable future. 46 Table of Contents ITEM 3.
PROPERTIES We currently have three facilities, including our principal executive office located at 332 Encinitas Blvd., Suite 102, Encinitas, CA, 92024 under a lease that expires in April 2025; our office located at 11 North Terrace, Adelaide, Australia, 5000 under a month-month lease term; and our office located at Herrengasse 5, 1010 Vienna, Austria under a lease that expires in October 2024.
PROPERTIES We currently have three facilities, including our principal executive office located at 332 Encinitas Blvd., Suite 102, Encinitas, CA, 92024 under a lease that expires in April 2025; our office located at 11 North Terrace, Adelaide, Australia, 5000 under a month-month lease term; and our office located at Herrengasse 5, 1010 Vienna, Austria under a lease that expires in October 2028.
LEGAL PROCEEDINGS We are not currently a party to any legal proceedings, however, from time to time we may be a party to a variety of legal proceedings that arise in the normal course of our business. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 48 Table of Contents PART II
LEGAL PROCEEDINGS We are not currently a party to any legal proceedings, however, from time to time we may be a party to a variety of legal proceedings that arise in the normal course of our business. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 47 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−1 removed2 unchanged
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES Market Information Our common stock currently trades on The Nasdaq Capital Market under the symbol “KPRX”. Our common stock began trading on the OTCQB Venture Marketplace on February 13, 2015, in connection with our initial public offering under the symbol “EYEG”.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES Market Information Our common stock currently trades on The Nasdaq Capital Market under the symbol “KPRX”. Holders There were 30 holders of record of our common stock as of March 21, 2025.
Purchase of Equity Securities We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K. ITEM 6. RESERVED Not applicable.
Purchase of Equity Securities We did not purchase any of our registered equity securities during the period covered by this Annual Report on Form 10-K. ITEM 6. RESERVED
There were 59 holders of record of our common stock as of March 22, 2024. This number does not include beneficial owners whose shares were held in street name. Dividend Policy We have never declared or paid any cash dividends on our capital stock.
This number does not include beneficial owners whose shares were held in street name. Dividend Policy We have never declared or paid any cash dividends on our capital stock.
Securities Authorized for Issuance Under Equity Compensation Plans See Item 12, Part III of this Form 10-K. Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended December 31, 2023 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended December 31, 2024 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Removed
Prior to that time, there was no established public trading market for our common stock. On July 31, 2015, our common stock began trading on The Nasdaq Capital Market. In connection with our name change, we changed our symbol on The Nasdaq Capital Market to “KPRX” effective as of November 8, 2021.

Item 7. Management's Discussion & Analysis

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

53 edited+48 added−18 removed27 unchanged
Biggest changeResults of Operations Comparison of Years Ended December 31, 2023 and 2022 The following table summarizes the results of our operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Change Operating Expenses: General and Administrative $ 4,663,146 $ 8,277,993 $ (3,614,847) Research and Development 4,027,037 3,448,925 578,112 In-Process R&D Impairment 1,904,314 — 1,904,314 Change in Fair Value of Contingent Consideration 1,992,399 582,605 1,409,794 Total Operating Expenses 12,586,896 12,309,523 277,373 Operating Loss Before Other Income (12,586,896) (12,309,523) (277,373) Total Other Income (Expense), Net 163,319 (1,387,097) 1,550,416 Loss Before Income Tax (Expense) Benefit (12,423,577) (13,696,620) 1,273,043 Income Tax (Expense) Benefit (90,319) 113,010 (203,329) Net Loss $ (12,513,896) $ (13,583,610) $ 1,069,714 General and Administrative Expenses General and administrative expenses decreased by $3.6 million due primarily to decreased professional fees of $1.8 million, executive severance of $1.0 million incurred in 2022, miscellaneous costs of $0.2 million and travel related costs of $0.2 million.
