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What changed in KIORA PHARMACEUTICALS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of KIORA 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.

+295 added−247 removedSource: 10-K (2026-03-25) vs 10-K (2024-12-31)

Top changes in KIORA PHARMACEUTICALS INC's 2025 10-K

295 paragraphs added · 247 removed · 195 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

65 edited+52 added−20 removed107 unchanged
Biggest changeThe key elements of this strategy are to: • Develop Core Assets – Continue clinical development of KIO-301 for which a Phase 2 clinical study is approved to initiate enrollment of patients with mid to late-stage retinitis pigmentosa in collaboration with TOI. – Continue clinical development of KIO-104 for which a Phase 2 clinical study is approved to initiate enrollment of patients with retinal inflammation due to diseases like diabetic macular edema and posterior non-infectious uveitis. • Increase Equity Value through Collaborations – Seek partnership for our KIO-101 product candidate to continue its development activities. – Pursue strategic collaborations to further our existing assets with respect to new indication potential and more detailed mechanism of action, which can result in new intellectual property. 4 Based on prevalence data from the Epidemiology of RMD study published in Rheumatology International (April 2017) 37:1551–1557. 6 Table of Contents Collaborations On January 25, 2024, we entered into an agreement with TOI, a sister company of Laboratories Théa, with respect to KIO-301.
Biggest changeThe key elements of this strategy are to: • Develop Core Assets – Continue clinical development of KIO-301 for which a Phase 2 clinical study is actively enrolling patients with mid to late-stage retinitis pigmentosa in collaboration with TOI. – Continue clinical development of KIO-104 for which a Phase 2 clinical study is actively enrolling patients with retinal inflammation due to diseases like diabetic macular edema and posterior non-infectious uveitis. • Increase Equity Value through Collaborations – Seek partnership for our KIO-101 product candidate to continue its development activities. – Pursue strategic collaborations to further our existing assets with respect to new indication potential and more detailed mechanism of action, which can result in new intellectual property.
On July 2, 2013, we (through our subsidiary, Kiora Pharmaceuticals, GmbH) entered into a patent and know-how assignment agreement with 4SC Discovery GmbH (4SC) transferring to us all patent rights and know-how to the compound KIO-101. We are responsible for paying royalties of 3.25% on net sales of KIO-101, KIO-104, or any other therapeutic product that uses the compound.
On July 2, 2013, we (through our subsidiary, Kiora Pharmaceuticals, GmbH) entered into a patent and know-how assignment agreement with 4SC Discovery GmbH (4SC) transferring to us all patent rights and know-how to the compound KIO-101. We are responsible for paying royalties of 3.25% on net sales of KIO-104, or any other therapeutic product that uses the compound.
Thus, steroid-sparing immunosuppressive therapy can play an important role for treating this disease. There are approximately 0.2 million cases of posterior non-infectious uveitis annually in the U.S., UK and EU. 3 Our Solution: KIO-104 KIO-104 is a third-generation small molecule DHODH inhibitor. DHODH is extensively exploited as potential drug targets for immunological disorders, oncology, and infectious diseases.
Thus, steroid-sparing immunosuppressive therapy can play an important role for treating this disease. There are approximately 0.2 million cases of posterior non-infectious uveitis annually in the U.S., UK and EU. Our Solution: KIO-104 KIO-104 is a third-generation small molecule DHODH inhibitor. DHODH is extensively exploited as potential drug targets for immunological disorders, oncology, and infectious diseases.
The process required by the FDA before a new drug product may be marketed in the U.S. generally involves: • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP, regulation; • submission to the FDA of an Investigational New Drug or IND, for human clinical testing which must become effective before human clinical trials may begin in the U.S.; 11 Table of Contents • approval by an independent Institutional Review Board or IRB, at each site where a clinical trial will be performed before the trial may be initiated at that site; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practices or GCP, to establish the safety and efficacy of the proposed product candidate for each intended use; • satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current Good Manufacturing Practice or CGMP regulations; • submission to the FDA of a new drug application or NDA, which must be accepted for filing by the FDA; • satisfactory completion of an FDA advisory committee review, if applicable; • payment of user fees, if applicable; and • FDA review and approval of the NDA.
The process required by the FDA before a new drug product may be marketed in the U.S. generally involves: • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP, regulation; • submission to the FDA of an Investigational New Drug or IND, for human clinical testing which must become effective before human clinical trials may begin in the U.S.; 12 Table of Contents • approval by an independent Institutional Review Board or IRB, at each site where a clinical trial will be performed before the trial may be initiated at that site; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practices or GCP, to establish the safety and efficacy of the proposed product candidate for each intended use; • satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current Good Manufacturing Practice or CGMP regulations; • submission to the FDA of a new drug application or NDA, which must be accepted for filing by the FDA; • satisfactory completion of an FDA advisory committee review, if applicable; • payment of user fees, if applicable; and • FDA review and approval of the NDA.
In addition, the agreement requires us to pay sublicense fees for the grant of rights under a sublicense agreement at 8% of sublicense revenue prior to enrolling the first patient in any Phase 1 or Phase II (if Phase I is not performed) clinical trial of a licensed product, 6% of sublicense revenue prior to enrolling the first patient in any Phase III clinical trial of a licensed product, or 4% of sublicense revenue prior to any arms-length first commercial sale of a licensed product.
In addition, the agreement requires us to pay sublicense fees for the grant of rights under a sublicense agreement at 8% of sublicense revenue prior to enrolling the first patient in any Phase I or Phase II (if Phase I is not performed) clinical trial of a licensed product, 6% of sublicense revenue prior to enrolling the first patient in any Phase III clinical trial of a licensed product, or 4% of sublicense revenue prior to any arms-length first commercial sale of a licensed product.
However, downstream retinal neurons, such as the bipolar and RGCs remain viable for long periods after photoreceptor death. KIO-301 selectively enters these cells and non-covalently resides on the intracellular domains of potassium and hyperpolarization-activated, cyclic nucleotide-gated voltage gated ion channels.
However, downstream retinal neurons, such as the bipolar and retinal ganglion cells ("RGCs") remain viable for long periods after photoreceptor death. KIO-301 selectively enters these cells and non-covalently resides on the intracellular domains of potassium and hyperpolarization-activated, cyclic nucleotide-gated voltage gated ion channels.
When Phase 2 evaluations demonstrate that a dose range of the product appears to be effective and has an acceptable safety profile, trials are undertaken in large patient populations to further evaluate dosage, to obtain additional evidence of clinical efficacy and safety in an expanded patient population at multiple, geographically-dispersed 12 Table of Contents clinical trial sites, to establish the overall risk-benefit relationship of the product, and to provide adequate information for the labeling of the product. • Phase 4 : In some cases, the FDA may conditionally approve an NDA for a product candidate on the sponsor’s agreement to conduct additional clinical trials to further assess the product’s safety and effectiveness after NDA approval.
When Phase 2 evaluations demonstrate that a dose range of the product appears to be effective and has an acceptable safety profile, trials are 13 Table of Contents undertaken in large patient populations to further evaluate dosage, to obtain additional evidence of clinical efficacy and safety in an expanded patient population at multiple, geographically-dispersed clinical trial sites, to establish the overall risk-benefit relationship of the product, and to provide adequate information for the labeling of the product. • Phase 4 : In some cases, the FDA may conditionally approve an NDA for a product candidate on the sponsor’s agreement to conduct additional clinical trials to further assess the product’s safety and effectiveness after NDA approval.
In September 2024, the European Medicines Agency expanded our Orphan Medicinal Product Designation to also include syndromic, rod-dominant retinal dystrophies that include diseases like Usher's syndrome, which has non-ocular aspects of diseases in addition to retinal involvement.
In September 2024, the European Medicines Agency expanded our Orphan Medicinal Product Designation to also include syndromic, rod-dominant retinal dystrophies that includes diseases like Usher's syndrome, which has non-ocular aspects of diseases in addition to retinal involvement.
While no approved therapies are available for the treatment of RP, current therapeutics in development primarily rely on genetic approaches to introduce light sensing channels into viable downstream cells, a field termed optogenetics.
While no approved therapies are available for the treatment of RP, current therapeutics in development primarily rely on genetic manipulation approaches to introduce light sensing channels into viable downstream cells, a field termed optogenetics.
We intend to rely on third-party 10 Table of Contents suppliers that we have used in the past for the manufacturing of various components that comprise our KIO-104, KIO-301 and other contemplated clinical trials. Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.
We intend to rely on third-party suppliers that we have used in the past for the manufacturing of various components that comprise our KIO-104, KIO-301 and other contemplated clinical trials. 11 Table of Contents Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: 13 Table of Contents • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • fines, warning letters, or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
In September 2024, the European Medicines Agency expanded our Orphan Medicinal Product Designation to also include syndromic, rod-dominant retinal dystrophies that includes diseases like Usher's syndrome, which has non-ocular aspects of diseases in addition to retinal involvement. Currently, no therapeutics are approved to treat patients with RP.
In September 2024, the European Medicines Agency expanded our Orphan Medicinal Product Designation to also include syndromic, rod-dominant retinal dystrophies that includes diseases like Usher syndrome, which has non-ocular aspects of diseases in addition to retinal involvement. Currently, no therapeutics are approved to treat patients with RP.
If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic products. Government Regulation FDA Approval Process In the U.S., pharmaceutical products are subject to extensive regulation by the FDA.
If our product candidates achieve marketing approval, we expect that they will be priced at a significant premium over competitive generic products. Government Regulation Approval Process United States In the U.S., pharmaceutical products are subject to extensive regulation by the FDA.
The information on our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be a part of this Annual Report on Form 10-K. Our website address is included in this Annual Report on Form 10-K as an inactive technical reference only. 16 Table of Contents
The information on our website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be a part of this Annual Report on Form 10-K. Our website address is included in this Annual Report on Form 10-K as an inactive technical reference only. 20 Table of Contents
Such perceived problems concerning safety or efficacy may arise in the context of clinical studies continued as a result of our post-marketing obligations, reports we or the FDA receive from patients and healthcare providers, or literature published by third parties regarding our products or similar products. Third-Party Payor Coverage and Reimbursement Reimbursement is expected to use standard approaches for ophthalmology.
Such perceived problems concerning safety or efficacy may arise in the context of clinical studies continued as a result of our post-marketing obligations, reports we or the FDA receive from patients and healthcare providers, or literature published by third parties regarding our products or similar products. 18 Table of Contents Third-Party Payor Coverage and Reimbursement Reimbursement is expected to use standard approaches for ophthalmology.
The commercial success of KIO-104 and KIO-301, if and when commercialized, and our other product candidates will depend, in part, upon the availability of coverage and reimbursement from third-party payors at the federal, state, and private levels, including U.S.
The commercial success of KIO-104, KIO-301, and any other product candidates, if and when commercialized, will depend, in part, upon the availability of coverage and reimbursement from third-party payors at the federal, state, and private levels, including U.S.
Regarding key secondary efficacy endpoints, KIO-301 consistently demonstrated improvements in vision from baseline, including expansion of visual fields, improved visual acuity and light perception, higher success rates in multiple functional vision tests, increased neural activity within the primary visual cortex and improvements in quality of life.
Regarding key secondary efficacy endpoints, KIO-301 consistently demonstrated improvements in vision from baseline, including expansion of visual fields, improved visual acuity and light 8 Table of Contents perception, higher success rates in multiple functional vision tests, increased neural activity within the primary visual cortex and improvements in quality of life.
The CGMP regulations include requirements relating to 14 Table of Contents organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, extensive records and reports, and returned or salvaged products.
The CGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, extensive records and reports, and returned or salvaged products.
Further, Bayon has the ability to assign or transfer the agreement providing written notice is given within at least 15 days prior to any such assignment, providing written assignment agreement by successor within 30 days, and by paying an assignment fee of $30,000 within thirty days of the assignment.
Further, Bayon has the 10 Table of Contents ability to assign or transfer the agreement providing written notice is given within at least 15 days prior to any such assignment, providing written assignment agreement by successor within 30 days, and by paying an assignment fee of $30,000 within thirty days of the assignment.
