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

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

+622 added−740 removedSource: 10-K (2024-04-16) vs 10-K (2023-02-28)

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

622 paragraphs added · 740 removed · 387 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

181 edited+88 added−228 removed230 unchanged
Biggest changeThe federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA") also created federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, a healthcare benefit program, regardless of whether the payor is public or private, in connection with the delivery or payment for health care benefits, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense and knowingly and willfully falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items, or services relating to healthcare matters.
Biggest changeThe federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA") prohibits, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, and knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statements or representations in connection with the delivery of, or payment for, healthcare benefits, items, or services relating to healthcare matters.
CanSinoBIO is responsible for the CMC development and manufacture of clinical supplies of such product candidates and is responsible for the costs associated with such activities.
CanSinoBIO is responsible for the CMC development and manufacture of clinical supplies of such product candidates and is responsible for the costs associated with such activities.
If our operations are found to be in violation of any of the laws or regulations described above or any other applicable laws, we may be subject to penalties or other enforcement actions, including criminal and significant civil monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, corporate integrity agreements, suspension and debarment from government contracts, and refusal of orders under existing government contracts, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If our operations are found to be in violation of any of the laws or regulations described above or any other applicable laws, we may be subject to penalties or other enforcement actions, including significant criminal, civil, and administrative monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, corporate integrity agreements, suspension and debarment from government contracts, and refusal of orders under existing government contracts, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
Exclusive License Agreement with Washington University In September 2022, we entered into the WU License Agreement with Washington University, pursuant to which we were granted an exclusive, sublicensable, royalty-bearing license to patent rights for an inhaled mucosal COVID-19 vaccine, as well as a license to certain tangible research property and technical information necessary to exploit the patent rights within the United States, Europe, and Japan.
Vaccines Exclusive License Agreement with Washington University In September 2022, we entered into the WU License Agreement with Washington University, pursuant to which we were granted an exclusive, sublicensable, royalty-bearing license to patent rights for an inhaled mucosal COVID-19 vaccine, as well as a license to certain tangible research property and technical information necessary to exploit the patent rights within the United States, Europe, and Japan.
Unlike other tissues in the body, cartilage in the joints has no innate ability to repair itself, making any injury permanent. If left untreated, even a small defect can expand in size and progress to debilitating OA, ultimately requiring a joint replacement procedure. Over 528 million individuals worldwide are diagnosed with OA.
Unlike other tissues in the body, cartilage in the joints has no innate ability to repair itself, making any injury permanent. If left untreated, even a small defect can expand in size and progress to debilitating Osteoarthritis ("OA"), ultimately requiring a joint replacement procedure. Over 528 million individuals worldwide are diagnosed with OA.
Regulation Outside of the United States and Canada In addition to regulations in the U.S. and Canada, we may be subject to a variety of regulations in foreign jurisdictions that govern, among other things, clinical trials and any commercial sales and distribution of our product candidates, if approved, either directly or through our distribution partners.
Regulation Outside of the United States In addition to regulations in the U.S., we may be subject to a variety of regulations in foreign jurisdictions that govern, among other things, clinical trials and any commercial sales and distribution of our product candidates, if approved, either directly or through our distribution partners.
DR and DME are the most common vision-threatening diseases in patients with diabetes. Approximately 162 million individuals are affected with DR and approximately 21 million with DME worldwide. As the population of people experiencing diabetes increases, these statistics are expected to increase, due to poor disease management and lifestyle-related changes.
DR and DME are the most common vision-threatening diseases in patients with diabetes. Approximately 162 million individuals are affected with DR and approximately 21 million with DME worldwide. As the population of people experiencing diabetes increases, these statistics are expected to increase, due to poor disease management, lifestyle-related changes and the aging population.
In addition to our employees, we engage various consultants to support key areas of our business, including support of our research and development, manufacturing, and commercialization activities. Talent Management Our human capital is critical to the success of our mission to deliver new options for people facing serious disease and conditions.
In addition to our employees, we engage various consultants to support key areas of our business, including support of our research and development, administrative, manufacturing, and commercialization activities. Talent Management Our human capital is critical to the success of our mission to deliver new options for people facing serious disease and conditions.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with the FDA's Good Laboratory Practice ("GLP") regulations, applicable requirements for the human use of laboratory animals, such as the Animal Welfare Act ("AWA"), or other applicable regulations; • submission to the FDA of an IND application, which must become effective before human clinical trials may begin at U.S. clinical trial sites; 25 T a ble of Content s • approval by an Institutional Review Board ("IRB") for each clinical site, or centrally, before a clinical trial may be initiated at that site; • adequate and well-controlled human clinical trials to establish the safety and efficacy, in the case of a drug product candidate, or safety, purity, and potency, in the case of a biological product candidate for its intended use, performed in accordance with Good Clinical Practices ("GCPs") and additional requirements for the protection of human research subjects and their health information; • development of manufacturing processes to ensure the product candidate's identity, strength, quality, purity, and potency in compliance with current GMP; • submission to the FDA of a New Drug Application ("NDA"), in the case of a drug product candidate, or a BLA, in the case of a biological product candidate, including results of preclinical testing, detailed information about the CMC, and proposed labeling and packaging for the product candidate; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the products are produced to assess compliance with current GMP, and to assure that the facilities, methods, and controls are adequate to preserve the therapeutics' identity, strength, quality, purity, and potency as well as satisfactory completion of an FDA inspection of selected clinical sites, selected clinical investigators to determine GCP compliance, and payment of user fees; and • FDA review and approval of the NDA, or licensure of a BLA to permit commercial marketing for particular indications for use, including agreement on post-marketing commitments, if applicable.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with the FDA's Good Laboratory Practice ("GLP") regulations, applicable requirements for the human use of laboratory animals, such as the Animal Welfare Act ("AWA"), or other applicable regulations; • submission to the FDA of an IND application, which must become effective before human clinical trials may begin at U.S. clinical trial sites; • approval by an Institutional Review Board ("IRB") for each clinical site, or centrally, before a clinical trial may be initiated at that site; • adequate and well-controlled human clinical trials to establish the safety and efficacy, in the case of a drug product candidate, or safety, purity, and potency, in the case of a biological product candidate for its intended use, performed in accordance with Good Clinical Practices ("GCPs") and additional requirements for the protection of human research subjects and their health information; • development of manufacturing processes to ensure the product candidate's identity, strength, quality, purity, and potency in compliance with current GMP; • submission to the FDA of a New Drug Application ("NDA"), in the case of a drug product candidate, or a BLA, in the case of a biological product candidate, including results of preclinical testing, detailed information about the CMC, and proposed labeling and packaging for the product candidate; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the products are produced to assess compliance with current GMP, and to assure that the facilities, methods, and controls are adequate to preserve the therapeutics' identity, strength, quality, purity, and potency as well as satisfactory completion of an FDA inspection of selected clinical sites, selected clinical investigators to determine GCP compliance, and payment of user fees; and • FDA review and approval of the NDA, or licensure of a BLA to permit commercial marketing for particular indications for use, including agreement on post-marketing commitments, if applicable.
Hoffmann-La Roche AG ("Roche AG"), Kiora Pharmaceuticals, Inc., Genentech, Inc. in partnership with Lineage Cell Therapeutics, Inc., and Luxturna, the product developed by Spark Therapeutics, Inc. and marketed by Roche AG, is currently the only gene therapy approved to treat IRDs in the United States which addresses only mutations in the RPE65 gene.
Hoffmann-La Roche AG ("Roche AG"), Kiora Pharmaceuticals, Inc., Genentech, Inc. in partnership with Lineage Cell Therapeutics, Inc., and Luxturna, the product developed by Spark Therapeutics, Inc. and marketed by Roche AG, is currently the only gene therapy approved to treat IRDs in the United States which addresses only mutations in the one gene, RPE65 .
This approach represents a potential universal booster, regardless of previous COVID-19 vaccination. OCU520, our combination quadrivalent seasonal flu and bivalent COVID-19 vaccine, is designed to provide the unique ease of getting both an annual COVID-19 booster vaccine and an annual seasonal flu vaccine in one vaccine.
This approach represents a potential universal booster, regardless of previous COVID-19 vaccination. OCU520, our combination quadrivalent seasonal flu and COVID-19 vaccine, is designed to provide the unique ease of getting both an annual COVID-19 booster vaccine and an annual seasonal flu vaccine in one vaccine.
Each of the aforementioned vaccines have been authorized or approved in at least one country within the Ocugen COVAXIN Territory or the Mucosal Vaccine Territory and are intramuscular vaccines. CanSinoBIO's Convidecia Air, an intranasal vaccine targeting COVID-19, has been approved in China.
Each of the aforementioned vaccines have been authorized or approved in at least one country within the Ocugen Mucosal Vaccine Territory and are intramuscular vaccines. CanSinoBIO's Convidecia Air, an intranasal vaccine targeting COVID-19, has been approved in China.
The S protein of SARS-CoV-2 is the principal target for antibody-based and vaccine countermeasures. The S protein serves as the primary viral attachment and entry factor to promote SARS-CoV-2 entry into human cells.
The Spike (S) protein of SARS-CoV-2 is the principal target for antibody-based and vaccine countermeasures. The S protein serves as the primary viral attachment and entry factor to promote SARS-CoV-2 entry into human cells.
Overview of Wet AMD OCU200 also has the potential to represent a better treatment option for patients suffering from wet AMD. Most AMD cases begin as dry AMD and may progress towards the advanced "wet" form. Wet AMD is caused by abnormal blood vessels in the retina that leak fluid or blood into the macula.
Overview of Wet AMD OCU200 also has the potential to represent a better treatment option for patients suffering from Wet AMD. Most AMD cases begin as dAMD and may progress towards the advanced "Wet" form. Wet AMD is caused by abnormal blood vessels in the retina that leak fluid or blood into the macula.
Regenerative Medicine Cell Therapy Platform NeoCart is a Phase 3-ready, regenerative medicine cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing chondrocytes, the cells responsible for maintaining cartilage health.
Regenerative Medicine Cell Therapy Platform NeoCart is a Phase 3-ready, regenerative medicine cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing the patient's own chondrocytes, the cells responsible for maintaining cartilage health.
In some cases, the eyes of individuals with LCA can appear sunken. LCA is associated with over 25 mutated genes and affects approximately 160,000 individuals worldwide. Luxturna, developed by Spark Therapeutics, Inc., has been approved by the FDA to treat IRDs caused by retinoid isomerohydrolase (" RPE65 ") gene mutations.
In some cases, the eyes of individuals with LCA can appear sunken. LCA is associated with over 25 mutated genes and affects approximately 180,000 individuals worldwide. Luxturna, developed by Spark Therapeutics, Inc., has been approved by the FDA to treat IRDs caused by retinoid isomerohydrolase (" RPE65 ") gene mutations.
Post-approval Requirements Any products manufactured or distributed pursuant to FDA approvals are subject to extensive and continuing regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and reporting, including adverse experience reporting, deviation reporting, shortage reporting, and periodic reporting, product sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety and effectiveness after commercialization.
Post-Approval Requirements Any products manufactured or distributed pursuant to FDA approvals are subject to extensive and continuing regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and reporting, including adverse 22 Table of Contents experience reporting, deviation reporting, shortage reporting, and periodic reporting, product sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety and effectiveness after commercialization.
The CanSinoBIO Agreement was originally entered into in September 2019 with regards to OCU400, and was subsequently amended in September 2021 and November 2022 to include OCU410 and OCU410ST, respectively, to our existing collaboration with CanSinoBIO. Pursuant to the CanSinoBIO Agreement, we are collaborating with CanSinoBIO on the development of our modifier gene therapy platform.
The CanSinoBIO Agreement was originally entered into in September 2019 with regards to OCU400, and was subsequently amended in September 2021 and November 2022 to include OCU410 and OCU410ST, respectively. Pursuant to the CanSinoBIO Agreement, we are collaborating with CanSinoBIO on the development of our modifier gene therapy platform.
OCU400 consists of a functional copy of the retina-specific NHR gene, NR2E3 , delivered to target cells in the retina using an AAV5 vector that has the potential to be used as a gene therapeutic not only for the treatment of retinal diseases associated with mutations in genes such as NR2E3 , RHO , CEP290 , and PDE6ß , but also other gene mutations associated with IRDs, including RP and LCA.
OCU400 consists of a functional copy of the retina-specific NHR gene, NR2E3 , delivered to target cells in the retina using an AAV5 vector that has the potential to be used as a gene therapeutic not only for the treatment of retinal diseases associated with mutations in genes such as NR2E3 , RHO , 6 Table of Contents CEP290 , and PDE6ß , but also other gene mutations associated with IRDs, including RP and LCA.
Whether or not we obtain FDA or Health Canada approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign jurisdictions prior to the commencement of clinical trials or marketing and sale of the product in those countries.
Whether or not we obtain FDA approval for a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign jurisdictions prior to the commencement of clinical trials or marketing and sale of the product in those countries.
If possible, Phase 1 trials may also be used to gain an initial indication of product effectiveness. • Phase 2 — Controlled studies are conducted in larger but still limited subject populations (e.g., a few hundred patients) with a specified disease or condition to evaluate preliminary efficacy, identify optimal dosages, dosage tolerance and schedule, possible adverse effects and safety risks, and expanded evidence of safety. • Phase 3 — These adequate and well-controlled clinical trials are undertaken in expanded subject populations (e.g., several hundred to several thousand patients), generally at geographically dispersed clinical trial sites, to generate enough data to provide statistically significant evidence of clinical efficacy and safety of the product candidate for approval, to establish the overall risk-benefit profile of the product candidate, and to provide adequate information for 27 T a ble of Content s the labeling of the product candidate.
If possible, Phase 1 trials may also be used to gain an initial indication of product effectiveness. • Phase 2 — Controlled studies are conducted in larger but still limited subject populations with a specified disease or condition to evaluate preliminary efficacy, identify optimal dosages, dosage tolerance and schedule, possible adverse effects and safety risks, and expanded evidence of safety. • Phase 3 — These adequate and well-controlled clinical trials are undertaken in expanded subject populations (e.g., several hundred to several thousand patients), generally at geographically dispersed clinical trial sites, to generate enough data to provide statistically significant evidence of clinical efficacy and safety of the product candidate for approval, to establish the overall risk-benefit profile of the product candidate, and to provide adequate information for the labeling of the product candidate.
Common risk factors for AMD include genetics, smoking, nutrition and vitamin deficiency, and heart disease. Dry AMD, which affects over 266 million individuals worldwide, involves the slow deterioration of the retina with submacular drusen (small white or yellow dots on the retina), atrophy, loss of macular function, and central vision impairment.
Common risk factors for dAMD include genetics, smoking, nutrition and vitamin deficiency, and heart disease. dAMD, which affects over 266 million individuals worldwide, involves the slow deterioration of the retina with submacular drusen (small white or yellow dots on the retina), atrophy, loss of macular function, and central vision impairment.
