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What changed in Tarsus Pharmaceuticals, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Tarsus Pharmaceuticals, Inc.'s 2024 and 2025 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 2025 report.

+622 added−648 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-25)

Top changes in Tarsus Pharmaceuticals, Inc.'s 2025 10-K

622 paragraphs added · 648 removed · 490 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

201 edited+55 added−46 removed210 unchanged
Biggest changeThese approaches have significant limitations, including: • limited efficacy of over-the-counter and off-label treatments as well as device-based treatments administered in clinic by ECPs; • insufficient definitive knowledge of diagnostic criteria to guide treatment decisions; • prohibitive side effects (significant burning and stinging) from treatments that target Demodex mites (e.g. tea tree oil); • current treatments do not typically eradicate the Demodex mites, leading to a chronic and progressive disease; and • some treatments may be harmful (e.g. to meibomian gland epithelial cells). 12 According to the Titan real-world prevalence study, 75% of patients using tea tree oils and 57% of those using lid wipes were found to have a high prevalence of collarettes, indicating that current management tools for this disease are ineffective.
Biggest changeAccording to the Titan real-world prevalence study, 75% of patients using tea tree oils and 57% of those using lid wipes were found to have a high prevalence of collarettes, indicating that current management tools for this disease are ineffective.
We believe we can improve upon existing treatments with an API that is potentially more effective (longer half-life, more lipophilic, greater therapeutic window).
We believe we can potentially improve upon existing treatments with an API that is potentially more effective (longer half-life, more lipophilic, greater therapeutic window).
The achievement deadlines for dermatological diligence milestones range between 24 months after contract execution to nine years after contract execution. All eye-related and dermatological diligence milestones have been achieved.
The achievement deadlines for dermatological diligence milestones range between 24 months to nine years after contract execution. All eye-related and dermatological diligence milestones have been achieved.
Elanco retains the sole responsibility to prosecute the patents they license to us and has the first right to enforce the licensed intellectual property against third parties in the licensed field of use but cannot settle or dispose of any such action without our written consent.
Elanco retains the sole responsibility to prosecute the patents they license to us and has the first right to enforce the licensed intellectual property against third parties in the licensed field of use but cannot settle or dispose of any such action without our written consent.
Patent-Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of any future product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act.
U.S. Patent-Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of any future product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act.
An application to transition ongoing trials from the current Clinical Trials Directive to the new EU Clinical Trials Regulation will need to be submitted and authorized in time before the end of the transitional period. From January 31, 2023 onwards, the application for new clinical trials must be 31 done in accordance with the new EU Clinical Trials Regulation.
An application to transition ongoing trials from the current Clinical Trials Directive to the new EU Clinical Trials Regulation will need to be submitted and authorized in time before the end of the transitional period. From January 31, 2023 onwards, the application for new clinical trials must be done in accordance with the new EU Clinical Trials Regulation.
Primary Endpoint: • 55% of patients on XDEMVY achieved complete collarette cure, defined as zero to two collarettes per lid at day 43, compared to 12% on vehicle (p Secondary Endpoints: • 50% of patients on XDEMVY achieved mite eradication defined as zero mites per lash at day 43, compared to 14% on vehicle (p • 30% of patients on XDEMVY compared to 9% of patients on vehicle (p • 19% of patients on XDEMVY achieved a complete composite cure, based on achieving both complete collarette cure and complete lid erythema cure, compared to 4% on vehicle (p Safety Profile: • Consistent with the results from the Saturn-1 trial, the Saturn-2 trial demonstrated that XDEMVY was well tolerated with a safety profile similar to the vehicle group. ▪ 91% of XDEMVY patients reported that the drop comfort was neutral to very comfortable. ▪ There were no serious treatment-related adverse events nor any treatment-related adverse events leading to treatment discontinuation.
Primary Endpoint: • 55% of patients on XDEMVY achieved complete collarette cure, defined as zero to two collarettes per lid at day 43, compared to 12% on vehicle (p 13 Secondary Endpoints: • 50% of patients on XDEMVY achieved mite eradication defined as zero mites per lash at day 43, compared to 14% on vehicle (p • 30% of patients on XDEMVY compared to 9% of patients on vehicle (p • 19% of patients on XDEMVY achieved a complete composite cure, based on achieving both complete collarette cure and complete lid erythema cure, compared to 4% on vehicle (p Safety Profile: • Consistent with the results from the Saturn-1 trial, the Saturn-2 trial demonstrated that XDEMVY was well tolerated with a safety profile similar to the vehicle group. ▪ 91% of XDEMVY patients reported that the drop comfort was neutral to very comfortable. ▪ There were no serious treatment-related adverse events nor any treatment-related adverse events leading to treatment discontinuation.
Pharmaceutical and other healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs; • the federal Health Insurance Portability and Accountability Act ("HIPAA"), which imposes criminal liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, or knowingly and willfully making false statements relating to healthcare matters; • HIPAA and its implementing regulations, also imposes obligations, on certain covered entity health care providers, health plans and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices, including off-label or pre-approval promotion; 29 • the federal Physician Payments Sunshine Act, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to Centers for Medicare & Medicaid Services ("CMS") information regarding direct or indirect payments and other transfers of value to physicians and teaching hospitals (and certain other practitioners as of 2022), as well as information regarding ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payers, including private insurers, state laws that require pharmaceutical manufacturers to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state laws that require pharmaceutical manufacturers to report information on the pricing of certain drug products, state and local laws that require the licensure and registration of pharmaceutical sales representatives, and state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Pharmaceutical and other healthcare companies also are subject to other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs; 29 • the federal Health Insurance Portability and Accountability Act (“HIPAA”), which imposes criminal liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, or knowingly and willfully making false statements relating to healthcare matters; • HIPAA and its implementing regulations, also imposes obligations, on certain covered entity health care providers, health plans and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices, including off-label or pre-approval promotion; • the federal Physician Payments Sunshine Act, which requires applicable manufacturers of covered drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to Centers for Medicare & Medicaid Services (“CMS”) information regarding direct or indirect payments and other transfers of value to physicians and teaching hospitals (and certain other practitioners as of 2022), as well as information regarding ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non- governmental third-party payers, including private insurers, state laws that require pharmaceutical manufacturers to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, state laws that require pharmaceutical manufacturers to report information on the pricing of certain drug products, state and local laws that require the licensure and registration of pharmaceutical sales representatives, and state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
These laws include the following: 28 • the federal Anti-Kickback Statute (“AKS”) which prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration (i.e., anything of value), directly or indirectly, in cash or in kind, to induce or in return either for the referral of an individual for, or for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
These laws include the following: • the federal Anti-Kickback Statute (“AKS”) which prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration (i.e., anything of value), directly or indirectly, in cash or in kind, to induce or in return either for the referral of an individual for, or for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified and a preliminary evaluation of efficacy is conducted. 25 • Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the safety and effectiveness of the product for its intended use and to establish the overall benefit/risk relationship of the product to provide an adequate basis for product approval.
At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified and a preliminary evaluation of efficacy is conducted. • Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the safety and effectiveness of the product for its intended use and to establish the overall benefit/risk relationship of the product to provide an adequate basis for product approval.
If the CHMP accepts such a request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP may revert to the standard time limit for the Centralized Procedure if it determines that it is no longer appropriate to conduct an accelerated assessment. • MAs based on the Mutual Recognition Procedure or the Decentralized Procedure are available for products not falling within the mandatory scope of the Centralized Procedure.
If the CHMP accepts such a request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP may revert to the standard time limit for the Centralized Procedure if it determines that it is no longer appropriate to conduct an accelerated assessment. 32 • MAs based on the Mutual Recognition Procedure or the Decentralized Procedure are available for products not falling within the mandatory scope of the Centralized Procedure.
We are targeting potentially at least 30 days of prophylactic protection against Lyme disease with a simple oral regimen of TP-05. Given that lotilaner was developed specifically, in part, to eradicate ticks with systemic administration to domesticated animals such as dogs or cats, the pharmacology of lotilaner for Lyme disease prophylaxis is well understood.
We are targeting potentially at least 30 days of prophylactic protection against Lyme disease with a simple oral 16 regimen of TP-05. Given that lotilaner was developed specifically, in part, to eradicate ticks with systemic administration to domesticated animals such as dogs or cats, the pharmacology of lotilaner for Lyme disease prophylaxis is well understood.
The Saturn-1 trial enrolled 421 adult patients having more than ten collarettes on the upper lid and at least mild erythema of the upper eyelid margin. Each 14 patient had at least 1.5 mites per lash on the upper and lower eyelids combined. One drop of XDEMVY was self-administered twice per day in each eye for six weeks.
The Saturn-1 trial enrolled 421 adult patients having more than ten collarettes on the upper lid and at least mild erythema of the upper eyelid margin. Each patient had at least 1.5 mites per lash on the upper and lower eyelids combined. One drop of XDEMVY was self-administered twice per day in each eye for six weeks.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks or imposition of distribution restrictions or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies 28 or clinical studies to assess new safety risks or imposition of distribution restrictions or other restrictions under a REMS program.
Clinical Trials The clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
Clinical Trials The clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s 25 control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the 27 establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.
After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.
Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. The contents of these websites are not incorporated into this Annual Report on Form 10-K. Further, references to the URLs for these websites are intended to be inactive textual references only.
Additionally, the SEC maintains 37 an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. The contents of these websites are not incorporated into this Annual Report on Form 10-K. Further, references to the URLs for these websites are intended to be inactive textual references only.
Any agency or judicial enforcement action could have a material adverse effect on our business, market acceptance of our products, and our reputation. Our product candidates are considered small molecule drugs and must be approved by the FDA through the NDA process before they may be legally marketed in the U.S.
Any agency or judicial enforcement action could have a material adverse effect on our business, market acceptance of our products, and our reputation. 24 Our product candidates are considered small molecule drugs and must be approved by the FDA through the NDA process before they may be legally marketed in the U.S.
To that end, we continue to seek protection for our technological innovations and branding efforts by filing new patent and trademark applications when and where appropriate. In the normal course of business, we intend to pursue, when possible, composition, method of use, dosing and formulation patent protection, as well as manufacturing and drug development processes and technology.
To that end, we continue to seek protection for our technological innovations and branding efforts by filing new patent and trademark applications when and where appropriate. In the normal course of business, 19 we intend to pursue, when possible, composition, method of use, dosing and formulation patent protection, as well as manufacturing and drug development processes and technology.
Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it 26 is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.
Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.
This window from the time of bite to the time of transmission offers an opportunity for intervention to prevent Lyme disease if the tick can be killed prior to the transfer of the Borrelia bacteria. 16 Lyme disease can be a serious condition that may affect multiple organ systems and produce a broad range of symptoms.
This window from the time of bite to the time of transmission offers an opportunity for intervention to prevent Lyme disease if the tick can be killed prior to the transfer of the Borrelia bacteria. Lyme disease can be a serious condition that may affect multiple organ systems and produce a broad range of symptoms.
Only after 8 years have lapsed, other parties that apply for a marketing authorization (generics or biosimilars) may make reference to the dossier of the originator product. Only after another 2 years (i.e. a total of 10 years) may such 32 generic or biosimilar medicinal product be placed on the market.
Only after 8 years have lapsed, other parties that apply for a marketing authorization (generics or biosimilars) may make reference to the dossier of the originator product. Only after another 2 years (i.e. a total of 10 years) may such generic or biosimilar medicinal product be placed on the market.
Manufacturing, sales, promotion and other activities also are potentially subject to federal and state consumer protection and unfair competition laws. The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.
Manufacturing, sales, promotion and other activities also are potentially subject to federal and state consumer protection and unfair competition laws. 30 The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products.
Sterile, non-pathogenic nymphal ticks were placed on the skin of healthy human volunteers at two separate instances (one day prior to dosing and 30 days after dosing). Tick mortality was evaluated within 24 hours of attachment after each placement.
Sterile, non-pathogenic nymphal ticks were placed on the skin of healthy human volunteers at two separate instances (one day prior to 7 dosing and 30 days after dosing). Tick mortality was evaluated within 24 hours of attachment after each placement.
We rely and expect to continue to rely for the foreseeable future on contract manufacturing organizations ("CMOs") to manufacture and supply our preclinical and clinical materials to be used during the development of our product candidates. We have assembled a team of employees and consultants to oversee our technical quality and CMOs.
We rely and expect to continue to rely for the foreseeable future on contract manufacturing organizations (“CMOs”) to manufacture and supply our preclinical and clinical materials to be used during the development of our product candidates. We have assembled a team of employees and consultants to oversee our technical quality and CMOs.
Further, patients continue to have underlying risk of Demodex infestation, as there could be a recurrence or reinfestation based on the presence of Demodex mites in the facial pores even after eradication of Demodex mites from the eyelid, that may potentially necessitate retreatment.
Further, patients continue to have underlying risk of Demodex infestation, as there could be a recurrence or reinfestation based on the presence of Demodex mites in the facial pores or elsewhere even after eradication of Demodex mites from the eyelid, that may potentially necessitate retreatment.
These improvements were shown across three objective measures of MGD: (i) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; (ii) the number of glands secreting normal or clear liquid; and (iii) the number of glands yielding any liquid.
These improvements were shown across three objective measures of MGD: (i) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; (ii) the number of glands 5 secreting normal or clear liquid; and (iii) the number of glands yielding any liquid.
Under the Prescription Drug User Fee Act (the "PDUFA"), as amended, each NDA must be accompanied by an application user fee. FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual program fee for each marketed human drug.
Under the Prescription Drug User Fee Act (the “PDUFA”), as amended, each NDA must be accompanied by an application user fee. FDA adjusts the PDUFA user fees on an annual basis. PDUFA also imposes an annual program fee for each marketed human drug.
In most 6 cases, ticks must be attached for 36-48 hours or more before Lyme disease can be transmitted, so killing ticks within 24 hours of attachment can greatly increase the probability of disease prevention.
In most cases, ticks must be attached for 36-48 hours or more before Lyme disease can be transmitted, so killing ticks within 24 hours of attachment can greatly increase the probability of disease prevention.
The estimated natural expiration dates of these issued patents are in 2038, and if additional patents issue on the material XDEMVY or TP-03-related pending applications of ours, the estimated natural expiration dates are between approximately 2038 and 2040.
The estimated natural expiration dates of these issued patents are in 2038, and if additional patents issue on the material XDEMVY or TP-03-related pending applications of ours, the estimated natural expiration dates are in approximately 2038 or 2040.
In addition, no impact to endothelial cell density ("ECD") was demonstrated in a subset of 21 patients. ECD was further evaluated as part of the Saturn-2 trial plan and also demonstrated no impact.
In addition, no impact to endothelial cell density (“ECD”) was demonstrated in a subset of 21 patients. ECD was further evaluated as part of the Saturn-2 trial plan and also demonstrated no impact.
The 340B ceiling 33 price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program.
The 340B ceiling price is calculated using a statutory formula, which is based on the average manufacturer price and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program.
Item 1. Business Overview We are a commercial stage biopharmaceutical company focused on the development and commercialization of therapeutics, starting with eye care. We launched XDEMVY ® (lotilaner ophthalmic solution) 0.25%, formerly known as TP-03, for the treatment of Demodex blepharitis, in August 2023 after receiving U.S. Food and Drug Administration ("FDA") approval in July 2023.
Item 1. Business Overview We are a commercial stage biopharmaceutical company focused on the development and commercialization of therapeutics, starting with eye care. We launched XDEMVY ® (lotilaner ophthalmic solution) 0.25%, formerly known as TP-03, for the treatment of Demodex blepharitis, in August 2023 after receiving U.S. Food and Drug Administration (“FDA”) approval in July 2023.
Our Approach: TP-04 Topical Formulation for Ocular Rosacea There are no FDA-approved therapeutics for Ocular Rosacea available today. Treatment options include topical anti-inflammatories including steroids for acute flares, and topical and/or oral antibiotics (e.g. tetracyclines, azithromycin). To address this unmet need in the rosacea market, we are developing lotilaner as a topical sterile ophthalmic product, TP-04.
Our Approach: TP-04 Topical Formulation for Ocular Rosacea There are no FDA-approved therapeutics for ocular rosacea available today. Treatment options include topical anti-inflammatories including steroids for acute flares, and topical and/or oral antibiotics (e.g. tetracyclines, azithromycin). To address this unmet need in the ocular rosacea market, we are developing lotilaner as a topical sterile ophthalmic gel, TP-04.
Depending on the circumstances, failure to meet applicable regulatory requirements can result in significant civil, criminal and administrative penalties, including damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, compliance oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings, injunctions, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enter into supply contracts, including government contracts. 30 U.S.
Depending on the circumstances, failure to meet applicable regulatory requirements can result in significant civil, criminal and administrative penalties, including damages, fines, disgorgement, individual imprisonment, exclusion from participation in government funded healthcare programs, such as Medicare and Medicaid, compliance oversight and reporting obligations, contractual damages, reputational harm, diminished profits and future earnings, injunctions, requests for recall, seizure of products, total or partial suspension of production, denial or withdrawal of product approvals or refusal to allow a firm to enter into supply contracts, including government contracts.
("GrandPharma") of TP-03 for the potential treatment of Demodex blepharitis and MGD within the China Territory, as described below within License Agreements: GrandPharma Agreement , we have retained our rights globally to all of our indications for use in humans, including for XDEMVY for the treatment of Demodex blepharitis, TP-04 for the potential treatment of Ocular Rosacea and TP-05 for potential Lyme disease prophylaxis and community malaria reduction.
(“GrandPharma”) of TP-03 for the potential treatment of Demodex blepharitis and MGD within the China Territory, as described below within License Agreements: GrandPharma Agreement , we have retained our rights globally to all of our indications for use in humans, including for XDEMVY and TP-03 for the treatment of Demodex blepharitis, TP-04 for the potential treatment of ocular rosacea and TP-05 for potential Lyme disease prophylaxis and community 9 malaria reduction.