Biggest changeResults of Operations Comparison of Years Ended December 31, 2024 and 2023 The following table summarizes the results of our operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Change Revenue: Collaboration Revenue $ 16,000,000 $ — $ 16,000,000 Grant Revenue 20,000 — 20,000 Total Revenue 16,020,000 — 16,020,000 Operating Expenses: General and Administrative $ 5,542,324 $ 4,663,146 $ 879,178 Research and Development 7,842,207 4,027,037 3,815,170 Collaboration Credit (2,945,350) — (2,945,350) In-Process R&D Impairment 2,008,000 1,904,314 103,686 Change in Fair Value of Contingent Consideration (937,469) 1,992,399 (2,929,868) Total Operating Expenses 11,509,712 12,586,896 (1,077,184) Operating Income (Loss) Before Other Income 4,510,288 (12,586,896) 17,097,184 Total Other Income, Net 1,149,450 163,319 986,131 Income (Loss) Before Income Tax Expense 5,659,738 (12,423,577) 18,083,315 Income Tax Expense (2,065,005) (90,319) (1,974,686) Net Income (Loss) $ 3,594,733 $ (12,513,896) $ 16,108,629 Revenue The increase of $16.0 million was attributable to the revenue recognized from the up-front payment pursuant the strategic development and commercialization agreement with TOI and from a grant from the Choroideremia Research Foundation.
The Company considered the development progress and timelines for its programs and noted no qualitative factors that would indicate potential impairment of its indefinite-lived intangible assets. Accrued Research and Development Expenses As part of the process of preparing the consolidated financial statements, we are required to estimate and accrue research and development expenses.
We considered the development progress and timelines for its programs and noted no qualitative factors that would indicate potential impairment of its indefinite-lived intangible assets. Accrued Research and Development Expenses As part of the process of preparing the consolidated financial statements, we are required to estimate and accrue research and development expenses.
If we obtain regulatory approval for KIO-104 and KIO-301, we expect to incur significant expenses to create an infrastructure to support the commercialization of KIO-104 and KIO-301 including sales, marketing, and distribution functions. We will need additional financing to support our continuing operations.
If we obtain regulatory approval for KIO-104, we expect to incur significant expenses to create an infrastructure to support the commercialization of KIO-104 including sales, marketing, and distribution functions. We will need additional financing to support our continuing operations.
We base our expense accruals related to non-clinical development, pre-clinical studies, and clinical trials on our estimates of the services received and efforts expended pursuant to contracts with organizations/consultants that conduct and manage clinical studies on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.
We base our expense accruals related to non-clinical development, preclinical studies, and clinical trials on our estimates of the services received and efforts expended pursuant to contracts with organizations/consultants that conduct and manage clinical studies on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows.
We do not expect our product candidates to be commercially available, if at all, for the next several years. General and Administrative Expenses General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation. Our general and administrative expenses consisted primarily of payroll expenses for our full-time employees.
We do not expect our product candidates to be commercially available, if at all, for the next several years. General and Administrative Expenses General and administrative expenses consist primarily of salaries and related benefits for our full time employees, including stock-based compensation.
Financing Activities During the year ended December 31, 2023, we received net proceeds of $5.6 million from the completion of a public offering, net proceeds of $0.4 million from equity line of credit purchases, $0.3 million from the exercise of warrants, and $0.1 million from the completion of a private placement.
During the year ended December 31, 2023, we received net proceeds of $5.6 million from the completion of a public offering, net proceeds of $0.4 million from equity line of credit purchases, $0.3 million from the exercise of warrants, and $0.1 million from the completion of a private placement.
We expect to incur significant expenses and increasing operating losses for the foreseeable future as we continue the development and clinical trials of and seek regulatory approval for our KIO-104 and KIO-301 product candidates, and any other product candidates we advance to clinical development.
We expect to incur significant expenses and increasing operating losses for the foreseeable future as we continue the development and clinical trials of and seek regulatory approval for our KIO-104 product candidate, and any other product candidates we advance to clinical development.
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 or other preferences that adversely affect the 57 Table of Contents rights of a common stockholder.
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 or other preferences that adversely affect the rights of a common stockholder.
We expect our research and development expenses to increase for the near future as we advance KIO-104, KIO-301, and any other product candidate through clinical development, including the conduct of our planned clinical trials. The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming.
We expect our research and development expenses to increase for the near future as we advance KIO-104, KIO-301 (to the extent there are any unreimbursed expenses), and any other product candidate through clinical development, including the conduct of our planned clinical trials. The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming.