This period may also be reduced by any time that the applicant did not act with due diligence. Only one patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 days of approval. The U.S.
This period may also be reduced by any time that the applicant did not act with due diligence. Only one patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 21 Table of Contents days of approval. The U.S.
It is the most common form of inherited macular degeneration, affecting approximately 0.8 million individuals worldwide. Stargardt disease happens when lipofuscin, a fatty yellow pigment, accumulates on the macula, which leads to the degeneration of the photoreceptor cells in the macula and ultimately leads to progressive central vision loss.
It is the most common form of inherited macular degeneration, affecting approximately 1 million individuals worldwide. Stargardt disease happens when lipofuscin, a fatty yellow pigment, accumulates on the macula, which leads to the degeneration of the photoreceptor cells in the macula and ultimately leads to progressive central vision loss.
Prior to 2019, Phase 1 and Phase 2 clinical trials were conducted to demonstrate the safety and efficacy of NeoCart. These clinical trials reported a decrease in pain and improved function of the knee. Additionally, per the results of the Phase 2 clinical trial, more patients responded to NeoCart than microfracture surgery. No SAEs were reported.
Prior to 2019, Phase 1 and Phase 2 clinical trials were conducted to demonstrate the safety and efficacy of NeoCart. These clinical trials reported a decrease in pain and improved function of the knee. Additionally, per the results of the Phase 2 clinical trial, more patients responded to NeoCart than microfracture surgery. No Serious Adverse Events ("SAEs") were reported.
In addition, newly discovered or developed safety or efficacy data may require changes to a product's approved labeling, including the addition of new warnings and contraindications. In addition, the distribution of prescription biotechnological samples is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution of samples at the federal level.
In addition, newly discovered or developed safety or efficacy data may require changes to a product's approved labeling, including the addition of new warnings and contraindications. In addition, the distribution of prescription drug and biological products is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution of samples at the federal level.
CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some products. Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products.
CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to 27 Table of Contents implement coverage restrictions for some products. Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products.
We plan to compete in the segments of pharmaceutical, biotechnological, and other related markets with therapeutics, regenerative medicines, and vaccines that have an acceptable safety profile and target commercially attractive indications. The development and commercialization of gene therapies is highly competitive.
We plan to compete in the segments of pharmaceutical, biotechnological, and other related markets with therapeutics, regenerative medicines, and vaccines that have an acceptable safety profile and target commercially attractive indications. 13 Table of Contents The development and commercialization of gene therapies is highly competitive.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities, including contract manufacturers and subcontractors, are in compliance with current GMP requirements and are adequate to assure consistent production of the product within required specifications.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities, including contract manufacturers and subcontractors, are in compliance with current GMP requirements and are adequate to assure consistent production of the product within required 20 Table of Contents specifications.
Some preclinical studies may continue even after the IND is in effect. An IND application automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, notifies the applicant of safety concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold.
Some preclinical studies may continue even after the IND is in effect. 18 Table of Contents An IND application becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, notifies the applicant of safety concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold.
Drug or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means the FDA may approve the product based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Drug or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may be developed and approved under the accelerated approval pathway, which means the FDA may approve the product candidate based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
Typically, two Phase 3 trials are required by the FDA for product approval. Under some limited circumstances, however, the FDA may approve an NDA or BLA based upon a single Phase 3 clinical study. The FDA may also require, or companies may conduct, additional clinical trials for the same indication after a product is approved.
Typically, two Phase 3 trials are required by the FDA for product approval. 19 Table of Contents Under some limited circumstances, however, the FDA may approve an NDA or BLA based upon a single Phase 3 clinical study. The FDA may also require, or companies may conduct, additional clinical trials for the same indication after a product is approved.
The U.S. government, state legislatures, and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription products. 37 T a ble of Content s In recent years, Congress has considered reductions in Medicare reimbursement levels for products administered by physicians.
The U.S. government, state legislatures, and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription products. In recent years, Congress has considered reductions in Medicare reimbursement levels for products administered by physicians.
("Purpose") relating to NeoCart, the Covaxin Agreement with Bharat Biotech with respect to COVAXIN in the Ocugen Covaxin Territory, the WU License Agreement with Washington University with respect to inhaled mucosal COVID-19 vaccines in the Mucosal Vaccine Territory, and the license agreement with the University of Colorado ("CU") pursuant to which we acquired rights to the transferrin-tumstatin fusion protein technology used in our OCU200 product candidate.
("Purpose") relating to NeoCart, the WU License Agreement with Washington University with respect to inhaled mucosal COVID-19 vaccines in the Mucosal Vaccine Territory, and the license agreement with the University of Colorado ("CU") pursuant to which we acquired rights to the transferrin-tumstatin fusion protein technology used in our OCU200 product candidate.
Currently no treatment options exist to address dry AMD or reverse or slow the progression of Stargardt disease and accordingly, there remains a significant unmet medical need for these ocular diseases. OCU410 and OCU410ST for the Treatment of Dry AMD and Stargardt Disease We are developing OCU410 and OCU410ST for the treatment of dry AMD and Stargardt disease, respectively.
Currently no treatment options exist to address dAMD or reverse or slow the progression of Stargardt disease and accordingly, there remains a significant unmet medical need for these ocular diseases. 7 Table of Contents OCU410 and OCU410ST for the Treatment of Dry AMD and Stargardt Disease We are developing OCU410 and OCU410ST for the treatment of dAMD and Stargardt disease, respectively.
Therefore, achieving favorable CMS coverage and reimbursement is usually a significant gating issue for successful introduction of a new product.
Therefore, achieving favorable Medicare coverage and reimbursement is usually a significant gating issue for successful introduction of a new product.
For more information about our partnership with Bharat Biotech, see "—License and Development Agreements—Co-Development, Supply and Commercialization Agreement with Bharat Biotech" and see Note 3 in our notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For more information about our partnership with CanSinoBIO, see "—License and Development Agreements—Co-Development and Commercialization Agreement with CanSinoBIO" and see Note 3 in our notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We believe that the experience of our management team, our scientific advisory board members, and our broad network of relationships with leaders within the industry and the medical community provides us with insight into the identification of product candidate opportunities as well as supports us in advancing the development and commercialization of our product candidates. • Manufacturing Partnerships.
We believe that the experience of our management team, our scientific advisory board members, business advisory board, and our broad network of relationships with leaders within the industry and the medical community provides us with insight into the identification of product candidate opportunities as well as supports us in advancing the development and commercialization of our product candidates. • Key Partnerships and Internal Capabilities.
We believe that NR2E3 may partially or fully rescue photoreceptors from degeneration in patients with IRDs and improve patients' vision. It 5 T a ble of Content s was also demonstrated preclinically that RORA offers a protective allele in AMD where the loss of photoreceptor cells leads to blindness.
We believe that NR2E3 may partially or fully rescue photoreceptors from degeneration in patients with IRDs and improve patients' vision. It was also demonstrated preclinically that RORA offers a protective allele in AMD where the loss of photoreceptor cells leads to blindness.
We intend to explore strategic licensing, acquisition, and collaboration opportunities with qualified partners to maximize the potential benefit of our product candidates on patients globally and to expand our product candidate pipeline to support our future growth. • Obtaining government funding to advance our vaccine programs towards commercialization.
We intend to explore strategic licensing, acquisition, and collaboration opportunities with qualified partners to maximize the potential benefit of our product candidates for patients globally and to expand our product candidate pipeline to support our future growth. 3 Table of Contents • Obtaining government funding to advance our vaccine programs towards commercialization.
RP is heterogeneous and varies greatly in age of onset, rate of progression, and even genetic etiology, yet a common pathology of photoreceptor cell degeneration develops. There is currently no approved treatment that slows or stops the progression of multiple forms of RP.
RP is heterogeneous and varies greatly in age of onset, rate of progression, and even genetic etiology, yet all of the mutations lead to a common pathology of photoreceptor cell degeneration. There is currently no approved treatment that slows or stops the progression of multiple forms of RP.
Common symptoms of RP include difficulty seeing in poor lighting or in the dark, loss of central vision or side (peripheral) vision, and difficulty reading print and deciphering detailed images. RP is associated with over 100 mutated genes that affect 10 T a ble of Content s 1.5 million individuals worldwide.
Common symptoms of RP include difficulty seeing in poor lighting or in the dark, loss of central vision or side (peripheral) vision, and difficulty reading print and deciphering detailed images. RP is associated with over 100 mutated genes that affect 1.5 million individuals worldwide.
The Tax Act, enacted on December 22, 2017, repealed the shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended, or the Code, commonly referred to as the individual mandate. Other legislative changes have been proposed and adopted since the passage of the ACA.
For example, the Tax Cuts and Job Act of 2017, repealed the shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as amended, or the Code, commonly referred to as the individual mandate. Other legislative changes have been proposed and adopted since the passage of the ACA.
Our modifier gene therapy platform is based on the use of NHRs, which have the potential to restore homeostasis — the basic biological processes in the retina.
Our modifier gene therapy platform is based on the use of NHRs, which have the potential to restore homeostasis — the basic biological processes in the retina from disease state to normal state.
We are proud of the fact that our team includes 55% of employees in ethnic and racial minority groups and also that 45% of our employees are women, both as self-disclosed.
We are proud of the fact that our team includes 69% of employees in ethnic and racial minority groups and also that 43% of our employees are women, both as self-disclosed.
The federal Anti-Kickback Statute, which regulates, among other things, marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities, prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order, or the referral to another for the furnishing or arranging of any item or service reimbursable under Medicare, Medicaid, or other federal healthcare programs, in whole or in part.
The federal Anti-Kickback Statute, which prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting, or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering, or arranging for or recommending the purchase, lease, or order, or the referral to another for the furnishing or arranging of any item or service reimbursable under Medicare, Medicaid, or other federal healthcare programs, in whole or in part.
It acts as a shock absorber throughout the body withstanding significant pressure and allowing for joints to glide smoothly with minimal friction. Cartilage damage can be caused by acute trauma, such as a bad fall or a sports-related injury, or by repetitive trauma, such as general 12 T a ble of Content s wear over time.
It acts as a shock absorber throughout the body withstanding significant pressure and allowing for joints to glide smoothly with minimal friction. Cartilage 10 Table of Contents damage can be caused by acute trauma, such as a bad fall or a sports-related injury, or by repetitive trauma, such as general wear over time.
Both the PDMA and state laws limit the distribution of prescription biotechnological product samples and impose requirements to ensure accountability in distribution. Free trial or 32 T a ble of Content s starter prescriptions provided through pharmacies are also subject to regulations under the Medicaid Drug Rebate Program ("MDRP") and potential liability under anti-kickback and false claims laws.
Both the PDMA and state laws limit the distribution of prescription drug and biological product samples and impose requirements to ensure accountability in distribution. Free trial or starter prescriptions provided through pharmacies are also subject to regulations under the Medicaid Drug Rebate Program ("MDRP") and potential liability under anti-kickback and false claims laws.
After the FDA grants ODD, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. ODD does not convey any advantage in, or 30 T a ble of Content s shorten the duration of, the regulatory review and approval process.
After the FDA grants ODD, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. ODD does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
Our website and the information contained on, or that can be accessed through, our website shall not be deemed to be incorporated by reference in, and is not considered part of this Annual Report on Form 10-K. 41 T a ble of Content s
Our website and the information contained on, or that can be accessed through, our website shall not be deemed to be incorporated by reference in, and is not considered part of this Annual Report on Form 10-K.
Recently, states have enacted or are considering legislation intended to make drug prices more transparent and deter significant price increases, typically as consumer protection laws. These laws may affect our future sales, marketing, and other promotional activities by imposing administrative and compliance burdens.
Other state laws and local ordinances require identification or licensing of sales representatives. Recently, states have enacted or are considering legislation intended to make drug prices more transparent and deter significant price increases, typically as consumer protection laws. These laws may affect our future sales, marketing, and other promotional activities by imposing administrative and compliance burdens.
Third-party payors also control costs by requiring prior authorization or imposing other dispensing 36 T a ble of Content s restrictions before covering certain products and by broadening therapeutic classes to increase competition. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
Third-party payors also control costs by requiring prior authorization or imposing other dispensing restrictions before covering certain products and by broadening therapeutic classes to increase competition. Third-party payors 26 Table of Contents are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
In single-gene replacement therapies such as gene augmentation, only the non-functional gene is targeted. and accordingly, this therapy cannot improve a multitude of disease-causing genetic defects.
Figure 9 demonstrates the mechanism of our modifier gene therapy. In single-gene replacement therapies such as gene augmentation, only the non-functional gene is targeted. and accordingly, this therapy cannot improve a multitude of disease-causing genetic defects.
Worldwide, the seasonal flu is estimated to result in 3 to 5 million cases of severe illness, and 0.3 million to 0.7 million respiratory deaths. The seasonal flu spreads easily and rapidly transmits in crowded areas.
As of October 3, 2023, worldwide, the seasonal flu is estimated to result in 3 to 5 million cases of severe illness, and 0.3 million to 0.7 million respiratory deaths. 12 Table of Contents The seasonal flu spreads easily and rapidly transmits in crowded areas.
In animal models for wet AMD (laser induced choroidal neovascularization in mice and rats), OCU200 demonstrated comparable or slightly better activity compared to anti-VEGF control groups in preventing the formation and growth of new leaky blood vessels and subsequent disease symptoms.
Studies in animal models for Wet AMD (laser induced choroidal neovascularization in mice and rats) suggest that OCU200 may possess comparable or slightly better activity compared to anti-VEGF control groups in preventing the formation and growth of new leaky blood vessels and subsequently disease symptoms.
As of February 15, 2023, we had exclusive rights or owned rights to: (i) two issued U.S. patents, one pending U.S. patent application, and three pending foreign patent applications related to OCU400; (ii) one issued U.S. patent, one pending U.S. patent application, and three pending foreign patent applications related to OCU410 and OCU410ST; (iii) 21 issued U.S. patents; four pending U.S. patent applications, 38 issued or registered foreign patents, and eight pending foreign patent applications related to NeoCart; (iv) four pending U.S. patent applications and two pending foreign patent applications related to OCU500 and OCU520; and (v) one issued U.S. patent, one pending U.S. patent application, 25 issued or registered foreign patents, and four pending foreign patent applications related to OCU200.
As of April 10, 2024, we had exclusive rights or owned rights to: (i) one issued U.S. patent related to OCU400; (ii) one issued U.S. patent, two pending U.S. patent applications, and four pending foreign patent applications related to OCU410 and OCU410ST; (iii) 21 issued U.S. patents; four pending U.S. patent applications, 38 issued or registered foreign patents, and eight pending foreign patent applications related to NeoCart; (iv) six pending U.S. patent applications and three pending foreign patent applications related to OCU500, OCU510 and OCU520; and (v) one issued U.S. patent and 25 issued or registered foreign patents related to OCU200.