This disease is partially caused by overactive inflammation in the retina causing a build up of extracellular fluid which can cause layers of the retina to separate and thus impair vision either temporarily or permanently. It is estimated that 34.2 million Americans have diabetes 1 and that approximately 750,000 Americans have DME 2 .
This disease is partially caused by overactive inflammation in the retina causing a build up of extracellular fluid which can cause layers of the retina to separate and thus impair vision either temporarily or permanently. It is estimated that 34.2 5 Table of Contents million Americans have diabetes and that approximately 750,000 Americans have DME.
We operate in one geographic segment. Our Corporate Information Kiora Pharmaceuticals, Inc. was formed in Delaware on December 28, 2004, under the name EyeGate Pharmaceuticals, Inc. On November 8, 2021, we completed a merger of our wholly-owned Delaware subsidiary, Kiora Pharmaceuticals, Inc.
We operate in one geographic segment. 19 Table of Contents Our Corporate Information Kiora Pharmaceuticals, Inc. was formed in Delaware on December 28, 2004, under the name EyeGate Pharmaceuticals, Inc. On November 8, 2021, we completed a merger of our wholly-owned Delaware subsidiary, Kiora Pharmaceuticals, Inc.
Employees and Human Capital Resources As of December 31, 2024, we had twelve full-time employees. None of our employees are represented by a collective bargaining agreement, and we have never experienced any work stoppage. We believe that we maintain good relations with our employees. Our employees are highly skilled, and many hold advanced degrees and have experience with drug development.
Employees and Human Capital Resources As of December 31, 2025, we had thirteen full-time employees. None of our employees are represented by a collective bargaining agreement, and we have never experienced any work stoppage. We believe that we maintain good relations with our employees. Our employees are highly skilled, and many hold advanced degrees and have experience with drug development.
As KIO-301 has an azobenzene core, visible light causes a rapid and reversible change in the isomeric state of the molecule, transforming from a linear molecule to an orthogonal molecule. When this happens, the voltage gated ion channels and current efflux are blocked, causing cellular depolarization and signaling to the brain as to the presence of light.
As KIO-301 has an azobenzene core, visible light causes a rapid and reversible change in the isomeric state of the molecule, transforming from a linear molecule to an orthogonal molecule. When this happens, the voltage gated ion channels and current flux are altered, causing cellular depolarization and signaling to the brain as to the presence of light.
Patent Portfolio Our patent portfolio includes patents covering KIO-101 and KIO-104 including composition-of-matter, formulations thereof and its therapeutic uses in the treatment of ocular disorders and diseases and more. Our 8 Table of Contents KIO-301 portfolio of patents covers composition-of-matter, methods of use, and formulations thereof.
Patent Portfolio Our patent portfolio includes patents covering KIO-101 and KIO-104 including composition-of-matter, formulations thereof and its therapeutic uses in the treatment of ocular disorders and diseases and more. Our KIO-301 portfolio of patents covers composition-of-matter, methods of use, and formulations thereof.
Our future performance depends significantly upon the 15 Table of Contents continued service of our key scientific, technical, and senior management personnel and our continued ability to attract and retain highly skilled employees.
Our future performance depends significantly upon the continued service of our key scientific, technical, and senior management personnel and our continued ability to attract and retain highly skilled employees.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease.
Orphan Drug Designation United States Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease.
They also play a role in the formation of glycogen, signal-transduction pathways, and as components of co-enzymes (nicotinamide adenine dinucleotide and flavin adenine dinucleotide). An ample supply of nucleotides in the cell is essential for all cellular processes. There are two pathways for the biosynthesis of nucleotides: salvage and de novo.
They further play a role in the formation of glycogen, signal-transduction pathways, and as components of co-enzymes (nicotinamide adenine dinucleotide and flavin adenine dinucleotide). An ample supply of nucleotides in the cell is essential for cellular function. There are two pathways for the biosynthesis of nucleotides: salvage and de novo.
On July 2, 2013, we (through our subsidiary, Kiora Pharmaceuticals, GmbH) entered into an out-license agreement with 4SC granting 4SC the exclusive worldwide right to commercialize the compound KIO-101 for RA and inflammatory bowel disease, including Crohn’s disease and ulcerative colitis.
On July 2, 2013, we (through our subsidiary, Kiora Pharmaceuticals, GmbH) entered into an out-license agreement with 4SC granting 4SC the exclusive worldwide right to commercialize the API in KIO-104 for RA and inflammatory bowel disease, including Crohn’s disease and ulcerative colitis.
A possible market expansion beyond RP would be to evaluate KIO-301 in patients with geographic atrophy (GA), an advanced stage of age-related dry macular degeneration. Like RP, GA results in photoreceptor 4 Table of Contents degeneration while maintaining RGC viability. Thus, KIO-301 could benefit these patients who have lost vision.
A possible market expansion beyond RP would be to evaluate KIO-301 in patients with other types of inherited retinal diseases of in patients with geographic atrophy (GA), an advanced stage of age-related dry macular degeneration. Like RP, GA results in photoreceptor degeneration while maintaining RGC viability. Thus, KIO-301 could benefit these patients who have lost vision.
KIO-104 (formerly known as PP-001) was acquired through the acquisition of Panoptes Pharma GmbH (Panoptes) in the fourth quarter of 2020.
Dosing began in the third quarter of 2025. KIO-104 (formerly known as PP-001) was acquired through the acquisition of Panoptes Pharma GmbH (Panoptes) in the fourth quarter of 2020.
On March 17, 2022, we were granted an ODD by the FDA for the active ingredient in KIO-301. In July 2024, we were granted Orphan Medicinal Product Designation by the European Medicines Agency for KIO-301 for the treatment of non-syndromic, rod-dominant retinal dystrophies, which includes diseases like retinitis pigmentosa, choroideremia, Stargardt disease and others.
In July 2024, we were granted Orphan Medicinal Product Designation by the European Medicines Agency for KIO-301 for the treatment of non-syndromic, rod-dominant retinal dystrophies, which includes diseases like retinitis pigmentosa, choroideremia, Stargardt disease and others.
Post-Approval Requirements Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to product/device listing, recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
Currently, no therapeutics are approved to treat patients with RP. 16 Table of Contents Post-Approval Requirements Once an NDA is approved, a product will be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to product/device listing, recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences with the product.
Under the collaboration, CRF will assist us with access to clinical and scientific thought leaders to assist in further development of KIO-301 for CHM. CRF will also provide aid in enrollment of patients for any future trials of KIO-301 for CHM.
This collaboration could accelerate our development of KIO-301 for this indication, which also is included in the TOI partnership. Under the collaboration, CRF will assist us with access to clinical and scientific thought leaders to assist in further development of KIO-301 for CHM. CRF will also provide aid in enrollment of patients for any future trials of KIO-301 for CHM.
Our principal executive offices are located at 332 Encinitas Blvd., Suite 102, Encinitas, California, 92024, and our telephone number is (858) 224-9600.
Our principal executive offices are located at 169 Saxony Rd., Suite 212, Encinitas, California, 92024, and our telephone number is (858) 224-9600.
We are considering strategic partnering for our KIO-101 asset, which focuses on treating the ocular manifestation of patients with autoimmune diseases, including rheumatoid arthritis and, as such, is termed the Ocular Presentation of Rheumatoid Arthritis and Other Autoimmune Diseases (OPRA+).
We are considering strategic partnering for our KIO-101 asset, which focuses on treating the ocular manifestation of patients with autoimmune diseases, including rheumatoid arthritis and, as such, is termed the Ocular Presentation of Rheumatoid Arthritis and Other Autoimmune Diseases (OPRA+). KIO-101 uses the same active compound in KIO-104, but is formulated as an ophthalmic topical eye drop.
When light is no longer touching the molecule, it reverts back to its linear state, allowing ion efflux from the cells and thus promoting repolarization and a turning “off” of the brain signaling. This novel mechanism of action enables potential application to multiple diseases. RP is a group of inherited eye diseases that cause photoreceptor cell death.
When light is no longer touching the molecule, it reverts back to its linear state, allowing ion flux from the cells to revert to pre-stimulation activity and thus promoting repolarization and a turning “off” of the brain signaling. This novel mechanism of action enables potential application to multiple diseases.
On July 21, 2023, we entered into a Memorandum of Understanding with the Choroideremia Research Foundation ("CRF") to support strategic development of KIO-301 in Choroideremia ("CHM"). CHM is a rare, inherited retinal disease that causes blindness. This collaboration could accelerate our development of KIO-301 for this indication, which also is included in the TOI partnership.
Further, TOI is responsible for all research and development costs of KIO-301. On July 21, 2023, we entered into a Memorandum of Understanding with the Choroideremia Research Foundation ("CRF") to support strategic development of KIO-301 in Choroideremia ("CHM"). CHM is a rare, inherited retinal disease that causes blindness.
The agreement expires on the date of the last-to-expire patent included in the licensed patent portfolio which is currently January 2030, however if patents that are currently pending approval are issued, the license expiration would extend into 2041. On September 26, 2018, we entered into an intellectual property licensing agreement (the “SentrX Agreement”) with SentrX Animal Care, Inc.
The agreement expires on the date of the last-to-expire patent included in the licensed patent portfolio which is currently January 2030. However, if patents that are currently pending approval are issued, the license expiration would extend into 2041.
RP affects about 1 in 3,500 people worldwide. Thus, with a population of about 341.5 million in the U.S. as of March 2025, about 97,571 people in the U.S. would be expected to have RP. With a worldwide population presently estimated at over 8.1 billion, it can be estimated that approximately 2.3 million people around the world have RP.
Thus, with a population of about 348.6 million in the U.S. as of March 2026, about 99,593 people in 4 Table of Contents the U.S. would be expected to have RP. With a worldwide population presently estimated at over 8.2 billion, it can be estimated that approximately 2.4 million people around the world have RP.
The first cohort of three patients included individuals with no or bare light perception due to the progression of RP. The second cohort included patients able to perceive light but with ultra-low vision, clinically diagnosed as being able to detect hand motion or count fingers, but incapable of reading even the largest letter on an eye chart.
The second cohort included patients able to perceive light but with ultra-low vision, clinically diagnosed as being able to detect hand motion or count fingers, but incapable of reading even the largest letter on an eye chart. Dose escalations were performed in each patient's contralateral eye.
We are also developing KIO-104 for the treatment of retinal inflammatory diseases, including Diabetic Macular Edema (DME) and Posterior Non-Infectious Uveitis, a rare T cell-mediated, intraocular inflammatory disease. KIO-104 is a novel and potent, non-steroidal small-molecule inhibitor of dihydroorotate dehydrogenase ("DHODH") formulated for intravitreal delivery, and is ideally suited to suppress overactive T-cell activity to treat the underlying inflammation.
KIO-104 is a novel and potent, non-steroidal small-molecule inhibitor of dihydroorotate dehydrogenase ("DHODH") formulated for intravitreal delivery, and is ideally suited to suppress overactive T-cell activity to treat the underlying inflammation.
Our Development * KIO-301 has been granted Orphan Disease Designation in the USA and EU Clinical Development KIO-301: Retinitis Pigmentosa Phase 1b Study: In the fourth quarter of 2022, we initiated a first-in-human clinical trial of KIO-301, referred to as the ABACUS study.
Our Pipeline Clinical Development KIO-301: Retinitis Pigmentosa Phase 1b Study: In the fourth quarter of 2022, we initiated a first-in-human clinical trial of KIO-301, referred to as the ABACUS study. The study was designed to evaluate the safety and efficacy of KIO-301 in patients with late-stage Retinitis Pigmentosa.
In the U.S., RP is considered an orphan disease with a prevalence of fewer than 200,000. This prevalence enables consideration for KIO-301 to qualify for an ODD in the treatment of RP, conferring increased regulatory collaboration with the FDA, and market exclusivity if clinical trials demonstrate safety and efficacy.
This prevalence enables consideration for KIO-301 to qualify for an ODD in the treatment of RP, conferring increased regulatory collaboration with the FDA, and market exclusivity if clinical trials demonstrate safety and efficacy. On March 17, 2022, we were granted an ODD by the FDA for the active ingredient in KIO-301.
See “Government Regulation — Patent Term Restoration and Marketing Exclusivity” below. Globally, we hold 34 active and valid patents that will expire between 2025 and 2035. We have applied for an additional 52 patents, which if approved will expire between 2035 and 2044. License Agreements We are a party to six license agreements as described below.