As of December 31, 2023, the Company also performed a qualitative update analysis for impairment and based on this analysis, the fair value of these products was greater than their carrying value resulting in no additional impairment.
As of December 31, 2024, we also performed a qualitative update analysis for impairment and based on this analysis, the fair value of these products was greater than their carrying value resulting in no additional impairment.
You should carefully review all of these factors, as well as the comprehensive discussion of forward-looking statements on page 2 of this Annual Report on Form 10-K. Business Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing products for the treatment of ophthalmic diseases.
You should carefully review all of these factors, as well as the comprehensive discussion of forward-looking statements on page 2 of this Annual Report on Form 10-K. 48 Table of Contents Business Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing product candidates for the treatment of ophthalmic diseases.
Examples of estimated research and development expenses that we accrue include: • fees paid to contract research organizations and investigative sites in connection with clinical studies; • fees paid to contract manufacturing organizations in connection with non-clinical development, pre-clinical research, and the production of clinical study materials; and • professional service fees for consulting and related services.
Examples of estimated research and development expenses that we accrue include: • fees paid to contract research organizations and investigative sites in connection with clinical studies; 53 Table of Contents • fees paid to contract manufacturing organizations in connection with non-clinical development, preclinical research, and the production of clinical study materials; and • professional service fees for consulting and related services.
The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following: • per patient trial costs; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; 51 Table of Contents • the number of doses that patients receive; • the cost of comparative agents used in trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient follow-up; and • the efficacy and safety profile of the product candidate.
We may never succeed in achieving marketing approval for our product candidates. 50 Table of Contents The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following: • per patient trial costs; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; • the cost of comparative agents used in trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient follow-up; and • the efficacy and safety profile of the product candidate.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, including our KIO-301 and KIO-104 products, on terms that may not be favorable to us.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, including our KIO-301 (outside of the territory already partnered with TOI), KIO-101, and KIO-104 products, on terms that may not be favorable to us.
We are unable to estimate with any certainty the costs we will incur in the continued development of our KIO-104, KIO-301, and any other product candidate that we may develop. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We may never succeed in achieving marketing approval for our product candidates.
We are unable to estimate with any certainty the costs we will incur in the continued development of our KIO-104, KIO-301, and any other product candidate that we may develop. Clinical development timelines, the probability of success and development costs can differ materially from expectations.
If we are unable to raise additional funds through equity or debt financings 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 KIO-104 and KIO-301 products, or any other products that we would otherwise prefer to develop and market ourselves.
For our active programs, if we are unable to raise additional funds through equity or debt financings 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 KIO-301 outside of the territory already partnered with TOI and KIO-104 products, or any other products that we would otherwise prefer to develop and market ourselves.
From inception through December 31, 2023, we have raised a total of approximately $133.7 million from such sales of our equity and debt securities, both as a public company and prior to our IPO, as well as approximately $14.9 million in payments received under our license agreements and government grants, $0.3 million received pursuant to the Loan under the PPP, which was fully forgiven in April of 2021, and $1.9 million received in R&D tax credits.
From inception through December 31, 2024, we have raised a total of approximately $148.7 million from such sales of our equity and debt securities, both as a public company and prior to our initial public offering, as well as approximately $31.1 million in payments received under our license agreements and government grants, $0.3 million received pursuant to the loan under the Paycheck Protection Plan, which was fully forgiven in April 2021, and $3.4 million received in R&D tax credits.
Federal NOL carryforwards generated during the years ended December 31, 2018 and forward totaling $44.1 million will carry forward indefinitely, but their utilization will be limited to 80% of taxable income. The Company has foreign net operating loss carryforwards of $12.2 million as of December 31, 2023, which can be carried forward indefinitely.
Federal NOL carryforwards generated during the years ended December 31, 2018 and forward totaling $31.7 million will carry forward indefinitely, but their utilization will be limited to 80% of taxable income. We had foreign net operating loss carryforwards of $12.8 million as of December 31, 2024, which can be carried forward indefinitely.
We anticipate that our expenses will increase substantially if and as we: • seek marketing approval for our KIO-104 or KIO-301 products, or any other products that we successfully develop; • establish a sales and marketing infrastructure to commercialize our KIO-104 product in the U.S., if approved; and • add operational, financial, and management information systems and personnel, including personnel to support our product development and future commercialization efforts.