This has led to significant variations in the member state regimes. Under the regime of the Clinical Trials Directive, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies: the National Competent Authority ("NCA"), and one or more ethics committees.
This has led to significant variations in the member state regimes. Under the regime of the Clinical Trials Directive, before a clinical trial can be initiated it must be approved in each of the EU countries where the trial is to be conducted by two distinct bodies: the National Competent Authority (“NCA”), and one or more ethics committees.
Drug Regulation In the U.S., we are subject to extensive regulation by the FDA, which regulates drugs under the Federal Food, Drug, and Cosmetic Act (the "FDCA"), and its implementing regulations. FDA approval is required before any new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the U.S.
Drug Regulation In the U.S., we are subject to extensive regulation by the FDA, which regulates drugs under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), and its implementing regulations. FDA approval is required before any new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the U.S.
Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trial or marketing of the product in those countries or jurisdictions. Marketing Authorization In the EEA, medicinal products can only be commercialized after obtaining a Marketing Authorization ("MA").
Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trial or marketing of the product in those countries or jurisdictions. Marketing Authorization In the EEA, medicinal products can only be commercialized after obtaining a marketing authorization (“MA”).
Additionally, maintaining coverage for a product is often evaluated annually by payers and additional barriers may be placed impacting access. We are committed to partnering with payers to ensure broad access and affordability. Pharmaceutical Pricing We participate in the Medicaid Drug Rebate Program and Medicare Part D Coverage Gap Discounts Program ("Medicare Part D").
Additionally, maintaining coverage for a product is often evaluated annually by payers and additional barriers may be placed impacting access. We are committed to partnering with payers to ensure broad access and affordability. Pharmaceutical Pricing We participate in the Medicaid Drug Rebate Program and Medicare Part D Coverage Gap Discounts Program (“Medicare Part D”).
The Titan study was an Institutional Review Board ("IRB") -approved, retrospective chart review of 1,032 patients across six U.S.-based ophthalmology and optometry practices conducted by seven investigators. The study was designed to better understand the prevalence of Demodex blepharitis via collarettes in U.S. eye care clinics.
The Titan study was an Institutional Review Board (“IRB”) approved, retrospective chart review of 1,032 patients across six U.S. based ophthalmology/optometry practices and conducted by seven investigators. The study was designed to better understand the prevalence of Demodex blepharitis via collarettes in U.S. eye care clinics.
During the exclusivity period, the FDA may not accept for review an abbreviated new drug application ("ANDA") or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.
During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”) or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.
Although we have relied on a single supplier for both non-clinical and clinical supply for lotilaner under cGMP protocols and a single CMO to manufacture XDEMVY and to perform analytical testing services, we have identified and are in the process of qualifying an additional manufacturer to provide lotilaner and drug product manufacturing and analytical testing services.
Although we have relied on a single supplier for both non-clinical and clinical supply for lotilaner under cGMP protocols and a single CMO to manufacture XDEMVY and to perform analytical testing services, we have identified and are in the process of qualifying an additional manufacturer to provide lotilaner and drug product manufacturing and analytical testing services in the U.S.
Approximately 76 of our owned material patents and pending patent applications include treatment and composition of matter claims which relate to XDEMVY or TP-03 with respect to our lead indication (e.g., isoxazoline parasiticides for the treatment of Demodex blepharitis), as well as other conditions.
Approximately 88 of our owned material patents and pending patent applications include treatment and composition of matter claims which relate to XDEMVY or TP-03 with respect to our lead indication (e.g., isoxazoline parasiticides for the treatment of Demodex blepharitis), as well as other conditions.
The Callisto trial was a randomized, double-blind, single and multiple-ascending dose trial that evaluated the safety, tolerability, and pharmacokinetic ("PK") of TP-05 in healthy subjects. Results from the trial showed that TP-05 was well tolerated with no dose-related or drug-related serious adverse events.
The Callisto trial was a randomized, double-blind, single and multiple-ascending dose trial that evaluated the safety, tolerability, and pharmacokinetic (“PK”) of TP-05 in healthy subjects. Results from the trial showed that TP-05 was well tolerated with no dose-related or drug-related serious adverse events.
In March 2023, we announced positive topline results from the Phase 1 Galatea trial (the "Galatea Phase 1 trial”) and initiated a Phase 2a trial (the "Galatea trial") for the potential treatment of rosacea. The Galatea trial was a multicenter, randomized, vehicle-controlled trial evaluating the safety, tolerability and efficacy of TP-04.
In March 2023, we announced positive topline results from the Phase 1 Galatea trial (the “Galatea Phase 1 trial”) and initiated a Phase 2a trial (the “Galatea trial”) for the potential treatment of papulopustular rosacea. The Galatea trial was a multicenter, randomized, vehicle-controlled trial evaluating the safety, tolerability and efficacy of TP-04.
Data from the Centers for Disease Control and Prevention ("CDC") show that the risk of Lyme disease is spreading to new geographic areas, resulting in a significant need for prophylactic solutions. Currently, there are no FDA-approved pharmacological prophylactic options for Lyme disease.
Data from the Centers for Disease Control and Prevention (“CDC”) show that the risk of Lyme disease is spreading to new geographic areas, resulting in a significant need for prophylactic solutions. Currently, there are no FDA-approved pharmacological prophylactic options for Lyme disease.
Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office ("USPTO"), in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.
Only one patent applicable to an approved drug is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent. The U.S. Patent and Trademark Office (“USPTO”), in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.
Although the European Union Clinical Trials Directive 2001/20/EC has sought to harmonize the EU clinical trials regulatory framework, setting out common rules for the control and authorization of clinical trials in the EU, the 27 member states of the EU (the "EU Member States") have transposed and applied the provisions of the Directive differently.
Although the European Union Clinical Trials Directive 2001/20/EC has sought to harmonize the EU clinical trials regulatory framework, setting out common rules for the control and authorization of clinical trials in the EU, the 27 member states of the EU (the “EU Member States”) have transposed and applied the provisions of the Directive differently.
In order to supplement the protection of our brand, we also own at least 6 registered internet domain names. Cybersecurity Risk Management and Strategy We continue to make substantial investments to augment the capabilities of our people, processes, and technologies in order to address our cybersecurity risks.
In order to supplement the protection of our brand, we also own at least 121 registered internet domain names. Cybersecurity Risk Management and Strategy We continue to make substantial investments to augment the capabilities of our people, processes, and technologies in order to address our cybersecurity risks.
Moreover, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA") established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities that provide coverage of outpatient prescription drugs.
Moreover, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) established the Medicare Part D program to provide a voluntary prescription drug benefit to Medicare beneficiaries. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities that provide coverage of outpatient prescription drugs.
Given the potential to treat patients worldwide we may opportunistically enter into additional strategic collaborations around certain product candidates, disease and/or geographic regions. • Continue innovating and planning for growth. We have assembled an exceptional management team with decades of deep and expansive strategic expertise building new markets across eye care and biotechnology.
Given the potential to treat patients worldwide we may opportunistically enter into additional strategic collaborations around certain product candidates, diseases and/or geographic regions. • Continue innovating and planning for growth. We have assembled an exceptional management team with decades of deep strategic expertise building new markets across eye care and biotechnology.
The EU Clinical Trials Regulation is applicable as of January 31, 2022 and is applicable directly in all countries of the European Economic Area ("EEA") (which is comprised of 27 Member States of the EU plus Norway, Iceland and Liechtenstein).
The EU Clinical Trials Regulation is applicable as of January 31, 2022 and is applicable directly in all countries of the European Economic Area (“EEA”) (which is comprised of 27 Member States of the EU plus Norway, Iceland and Liechtenstein).
There are approximately 25 million people in the U.S. who suffer from Demodex blepharitis, however, we are initially targeting the approximately 9 million people who are proactively seeking treatment for Demodex blepharitis or seeking treatment for complementary eye conditions or treatments.
There are approximately 25 million people in the U.S. who suffer from Demodex blepharitis and we are initially targeting the approximately 9 million people who are proactively seeking treatment for Demodex blepharitis or seeking treatment for complementary eye conditions or treatments.
Under the Eye and Derm Elanco Agreement, we have made cash payments to Elanco totaling $14.0 million for clinical milestone achievements, including: a $1.0 million upfront payment at execution in 2019, and a total of $4.0 million for three specified clinical milestone achievements in September 2020, April 2021, and March 2023, which were recorded as research and development expense in the accompanying Statements of Operations and Comprehensive Loss in the respective periods incurred.
Under the Eye and Derm Elanco Agreement, we have made cash payments to Elanco totaling $14.0 million for clinical milestone achievements, including: a $1.0 million upfront payment at contract execution in January 2019, and a total of $4.0 million for three specified clinical milestone achievements in September 2020, April 2021, and March 2023, which were all recorded as research and development expense in the Statements of Operations and Comprehensive Loss in the respective periods incurred.
We intend to further advance our pipeline with the lotilaner API to address several diseases in human medicine, including eye care and infectious disease prevention.
We intend to further advance our pipeline with, e.g., the lotilaner API to address several diseases in human medicine, including eye care and infectious disease prevention.
Chemistry, Manufacturing and Controls ("CMC") We do not currently own or operate and currently have no plans to establish facilities for manufacturing, storing, distributing or testing our product or product candidates.
Chemistry, Manufacturing and Controls (“CMC”) We do not currently own or operate and currently have no plans to establish facilities for manufacturing, storing, distributing or testing our product or product candidates.
The process generally involves the following: • completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice ("GLP") requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin in the U.S. and must be updated annually or when significant changes are made; • approval by an independent IRB or independent ethics committee at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practices ("GCP"), requirements and other clinical trial-related regulations to establish substantial evidence of the safety and efficacy of the investigational product for each proposed indication; • submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to accept the submission for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements, and of selected clinical investigational sites to assess compliance with GCP; • potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA filing; • payment of user fees for FDA review of the NDA as well as annual fees after NDA approval; • FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the U.S.; and • compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Migration Strategy ("REMS") and the potential requirement to conduct post-approval studies. 24 The data required to support an NDA are generated in two distinct developmental stages: preclinical and clinical.
The process generally involves the following: • completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice (“GLP”) requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin in the U.S. and must be updated annually or when significant changes are made; • approval by an independent IRB or independent ethics committee at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practices (“GCP”), requirements and other clinical trial-related regulations to establish substantial evidence of the safety and efficacy of the investigational product for each proposed indication; • submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to accept the submission for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug will be produced to assess compliance with cGMP requirements, and of selected clinical investigational sites to assess compliance with GCP; • potential FDA audit of the preclinical study and/or clinical trial sites that generated the data in support of the NDA filing; • payment of user fees for FDA review of the NDA as well as annual fees after NDA approval; • FDA review and approval of the NDA, including consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug in the U.S.; and • compliance with any post-approval requirements, including the potential requirement to implement a risk evaluation and migration strategy (“REMS”) and the potential requirement to conduct post-approval studies.
In December 2022, we announced positive topline results from the completed Phase 1 Callisto trial (the "Callisto trial") and enrollment of the first patient in the Phase 2a clinical trial (the "Carpo trial"). The Carpo trial was designed to evaluate TP-05, for the potential prevention of Lyme disease in humans.
In December 2022, we announced positive topline results from the completed Phase 1 Callisto trial (the “Callisto trial”) and enrollment of the first patient in the Phase 2a clinical trial (the “Carpo trial”). The Carpo trial was designed to evaluate TP-05, for the potential prevention of Lyme disease in humans.
Under this program, the manufacturer is obligated to make its innovator and single source products available for procurement on an FSS contract and charge a price to four federal agencies, the VA, U.S. Department of Defense ("DoD"), Public Health Service and U.S. Coast Guard - that is no higher than the statutory Federal Ceiling Price ("FCP").
Under this program, the manufacturer is obligated to make its innovator and single source products available for procurement on an FSS contract and charge a price to four federal agencies, the VA, U.S. Department of Defense (“DoD”), Public Health Service and U.S. Coast Guard - that is no higher than the statutory Federal Ceiling Price (“FCP”).
Our Additional Product Candidates TP-04 Topical Formulation for the Treatment of Ocular Rosacea Rosacea Rosacea is a chronic skin disease characterized by facial redness, inflammatory lesions, burning and stinging, which can flare up in response to certain triggers such as sun exposure or emotional stress.
Our Additional Product Candidates TP-04 Topical Sterile Ophthalmic Gel Formulation for the Potential Treatment of Ocular Rosacea Ocular Rosacea Rosacea is a chronic skin disease characterized by facial redness, inflammatory lesions, burning and stinging, which can flare up in response to certain triggers such as sun exposure or emotional stress.
These pending material patent applications include applications in the U.S., Australia, Brazil, Canada, China, several European territories, Hong Kong, Israel, India, Japan, South Korea, Mexico, New Zealand, the Russian Federation, and South Africa. We have a total of 38 material XDEMVY or TP-03-related issued patents worldwide.
These pending material patent applications include applications in the U.S., Australia, Brazil, Canada, China, several European territories, Hong Kong, Israel, India, Japan, South Korea, Macau, Mexico, New Zealand, the Russian Federation, and South Africa. We have a total of approximately 48 material XDEMVY or TP-03-related issued patents worldwide.
There are a number of types of marketing authorizations. • The Community MA is adopted by the European Commission in the form of a decision through the Centralized Procedure (the "Centralized Procedure").
There are a number of types of marketing authorizations. • The Community MA is adopted by the European Commission in the form of a decision through the Centralized Procedure (the “Centralized Procedure”).
The estimated natural expiration dates of the issued material in-licensed patents is approximately 2029 or 2030 with a potential extension until 2032.
The estimated natural expiration dates of the issued material in-licensed patents are approximately 2029 or 2030 with a potential extension until 2032.
Participation is required for federal funds to be available for our covered outpatient drugs under Medicaid and Medicare Part B ("Medicare Part B"), and under Medicare Part D, respectively.
Participation is required for federal funds to be available for our covered outpatient drugs under Medicaid and Medicare Part B (“Medicare Part B”), and under Medicare Part D, respectively.
In order to streamline the regulation of clinical trials across the EU, the EU legislator has adopted Regulation (EU) No 536/2014 (the "EU Clinical Trials Regulation"). The new EU Clinical Trials Regulation, which has repealed and replaced the EU Clinical Trials Directive, introduced a complete overhaul of the former regulation of clinical trials for medicinal products in the EU.
In order to streamline the regulation of clinical trials across the EU, the EU legislator has adopted Regulation (EU) No 536/2014 (the “EU Clinical Trials Regulation”). The new EU Clinical Trials Regulation, which has repealed and replaced 31 the EU Clinical Trials Directive, introduced a complete overhaul of the former regulation of clinical trials for medicinal products in the EU.
We have completed the initial preclinical studies and a Phase 1 trial for TP-04 and have selected a topical ophthalmic formulation for early clinical studies. We intend to leverage systemic preclinical data from our XDEMVY program such as embryofetal development studies, genotoxicity studies and safety pharmacology studies, and augment with the dermal toxicology studies.
We have completed the initial preclinical studies and a Phase 1 trial for TP-04 and have selected a uniquely tailored sterile topical ophthalmic formulation for early clinical studies. We intend to leverage systemic preclinical data from our 15 XDEMVY program such as embryofetal development studies, genotoxicity studies and safety pharmacology studies, and augment with the dermal toxicology studies.
In addition, to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain federal agencies and grantees, a manufacturer also must participate in the U.S. Department of Veterans Affairs ("VA") Federal Supply Schedule ("FSS") pricing program.
In addition, to be eligible to have its products paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain federal agencies and grantees, a manufacturer also must participate in the U.S. Department of Veterans Affairs (“VA”) Federal Supply Schedule (“FSS”) pricing program.
GrandPharma Agreement In March 2021, we entered into the China Out-License with LianBio (the "China Out-License") for its exclusive development and commercialization rights of TP-03 (lotilaner ophthalmic solution) 0.25% in The People's Republic of China, Macau, Hong Kong, and Taiwan (the "China Territory") for the treatment of Demodex blepharitis and MGD.
GrandPharma Agreement In March 2021, we entered into the China Out-License with LianBio (the “China Out-License”) for its exclusive development and commercialization rights of TP-03 (lotilaner ophthalmic solution) 0.25% in The People’s Republic of China, Macau, Hong Kong, and Taiwan (the “China Territory”) for the treatment of Demodex blepharitis and MGD.
Additionally, the FDA confirmed that a Phase 3 clinical study would require a disease prevention field study that would likely require the enrollment of thousands of patients.
Additionally, the FDA confirmed that a Phase 3 trial would require a disease prevention field study that would likely require the enrollment of thousands of patients.
As of December 31, 2024, we will be eligible to receive further consideration from GrandPharma upon the achievement of additional TP-03 events, including: (i) additional regulatory and/or patent milestones of up to an aggregate of $20.0 million; (ii) China-based TP-03 sales threshold milestone payments of up to an aggregate of $100.0 million and (iii) tiered low-to-high-teen royalties for China Territory TP-03 product sales.
As of December 31, 2025, we are eligible to receive further consideration from GrandPharma upon the achievement of additional TP-03 events, including: (i) additional regulatory and/or patent issuance milestones of up to an aggregate of $20.0 million; (ii) China-based TP-03 sales threshold milestone payments of up to an aggregate of $100.0 million and (iii) tiered low-to-high-teen royalties for China Territory TP-03 product sales.
Improvements were also demonstrated across some of the most reported patient outcomes, including fluctuating vision, itching and redness. Further, XDEMVY demonstrated statistically significant rates of collarette cure and lid margin erythema cure that are consistent with previous XDEMVY studies.
Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness. Further, XDEMVY demonstrated statistically significant rates of collarette cure and lid margin erythema cure that are consistent with previous XDEMVY studies.
We have conducted epidemiology and market research on the prevalence of blepharitis and potential adoption of XDEMVY. Our research indicates approximately 58% of patients presenting to ECP offices have collarettes and, based on the Gao et al 2005 study (the "Gao study"), all patients with collarettes were also found to have Demodex mites.
Prior to the commercial launch of XDEMVY, we conducted epidemiology and market research on the prevalence of blepharitis and potential adoption of XDEMVY. Our research indicates approximately 58% of patients presenting to ECP offices have collarettes and, based on the Gao et al 2005 study (the “Gao study”), all patients with collarettes were also found to have Demodex mites.
Furthermore, states are constantly adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements. For example, California has enacted the California Consumer Privacy Act ("CCPA"), as amended by the California Privacy Rights Act ("CPRA").
Furthermore, states are constantly adopting new laws or amending existing laws, requiring attention to frequently changing regulatory requirements. For example, California has enacted the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act (“CPRA”).
Demodex blepharitis can be diagnosed by ECPs with a slit lamp examination, by confirming the presence of collarettes. The slit lamp examination is routinely performed by ECPs as part of standard practice during a customary eye examination, so diagnosing Demodex blepharitis via presence of collarettes would not involve any additional equipment or workflow alterations on the part of the ECP.
The slit lamp examination is routinely performed by ECPs as part of standard practice during a customary eye examination, so diagnosing Demodex blepharitis via presence of collarettes would not involve any additional equipment or workflow alterations on the part of the ECP.
If Elanco terminates the All Human Uses Elanco Agreement for our failure to achieve a development milestone by the specified achievement deadline, then we must grant Elanco a non-exclusive, sublicensable, royalty free license to our patents and know-how relating to lotilaner to develop, manufacture and commercialize lotilaner and any licensed products for all applications in humans other than the treatment, palliation, prevention or cure of any eye or skin disease or condition.
If Elanco terminates the All Human Uses Elanco Agreement for our failure to achieve a development milestone by the specified achievement deadline, then we must grant Elanco a non-exclusive, sublicensable, royalty-free license to our patents and know-how related to lotilaner to develop, manufacture and commercialize lotilaner and any licensed products for human applications other than the treatment, palliation, prevention or cure of any eye or skin diseases or conditions.
During 2024, we continued to work with KOLs and various associations to increase Demodex blepharitis awareness and education, and we have highlighted prevalence, impact, and simplicity of diagnosis of Demodex blepharitis. Our goal is to continue to educate ECPs about the prevalence of Demodex blepharitis, simplicity and efficiency of diagnosis, and the positive profile of XDEMVY.
During 2024, we continued to work with KOLs and various associations to increase Demodex blepharitis awareness and education, and we have highlighted prevalence, impact, and simplicity of diagnosis of Demodex blepharitis. During 2025, we continued to educate ECPs about the prevalence of Demodex blepharitis, simplicity and efficiency of diagnosis, and the positive profile of XDEMVY.
Although we believe blepharitis and Demodex blepharitis are significantly under-diagnosed diseases with limited treatment alternatives, there are already approximately 1.5 million Demodex blepharitis diagnoses in the U.S. based on findings from the Titan study and data that show blepharitis classified per the International Classification of Diseases, Tenth Revision, Clinical Modification ("ICD-10-CM").
Although we believe blepharitis and Demodex blepharitis are significantly under-diagnosed diseases with limited treatment alternatives, there are already approximately 1.5 million Demodex blepharitis 11 diagnoses in the U.S. based on the Titan study and data that show blepharitis classified per International Classification of Diseases, Tenth Revision, Clinical Modification (“ICD-10-CM”).
To date, we have completed seven clinical trials that include a Phase 3 trial (the "Saturn-2 trial"), a Phase 2b/3 trial (the "Saturn-1 trial"), four Phase 2 trials, and a Phase 1 trial (the "Hyperion trial") for XDEMVY in Demodex blepharitis, all of which met their primary, secondary and/or certain exploratory endpoints, with the drug generally safe and well tolerated throughout each trial.
To date, we have completed seven clinical trials that include a Phase 3 trial (the “Saturn-2 trial”), a Phase 2b/3 trial (the “Saturn-1 trial”), four Phase 2 trials, and a Phase 1 trial (the “Hyperion trial”) for XDEMVY in Demodex blepharitis, all of which met their primary, secondary and/or certain exploratory endpoints, with the drug well tolerated throughout each trial.
In February 2024, LianBio announced its plan to wind down its operations and in March 2024 made a special cash dividend payment to the Company of $0.7 million (equivalent to $4.80 per share - see Note 3 ).
In February 2024, LianBio announced its plan to wind down its operations and in March 2024 made a special cash dividend payment to us for $0.7 million (equivalent to $4.80 per share - see Note 3 ).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile the regulatory provisions that purported to affect the applicability of the best price and average manufacturer price exclusions of manufacturer-sponsored patient benefit programs, in the context of pharmacy benefit managers ("PBM") “accumulator” and "maximizer" programs were invalidated by a court, such programs may continue to negatively affect us in other ways.
Biggest changeCertain pharmacy benefit managers (“PBM”) “accumulator” and “maximizer” programs that attempted to implement these regulations were invalidated by a court, but such programs may continue to negatively affect us in other ways. Our failure to comply with these price reporting and rebate payment options, as well as PBM “accumulator” and “maximizer” programs, could negatively impact our financial results.
We face potential competition with respect to XDEMVY and our product candidates that we may seek to develop or commercialize in the future, from many different sources, including major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide and existing treatments.
We may face potential competition with respect to XDEMVY and our product candidates that we may seek to develop or commercialize in the future, from many different sources, including major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide and existing treatments.
Under the Medicaid Drug Rebate Program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B ("Medicare Part B").
Under the Medicaid Drug Rebate Program, a participating manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by the state Medicaid program as a condition of having federal funds being made available for drugs under Medicaid and Medicare Part B.
Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
Failure to make necessary disclosures and/or to identify contract overcharges can result in allegations against us under the False Claims Act and other laws and regulations.
As noted above, the Novation Agreement amended the $15.0 million future development milestone payable on China regulatory approval of the China Out-License agreement with a combined condition of patent issuance related to TP-03 in China.
As noted above, the Novation Agreement amended the $15.0 million future development milestone payable on China regulatory approval of the China Out-License with a combined condition of patent issuance related to TP-03 in China.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • a classified Board of Directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the ability of our Board of Directors to issue 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 exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our 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; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our entire Board of Directors, the Chairman of our Board of Directors or our Chief Executive Officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; 92 • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply 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.
In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • a classified Board of Directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the ability of our Board of Directors to issue 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 exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our 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; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • the requirement that a special meeting of stockholders may be called only by a majority vote of our entire Board of Directors, the Chairman of our Board of Directors or our Chief Executive Officer, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our amended and restated certificate of incorporation or our amended and restated bylaws, which may inhibit the ability of an acquiror to effect such amendments to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply 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.
Collaborations pose a number of risks, including the following: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development of our product candidates or may elect not to continue or renew development programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition or business combination, that divert resources or create competing priorities; • collaborators may not pursue commercialization of any product or product candidates that achieve marketing approval or may elect not to continue or renew commercialization programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition or business combination, that may divert resources or create competing priorities; 71 • 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; • we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates on a discretionary basis; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with XDEMVY or our product candidates and products if the collaborators believe that the 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 may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; • a collaborator may seek to renegotiate or terminate their relationship with us due to unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control or other reasons; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve marketing approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations 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 obtain, maintain, enforce, defend or protect our intellectual property or proprietary rights or may use our proprietary information in such a way as to potentially lead to disputes or legal proceedings that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations; • collaborators may infringe, misappropriate or otherwise violate the intellectual property or proprietary rights of third parties, 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.
Collaborations pose a number of risks, including the following: • collaborators have significant discretion in determining the amount and timing of efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development of our product candidates or may elect not to continue or renew development programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition or business combination, that divert resources or create competing priorities; • collaborators may not pursue commercialization of any product or product candidates that achieve marketing approval or may elect not to continue or renew commercialization programs based on results of clinical trials or other studies, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition or business combination, that may 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; • we may not have access to, or may be restricted from disclosing, certain information regarding product candidates being developed or commercialized under a collaboration and, consequently, may have limited ability to inform our stockholders about the status of such product candidates on a discretionary basis; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with XDEMVY or our product candidates and products if the collaborators believe that the 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 may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product; • a collaborator may seek to renegotiate or terminate their relationship with us due to unsatisfactory clinical results, manufacturing issues, a change in business strategy, a change of control or other reasons; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve marketing approval may not commit sufficient resources to the marketing and distribution of such product or products; • disagreements with collaborators, including disagreements over intellectual property or proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations 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; 74 • collaborators may not properly obtain, maintain, enforce, defend or protect our intellectual property or proprietary rights or may use our proprietary information in such a way as to potentially lead to disputes or legal proceedings that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • disputes may arise with respect to the ownership of intellectual property developed pursuant to our collaborations; • collaborators may infringe, misappropriate or otherwise violate the intellectual property or proprietary rights of third parties, 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.
In addition, there are risks inherent in conducting clinical trials in multiple jurisdictions, inside and outside of the U.S. and if we conduct trials outside of the U.S., we may face risks, such as: 58 • regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct our clinical trials; • foreign exchange rate fluctuations; • manufacturing, customs, shipment and storage requirements; • cultural or legal differences in the standards for medical practice and clinical research; • diminished protection of intellectual property in some countries; • different cultural attitudes to self-reported adverse events (such as burning, stinging, blurry vision) leading to a different safety profile; and • the risk that the patient populations in such trials are not considered representative as compared to the patient population in the target markets where approval is being sought.
In addition, there are risks inherent in conducting clinical trials in multiple jurisdictions, inside and outside of the U.S. and if we conduct trials outside of the U.S., we may face risks, such as: • regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct our clinical trials; • foreign exchange rate fluctuations; • manufacturing, customs, shipment and storage requirements; • cultural or legal differences in the standards for medical practice and clinical research; • diminished protection of intellectual property in some countries; • different cultural attitudes to self-reported adverse events (such as burning, stinging, blurry vision) leading to a different safety profile; and • the risk that the patient populations in such trials are not considered representative as compared to the patient population in the target markets where approval is being sought.
Our future capital requirements will depend on many factors, including: • the cost and timing, receipt and amount of sales and marketing capabilities of any current and future products, including the success of our commercialization efforts involving XDEMVY; 60 • market acceptance of our current and future products, including XDEMVY, and the impact of any competing products; • the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for any current or future products; • the scope and costs of manufacturing development and commercial manufacturing activities and our ability to scale them up; • the scope, rate of progress, costs and results of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates; • the number and scope of clinical programs we decide to pursue; • the extent to which we acquire or in-license other product candidates and technologies; • the cost, timing and outcome of regulatory review of our product candidates, including the potential for regulatory authorities to require that we conduct more studies and trials than those that we currently expect to conduct and the costs of post-marketing studies or REMS that could be required by regulatory authorities; • suspensions or delays in enrollment of our ongoing and future clinical trials, issues with data collection, or changes to the number of subjects we decide to enroll in clinical trials, including as a result of health pandemics, competing trials, or otherwise; • the costs of commercialization activities for any current or future products that are approved for sale, including marketing, sales, and distribution costs, and any discounts or rebates to obtain access; • potential changes in the regulatory environment and enforcement rules; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish and maintain collaborations on favorable terms, if at all; • our ability to satisfy our outstanding debt obligations; • our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the sales and marketing activities associated with the commercialization of our products, including XDEMVY, and the development of our product candidates; • potential changes in pharmaceutical pricing and reimbursement infrastructure; • the costs related to any future collaboration or licensing partners upon the achievement of negotiated milestones; • the costs associated with any product liability or other lawsuits related to our products; • the expense needed to attract and retain skilled personnel; and • the costs associated with being a public company.
Our future capital requirements will depend on many factors, including: • the cost and timing, receipt and amount of sales and marketing capabilities of any current and future products, including the success of our commercialization efforts involving XDEMVY; • market acceptance of our current and future products, including XDEMVY, and the impact of any competing products; • the ability of patients or healthcare providers to obtain coverage of or sufficient reimbursement for any current or future products; • the scope and costs of manufacturing development and commercial manufacturing activities and our ability to scale them up; • the scope, rate of progress, costs and results of our drug discovery, preclinical development activities, laboratory testing and clinical trials for our product candidates; • the number and scope of clinical programs we decide to pursue; • the extent to which we acquire or in-license other product candidates and technologies; • the cost, timing and outcome of regulatory review of our product candidates, including the potential for regulatory authorities to require that we conduct more studies and trials than those that we currently expect to conduct and the costs of post-marketing studies or REMS that could be required by regulatory authorities; • suspensions or delays in enrollment of our ongoing and future clinical trials, issues with data collection, or changes to the number of subjects we decide to enroll in clinical trials, including as a result of health pandemics, competing trials, or otherwise; • the costs of commercialization activities for any current or future products that are approved for sale, including marketing, sales, and distribution costs, and any discounts or rebates to obtain access; • potential changes in the regulatory environment and enforcement rules; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish and maintain collaborations on favorable terms, if at all; • our ability to satisfy our outstanding debt obligations; • our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the sales and marketing activities associated with the commercialization of our products, including XDEMVY, and the development of our product candidates; • potential changes in pharmaceutical pricing and reimbursement infrastructure; • the costs related to any future collaboration or licensing partners upon the achievement of negotiated milestones; 63 • the costs associated with any product liability or other lawsuits related to our products; • the expense needed to attract and retain skilled personnel; and • the costs associated with being a public company.
Regardless of merit or eventual outcome, product liability claims may result in: • the inability or delay of our efforts to commercialize XDEMVY or any products that we may develop; • decreased demand for XDEMVY or any product candidates or products that we may develop; • withdrawal of regulatory approval, recall, restriction on the approval or a black box warning or contraindication for XDEMVY or any future product candidates, if approved; • delay, variation or termination of clinical trials; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial subjects or challenges with clinical trial enrollment; • initiation of investigations by regulators; • significant costs to defend the related litigation and diversion of management’s time and our resources; 40 • substantial monetary awards to study subjects or patients; • product recalls, withdrawals or new labeling requirements, marketing or promotional restrictions; or • loss of revenue.
Regardless of merit or eventual outcome, product liability claims may result in: • the inability or delay of our efforts to commercialize XDEMVY or any products that we may develop; • decreased demand for XDEMVY or any product candidates or products that we may develop; • withdrawal of regulatory approval, recall, restriction on the approval or a black box warning or contraindication for XDEMVY or any future product candidates, if approved; • delay, variation or termination of clinical trials; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial subjects or challenges with clinical trial enrollment; • initiation of investigations by regulators; • significant costs to defend the related litigation and diversion of management’s time and our resources; • substantial monetary awards to study subjects or patients; • product recalls, withdrawals or new labeling requirements, marketing or promotional restrictions; or • loss of revenue.
Although we have pending U.S. and foreign patent applications in our portfolio, we cannot predict: • if and when patents may issue based on our patent applications; • the scope of protection of any patent issuing based on our patent applications; • whether the claims of any patent issuing based on our patent applications will provide protection against competitors; • whether or not third parties will find ways to invalidate or circumvent our patent rights; • whether or not others will obtain patents claiming aspects similar to those claimed in our patents and patent applications; • whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; and/or • whether the patent applications that we own or in-license will result in issued patents with claims that cover our products or product candidates or uses thereof in the U.S. or in other foreign countries.
Although we have pending U.S. and foreign patent applications in our portfolio, we cannot predict: • if and when patents may issue based on our patent applications; • the scope of protection of any patent issuing based on our patent applications; • whether the claims of any patent issuing based on our patent applications will provide protection against competitors; • whether or not third parties will find ways to invalidate or circumvent our patent rights; 76 • whether or not others will obtain patents claiming aspects similar to those claimed in our patents and patent applications; • whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; and/or • whether the patent applications that we own or in-license will result in issued patents with claims that cover our products or product candidates or uses thereof in the U.S. or in other foreign countries.
T he market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • our failure to achieve product development or commercialization goals or regulatory approval milestones in the timeframe we announce; • overall performance of the equity markets; • our operating performance and the performance of other similar companies; • results from our ongoing clinical trials and future clinical trials with our current and future product candidates or of our competitors; • delays in the commencement, enrollment and the ultimate completion of clinical trials; • changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; 88 • regulatory actions with respect to our product or product candidates; • regulatory or legal developments in the U.S. and other countries; • the level of expenses related to future product candidates or clinical development programs; • changes in hospital or ECP practices; • announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors; • developments or disputes concerning patent applications, issued patents or other intellectual property or proprietary rights; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • variations in our financial results or the financial results of companies that are perceived to be similar to us; • financing or other corporate transactions, or inability to obtain additional funding; • trading activity by a limited number of stockholders who together beneficially own a majority of our outstanding common stock; • the expiration of market standoff or contractual lock-up agreements; • the size of our market float; and • any other factors discussed in this report.