See “Government Regulation — Patent Term Restoration and Marketing Exclusivity” below. Globally, we hold 36 active and valid patents that will expire between 2031 and 2043. We have applied for an additional 68 patents, which if approved will expire between 2035 and 2046. Option Agreement The Company is party to one option agreement.
The study was designed to evaluate the safety and efficacy of KIO-301 in patients with late-stage Retinitis Pigmentosa. Design This was a Phase 1b open-label, single ascending dose clinical trial for people living with retinitis pigmentosa. The study enrolled six patients and evaluated 12 eyes.
Design This was a Phase 1b open-label, single ascending dose clinical trial for people living with retinitis pigmentosa. The study enrolled six patients and evaluated 12 eyes. The first cohort of three patients included individuals with no or bare light perception due to the progression of RP.
As a further sign of safety, there were zero clinically significant laboratory findings observed in both healthy patients and those with ocular surface inflammation. Market Opportunity Retinitis Pigmentosa Market Overview More than 3.4 million patients globally are estimated to have an inherited retinal disease leading to significant or permanent vision loss. RP is the largest family of these inherited diseases.
Market Opportunity Retinitis Pigmentosa Market Overview More than 3.4 million patients globally are estimated to have an inherited retinal disease leading to significant or permanent vision loss. RP is the largest family of these inherited diseases. RP affects about 1 in 3,500 people worldwide.
The agreement grants TOI the global rights (except for certain countries in Asia) to co-develop and commercialize KIO-301 in ophthalmology. We and TOI will operate under a Joint Steering Committee for the strategic and operational components of KIO-301's continued development.
We and TOI will operate under a Joint Steering Committee for the strategic and operational components of KIO-301's continued development.
Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off label uses, and a company that is found to have improperly promoted off label uses may be subject to significant liability, both at the federal and state levels. 17 Table of Contents Patent Term Restoration and Marketing Exclusivity Depending upon the timing, duration and specifics of FDA approval of the use of our drug candidates, some of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
Dose escalations were performed in each patient's contralateral eye. The primary endpoints were safety and tolerability, with secondary efficacy endpoints including objective and subjective evaluations, such as object identification and contrast assessment, navigation, perimetry, functional MRI and other ophthalmic and quality-of-life assessments.
The primary endpoints were safety and tolerability, with secondary efficacy endpoints including objective and subjective evaluations, such as object identification and contrast assessment, navigation, perimetry, functional MRI and other ophthalmic and quality-of-life assessments. This multi-site study was being conducted at The Royal Adelaide Hospital in Adelaide, South Australia as well as at a private ophthalmology clinic in Adelaide, South Australia.
In exchange, we received an upfront payment of $16 million and will be eligible to receive aggregate clinical development, regulatory and commercial milestone payments of up to $285 million and tiered commercial royalties up to the low 20% on net sales. Further, TOI is responsible for all research and development costs of KIO-301.
In exchange, we 1 Based on prevalence data from the Epidemiology of RMD study published in Rheumatology International (April 2017) 37:1551–1557. 7 Table of Contents received an upfront payment of $16 million and will be eligible to receive aggregate clinical development, regulatory and commercial milestone payments of up to $285 million and tiered commercial royalties up to the low 20% on net sales.
The ABACUS-2 trial is expected to be a 36 patient, multi-center, double-masked, randomized, controlled, multiple dose study enrolling patients with ultra-low vision or no light perception regardless of their underlying gene mutation associated with retinitis pigmentosa. Enrollment of the first patient is expected to begin in the first half of 2025 following validation of novel functional vision endpoints.
The ABACUS-2 trial is a 36 patient, multicenter, double-masked, randomized, controlled, multiple dose study enrolling patients with ultra-low vision or no light perception regardless of their underlying gene mutation associated with retinitis pigmentosa. Enrollment in the ABACUS-2 trial is currently ongoing. As KIO-301 and its sister molecules are ion channel modulators, the potential to treat other neurological diseases exists.
A key advantage of DHODH inhibition is the selectivity towards metabolically activated cells (with a high need for RNA and DNA production), which should mitigate any negative impact on normal cells. Depletion of cellular pyrimidine pools through the selective inhibition of DHODH has been shown to be a successful approach for therapeutic development.
These metabolic activities will predominately utilize the de novo pathway for nucleotide biosynthesis. A key advantage of DHODH inhibition is the selectivity towards metabolically activated cells (with a high need for RNA and DNA production), which should mitigate any negative impact on normal cells.
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 candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
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 candidates are commercialized.
These ocular presentations can include signs and symptoms similar to keratoconjunctivitis sicca (KCS), episcleritis, scleritis, peripheral ulcerative keratitis, anterior uveitis, as well as retinal vasculitis. In patients with OPRA+, the surface of the eye often has significant irritation accompanied by symptoms of soreness, grittiness, light sensitivity, and dryness.
Secondary to inflammation and associated pathologies in the joint synovium, the eye carries significant morbidity and impact on eye health and quality of life. These ocular presentations can include signs and symptoms similar to keratoconjunctivitis sicca (KCS), episcleritis, scleritis, peripheral ulcerative keratitis, anterior uveitis, as well as retinal vasculitis.
Hepatotoxicity was reported as a major side effect after oral administration, possibly as a result of the extent of liver metabolism. Moreover, it was shown that apart from DHODH, a series of protein kinases are inhibited by Arava ® and Aubagio ® .
Arava ® and Aubagio ® are formulated as oral drugs, and it has been established that leflunomide is metabolized in the liver to the active metabolite teriflunomide. Hepatotoxicity was reported as a major side effect after oral administration, possibly as a result of the extent of liver metabolism.
Patients with RA suffer from ocular signs and symptoms at a rate reported to be 2-3X that of the general population. Furthermore, in those OPRA+ patients, up to 50% report moderate to severe signs and symptoms. Today, there are estimated to be approximately 1.8 million 4 RA patients in the U.S.
Furthermore, in those OPRA+ patients, up to 50% report moderate to severe signs and symptoms. Today, there are estimated to be approximately 1.8 million 1 RA patients in the U.S. Approximately one-third of these patients present with OPRA+ (more than 0.5 million in the U.S.), with more than 90% seeking prescription medication to address these ophthalmic manifestations.
KIO-101 uses the 3 Table of Contents same active compound in KIO-104, but is formulated as an ophthalmic topical eye drop. In the fourth quarter of 2021, we reported top-line safety and tolerability data from a Phase 1b proof-of-concept study evaluating KIO-101 in patients with ocular surface inflammation.
In the fourth quarter of 2021, we reported top-line safety and tolerability data from a Phase 1b proof-of-concept study evaluating KIO-101 in patients with ocular surface inflammation. As a further sign of safety, there were zero clinically significant laboratory findings observed in both healthy patients and those with ocular surface inflammation.
Data from this trial were presented in November 2023 at the American Academy of Ophthalmology Annual Meeting. The full data package triggered multiple discussions with various potential pharmaceutical partners. After assessing all available options, in January 2024, we chose to partner with Théa Open Innovation ("TOI"), a sister company of Laboratories Théa.
The full data package triggered multiple discussions with various potential pharmaceutical partners. After assessing available options, in January 2024, we partnered with Théa Open Innovation ("TOI"), a sister company of Laboratories Théa. In October 2024, we received regulatory approval to initiate a Phase 2 clinical trial to investigate KIO-301 in patients with retinitis pigmentosa.
We are developing KIO-301, with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (collectively including any and all sub-forms, "RP"). KIO-301 is a potential vision-restoring small molecule that acts as a “photoswitch” specifically created to restore vision in patients with inherited and age-related degenerative retinal diseases, including RP.
ITEM 1. BUSINESS Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing therapies for the treatment of retinal diseases. We are developing KIO-301, with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (collectively including any and all sub-forms, "RP").
Approximately one-third of these patients present with OPRA+ (more than 0.5 million in the U.S.), with more than 90% seeking prescription medication to address these ophthalmic manifestations. Unfortunately, today's ocular surface anti-inflammatory medicines are usually not sufficient to treat OPRA+ as they are broad and not targeted to the underlying pathophysiology.
Unfortunately, today's ocular surface anti-inflammatory medicines are usually not sufficient to treat OPRA+ as they are broad and not targeted to the underlying pathophysiology.
The main difference is where the nucleotide bases come from. In the salvage pathway, the bases are recovered (salvaged) from RNA and DNA degradation. In the de novo pathway, the bases are assembled from simple precursor molecules (made from scratch).
In the salvage pathway, the bases are recycled (salvaged) from RNA and DNA degradation. In the de novo pathway, the bases are assembled from precursor molecules (made from scratch). One critical requirement of fast-growing or proliferating cells, such as the expansion of activated T-cells, is the requirement of an abundance of nucleotide bases.
KIO-301 achieved its primary endpoint of safety and tolerability at all doses tested with no ocular nor non-ocular serious adverse events.
Study Results We completed the last patient dosing of the initial trial in September 2023 with topline results announced on November 4, 2023 at the American Academy of Ophthalmology retina sub-specialty day. KIO-301 achieved its primary endpoint of safety and tolerability at all doses tested with no ocular nor non-ocular serious adverse events.
Currently, two first generation DHODH inhibitors have been approved in the U.S. and abroad and are marketed by Sanofi S.A. as leflunomide (Arava ® ) and the active metabolite teriflunomide (Aubagio ® ). These oral tablets are approved for the treatment of rheumatoid and psoriatic arthritis and multiple sclerosis (MS), respectively. 1 Based on data from the American Diabetes Association.
Depletion of cellular pyrimidine pools through the selective inhibition of DHODH has been shown to be a successful approach for treating certain diseases. Currently, two first generation DHODH inhibitors have been approved in the U.S. and abroad and are marketed by Sanofi S.A. as leflunomide (Arava ® ) and the active metabolite teriflunomide (Aubagio ® ).
One potential explanation for the therapeutic effects of Arava ® in arthritis is the reduction in the numbers or reactivity of activated T-cells, which are involved in the pathogenesis of arthritis. The generally accepted view of human MS pathogenesis implicates peripheral activation of myelin-specific autoreactive T-cells that lead to inflammatory disease in the central nervous system.
The generally accepted view of human MS pathogenesis implicates peripheral activation of myelin-specific autoreactive T-cells that lead to inflammatory disease in the central nervous system. By blocking the de novo pyrimidine synthesis pathway via DHODH inhibition, it is suggested that Aubagio ® reduces T-cell proliferation in the periphery.
Ocular Presentation of Rheumatoid Arthritis Market (OPRA+) Overview Patients with systemic autoimmune diseases including Rheumatoid Arthritis (RA), are known to suffer from ocular presentation of their underlying autoimmune conditions. Secondary to inflammation and associated pathologies in the joint synovium, the eye carries significant morbidity and impact on eye health and quality of life.
Moreover, it was shown that apart from DHODH, a series of protein kinases are inhibited by Arava ® and Aubagio ® . Ocular Presentation of Rheumatoid Arthritis Market (OPRA+) Overview Patients with systemic autoimmune diseases including Rheumatoid Arthritis (RA), are known to suffer from ocular presentation of their underlying autoimmune conditions.
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ITEM 1. BUSINESS Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing therapies for the treatment of retinal diseases. We were originally incorporated in 1998 under the name of Optis France S.A. in Paris, France.
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KIO-301 is a potential vision-restoring small molecule that acts as a “photoswitch” specifically created to restore vision in patients with inherited and age-related degenerative retinal diseases, including RP. We completed a Phase 1b clinical trial in September 2023 and presented topline results in November 2023 at the American Academy of Ophthalmology Annual Meeting.
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We were formed as a Delaware corporation on December 28, 2004, under the name of EyeGate Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc. effective November 8, 2021 in connection with a merger of one of our wholly owned subsidiaries.
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KIO-301 (formerly known as B-203) was acquired through the Bayon Therapeutics, Inc. ("Bayon") transaction which closed October 21, 2021. We are also developing KIO-104 for the treatment of retinal inflammatory diseases, including Diabetic Macular Edema (DME) and Posterior Non-Infectious Uveitis, a T cell-mediated, intraocular inflammatory disease.