We anticipate that our expenses will increase substantially if and as we: • seek marketing approval for our KIO-301 product outside of the territory already partnered with TOI; • seek marketing approval for our KIO-104 product or any other products that we successfully develop; • establish a sales and marketing infrastructure to commercialize our KIO-301 product outside of the territory already partnered with TOI; • establish a sales and marketing infrastructure to commercialize our KIO-104 product, if approved; and • seek partnerships for our KIO-101 product to continue our development activities; • add operational, financial, and management information systems and personnel, including personnel to support our product development and future commercialization efforts.
KIO-104 is a next-generation, non-steroidal, immuno-modulatory and small-molecule inhibitor of DHODH. We believe KIO-104 to be best-in-class with picomolar potency and a validated immune modulating mechanism designed to overcome the off-target side effects and safety issues associated with commercially available DHODH inhibitors.
We believe KIO-104 to be best-in-class with picomolar potency and a validated immune modulating mechanism designed to overcome the off-target side effects and safety issues associated with commercially available DHODH inhibitors.
During the year ended December 31, 2022, we recorded a net loss of $13.6 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.5 million, an increase in the change in fair value of contingent consideration of $0.6 million, an increase in the change in fair value of warrant liability of $1.4 million and a decrease in accounts payable of $0.8 million and accrued expenses of $0.6 million, which was partially offset by an increase in tax credits receivable of $0.9 million.
During the year ended December 31, 2023, we recorded a net loss of $12.5 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.8 million, an increase in the change in fair value of contingent consideration of $2.0 million, an increase of $1.9 million due to an impairment of in-process R&D, decreases in accounts payable of $0.8 million and accrued expenses of $0.5 million, which was partially offset by an increase in tax credits receivable of $0.5 million.
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service/vesting period.
Stock-Based Compensation We have issued options to purchase our common stock and restricted stock. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service/vesting period.
Our consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern.
Our consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern. 59 Table of Contents Off-Balance Sheet Arrangements We had no material off-balance sheet arrangements at December 31, 2024.
Research and development expenses primarily include: • non-clinical development, pre-clinical research, and clinical trial and regulatory-related costs; • expenses incurred under agreements with sites and consultants that conduct our clinical trials; • expenses related to generating, filing, and maintaining intellectual property; and • employee-related expenses, including salaries, bonuses, benefits, travel, and stock-based compensation expense.
Research and Development Expenses We expense all research and development expenses as they are incurred. Research and development expenses primarily include: • non-clinical development, preclinical research, and clinical trial and regulatory-related costs; • expenses incurred under agreements with sites and consultants that conduct our clinical trials; and • employee-related expenses, including salaries, bonuses, benefits, travel, and stock-based compensation expense.
Financial Overview Revenues To date, we have recognized collaboration revenue from U.S. and foreign government grants made to Jade and Panoptes, as well as from license agreements as performance obligations toward milestones that were met.
Financial Overview Revenues To date, we have recognized collaboration revenue from U.S. and foreign government grants made to Jade and Panoptes, as well as from license and research collaboration agreements as performance obligations toward milestones that were met. In the future, we anticipate our revenue to include additional milestone payments under our current and/or future collaboration agreements.
These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or 49 Table of Contents implied by the forward-looking statements.
These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.
These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Factors that may cause our actual results to differ materially from those in the forward-looking statements include those factors described in “Item 1A. Risk Factors” beginning on page 18 of this Annual Report on Form 10-K.
Factors that may cause our actual results to differ materially from those in the forward-looking statements include those factors described in “Item 1A. Risk Factors” beginning on page 17 of this Annual Report on Form 10-K.
After the initial valuation, we will use our best estimate to measure contingent consideration at each subsequent reporting period. Gains and losses are recorded in operating expenses within the consolidated statements of operations and comprehensive loss. Stock-Based Compensation We have issued options to purchase our common stock and restricted stock.
Key assumptions used to estimate the fair value of contingent consideration include the probability of success, discount rate, and updated timing of payment. After the initial valuation, we will use our best estimate to measure contingent consideration at each subsequent reporting period. Gains and losses are recorded in operating expenses within the consolidated statements of operations and comprehensive loss.