As of February 15, 2023, our global intellectual property portfolio contains 87 patents and 23 pending patent applications related to composition of matter, pharmaceutical compositions, methods of use for our product candidates, and other proprietary technology including those under our licensing and development arrangements.
As of April 10, 2024, our global intellectual property portfolio contains 87 patents and 27 pending patent applications related to composition of matter, pharmaceutical compositions, methods of use for our product candidates, and other proprietary technology including those under our licensing and development arrangements.
We believe these broad ODD and OMPD designations demonstrate that OCU400 has the potential to be a broad-spectrum therapeutic to treat multiple IRDs. These ODD and OMPD designations represent gene-agnostic broad coverage for RP and LCA, and are not mutation-specific designations.
We believe these broad ODD, RMAT, and OMPD designations demonstrate that OCU400 has the potential to be a broad-spectrum therapeutic to treat multiple IRDs. These ODD, RMAT, and OMPD designations represent gene-agnostic broad coverage for RP and LCA and are not mutation-specific designations. Figure 9: Mechanism of our modifier gene therapy.
We believe OCU200's distinct mechanism of action through the target of the integrin pathway will potentially provide benefit to patients, particularly to those patients that do not respond to currently approved therapies.
We believe that OCU200's distinct mechanism of action by targeting the integrin pathway could potentially provide benefit to patients, particularly to those patients that do not respond to currently approved therapies.
Although we rely on our partnership for manufacturing, we have personnel with extensive experience in gene therapy manufacturing to oversee and guide the process and analytical development, scale-up, release, and stability testing at our partner site.
Although we rely on our partnership for manufacturing, we have personnel with extensive experience in gene therapy manufacturing to oversee and guide the process and analytical development, scale-up, release, and stability testing at our partner site. We perform periodic audits of our manufacturing partner to confirm compliance with applicable regulations.
Such actions may include refusal to approve pending applications, license or approval suspension or revocation, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, Form 483s, cyber letters, modification of promotional materials or labeling, provision of corrective information, imposition of post-market requirements including the need for additional testing, imposition of distribution or other restrictions under a REMS, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines, consent decrees, corporate integrity agreements, suspension and debarment from government contracts, refusal of orders under existing government contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement, civil or criminal penalties including fines and imprisonment, and adverse publicity, among other adverse consequences.
Such actions may include refusal to approve pending applications, license or approval suspension or revocation, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, Form 483s, cyber letters, modification of promotional materials or labeling, provision of corrective information, imposition of post-market requirements including the need for additional testing, imposition of distribution or other restrictions under a REMS, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines, consent decrees, corporate integrity agreements, suspension and debarment from government contracts, refusal of orders under existing government contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement, civil or criminal penalties including fines and imprisonment, and adverse publicity, among other adverse consequences. 23 Table of Contents Additional controls for biologics To help reduce the increased risk of the introduction of adventitious agents, the PHSA emphasizes the importance of manufacturing controls for products whose attributes cannot be precisely defined.
On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers, and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
The American Taxpayer Relief Act among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers, and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
The bioadhesive is a natural, biocompatible material which acts as adhesives for biological tissue, thereby eliminating the need for complicated suturing ( Figure 10 ). 13 T a ble of Content s Figure 10: Mechanism of the regenerative medicine cell therapy technology, NeoCart. Figure 10 demonstrates the mechanism of our regenerative medicine cell therapy technology, NeoCart.
The bioadhesive is a natural, biocompatible material which acts as adhesives for biological tissue, thereby eliminating the need for complicated suturing ( Figure 10 ). 11 Table of Contents Figure 10: Mechanism of the regenerative medicine cell therapy technology, NeoCart. Figure 10 demonstrates the mechanism of our regenerative medicine cell therapy technology, NeoCart.
Under the SERI Agreement, we may make, have made, use, offer to sell, sell, and import licensed products, and must use commercially reasonable efforts to bring one or more licensed products to market as soon as reasonably practicable.
Under the SERI Agreement, we may make, have made, use, offer to sell, and import licensed products, and must use commercially reasonable efforts to bring one or more licensed products to market as soon as reasonably practicable. SERI maintains control of patent preparation, filing, prosecution, and maintenance.
In our employee recruitment process, we adhere to equal employment opportunity policies. We are committed to include diverse candidates in any pool of candidates from which employees are chosen. Additionally, we recognize that our employees perform best when they know how their work contributes to our overall strategy.
We are committed to include diverse candidates in any pool of candidates from which employees are chosen. Additionally, we recognize that our employees perform best when they know how their work contributes to our overall strategy.
A drug or biologic candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect of the product.
A drug or biologic candidate approved under the accelerated approval pathway is generally subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect of the product.
This study will be a randomized, controlled clinical trial designed to evaluate the efficacy and safety of NeoCart in comparison to the current standard of care, chondroplasty, in subjects with articular cartilage defects. We intend to initiate the Phase 3 clinical trial in the first half of 2024, subject to discussions with the FDA.
This study will be a randomized, controlled clinical trial designed to evaluate the efficacy and safety of NeoCart in comparison to the current standard of care, chondroplasty, in subjects with articular cartilage defects. We intend to initiate the Phase 3 trial in the second half of 2024, contingent on adequate availability of funding.
A CRL generally contains a statement of specific conditions that must be met in order to secure final approval of the marketing application, and may require additional clinical or preclinical testing in order for the FDA to reconsider the application. The deficiencies identified may be minor, for example, requiring labeling changes; or major, for example, requiring additional clinical trials.
A CRL generally contains a statement of specific conditions that must be met in order to secure final approval of the marketing application, and may require additional clinical or preclinical testing in order for the FDA to reconsider the application.
As of February 15, 2023, our patent portfolio for our product candidates included a total of 24 issued patents in the United States, 63 issued or registered patents in foreign countries, nine pending patent applications in the United States, and 14 pending patent applications in foreign countries.
As of April 10, 2024, our patent portfolio for our product candidates included a total of 24 issued patents in the United States, 63 issued or registered patents in foreign countries, 12 pending patent applications in the United States, and 15 pending patent applications in foreign countries.
OCU510 is being developed for the global market. Overview of COVID-19 COVID-19, caused by the SARS-CoV-2 virus, was first reported to have surfaced in Wuhan, China in December 2019 and was declared a global pandemic by the WHO in March 2020.
Overview of COVID-19 COVID-19, caused by the SARS-CoV-2 virus, was first reported to have surfaced in Wuhan, China in December 2019 and was declared a global pandemic by the World Health Organization ("WHO") in March 2020.
We believe NeoCart has the potential to accelerate healing and reduce pain by reconstructing a patient's previously damaged knee cartilage. In this therapy, healthy cartilage tissue is grown and implanted in the patient. NeoCart was acquired in our reverse merger in 2019 with Histogenics Corporation ("Histogenics").
We believe NeoCart has the potential to accelerate healing and reduce pain by reconstructing a patient's previously damaged knee cartilage. In this therapy, healthy cartilage tissue is grown and implanted in the patient.
These partners have state-of-the-art facilities and proven expertise in the fields of gene therapy, vaccines, and biologics, which is critical to advancing our product candidates into and through clinical trials and commercialization as well as accelerating development timelines, reducing our associated costs, and increasing the reliability of our product candidate manufacturing. • Product Designations.
CanSinoBIO has state-of-the-art facilities and proven expertise in the gene therapy field, which is critical to advancing our gene therapy product candidates into and through clinical trials as well as accelerating development timelines, reducing our associated costs, and increasing the reliability of our product candidate manufacturing.
These licensing and development arrangements include the licensing agreement with The Schepens Eye Research Institute, Inc. ("SERI"), an affiliate of Harvard Medical School, through which we acquired the technology used in our modifier gene therapy platform as well as access to technologies for other NHR genes, the license agreement with Purpose Co., Ltd.
("SERI"), an affiliate of Harvard Medical School, through which we acquired the technology used in our modifier gene therapy platform as well as access to technologies for other NHR genes, the license agreement with Purpose Co., Ltd.
We seek to protect our proprietary technology and processes, and obtain and maintain ownership of certain technologies, in part, by confidentiality and invention assignment agreements with our employees, consultants, scientific advisors, and contractors.
In addition to patents, we may rely, in some circumstances, on trade secrets to protect our technology. We seek to protect our proprietary technology and processes, and obtain and maintain ownership of certain technologies, in part, by confidentiality and invention assignment agreements with our employees, consultants, scientific advisors, and contractors.
OCU200 is designed to treat DME, DR, and wet AMD. We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization ("CDMO") and have produced clinical trial materials to initiate a Phase 1 clinical trial. We submitted an IND application to the FDA in February 2023 to initiate a Phase 1 clinical trial targeting DME.
OCU200 is designed to treat DME, DR, and Wet AMD. We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization ("CDMO") and have produced trial materials to initiate a Phase 1 trial.
OCU410 and OCU410ST utilize an AAV delivery platform for the retinal delivery of the RORA gene. RORA regulated gene networks are relevant in the treatment of dry AMD and Stargardt disease. RORA reduces oxidative stress, limits lipofuscin deposits, reduces chronic inflammation, and improves choroidal blood flow. Gene variants of the ABCA4 gene are associated with both AMD and Stargardt disease.
OCU410 and OCU410ST utilize an AAV delivery platform for the retinal delivery of the RORA gene. RORA regulated gene networks are relevant in the treatment of dAMD and Stargardt disease. RORA reduces oxidative stress, limits lipofuscin deposits, reduces chronic inflammation, regulates complement activation, and improves choroidal blood flow.
Further, the FDA recommends that sponsors observe subjects for potential gene therapy-related delayed adverse events for a prolonged period of time. 33 T a ble of Content s Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations Our business activities, including but not limited to, research, marketing, sales, promotion, distribution, medical education, and other activities following product approval will be subject to regulation by numerous federal and state regulatory and law enforcement authorities in the United States in addition to the FDA, including potentially the Department of Justice, the Department of Health and Human Services and its various divisions, including the Centers for Medicare and Medicaid Services ("CMS") and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense, and state and local governments.
Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations Our business activities, including but not limited to, research, marketing, sales, promotion, distribution, medical education, and other activities following product approval will be subject to regulation by numerous federal and state regulatory and law enforcement authorities in the United States in addition to the FDA, including potentially the Department of Justice, the Department of Health and Human Services and its various divisions, including the Centers for Medicare and Medicaid Services ("CMS") and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense, and state and local governments.
Our product candidates have the potential to cure blindness diseases, treat serious conditions such as articular cartilage lesions, reduce the transmission of COVID-19, and make a significant impact in the ever-evolving COVID-19 landscape. Key elements of the strategy we employ to accomplish this mission include: • Continuing to advance our modifier gene therapy platform into and through clinical development.
We believe our product candidates have the potential to treat blindness diseases, treat serious conditions such as articular cartilage lesions, and reduce transmission or prevent respiratory diseases such as the flu and COVID-19. Key elements of the strategy we employ to accomplish this mission include: • Continuing to advance our modifier gene therapy platform into and through clinical development.
These designations demonstrate the potential broad-spectrum application of OCU400, through its use of NHRs, to treat the more than 125 genes associated with RP and LCA with one product rather than developing individual treatments for each gene mutation.
These designations demonstrate the potential broad-spectrum application of OCU400, through its use of NHRs, to treat the more than 125 genes associated with RP and LCA with one product rather than developing individual treatments for each gene mutation. OCU410ST has received ODD from the FDA for the treatment of ABCA4 -associated retinopathies, including Stargardt disease.
Pediatric Exclusivity Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity periods for both drugs and biologics, and also Orange Book listed patents in the case of drugs.
Pediatric Exclusivity Pediatric exclusivity is one type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity and patent periods.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, there is no guarantee that we will be able to maintain these designations, receive this designation for any of our other product candidates, or receive or maintain any corresponding benefits, including periods of exclusivity. 54 T a ble of Content s We have obtained from the FDA Office of Orphan Products, ODDs for OCU400 for NR2E3 -related RP and LCA and had previously received ODDs for the treatment of the following disease genotypes: NR2E3 , RHO , CEP290 , and PDE6ß mutation-associated inherited retinal degenerations.
Biggest changeWe have obtained from the FDA Office of Orphan Products, ODDs for OCU400 for RP and LCA and had previously received ODDs for the treatment of the following disease genotypes: NR2E3, RHO , CEP290 , and PDE6ß mutation-associated inherited retinal degenerations. OCU400 has additionally received OMPD from the EC, based on the recommendation of the EMA, for RP and LCA.
We may not be able to initiate or continue conducting clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside the United States.
We may not be able to initiate or continue conducting clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these clinical trials as required by the FDA or similar regulatory authorities outside the United States.
A number of companies have suffered significant setbacks in advanced clinical trials, notwithstanding promising results in earlier trials.
A number of companies have suffered significant setbacks in advanced clinical trials, notwithstanding promising results in earlier clinical trials.
We may, in the future, conduct clinical trials for product candidates at sites outside the United States, and the FDA may not accept data from trials conducted in such locations. We may, in the future, choose to conduct one or more of our clinical trials outside the United States.
We may, in the future, conduct clinical trials for product candidates at sites outside the United States, and the FDA may not accept data from clinical trials conducted in such locations. We may, in the future, choose to conduct one or more of our clinical trials outside the United States.
In addition, while these clinical trials are subject to the applicable local laws (and therefore failure to comply with such laws could result in regulatory enforcement action), acceptance of the data by the FDA will be dependent upon its determination that the trials were conducted consistent with all applicable U.S. laws and regulations.
In addition, while these clinical trials are subject to the applicable local laws (and therefore failure to comply with such laws could result in regulatory enforcement action), acceptance of the data by the FDA will be dependent upon its determination that the clinical trials were conducted consistent with all applicable U.S. laws and regulations.
Risks Related to Our Dependence on Third Parties We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements.
Risks Related to Our Dependence on Third Parties We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such preclinical studies or clinical trials or failing to comply with regulatory requirements.
In particular, we may enter into arrangements with third parties to perform certain services in the United States or other countries if we do not establish our own sales, marketing, and distribution capabilities in the such countries, or if we determine that such third-party arrangements are otherwise beneficial.
In particular, we may enter into arrangements with third parties to perform certain services in the United States or other countries if we do not establish our own sales, marketing, and distribution capabilities in such countries, or if we determine that such third-party arrangements are otherwise beneficial.
Substantial penalties can be assessed for noncompliance with the drug pricing provisions in the IRA. The IRA could have the effect of reducing the prices we can charge and reimbursement we receive for our products, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.
Substantial penalties can be assessed for noncompliance with the drug pricing provisions in the IRA. The IRA could have the effect of reducing the prices we can charge and reimbursement we receive for our products, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.