T he market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • our failure to achieve product development or commercialization goals or regulatory approval milestones in the timeframe we announce; • overall performance of the equity markets; • our operating performance and the performance of other similar companies; • results from our ongoing clinical trials and future clinical trials with our current and future product candidates or of our competitors; • delays in the commencement, enrollment and the ultimate completion of clinical trials; • changes in our projected operating results that we provide to the public, our failure to meet these projections or changes in recommendations by securities analysts that elect to follow our common stock; • regulatory actions with respect to our product or product candidates; • regulatory or legal developments in the U.S. and other countries; • the level of expenses related to future product candidates or clinical development programs; 91 • changes in hospital or ECP practices; • announcements of acquisitions, strategic alliances or significant agreements by us or by our competitors; • developments or disputes concerning patent applications, issued patents or other intellectual property or proprietary rights; • recruitment or departure of key personnel; • the economy as a whole and market conditions in our industry; • variations in our financial results or the financial results of companies that are perceived to be similar to us; • financing or other corporate transactions, or inability to obtain additional funding; • trading activity by a limited number of stockholders who together beneficially own a majority of our outstanding common stock; • the expiration of market standoff or contractual lock-up agreements; • the size of our market float; and • any other factors discussed in this report.
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, or any other product candidates that we may develop, including: • we may experience delays in or failure to reach agreement on acceptable terms with prospective CROs, vendors and clinical sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs, vendors and trial sites; • we may fail to obtain sufficient enrollment in our clinical trials, our enrollment needs may grow larger than we anticipate, or participants may fail to complete our clinical trials at a higher rate than we anticipate; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • we may decide, or regulators or Institutional Review Boards ("IRBs") or ethics committees may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • regulators or IRBs or ethics committees may not authorize us or our investigators to commence a clinical trial at a prospective clinical trial site or at all or may require us to perform additional or unanticipated clinical trials to obtain approval or we may be subject to additional post-marketing testing requirements to maintain regulatory approval; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; 53 • the cost of clinical trials of our product candidates may be greater than we anticipate, and we may need to delay or suspend one or more trials until we complete additional financing transactions or otherwise receive adequate funding; • 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 or may be delayed; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs or ethics committees to suspend or terminate trials; • regulatory authorities may determine that the planned design of our clinical trials is flawed or inadequate; • regulatory authorities may suspend or withdraw their approval of a product or impose restrictions on its distribution; • we may not be able to timely or at all obtain INDs for a product candidate; • we may modify a preclinical study or clinical trial protocol; • third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may be unable to establish clinical endpoints that applicable regulatory authorities consider clinically meaningful, or, if we seek accelerated approval, biomarker efficacy endpoints that applicable regulatory authorities consider likely to predict clinical benefit; • we may experience delays due to the outbreak of health epidemics, including with respect to the conduct of ongoing clinical trials, receipt of product candidates or other materials, submission of NDAs, filing of INDs, and starting any clinical trials for other indications or programs; and • we may experience manufacturing delays due to health epidemics in our supply chain caused by a shortage of raw materials, a lack of employees on site at our suppliers due to illness, or a lack of productivity at our suppliers due to local or national government quarantine restrictions on coming to the workplace.
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, or any other product candidates that we may develop, including: • we may experience delays in or failure to reach agreement on acceptable terms with prospective CROs, vendors and clinical sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs, vendors and trial sites; • we may fail to obtain sufficient enrollment in our clinical trials, our enrollment needs may grow larger than we anticipate, or participants may fail to complete our clinical trials at a higher rate than we anticipate; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • we may decide, or regulators or Institutional Review Boards (“IRBs”) or ethics committees may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • regulators or IRBs or ethics committees may not authorize us or our investigators to commence a clinical trial at a prospective clinical trial site or at all or may require us to perform additional or unanticipated clinical trials to obtain approval or we may be subject to additional post-marketing testing requirements to maintain regulatory approval; • regulators may revise the requirements for approving our product candidates, or such requirements may not be as we anticipate; 55 • the cost of clinical trials of our product candidates may be greater than we anticipate, and we may need to delay or suspend one or more trials until we complete additional financing transactions or otherwise receive adequate funding; • 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 or may be delayed; • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or IRBs or ethics committees to suspend or terminate trials; • regulatory authorities may determine that the planned design of our clinical trials is flawed or inadequate; • regulatory authorities may suspend or withdraw their approval of a product or impose restrictions on its distribution; • we may not be able to timely or at all obtain INDs for a product candidate; • we may modify a preclinical study or clinical trial protocol; • third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may be unable to establish clinical endpoints that applicable regulatory authorities consider clinically meaningful, or, if we seek accelerated approval, biomarker efficacy endpoints that applicable regulatory authorities consider likely to predict clinical benefit; • we may experience delays due to the outbreak of health epidemics, including with respect to the conduct of ongoing clinical trials, receipt of product candidates or other materials, submission of NDAs, filing of INDs, and starting any clinical trials for other indications or programs; and • we may experience manufacturing delays due to health epidemics in our supply chain caused by a shortage of raw materials, a lack of employees on site at our suppliers due to illness, or a lack of productivity at our suppliers due to local or national government quarantine restrictions on coming to the workplace.
Our operating results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the cost of manufacturing XDEMVY or our other product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • the level of demand for XDEMVY or our product candidates should they receive approval, which may vary significantly; • the risk/benefit profile, cost and reimbursement policies with respect to XDEMVY or our product candidates, if approved, and existing and potential future drugs that compete with our product candidates; • the gross-to-net yields for XDEMVY or our other product candidates, if approved; 91 • the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our ability to successfully recruit patients for preclinical studies and clinical trials, and any delays caused by difficulties in such recruitment efforts; • our ability to obtain regulatory approval for our product candidates, and the timing and scope of any such approvals we may receive; • the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional product candidates; • the changing and volatile U.S., EU and global economic environments, including the impact of current or future health pandemics; and • future accounting pronouncements or changes in our accounting policies.
Our operating results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including the following: • the cost of manufacturing XDEMVY or our other product candidates, which may vary depending on the quantity of production and the terms of our agreements with manufacturers; • the level of demand for XDEMVY or our product candidates should they receive approval, which may vary significantly; • the risk/benefit profile, cost and reimbursement policies with respect to XDEMVY or our product candidates, if approved, and existing and potential future drugs that compete with our product candidates; • the gross-to-net yields for XDEMVY or our other product candidates, if approved; • the timing and success or failure of clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners; • our ability to successfully recruit patients for preclinical studies and clinical trials, and any delays caused by difficulties in such recruitment efforts; • our ability to obtain regulatory approval for our product candidates, and the timing and scope of any such approvals we may receive; • the timing and cost of, and level of investment in, research and development activities relating to our product candidates, which may change from time to time; • our ability to attract, hire and retain qualified personnel; • expenditures that we will or may incur to develop additional product candidates; • the changing and volatile U.S., EU and global economic environments, including the impact of current or future health pandemics; and 94 • future accounting pronouncements or changes in our accounting policies.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation related issues; • the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; 73 • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation related issues; • the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
If we are found to have knowingly and intentionally charged 340B program covered entities more than the statutorily mandated ceiling price, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for Health Resources and Services to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.
If we are found to have knowingly and intentionally charged 340B program covered entities more than the statutorily mandated ceiling price, we could be subject to significant civil monetary penalties and/or such failure also could be grounds for Health Resources and Services Administration to terminate our agreement to participate in the 340B program, in which case our covered outpatient drugs would no longer be eligible for federal payment under the Medicaid or Medicare Part B program.
For example: • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; 78 • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; • the U.S.
For example: 80 • others may be able to make product candidates that are similar to ours but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we or our licensors or future collaborators might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we cannot ensure that any of our patents, or any of our pending patent applications, if issued, or those of our licensors, will include claims having a scope sufficient to protect our product candidates; • we cannot ensure that any patents issued to us or our licensors will provide a basis for an exclusive market for our commercially viable product candidates or will provide us with any competitive advantages; • the U.S.
It is possible that as we test our product candidates in larger, longer and more extensive clinical trials, or as use of these product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went undetected in previous trials, will be reported by subjects.
It is possible that as we test our product candidates in larger, longer and more extensive clinical trials, or as use of these product candidates becomes more widespread if they receive regulatory approval, illnesses, injuries, discomforts and other adverse events that were not observed in earlier trials, as well as conditions that did not occur or went 50 undetected in previous trials, will be reported by subjects.
We may experience disruptions that could severely impact our business, preclinical studies, and clinical trials, including: 41 • delays in receiving approval from local regulatory authorities to initiate our planned clinical trials, including receiving any required investigational new drug ("IND"); • delays or difficulties in enrolling and retaining patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • manufacturing and supply chain disruptions; • delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; • delays in the transport of clinical trial materials; • changes in local regulations as part of a response to a health epidemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • difficulties recruiting or retaining patients for our planned clinical trials if patients are affected by the virus or are fearful of visiting or traveling to clinical trial sites because of the outbreak; • interruption of or changes in key clinical trial activities, such as clinical trial site monitoring, implementation of virtual monitoring, use of local testing labs, or home delivery of study drugs, due to limitations on travel imposed or recommended by federal or state governments, employers and others, use of new digital technologies for subject visits or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; • risk that participants enrolled in our clinical trials will acquire a particular disease related to a health epidemic while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; • limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • interruption or delays in the operations of the FDA which may impact review and approval timelines; • delays in regulatory approvals for our product candidates due to the FDA focusing on clinical trials related to therapies and vaccines targeting health epidemics; • refusal of the FDA to accept data, including from clinical trials in affected geographies or failure to comply with updated FDA guidance and expectations related to the conduct of clinical trials during a health epidemic; and • interruption or delays to our sourced discovery and clinical activities.
We may experience disruptions that could severely impact our business, preclinical studies, and clinical trials, including: • delays in receiving approval from local regulatory authorities to initiate our planned clinical trials, including receiving any required investigational new drug (“IND”); • delays or difficulties in enrolling and retaining patients in our clinical trials; • delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; • manufacturing and supply chain disruptions; • delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; • delays in the transport of clinical trial materials; • changes in local regulations as part of a response to a health epidemic which may require us to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether; • diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; • difficulties recruiting or retaining patients for our planned clinical trials if patients are affected by the virus or are fearful of visiting or traveling to clinical trial sites because of the outbreak; • interruption of or changes in key clinical trial activities, such as clinical trial site monitoring, implementation of virtual monitoring, use of local testing labs, or home delivery of study drugs, due to limitations on travel imposed or recommended by federal or state governments, employers and others, use of new digital technologies for subject visits or interruption of clinical trial subject visits and study procedures, the occurrence of which could affect the integrity of clinical trial data; • risk that participants enrolled in our clinical trials will acquire a particular disease related to a health epidemic while the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse events; 44 • delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; • limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; • interruption or delays in the operations of the FDA which may impact review and approval timelines; • delays in regulatory approvals for our product candidates due to the FDA focusing on clinical trials related to therapies and vaccines targeting health epidemics; • refusal of the FDA to accept data, including from clinical trials in affected geographies or failure to comply with updated FDA guidance and expectations related to the conduct of clinical trials during a health epidemic; and • interruption or delays to our sourced discovery and clinical activities.
We expect that our expenses will increase substantially as we: • continue to commercialize XDEMVY and any other products for which we may obtain marketing approval; • enhance our product development and planned future commercialization efforts of our product candidates, including through hiring additional clinical, regulatory, quality control and scientific personnel; • seek marketing approvals and reimbursement for our product candidates; • prepare for and initiate additional preclinical, clinical and other studies for our product candidates; • change or add additional manufacturers or suppliers, some of which may require additional permits or other governmental approvals; • create additional infrastructure to support our operations as a public company, including adding operational, financial and management information systems and personnel; • seek to identify, assess, acquire or develop additional product candidates; • acquire or in-license other product candidates and technologies; • make milestone or other payments in connection with the development or approval of our product candidates; • maintain, protect, enforce and expand our intellectual property portfolio; and 37 • experience any delays or encounter issues with any of the above.
We expect that our expenses will increase substantially as we: • continue to commercialize XDEMVY and any other products for which we may obtain marketing approval; 38 • enhance our product development and planned future commercialization efforts of our product candidates, including through hiring additional clinical, regulatory, quality control and scientific personnel; • seek marketing approvals and reimbursement for our product candidates; • prepare for and initiate additional preclinical, clinical and other studies for our product candidates; • change or add additional manufacturers or suppliers, some of which may require additional permits or other governmental approvals; • create additional infrastructure to support our operations as a public company, including adding operational, financial and management information systems and personnel; • seek to identify, assess, acquire or develop additional product candidates; • acquire or in-license other product candidates and technologies; • make milestone or other payments in connection with the development or approval of our product candidates; • maintain, protect, enforce and expand our intellectual property portfolio; and • experience any delays or encounter issues with any of the above.
In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by our vendors or consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to successfully commercialize XDEMVY, obtain marketing approval of our product candidates or otherwise advance our business.
In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by our vendors or consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we may not be able to continue to successfully commercialize XDEMVY, obtain marketing approval of our product candidates or otherwise advance our business.
If we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to additional risks and uncertainties, including: • our customers’ ability to obtain reimbursement for our product candidates in foreign markets; • our inability to directly control commercial activities if we are relying on third parties; • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • import or export licensing requirements; • longer accounts receivable collection times; • longer lead times for shipping; 57 • language barriers for technical training and the need for language translations; • reduced protection of intellectual property rights in some foreign countries; • the existence of additional potentially relevant third-party intellectual property rights; • foreign currency exchange rate fluctuations; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
If we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to additional risks and uncertainties, including: • our customers’ ability to obtain reimbursement for our product candidates in foreign markets; • our inability to directly control commercial activities if we are relying on third parties; • the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements; • different medical practices and customs in foreign countries affecting acceptance in the marketplace; • import or export licensing requirements; • longer accounts receivable collection times; 59 • longer lead times for shipping; • language barriers for technical training and the need for language translations; • reduced protection of intellectual property rights in some foreign countries; • the existence of additional potentially relevant third-party intellectual property rights; • foreign currency exchange rate fluctuations; and • the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.
If we, or our manufacturing partners, are unable to successfully scale up the manufacture of XDEMVY or our product candidates in sufficient quality and quantity, the commercialization of XDEMVY or the development, testing and clinical trials of that 66 product candidate may be delayed or become infeasible, and commercialization of XDEMVY or marketing approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.
If we, or our manufacturing partners, are unable to successfully scale up the manufacture of XDEMVY or our product candidates in sufficient quality and quantity, the commercialization of XDEMVY or the development, testing and clinical trials of that product candidate may be delayed or become infeasible, and commercialization of XDEMVY or marketing approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.
These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for stockholders or potential acquirors to obtain control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including delay or impede a merger, tender offer or proxy contest involving our company.
These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult for stockholders or potential acquirors to obtain control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including delay or impede a merger, tender 95 offer or proxy contest involving our company.
Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such product candidates are commercialized.
Laws governing analogous patent term extensions in foreign jurisdictions vary widely, as do laws governing the ability to obtain multiple patents from a single patent family. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents 81 protecting such candidates might expire before or shortly after such product candidates are commercialized.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; 55 • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; • costs to, or lack of adequate compensation for, prospective patients; • difficulties of enrolling patients or patients continuing to participate in follow-up visits due to ongoing or new health epidemics; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
The enrollment of patients depends on many factors, including: • the patient eligibility criteria defined in the protocol; • size of the patient population required for analysis of the trial’s primary endpoints; • the proximity of patients to study sites; • the design of the trial; 57 • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; • costs to, or lack of adequate compensation for, prospective patients; • difficulties of enrolling patients or patients continuing to participate in follow-up visits due to ongoing or new health epidemics; and • the risk that patients enrolled in clinical trials will drop out of the trials before completion.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators and changes to the strategies of the combined company. As a result, we may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators and changes to the strategies of the combined company. As a result, we 73 may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all.
In markets outside of the U.S. and the EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. Also, at the national level, actions have been taken to enact transparency laws regarding payments between pharmaceutical companies and health care professionals.
In markets outside of the U.S. and the EU, reimbursement and healthcare payment systems vary significantly by country, and 84 many countries have instituted price ceilings on specific products and therapies. Also, at the national level, actions have been taken to enact transparency laws regarding payments between pharmaceutical companies and health care professionals.
Further, in order to continue to commercialize XDEMVY or commercialize any product candidates, if approved, we must continue to build marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services for each of the territories in which we may have approval to sell and market our product candidates.
Further, in order to continue to successfully commercialize XDEMVY or commercialize any product candidates, if approved, we must continue to build marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services for each of the territories in which we may have approval to sell and market our product candidates.
As such, failure in clinical 52 trials can occur at any stage of testing. A number of companies in the biopharmaceutical industry have suffered setbacks in the advancement of clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and we cannot be certain that we will not face similar setbacks.
As such, failure in clinical trials can occur at any stage of testing. A number of companies in the biopharmaceutical industry have suffered setbacks in the advancement of clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials, and we cannot be certain that we will not face similar setbacks.
Our future financial performance and our ability to develop, manufacture and commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert financial and other resources, and a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time, to managing these growth activities.
Our future financial performance and our ability to develop, manufacture and commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to 39 divert financial and other resources, and a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time, to managing these growth activities.
The Company's estimates for rebates under government programs are based on statutory discount rates and expected utilization as well as historical data it has accumulated since product launch. Our rebate calculations may require estimates, including estimates of customer mix, to determine which product sales will be subject to rebates and the amount of such rebates.
Our estimates for rebates under government programs are based on statutory discount rates and expected utilization as well as historical data it has accumulated since product launch. Our rebate calculations may require estimates, including estimates of customer mix, to determine which product sales will be subject to rebates and the amount of such rebates.
Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. 84 We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations.
Further, in our operations as a public company, future government shutdowns could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations. We are subject to certain U.S. and foreign anti-corruption, anti-money laundering, export control, sanctions, and other trade laws and regulations.
In connection with our in-license, out-license, or other collaborations or strategic alliances, we may agree to and be bound by negative covenants which may limit our development and commercial opportunities. For example, pursuant to the Elanco Agreements, we made certain covenants to only engage with third party suppliers previously approved by Elanco, and only under certain circumstances.