Under the income approach, fair value reflects the present value of the projected cash flows that are expected to be generated by the products incorporating the in-process research and development, if successful. 52 Table of Contents Intangible Assets Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at fair value at the acquisition date.
The fair value for these intangible assets was determined using the income approach. Under the income approach, fair value reflects the present value of the projected cash flows that are expected to be generated by the products incorporating the in-process research and development, if successful.
Business Combinations We applied the provisions of Accounting Standards Codification (ASC) Topic 805, “Business Combinations,” in the accounting for our acquisitions of Bayon and Panoptes. It required us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values, which were determined using market, income, and cost approaches, or a combination.
It required us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values, which were determined using market, income, and cost approaches, or a combination.
However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities. 53 Table of Contents Refunds for Research and Development We, through our Kiora Pharmaceuticals, GmbH and Kiora Pharmaceuticals Pty Ltd. subsidiaries, are eligible to receive certain refundable tax incentives associated with our research and development expenses in Austria and Australia.
However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities.
The Company tests intangible assets for impairment as of December 31 of each year or more frequently if indicators of impairment are present. The authoritative accounting guidance provides an optional qualitative assessment for any indicators that indefinite-lived intangible assets are impaired.
The authoritative accounting guidance provides an optional qualitative assessment for any indicators that indefinite-lived intangible assets are impaired.
However, based on the cash on hand at December 31, 2023, plus approximately $32.4 million in gross cash receipts subsequent to year-end ( Note 13 ), the Company anticipates having sufficient cash to fund planned operations into 2026 and does not anticipate an immediate need within the next 24 months to raise additional capital to fund operations. 56 Table of Contents Comparison of Years Ended December 31, 2023 and 2022 The following table sets forth the primary sources and uses of cash for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net Cash Used in Operating Activities $ (9,556,951) (10,428,133) Net Cash Provided by Investing Activities — 6,375 Net Cash Provided by Financing Activities 5,966,066 8,620,921 Operating Activities During the year ended December 31, 2023, we recorded a net loss of $12.5 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.8 million, an increase in the change in fair value of contingent consideration of $2.0 million, an increase of $1.9 million due to an impairment of in-process R&D, decreases in accounts payable of $0.8 million and accrued expenses of $0.5 million, which was partially offset by an increase in tax credits receivable of $0.5 million.
Comparison of Years Ended December 31, 2024 and 2023 The following table sets forth the primary sources and uses of cash for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Net Cash Provided by/(Used in) Operating Activities $ 8,559,115 (9,556,951) Net Cash Used in Investing Activities (22,662,611) — Net Cash Provided by Financing Activities 15,498,155 5,966,066 Operating Activities During the year ended December 31, 2024, we recorded net income of $3.6 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.7 million, a decrease in the change in fair value of contingent consideration of $0.9 million, an increase of $2.0 million due to an impairment of in-process R&D, an increase in prepaid expenses and other assets of $1.8 million, decreases in accounts payable of $0.2 million and accrued expenses of $3.3 million, which was partially offset by a decrease in tax credits receivable of $1.6 million.
Contingent Consideration We initially value contingent consideration related to business combinations using a probability-weighted calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows. Key assumptions used to estimate the fair value of contingent consideration include the probability of success, discount rate, and updated timing of payment.
We record the refundable payment as a tax receivable and a reduction in expense in the period in which the research and development expenses are incurred. Contingent Consideration We initially value contingent consideration related to business combinations using a probability-weighted calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows.
In general, the assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. Recent Accounting Pronouncements Refer to Note 1 .
In general, the assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment.
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations. 51 Table of Contents Revenue Recognition To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, Revenue from Contracts with Customers, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Off-Balance Sheet Arrangements We had no material off-balance sheet arrangements at December 31, 2023. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
We have four wholly-owned subsidiaries: Jade Therapeutics, Inc., Kiora Pharmaceuticals, GmbH (formerly known as Panoptes Pharma GmbH), Bayon Therapeutics, Inc., and Kiora Pharmaceuticals Pty Ltd (formerly known as Bayon Therapeutics Pty Ltd). Our lead product is KIO-301 with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (RP, any and all sub-forms).
We were formed as a Delaware corporation on December 28, 2004, under the name of EyeGate Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc. effective November 8, 2021. Our first product candidate is KIO-301 with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (RP, any and all sub-forms).