District Court for the Eastern District of Pennsylvania ("Court") (Case No. 2:21-cv-02725) that purported to state a claim for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, based on statements made by us concerning the announcement of our decision to pursue the submission of a BLA for COVAXIN for adults ages 18 years and older rather than pursuing an EUA for the vaccine candidate.
District Court for the Eastern District of Pennsylvania (“Court”) (Case No. 2:21-cv-02725) that purported to state a claim for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, based on statements made by us concerning the announcement of our decision to pursue the submission of a BLA for COVAXIN for adults ages 18 years and older rather than pursuing an EUA for the vaccine candidate.
In addition, later discovery of previously unknown adverse events or that the product is less effective than previously thought or other problems with our products, manufacturers, or manufacturing processes, or failure to comply with regulatory requirements both before and after approval, may yield various results, including: • restrictions on manufacturing, distribution, or marketing of such products; • restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions; • modifications to promotional pieces; • issuance of corrective information; • requirements to conduct post-marketing studies or other clinical trials; • clinical holds or termination of clinical trials; • requirements to establish or modify a REMS, or a comparable foreign authority may require that we establish or modify a similar strategy; • liability for harm caused to patients or subjects; • reputational harm; • warning, untitled, Form 483s, or cyber letters; • suspension of marketing or withdrawal or recall of the products from the market; • regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; • refusal to approve pending applications or supplements to approved applications that we submit; • fines, restitution, or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure or detention; • FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or • injunctions or the imposition of civil or criminal penalties, including imprisonment.
In addition, later discovery of previously unknown adverse events or that the product is less effective than previously thought or other problems with our products, manufacturers, or manufacturing processes, or failure to comply with regulatory requirements both before and after approval, may yield various results, including: • restrictions on manufacturing, distribution, or marketing of such products; • restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions; • modifications to promotional pieces; • issuance of corrective information; • requirements to conduct post-marketing studies or other clinical trials; • clinical holds or termination of clinical trials; • requirements to establish or modify a REMS, or a comparable foreign authority may require that we establish or modify a similar strategy; • liability for harm caused to patients or subjects; • reputational harm; • warning, untitled, Form 483s, or cyber letters; 48 Table of Contents • suspension of marketing or withdrawal or recall of the products from the market; • regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; • refusal to approve pending applications or supplements to approved applications that we submit; • fines, restitution, or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure or detention; • FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or • injunctions or the imposition of civil or criminal penalties, including imprisonment.
If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt our development of the applicable product candidates.
If the FDA does not accept the data from any clinical trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and could delay or permanently halt our development of the applicable product candidates.
The complaints seek unspecified damages, interest, attorneys’ fees, and other costs. We believe that the lawsuits are without merit and intend to vigorously defend against them. At this time, no assessment can be made as to their likely outcome or whether the outcome will be material to us.
The complaints seek unspecified damages, interest, attorneys' fees, and other costs. We believe that these lawsuits are without merit and intend to vigorously defend against them. At this time, no assessment can be made as to their likely outcome or whether the outcome will be material to us.
For example, we will remain responsible for ensuring that each of our trials is conducted in accordance with the general investigational plan and protocols for the trial. We must also ensure that our preclinical trials are conducted in accordance with GLP and under current GMP conditions, as appropriate.
For example, we will remain responsible for ensuring that each of our trials is conducted in accordance with the general investigational plan and protocols for the trial. We must also ensure that our preclinical studies are conducted in accordance with GLP and under current GMP conditions, as appropriate.
Each of the aforementioned vaccines have been authorized or approved in at least one country within the Ocugen COVAXIN Territory or the Mucosal Vaccine Territory and are intramuscular vaccines. CanSinoBIO's Convidecia Air, an intranasal vaccine targeting COVID-19, has been approved in China.
Each of the aforementioned vaccines have been authorized or approved in at least one country within the Ocugen Mucosal Vaccine Territory and are intramuscular vaccines. CanSinoBIO's Convidecia Air, an intranasal vaccine targeting COVID-19, has been approved in China.
In August 2021, a stockholder derivative lawsuit was filed derivatively on behalf of our company against certain of our agents and the nominal defendant Ocugen in the Court (Case No. 2:21-cv-03876) that purported to state a claim for breach of fiduciary duty and contribution for violations of Sections 10(b) and 21(d) of the Exchange Act, based on facts and circumstances relating to the securities class action lawsuits and seeking contribution and indemnification in connection with claims asserted in the securities class action lawsuits.
In August 2021, a stockholder derivative lawsuit was filed derivatively on behalf of us against certain of our agents and the nominal defendant Ocugen in the Court (Case No. 2:21-cv-03876) that purported to state a claim for breach of fiduciary duty and contribution for violations of Sections 10(b) and 21(d) of the Exchange Act, based on facts and circumstances relating to the securities class action lawsuits and seeking contribution and indemnification in connection with claims asserted in the securities class action lawsuits.
We may not be able to obtain any future ODDs or OMPDs that we apply for, ODDs or OMPDs do not guarantee that we will be able to successfully develop our product candidates, and there is no guarantee that we will be able to maintain any ODDs or OMPDs that we receive.
We may not be able to obtain any future ODDs or OMPDs that we apply for. Receiving ODDs or OMPDs do not guarantee that we will be able to successfully develop our product candidates, and there is no guarantee that we will be able to maintain any ODDs or OMPDs that we receive.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators, including the FDA and the NIH, or IRBs or IBCs may not authorize us or our investigators to commence or continue a clinical trial, conduct a clinical trial at a prospective trial site, or amend trial protocols, or regulators, IRBs, or IBCs may require that we modify or amend our clinical trial protocols; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our CDMOs; • 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, or be lost to follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or we may be required to engage in additional clinical trial site monitoring; • us, the regulators, IRBs, or IBCs may require the suspension or termination of clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics (alone or in combination with 52 T a ble of Content s other products) of the product candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic or therapeutic candidate; • changes in marketing approval policies or regulations, or changes in or the enactment of additional statutes or regulations, during the development period rendering our data insufficient to obtain marketing approval and requiring us to conduct additional studies; • the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a marketing application; • 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; • we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; • patients that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the study, increase the needed enrollment size for the study, or extend the study’s duration; • the FDA or comparable foreign regulatory authorities may disagree with our study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials or find that a product candidate’s benefits do not outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; • the FDA or comparable foreign regulatory authorities may disagree with our intended indications; • the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or our contract manufacturer’s manufacturing facility for clinical and future commercial supplies; • the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a marketing application, or other comparable submissions in foreign jurisdictions, or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may take longer than we anticipate to make a decision on our product candidates; and • we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators, including the FDA and the NIH, or IRBs or IBCs may not authorize us or our investigators to commence or continue a clinical trial, conduct a clinical trial at a prospective trial site, or amend trial protocols, or regulators, IRBs, or IBCs may require that we modify or amend our clinical trial protocols; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our CDMOs; • 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, or be lost to follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or we may be required to engage in additional clinical trial site monitoring; • us, the regulators, IRBs, or IBCs may require the suspension or termination of clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics (alone or in combination with other products) of the product candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic or therapeutic candidate; • changes in marketing approval policies or regulations, or changes in or the enactment of additional statutes or regulations, during the development period rendering our data insufficient to obtain marketing approval and requiring us to conduct additional studies; • the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a marketing application; • 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; • we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; • patients that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the study, increase the needed enrollment size for the study, or extend the study’s duration; • the FDA or comparable foreign regulatory authorities may disagree with our study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials or find that a product candidate’s benefits do not outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; • the FDA or comparable foreign regulatory authorities may disagree with our intended indications; • the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or our contract manufacturer’s manufacturing facility for clinical and future commercial supplies; • the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a marketing application, or other comparable submissions in foreign jurisdictions, or to obtain regulatory approval in the United States or elsewhere; 41 Table of Contents • the FDA or comparable foreign regulatory authorities may take longer than we anticipate to make a decision on our product candidates; and • we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development.
Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we do.
Litigation and contested proceedings can be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we do.
The degree of market acceptance of any of our product candidates will depend on a number of factors, including: • the efficacy of our product candidates; • the prevalence and severity of adverse events associated with such product candidates; • the clinical indications for which the product candidates are approved and the approved claims that we may make for the products; • limitations or warnings contained in the product's FDA-approved labeling, including potential limitations or warnings for such product candidates that may be more restrictive than other competitive products; • changes in the standard of care for the targeted indications for such product candidates, which could reduce the marketing impact of any claims that we could make following FDA approval, if obtained; • the relative convenience and ease of administration of such product candidates; • cost of treatment versus economic and clinical benefit in relation to alternative treatments or therapies; • the availability of third-party formulary coverage and adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicaid and particularly by Medicare in light of the prevalence of retinal diseases in persons over age 55; • the price concessions required by third party payors to obtain coverage; • the extent and strength of our manufacturing, marketing, and distribution of such product candidates; • distribution and use restrictions imposed by the FDA with respect to such product candidates or to which we agree as part of a REMS or voluntary risk management plan; 64 T a ble of Content s • the extent of availability of generic or biosimilar versions of any products that compete with any of our product candidates and the extent to which they are offered at a substantially lower price than we expect to offer for our product candidates, if approved; • adverse publicity about the product or favorable publicity about competitive products; and • potential product liability claims.
The degree of market acceptance of any of our product candidates will depend on a number of factors, including: • the efficacy of our product candidates; • the prevalence and severity of adverse events associated with such product candidates; • the clinical indications for which the product candidates are approved and the approved claims that we may make for the products; • limitations or warnings contained in the product's FDA-approved labeling, including potential limitations or warnings for such product candidates that may be more restrictive than other competitive products; • changes in the standard of care for the targeted indications for such product candidates, which could reduce the marketing impact of any claims that we could make following FDA approval, if obtained; • the relative convenience and ease of administration of such product candidates; • cost of treatment versus economic and clinical benefit in relation to alternative treatments or therapies; • the availability of third-party formulary coverage and adequate coverage or reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicaid and particularly by Medicare in light of the prevalence of retinal diseases in persons over age 55; • the price concessions required by third party payors to obtain coverage; • the extent and strength of our manufacturing, marketing, and distribution of such product candidates; • distribution and use restrictions imposed by the FDA with respect to such product candidates or to which we agree as part of a REMS or voluntary risk management plan; • the extent of availability of generic or biosimilar versions of any products that compete with any of our product candidates and the extent to which they are offered at a substantially lower price than we expect to offer for our product candidates, if approved; • adverse publicity about the product or favorable publicity about competitive products; and • potential product liability claims.
These FCA lawsuits against sponsors of drugs and biologics have increased significantly in volume and breadth, leading to several substantial civil and criminal settlements, up to $3.0 billion, pertaining to certain sales practices and promoting off-label uses. In addition, FCA lawsuits may expose sponsors to follow-on claims by private payors based on fraudulent marketing practices.
These FCA lawsuits against sponsors of drugs and biologics have increased significantly in volume and breadth in recent years, leading to several substantial civil and criminal settlements, up to $3.0 billion, pertaining to certain sales practices and promoting off-label uses. In addition, FCA lawsuits may expose sponsors to follow-on claims by private payors based on fraudulent marketing practices.
The market price for our common stock may be influenced by those factors discussed in this "Risk Factors" section and many others, including: • our ability to enroll subjects in our ongoing and planned clinical trials; • the results of our clinical trials and preclinical studies, and the results of trials of our competitors or those of other companies in our market sector; • regulatory approval of our product candidates, or limitations to specific label indications or patient populations for use, or changes or delays in the regulatory review process; • the level of expenses related to any of our product candidates or clinical development programs; 83 T a ble of Content s • regulatory developments in the United States and foreign countries; • reports of adverse events in any of our products, competing biologics, or gene therapy products; • changes in the structure of healthcare payment systems, especially in light of current reforms to the U.S. healthcare system; • the success or failure of our efforts to acquire, license, or develop additional product candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; • manufacturing, supply, or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators, or other strategic partners; • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to ours; • market conditions in the biopharmaceutical sector and issuance of securities analysts' reports or recommendations; • trading volume of our common stock; • an inability to obtain additional funding; • sales of our stock by insiders and stockholders or the perception that such sales could occur; • our ability to effectively manage our growth; • ineffectiveness of our internal control over financial reporting; • additions or departures of key personnel, including major changes in our board or management; • intellectual property, product liability, or other litigation against us; and • general economic, industry, market conditions, and other events or factors, many of which are beyond our control.
The market price for our common stock may be influenced by those factors discussed in this "Risk Factors" section and many others, including: • our ability to enroll subjects in our ongoing and planned clinical trials; • the results of our clinical trials and preclinical studies, and the results of trials of our competitors or those of other companies in our market sector; • regulatory approval of our product candidates, or limitations to specific label indications or patient populations for use, or changes or delays in the regulatory review process; • the level of expenses related to any of our product candidates or clinical development programs; • regulatory developments in the United States and foreign countries; • reports of adverse events in any of our products, competing biologics, or gene therapy products; • changes in the structure of healthcare payment systems, especially in light of current reforms to the U.S. healthcare system; • the success or failure of our efforts to acquire, license, or develop additional product candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; • manufacturing, supply, or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators, or other strategic partners; 72 Table of Contents • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to ours; • market conditions in the biopharmaceutical sector and issuance of securities analysts' reports or recommendations; • trading volume of our common stock; • an inability to obtain additional funding; • sales of our stock by insiders and stockholders or the perception that such sales could occur; • our ability to effectively manage our growth; • ineffectiveness of our internal control over financial reporting; • additions or departures of key personnel, including major changes in our board or management; • intellectual property, product liability, or other litigation against us; and • general economic, industry, market conditions, and other events or factors, many of which are beyond our control.
The success of our product candidates and our ability to generate revenues from our product candidates, if approved, will depend on many factors including our ability to: • complete and obtain favorable results from our clinical trials and preclinical studies with respect to our product candidates; • apply for and receive marketing approval from the applicable regulatory authorities; • receive regulatory approval for claims that are necessary or desirable for successful marketing; • receive approval for our manufacturing processes and facilities from the applicable regulatory authorities; • recruit and enroll qualified patients for clinical trials with respect to our product candidates in a timely manner; • expand and maintain a workforce of experienced scientists and others with experience in relevant technologies to continue to develop our product candidates; • hire, train, and deploy marketing and sales representatives or contract with a third-party for marketing and sales representatives to commercialize product candidates in the United States and key foreign markets; • launch and create market demand for our product candidates, if approved, through marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; 48 T a ble of Content s • achieve market acceptance of our product candidates by patients, the medical community, and third-party payors; • effectively compete with other therapies and establish a market share; • maintain a continued acceptable safety and efficacy profile of our product candidates, if approved, following commercial launch; • achieve appropriate reimbursement, pricing, and payment coverage for our product candidates, if approved; • manufacture product candidates in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; • establish and maintain agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; • pursue partnerships with, or offer licenses to, qualified third parties to promote and sell product candidates, if approved, in domestic and key foreign markets where we receive marketing approval; • develop our product candidates for additional indications or for use in broader patient populations; • maintain patent and trade secret protection and regulatory exclusivity for our product candidates; and • qualify for, identify, register, maintain, enforce, and defend intellectual property rights and claims covering our products and intellectual property portfolio; and not infringe on others’ intellectual property rights.