In connection with our in-license, out-license, or other collaborations or strategic alliances, we may agree to and be bound by negative covenants which may limit our development and commercial opportunities. For example, pursuant to the 61 Elanco Agreements, we made certain covenants to only engage with third party suppliers previously approved by Elanco, and only under certain circumstances.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the 64 future lead to market-wide liquidity problems.
We may not be granted patent term extension either in the U.S. or in any foreign country because of, for example, failing to exercise due diligence during the 75 testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.
We may not be granted patent term extension either in the U.S. or in any foreign country because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements.
There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from making, using or selling the invention at issue on the grounds that our patent claims do not cover the invention.
There is also a risk that, even if the validity of such patents is upheld, the court will construe 78 the patent’s claims narrowly or decide that we do not have the right to stop the other party from making, using or selling the invention at issue on the grounds that our patent claims do not cover the invention.
Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP 81 Reauthorization Act of 2015 which first affected physician payment in 2019. It is unclear how the introduction of the Medicare quality payment program will impact our business.
Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 which first affected physician payment in 2019. It is unclear how the introduction of the Medicare quality payment program will impact our business.
We also expect that significant additional capital may be needed in the future to continue our planned operations. To raise capital, we may sell common stock, including pursuant to our 2023 ATM Prospectus, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time.
We also expect that significant additional capital may be needed in the future to continue our planned operations. To raise capital, we may sell common stock, including pursuant to our 2023 ATM Prospectus, convertible securities or other equity securities in one or more 92 transactions at prices and in a manner we determine from time to time.
Any failure or delay in the development of these capabilities could or negatively affect the success of our commercialization efforts and business. For example, the commercialization of XDEMVY may not develop as planned or anticipated, which may require us to, among other items, adjust or amend our business plan and strategies and incur significant expenses.
Any failure or delay in the development of these capabilities could negatively affect the success of our commercialization efforts and business. For example, the commercialization of XDEMVY may not continue to develop as planned or anticipated, which may require us to, among other items, adjust or amend our business plan and strategies and incur significant expenses.
Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.
Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel could 77 be diverted in pursuing these proceedings, which could have a material adverse effect on our business and operations. In addition, we may not have sufficient resources to bring these actions to a successful conclusion.
Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business 85 arrangements.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: • the FDA or comparable foreign regulatory authorities placing the clinical trial on hold; • subjects failing to enroll or remain in our trial at the rate we expect; • subjects choosing an alternative treatment or other product candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related adverse effects; • failure to demonstrate efficacy of the product; • any interruptions or delays in the supply of our product candidates for our clinical trials; • a facility manufacturing any of our product candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; • any changes to our manufacturing process that may be necessary or desired; 56 • any failure or delay in reaching an agreement with CROs, vendors and clinical trial sites; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices ("GCP") or regulatory requirements or other third parties not performing data collection or analysis in a timely or accurate manner; • third-party contractors becoming debarred, disqualified or suspended or otherwise penalized by the FDA or other comparable foreign regulatory authorities for violations of applicable regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications; • one or more IRBs, other ethics committees refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing its approval of the trial; or • changes in regulatory requirements and policies, which may require us to amend clinical trial protocols to comply with these changes and resubmit our clinical trial protocols to IRBs or ethics committees for reexamination.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: • the FDA or comparable foreign regulatory authorities placing the clinical trial on hold; • subjects failing to enroll or remain in our trial at the rate we expect; • subjects choosing an alternative treatment or other product candidates, or participating in competing clinical trials; • lack of adequate funding to continue the clinical trial; • subjects experiencing severe or unexpected drug-related adverse effects; • failure to demonstrate efficacy of the product; • any interruptions or delays in the supply of our product candidates for our clinical trials; • a facility manufacturing any of our product candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of cGMP regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; 58 • any changes to our manufacturing process that may be necessary or desired; • any failure or delay in reaching an agreement with CROs, vendors and clinical trial sites; • third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP or regulatory requirements or other third parties not performing data collection or analysis in a timely or accurate manner; • third-party contractors becoming debarred, disqualified or suspended or otherwise penalized by the FDA or other comparable foreign regulatory authorities for violations of applicable regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications; • one or more IRBs, other ethics committees refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing its approval of the trial; or • changes in regulatory requirements and policies, which may require us to amend clinical trial protocols to comply with these changes and resubmit our clinical trial protocols to IRBs or ethics committees for reexamination.
Clinical trial failure may result from a multitude of factors including flaws in trial design, dose selection, placebo effect, patient enrollment criteria and other challenges with enrolling and maintaining trial subjects, relatively smaller sample size in earlier trials, and failure to demonstrate favorable safety or efficacy traits.
Clinical trial failure may result from a multitude of factors including flaws in trial design, dose selection, placebo effect, patient enrollment criteria and other challenges with enrolling and maintaining trial subjects, relatively 54 smaller sample size in earlier trials, and failure to demonstrate favorable safety or efficacy traits.
Our operations to date have been limited to organizing our company, raising capital, identifying and developing product candidates, establishing licensing arrangements and/or acquiring necessary technology, undertaking research, preclinical studies and clinical trials of our product candidates, establishing arrangements for the manufacture of XDEMVY and other product candidates and longer-term planning for commercialization efforts of XDEMVY and our other potential product candidates.
Our operations to date have been limited to organizing our company, raising capital, identifying and developing product candidates, establishing licensing arrangements and/or acquiring necessary technology, undertaking research, preclinical studies and clinical trials of our product candidates, establishing arrangements for the manufacture of XDEMVY and other product candidates, longer-term planning for commercialization efforts of XDEMVY and our other potential product candidates, and commercializing XDEMVY.
In addition, the scope of patent protection outside of the U.S. is uncertain and laws of foreign countries may not protect 68 our rights to the same extent as the laws of the U.S., or vice versa. For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does.
In addition, the scope of patent protection outside of the U.S. is uncertain and laws of foreign countries may not protect our rights to the same extent as the laws of the U.S., or vice versa. For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does.
At times, competitors may adopt trademarks and trade names similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. During trademark registration proceedings, we may receive rejections. Although we would be given an opportunity to respond to those rejections, 69 we may be unable to overcome such rejections.
At times, competitors may adopt trademarks and trade names similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. During trademark registration proceedings, we may receive rejections. Although we would be given an opportunity to respond to those rejections, we may be unable to overcome such rejections.
Litigation or other 74 legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time consuming and, even if resolved in our favor, are likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities.
Litigation or other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and generally expensive and time consuming and, even if resolved in our favor, are likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities.
Our employees, independent contractors, clinical trial investigators, CROs, consultants, vendors and any potential commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading. 82 We are exposed to the risk of fraud or other misconduct by our employees, clinical trial investigators, CROs, consultants, vendors and any potential commercial partners.
Our employees, independent contractors, clinical trial investigators, CROs, consultants, vendors and any potential commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading. We are exposed to the risk of fraud or other misconduct by our employees, clinical trial investigators, CROs, consultants, vendors and any potential commercial partners.
It follows from case law of the Court of Justice of the EU and the European Data Protection Board that compliance with EU data transfer obligations involves conducting transfer impact assessments, which includes documenting detailed analyses of data access and protection laws in the countries in which data importers are located, which can be costly and time-consuming.
It follows from case law of the Court of Justice of the EU and the European Data Protection 90 Board that compliance with EU data transfer obligations involves conducting transfer impact assessments, which includes documenting detailed analyses of data access and protection laws in the countries in which data importers are located, which can be costly and time-consuming.
Additionally, the net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indicator of our future performance. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue.
Additionally, the net losses we incur may fluctuate significantly from quarter to quarter such that a period-to-period comparison of our results of operations may not be a good indicator of our future performance. The size of potential future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue.
Our 65 CMOs and other suppliers are subject to inspection by the FDA and may receive observations that they may not be able to resolve in a timely or effective manner, which could impact whether our products can be approved on a timely basis, if at all.
Our CMOs and other suppliers are subject to inspection by the FDA and may receive observations that they may not be able to resolve in a timely or effective manner, which could impact whether our products can be approved on a timely basis, if at all.
The adequacy decision concludes that the U.S. ensures an adequate level of protection (compared to that of the EU) for personal data transferred from the EU to U.S. companies participating in the EU-U.S. Data Privacy Framework. The adequacy decisions of 87 the European Commission are subject to periodic reviews and may be amended or withdrawn.
The adequacy decision concludes that the U.S. ensures an adequate level of protection (compared to that of the EU) for personal data transferred from the EU to U.S. companies participating in the EU-U.S. Data Privacy Framework. The adequacy decisions of the European Commission are subject to periodic reviews and may be amended or withdrawn.
Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our nonclinical studies or clinical trials, or illegal misappropriation of product, which could result in regulatory sanctions and cause serious harm to our reputation.
Activities subject to these laws also involve the improper use or misrepresentation of information obtained in the course of clinical trials, the creation of fraudulent data in our nonclinical studies or clinical trials, or illegal misappropriation of product, which could result in regulatory sanctions and 42 cause serious harm to our reputation.
Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an 50 FSS contract and charge a price to the Big Four agencies that is no higher than the Federal Ceiling Price (“FCP”), which is a price calculated pursuant to a statutory formula.
Under this program, the manufacturer is obligated to make its covered drugs available for procurement on an FSS contract and charge a price to the Big Four agencies that is no higher than the Federal Ceiling Price (“FCP”), which is a price calculated pursuant to a statutory formula.
As a result, interim and preliminary 59 data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could be material and could significantly harm our reputation and business prospects and may cause the trading price of our common stock to fluctuate significantly.
As a result, interim and preliminary data should be viewed with caution until the final data are available. Adverse differences between preliminary or interim data and final data could be material and could significantly harm our reputation and business prospects and may cause the trading price of our common stock to fluctuate significantly.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, limit, reduce or eliminate our research and 61 development programs or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, limit, reduce or eliminate our research and development programs or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Elements of our product candidate, including processes for their preparation and manufacture, may involve proprietary know-how, 77 information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property.
Elements of our product candidate, including processes for their preparation and manufacture, may involve proprietary know-how, information, or technology that is not covered by patents, and thus for these aspects we may consider trade secrets and know-how to be our primary intellectual property.
We may need to obtain substantial additional funding to achieve our goals and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, reduce or eliminate our product development programs, commercialization efforts or other operations.
We may need to obtain additional funding to achieve our goals and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, reduce or eliminate our product development programs, commercialization efforts or other operations.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. 63 We have incurred substantial losses during our history which we expect to continue, we do not expect to become profitable in the near future, and we may never achieve profitability.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial losses during our history which we expect to continue, we do not expect to become profitable in the near future, and we may never achieve profitability.
For example, we have established an internal infrastructure as well as an ECP-focused sales and distribution infrastructure to market XDEMVY and our product candidates in the U.S., and have completed hiring in areas to support commercialization, including sales management, sales representatives, marketing, access and reimbursement, sales support and distribution.
For example, we have established an internal infrastructure as well as an ECP-focused sales and distribution infrastructure to market XDEMVY and our product candidates in the U.S., and have substantially completed hiring in areas to support commercialization, including sales management, sales representatives, marketing, access and reimbursement, sales support and distribution.
Moreover, the FDA requires us to comply with GCP standards, regulations for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. The EC also requires us to comply with similar standards.
Moreover, the FDA 66 requires us to comply with GCP standards, regulations for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. The EC also requires us to comply with similar standards.
Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and 69 regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
The 86 CCPA and other state laws could impact our business activities depending on how they are interpreted and exemplify the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and protected health information.
The CCPA and other state laws could impact our business activities depending on how they are interpreted and exemplify the vulnerability of our business to not only cyber threats but also the evolving regulatory environment related to personal data and protected health information.
Another example of the changing regulatory requirements is that in the European Union ("EU"), the European Commission has presented a proposal to reform the current EU pharmaceutical legislation. The proposal intends to reduce the regulatory data protection period and orphan market exclusivity period for new medicinal products.
Another example of the changing regulatory requirements is that in the EU, the European Commission has presented a proposal to reform the current EU pharmaceutical legislation. The proposal intends to reduce the regulatory data protection period and orphan market exclusivity period for new medicinal products.
If we are unable to establish sales and marketing capabilities for any of our future approved products or enter into agreements with third parties to sell and market XDEMVY or any future approved products on acceptable terms, we may be unable to successfully commercialize XDEMVY or any future approved products.
If we are unable to establish sales and marketing capabilities for any of our future approved products or enter into agreements with third parties to sell and market XDEMVY or any future approved products on acceptable terms, we may be unable to continue to successfully commercialize XDEMVY or successfully commercialize any future approved products.
In each of the Elanco Agreements, Elanco retains, and future licensors could retain, the right to prosecute and defend the intellectual property rights licensed to us, in which case we would depend on the ability of our licensors to obtain, maintain and enforce such licensed intellectual property.
In each of the Elanco Agreements, Elanco retains, and future licensors could retain, the right to prosecute and defend the intellectual property rights licensed to us, in which case we would depend on 75 the ability of our licensors to obtain, maintain and enforce such licensed intellectual property.
Approval by the FDA in the U.S. does not ensure approval by comparable regulatory authorities in other countries or jurisdictions nor does it ensure that we will be able to successfully commercialize XDEMVY or any other approved products in the U.S. or in other jurisdictions.
Approval by the FDA in the U.S. does not ensure approval by comparable regulatory authorities in other countries or jurisdictions nor does it ensure that we will be able to continue to successfully commercialize XDEMVY or successfully commercialize any other approved products in the U.S. or in other jurisdictions.
Many times, side effects are only detectable after investigational 48 products are tested in large-scale, Phase 3 clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval.
Many times, side effects are only detectable after investigational products are tested in large-scale, Phase 3 clinical trials or, in some cases, after they are made available to patients on a commercial scale after approval.
Additionally, we and other parties with whom we conduct business may be unable to access funds in such deposit account or other accounts, including money market funds, held with a financial institution or lending arrangements with such a 62 financial institution.
Additionally, we and other parties with whom we conduct business may be unable to access funds in such deposit account or other accounts, including money market funds, held with a financial institution or lending arrangements with such a financial institution.
Sequestration is currently set at 2% and will increase to 2.25% for the first half of fiscal year 2030, to 3% for the second half of fiscal year 2030, and to 4% for the remainder of the sequestration period that lasts through the first six months of fiscal year 2031.
Sequestration is currently set at 2% and will increase to 2.25% for the first half of fiscal year 2030, to 3% for the second half of fiscal year 2030, and to 4% for the 83 remainder of the sequestration period that lasts through the first six months of fiscal year 2031.
Additionally, if we or others later identify undesirable side effects or adverse events caused by XDEMVY or one of our product candidates that receives marketing approval, a number of potentially significant negative consequences could result, including, but not limited to: • regulatory authorities may withdraw approvals of such product or require additional warnings on the label such as a black box warning, a contraindication or other limitations on the product's approved use, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • the product may be seized by regulatory authorities; • there may be a recall of the product; • we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies; • we may be required to create and implement a Risk Evaluation Mitigation Strategy ("REMS") plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, including ECPs, and/or other elements to assure safe use; • the product may become less competitive; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer and there may be resulting harm to physician or patient acceptance of our product.
Additionally, if we or others later identify undesirable side effects or adverse events caused by XDEMVY or one of our product candidates that receives marketing approval, a number of potentially significant negative consequences could result, including, but not limited to: • regulatory authorities may withdraw approvals of such product or require additional warnings on the label such as a black box warning, a contraindication or other limitations on the product’s approved use, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • the product may be seized by regulatory authorities; • there may be a recall of the product; • we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies; • we may be required to create and implement a REMS plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers, including ECPs, and/or other elements to assure safe use; • the product may become less competitive; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer and there may be resulting harm to physician or patient acceptance of our product.
If we are unable to continue to attract and retain high quality personnel and consultants, the rate and success at which we can 38 discover and develop product candidates and operate our business will be limited.
If we are unable to continue to attract and retain high quality personnel and consultants, the rate and success at which we can discover and develop product candidates and operate our business will be limited.
Our competitors may obtain FDA approval or other regulatory authority approval for their products more rapidly than we may obtain approval for our product candidates, which could result in our competitors establishing a strong market position before we are able to enter the market. 47 In addition, our ability to compete may be affected in many cases by insurers or other third-party payers, particularly Medicare and other comparable foreign regulatory authorities, seeking to encourage the use of generic products.
Our competitors may obtain FDA approval or other regulatory authority approval for their products more rapidly than we may obtain approval for our product candidates, which could result in our competitors establishing a strong market position before we are able to enter the market. 49 In addition, our ability to compete may be affected in many cases by insurers or other third-party payers, particularly Medicare and other comparable foreign regulatory authorities, seeking to encourage the use of generic products.
We believe such conditions have led and could continue to lead to reduced demand for our products, which could have a material adverse effect on our product sales, net, business and results of operations.
We believe such conditions have led and could continue to lead to reduced demand for our product, which could have a material adverse effect on our product sales, net, business and results of operations.
We may not be successful in educating ECPs and the market about the need for treatments specifically for Demodex blepharitis and other diseases or conditions targeted by XDEMVY or our product candidates.
We may not ultimately be successful in educating ECPs and the market about the need for treatments specifically for Demodex blepharitis and other diseases or conditions targeted by XDEMVY or our product candidates.
Any performance failure on the part of our existing or future manufacturers could prevent or delay commercialization efforts of XDEMVY or any future products, if approved, clinical development of product candidates or marketing approval of current or future product candidates.
Any performance failure on the part of our existing or future manufacturers could prevent or 68 delay commercialization efforts of XDEMVY or any future products, if approved, clinical development of product candidates or marketing approval of current or future product candidates.