At December 31, 2023, Kiora had unrestricted Cash and Cash Equivalents of approximartely $2.5 million, and an Accumulated Deficit of $147.0 million. Kiora has incurred losses and negative cash flows since inception, and future losses are anticipated.
At December 31, 2024, we had unrestricted Cash and cash equivalents of approximately $3.8 million, short-term investments of $23.0 million and an accumulated deficit of $143.4 million. Prior to the License Agreement with TOI in 2024, we had incurred losses and negative cash flows since inception, and future losses are anticipated.
These refunds are realized in the form of a cash payment when received, following the incurred research & development expenses. We record the refundable payment as a tax receivable and a reduction in expense in the period in which the research and development expenses are incurred.
Refunds for Research and Development We, through our Kiora Pharmaceuticals, GmbH and Kiora Pharmaceuticals Pty Ltd. subsidiaries, are eligible to receive certain refundable tax incentives associated with our research and development expenses in Austria and Australia. These refunds are realized in the form of a cash payment when received, following the incurred research & development expenses.
Research and Development Expenses Research and development expenses increased by $0.6 million due to increased spending on clinical trial related activities for KIO-301 of $0.6 million, increased personnel costs related to compensation and other benefits of $0.5 million, increased scientific advisory board related costs of $0.2 million and facilities and IT costs of $0.2 million,, partially offset by reduced preclinical development and CMC costs for KIO-101 of $0.8 million and KIO-201 of $34 thousand and an increase in the research refundable credit of $0.2 million.
Franchise taxes increased by $0.2 million, offset by a reduction in D&O insurance premiums of $0.2 million and reduced rent expense costs of $50 thousand related to closure of the Salt Lake City location. 56 Table of Contents Research and Development Expenses The increase of $3.8 million was primarily due to increased spending on preclinical, CMC and clinical trial related activities for KIO-301 of $1.8 million, preclinical and CMC activities related to KIO-104 of $0.7 million, travel and research consulting costs of $0.2 million, and increased personnel costs related to compensation and other benefits of $0.2 million.
Business, Presentation and Recent Accounting Pronouncements, in the Notes to the audited consolidated financial statements of Part IV, Item 15. Exhibits, Financial Statement Schedules of this Form 10-K for detailed information regarding the status of recently issued accounting pronouncements.
This change in estimate is reflected in our consolidated financial statements for the year ended December 31, 2024. Recent Accounting Pronouncements Refer to Note 1 . Business, Presentation and Recent Accounting Pronouncements, in the Notes to the audited consolidated financial statements of Part IV, Item 15.
The drug was well tolerated, with no serious side effects on intraocular tissues or other serious adverse events observed. We are currently planning a Phase 2b trial for KIO-104 in Posterior Non-Infectious Uveitis to begin in late 2024. In August 2023 we decided to halt development work on our anterior segment assets, specifically KIO-101 and KIO-201.
The drug was well tolerated, with no serious side effects on intraocular tissues or other serious adverse events observed. We are currently approved to start enrolling patients in a Phase 2 trial for KIO-104 in retinal inflammation and expect enrollment to commence in the first half of 2025.
Other general and administrative expenses include professional fees for auditing, tax, patent costs, and legal services. We expect that general and administrative expenses will remain consistent for the near future until commercialization of our KIO-104 and KIO-301 products, which could lead to an increase in these expenses.
Other general and administrative expenses include professional fees for investor relations and external communications, auditing, tax, patent costs, and legal services. We expect that general and administrative expenses will remain consistent for the near future. Other Income, Net Other income, net consists primarily of interest income we earn on interest-bearing accounts and interest expense incurred on our outstanding financing arrangements.
Investing Activities During the year ended December 31, 2023, there was no net cash provided by investing activities. During the year ended December 31, 2022, net cash provided by investing activities related to proceeds from the sale of equipment.
During the year ended December 31, 2023, there was no net cash provided by investing activities. 58 Table of Contents Financing Activities During the year ended December 31, 2024, we received net proceeds of $1.7 million from the exercise of warrants, and $15.0 million from the completion of a private placement.