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The molecule is designed to restore the eyes’ ability to perceive and interpret light in visually impaired patients through selectively entering viable downstream retinal ganglion cells ("RGCs") (no longer receiving electrical input due to degenerated rods and cones) and turning them into light sensing cells, capable of signaling the brain as to the presence or absence of light.
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KIO-104 has also been tested in preclinical models of Proliferative Vitreoretinopathy demonstrating a dose responsive improvement in scarring size and frequency. These data were presented at the Association for Research in Vision and Ophthalmology (ARVO) annual scientific conference in May 2025.
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On March 17, 2022, we were granted orphan drug designation ("ODD") by the United States Food and Drug Administration (FDA) for the active pharmaceutical ingredient ("API") in KIO-301. We initiated a Phase 1b clinical trial in the third quarter of 2022 and dosed the first patient in November 2022 with the last patient completing the study in September 2023.
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In May 2025, we received approval to start enrolling patients in a Phase 2 trial for KIO-104 in retinal inflammation. We began enrollment of the KLARITY trial in the second quarter of 2025. KLARITY is an open-label, multiple dose study of the safety, tolerability and efficacy of KIO-104 in patients with macular edema.
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In addition to the financial terms of this partnership, we have formed a joint steering committee with TOI for the continued development and potential commercialization of KIO-301.
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RP is a group of inherited eye diseases that cause photoreceptor cell death. In the U.S., RP is considered an orphan disease with a prevalence of fewer than 200,000.
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In October 2024, we, in collaboration with our partner TOI, announced that we received regulatory approval to initiate a Phase 2 clinical trial to investigate KIO-301 for vision restoration in patients with retinitis pigmentosa.
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These oral tablets are approved for the treatment of rheumatoid arthritis (RA) and multiple sclerosis (MS), respectively. These diseases are autoimmune disorders. One potential explanation for the therapeutic effects of Arava ® in arthritis is the reduction in the numbers or reactivity of activated T-cells, which are involved in the pathogenesis of RA.
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These functional assessments may serve as approvable primary endpoints in subsequent registration studies in the United States, Europe and other major regions. KIO-301 (formerly known as B-203) was acquired through the Bayon Therapeutics, Inc. ("Bayon") transaction which closed October 21, 2021.
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In patients with OPRA+, the surface of the eye often has significant irritation accompanied by symptoms of soreness, grittiness, 6 Table of Contents light sensitivity, and dryness. Patients with RA suffer from ocular signs and symptoms at a rate reported to be 2-3X that of the general population.
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KIO-301 is a small molecule photoswitch that confers light sensitivity to downstream cells, specifically the RGCs, potentially triggering the same phototransduction signaling as if the photoreceptors were present and viable.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize KIO-104, KIO-301, or any other product candidates that we may develop, including: • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate; • any third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • we may decide, or regulators or institutional review boards may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, or institutional review boards to suspend or terminate the trials. 23 Table of Contents If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may: • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; or • have the product removed from the market after obtaining marketing approval.
Biggest changeWe may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize KIO-104, KIO-301, or any other product candidates that we may develop, including: • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials at a higher rate than we anticipate; • any third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; 27 Table of Contents • we may decide, or regulators or institutional review boards may require us, to suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, or institutional review boards to suspend or terminate the trials.
If we are unable to successfully obtain marketing approval for KIO-104, or KIO-301, or experience significant delays in doing so, or if after obtaining marketing approvals, we fail to commercialize KIO-104 or KIO-301, our business will be materially harmed. • If clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or foreign regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be delayed or unable to complete, the development and commercialization of KIO-104, KIO-301, or any other product candidate. • Even if KIO-104, KIO-301, or any other product candidate that we may develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for our product candidates may be smaller than we estimate. • If we are unable to establish sales, marketing, and distribution capabilities, we may not be successful in KIO-104, KIO-301, or any other product candidates that we may develop if and when they are approved. • We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than we do. • Even if we are able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop, the products may become subject to unfavorable pricing regulations, third-party coverage or reimbursement practices, or healthcare reform initiatives which could harm our business. • We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials. • If we are unable to obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired. 17 Table of Contents • We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming, and unsuccessful. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. • If we are not able to obtain required regulatory approvals, we will not be able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop; and our ability to generate revenue will be materially impaired. • We incur increasing costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices. • Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain. • If we identify a material weakness in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely meet requirements applicable to public companies, which may adversely affect investor confidence in us, and, as a result, the market price of our common stock.
If we are unable to successfully obtain marketing approval for KIO-104, or KIO-301, or experience significant delays in doing so, or if after obtaining marketing approvals, we fail to commercialize KIO-104 or KIO-301, our business will be materially harmed. • If clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop fail to demonstrate safety and efficacy to the satisfaction of the FDA or foreign regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be delayed or unable to complete, the development and commercialization of KIO-104, KIO-301, or any other product candidate. • Even if KIO-104, KIO-301, or any other product candidate that we may develop receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for our product candidates may be smaller than we estimate. • If we are unable to establish sales, marketing, and distribution capabilities, we may not be successful in KIO-104, KIO-301, or any other product candidates that we may develop if and when they are approved. • We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than we do. • Even if we are able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop, the products may become subject to unfavorable pricing regulations, third-party coverage or reimbursement practices, or healthcare reform initiatives which could harm our business. • We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials. 21 Table of Contents • If we are unable to obtain and maintain patent protection for our technology and products or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be impaired. • We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming, and unsuccessful. • Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business. • If we are not able to obtain required regulatory approvals, we will not be able to commercialize KIO-104, KIO-301, or any other product candidate that we may develop; and our ability to generate revenue will be materially impaired. • We incur increasing costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices. • Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain. • If we identify a material weakness in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely meet requirements applicable to public companies, which may adversely affect investor confidence in us, and, as a result, the market price of our common stock.
The applicable federal, state, and foreign healthcare laws and regulations that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; 36 Table of Contents • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which imposes obligations, including mandatory contractual terms, on covered healthcare providers, health plans and healthcare clearinghouses, as well as their business associates, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The applicable federal, state, and foreign healthcare laws and regulations that may affect our ability to operate include: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under a federal healthcare program such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and their respective implementing regulations, which imposes obligations, including mandatory contractual terms, on covered healthcare providers, health plans and healthcare clearinghouses, as 41 Table of Contents well as their business associates, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The market price for our common stock may be influenced by many factors, including: • the success of competitive products or technologies; • the results of clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop; • the results of clinical trials of product candidates of our competitors; 40 Table of Contents • regulatory or legal developments in the U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key scientific or management personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire, or in-license additional products, product candidates, or technologies for the treatment of ophthalmic diseases, the costs of commercializing any such products, and the costs of development of any such product candidates or technologies; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • reduction in stock price could indicate impairment of the goodwill and intangible assets; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may be influenced by many factors, including: • the success of competitive products or technologies; • the results of clinical trials of KIO-104, KIO-301, or any other product candidate that we may develop; • the results of clinical trials of product candidates of our competitors; • regulatory or legal developments in the U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; 45 Table of Contents • the recruitment or departure of key scientific or management personnel; • the level of expenses related to any of our product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire, or in-license additional products, product candidates, or technologies for the treatment of ophthalmic diseases, the costs of commercializing any such products, and the costs of development of any such product candidates or technologies; • actual or anticipated changes in estimates as to financial results, development timelines, or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • changes in the structure of healthcare payment systems; • reduction in stock price could indicate impairment of the goodwill and intangible assets; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry, and market conditions; and • the other factors described in this “Risk Factors” section.
Our expenses will also increase if and as we: • seek marketing approval for KIO-104 and KIO-301, whether alone or in collaboration with third parties; • continue the research and development of KIO-104 and KIO-301; • seek to develop additional product candidates; • in-license or acquire the rights to other products, product candidates, or technologies; 18 Table of Contents • seek marketing approvals for any product candidates that successfully complete clinical trials; • establish sales, marketing, and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, quality control, scientific and management personnel; • expand our operational, financial and management systems, and personnel, including personnel to support our clinical development, manufacturing, and planned future commercialization efforts and our operations as a public company; and • increase our insurance coverage as we expand our clinical trials and commence commercialization of KIO-104 and KIO-301.
Our expenses will also increase if and as we: 22 Table of Contents • seek marketing approval for KIO-104 and KIO-301, whether alone or in collaboration with third parties; • continue the research and development of KIO-104 and KIO-301; • seek to develop additional product candidates; • in-license or acquire the rights to other products, product candidates, or technologies; • seek marketing approvals for any product candidates that successfully complete clinical trials; • establish sales, marketing, and distribution capabilities and scale up and validate external manufacturing capabilities to commercialize any products for which we may obtain marketing approval; • maintain, expand and protect our intellectual property portfolio; • hire additional clinical, quality control, scientific and management personnel; • expand our operational, financial and management systems, and personnel, including personnel to support our clinical development, manufacturing, and planned future commercialization efforts and our operations as a public company; and • increase our insurance coverage as we expand our clinical trials and commence commercialization of KIO-104 and KIO-301.
With the current cash and short-term investments on hand, we believe we will have sufficient cash to fund planned operations into 2027, however, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
With the current cash and short-term investments on hand, we believe we will have sufficient cash to fund planned operations into late 2027, however, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
Among the provisions of PPACA of importance to our business, including, without limitation, our ability to commercialize and the prices we may obtain for any of our product candidates and that are approved for sale, are the following: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; • a new Medicare Part D coverage gap discount program, in which participating manufacturers must agree to offer 50% point-of-sale discounts off negotiated drug prices during the coverage gap period as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; • expansion of healthcare fraud and abuse laws, including the federal False Claims Act and the federal Anti-Kickback Statute, and the addition of new government investigative powers, and enhanced penalties for noncompliance; • extension of manufacturers’ Medicaid rebate liability; • expansion of eligibility criteria for Medicaid programs; and • expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program.
Among the provisions of PPACA of importance to our business, including, without limitation, our ability to commercialize and the prices we may obtain for any of our product candidates and that are approved for sale, are the following: • an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; 42 Table of Contents • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; • a new Medicare Part D coverage gap discount program, in which participating manufacturers must agree to offer 50% point-of-sale discounts off negotiated drug prices during the coverage gap period as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; • expansion of healthcare fraud and abuse laws, including the federal False Claims Act and the federal Anti-Kickback Statute, and the addition of new government investigative powers, and enhanced penalties for noncompliance; • extension of manufacturers’ Medicaid rebate liability; • expansion of eligibility criteria for Medicaid programs; and • expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program.
Among other things, these provisions: • establish a classified board of directors such that only one of three classes of directors is elected each year; • allow the authorized number of our directors to be changed only by resolution of our board of directors; • limit the manner in which stockholders can remove directors from our board of directors; • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call stockholder meetings; • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and • require the affirmative vote of stockholders holding at least two-thirds of shares entitled to be cast to amend or repeal specified provisions of our restated certificate of incorporation or our amended and restated bylaws.
Among other things, these provisions: 47 Table of Contents • establish a classified board of directors such that only one of three classes of directors is elected each year; • allow the authorized number of our directors to be changed only by resolution of our board of directors; • limit the manner in which stockholders can remove directors from our board of directors; • establish advance notice requirements for stockholder proposals that can be acted on at stockholder meetings and nominations to our board of directors; • require that stockholder actions must be effected at a duly called stockholder meeting and prohibit actions by our stockholders by written consent; • limit who may call stockholder meetings; • authorize our board of directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and • require the affirmative vote of stockholders holding at least two-thirds of shares entitled to be cast to amend or repeal specified provisions of our restated certificate of incorporation or our amended and restated bylaws.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various adverse results, including: • restrictions on such products, manufacturers, or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution, or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure; or • injunctions or the imposition of civil or criminal penalties.
In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various adverse results, including: • restrictions on such products, manufacturers, or manufacturing processes; • restrictions on the labeling or marketing of a product; 40 Table of Contents • restrictions on product distribution or use; • requirements to conduct post-marketing studies or clinical trials; • warning letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • fines, restitution, or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure; or • injunctions or the imposition of civil or criminal penalties.