Even if we successfully commercialize XDEMVY in the U.S., we may be unable to achieve or maintain profitability, unless XDEMVY is approved in other jurisdictions or for additional indications.
Even if we continue to successfully commercialize XDEMVY in the U.S., we may be unable to achieve or maintain profitability, unless XDEMVY is approved in other jurisdictions or for additional indications.
The FCP is derived from a calculated price point called the “non-federal average manufacturer price” (“Non FAMP”), which the manufacturer calculates and reports to the VA on a quarterly and annual basis.
The FCP is derived from a calculated price point called the “non-federal average manufacturer price” (“Non FAMP”), which the manufacturer 52 calculates and reports to the VA on a quarterly and annual basis.
The degree of market acceptance of XDEMVY or any other product candidate that we develop, if approved for commercial sale, will depend on a number of factors, including: • the efficacy, safety and potential advantages of XDEMVY, or our product candidates, if approved, compared to alternative treatments, including the existing standard-of-care, and the perceptions by members of the healthcare community of the same; • our ability to offer our products for sale at competitive prices, particularly in light of the lower cost of alternative treatments; • the clinical indications for which the product is approved; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of ECPs to prescribe these therapies; • the strength and effectiveness of our marketing and distribution support, which may be adversely impacted by health epidemics; • publicity concerning our products or competing products and treatments; • the timing of market introduction of competitive products; • the perception by patients or physicians that the diseases we are targeting, including Demodex blepharitis, are not burdensome; • the potential for our competitors to limit our access to the market through anti-competitive contracts or other arrangements; • the availability of third-party formulary coverage and adequate reimbursement; • product labeling or product insert requirements of the FDA or other regulatory authorities; • the prevalence and severity of any side effects; and • any restrictions on the use of our products, if approved, together with other medications.
The degree of market acceptance of XDEMVY or any other product candidate that we develop, if approved for commercial sale, will depend on a number of factors, including: 47 • the efficacy, safety and potential advantages of XDEMVY, or our product candidates, if approved, compared to alternative treatments, including the existing standard-of-care, and the perceptions by members of the healthcare community of the same; • our ability to offer our products for sale at competitive prices, particularly in light of the lower cost of alternative treatments; • the clinical indications for which the product is approved; • the convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of ECPs to prescribe these therapies; • the strength and effectiveness of our marketing and distribution support, which may be adversely impacted by health epidemics; • publicity concerning our products or competing products and treatments; • the timing of market introduction of competitive products; • the perception by patients or physicians that the diseases we are targeting, including Demodex blepharitis, are not burdensome; • the potential for our competitors to limit our access to the market through anti-competitive contracts or other arrangements; • the availability of third-party formulary coverage and adequate reimbursement; • product labeling or product insert requirements of the FDA or other regulatory authorities; • regulatory requirements and potential additional restrictions by the FDA or other regulatory authorities on direct-to-consumer advertising; • the prevalence and severity of any side effects; and • any restrictions on the use of our products, if approved, together with other medications.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity. We continue to make substantial investments to augment the capabilities of our people, processes, and technologies in order to address our cybersecurity risks.
Biggest changeItem 1C. Cybersecurity. We continue to make substantial investments to augment the capabilities of our people, processes, and technologies in order to address our cybersecurity risks. Our cybersecurity risks, and the controls designed to mitigate those risks, are integrated into our overall risk management governance and are reviewed quarterly by our Board of Directors.
We also perform cybersecurity assessments of all our third-party providers who have access to our information technology systems and data. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with the Head of Information Technology ("IT") who reports to our Chief Financial Officer, to manage the risk assessment and mitigation process.
We also perform cybersecurity assessments of all our third-party providers who have access to our information technology systems and data. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with the Head of Information Technology (“IT”) who reports to our Chief Financial Officer, to manage the risk assessment and mitigation 96 process.
Our employees and contractors receive regular cybersecurity awareness trainings, including specific topics related to social engineering and email frauds. We have capable employees and consultants with significant expertise and certifications in cybersecurity related to our industry.
Risk Management and Strategy As of December 31, 2025, we’ve continued to maintain a set of comprehensive cybersecurity and data protection policies and procedures. Our employees and contractors receive regular cybersecurity awareness trainings, including specific topics related to social engineering and email frauds. We have capable employees and consultants with significant expertise and certifications in cybersecurity related to our industry.
Removed
Our cybersecurity risks, and the controls designed to mitigate those risks, are integrated into our overall risk management governance and are reviewed quarterly by our Board of Directors. 93 Risk Management and Strategy As of December 31, 2024, we've implemented a set of comprehensive cybersecurity and data protection policies and procedures.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. We currently lease approximately 39,181 square feet of office and laboratory space in Irvine, California. In December 2024, we entered into a new lease agreement for 59,626 square feet of office space located in Irvine, California for a 10-year lease term.
Added
Item 2. Properties. As of December 31, 2025, the Company had two active leases with combined square footage of 98,807 for office and laboratory suites in Irvine, California.
Removed
The lease payments are expected to commence in late 2025 following the earlier of: (i) eleven months following the lease execution date, or (ii) the date the Company commences its regular business activities at the premises following completion of tenant improvements.
Added
In December 2024, the Company entered into an agreement to terminate its former facility lease agreements and entered into a new lease agreement both with the same landlord, to relocate its corporate headquarters to another location in Irvine, California for a 10-year lease term.
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In September 2025, the Company gained access to the new facility, and commenced the new lease, however the Company’s headquarters have not yet been relocated. Construction is still in progress on the new facility and the Company plans to move in during 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeRegardless of outcome, litigation can have an adverse impact 94 on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors. Item 4. Mine Safety Disclosures. None. 95 PART II
Biggest changeRegardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity, reputational harm and other factors. Item 4. Mine Safety Disclosures. None. 97 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Common Stock As of February 19, 2025, the closing price of our common stock on the Nasdaq was $49.55 per share, and there were approximately 27 holders of record of our common stock.
Biggest changeHolders of Common Stock As of February 17, 2026, the closing price of our common stock on the Nasdaq was $62.78 per share, and there were approximately 12 holders of record of our common stock.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with our Annual Meeting of Stockholders within 120 days after December 31, 2024 and is incorporated in this Annual Report on Form 10-K by reference.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be contained in our definitive proxy statement to be filed with the SEC in connection with our Annual Meeting of Stockholders within 120 days after December 31, 2025 and is incorporated in this Annual Report on Form 10-K by reference.
The graph assumes an initial investment of $100 on the date of the IPO, both in our common stock and each index. Historical stockholder return shown is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 96 Recent Sales of Unregistered Securities None.
The graph assumes an initial investment of $100 on the date of the IPO, both in our common stock and each index. Historical stockholder return shown is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 98 Recent Sales of Unregistered Securities None.
Purchases of Equity Securities by the Issuer and Affiliated Purchases None. Other Information None. Item 6. [Reserved] 97 Table of Content
Purchases of Equity Securities by the Issuer and Affiliated Purchases None. Other Information None. Item 6. [Reserved] 99 Table of Content

Item 7. Management's Discussion & Analysis

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

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Biggest changeTo date we have financed our operations through private placements of preferred stock, convertible promissory notes, net proceeds from issuance of common stock in our Initial Public Offering ("IPO"), our subsequent follow-on public offerings in May 2022 (the "May 2022 Public Offering"), August 2023 (the "August 2023 Public Offering"), and March 2024 (the "March 2024 Public Offering", collectively the "Follow-On Public Offerings"), and our Open Market Sale Agreement TM (the "2023 ATM Prospectus"), as well as proceeds from net product sales, our China Out-License, and drawdowns from the Credit Facilities.
Biggest changeTo date, we have financed our operations through private placements of preferred stock, convertible promissory notes, net proceeds from issuance of common stock in our initial public offering (“IPO”), our subsequent follow-on public offerings in May 2022 (the “May 2022 Public Offering”), August 2023 (the “August 2023 Public Offering”), March 2024 (the “March 2024 Public Offering”), and March 2025 (the “March 2025 Public Offering”, collectively the “Follow-On Public Offerings”), and our Open Market Sale Agreement TM (the “2023 ATM Prospectus”), as well as proceeds from net product sales, our China Out-License, and drawdowns from the loan and security agreement (the “2024 Credit Facility”) with funds associated with Pharmakon Advisors, LP (“Pharmakon”), and the previous loan and security agreement with Hercules Capital, Inc. and Silicon Valley Bank, a division of First Citizens Bank & Trust Company (the “2022 Credit Facility”, and collectively the “Credit Facilities”).
Blepharitis (“Blephar” is a reference to eyelid and “itis” is a reference to inflammation) is an ophthalmic lid margin disease characterized by inflammation of the eyelid margin, redness and ocular irritation, including a specific type of eyelash dandruff called collarettes, which are pathognomonic for Demodex blepharitis.
Demodex blepharitis (“blephar” is a reference to eyelid and “itis” is a reference to inflammation) is an ophthalmic lid margin disease characterized by inflammation of the eyelid margin, redness and ocular irritation, including a specific type of eyelash dandruff called collarettes, which are pathognomonic for Demodex blepharitis.
Poorly controlled and progressive blepharitis can lead to corneal damage over time and, in extreme cases, blindness. There may be as many as approximately 25 million people in the U.S. who suffer from Demodex blepharitis.
Poorly controlled and progressive Demodex blepharitis can lead to corneal damage over time and, in extreme cases, blindness. There may be as many as approximately 25 million people in the U.S. who suffer from Demodex blepharitis.
China Out-License As of the date of this filing, we have received $86.1 million of total proceeds in connection with our China Out-License comprised of (i) $15.0 million of initial consideration, (ii) $67.5 million for the achievement of specified milestones, (iii) $0.7 million related to a special cash dividend, (iv) $2.5 million related to the Novation Agreement, and (v) $0.4 million related to the Warrant Termination Agreement.
China Out-License As of the date of this filing, we have received $86.1 million of total proceeds in connection with our China Out-License comprised of (i) $15.0 million of initial consideration, (ii) $67.5 million for the achievement of specified milestones, (iii) $0.7 million related to a special cash dividend, (iv) $2.5 million related to the Novation Agreement, and (v) $0.4 million related to a warrant termination agreement.
Open Market Sales Agreement During the year ended December 31, 2023, we sold 1,000,000 shares of our common stock for $20.00 per share under a sales agreement prospectus filed in November 2023, pursuant to the 2023 Shelf Registration Statement (defined below) covering the sale of up to $100.0 million of our common stock pursuant to the 2023 ATM Prospectus with Jefferies LLC ("Jefferies").
Open Market Sales Agreement During the year ended December 31, 2023, we sold 1,000,000 shares of our common stock for $20.00 per share under a sales agreement prospectus filed in November 2023, pursuant to the 2023 Shelf Registration Statement (defined below) covering the sale of up to $100.0 million of our common stock pursuant to the 2023 ATM Prospectus with Jefferies LLC (“Jefferies”).
We anticipate that our operating expenses will increase significantly as we: • continue to commercialize XDEMVY and our other product candidates for which we obtain regulatory approvals; • maintain regulatory approval for XDEMVY and seek regulatory approval for our other product candidates that successfully complete clinical development, if any; • advance the clinical development of TP-04 for the potential treatment of Ocular Rosacea and TP-05 for the potential Lyme disease prophylaxis; • engage with contract manufacturers to ensure a sufficient supply chain capacity to provide commercial quantities of XDEMVY and any other products for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; 100 Table of Content • hire additional staff, including clinical, scientific, technical, regulatory, marketing, sales, operations, financial, and other support personnel, to execute our business plan; and • add information systems and personnel to support our product development and commercialization efforts, and to enable us to operate as a public company.
We anticipate that our operating expenses will increase significantly as we: • continue to commercialize XDEMVY and our other product candidates for which we obtain regulatory approvals; • maintain regulatory approval for XDEMVY and seek regulatory approval for our other product candidates that successfully complete clinical development, if any; • advance the clinical development of TP-04 for the potential treatment of ocular rosacea and TP-05 for the potential Lyme disease prophylaxis; 102 Table of Content • engage with contract manufacturers to ensure a sufficient supply chain capacity to provide commercial quantities of XDEMVY and any other products for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; • hire additional staff, including clinical, scientific, technical, regulatory, marketing, sales, operations, financial, and other support personnel, to execute our business plan; and • add information systems and personnel to support our product development and continued commercialization efforts, and to enable us to operate as a public company.
These increases to cash were partially offset by $31.9 million of debt extinguishment payments on the 2022 Credit Facility and $3.5 million of cash paid for loan issuance costs on the 2024 Credit Facility.
These cash increases were partially offset by $31.9 million of debt extinguishment payments on the 2022 Credit Facility and $3.5 million of cash paid for loan issuance costs on the 2024 Credit Facility.
We also granted the underwriters a 30-day option to purchase up to 468,750 additional shares of its common stock at the public offering price of $32.00 per share, which the underwriters exercised in full in March 2024. We received $107.7 million in aggregate net proceeds, after deducting underwriting discounts, commissions, and other estimated offering-related expenses.
We also granted the underwriters a 30-day option to purchase up to 468,750 additional shares of our common stock at the public offering price of $32.00 per share, which the underwriters exercised in full in March 2024. We received $107.7 million of aggregate net proceeds, after deducting underwriting discounts, commissions, and other estimated offering-related expenses.
Our requirements of a future capital raise will depend on many factors, including: • the amount of revenue received from commercial sales of XDEMVY or our product candidates, should any of our product candidates receive marketing approval; • the cost and timing associated with commercializing XDEMVY or our product candidates, if they receive marketing approval; • the scope, timing, rate of progress and costs of our drug discovery efforts, preclinical development activities, laboratory testing and clinical trials for our product candidates; • the number and scope of clinical programs we decide to pursue; • the cost, timing and outcome of preparing for and undergoing regulatory review of our product candidates; • the scope and costs of development and commercial manufacturing activities; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we might have at such time; • the availability of our 2024 Credit Facility; • the extent to which we acquire or in-license other product candidates and technologies; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish and maintain collaborations on favorable terms, if at all; • our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates and, ultimately, the sale of our products, following FDA approval; • our implementation of various computerized information systems; • impact of health epidemics on our clinical development or operations; and • the costs associated with being a public company.
Our requirements of a future capital raise will depend on many factors, including: • the amount of revenue received from commercial sales of XDEMVY or our product candidates, should any of our product candidates receive marketing approval; • the cost and timing associated with commercializing XDEMVY or our product candidates, if they receive marketing approval; • the scope, timing, rate of progress and costs of our drug discovery efforts, preclinical development activities, laboratory testing and clinical trials for our product candidates; • the number and scope of clinical programs we decide to pursue; 107 Table of Content • the cost, timing and outcome of preparing for and undergoing regulatory review of our product candidates; • the scope and costs of development and commercial manufacturing activities; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements we might have at such time; • the extent to which we acquire or in-license other product candidates and technologies; • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; • our ability to establish and maintain collaborations on favorable terms, if at all; • our efforts to enhance operational systems and our ability to attract, hire and retain qualified personnel, including personnel to support the development of our product candidates and, ultimately, the sale of our products, following FDA approval; • our implementation of various computerized information systems; • impact of health epidemics on our clinical development or operations; and • the costs associated with being a public company.
We launched XDEMVY ® (lotilaner ophthalmic solution) 0.25%, formerly known as TP-03, for the treatment of Demodex blepharitis, in August 2023 after receiving the U.S. Food and Drug Administration ("FDA") approval in July 2023. Demodex blepharitis is caused by the infestation of Demodex mites.
We launched XDEMVY ® (lotilaner ophthalmic solution) 0.25%, formerly known as TP-03, for the treatment of Demodex blepharitis, in August 2023 after receiving U.S. Food and Drug Administration (“FDA”) approval in July 2023. Demodex blepharitis is caused by the infestation of Demodex mites.
In March 2024 we completed the March 2024 Public Offering. The 2024 Public Offering was an underwritten follow-on public offering under the 2024 Shelf Registration Statement, pursuant to which we sold 2,812,500 shares of our common stock, and, in lieu of common stock to a certain investor, pre-funded warrants to purchase 312,500 shares of our common stock.
The 2024 Public Offering was an underwritten follow-on public offering under the 2024 Shelf Registration Statement, pursuant to which we sold 2,812,500 shares of our common stock, and, in lieu of common stock to a certain investor, pre-funded warrants to purchase 312,500 shares of our common stock.
We have incurred significant net operating losses ("NOLs") in every year since our inception and expect to continue to incur significant operating expenses as we commercialize XDEMVY for Demodex blepharitis, and, as we advance our other product candidates through clinical trials, regulatory submissions, and potential commercialization.
We have incurred significant net operating losses (“NOLs”) in every year since our inception and expect to continue to incur significant operating expenses as we commercialize XDEMVY for Demodex blepharitis and as we advance our other product candidates through clinical trials, regulatory submissions, and potential commercialization.
This resulted in net proceeds of $19.2 million, after deducting broker commissions and offering related expenses. During the year ended December 31, 2024, there were no sales of our common stock pursuant to the 2023 ATM Prospectus.
This resulted in net proceeds of $19.2 million, after deducting broker commissions and offering related expenses. During the years ended December 31, 2024 and 2025, there were no sales of our common stock pursuant to the 2023 ATM Prospectus.
Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay 109 Table of Content dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions.
Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations, including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments or engage in certain merger, consolidation or asset sale transactions.
Comparison of the Years Ended December 31, 2023 and 2022 For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024. 106 Table of Content Liquidity and Capital Resources Sources of Liquidity Overview Since our inception, we have financed our operations substantially through private placements of preferred stock, net proceeds from the issuance of common stock through our IPO, Follow-on Public Offerings, and the 2023 ATM Prospectus, as well as proceeds from product sales, net, the China Out-License, and drawdowns from our Credit Facilities.