We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
Funding Requirements and Other Liquidity Matters Our KIO-104 and KIO-301 product pipeline is still in various stages of clinical development. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future.
The Company performed an annual evaluation of its indefinite-lived intangible assets for impairment as of August 31, 2023 with a quantitative analysis and recognized an impairment loss of $1.9 million.
The Company performed an annual evaluation of its indefinite-lived intangible assets for impairment as of August 31, 2024 with a quantitative analysis. The estimated fair value of the KIO-201 assets was less than their carrying value due to the strategic decision to cease all future development or partnership leading to commercialization. Accordingly, we recognized an impairment loss of $2.0 million.
Should this change, additional capital may not be available on terms favorable to us, if at all. We do not know if our future offerings will succeed. Accordingly, no assurances can be given that management will be successful in these endeavors.
To continue development, we will need to raise additional capital through debt and/or equity financing, grants and other arrangements. Although historically we have been successful at raising capital, additional capital may not be available on terms favorable to us, if at all. We do not know if our future offerings will succeed.
Other Information Net Operating Loss Carryforwards As of December 31, 2023, the Company has federal and state net operating loss carryforwards of approximately $90.2 million and $63.6 million, respectively, to offset future federal and state taxable income.
Exhibits, Financial Statement Schedules of this Annual Report on Form 10-K for detailed information regarding the status of recently issued accounting pronouncements. Other Information Net Operating Loss Carryforwards As of December 31, 2024, we had federal net operating loss carryforwards of approximately $31.7 million and no state operating loss carryforwards, to offset future federal and state taxable income.
The change in fair value of contingent consideration is primarily due to a change in the probability of success related to a new formulation that was added for KIO-104 which increased the probability of success for the Panoptes milestone payment.
The change in fair value of contingent consideration is primarily due to the full impairment of KIO-201 resulting in a reduction of future potential Jade milestone payments.
The acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of its products, however we do not foresee a need within the next 24 months to raise additional capital through debt and/or equity financing, or access additional funding through grants.
Based on our cash on hand and short-term investments at December 31, 2024, we believe that we will have sufficient cash to fund planned operations into 2027. However, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
Our Net 50 Table of Contents Loss was approximately $12.5 million and $13.6 million for the twelve months ended December 31, 2023, and 2022, respectively.
From inception through December 31, 2024, our losses from operations have aggregated $143.4 million. As a result of the collaboration with TOI in 2024, our net income was $3.6 million for the twelve months ended December 31, 2024. Our net loss was $12.5 million for the twelve months ended December 31, 2023.
We have not completed a study to determine whether our initial public offering, our registered direct offering, our follow-on public offerings, and other transactions that have occurred over the past three years may have triggered an ownership change limitation. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership.
We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership.
Removed
We were formed as a Delaware corporation on December 28, 2004, under the name of EyeGate Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc. effective November 8, 2021. We were originally incorporated in 1998 under the name of Optis France S.A. in Paris, France.
Added
In October 2024, we, in collaboration with our partner TOI, announced that we received regulatory approval to initiate a Phase 2 clinical trial to investigate KIO-301 for vision restoration in patients with retinitis pigmentosa.
Removed
At that time, the name of the French corporation was changed to EyeGate Pharma S.A.S. and became a subsidiary of EyeGate Pharmaceuticals, Inc. EyeGate Pharma S.A.S. was dissolved effective December 30, 2020.
Added
The ABACUS-2 trial is expected be a 36 patient, multi-center, double-masked, randomized, controlled, multiple dose study enrolling patients with ultra-low vision or no light perception regardless of their underlying gene mutation associated with retinitis pigmentosa. Dosing of the first patient with KIO-301 is expected to begin in the first half of 2025 following validation of novel functional vision endpoints.
Removed
The results from this study have provided direction for continued development of this program in this indication, and we are currently working with our partner, TOI, planning Phase 2 clinical development. KIO-301 (formerly known as B-203) was acquired through the Bayon transaction which closed October 21, 2021. KIO-104 focuses on patients with Posterior Non-Infectious Uveitis.
Added
These functional assessments may serve as approvable primary endpoints in subsequent registration studies in the United States, Europe and other major regions. KIO-301 (formerly known as B-203) was acquired through the Bayon transaction which closed October 21, 2021.