The success of KIO-104 and KIO-301 will depend on several factors, including the following: • obtaining favorable results from clinical trials; • applying for and receiving marketing approvals from applicable regulatory authorities for KIO-104 and KIO-301; • making arrangements with third-party manufacturers for commercial quantities of KIO-104 and KIO-301 and receiving regulatory approval of our manufacturing processes and our third-party manufacturers’ facilities from applicable regulatory authorities; • establishing sales, marketing, and distribution capabilities and launching commercial sales of KIO-104 and KIO-301, if and when approved, whether alone or in collaboration with others; • acceptance of KIO-104 and KIO-301, if and when approved, by patients, the medical community, and third-party payors; • effectively competing with other therapies, including the existing standard-of-care; • maintaining a continued acceptable safety profile of KIO-104 and KIO-301 following approval; • obtaining and maintaining coverage and adequate reimbursement from third-party payors; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity; and 22 Table of Contents • protecting our rights in our intellectual property portfolio related to KIO-104 and KIO-301.
The success of KIO-104 and KIO-301 will depend on many factors, including the following: • obtaining favorable results from clinical trials; • applying for and receiving marketing approvals from applicable regulatory authorities for KIO-104 and KIO-301; • making arrangements with third-party manufacturers for commercial quantities of KIO-104 and KIO-301 and receiving regulatory approval of our manufacturing processes and our third-party manufacturers’ facilities from applicable regulatory authorities; • establishing sales, marketing, and distribution capabilities and launching commercial sales of KIO-104 and KIO-301, if and when approved, whether alone or in collaboration with others; 26 Table of Contents • acceptance of KIO-104 and KIO-301, if and when approved, by patients, the medical community, and third-party payors; • effectively competing with other therapies, including the existing standard-of-care; • maintaining a continued acceptable safety profile of KIO-104 and KIO-301 following approval; • obtaining and maintaining coverage and adequate reimbursement from third-party payors; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity; and • protecting our rights in our intellectual property portfolio related to KIO-104 and KIO-301.
Reliance on third-party manufacturers entails additional risks, including: • KIO-104, KIO-301, and any other product candidates that we may develop may compete with other product candidates and products for access to a limited number of suitable manufacturing facilities that operate under current good manufacturing practices or CGMP regulations; • reliance on the third party for regulatory compliance and quality assurance; • the possible breach of the manufacturing agreement by the third party; • the possible misappropriation of our proprietary information, including our trade secrets and know-how; and • the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us.
Reliance on third-party manufacturers entails additional risks, including: • KIO-104, KIO-301, and any other product candidates that we may develop may compete with other product candidates and products for access to a limited number of suitable manufacturing facilities that operate under current good manufacturing practices or CGMP regulations; 35 Table of Contents • reliance on the third party for regulatory compliance and quality assurance; • the possible breach of the manufacturing agreement by the third party; • the possible misappropriation of our proprietary information, including our trade secrets and know-how; and • the possible termination or non-renewal of the agreement by the third party at a time that is costly or inconvenient for us.
We, our contract manufacturers, our current and future collaborators, and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to physicians, 35 Table of Contents recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product, such as the requirement to implement a risk evaluation and mitigation strategy.
We, our contract manufacturers, our current and future collaborators, and their contract manufacturers will also be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to physicians, recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product, such as the requirement to implement a risk evaluation and mitigation strategy.
If KIO-104, KIO-301, or any of our other product candidates are associated with serious adverse events or undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development or limit development to more narrow uses or subpopulations in which the serious adverse events, undesirable side effects, or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective.
If KIO-104, KIO-301, or any of our other product candidates are associated with serious adverse events or undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon 28 Table of Contents their development or limit development to more narrow uses or subpopulations in which the serious adverse events, undesirable side effects, or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in 42 Table of Contents which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner.
In this regard, we will need to continue to dedicate internal resources, engage outside consultants, and adopt a detailed work plan to continue to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.
In 49 Table of Contents this regard, we will need to continue to dedicate internal resources, engage outside consultants, and adopt a detailed work plan to continue to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.
We will remain an SRC until (a) in the event we have more than $100 million in annual revenues, the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $250 million or (b) in the event we have less than $100 million in annual revenues, the aggregate market value of our outstanding common stock 43 Table of Contents held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $700 million.
We will remain an SRC until (a) in the event we have more than $100 million in annual revenues, the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $250 million or (b) in the event we have less than $100 million in annual revenues, the aggregate market value of our outstanding common stock held by non-affiliates as of the last business day our most recently completed second fiscal quarter exceeds $700 million.
We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. We expect to devote substantial financial resources to our ongoing and planned activities, particularly continuing the clinical development of our KIO-104 and KIO-301 product candidates.
We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce, or eliminate our product development programs or commercialization efforts. 23 Table of Contents We expect to devote substantial financial resources to our ongoing and planned activities, particularly continuing the clinical development of our KIO-104 and KIO-301 product candidates.
If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that such arrangements be priced the same as those between unrelated companies dealing at arm’s length and that appropriate documentation is maintained to support the value of such arrangements.
If two or 25 Table of Contents more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that such arrangements be priced the same as those between unrelated companies dealing at arm’s length and that appropriate documentation is maintained to support the value of such arrangements.
To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.
To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. Adverse 31 Table of Contents pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.
Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable. The regulatory process can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved.
Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable. 39 Table of Contents The regulatory process can vary substantially based upon a variety of factors, including the type, complexity, and novelty of the product candidates involved.
As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable 24 Table of Contents market opportunities.
As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources 30 Table of Contents being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
Our foreign operations require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, 41 Table of Contents manufacturing, or selling certain products and product candidates outside of the U.S., which could limit our growth potential and increase our development costs.
Our foreign operations require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling certain products and product candidates outside of the U.S., which could limit our growth potential and increase our development costs.
If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could 21 Table of Contents result in a higher tax liability to us.
If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be 38 Table of Contents negative, it could have a substantial adverse effect on the price of our common stock.
Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, 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.
Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, 34 Table of Contents 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.
Moreover, changes in either the patent laws or interpretation of the patent laws in the U.S. and other countries may diminish the value of our patents or narrow the scope of our patent protection. Moreover, we may be subject to a third-party pre-issuance submission of prior art to the U.S.
Moreover, changes in either the patent laws or interpretation of the patent laws in the U.S. and other countries may diminish the value of our patents or narrow the scope of our patent protection. 36 Table of Contents Moreover, we may be subject to a third-party pre-issuance submission of prior art to the U.S.
Under the agreement, TOI is solely and exclusively responsible for all costs and activities related to Phase III clinical trials for KIO-301. TOI may determine, however, that it is commercially reasonable to de-prioritize or discontinue the development of the KIO-301.
Under the agreement, TOI is solely and exclusively responsible for all costs and activities related to Phase III clinical trials for KIO-301. TOI may determine, however, that it is commercially reasonable to de-prioritize or 33 Table of Contents discontinue the development of the KIO-301.
In addition, the Tax Cuts and Jobs Act (TCJA) enacted on December 22, 2017, limits the amount of net operating losses that we are permitted to deduct in any taxable year to 80% of our taxable income in such year.
In addition, the Tax 48 Table of Contents Cuts and Jobs Act (TCJA) enacted on December 22, 2017, limits the amount of net operating losses that we are permitted to deduct in any taxable year to 80% of our taxable income in such year.
While the MMA applies only to product benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in 37 Table of Contents reimbursement that results from the MMA or other healthcare reform measures may result in a similar reduction in payments from private payors.
While the MMA applies only to product benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the MMA or other healthcare reform measures may result in a similar reduction in payments from private payors.
We do not currently have any contractual commitments for commercial supply of bulk drug substance for KIO-104, KIO-301, or fill-finish services. We also do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for KIO-104 and KIO-301, or for fill-finish 30 Table of Contents services.
We do not currently have any contractual commitments for commercial supply of bulk drug substance for KIO-104, KIO-301, or fill-finish services. We also do not currently have arrangements in place for redundant supply or a second source for bulk drug substance for KIO-104 and KIO-301, or for fill-finish services.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. We expect to expand our development capabilities and potentially implement sales, marketing, and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. 44 Table of Contents We expect to expand our development capabilities and potentially implement sales, marketing, and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. 20 Table of Contents Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
The availability of qualified personnel in the markets in which we operate has declined in recent years and competition for such labor has increased. We also experience competition for the hiring of scientific and clinical personnel from 39 Table of Contents universities and research institutions.
The availability of qualified personnel in the markets in which we operate has declined in recent years and competition for such labor has increased. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
We may also enter into arrangements with third parties to perform these 25 Table of Contents services in the U.S. if we do not establish our own sales, marketing, and distribution capabilities in the U.S., or if we determine that such third-party arrangements are otherwise beneficial.
We may also enter into arrangements with third parties to perform these services in the U.S. if we do not establish our own sales, marketing, and distribution capabilities in the U.S., or if we determine that such third-party arrangements are otherwise beneficial.
Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We 34 Table of Contents have not received approval to market KIO-104, KIO-301, or any other product candidate from regulatory authorities in any jurisdiction.
Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market KIO-104, KIO-301, or any other product candidate from regulatory authorities in any jurisdiction.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce, or eliminate our research and development programs or any future commercialization efforts. 19 Table of Contents Our future capital requirements will depend on many factors, including: • the progress, costs, and outcome of our clinical trials for our product candidates and of any clinical activities required for regulatory review of our product candidates outside of the U.S.; • the costs and timing of process development and manufacturing scale up and validation activities associated with our product candidates; • the costs, timing, and outcome of regulatory review of our product candidates in the U.S., and in other jurisdictions; • the costs and timing of commercialization activities for our product candidates if we receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution, and outsourced manufacturing capabilities; • subject to receipt of marketing approval, the amount of revenue received from commercial sales of our product candidates; • our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing, and distribution arrangements for our product candidates; • the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims; and • the extent to which we in-license or acquire rights to other products, product candidates, or technologies for the treatment of ophthalmic diseases.
Our future capital requirements will depend on many factors, including: • the progress, costs, and outcome of our clinical trials for our product candidates and of any clinical activities required for regulatory review of our product candidates outside of the U.S.; • the costs and timing of process development and manufacturing scale up and validation activities associated with our product candidates; • the costs, timing, and outcome of regulatory review of our product candidates in the U.S., and in other jurisdictions; • the costs and timing of commercialization activities for our product candidates if we receive marketing approval, including the costs and timing of establishing product sales, marketing, distribution, and outsourced manufacturing capabilities; • subject to receipt of marketing approval, the amount of revenue received from commercial sales of our product candidates; • our ability to establish collaborations on favorable terms, if at all, particularly manufacturing, marketing, and distribution arrangements for our product candidates; • the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims; and • the extent to which we in-license or acquire rights to other products, product candidates, or technologies for the treatment of ophthalmic diseases.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2024, we had federal net operating loss carryforwards of approximately $31.7 million, no state net operating loss carryforwards, and no federal and state research and development tax credit carryforwards available to reduce future taxable income.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As of December 31, 2025, we had federal net operating loss carryforwards of approximately $53.8 million, no state net operating loss carryforwards, and no and one tenth federal and state research and development tax credit carryforwards available to reduce future taxable income.
A material amount of our assets represents intangible assets, and our net income would be reduced if our intangible assets become impaired. As of December 31, 2024, intangible assets, net, represented approximately $6.7 million, or 18% of our total assets. Indefinite-lived intangible assets are subject to an impairment analysis at least annually based on fair value.
A material amount of our assets represents intangible assets, and our net income would be reduced if our intangible assets become impaired. As of December 31, 2025, intangible assets, net, represented approximately $2.1 million, or 9% of our total assets. Indefinite-lived intangible assets are subject to an impairment analysis at least annually based on fair value.
Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant operating losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability. Since inception, we have incurred significant operating losses. Our net income was approximately $3.6 million for the year ended December 31, 2024.
Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant operating losses since our inception. We expect to incur losses for the foreseeable future and may never achieve or maintain profitability. Since inception, we have incurred significant operating losses. Our net loss was approximately $10.8 million for the year ended December 31, 2025.
Litigation may be necessary to defend against these claims. 33 Table of Contents In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
Factors that may inhibit our efforts to commercialize product candidates on our own include: • our inability to recruit, train, and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe our products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. 29 Table of Contents Factors that may inhibit our efforts to commercialize products or product candidates that receive marketing approval on our own include: • our inability to recruit, train, and retain adequate numbers of effective sales and marketing personnel; • the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe our products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment.
Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.
Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product.
However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by court order, to cease commercializing the infringing technology or product.
Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all. If we do not receive the funding we expect under any future collaboration agreements, our development of our product candidates could be delayed and we may need additional resources to develop our product candidates.
If we do not receive the funding we expect under any future collaboration agreements, our development of our product candidates could be delayed, and we may need additional resources to develop our product candidates.
Our net loss was $12.5 million for the year ended December 31, 2023 and $143.4 million from the period of inception (December 28, 2004) through December 31, 2024. To date, we have financed our operations primarily through private placements and public offerings of our securities, and payments from our license agreements.
Our net income was $3.6 million for the year ended December 31, 2024 and $154.2 million from the period of inception (December 28, 2004) through December 31, 2025. To date, we have financed our operations primarily through private placements and public offerings of our securities, and payments from our license agreements.
Our commercial revenues, if any, will be derived from sales of KIO-104, KIO-301, or any other product candidates that we successfully develop, none of which we expect to be commercially available for several years, if at all. In addition, if approved, any product candidate that we develop or any product that we in-license may not achieve commercial success.
Our commercial revenues, if any, will be derived from sales of KIO-104, KIO-301, or any other product candidates that we successfully develop, 24 Table of Contents none of which we expect to be commercially available for several years, if at all.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases, not at all.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after filing, or in some cases, not at all.
While we obtain insurance for each clinical trial we perform, we may not be adequately insured to cover all liabilities that we may incur. We will need to increase our insurance coverage as we expand our clinical trials. We will need to further increase our insurance coverage if we commence commercialization of any product candidate that receives marketing approval.
While we obtain insurance for each clinical trial we perform, we may not be adequately insured to cover all liabilities that we may incur. We will need to increase our insurance coverage as we expand our clinical trials.
In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. 29 Table of Contents If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense.
We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies. If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.
To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies.
Accordingly, we will need to obtain substantial additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
In addition, if approved, any product candidate that we develop or any product that we in-license may not achieve commercial success. Accordingly, we will need to obtain substantial additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
The in-licensing and acquisition of pharmaceutical products is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire products, 27 Table of Contents product candidates, or technologies that we may consider attractive.
The in-licensing and acquisition of pharmaceutical products is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire products, product candidates, or technologies that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. 38 Table of Contents The pricing of prescription pharmaceuticals is also subject to governmental control outside the U.S.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. The pricing of prescription pharmaceuticals is also subject to governmental control outside the U.S. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product.
As of December 31, 2024, we had cash and cash equivalents of $3.8 million and short-term investments of $23.0 million for a total of $26.8 million.
As of December 31, 2025, we had cash and cash equivalents of $8.7 million and short-term investments of $8.4 million for a total of $17.1 million.
If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates. We expect to utilize a variety of types of collaboration, distribution, and other marketing arrangements with third parties to commercialize KIO-104 and KIO-301 in markets outside the U.S.
We expect to utilize a variety of types of collaboration, distribution, and other marketing arrangements with third parties to commercialize KIO-104 and KIO-301 in markets outside the U.S.
We also may be unable to in-license or acquire the rights to the relevant product, product candidate, or technology on terms that would allow us to make an appropriate return on our investment. Furthermore, we may be unable to identify suitable products, product candidates, or technologies within our area of focus.
In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to in-license or acquire the rights to the relevant product, product candidate, or technology on terms that would allow us to make an appropriate return on our investment.
Coverage and reimbursement may not be available for our product candidates and, even if they are available, the level of reimbursement may not be satisfactory. Inadequate reimbursement may adversely affect the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining and maintaining adequate reimbursement for our products may be difficult.
Inadequate reimbursement may adversely affect the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining and maintaining adequate reimbursement for our products may be difficult. We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies.
As a result, the issuance, scope, validity, enforceability, and commercial value of our and our licensors’ patent rights are highly uncertain. Our and our licensors’ pending and future patent applications may not result in patents being issued which protect our technology or products, or which effectively prevent others from commercializing competitive technologies and products.
Our and our licensors’ pending and future patent applications may not result in patents being issued which protect our technology or products, or which effectively prevent others from commercializing competitive technologies and products. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S.
On January 25, 2024, we entered into an agreement with TOI relating to KIO-301, which grants TOI global rights (except for certain countries in Asia) to co-develop and co-commercialize KIO-301 in ophthalmology. We also may seek third-party collaborators for development and commercialization of other product candidates.
On January 25, 2024, we entered into an agreement with TOI relating to KIO-301, which grants TOI global rights (except for Asia) to co-develop and co-commercialize KIO-301 in ophthalmology, and in May 2025 we entered into an option agreement with Senju pursuant to which we granted Senju an exclusive option to obtain an exclusive license to the development and commercialization rights of KIO-301 for the treatment of ophthalmic diseases in certain key countries in Asia, including Japan and China.
We may not be aware of all such intellectual property rights potentially relating to our product candidates and their uses. Thus, we do not know with certainty that KIO-104, KIO-301, or any other product candidate, or our commercialization thereof, does not and will not infringe or otherwise violate any third party’s intellectual property.
Thus, we do not know with certainty that KIO-104, KIO-301, or any other product candidate, or our commercialization thereof, does not and will not infringe or otherwise violate any third party’s intellectual property. 37 Table of Contents If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our products and technology.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our ability to generate revenues and become profitable could be impaired.
If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our ability to generate revenues and become profitable could be impaired. 43 Table of Contents If we or our third-party manufacturers fail to comply with environmental, health, and safety laws and regulations, we could become subject to fines or penalties or incur significant costs.
As a result, it is possible that we and our licensors will fail to maintain such patents thereby reducing the rights of our portfolio. 31 Table of Contents The patent position of pharmaceutical, biotechnology, and medical device companies generally is highly uncertain, involves complex legal and factual questions, and has in recent years been the subject of much litigation.
The patent position of pharmaceutical, biotechnology, and medical device companies generally is highly uncertain, involves complex legal and factual questions, and has in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability, and commercial value of our and our licensors’ patent rights are highly uncertain.
Maintaining patents in the U.S. is an expensive process and it is even more expensive to maintain patents and patent applications in foreign countries.
Maintaining patents in the U.S. is an expensive process and it is even more expensive to maintain patents and patent applications in foreign countries. As a result, it is possible that we and our licensors will fail to maintain such patents thereby reducing the rights of our portfolio.
If we are unable to successfully obtain rights to suitable products, product candidates or technologies, our ability to pursue this element of our strategy could be impaired. Product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we develop.
Furthermore, we may be unable to identify suitable products, product candidates, or technologies within our area of focus. If we are unable to successfully obtain rights to suitable products, product candidates or technologies, our ability to pursue this element of our strategy could be impaired.
Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. Risks Related to Our Dependence on Third Parties We may enter into collaborations with other third parties for the development or commercialization of our product candidates.
We will need to further increase our insurance coverage if we commence commercialization of any product 32 Table of Contents candidate that receives marketing approval. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
Government authorities and third-party payors have attempted to control costs by limiting coverage and the 26 Table of Contents amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.
Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Coverage and reimbursement may not be available for our product candidates and, even if they are available, the level of reimbursement may not be satisfactory.
Our likely collaborators for any sales, marketing, distribution, development, licensing, or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies, and biotechnology companies. Our ability to generate revenues from these 28 Table of Contents arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements.
Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities and efforts to successfully perform the functions assigned to them in these arrangements. Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner, or at all.
Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert management’s attention and resources. General Risk Factors Laws and regulations governing international operations may preclude us from developing, manufacturing, and selling certain products outside of the U.S. and require us to develop and implement costly compliance programs.
Such litigation, if instituted against us, could cause us to incur substantial costs to defend such claims and divert management’s attention and resources.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.
Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce, or eliminate our research and development programs or any future commercialization efforts.
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This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
Added
If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or are only modestly favorable or if there are safety concerns, we may: • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to additional post-marketing testing requirements; or • have the product removed from the market after obtaining marketing approval.
Removed
These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.
Added
Product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of any products that we develop.
Removed
Collaborations are complex and time-consuming to negotiate and document.
Added
Risks Related to Our Dependence on Third Parties We may enter into collaborations with other third parties for the development or commercialization of our product candidates. If our collaborations are not successful, we may not be able to capitalize on the market potential of these product candidates.
Removed
An adverse result in any litigation proceeding could put one or more of our patents at 32 Table of Contents risk of being invalidated or interpreted narrowly.
Added
We also may seek third-party collaborators for development and commercialization of other product candidates. Our likely collaborators for any sales, marketing, distribution, development, licensing, or broader collaboration arrangements include large and mid-size pharmaceutical companies, regional and national pharmaceutical companies, and biotechnology companies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed19 unchanged
Biggest changeIn addition, our online employees are required to participate in cyber, information security, and privacy training at least annually. We also maintain insurance coverage that is intended to address certain aspects of cybersecurity risks. To date, there have not been any known cybersecurity threats that have materially affected the Company.
Biggest changeIn addition, our online employees are required to participate in cyber, information security, and privacy training at least annually. 50 Table of Contents We also maintain insurance coverage that is intended to address certain aspects of cybersecurity risks. To date, there have not been any known cybersecurity threats that have materially affected the Company.
We conduct periodic compliance training for our employees regarding the protection of sensitive information, which includes training intended to prevent the success of cyberattacks. We also conduct regular phishing simulations to increase employee awareness on how to spot phishing attempts, and what to do if they suspect an email to be a phishing attack.
We conduct periodic compliance training for our employees regarding the protection of sensitive information, which includes training intended to prevent the success of cyberattacks. We also conduct regular phishing 51 Table of Contents simulations to increase employee awareness on how to spot phishing attempts, and what to do if they suspect an email to be a phishing attack.
Both executives have experience overseeing the information technology function and implementing and overseeing internal controls frameworks in our industry. We have engaged an IT Managed Service Provider 45 Table of Contents who assists in the oversight of our corporate-wide data security, including developing, implementing and enforcing security policies to manage our overall cybersecurity risks.
Both executives have experience overseeing the information technology function and implementing and overseeing internal controls frameworks in our industry. We have engaged an IT Managed Service Provider who assists in the oversight of our corporate-wide data security, including developing, implementing and enforcing security policies to manage our overall cybersecurity risks.
ITEM 1C. CYBERSECURITY Overview 44 Table of Contents Our IT and related systems are critical to the efficient operation of our business and essential to our ability to perform day to day processes.
ITEM 1C. CYBERSECURITY Overview Our IT and related systems are critical to the efficient operation of our business and essential to our ability to perform day to day processes.

Item 2. Properties

Properties — owned and leased real estate

2 edited+2 added−1 removed0 unchanged
Biggest changeLEGAL PROCEEDINGS We are not currently a party to any legal proceedings, however, from time to time we may be a party to a variety of legal proceedings that arise in the normal course of our business. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 47 Table of Contents PART II
Biggest changeWe believe our current facilities are adequate for our needs for the foreseeable future. ITEM 3. LEGAL PROCEEDINGS We are not currently a party to any legal proceedings, however, from time to time we may be a party to a variety of legal proceedings that arise in the normal course of our business. ITEM 4.
PROPERTIES We currently have three facilities, including our principal executive office located at 332 Encinitas Blvd., Suite 102, Encinitas, CA, 92024 under a lease that expires in April 2025; our office located at 11 North Terrace, Adelaide, Australia, 5000 under a month-month lease term; and our office located at Herrengasse 5, 1010 Vienna, Austria under a lease that expires in October 2028.
PROPERTIES We currently have three facilities, including our principal executive office located at 169 Saxony Rd., Suite 212, Encinitas, CA, 92024 under a lease that expires in August 2028; our office located at Level 7, 180 Flinders Street, Melbourne, Australia 3000 under a lease that expires in December 2026; and our office located at Herrengasse 5, 1010 Vienna, Austria under a lease that expires in October 2028.
Removed
We conduct our operations using third-party manufacturing facilities and trial sites. We believe our current facilities are adequate for our needs for the foreseeable future. 46 Table of Contents ITEM 3.