Comparison of the Years Ended December 31, 2024 and 2023 For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025. 105 Table of Content Liquidity and Capital Resources Sources of Liquidity Overview Since our inception, we have financed our operations substantially through private placements of preferred stock, net proceeds from the issuance of common stock through our IPO, Follow-on Public Offerings, and the 2023 ATM Prospectus, as well as proceeds from product sales, net, the China Out-License, and drawdowns from our Credit Facilities.
Given the positive results of these trials, plus the FDA’s feedback that these patients are already covered under XDEMVY’s label for the treatment of Demodex blepharitis, our medical affairs team is moving forward with sharing this data with ECPs.
Given the positive results of these trials, plus the FDA’s feedback that these patients are already covered under XDEMVY’s label for the treatment of Demodex blepharitis, our medical affairs team is continuing to move forward with sharing this data with ECPs.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $154.7 million for the year ended December 31, 2024, and consisted of (i) $98.3 million of net proceeds from the issuance of common stock from our March 2024 Public Offering, (ii) $9.4 million from the issuance of pre-funded warrants related to the March 2024 Public Offering, (iii) $75.0 million of proceeds from an initial draw against our 2024 Credit Facility, (iv) $5.6 million of proceeds from the exercise of vested employee stock options, and (v) $1.8 million of proceeds from our Employee Stock Purchase Plan ("ESPP").
Net cash provided by financing activities was $154.7 million for the year ended December 31, 2024, and consisted of (i) $98.3 million of net proceeds from the issuance of common stock from our March 2024 Public Offering, (ii) $9.4 million from the issuance of pre-funded warrants related to our March 2024 Public Offering, (iii) $75.0 million of proceeds from an initial draw against our 2024 Credit Facility, (iv) $5.6 million of proceeds from employee stock option exercises, and (v) $1.8 million of proceeds from our ESPP.
We intend to further advance our pipeline with the lotilaner API to address several diseases in human medicine, including eye care, and infectious disease prevention.
We intend to further advance our pipeline with, e.g., lotilaner API to address several diseases in human medicine, including eye care, and infectious disease prevention.
The active pharmaceutical ingredient ("API") of XDEMVY, lotilaner, paralyzes and eradicates mites and other parasites through the inhibition of parasite-specific gamma-aminobutyric acid-gated chloride ("GABA-Cl") channels with no GABA-Cl inhibition in humans.
The active pharmaceutical ingredient (“API”) of XDEMVY, lotilaner, paralyzes and eradicates mites and other parasites through the inhibition of parasite-specific gamma-aminobutyric acid-gated chloride (“GABA-Cl”) channels with no GABA-Cl inhibition in humans.
The amount and timing of such obligations are unknown or uncertain as of December 31, 2024.
The amount and timing of such obligations are unknown or uncertain as of December 31, 2025.
We are investigating the development of our product candidates to address targeted diseases with high unmet medical needs, which currently include TP-04, a novel gel formulation of lotilaner for the potential treatment of Ocular Rosacea, and TP-05, a novel investigational oral formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction.
We are investigating the development of our product candidates to address targeted diseases with high unmet medical needs, which currently include TP-04, an investigational sterile aqueous gel formulation of lotilaner for the potential treatment of ocular rosacea, and TP-05, an investigational oral tablet formulation of lotilaner, for potential Lyme disease prophylaxis and community malaria reduction.
These improvements were shown across three objective measures of MGD: 1) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; 2) the number of glands secreting normal or clear liquid; and 3) the number of glands yielding any liquid. Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness.
These improvements were shown across three objective measures of MGD: i) the presence and quality of liquid secretion as measured by the Meibomian Gland Secretion Score; ii) the number of glands secreting normal or clear liquid; and iii) the number of glands yielding any liquid. Improvements were also demonstrated across certain patient reported outcomes, including fluctuating vision, itching and redness.
We believe the fair value of the indemnification rights and agreements is minimal. Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2024. 112 Table of Content
We believe the fair value of the indemnification rights and agreements is minimal. Accordingly, we have not recorded any liabilities for these indemnification rights and agreements as of December 31, 2025. 111 Table of Content
License Fees and Collaboration Revenue For the year ended December 31, 2024, we recognized $2.9 million of license fees and collaboration revenue including (i) $2.5 million for the Termination Payment related to the Novation Agreement, and (ii) $0.4 million for the Warrant Termination Payment.
During the year ended December 31, 2024, we recognized $2.9 million of license fees and collaboration revenue including (i) $2.5 million for a termination payment related to the Novation Agreement, and (ii) $0.4 million for a warrant termination payment (see Note 10 ).
TP-03 Demodex blepharitis in patients with Meibomian Gland Disease, Ersa and Rhea Trials In December 2023, we announced positive topline results of the Ersa trial evaluating XDEMVY administered twice daily ("BID") or three times a day ("TID") for 6 weeks and 12 weeks for the treatment of MGD in patients with Demodex mites.
TP-03 Demodex blepharitis in patients with MGD, Ersa and Rhea Trials: In December 2023, we announced positive topline results of the Ersa Trial evaluating XDEMVY administered twice daily (“BID”) or three times a day (“TID”) for 6 weeks and 12 weeks for the treatment of MGD in patients with Demodex mites.
We believe that our cash, cash equivalents and marketable securities of $291.4 million as of December 31, 2024 is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Annual Report on Form 10-K.
We believe our cash, cash equivalents and marketable securities of $417.3 million as of December 31, 2025 is sufficient to fund our current and planned operations for at least the next twelve months from the date of filing this Annual Report on Form 10-K.
Our net losses were $115.6 million, $135.9 million and $62.1 million for the years ended December 31, 2024, 2023, and 2022, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial.
Our net losses were $66.4 million, $115.6 million and $135.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. Our net losses may fluctuate significantly from quarter to quarter and year to year and could be substantial.
We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $360.2 million and $244.7 million as of December 31, 2024 and 2023, respectively.
We have incurred significant losses and negative cash flows from operations since our inception and had an accumulated deficit of $426.6 million and $360.2 million as of December 31, 2025 and 2024, respectively.
The 2024 Credit Facility provides for three potential additional term loan tranches in principal amounts up to $25.0 million, $50.0 million, and $50.0 million, respectively, subject to customary conditions to funding and, in the case of the last two tranches, achieving minimum net sales milestones.
The 2024 Credit Facility provided for three potential additional term loan tranches in principal amounts up to $25.0 million, $50.0 million and $50.0 million, respectively, subject to customary conditions to funding and, in the case of the last two tranches, achieving minimum net sales milestones, 106 Table of Content which were met.
We began generating product sales during the year ended December 31, 2023, following the FDA approval of XDEMVY in July 2023 and our subsequent commercial launch in August 2023. Our reported revenue within license fees and collaboration revenue is from our China Out-License and clinical supply agreement; we expect to report additional revenue under this caption in future periods.
We began generating XDEMVY product sales in August 2023, following FDA approval in July 2023. Our reported revenue within license fees and collaboration revenue is from our China Out-License and clinical supply agreement; we expect to report additional revenue under this caption in future periods.
In November 2024, additional positive data was presented from the Ersa trial as well as data from the Rhea trial, a pilot study evaluating XDEMVY vehicle for the treatment of MGD in patients with Demodex mites, at the American Academy of Optometry ("AAOpt") Annual Meeting 2024.
In November 2024, additional positive data was presented from the Ersa Trial as well as data from the Rhea Trial, a pilot study evaluating XDEMVY vehicle for the treatment of MGD in patients with Demodex mites, at the American Academy of Optometry (“AAOpt”) Annual Meeting 2024, and in April 2025 at the American Society of Cataract and Refractive Surgery (“ASCRS”) Annual Meeting 2025.
Net Cash (Used in) Provided by Investing Activities Net cash used in investing activities was $199.2 million for the year ended December 31, 2024, and consisted of (i) $262.6 million of purchased marketable securities, (ii) $3.0 million of purchased long-term investments, (iii) $5.0 million of intangible asset additions, and (iv) $1.6 million of purchased property, plant and equipment.
These cash decreases were partially offset by $361.8 million of proceeds from maturities of marketable securities. 109 Table of Content Net cash used in investing activities was $199.2 million for the year ended December 31, 2024, and consisted of (i) $262.6 million of purchased marketable securities, (ii) $5.0 million of intangible asset additions, (iii) $3.0 million of purchased long-term investments, and (iv) $1.6 million of purchased property, plant and equipment.
As of December 31, 2024, our contractual commitments for our leases were $0.8 million, which will be paid over the remaining lease term of 0.8 years. Purchase Obligations As of December 31, 2024, we have entered into manufacturing supply agreements for the commercial supply of XDEMVY.
As of December 31, 2025, our contractual commitments for our leases were $28.4 million, which will be paid over a remaining lease term of 9.9 years. 108 Table of Content Purchase Obligations As of December 31, 2025, we have entered into manufacturing supply agreements for the commercial supply of XDEMVY.
The three additional tranches may be requested on or prior to December 31, 2024, June 30, 2025 and December 31, 2025, respectively. The 2024 Credit Facility bears interest at a floating rate based upon the secured overnight financing rate (“SOFR”), plus a margin of 6.75% per annum. The SOFR is subject to a 3.75% floor.
We did not draw on any of the three additional tranches, each of which expired on December 31, 2024, June 30, 2025, and December 31, 2025. The 2024 Credit Facility bears interest at a floating rate based upon the secured overnight financing rate (“SOFR”), plus a margin of 6.75% per annum. The SOFR is subject to a 3.75% floor.
Other Liquidity Risks We expect to incur significant operating losses for the foreseeable future, and for these losses to further increase, as we expand our clinical development programs for our other product candidates and continue to commercialize XDEMVY. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
Other Liquidity Risks While we have generated revenue from the launch of XDEMVY, we could incur operating losses in the future as we expand our clinical development programs for our other product candidates and continue to commercialize XDEMVY. We may also encounter unforeseen expenses, difficulties, complications, delays and other currently unknown factors that could adversely affect our business.
As of December 31, 2024 we are eligible to receive further consideration from GrandPharma upon the achievement of additional TP-03 events, including: (i) $20.0 million of potential future regulatory and/or patent milestones; (ii) $100.0 million of potential future China-based TP-03 sales threshold milestones; and (iii) tiered low-to-high-teen royalties for China Territory TP-03 product sales.
As of the date of this filing, we are eligible to receive further consideration from GrandPharma upon the achievement of additional TP-03 events, including: (i) additional regulatory approval and/or patent issuance milestones and one-time payments of up to an aggregate of $20.0 million ; (ii) China-based TP-03 sales threshold milestones of up to an aggregate of $100.0 million; and (iii) tiered low-to-high-teen royalties for China Territory TP-03 product sales.
As part of the 2023 Shelf Registration Statement, we concurrently filed the 2023 ATM Prospectus with Jefferies covering the sale of up to $100.0 million of our common stock pursuant to an Open Market Sales Agreement TM we entered into with Jefferies in 2021 (the "ATM Sales Agreement").
The 2023 ATM Prospectus covers the sale of up to $100.0 million of our common stock pursuant to an Open Market Sales Agreement TM we entered into with Jefferies in 2021 (the “ATM Sales Agreement”).
Until such time as we can generate significant revenue from product sales and achieve profitability, if ever, we expect to finance our operations through public equity or debt financings, or collaborations, strategic alliances, or licensing arrangements with third parties. Adequate funding may not be available to us when needed on acceptable terms, or at all.
We expect to finance our operations through existing capital balances, revenue from product sales, public equity or debt financings, or collaborations, strategic alliances, or licensing arrangements with third parties. Adequate funding may not be available to us when needed on acceptable terms, or at all.
These amounts do not represent all of our anticipated purchases, but instead represent the contractually obligated minimum purchases or firm commitments of non-cancelable minimum amounts, as follows: Amounts 2025 $ 1,943 2026 4,072 2027 3,744 2028 4,445 2029 4,534 Thereafter — Total $ 18,738 Milestone Obligations The terms of our Eye and Derm Elanco Agreement, All Human Uses Elanco Agreement, and Other In-License Agreement requires us to make future development milestone payments aggregating up to $9.0 million and future commercial and sales-based milestone payments aggregating up to $249.0 million upon our achievement of the specified milestones.
These amounts do not represent all of our anticipated purchases, but instead represent the contractually obligated minimum purchases or firm commitments of non-cancelable minimum amounts, as follows: Amounts 2026 $ 6,221 2027 5,278 2028 6,072 2029 6,193 Thereafter — Total $ 23,764 Milestone Obligations The terms of our Eye and Derm Elanco Agreement, All Human Uses Elanco Agreement, Other In-License Agreement, and February 2026 In-License Agreement require us to make future development milestone payments aggregating up to $11.5 million and future commercial and sales-based milestone payments aggregating up to $341.0 million upon our achievement of the specified milestones.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $128.6 million for the year ended December 31, 2024, to $237.3 million as compared to the prior year period.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $190.0 million for the year ended December 31, 2025, as compared to the prior year period.
Net cash used in operating activities was $117.5 million for the year ended December 31, 2023, which primarily consisted of our net loss of $135.9 million, partially offset by net increases in non-cash and other charges of $18.1 million and net operating assets and liabilities of $0.3 million.
Net cash used in operating activities was $83.0 million for the year ended December 31, 2024, which primarily consisted of our net loss of $115.6 million, partially offset by net increases in non-cash and other charges of $28.7 million and net operating assets and liabilities of $3.8 million.
Such arrangements include those related to the contractual obligations described below: Lease Commitments Our operating lease commitments reflect payments due for our active lease agreements in Irvine, California, for adjacent office and laboratory suites. In December 2024, we entered into a lease agreement for office space located in Irvine, California for a 10-year lease term.
Such arrangements include those related to the contractual obligations described below: Lease Commitments Our operating lease commitments reflect payments due for our active lease agreement in Irvine, California, for office and laboratory suites.
Summary Statement of Cash Flows The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below: 110 Table of Content Year Ended December 31, 2024 2023 (in thousands) Net cash (used in) provided by: Operating activities $ (83,027) $ (117,493) Investing activities (199,195) 140,604 Financing activities 154,656 130,176 Net (decrease) increase in cash and cash equivalents $ (127,566) $ 153,287 Net Cash Used in Operating Activities Net cash used in operating activities was $83.0 million for the year ended December 31, 2024, which primarily consisted of our net loss of $115.6 million, partially offset by net increases in non-cash and other charges of $28.7 million and net operating assets and liabilities of $3.8 million.
Summary Statement of Cash Flows The following table sets forth the primary sources and uses of cash and cash equivalents for each of the periods presented below: Year Ended December 31, 2025 2024 (in thousands) Net cash (used in) provided by: Operating activities $ (12,451) $ (83,027) Investing activities (42,115) (199,195) Financing activities 143,388 154,656 Net increase (decrease) in cash and cash equivalents $ 88,822 $ (127,566) Net Cash Used in Operating Activities Net cash used in operating activities was $12.5 million for the year ended December 31, 2025, which primarily consisted of net loss of $66.4 million, partially offset by net increases in non-cash and other charges of $39.3 million and net operating assets and liabilities of $14.6 million.
The increase was primarily due to (i) $3.5 million of increased indirect expenses related to payroll and personnel-related costs (including increased stock-based compensation expense of $1.0 million) for employee additions to drive our product development initiatives, (ii) $0.7 million of increased other indirect expenses, (iii) a $1.5 million increase in milestone expense related to our in-license agreements (see Note 9 ), and (iv) $1.2 million of increased TP-03 program expenses.
The increase was due to (i) $8.9 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $3.2 million) for employee additions to drive our product development initiatives, (ii) $1.6 million of increased other indirect expenses, (iii) $3.3 million of increased early-stage programs, and (iv) $2.4 million of increased TP-04 program expenses.
The increase was primarily due to (i) $39.7 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $6.6 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY, (ii) $52.0 million of increased commercial and marketing costs as we continued our commercial expansion of XDEMVY, (iii) $36.8 million of increased information technology applications, legal, professional and other corporate expenses.
The increase was primarily due to (i) $112.6 million of increased commercial and marketing costs, including direct to consumer advertising costs, as we expanded our promotional efforts for the commercial launch of XDEMVY, (ii) $46.8 million of increased patient support functions, information technology, legal, and professional expenses, and (iii) $30.6 million of increased payroll and personnel-related costs (including increased stock-based compensation expense of $10.6 million) for commercial and corporate employee additions to support our business growth and commercial leadership hires for XDEMVY.
Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, and freight-in, as well as third-party royalties payable on our product sales, net and amortization of capitalized intangible assets associated with XDEMVY. 105 Table of Content Research and Development Expenses December 31, Change 2024 2023 Direct external expenses: TP-03 program $ 15,520 $ 14,311 $ 1,209 TP-04 program 1,415 2,583 (1,168) TP-05 program 2,602 5,261 (2,659) Other early-stage programs 623 619 4 Indirect expenses: Compensation and personnel-related 27,591 24,129 3,462 Other 3,135 2,409 726 Elanco milestone expenses 2,500 1,000 1,500 Total research and development expenses $ 53,386 $ 50,312 $ 3,074 Research and development expenses increased by $3.1 million for the year ended December 31, 2024 to $53.4 million, as compared to the prior year period.
Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of XDEMVY, including raw materials, third-party manufacturing costs, packaging services, and freight-in, as well as third-party royalties payable on our product sales, net and amortization of capitalized intangible assets associated with XDEMVY. 104 Table of Content Research and Development Expenses December 31, Change 2025 2024 (in thousands) Direct external expenses: TP-03 program $ 12,800 $ 15,520 $ (2,720) TP-04 program 3,864 1,415 2,449 TP-05 program 2,528 2,602 (74) Other early-stage programs 3,957 623 3,334 Indirect expenses: Compensation and personnel-related 36,457 27,591 8,866 Other 4,716 3,135 1,581 Elanco milestone expenses — 2,500 (2,500) Total research and development expenses $ 64,322 $ 53,386 $ 10,936 Research and development expenses increased by $10.9 million for the year ended December 31, 2025, as compared to the prior year period.