Removed
We are actively pursuing partnership opportunities for these programs. Throughout our history, we have not generated significant revenue. We have never been profitable, and from inception through December 31, 2023, our losses from operations have aggregated $147.0 million.
Added
Our second product candidate is KIO-104, which focuses on patients with retinal inflammation due to diseases including Diabetic Macular Edema, Posterior Non-Infectious Uveitis and more. KIO-104 is a next-generation, non-steroidal, immuno-modulatory and small-molecule inhibitor of DHODH.
Removed
Research and Development Expenses We expense all research and development expenses as they are incurred.
Added
In August 2023, we decided to halt development work on our anterior segment assets, specifically KIO-101 and KIO-201. In July 2024, we made a strategic decision to cease future development or partnership leading to commercialization of KIO-201 and impaired the remaining asset balance. We are actively pursuing partnership opportunities for the KIO-101 program.
Removed
Other Income, Net Other income, net consists primarily of warrant liability fair value changes, interest income we earn on interest-bearing accounts, and interest expense incurred on our outstanding financing arrangements.
Added
In January 2024, we entered into a strategic development and commercialization agreement with Théa Open Innovation (TOI), a sister company of the global ophthalmic specialty company Laboratoires Théa (Théa). Under the agreement, we granted TOI exclusive worldwide development and commercialization rights, excluding certain countries in Asia, to KIO-301 for the treatment of degenerative retinal diseases.
Removed
The fair value for these intangible assets was determined using the income approach.
Added
In exchange, we will receive an up-front, payment of $16 million; will become eligible to receive up to $285 million upon 49 Table of Contents achievement of pre-specified clinical development, regulatory and commercial milestones; tiered royalties of up to low 20% on net sales; and reimbursement of certain KIO-301 research and development expenses.
Removed
Federal NOL carryforwards as of December 31, 2017 totaling $46.1 million, and state NOL carryforwards as of December 31, 2023 totaling $63.6 million will expire at various dates through 2042.
Added
We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and regulatory approval, if ever.
Removed
As of December 31, 2023, the Company also has federal and state research and development tax credit carryforwards of approximately $2.5 million and $0.5 million, respectively, to offset future income taxes, which expire at various times through 2042.
Added
We expect that any revenue we generate, if at all, will fluctuate from quarter-to-quarter as a result of the timing and amount of payments relating to such services and milestones and the extent to which any of our products are approved and successfully commercialized.
Removed
Utilization of these net operating loss and tax credit carryforwards may be subject to a substantial limitation under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, and comparable provisions of state, local, and foreign tax laws due to changes in ownership of our company that have occurred previously or that could occur in the future.
Added
We apply the five-step model to contracts when we determines that it is probable we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer.
Removed
Under Section 382 of the Code and comparable provisions of state, 54 Table of Contents local, and foreign tax laws, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change by value in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research and development tax credits, to reduce its post-change income may be limited.
Added
At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assesses whether each promised good or service is distinct.
Removed
The decrease in professional fees was driven by reduced external accounting and auditing services.
Added
We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Removed
The following table summarizes our research and development expense by program: 55 Table of Contents Year Ended December 31, 2023 2022 Change External research and development expense by program KIO-101 $ 797,876 $ 1,622,602 $ (824,726) KIO-201 68,840 102,754 (33,914) KIO-301 1,990,202 1,349,382 640,820 Unallocated research and development expense Personnel 2,372,040 1,868,131 503,909 R&D Credit (1,736,398) (1,541,609) (194,789) Other Research 534,477 47,665 486,812 Total research and development expense $ 4,027,037 $ 3,448,925 $ 578,112 In-Process R&D Impairment In-Process R&D impairment increased by $1.9 million due to an impairment loss recognized in August 2023 when we made a strategic decision to revise our commercialization strategy for the KIO-101 and KIO-201 assets and seek partnership for all future development.
Added
In a contract with multiple performance obligations, we must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each distinct performance obligation which determines how the transaction price is allocated among the performance obligation.
Removed
Accordingly, the estimated fair value of the KIO-201 assets was determined to be less than their carrying value based on a quantitative analysis. Change in Fair Value of Contingent Consideration The change in fair value of contingent consideration increased $2.0 million which was partially offset by a milestone payment of $0.5 million.

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