The success of our product candidates and our ability to generate revenues from our product candidates, if approved, will depend on many factors including our ability to: • complete and obtain favorable results from our clinical trials and preclinical studies with respect to our product candidates; • apply for and receive marketing approval from the applicable regulatory authorities; • receive regulatory approval for claims that are necessary or desirable for successful marketing; 38 Table of Contents • receive approval for our manufacturing processes and facilities from the applicable regulatory authorities; • recruit and enroll qualified patients for clinical trials with respect to our product candidates in a timely manner; • expand and maintain a workforce of experienced scientists and others with experience in relevant technologies to continue to develop our product candidates; • hire, train, and deploy marketing and sales representatives or contract with a third-party for marketing and sales representatives to commercialize product candidates in the United States and key foreign markets; • launch and create market demand for our product candidates, if approved, through marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; • achieve market acceptance of our product candidates by patients, the medical community, and third-party payors; • effectively compete with other therapies and establish a market share; • maintain a continued acceptable safety and efficacy profile of our product candidates, if approved, following commercial launch; • achieve appropriate reimbursement, pricing, and payment coverage for our product candidates, if approved; • manufacture product candidates in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; • establish and maintain agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; • pursue partnerships with, or offer licenses to, qualified third parties to promote and sell product candidates, if approved, in domestic and key foreign markets where we receive marketing approval; • develop our product candidates for additional indications or for use in broader patient populations; • maintain patent and trade secret protection and regulatory exclusivity for our product candidates; and • qualify for, identify, register, maintain, enforce, and defend intellectual property rights and claims covering our products and intellectual property portfolio; and not infringe on others’ intellectual property rights.
Patient enrollment is affected by other factors including: • the size and nature of the patient population (for instance, we are pursuing clinical trials for certain orphan indications, for which the size of the patient population is limited); • the severity of the disease under investigation; • the existence of current treatments for the indications for which we are conducting clinical trials; • the eligibility criteria for and design of the clinical trial in question, including factors such as frequency of required assessments, length of the study, and ongoing monitoring requirements; 56 T a ble of Content s • the perceived risks and benefits of the product candidate, including the potential advantages or disadvantages of the product candidate being studied in relation to other available therapies; • competition in recruiting and enrolling patients in clinical trials; • efforts to facilitate timely enrollment in clinical trials; • patient referral practices of physicians; • effectiveness of publicity created by clinical trial sites regarding the trial; • patients’ ability to comply with the specific instructions related to the trial protocol, proper documentation, and use of the product candidate; • an inability to obtain or maintain patients' informed consents; • the risk that enrolled patients will drop out before completion or not return for post-treatment follow-up; • the ability to monitor patients adequately during and after treatment; • the ability to compensate patients for their time and effort; and • the proximity and availability of clinical trial sites for prospective patients.
Patient enrollment is affected by other factors including: • the size and nature of the patient population (for instance, we are pursuing clinical trials for certain orphan indications, for which the size of the patient population is limited); • the severity of the disease under investigation; • the existence of current treatments for the indications for which we are conducting clinical trials; • the eligibility criteria for and design of the clinical trial in question, including factors such as frequency of required assessments, length of the study, and ongoing monitoring requirements; • the perceived risks and benefits of the product candidate, including the potential advantages or disadvantages of the product candidate being studied in relation to other available therapies; • competition in recruiting and enrolling patients in clinical trials; • efforts to facilitate timely enrollment in clinical trials; • patient referral practices of physicians; • effectiveness of publicity created by clinical trial sites regarding the trial; • patients’ ability to comply with the specific instructions related to the trial protocol, proper documentation, and use of the product candidate; • an inability to obtain or maintain patients' informed consents; • the risk that enrolled patients will drop out before completion or not return for post-treatment follow-up; • the ability to monitor patients adequately during and after treatment; • the ability to compensate patients for their time and effort; and • the proximity and availability of clinical trial sites for prospective patients.
The provisions in our charter documents include the following: • a classified Board of Directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our Board of Directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our Board of Directors, unless the Board of Directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the prohibition on removal of directors without cause due to the classified Board of Directors; • the ability of our Board of Directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our Board of Directors to alter our amended and restated bylaws without obtaining stockholder approval; 82 T a ble of Content s • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend, or repeal our amended and restated bylaws or repeal certain provisions of our amended and restated certificate of incorporation; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the chairman of the Board of Directors, the Chief Executive Officer, or the Board of Directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
The provisions in our charter documents include the following: • a classified Board of Directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our Board of Directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; 70 Table of Contents • the exclusive right of our Board of Directors, unless the Board of Directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the prohibition on removal of directors without cause due to the classified Board of Directors; • the ability of our Board of Directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our Board of Directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend, or repeal our amended and restated bylaws or repeal certain provisions of our amended and restated certificate of incorporation; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the chairman of the Board of Directors, the Chief Executive Officer, or the Board of Directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
If these third parties upon which we depend do not successfully carry out their contractual duties, meet expected deadlines, conduct our preclinical studies or any clinical trials in accordance with regulatory requirements or our stated protocols, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements, or for other reasons: • we, our CDMOs, or other third-party collaborators may be subject to regulatory enforcement or other legal actions; • the data generated in our preclinical studies or clinical trials may be deemed unreliable and our such studies and clinical trials may need to be repeated, extended, delayed, or terminated; • we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates; or • we may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates, if approved.
If these third parties upon which we depend do not successfully carry out their contractual duties, meet expected deadlines, conduct our preclinical studies or any clinical trials in accordance with regulatory requirements or our stated protocols, if they need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements, or for other reasons: • we, our CDMOs, or other third-party collaborators may be subject to regulatory enforcement or other legal actions; • the data generated in our preclinical studies or clinical trials may be deemed unreliable and our such studies and clinical trials may need to be repeated, extended, delayed, or terminated; • we may need to identify new CDMOs with which to partner for the supply of our product candidates; • we may not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates; or • we may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates, if approved.
We expect that we will be subject to additional risks related to conducting marketing and sales activities in international jurisdictions and entering into international business relationships, including: • different regulatory requirements for approval of drugs and biologics in foreign countries; • the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally; 61 T a ble of Content s • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • the need to seek additional patent approvals, licenses to patents held by third parties, and/or face claims of infringing third-party patent rights; • unexpected changes in tariffs, trade barriers, and regulatory requirements; • economic weakness, including inflation or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the FCPA, the U.K.
We expect that we will be subject to additional risks related to conducting marketing and sales activities in international jurisdictions and entering into international business relationships, including: • different regulatory requirements for approval of drugs and biologics in foreign countries; • the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; • the need to seek additional patent approvals, licenses to patents held by third parties, and/or face claims of infringing third-party patent rights; • unexpected changes in tariffs, trade barriers, and regulatory requirements; • economic weakness, including inflation or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; 50 Table of Contents • foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the FCPA, the U.K.
The number of available third-party facilities may also be further limited by natural disasters, such as pandemics, including the ongoing COVID-19 pandemic, floods, fire, or such facilities could face manufacturing issues, such as contamination or regulatory findings following a regulatory inspection of such facility.
The number of available third-party facilities may also be further limited by natural disasters, such as pandemics, including any ongoing effects of the COVID-19 pandemic, floods, fire, or such facilities could face manufacturing issues, such as contamination or regulatory findings following a regulatory inspection of such facility.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and 74 T a ble of Content s curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business and financial results, including, without limitation, the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgements, possible exclusion from participation in Medicare, Medicaid, and other federal healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.
Item 1A. Risk Factors. Risk Factors Summary Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties described in this section of this Annual Report on Form 10-K.
Risk Factors Summary Investing in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties described in this section of this Annual Report on Form 10-K.
The IRA contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
The IRA also contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
Department of Health and Human Services that would require manufacturers to charge a negotiated "maximum fair price" for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on Part D drugs.
Department of Health and Human Services that would require manufacturers to charge a negotiated "maximum fair price" for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide 54 Table of Contents discounts on Part D drugs.
If the manufacturers upon whom we rely fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues.
If the manufacturers upon whom we rely fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology 56 Table of Contents manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues.
Our operating results will suffer if we fail to compete effectively. The biotechnology industry is characterized by rapidly advancing technologies as well as a strong emphasis on intellectual property leading to a highly competitive environment for the development and commercialization of therapeutic products, regenerative medicines, and vaccines.
Our operating results will suffer if we fail to compete effectively. The biotechnology industry is characterized by rapidly advancing technologies as well as a strong emphasis on intellectual property leading to a highly competitive environment for the development and commercialization of therapeutic products, 51 Table of Contents regenerative medicines, and vaccines.
We cannot predict when we will be able to generate the necessary data or results required to obtain regulatory approval of products with the market potential sufficient to enable us to achieve profitability, if ever. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations.
We cannot predict when we will be able to generate the necessary data or results required to obtain regulatory approval of products with the market potential sufficient to enable us to achieve profitability, if ever. Accordingly, we may need 35 Table of Contents to obtain substantial additional funding in connection with our continuing operations.
If these third parties terminate their agreements with us or fail to maintain or enforce the underlying patents or licenses thereto, or we otherwise lose our rights to these patents, our competitive position and our market share in the markets for any of our approved products will be harmed. • Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. • The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses. • Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel. • If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline. 43 T a ble of Content s Risks Related to Our Financial Position and Capital Requirements We have incurred significant losses and negative cash flows from operations since our inception.
If these third parties terminate their agreements with us or fail to maintain or enforce the underlying patents or licenses thereto, or we otherwise lose our rights to these patents, our competitive position and our market share in the markets for any of our approved products will be harmed. • Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. • The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses. • Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel. • If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline 33 Table of Contents Risks Related to Our Financial Position and Capital Requirements We have incurred significant losses and negative cash flows from operations since our inception.
Our current and future collaborations may pose a number of additional risks, including the following: • collaborators may not pursue development of product candidates and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; 70 T a ble of Content s • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could fail to make timely regulatory submissions for a product candidate; • collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the preferred course of development, might cause delays or termination of the research, development, or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties or fail to maintain intellectual property rights which they license to us, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
Our current and future collaborations may pose a number of additional risks, including the following: • collaborators may not pursue development of product candidates and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could fail to make timely regulatory submissions for a product candidate; • collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the preferred course of development, might cause delays or termination of the research, development, or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties or fail to maintain intellectual property rights which they license to us, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. 59 Table of Contents Collaboration agreements may not lead to development or commercialization of our product candidates in the most efficient manner, or at all.
Our operating results will suffer if we fail to compete effectively. • If third-party payors do not reimburse patients for our products candidates, if approved, or if reimbursement levels are set too low for us to sell our product candidates at a profit, our ability to successfully commercialize our product candidates, if approved, and our results of operations will be harmed. • We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements. • If we encounter difficulties in negotiating commercial manufacturing and supply agreements with third-party manufacturers and suppliers of our product candidates or any product components, our ability to commercialize our product candidates, if approved, would be impaired. • If the manufacturers upon whom we rely fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology 42 T a ble of Content s manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues. • We may seek to collaborate with third parties for the development or commercialization of our product candidates.
Our operating results will suffer if we fail to compete effectively. • If third-party payors do not reimburse patients for our products candidates, if approved, or if reimbursement levels are set too low for us to sell our product candidates at a profit, our ability to successfully commercialize our product candidates, if approved, and our results of operations will be harmed. • We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements. • If we encounter difficulties in negotiating commercial manufacturing and supply agreements with third-party manufacturers and suppliers of our product candidates or any product components, our ability to commercialize our product candidates, if approved, would be impaired. 32 Table of Contents • If the manufacturers upon whom we rely fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues. • We may seek to collaborate with third parties for the development or commercialization of our product candidates.
We may be subject to a third-party preissuance submission of prior art to the USPTO, or become involved in other contested proceedings such as opposition, derivation, reexamination, inter partes review, post-grant review, or interference proceedings in the United States or elsewhere, challenging our patent rights or the patent rights of others.
We may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in other contested proceedings such as opposition, derivation, reexamination, inter partes review, post-grant review, or interference proceedings in the United States or elsewhere, challenging our patent rights or the patent rights of others.
If one or more of these analysts ceases to cover us or fails to regularly publish reports on us, interest in our stock could decrease, which could cause our stock price or trading volume to decline. Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel.
If one or more of these analysts ceases to cover us or fails to regularly publish reports on us, interest in our stock could decrease, which could cause our stock price or trading volume to decline. General Risk Factors Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel.
To the extent that any disruption or cybersecurity or other 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, the further development and commercialization of our product candidates could be delayed, and our reputation could be harmed.
To the extent that any disruption or cybersecurity or other security breach were to result in a loss of, or damage to, our data or applications, or 77 Table of Contents inappropriate disclosure of confidential or proprietary information, we could incur liability, the further development and commercialization of our product candidates could be delayed, and our reputation could be harmed.
The failure to comply with FDA and comparable foreign regulatory requirements may, either before or after product approval, if any, subject us to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on our products, manufacturers, or manufacturing process; • warning letters, Form 483s, or untitled letters alleging violations; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions, or import bans; • voluntary or mandatory product recalls and publicity requirements; 53 T a ble of Content s • total or partial suspension of production; • imposition of restrictions on operations, including costly new manufacturing requirements; and • refusal to approve pending marketing applications or supplements to approved marketing applications.
The failure to comply with FDA and comparable foreign regulatory requirements may, either before or after product approval, if any, subject us to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on our products, manufacturers, or manufacturing process; • warning letters, Form 483s, or untitled letters alleging violations; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions, or import bans; • voluntary or mandatory product recalls and publicity requirements; • total or partial suspension of production; • imposition of restrictions on operations, including costly new manufacturing requirements; and • refusal to approve pending marketing applications or supplements to approved marketing applications.
Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and product candidates.
Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the 64 Table of Contents duration of the patent protection of our technology and product candidates.
In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities.
In the event of contamination or injury resulting from our use of hazardous 74 Table of Contents materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities.
This amount will not meet our capital requirements over the next 12 months. We estimate that our cash, cash equivalents, and investments will enable us to fund our operations into the first quarter of 2024. Based on this estimate, we will need to raise significant additional capital in order to fund our future operations.
This amount will not meet our capital requirements over the next 12 months. We estimate that our cash and cash equivalents will enable us to fund our operations into the fourth quarter of 2024. Based on this estimate, we will need to raise significant additional capital in order to fund our future operations.
Although the FDA decides whether individual gene therapy protocols may proceed, it is possible the NExTRAC review process, which is still being implemented, could delay the initiation of a clinical trial, even if the FDA has reviewed the trial design and details and approved its initiation.