Added
We also have four clinical trial sites in Adelaide, Australia, Brisbane, Australia, Perth, Australia, and Auckland, New Zealand under leases that expire in January 2027 for Brisbane and Perth and under a month-to-month lease for Adelaide; We conduct our operations using third-party manufacturing facilities and trial sites.
Added
MINE SAFETY DISCLOSURES Not applicable. 52 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed4 unchanged
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES Market Information Our common stock currently trades on The Nasdaq Capital Market under the symbol “KPRX”. Holders There were 30 holders of record of our common stock as of March 21, 2025.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES Market Information Our common stock currently trades on The Nasdaq Capital Market under the symbol “KPRX”. Holders There were [28] holders of record of our common stock as of March 21, 2026.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended December 31, 2024 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Recent Sales of Unregistered Securities There were no sales of unregistered securities during the fiscal year ended December 31, 2025 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

Item 7. Management's Discussion & Analysis

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

50 edited+33 added−25 removed53 unchanged
Biggest changeFranchise taxes increased by $0.2 million, offset by a reduction in D&O insurance premiums of $0.2 million and reduced rent expense costs of $50 thousand related to closure of the Salt Lake City location. 56 Table of Contents Research and Development Expenses The increase of $3.8 million was primarily due to increased spending on preclinical, CMC and clinical trial related activities for KIO-301 of $1.8 million, preclinical and CMC activities related to KIO-104 of $0.7 million, travel and research consulting costs of $0.2 million, and increased personnel costs related to compensation and other benefits of $0.2 million.
Biggest changeGeneral and Administrative Expenses The increase of $0.2 million was primarily due to increased personnel and benefit costs of $0.5 million related to market adjustments and higher bonus expenses, increased corporate expenses driven by stock compensation expense for new grants to board directors of $0.3 million, partially offset by lower professional expenses of $0.5 million and corporate insurance of $0.1 million. 62 Table of Contents Research and Development Expenses The increase of $2.9 million was primarily due to increased spending on preclinical, CMC and clinical trial related activities for KIO-301 of $3.4 million, which are reimbursed by TOI, travel and research consulting costs of $0.1 million, offset by a net reduction in expenses resulting from an increase in research tax credits expected from Australian and Austrian government programs of $0.6 million.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, including our KIO-301 (outside of the territory already partnered with TOI), KIO-101, and KIO-104 products, on terms that may not be favorable to us.
If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with pharmaceutical partners, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, including our KIO-301 (outside of the territory already partnered with TOI), and KIO-104 products, on terms that may not be favorable to us.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis.
GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis.
At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assesses whether each promised good or service is distinct.
At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determine those that are performance obligations, and assess whether each promised good or service is distinct.
You should carefully review all of these factors, as well as the comprehensive discussion of forward-looking statements on page 2 of this Annual Report on Form 10-K. 48 Table of Contents Business Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing product candidates for the treatment of ophthalmic diseases.
You should carefully review all of these factors, as well as the comprehensive discussion of forward-looking statements on page 2 of this Annual Report on Form 10-K. 53 Table of Contents Business Overview We are a clinical-stage specialty pharmaceutical company developing and commercializing product candidates for the treatment of ophthalmic diseases.
We anticipate that our expenses will increase substantially if and as we: • seek marketing approval for our KIO-301 product outside of the territory already partnered with TOI; • seek marketing approval for our KIO-104 product or any other products that we successfully develop; • establish a sales and marketing infrastructure to commercialize our KIO-301 product outside of the territory already partnered with TOI; • establish a sales and marketing infrastructure to commercialize our KIO-104 product, if approved; and • seek partnerships for our KIO-101 product to continue our development activities; • add operational, financial, and management information systems and personnel, including personnel to support our product development and future commercialization efforts.
We anticipate that our expenses will increase substantially if and as we: • seek marketing approval for our KIO-301 product outside of the territory already partnered with TOI; • seek marketing approval for our KIO-104 product or any other products that we successfully develop; • establish a sales and marketing infrastructure to commercialize our KIO-301 product outside of the territory already partnered with TOI; • establish a sales and marketing infrastructure to commercialize our KIO-104 product, if approved; • seek partnerships for our KIO-101 product to continue our development activities; and 65 Table of Contents • add operational, financial, and management information systems and personnel, including personnel to support our product development and future commercialization efforts.
Factors that may cause our actual results to differ materially from those in the forward-looking statements include those factors described in “Item 1A. Risk Factors” beginning on page 17 of this Annual Report on Form 10-K.
Factors that may cause our actual results to differ materially from those in the forward-looking statements include those factors described in “Item 1A. Risk Factors” beginning on page 21 of this Annual Report on Form 10-K.
Based on our cash on hand and short-term investments at December 31, 2024, we believe that we will have sufficient cash to fund planned operations into 2027. However, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
Based on our cash on hand and short-term investments at December 31, 2025, we believe that we will have sufficient cash to fund planned operations into late 2027. However, the acceleration or reduction of cash outflows by management can significantly impact the timing needed for raising additional capital to complete development of our products.
Refunds for Research and Development We, through our Kiora Pharmaceuticals, GmbH and Kiora Pharmaceuticals Pty Ltd. subsidiaries, are eligible to receive certain refundable tax incentives associated with our research and development expenses in Austria and Australia. These refunds are realized in the form of a cash payment when received, following the incurred research & development expenses.
Refunds for Research and Development We, through our Kiora Pharmaceuticals, GmbH and Kiora Pharmaceuticals Pty Ltd. subsidiaries, are eligible to receive certain refundable tax incentives associated with our research and development expenses in Austria 59 Table of Contents and Australia. These refunds are realized in the form of a cash payment when received, following the incurred research & development expenses.
In exchange, we will receive an up-front, payment of $16 million; will become eligible to receive up to $285 million upon 49 Table of Contents achievement of pre-specified clinical development, regulatory and commercial milestones; tiered royalties of up to low 20% on net sales; and reimbursement of certain KIO-301 research and development expenses.
In exchange, we will receive an up-front, payment of $16 million; will become eligible to receive up to $285 million upon achievement of pre-specified clinical development, regulatory and commercial milestones; tiered royalties of up to low 20% on net sales; and reimbursement of certain KIO-301 research and development expenses.
We apply the five-step model to contracts when we determines that it is probable we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer.
We apply the five-step model to contracts when we determine that it is probable we will collect the consideration we are entitled to in exchange for the goods or services it transfers to the customer.
Examples of estimated research and development expenses that we accrue include: • fees paid to contract research organizations and investigative sites in connection with clinical studies; 53 Table of Contents • fees paid to contract manufacturing organizations in connection with non-clinical development, preclinical research, and the production of clinical study materials; and • professional service fees for consulting and related services.
Examples of estimated research and development expenses that we accrue include: • fees paid to contract research organizations and investigative sites in connection with clinical studies; • fees paid to contract manufacturing organizations in connection with non-clinical development, preclinical research, and the production of clinical study materials; and • professional service fees for consulting and related services.
Amounts expected to be recognized as revenue within the twelve months following the balance sheet date are classified as the current portion of deferred revenue. Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as deferred revenue, net of current portion.
Amounts expected to be recognized as revenue within the twelve months following the balance sheet date are classified as the current portion of deferred revenue.
In January 2024, we entered into a strategic development and commercialization agreement with Théa Open Innovation (TOI), a sister company of the global ophthalmic specialty company Laboratoires Théa (Théa). Under the agreement, we granted TOI exclusive worldwide development and commercialization rights, excluding certain countries in Asia, to KIO-301 for the treatment of degenerative retinal diseases.
In January 2024, we entered into a strategic development and commercialization agreement with Théa Open Innovation (TOI), a sister company of the global ophthalmic specialty company Laboratoires Théa (Théa). Under the agreement, we granted TOI exclusive worldwide development and commercialization rights, 54 Table of Contents excluding Asia, to KIO-301 for the treatment of degenerative retinal diseases.
From inception through December 31, 2024, we have raised a total of approximately $148.7 million from such sales of our equity and debt securities, both as a public company and prior to our initial public offering, as well as approximately $31.1 million in payments received under our license agreements and government grants, $0.3 million received pursuant to the loan under the Paycheck Protection Plan, which was fully forgiven in April 2021, and $3.4 million received in R&D tax credits.
From inception through December 31, 2025, we have raised a total of approximately $149.0 million from such sales of our equity and debt securities, both as a public company and prior to our initial public offering, as well as approximately $31.1 million in payments received under our license agreements and government grants, $0.3 million received pursuant to the loan under the Paycheck Protection Plan, which was fully forgiven in April 2021, and $3.9 million received in R&D tax credits.
We may never succeed in achieving marketing approval for our product candidates. 50 Table of Contents The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following: • per patient trial costs; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; • the cost of comparative agents used in trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient follow-up; and • the efficacy and safety profile of the product candidate.
The costs of clinical trials may vary significantly over the life of a project owing to, but not limited to, the following: • per patient trial costs; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; • the cost of comparative agents used in trials; • the drop-out or discontinuation rates of patients; • potential additional safety monitoring or other studies requested by regulatory agencies; • the duration of patient follow-up; and • the efficacy and safety profile of the product candidate.
We are unable to estimate with any certainty the costs we will incur in the continued development of our KIO-104, KIO-301, and any other product candidate that we may develop. Clinical development timelines, the probability of success and development costs can differ materially from expectations.
We are unable to estimate with any certainty the costs we will incur in the continued development of our KIO-104, KIO-301, and any other product candidate that we may develop. Clinical development timelines, the probability of success and development costs can differ materially from expectations. We may never succeed in achieving marketing approval for our product candidates.
Exhibits, Financial Statement Schedules of this Annual Report on Form 10-K for detailed information regarding the status of recently issued accounting pronouncements. Other Information Net Operating Loss Carryforwards As of December 31, 2024, we had federal net operating loss carryforwards of approximately $31.7 million and no state operating loss carryforwards, to offset future federal and state taxable income.
Exhibits, Financial Statement Schedules of this Annual Report on Form 10-K for detailed information regarding the status of recently issued accounting pronouncements. Other Information Net Operating Loss Carryforwards As of December 31, 2025, we had federal net operating loss carryforwards of approximately $53.8 million, to offset future taxable income.
At December 31, 2024, we had unrestricted Cash and cash equivalents of approximately $3.8 million, short-term investments of $23.0 million and an accumulated deficit of $143.4 million. Prior to the License Agreement with TOI in 2024, we had incurred losses and negative cash flows since inception, and future losses are anticipated.
At December 31, 2025, we had unrestricted cash and cash equivalents of approximately $8.7 million, short-term investments of $8.4 million and an accumulated deficit of $154.2 million. Prior to the license agreement with TOI in 2024, we had incurred losses and negative cash flows since inception, and future losses are anticipated.
During the year ended December 31, 2023, we recorded a net loss of $12.5 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.8 million, an increase in the change in fair value of contingent consideration of $2.0 million, an increase of $1.9 million due to an impairment of in-process R&D, decreases in accounts payable of $0.8 million and accrued expenses of $0.5 million, which was partially offset by an increase in tax credits receivable of $0.5 million.
During the year ended December 31, 2024, we recorded net income of $3.6 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.7 million, a decrease in the change in fair value of contingent consideration of $0.9 million, an increase of $2.0 million due to an impairment of in-process R&D, an increase in prepaid expenses and other assets of $1.8 million, decreases in accounts payable of $0.2 million and accrued expenses of $3.3 million, which was partially offset by a decrease in tax credits receivable of $1.6 million.
Research and Development Expenses We expense all research and development expenses as they are incurred. Research and development expenses primarily include: • non-clinical development, preclinical research, and clinical trial and regulatory-related costs; • expenses incurred under agreements with sites and consultants that conduct our clinical trials; and • employee-related expenses, including salaries, bonuses, benefits, travel, and stock-based compensation expense.
Research and development expenses primarily include: 55 Table of Contents • non-clinical development, preclinical research, and clinical trial and regulatory-related costs; • expenses incurred under agreements with sites and consultants that conduct our clinical trials; and • employee-related expenses, including salaries, bonuses, benefits, travel, and stock-based compensation expense.