If actual rebates vary from estimates, we may need to adjust accruals, which would affect product sales, net in the period of adjustment. An accrued liability is recorded for unpaid rebates related to product for which control has transferred to the customer.
If actual rebates vary from estimates, we may need to adjust accruals, which would affect product sales, net in the period of adjustment.
We did not incur lender fees as part of the 2022 Credit Facility. In April 2024, we executed the 2024 Credit Facility with Pharmakon with maturity in April 2029 (collectively, with the 2022 Credit Facility, the “Credit Facilities”). The 2024 Credit Facility is collateralized by substantially all of the Company's presently existing and subsequently acquired assets.
Credit Facilities In April 2024, we executed the 2024 Credit Facility with Pharmakon with maturity in April 2029. The 2024 Credit Facility is collateralized by substantially all of our presently existing and subsequently acquired assets.
Accordingly, we may be required to raise additional capital earlier than we currently expect based on our cash requirements and market dynamics.
Our cash runway estimate is predicated on current assumptions for future revenue, operating expenses, and debt availability and may require future adjustments. Accordingly, we may be required to raise additional capital earlier than we currently expect based on our cash requirements and market dynamics.
The AAOpt presentation, which combined the Ersa and Rhea trials data in a pooled analysis, demonstrated that XDEMVY provided statistically significant and clinically meaningful improvements from baseline and when compared to vehicle.
The presentations, which combined the Ersa and Rhea Trials data in a pooled analysis, demonstrated that XDEMVY provided statistically significant and clinically meaningful improvements of the meibomian glands from baseline and when compared to vehicle, including at least three times more glands secreting normal or clear liquid in patients treated with XDEMVY compared to vehicle at day 43.
As of December 31, 2024, our aggregate cash, cash equivalents and marketable securities was $291.4 million – see the section below titled " Management's Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.
As of December 31, 2025, our aggregate cash, cash equivalents and marketable securities was $417.3 million – see the section below titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.” Impact of the Macroeconomic Environment Recent global economic conditions have been marked by significant volatility and heightened trade tensions.
For a discussion of the statement of cash flows for the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024. 111 Table of Content Critical Accounting Policies, Significant Judgments and Use of Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
For a discussion of the statement of cash flows for the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025.
TP-04 Rosacea, Galatea Trial In March 2023, we initiated the Galatea trial, a Phase 2a trial evaluating TP-04, a novel gel formulation of lotilaner, for the treatment of rosacea.
TP-04 Rosacea, Galatea Trial: In February 2024, we announced positive topline results from the Galatea trial, a Phase 2a trial evaluating TP-04, an investigational sterile aqueous gel formulation of lotilaner, for the potential treatment of papulopustular rosacea.
Net cash provided by financing activities was $130.2 million for the year ended December 31, 2023, and consisted of (i) $99.4 million of net proceeds from the issuance of common stock from our August 2023 Public Offering, (ii) $19.2 million of net proceeds from common stock sold under the 2023 ATM Prospectus, (iii) $10.0 million of proceeds from our 2022 Credit Facility, (iv) $1.0 million of proceeds from our ESPP, and (v) $0.6 million of proceeds from the exercise of vested employee stock options.
Net Cash Provided by Financing Activities Net cash provided by financing activities was $143.4 million for the year ended December 31, 2025, and consisted of (i) $134.8 million of net proceeds from the issuance of common stock from our March 2025 Public Offering, (ii) $6.3 million of proceeds from employee stock option exercises, and (iii) $2.3 million of proceeds from our Employee Stock Purchase Plan (“ESPP”).
These increases were partially offset by (i) $2.7 million of decreased TP-05 program expenses including $1.5 million for the food effect study and $1.2 million for the Carpo trial, and (ii) a $1.2 million decrease in TP-04 program expenses related to completion of the Galatea trial.
These increases were partially offset by (i) $2.7 million of decreased TP-03 expenses, (ii) $2.5 million of decreased milestone expenses related to our in-license agreements in the prior year period (see Note 9 ) and (iii) $0.1 million of decreased TP-05 program expenses.
Our field sales headcount and associated vendor expenses continued to increase during 2024 due to further growth and expansion of our commercial activities for XDEMVY. XDEMVY was approved by the FDA in July 2023 and was commercially launched in August 2023.
Additionally, our field sales headcount and associated vendor expenses increased in 2025 due to further growth and expansion of our commercial activities for XDEMVY and other corporate initiatives.
The FDA agreed to our proposed approach for a Phase 2b clinical trial, which would include several hundred subjects. Additionally, the FDA confirmed that a Phase 3 clinical study would require a disease prevention field study that would likely require the enrollment of thousands of patients.
Additionally, the FDA confirmed that a Phase 3 trial would require a disease prevention field study that would likely require the enrollment of thousands of patients. We believe that partnering this program, following completion of the Phase 2 clinical trial, could be the best approach to potentially deliver this prophylactic therapy candidate to patients.
We have also completed, and/or have ongoing clinical trials for the potential treatment of Demodex blepharitis in patients with Meibomian Gland Disease ("MGD"), including the Ersa clinical trial involving XDEMVY, and the Rhea clinical trial involving an XDEMVY vehicle; TP-04 for the potential treatment of Ocular Rosacea; and TP-05 for potential Lyme disease prophylaxis, among others.
We have also completed clinical trials in Demodex blepharitis patients with Meibomian Gland Disease (“MGD”), including the Phase 2a clinical trial (the “Ersa Trial”), and a pilot clinical trial (the “Rhea Trial”) involving an XDEMVY vehicle.
Net cash provided by investing activities was $140.6 million for the year ended December 31, 2023, and consisted of $174.8 million of proceeds from maturities of marketable securities, partially offset by (i) $28.7 million of purchased marketable securities, (ii) $4.0 million of intangible asset additions, and (iii) $1.5 million of purchased property, plant and equipment.
Net Cash Used in Investing Activities Net cash used in investing activities was $42.1 million for the year ended December 31, 2025, and related to (i) $393.2 million of purchased marketable securities, (ii) $0.9 million of purchased long-term investments, and (iii) $9.9 million of purchased property, plant and equipment.
Goodrich is currently the Chief Medical Officer of Humana Inc., and brings decades of experience driving innovative and value-based initiatives designed to improve patient outcomes. Additional Potential Growth Drivers in 2025 and Beyond We are on track for potential European regulatory approval of a preservative-free formulation of XDEMVY for the potential treatment of Demodex blepharitis in 2027.
Additional Potential Growth Drivers in 2026 and Beyond: • In Europe, we are on track for the potential approval of a preservative-free formulation of TP-03 for the potential treatment of Demodex blepharitis expected in 2027. • Ongoing discussions continue with regulatory authorities in Japan on a potential path to approval of TP-03 for Demodex blepharitis.
The Chinese regulatory agency, National Medical Products Administration, accepted the New Drug Application ("NDA") submitted by our partner, Grand Pharmaceutical Group Ltd., for TP-03 for Demodex blepharitis. Corporate and Financial Overview We were incorporated as a Delaware corporation in November 2016, and our headquarters are located in Irvine, California.
The Elara prevalence trial showed high prevalence and significant impact of Demodex blepharitis in Japan, consistent with U.S. findings. • Our partner in Greater China, GrandPharma, expects potential approval of TP-03 for Demodex blepharitis in 2026. Corporate and Financial Overview We were incorporated as a Delaware corporation in November 2016, and our headquarters are located in Irvine, California.
Other Income, Net Other income, net decreased by $2.2 million for the year ended December 31, 2024 due to (i) $1.9 million of loss on debt extinguishment related to the termination of our 2022 Credit Facility (defined below), (ii) $4.5 million of increased interest expense related to the Credit Facilities, (iii) a $0.9 million decrease related to the change in fair value of the LianBio common stock sold in June, and (iv) a $0.3 million decrease related to the change in fair value related to the final mark-to-market adjustment on the unvested third tranche equity warrant.
Other Income (Expense), Net Other income (expense), net increased by $1.6 million for the year ended December 31, 2025, primarily due to $1.9 million of loss on debt extinguishment related to the 2022 Credit Facility, which was recognized in the prior year period, and $0.7 million of increased interest income earned on our cash, cash equivalents and marketable securities.
In November 2023, we filed a shelf registration statement on Form S-3 that was declared effective by the SEC on November 21, 2023, (the "2023 Shelf Registration Statement"), which replaced the November 2021 Shelf Registration Statement, as defined below, and permits us to offer up to $300.0 million of common stock, preferred stock, debt securities and warrants in one or more offerings and in any combination, including in units from time to time.
In November 2023, we filed a shelf registration statement on Form S-3 that was declared effective by the SEC on November 21, 2023, (the “2023 Shelf Registration Statement”), and as part of the 2023 Shelf Registration Statement, we concurrently filed the 2023 ATM Prospectus with Jefferies.
This increase was primarily driven by more than 163,000 bottles of XDEMVY dispensed to patients, compared to 17,400 bottles dispensed to patients in the prior year period. XDEMVY was approved by the FDA in July 2023 and was commercially launched in August 2023.
This increase was primarily driven by approximately 400,000 bottles of XDEMVY delivered to patients during the year ended December 31, 2025, compared to approximately 163,000 bottles delivered to patients in the prior year period, as well as an increase in net sales price compared to the prior period driven primarily by an improvement in the gross-to-net discount as we secured greater payer coverage in 2025.
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $291.4 million. Follow-On Public Offerings In August 2023, we completed the August 2023 Public Offering in which 5,714,285 shares of our common stock were sold at a public offering price of $17.50 per share.
As of December 31, 2025, we had cash, cash equivalents and marketable securities of $417.3 million. Follow-On Public Offerings In February 2024, we filed an automatic shelf registration statement on Form S-3 ASR (the “2024 Shelf Registration Statement”). In March 2024, we completed the March 2024 Public Offering.
Removed
Recent Business and Clinical Highlights XDEMVY • We recognized $66.4 million and $180.1 million in XDEMVY net product sales for the fourth quarter and full year 2024, respectively. • We dispensed more than 58,500 and 163,000 bottles of XDEMVY to patients during the fourth quarter and full year 2024, respectively. • We established broad Eye Care Professional ("ECP") utilization across more than 15,000 targets. • The expanded sales force deployed in the third quarter 2024 started to deliver meaningfully to the increased ECP utilization and prescription volumes reported for the fourth quarter 2024. • Broad commercial, Medicare, and Medicaid reimbursement of XDEMVY now extends to more than 90% of covered lives, as of February 25, 2025. ◦ Recognized a gross-to-net discount of approximately 45% in the fourth quarter and full year 2024. 98 Table of Content • We activated a memorable and action-oriented Direct-to-Consumer ("DTC") campaign on streamlining platforms in the fourth quarter 2024 and initiated a trial-run on network televisions in January 2025, including spots on the Golden Globes, the GRAMMYs and the National Football League playoffs. ◦ The initial patient response from this campaign has been positive across multiple leading indicators, including the downloading of materials, taking the Demodex blepharitis quiz and utilizing the "find an eye doctor tool on the XDEMVY website. ◦ DTC initiatives will continue on streamlining platforms and will meaningfully expand into a network television campaign beginning in the first quarter of 2025.
Added
Recent Business and Corporate Highlights XDEMVY • XDEMVY is one of the best-selling prescription eye drops. ◦ Net product sales were $151.7 million and $451.4 million for the fourth quarter and full year 2025, respectively. ◦ Delivered approximately 130,000 and 400,000 bottles to patients during the fourth quarter and full year 2025, respectively. ◦ Maintained over 90% of commercial, Medicare, and Medicaid covered lives and recognized a gross-to-net discount of approximately 44% and 45% in the fourth quarter and full year 2025, respectively. • Direct-to-consumer (“DTC”) campaign on streaming platforms and network television generated a positive return on investment in 2025 that continues to grow. 100 Table of Content ◦ Unaided awareness of Demodex blepharitis is now approximately 25% versus 2% of patients surveyed at the beginning of the campaign. • We continued to execute on our category-creating strategy, advancing a robust pipeline. • Strengthened our leadership with the appointment of David E.I.
Removed
In February 2024, we announced positive topline results from the Galatea trial evaluating TP-04 for the treatment of rosacea which demonstrated statistically significant improvements (p TP-05 Lyme Disease, Carpo Trial In February 2024, we announced positive topline results from the Carpo trial, which demonstrated statistical significance in the mortality of ticks compared to vehicle (p In December 2024, we met with the FDA about our Lyme disease program.
Added
Pyott, a renowned Biopharmaceutical leader and former Chief Executive Officer and Chairman of Allergan Inc., to the Board of Directors. ◦ Mr. Pyott joined our Board of Directors in February 2026 and brings decades of global leadership experience spanning innovative R&D, product development, and commercial execution.
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We continue to believe that the best approach to get this potential prophylactic therapy to patients is to partner this program either prior to the initiation of the Phase 2b study or after the completion of the study. 99 Table of Content We believe TP-05 is currently the only non-vaccine, drug-based prophylaxis in development that targets ticks, and potentially prevents Lyme disease transmission.
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He was instrumental in transforming Allergan from a focused eye care business with approximately $1 billion in revenue into a global specialty pharmaceutical and medical device leader generating more than $7 billion in revenue.
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It is designed to rapidly and durably provide systemic blood levels of lotilaner potentially sufficient to kill infected ticks attached to the human body before they can transmit the Borrelia bacteria that causes Lyme disease. Officer and Board Appointments We expanded and strengthened our eye care leadership with two key appointments to our executive team and Board of Directors.
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The positive topline results demonstrated statistically significant improvements (p After review of the Galatea trial data with the FDA and key opinion leaders (“KOLs”), we decided to pursue development of TP-04 for the potential treatment for ocular rosacea, a highly prevalent and underserved eye disease with no FDA-approved therapy.
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Elizabeth Yeu, M.D. was appointed Chief Medical Officer in November 2024. Dr. Yeu is a distinguished ophthalmologist with more than two decades of experience who transitioned from her role as our Chief Medical Advisor and a member of our Board of Directors. Katherine H. Goodrich, M.D., MHS was appointed to our Board of Directors in November 2024. Dr.
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In December 2025, we initiated a Phase 2 trial for the potential treatment of ocular rosacea with topline results expected in the first half of 2027. TP-05 Lyme Disease, Carpo Trial: We believe TP-05 is currently the only on-demand, oral tablet in development that targets ticks, and potentially prevents Lyme disease transmission.
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We have initiated market development work, including Key Opinion Leader engagement, disease education and scientific presentations at major conferences. In Japan, we expect to share results from a Demodex blepharitis prevalence study in the first half of 2025 and meet with Japanese regulatory authorities to help determine a regulatory path forward.
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It is designed to rapidly and durably provide systemic blood levels of lotilaner potentially sufficient to kill infected ticks attached to the human body before they can transmit the Borrelia bacteria that causes Lyme disease. 101 Table of Content In February 2024, we announced positive topline results from the Carpo trial, which demonstrated a statistically significant increase in tick mortality compared to vehicle (p Given ongoing discussions with the FDA about our Lyme disease program, they agreed to our proposed approach for a Phase 2 clinical trial of TP-05 (an investigational oral tablet), which would include several hundred subjects with planned trial initiation expected in the second quarter of 2026.
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" Impact of the Macroeconomic Environment Recently, the economy has experienced downward pressure, and together with high rates of inflation and energy supply issues experienced in certain regions, war and geopolitical conflicts, have led to regional and/or global macroeconomic challenges, the effects of which may be of an extended duration.
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In addition, persistent inflationary pressures, a prolonged higher interest rate environment, energy supply disruptions in certain regions, evolving trade policies, regulatory uncertainty, and ongoing and emerging geopolitical conflicts, including war, have contributed to regional and global macroeconomic challenges. These conditions have created uncertainty in global markets and may continue to impact economic conditions for an extended period.
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In addition, we may be exposed to credit risk on deposits at financial institutions to the extent our account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). We maintain cash held in deposit at financial institutions in the U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, we had cash, cash equivalents and marketable securities of $291.4 million, consisting of interest-bearing money market accounts, for which the fair market value would be affected by changes in the general level of United States interest rates.
Biggest changeAs of December 31, 2025, we had cash, cash equivalents and marketable securities of $417.3 million, consisting of interest-bearing money market accounts, for which the fair market value would be affected by changes in the general level of United States interest rates.
However, due to the short-term maturities and the low-risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash, cash equivalents and marketable securities. As of December 31, 2024, we had $75.0 million of debt principal outstanding.
However, due to the short-term maturities and the low-risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our cash, cash equivalents and marketable securities. As of December 31, 2025, we had $75.0 million of debt principal outstanding.
Inflation, interest rate changes, and foreign currency exchange rate fluctuations did not have a significant impact on our results of operations for any periods presented herein. However, with further inflationary pressures, certain significant increased costs could have an adverse impact on the results of our operations. 113 Table of Content
Inflation, interest rate changes, and foreign currency exchange rate fluctuations did not have a significant impact on our results of operations for any periods presented herein. However, with further inflationary pressures, certain significant increased costs could have an adverse impact on the results of our operations. 112 Table of Content
We do not believe that a hypothetical 100 basis point increase or decrease in the applicable interest rate would have had a significant impact on our interest expense for the year ended December 31, 2024.
We do not believe that a hypothetical 100 basis point increase or decrease in the applicable interest rate would have had a significant impact on our interest expense for the year ended December 31, 2025.

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