Although the FDA decides whether individual gene therapy protocols may proceed, it is possible the NExTRAC review process, which is still being implemented, could delay the 39 Table of Contents initiation of a clinical trial, even if the FDA has reviewed the trial design and details and approved its initiation.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative 52 Table of Contents arrangements with large and established companies.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if 69 Table of Contents securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
Moreover, patients in our clinical trials, especially patients in our control groups, may be at risk for dropping out of our studies if they are not experiencing relief of their disease. A significant number of withdrawn patients would compromise the quality of a study's data.
Moreover, patients in our clinical trials, especially patients in 45 Table of Contents our control groups, may be at risk for dropping out of our studies if they are not experiencing relief of their disease. A significant number of withdrawn patients would compromise the quality of a study's data.
In September 2021, a second stockholder derivative lawsuit was filed derivatively on behalf of our company against certain of our agents and the nominal defendant Ocugen in the Court (Case No. 2:21-cv-04169) that purported to state a claim for breach of fiduciary duties, unjust enrichment, abuse of control, waste of corporate assets, and contribution for violations of Sections 10(b) and 21(d) of the Exchange Act, based on the same allegations as the first complaint.
In September 2021, a second stockholder derivative lawsuit was filed derivatively on behalf of 60 Table of Contents us against certain of our agents and the nominal defendant Ocugen in the Court (Case No. 2:21-cv-04169) that purported to state a claim for breach of fiduciary duties, unjust enrichment, abuse of control, waste of corporate assets, and contribution for violations of Sections 10(b) and 21(d) of the Exchange Act, based on the same allegations as the first complaint.
If our licensors were to fail to maintain such licenses, we may need to obtain additional licenses with respect to the applicable product candidates. Risks with respect to parties from whom we have obtained intellectual property rights may also arise out of circumstances beyond our control.
If our licensors were to fail to maintain such licenses, we may need to obtain additional licenses with respect to the applicable product candidates. 67 Table of Contents Risks with respect to parties from whom we have obtained intellectual property rights may also arise out of circumstances beyond our control.
If we do not lawfully promote our approved products, if any, we may become subject to such litigation and, if we do not successfully defend against such actions, those actions may have a material adverse effect on our business, financial condition, results of operations, and prospects.
If we do not lawfully promote our approved products, if any, we may become 47 Table of Contents subject to such litigation and, if we do not successfully defend against such actions, those actions may have a material adverse effect on our business, financial condition, results of operations, and prospects.
Orphan exclusivity may also be lost for the same reasons that ODD or OMPD may be lost. Orphan exclusivity may further be lost if we are unable to assure a sufficient quantity of the product to meet the needs of patients with the rare disease or condition.
Orphan exclusivity may also be lost for the same reasons that ODD or OMPD may be lost. Orphan exclusivity may further be 43 Table of Contents lost if we are unable to assure a sufficient quantity of the product to meet the needs of patients with the rare disease or condition.
If our existing third-party manufacturers, or the third parties that we engage in the future to manufacture a product, if approved, or component for commercial sale or for any clinical trials we expect to initiate in the future should cease to continue to do so for any reason 69 T a ble of Content s (including the termination of our agreements with such manufacturers, which can occur for a variety of reasons, or the bankruptcy of such manufacturers), it would be difficult to obtain a suitable alternative manufacturer.
If our existing third-party manufacturers, or the third parties that we engage in the future to manufacture a product, if approved, or component for commercial sale or for any clinical trials we expect to initiate in the future should cease to continue to do so for any reason (including the termination of our agreements with such manufacturers, which can occur for a variety of reasons, or the bankruptcy of such manufacturers), it would be difficult to obtain a suitable alternative manufacturer.
Should we desire to 71 T a ble of Content s pursue a collaboration agreement but 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 our development program or one or more of our other development programs, delay our 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.
Should we desire to pursue a collaboration agreement but 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 our development program or one or more of our other development programs, delay our 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.
Risks Related to the Commercialization of Our Product Candidates We have no prior experience in the marketing, sale, and distribution of biotechnology products and there can be no assurance that our product candidates, if approved, will be successfully commercialized.
Risks Related to the Commercialization of Our Product Candidates 49 Table of Contents We have no prior experience in the marketing, sale, and distribution of biotechnology products and there can be no assurance that our product candidates, if approved, will be successfully commercialized.
Recruiting and training a sales force is expensive and time-consuming, particularly to the extent that we seek to commercialize any product, if approved, for an indication, such as dry AMD, that has a large patient population.
Recruiting and training a sales force is expensive and time-consuming, particularly to the extent that we seek to commercialize any product, if approved, for an indication, such as dAMD, that has a large patient population.
Additionally, our expenses will also increase if, and, as we: • initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future, particularly if there are any delays in enrollment of patients in or completing our clinical trials or the development of our product candidates; • seek marketing approvals for product candidates that successfully complete clinical development; 44 T a ble of Content s • establish sales, marketing, and distribution capabilities for our product candidates for which we obtain a regulatory approval; • scale up our manufacturing processes and capabilities to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain a regulatory approval; • expand our operational, financial, and management systems and increase personnel, including personnel to support our clinical development, manufacturing, and commercialization efforts, and our operations as a public company; • acquire other companies, products, product candidates, or technologies, or in-license the rights to other products, product candidates, or technologies; and • develop, maintain, expand, and protect our intellectual property portfolio.
Additionally, our expenses will also increase if, and, as we: • initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future, particularly if there are any delays in enrollment of patients in or completing our clinical trials or the development of our product candidates; • seek marketing approvals for product candidates that successfully complete clinical development; • establish sales, marketing, and distribution capabilities for our product candidates for which we obtain a regulatory approval; • scale up our manufacturing processes and capabilities to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain a regulatory approval; 34 Table of Contents • expand our operational, financial, and management systems and increase personnel, including personnel to support our clinical development, manufacturing, and commercialization efforts, and our operations as a public company; • acquire other companies, products, product candidates, or technologies, or in-license the rights to other products, product candidates, or technologies; and • develop, maintain, expand, and protect our intellectual property portfolio.
The approval procedures vary among countries and the time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval.
The approval procedures vary 46 Table of Contents among countries and the time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval.
We face, and will continue to face, intense competition from companies as well as institutions that are pursuing or have commercialized vaccines that would compete with our vaccine candidates, COVAXIN and our novel inhaled mucosal vaccine platform, if commercialized.
We face, and will continue to face, intense competition from companies as well as institutions that are pursuing or have commercialized vaccines that would compete with our inhaled mucosal vaccine platform, if commercialized.
Our estimates of the potential market opportunities are predicated on many assumptions, which may include industry knowledge and publications, third-party research reports, and other surveys, some of which we may have commissioned.
Our estimates of the potential market opportunities are predicated on many assumptions, which may include industry knowledge and publications, third-party 53 Table of Contents research reports, and other surveys, some of which we may have commissioned.
If our existing stockholders sell, or indicate an intention to sell, substantial amounts of common stock in the public market, the market price of our common stock could decline. We had 221.6 million shares of common stock outstanding as of December 31, 2022, which were all freely tradable, without restriction, in the public market.
If our existing stockholders sell, or indicate an intention to sell, substantial amounts of common stock in the public market, the market price of our common stock could decline. We had 256.6 million shares of common stock outstanding as of December 31, 2023, which were all freely tradable, without restriction, in the public market.
The cost of defending against these types of claims against us or the ultimate resolution of such claims, whether by settlement or adverse court decision, may harm our business. Further, potential claimants may be encouraged to bring lawsuits based on a settlement from us or adverse court decisions against us.
The cost of defending against these types of claims against us or the ultimate resolution of such claims, whether by settlement or adverse court decision, may divert management’s attention and harm our business. Further, potential claimants may be encouraged to bring lawsuits based on a settlement from us or adverse court decisions against us.
For example, insurers may establish a "step-edit" system that requires a patient to first use a lower price alternative product prior to becoming eligible for reimbursement of a higher price product. 65 T a ble of Content s Third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement for medical products and services.
For example, insurers may establish a "step-edit" system that requires a patient to first use a lower price alternative product prior to becoming eligible for reimbursement of a higher price product. Third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement for medical products and services.
For example, we are renovating an existing facility into a current GMP facility in accordance with the FDA's regulations in support of NeoCart manufacturing for Phase 3 clinical trial material.
For example, we have completed renovating an existing facility into a current GMP facility in accordance with the FDA's regulations in support of NeoCart manufacturing for Phase 3 clinical trial material.
We have based this estimate on assumptions 45 T a ble of Content s that may prove to be wrong, and our operating and capital requirements may change as a result of many factors currently unknown to us. Conducting preclinical testing and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete.
We have based this estimate on assumptions that may prove to be wrong, and our operating and capital requirements may change as a result of many factors currently unknown to us. Conducting preclinical testing and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete.
In the event we are unable to develop a team of marketing and sales representatives or to establish an effective third-party contractual relationship for such services, we may not be able to commercialize our product candidates, if approved, which 62 T a ble of Content s would limit our ability to generate product revenues.
In the event we are unable to develop a team of marketing and sales representatives or to establish an effective third-party contractual relationship for such services, we may not be able to commercialize our product candidates, if approved, which would limit our ability to generate product revenues.
General Risk Factors The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses. Our stock price has been, and will likely continue to be volatile.
The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses. Our stock price has been, and will likely continue to be volatile.
Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical, or other studies.
Regulatory authorities have substantial discretion in the approval process 40 Table of Contents and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical, or other studies.
If we or our licensors fail to maintain the patents and patent applications covering our product candidates, it would have a material adverse effect on our business. 78 T a ble of Content s Certain aspects of our product candidates are protected by patents exclusively licensed from other companies or institutions.
If we or our licensors fail to maintain the patents and patent applications covering our product candidates, it would have a material adverse effect on our business. Certain aspects of our product candidates are protected by patents exclusively licensed from other companies or institutions.
Although use of a product directed by off-label prescriptions may infringe our method-of-treatment 77 T a ble of Content s patents, the practice is common across medical specialties, particularly in the United States, and such infringement is difficult to detect, prevent, or prosecute.
Although use of a product directed by off-label prescriptions may infringe our method-of-treatment patents, the practice is common across medical specialties, particularly in the United States, and such infringement is difficult to detect, prevent, or prosecute.
For example, we hold exclusive licenses for patent families relating to OCU400, OCU410, OCU410ST, and OCU200, and an exclusive license in the United States, Canada, and Mexico with respect to COVAXIN, an exclusive license in the United States, Europe, Japan, South Korea, Australia, and China with respect an inhaled mucosal COVID-19 vaccine, and exclusive licenses for patent families related to NeoCart.
For example, we hold exclusive licenses for patent families relating to OCU400, OCU410, OCU410ST, and OCU200, and an exclusive license in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong with respect an inhaled mucosal COVID-19 vaccine, and exclusive licenses for patent families related to NeoCart.
The availability of the PTAB as a lower-cost, faster, and potentially 76 T a ble of Content s more potent tribunal for challenging patents could therefore increase the likelihood that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining, defending, and enforcing them.
The availability of the PTAB as a lower-cost, faster, and potentially more potent tribunal for challenging patents could therefore increase the likelihood that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining, defending, and enforcing them.
The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. The FDA may also object to a product name if 60 T a ble of Content s it believes the name inappropriately implies medical claims or contributes to an overstatement of efficacy.
The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. The FDA may also object to a product name if it believes the name inappropriately implies medical claims or contributes to an overstatement of efficacy.
In general, the Bayh-Dole Act provides the 79 T a ble of Content s U.S. government certain rights in inventions developed using a government funded program, such as U.S. government’s right to a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose.
In general, the Bayh-Dole Act provides the U.S. government certain rights in inventions developed using a government funded program, such as U.S. government’s right to a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to 85 T a ble of Content s these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees, or as executive officers.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees, or as executive officers.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have an adverse effect on our ability to compete in the marketplace. 81 T a ble of Content s If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have an adverse effect on our ability to compete in the marketplace. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
We may not be able to protect our intellectual property and proprietary rights throughout the world. Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
Filing, prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States.
We may not be successful in establishing or maintaining collaborative relationships, any of which could adversely affect our ability to develop and commercialize our product candidates. We are in an agreement with CanSinoBIO for the development and commercialization of our modifier gene therapy platform and with Bharat Biotech for the development and commercialization of COVAXIN in the North American market.
We may not be successful in establishing or maintaining collaborative relationships, any of which could adversely affect our ability to develop and commercialize our product candidates. We are in an agreement with CanSinoBIO for the development and commercialization of our modifier gene therapy platform.
Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience 84 T a ble of Content s required to successfully develop, gain regulatory approval of, and commercialize products.
Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of, and commercialize products.
As a biotechnology company, we are subject to many federal and state healthcare laws, such as the federal Anti-Kickback Statute, the federal civil and criminal FCA, the civil monetary penalties statute, the Medicaid Drug Rebate statute and other 72 T a ble of Content s price reporting requirements, the VHCA, the HIPAA, the FCPA, the ACA, and similar state laws.
As a biotechnology company, we are subject to many federal and state healthcare laws, such as the federal Anti-Kickback Statute, the federal civil and criminal FCA, the civil monetary penalties statute, the Medicaid Drug Rebate statute and other price reporting requirements, the VHCA, the HIPAA, the FCPA, the ACA, and similar state laws.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our properties are located in Malvern, Pennsylvania, including our corporate headquarters, and consist of an aggregate of approximately 44,889 square feet of leased office, laboratory, and future manufacturing space. Our leases have initial terms of approximately seven years and include options to extend the leases for up to 10 years. Item 3. Legal Proceedings.
Biggest changeItem 2. Properties Our properties are located in Malvern, Pennsylvania, including our corporate headquarters, which consist of approximately 28,488 square feet of leased office space, and our current GMP facility, which consists of approximately 16,401 square feet. of laboratory and future manufacturing space.
For a discussion of legal proceedings, see Note 15 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. This discussion is incorporated herein by reference.
For a discussion of legal proceedings, see Note 15 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. This discussion is incorporated herein by reference. Item 4. Mine Safety Disclosures. Not applicable. 80 Table of Contents PART II
Added
Our corporate headquarters has initial terms of approximately seven years and include options to extend the leases for up to 10 years.
Added
Our current GMP facility has initial terms of seven years and includes an option to extend the lease for up to 5 years, which the Company has elected to account for since it is reasonably certain that the Company will exercise such option. Item 3. Legal Proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed3 unchanged
Biggest changeIssuer Purchases of Equity Securities During the quarter ended December 31, 2022, we did not repurchase any shares of our common stock. 90 T a ble of Content s
Biggest changeIssuer Purchases of Equity Securities During the quarter ended December 31, 2023, we did not repurchase any shares of our common stock. 81 Table of Contents
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol "OCGN." Holders As of February 21, 2023, we had 226.4 million shares of common stock outstanding held by approximately 22 stockholders of record.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol "OCGN." Holders As of April 9, 2024, we had 257.3 million shares of common stock outstanding held by approximately 23 stockholders of record.

Item 7. Management's Discussion & Analysis

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

51 edited+49 added−42 removed39 unchanged
Biggest changeThe following table shows a summary of our cash flows for the year ended December 31, 2022 and the year ended December 31, 2021 (in thousands): Year ended December 31, 2022 2021 Net cash used in operating activities $ (60,079) $ (47,941) Net cash used in investing activities (16,967) (1,816) Net cash provided by financing activities 59,475 120,676 Effect of changes in exchange rate on cash, cash equivalents, and restricted cash 25 — Net (decrease) increase in cash, cash equivalents, and restricted cash $ (17,546) $ 70,919 95 T a ble of Content s Operating activities Cash used in operating activities was $60.1 million for the year ended December 31, 2022 compared to $47.9 million for the year ended December 31, 2021.
Biggest changeThe following table shows a summary of our cash flows for the year ended December 31, 2023 and the year ended December 31, 2022 (in thousands): Year ended December 31, (As Restated) 2023 2022 Net cash used in operating activities $ (62,054) $ (60,079) Net cash provided by (used in) investing activities 3,077 (16,967) Net cash provided by financing activities 20,881 59,475 Effect of changes in exchange rate on cash, cash equivalents, and restricted cash (5) 25 Net (decrease) in cash and cash equivalents $ (38,101) $ (17,546) Operating activities Cash used in operating activities was $62.1 million for the year ended December 31, 2023, and primarily consisted of a net loss of $63.1 million adjusted for non-cash items including stock-based compensation of $9.2 million, impairment of advance for COVAXIN supply of $4.1 million, depreciation and amortization of $0.7 million, non-cash lease expense of $0.5 million, other non-cash items of $0.4 million, and a change in net working capital of $13.1 million.
We will need to raise significant additional capital in order to fund our future operations until we recognize significant revenue from product sales. Our management is currently evaluating different strategies to obtain the required funding for future operations.
We will need to raise significant additional capital in order to fund our operations until we recognize significant revenue from product sales. Our management is currently evaluating different strategies to obtain the funding required for our future operations.
Indebtedness We have outstanding debt related to the funds borrowed from EB5 Life Sciences, L.P. ("EB-5 Life Sciences") pursuant to the U.S. government's Immigrant Investor Program, commonly known as the EB-5 program. Pursuant to the loan agreement entered into with EB-5 Life Sciences, we have borrowed $2.0 million to date.
Indebtedness We have outstanding debt related to the funds borrowed from EB5 Life Sciences, L.P. ("EB-5 Life Sciences") pursuant to the U.S. government's Immigrant Investor Program, commonly known as the EB-5 program. Pursuant to the loan agreement entered into with EB-5 Life Sciences, we have borrowed $2.5 million to date.
As of December 31, 2022, we had future minimum operating lease base rent payment obligations of $5.0 million, with $0.8 million payable within 12 months of December 31, 2022. See Note 7 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under lease obligations.
As of December 31, 2023, we had future minimum operating lease base rent payment obligations of $5.8 million, with $0.8 million payable within 12 months of December 31, 2023. See Note 7 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under lease obligations.
Regenerative Medicine Cell Therapy Platform NeoCart is a Phase 3-ready, regenerative medicine cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing chondrocytes, the cells responsible for maintaining cartilage health.
Regenerative Medicine Cell Therapy Platform NeoCart is a Phase 3-ready, regenerative medicine cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing the patient's own chondrocytes, the cells responsible for maintaining cartilage health.
These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, government grants, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the adult safety clinical trial for COVAXIN and for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties.
These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties.
Factors impacting our future funding requirements include, without limitation, the following: • the initiation, progress, timing, costs, and results of clinical trials for our product candidates; • the outcome, timing, and cost of the regulatory approval process for our product candidates; • the costs of manufacturing and commercialization; • the costs related to doing business internationally with respect to the development and commercialization of our product candidates; • the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us; • the costs of expanding infrastructure to support our development, commercialization, and business efforts, including the costs related to the development of a laboratory and manufacturing facility; • the costs involved in recruiting and retaining skilled personnel; • the extent to which we in-license or acquire other products, product candidates, or technologies; • the extent to which we out-license our product candidates; and • the impact of geopolitical turmoil, macroeconomic conditions, social unrest, political instability, terrorism, or other acts of war.
Factors impacting our future funding requirements include, without limitation, the following: • the initiation, progress, timing, costs, and results of trials for our product candidates; • the preparation and submission of Investigational New Drug applications, or INDs, with the FDA for current and future product candidates; • the outcome, timing, and cost of the regulatory approval process for our product candidates; • the costs of manufacturing and commercialization; • the costs related to doing business internationally with respect to the development and commercialization of our product candidates; • the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights; • the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us; • the acquisition of or in-licensing of additional product candidates and technologies; • the costs of expanding infrastructure to support our development, commercialization, and business efforts, including the costs related to the development of a laboratory and manufacturing facility; • the costs involved in recruiting and retaining skilled personnel; • the extent to which we in-license or acquire other products, product candidates, or technologies and out-license our product candidates; and • the impact of geopolitical turmoil, macroeconomic conditions, social unrest, political instability, terrorism, or other acts of war.
During the year ended December 31, 2022, cash provided by financing activities primarily consisted of gross proceeds of $50.0 million received from our underwritten offering that closed in February 2022 and gross proceeds of $8.3 million received from the Sales Agreement.
During the year ended December 31, 2022, cash provided financing activities primarily consisted of gross proceeds of $50.0 million received from our underwritten offering that closed in February 2022.
As these vaccine candidates are being developed to be administered through inhalation, we believe they have the potential to generate rapid local immunity in the upper airways and lungs where viruses enter and infect the body, which we believe may help reduce or prevent infection and transmission as well as provide protection against new virus variants.
As these vaccine candidates are being developed to be administered via inhalation, we believe they have the potential to generate rapid local immune response in the upper airways and lungs, where viruses enter and infect the body. We believe this novel delivery route may help reduce or prevent infection and transmission as well as provide protection against new virus variants.
We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of our product candidates.
Research and development expenses account for a significant portion of our operating expenses. We plan to incur research and development expenses for the foreseeable future as we expect to continue the development of our product candidates.
As of December 31, 2022, we had cash, cash equivalents, and investments of approximately $90.9 million. This amount will not meet our capital requirements over the next 12 months. We believe that our cash, cash equivalents, and investments will enable us to fund our operations into the first quarter of 2024.
As of December 31, 2023, we had cash and cash equivalents of approximately $39.5 million. This amount will not meet our capital requirements over the next 12 months. We believe that our cash and cash equivalents will enable us to fund our operations into the fourth quarter of 2024.
Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $81.4 million and $58.4 million for the years ended December 31, 2022 and 2021, respectively.
Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $63.1 million and $86.8 million for the years ended December 31, 2023 and 2022, respectively.
Our modifier gene therapy platform is based on the use of NHRs, which have the potential to restore homeostasis — the basic biological processes in the retina.
Our modifier gene therapy platform is based on the use of NHRs, which have the potential to 82 Table of Contents restore homeostasis — the basic biological processes in the retina from disease state to normal state.
Since our inception and through December 31, 2022, we have raised an aggregate of $279.6 million to fund our operations, of which $266.4 million was from gross proceeds from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $2.7 million was from the issuance of debt, and $0.2 million was from grant proceeds.
Since our inception and through December 31, 2023, we have raised an aggregate of $301.0 million to fund our operations, of which $287.2 million is from gross proceeds from the sale of our common stock and warrants, $10.3 million is from the issuance of convertible notes, $3.3 million is from the issuance of debt, and $0.2 million is from grant proceeds.
Our headquarters are located in Malvern, Pennsylvania. Research and development expense Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation expense on assets used within our research and development activities.
As of December 31, 2023, substantially all of our assets were located in the United States. Our headquarters are located in Malvern, Pennsylvania. Research and development expense Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation expense on assets used within our research and development activities.
Our ability to secure funding is subject to numerous risks and uncertainties, including, but not limited to the impact of the COVID-19 pandemic and geopolitical turmoil, including the ongoing invasion of Ukraine by Russia, and as a result, there can be no assurance that these funding efforts will be successful.
Our ability to secure funding is subject to numerous risks and uncertainties, including, but not limited to the impact of the geopolitical turmoil, macroeconomic conditions, and the impact of inflation and as a result, there can be no assurance that these funding efforts will be successful.
Expense related to stock-based compensation awards are recorded to research and development expense or general and administrative expense based on the underlying function of the individual that was granted the stock-based compensation award.
Expense related to stock-based compensation awards are recorded to research and development expense or general and administrative expense based on the underlying function of the individual that was granted the stock-based compensation award. Shares issued upon stock option exercise and RSU vesting are newly issued common shares.
We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Our research and development expenses are not currently tracked on a program-by-program basis for indirect and overhead costs.
We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates. Our research and development expenses are not currently tracked on a program-by-program basis for indirect and overhead costs. We use our personnel and infrastructure resources across multiple research and development programs directed toward identifying, developing, and commercializing product candidates.
Overview We are a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe.
Overview This Part II, Item 7 includes restated financial data. See "Explanatory Note." We are a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe.
Consulting Agreement We have an obligation under a consulting agreement with regard to our Canadian operations to make cash payments of up to $3.0 million upon the achievement of certain milestones related to COVAXIN. 96 T a ble of Content s Funding requirements We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, prepare to manufacture our product candidates, prepare for the potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, explore strategic licensing, acquisition, and collaboration opportunities to expand our product candidate pipeline to support our future growth, expand headcount to support our development, commercialization, and business efforts, and operate as a public company.
Funding requirements We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, prepare to manufacture our product candidates, prepare for the potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, explore strategic licensing, 88 Table of Contents acquisition, and collaboration opportunities to expand our product candidate pipeline to support our future growth; expand headcount to support our development, commercialization, and business efforts, and operate as a public company.
As a result of these factors, together with the anticipated increase in spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Annual Report on Form 10-K are issued. 97 T a ble of Content s Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.
As a result of these factors, together with the anticipated continued spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Annual Report on Form 10-K are issued.
Unlike single-gene replacement therapies, which only target one genetic mutation, we believe that our modifier gene therapy platform, through its use of NHRs, represents a novel approach that has the potential to address multiple retinal diseases caused by mutations in multiple genes with one product, and potentially address complex diseases that are potentially caused by imbalances in multiple gene networks.
Unlike single-gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique approach and has demonstrated potential to address multiple retinal diseases caused by mutations in multiple genes in our Phase 1/2 clinical study.
Utilizing these rights, we are developing a novel inhaled mucosal vaccine platform, which includes OCU500, a bivalent COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and bivalent COVID-19 vaccine.
We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine.
As of December 31, 2022, we had an accumulated deficit of $213.0 million. In addition, as of December 31, 2022, we had accounts payable and accrued expenses and other current liabilities of $18.0 million and indebtedness of $2.3 million.
As of December 31, 2023, we had an accumulated deficit of $286.2 million. In addition, as of December 31, 2023, we had accounts payable and accrued expenses and other current liabilities of $16.5 million, lease liability of $4.1 million, and indebtedness of $2.8 million.
Shares issued upon stock option exercise and RSU vesting are newly issued common shares. 98 T a ble of Content s Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends.
General and administrative expense General and administrative expense increased by $12.2 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Other income (expense), net Other income (expense), net increased by $0.2 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Louis ("Washington University"), pursuant to which we obtained the rights to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, and Japan.
Louis ("Washington University"), pursuant to which we licensed the rights to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong (the "Mucosal Vaccine Territory"). In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property.
Segment Information As of December 31, 2022, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance. As of December 31, 2022, substantially all of our assets were located in the United States.
Substantially all of our net losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. 84 Table of Contents Segment Information As of December 31, 2023, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance.
The increase in cash used in investing activities was primarily driven by purchases of $13.3 million of marketable securities, classified as available-for-sale, during the year ended December 31, 2022 and an increase of $3.5 million in purchases of property and equipment during the year ended December 31, 2022 as compared to the year ended December 31, 2021.
The increase in cash provided by investing activities was primarily driven by gross proceeds of $17.5 million from the maturities of marketable securities as well as a decrease in purchases of marketable securities of $9.3 million, classified as available-for-sale, during the year ended December 31, 2023.
We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization and have produced clinical trial materials to initiate a Phase 1 clinical trial. We submitted an IND application to the FDA in February 2023 to initiate a Phase 1 clinical trial targeting DME.
OCU200 is designed to treat DME, DR, and Wet AMD. We have completed the technology transfer of manufacturing processes to our contract development and manufacturing organization ("CDMO") and have produced trial materials to initiate a Phase 1 trial.
We incurred net losses of approximately $81.4 million and $58.4 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $213.0 million and a cash, cash equivalents, and investments balance of $90.9 million.
We incurred net losses of approximately $63.1 million and $86.8 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $286.2 million and cash and cash equivalents balance of $39.5 million.
The increase was primarily due to $1.4 million in interest earned on our cash, cash equivalents, and investments balance and the collection of $0.8 million related to a note receivable that was previously impaired during the year ended December 31, 2021.
The increase was primarily due to $1.1 million in interest earned on our cash and cash equivalents balance which was offset by a decrease of $0.9 million related to a note receivable that was received during the year ended December 31, 2022. Liquidity and Capital Resources As of December 31, 2023, we had $39.5 million in cash and cash equivalents.
In February 2022, we issued and sold 16.0 million shares of our common stock at a public offering price of $3.13 per share and received net proceeds of $49.8 million, after deducting equity issuance costs payable by us.
During the year ended December 31, 2023, we issued and sold 30.0 million shares of our common stock at a public offering price of $0.50 per share pursuant to a May 2023 public offering (the "May 2023 Public Offering"). We received net proceeds of $14.8 million after deducting equity issuance costs.
Pursuant to the Sales Agreement, we sold 9.1 million shares of our common stock and received net proceeds of $13.5 million after deducting equity issuance costs of $0.6 million.
During the year ended December 31, 2023, we sold 4.5 million shares of our common stock under an At Market Issuance Sales Agreement ("the Sales Agreement") and received net proceeds of $5.6 million after deducting equity issuance costs of $0.2 million. The Sales Agreement was terminated in February 2023.
Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC. 89 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
These increases were partially offset by the collection of a note receivable of $0.8 million during the year ended December 31, 2022 that was issued during the year ended December 31, 2021. Financing activities Cash provided by financing activities was $59.5 million for the year ended December 31, 2022 compared to $120.7 million for the year ended December 31, 2021.
This increase was partially offset by an increase of $6.0 million in purchases of property and equipment during the year ended December 31, 2023. Financing activities Cash provided by financing activities was $20.9 million for the year ended December 31, 2023 compared to $59.5 million for the year ended December 31, 2022.
We are renovating an existing facility into a current Good Manufacturing Practice facility in accordance with the FDA's regulations in support of NeoCart manufacturing for Phase 3 clinical trial material. We intend to initiate the Phase 3 clinical trial in the first half of 2024, subject to discussions with the FDA.
Additionally, we received concurrence from the FDA on the confirmatory Phase 3 trial design where chondroplasty will be used as a control group. We have completed renovating an existing facility into a current Good Manufacturing Practice ("GMP") facility in accordance with the FDA's regulations in support of NeoCart manufacturing for personalized Phase 3 trial material.
Stock-based compensation expense was $10.5 million and $7.0 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, we had $14.9 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 1.8 years.
As of December 31, 2023, we had $8.6 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 1.5 years. 91 Table of Contents Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
OCU200 is designed to treat diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet AMD. Modifier Gene Therapy Platform We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including inherited retinal diseases ("IRDs"), such as RP, LCA, and Stargardt disease, as well as dry AMD.
We are continuing discussions with relevant government agencies regarding developmental funding for our OCU510 and OCU520 platforms. Modifier Gene Therapy Platform We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including inherited retinal diseases ("IRDs"), such as RP, LCA, Stargardt disease and multifactorial diseases such as dAMD and Geographic Atrophy ("GA").
We are conducting a Phase 1/2 clinical trial to assess the safety of unilateral subretinal administration of OCU400 in patients with NR2E3 and RHO -related RP and CEP290 -related LCA in the United States.
The objective of this study was to assess the safety and efficacy using 3 different treatment doses of unilateral subretinal administration of OCU400 in NR2E3 and rhodopsin (" RHO") -related RP patients and centrosomal protein 290 (" CEP290 " ) -related LCA patients in the United States.
We intend to initiate a Phase 1/2 pediatric clinical trial for OCU400 for the treatment of RP and LCA in the second quarter of 2023 and a Phase 3 clinical trial for OCU400 for the treatment of RP and LCA near the end of 2023, subject to discussions with the FDA.
We received clearance from FDA to initiate a Phase 3 trial for OCU400 for the treatment of RP and intend to begin dosing patients in 2Q, 2024.
OCU510 is being developed for the global market. Novel Biologic Therapy for Retinal Diseases We are developing OCU200, which is a novel fusion protein containing parts of human tumstatin and transferrin. OCU200 is designed to treat DME, DR, and wet AMD.
An additional three patients will be dosed with the medium dose in the second cohort and three patients with the high dose in the third cohort in the dose-escalation phase. Novel Biologic Therapy for Retinal Diseases We are developing OCU200, which is a novel fusion protein containing parts of human transferrin and tumstatin.
These increases were offset by a $15.0 million upfront payment to Bharat Biotech in connection with the amendment to the Covaxin Agreement to add rights to the Canadian market in June 2021. Investing activities Cash used in investing activities was $17.0 million for the year ended December 31, 2022 compared to $1.8 million for the year ended December 31, 2021.
Investing activities Cash provided by investing activities was $3.1 million for the year ended December 31, 2023 compared to cash used in investing activities of $17.0 million for the year ended December 31, 2022.
The increase was primarily due to increases of $6.5 million in employee-related expenses, including $2.9 million in stock-based compensation expense; $3.3 million in professional and consulting services, including legal fees; $1.5 million in office expenses for our new corporate headquarters; and $1.1 million in pre-commercialization activities.
The decrease was primarily due to $1.9 million in consulting expenses; $1.7 million in pre-commercial expenses; $1.4 million in non-recurring office expenses incurred in connection with the opening of our corporate headquarters; $0.7 million in insurance expense; and $0.5 million in employee related expenses. These decreases were partially offset by increases of $2.8 million in legal expenses.
During the year ended December 31, 2021, cash provided by financing activities primarily consisted of gross proceeds of $122.9 million received under registered direct offerings and gross proceeds of $5.0 million received under an at-the-market offering, partially offset by payments of equity issuance costs of $8.5 million.
During the year ended December 31, 2023, cash provided by financing activities primarily consisted of gross proceeds of a combined $20.8 million received from the May 2023 Public Offering and pursuant to the Sales Agreement.
Our cutting-edge technology pipeline includes: • Modifier Gene Therapy Platform — Based on the use of nuclear hormone receptors ("NHRs"), we believe our modifier gene therapy platform has the potential to address many retinal diseases, including retinitis pigmentosa ("RP"), Leber congenital amaurosis ("LCA"), dry age-related macular degeneration ("AMD"), and Stargardt disease, with a single mutation-agnostic therapy. • Regenerative Medicine Cell Therapy Platform — Our Phase 3-ready regenerative medicine cell therapy platform technology, NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults. • Vaccines — COVAXIN is our whole-virion inactivated intramuscular COVID-19 vaccine candidate, which we are developing for the North American market.
Our technology pipeline includes: • Modifier Gene Therapy Platform — Based on the use of nuclear hormone receptors ("NHRs"), we believe our modifier gene therapy platform has the potential to address many retinal diseases, including rare diseases such as retinitis pigmentosa ("RP") (OCU400) and Leber congenital amaurosis ("LCA") (OCU400), with a gene-agnostic approach.
OCU400 has received Orphan Drug Designation ("ODD") for nuclear receptor subfamily 2 group E member 3 (" NR2E3 ")-related RP and LCA and Orphan Medicinal Product Designation ("OMPD") from the European Commission, based on the recommendation of the European Medicines Agency, for RP and LCA.
OCU400, our first product candidate in our modifier gene therapy platform, has received Orphan Drug Designation ("ODD") from the United States Food and Drug Administration ("FDA") for RP and LCA, a regenerative medicine advanced therapy ("RMAT") designation to OCU400 for the treatment of RP associated with NR2E3 and rhodopsin (" RHO") mutations from the FDA, and Orphan Medicinal Product Designation ("OMPD") from the European Commission ("EC"), based on the recommendation of the European Medicines Agency ("EMA"), for RP and LCA.
We believe these broad ODD and OMPD designations demonstrate that OCU400 has the potential to be a broad-spectrum therapeutic to treat multiple IRDs. These ODD and OMPD designations represent gene-agnostic broad coverage for RP and LCA, and are not mutation-specific designations.
These broad ODD, RMAT, and OMPD designations further support broad-spectrum (gene agnostic) therapeutic potential of OCU400 to treat multiple IRDs such as RP and LCA associated with mutations in multiple genes. We completed enrolling, dosing, and recruiting RP and LCA patients in the Phase 1/2 trial for OCU400.
These increases were partially offset by a decrease of $1.9 million in expenses for the annual stockholder meeting and proxy solicitation. Other income (expense), net Other income (expense), net increased by $3.9 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.
These decreases were partially offset by an increase of $0.9 million related to NeoCart, driven by CMC activities. General and administrative expense 86 Table of Contents General and administrative expense decreased by $3.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
We anticipate that our research and development expenses will be higher in fiscal year 2023 as compared to fiscal year 2022 as we continue to conduct preclinical and clinical activities with respect to our product candidates, including the continuation and planned initiation of several clinical trials for our product candidates.
We anticipate that our research and development expenses will be lower in fiscal year 2024 as compared to fiscal year 2023 due to a reduced headcount as well as internal cost saving initiatives.
We are also developing OCU410 and OCU410ST to utilize the nuclear receptor genes RAR-related orphan receptor A for the treatment of dry AMD and Stargardt disease, respectively. We are currently executing Investigational New Drug ("IND")-enabling studies and we intend to submit IND applications in the second quarter of 2023 to initiate Phase 1/2 clinical trials.
We are also developing OCU410 and OCU410ST, utilizing the nuclear receptor genes RAR-related orphan receptor A (" RORA " ) , for the treatment of dAMD and Stargardt disease, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection.
Removed
We are also developing a novel inhaled mucosal vaccine platform, which includes OCU500, a bivalent COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and bivalent COVID-19 vaccine. • Novel Biologic Therapy for Retinal Diseases — OCU200 is a novel fusion protein containing parts of human tumstatin and transferrin.
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We also believe our modifier gene therapy platform has the potential to address many retinal diseases, including a multifactorial dry age-related macular degeneration ("dAMD") using OCU410, which we believe has the potential to treat millions of patients, and Stargardt disease (OCU410ST), which is also a rare disease.
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IRDs, such as RP and LCA, can lead to visual impairment and blindness. RP and LCA are associated with over 125 mutated genes that affect approximately 1.6 million individuals worldwide. We believe that OCU400 has the potential to be broadly effective in restoring retinal integrity and function across a range of genetically diverse IRDs, including RP and LCA.
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We further expect to expand OCU400 Phase 3 development in LCA patients in the second half of 2024 based on Phase 1/2 study results in LCA patients and subject to alignment with the FDA.
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OCU400 had previously received ODDs from the FDA for the treatment of the following disease genotypes: NR2E3 , rhodopsin (" RHO "), centrosomal protein 290 (" CEP290 "), and phosphodiesterase 6B mutation-associated inherited retinal degenerations.
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Currently both OCU410, for the treatment of geographic atrophy ("GA") patients, and OCU410ST, for the treatment of Stargardt patients, programs are in Phase 1/2 clinical development. • Novel Biologic Therapy for Retinal Diseases — OCU200 is a novel fusion protein consisting of two human proteins, tumstatin and transferrin.
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We have completed dosing patients with RP 91 T a ble of Content s in the dose-escalation portion of the clinical trial, which enrolled 10 subjects to receive a low, medium, or high dose of OCU400 in the subretinal space.
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OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR") and wet AMD. Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis.
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We are continuing to enroll subjects with RP and LCA in this clinical trial to receive the high dose, which was determined to be the maximum tolerable dose from the dose-escalation portion of the clinical trial.
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Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors.
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The chondrocytes are derived from the patient on a unique scaffold. In this therapy, healthy cartilage tissue is grown and implanted in the patient. We believe NeoCart has the potential to accelerate healing and reduce pain by reconstructing a patient's previously damaged knee cartilage.
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We continue to work with the FDA to address comments to lift the clinical hold. • Regenerative Medicine Cell Therapy Platform — Our Phase 3-ready regenerative medicine cell therapy platform technology, which includes NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults.
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It is designed to treat pain at the source, improve function, and potentially prevent a patient's progression to osteoarthritis. The FDA granted a regenerative medicine advanced therapy designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults. We have received concurrence from the FDA on the confirmatory Phase 3 clinical trial design.
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We received concurrence from the FDA on the confirmatory Phase 3 trial design and have completed renovating an existing facility into a current Good Manufacturing Practice ("GMP") facility to support clinical study and initial commercial launch. • Inhaled Mucosal Vaccine Platform — Our next-generation, inhaled mucosal vaccine platform includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine.
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Vaccines Intramuscular COVID-19 Vaccine We have a Co-Development, Supply and Commercialization Agreement with Bharat Biotech (as amended, the "Covaxin Agreement"), pursuant to which we obtained an exclusive right and license under certain of Bharat Biotech's intellectual property rights, with the right to grant sublicenses, to develop, manufacture, and commercialize COVAXIN for the prevention of COVID-19, caused by SARS-CoV-2, in the United States, its territories, and possessions, Canada, and Mexico (the "Ocugen Covaxin Territory").
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We are conducting IND enabling and product development activities for our OCU500 product and planning to submit an IND in 2024. We are currently collaborating with the National Institute of Allergy and Infectious Diseases ("NIAID") for early clinical studies for the OCU500 program. We expect OCU500 clinical trials to begin mid-2024.
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COVAXIN is a whole-virion inactivated, intramuscular COVID-19 vaccine candidate that is manufactured using a Vero cell manufacturing platform. COVAXIN was granted an Emergency Use Listing by the World Health Organization ("WHO") in November 2021, has been authorized or approved for use in over 25 countries, and is accepted for travel purposes in over 85 countries.
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This has potential of a gene-agnostic therapy addressing complex diseases that are potentially caused by imbalances in multiple gene networks in the disease condition.
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Additionally, COVAXIN has received Emergency Use Authorization ("EUA") in India for children ages six to 18 years.
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In February 2024, in continuation of the preliminary analyses update, we announced an update for 18 participants. The trial update was an extension of the positive preliminary data from September 2023.
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COVAXIN is intended for administration into the deltoid muscle of the upper arm, in two doses occurring 28 days apart, and has an expected shelf life of 24 months from the date of manufacture at 2-8°C and a six-month stability at room temperature (25°C).
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The positive trial update demonstrated that OCU400 continued to be generally safe and well-tolerated in subjects across different mutations and dose levels. 89% of participants demonstrated preservation or improvement in OCU400 treated eyes either on BCVA or LLVA or MLMT scores from baseline. 78% of participants demonstrated stabilization or improvement in OCU400 treated eyes in MLMT scores from baseline. 80% of RHO mutation subjects experienced either stabilization or increase in MLMT scores from baseline.
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A Phase 3 clinical trial conducted by Bharat Biotech in India in 25,798 adults, ages 18 years and older, who were healthy or had stable chronic medical conditions reported an overall estimated vaccine efficacy of COVAXIN against COVID-19 of 77.8%, with efficacy against severe COVID-19 of 93.4%.
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In April 2024, the FDA cleared our IND amendment to initiate a Phase 3 trial of OCU400 for RP. OCU400 is the first gene therapy program to enter Phase 3 with a broad RP indication. This Phase 3 trial will enroll 150 subjects, distributed 1:1 into two separate arms (RHO: N=75, and Gene Agnostic: N=75).
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In January 2023, we announced top-line results from our Phase 2/3 immuno-bridging and broadening clinical trial in the United States evaluating COVAXIN for adults ages 18 years and older.
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In each arm subjects will be further randomized into 2:1 ratio to treated and untreated control groups. Subjects will be followed for a year after dosing for primary end point analyses. In the Phase 1/2 OCU400 clinical trial a MLMT scale was the primary functional endpoint.
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The clinical trial was designed to evaluate whether the immune response observed in participants in Bharat Biotech's Phase 3 clinical trial in India is similar to a demographically representative, adult population in the United States. The clinical trial enrolled 419 adult participants that were randomized to receive either two doses of COVAXIN or a placebo, 28 days apart.
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For the Phase 3 OCU400 clinical trial, an updated mobility course will be used, Luminance Dependent Navigation Assessment ("LDNA") that includes a wider range of light intensity (0.04-500 Lux) and Lux Levels (0-9) with a uniform correlation between Lux level and Lux intensity.
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Immune responses were adjusted for differences between the U.S. and Indian cohorts in baseline neutralizing antibody, body mass index, gender, and age. Both co-primary immunogenicity endpoints were met, with the 95% confidence interval ("CI") for the propensity score-adjusted geometric mean titer ratio being well above the non-inferiority limit of 0.667.

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Other OCGN 10-K year-over-year comparisons