For arrangements that include sales-based royalties, including commercial milestone payments based on the level of sales, and a license is deemed to be the predominant item to which the royalties relate, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied, or partially satisfied. 52 Table of Contents Collaboration Agreements We entered into a research agreement that falls under the scope of ASC 808, Collaborative Arrangements.
For arrangements that include sales-based royalties, including commercial milestone payments based on the level of sales, and a license is deemed to be the predominant item to which the royalties relate, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied, or partially satisfied.
The ABACUS-2 trial is expected be a 36 patient, multi-center, double-masked, randomized, controlled, multiple dose study enrolling patients with ultra-low vision or no light perception regardless of their underlying gene mutation associated with retinitis pigmentosa. Dosing of the first patient with KIO-301 is expected to begin in the first half of 2025 following validation of novel functional vision endpoints.
The ABACUS-2 trial is a 36 patient, multi-center, double-masked, randomized, controlled, multiple dose study enrolling patients with ultra-low vision or no light perception regardless of their underlying gene mutation associated with retinitis pigmentosa. Enrollment began in the second quarter of 2025 and dosing began in the third quarter of 2025 following validation of novel functional vision endpoints.
Investing Activities During the year ended December 31, 2024, there was $22.7 million net cash used in investing activities related to the purchase and maturity of short-term investments.
Investing Activities During the years ended December 31, 2025, there was $14.4 million net cash provided by investing activities related to the purchase and maturity of short-term investments. During the year ended December 31, 2024, there was $22.7 million net cash provided by investing activities related to the purchase and maturity of short-term investments.
Stock-Based Compensation We have issued options to purchase our common stock and restricted stock. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service/vesting period.
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service/vesting period.
Our consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern. 59 Table of Contents Off-Balance Sheet Arrangements We had no material off-balance sheet arrangements at December 31, 2024.
Our consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern.
The drug was well tolerated, with no serious side effects on intraocular tissues or other serious adverse events observed. We are currently approved to start enrolling patients in a Phase 2 trial for KIO-104 in retinal inflammation and expect enrollment to commence in the first half of 2025.
The drug was well tolerated, with no serious side effects on intraocular tissues or other serious adverse events observed. In May 2025, we received approval to start enrolling patients in a Phase 2 trial for KIO-104 in retinal inflammation and began enrollment in the second quarter of 2025. Dosing began in the third quarter of 2025.
During the year ended December 31, 2023, there was no net cash provided by investing activities. 58 Table of Contents Financing Activities During the year ended December 31, 2024, we received net proceeds of $1.7 million from the exercise of warrants, and $15.0 million from the completion of a private placement.
Financing Activities During the year ended December 31, 2025, we received net proceeds of $0.3 million from the exercise of warrants. During the year ended December 31, 2024, we received net proceeds of $1.7 million from the exercise of warrants, and $15.0 million from the completion of a private placement.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP.
Other Income (Expense), Net Other income (expense), net consists primarily of interest income we earn on interest-bearing accounts and interest expense incurred on our outstanding financing arrangements. 56 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States, or U.S.
As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. 54 Table of Contents Income Taxes During the fourth quarter of 2024, we recorded an adjustment to its income tax provision based on new information obtained from the completion of complex tax analyses, specifically a Section 382 study to assess the availability of historical net operating losses (NOLs) and a transfer pricing analysis.
Income Taxes During the fourth quarter of 2024, we recorded an adjustment to its income tax provision based on new information obtained from the completion of complex tax analyses, specifically a Section 382 study to assess the availability of historical net operating losses (NOLs) and a transfer pricing analysis.
Other Income (Expense), Net Other income (expense) increased by $1.0 million primarily due to increased net interest income and accrued interest amortization of approximately $1.2 million resulting from funds raised in the first quarter of 2024 offset by the write off of an intangible asset related to the SentrX Agreement of $0.1 million and unrealized losses related to foreign currency activity of $0.1 million.
Other Income (Expense), Net Other income (expense) decreased by $0.4 million primarily due to decreased net interest income and accrued interest amortization of approximately $0.3 million resulting from lower interest rates and a lower carrying balance of short-term marketable securities and unrealized losses related to foreign currency activity of $0.2 million offset by the write off of an intangible asset related to the SentrX Agreement of $0.1 million .
Other general and administrative expenses include professional fees for investor relations and external communications, auditing, tax, patent costs, and legal services. We expect that general and administrative expenses will remain consistent for the near future. Other Income, Net Other income, net consists primarily of interest income we earn on interest-bearing accounts and interest expense incurred on our outstanding financing arrangements.
Other general and administrative expenses include professional fees for investor relations and external communications, auditing, tax, patent costs, and legal services. We expect that general and administrative expenses will remain consistent for the near future.
Comparison of Years Ended December 31, 2024 and 2023 The following table sets forth the primary sources and uses of cash for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Net Cash Provided by/(Used in) Operating Activities $ 8,559,115 (9,556,951) Net Cash Used in Investing Activities (22,662,611) — Net Cash Provided by Financing Activities 15,498,155 5,966,066 Operating Activities During the year ended December 31, 2024, we recorded net income of $3.6 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.7 million, a decrease in the change in fair value of contingent consideration of $0.9 million, an increase of $2.0 million due to an impairment of in-process R&D, an increase in prepaid expenses and other assets of $1.8 million, decreases in accounts payable of $0.2 million and accrued expenses of $3.3 million, which was partially offset by a decrease in tax credits receivable of $1.6 million.
However, based on the cash and short-term investments on hand at December 31, 2025, we anticipate having sufficient cash to fund planned operations into late 2027 and do not currently anticipate an immediate need to raise additional capital to fund operations. 64 Table of Contents Comparison of Years Ended December 31, 2025 and 2024 The following table sets forth the primary sources and uses of cash for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Net Cash (Used in)/Provided by Operating Activities $ (9,961,176) $ 8,559,115 Net Cash Provided by/(Used in) Investing Activities $ 14,426,645 $ (22,662,611) Net Cash Provided by Financing Activities $ 265,655 $ 15,498,155 Operating Activities During the year ended December 31, 2025, we recorded net loss of $10.8 million and adjusted primarily for non-cash expense for stock-based compensation in the amount of $0.9 million, a decrease in the change in fair value of contingent consideration of $1.3 million, an increase of $4.6 million due to an impairment of in-process R&D, a decrease in prepaid expenses and other assets of $0.4 million, decrease in accounts payable of $1.1 million and increase in accrued expenses of $2.3 million, which was partially offset by an increase in tax and other receivables of $1.5 million.
From inception through December 31, 2024, our losses from operations have aggregated $143.4 million. As a result of the collaboration with TOI in 2024, our net income was $3.6 million for the twelve months ended December 31, 2024. Our net loss was $12.5 million for the twelve months ended December 31, 2023.
Our net loss was $10.8 million for the twelve months ended December 31, 2025. As a result of the collaboration with TOI in 2024, our net income was $3.6 million for the twelve months ended December 31, 2024.
In general, the assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment.
In general, the assumptions used in calculating the fair value of stock-based payment awards represent management’s best estimates, but the estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future.
It required us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values, which were determined using market, income, and cost approaches, or a combination.
Business Combinations We applied the provisions of Accounting Standards Codification (ASC) Topic 805, Business Combinations, in the accounting for our acquisitions of Bayon and Panoptes. It required us to recognize the assets acquired and the liabilities assumed at their acquisition date fair values, which were determined using market, income, and cost approaches, or a combination.
Intangible Assets Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at fair value at the acquisition date. We test intangible assets for impairment as of August 31 of each year or more frequently if indicators of impairment are present.
Intangible Assets Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at fair value at the acquisition date. Historically we have tested our indefinite-lived intangible assets for impairment annually as of August 31, or more frequently if events or changes in circumstances indicated that the assets might be impaired.
Collaboration Revenue If a license to our intellectual property is determined to be distinct from the other performance obligations identified in a contract, we recognize revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.
Amounts not expected to be recognized as revenue within the twelve months following the balance sheet date are classified as deferred revenue, net of current portion. 57 Table of Contents Collaboration Revenue If a license to our intellectual property is determined to be distinct from the other performance obligations identified in a contract, we recognize revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license.
Key assumptions used to estimate the fair value of contingent consideration include the probability of success, discount rate, and updated timing of payment. After the initial valuation, we will use our best estimate to measure contingent consideration at each subsequent reporting period. Gains and losses are recorded in operating expenses within the consolidated statements of operations and comprehensive loss.
After the initial valuation, we will use our best estimate to measure contingent consideration at each subsequent reporting period. Gains and losses are recorded in operating expenses within the consolidated statements of operations and comprehensive loss. Stock-Based Compensation We have issued options to purchase our common stock and restricted stock.
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations. 51 Table of Contents Revenue Recognition To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, Revenue from Contracts with Customers, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Revenue Recognition To determine revenue recognition for arrangements that we determine are within the scope of ASC 606, Revenue from Contracts with Customers, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Federal NOL carryforwards generated during the years ended December 31, 2018 and forward totaling $31.7 million will carry forward indefinitely, but their utilization will be limited to 80% of taxable income. We had foreign net operating loss carryforwards of $12.8 million as of December 31, 2024, which can be carried forward indefinitely.
All of the federal NOL carryforwards were generated during the years ended December 31, 2018 and forward and they will carry forward indefinitely, but their utilization will be limited to 80% of taxable income.
KIO-301 is a potential vision-restoring small molecule that acts as a “photoswitch” specifically designed to restore vision in patients with inherited and age-related degenerative retinal diseases.
Our first product candidate is KIO-301 with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (RP, any and all sub-forms). KIO-301 is a potential vision-restoring small molecule that acts as a “photoswitch” specifically designed to restore vision in patients with inherited and age-related degenerative retinal diseases.
Results of Operations Comparison of Years Ended December 31, 2024 and 2023 The following table summarizes the results of our operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Change Revenue: Collaboration Revenue $ 16,000,000 $ — $ 16,000,000 Grant Revenue 20,000 — 20,000 Total Revenue 16,020,000 — 16,020,000 Operating Expenses: General and Administrative $ 5,542,324 $ 4,663,146 $ 879,178 Research and Development 7,842,207 4,027,037 3,815,170 Collaboration Credit (2,945,350) — (2,945,350) In-Process R&D Impairment 2,008,000 1,904,314 103,686 Change in Fair Value of Contingent Consideration (937,469) 1,992,399 (2,929,868) Total Operating Expenses 11,509,712 12,586,896 (1,077,184) Operating Income (Loss) Before Other Income 4,510,288 (12,586,896) 17,097,184 Total Other Income, Net 1,149,450 163,319 986,131 Income (Loss) Before Income Tax Expense 5,659,738 (12,423,577) 18,083,315 Income Tax Expense (2,065,005) (90,319) (1,974,686) Net Income (Loss) $ 3,594,733 $ (12,513,896) $ 16,108,629 Revenue The increase of $16.0 million was attributable to the revenue recognized from the up-front payment pursuant the strategic development and commercialization agreement with TOI and from a grant from the Choroideremia Research Foundation.
Results of Operations Comparison of Years Ended December 31, 2025 and 2024 The following table summarizes the results of our operations for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Change Revenue: Collaboration Revenue $ — $ 16,000,000 $ (16,000,000) Grant Revenue — 20,000 (20,000) Total Revenue — 16,020,000 (16,020,000) Operating Expenses: General and Administrative 5,745,087 5,542,324 202,763 Research and Development 10,780,397 7,842,207 2,938,190 Collaboration Credits (7,066,237) (2,945,350) (4,120,887) In-Process R&D Impairment 4,624,000 2,008,000 2,616,000 Change in Fair Value of Contingent Consideration (1,252,174) (937,469) (314,705) Total Operating Expenses 12,831,073 11,509,712 1,321,361 Operating (Loss) Income Before Other Income (Expense), Net (12,831,073) 4,510,288 (17,341,361) Total Other Income, Net 713,770 1,149,450 (435,680) (Loss) Income Before Income Tax Expense (12,117,303) 5,659,738 (17,777,041) Income Tax Benefit (Expense) 1,282,149 (2,065,005) 3,347,154 Net (Loss) Income $ (10,835,154) $ 3,594,733 $ (14,429,887) Revenue The decrease of $16.0 million was attributable to the revenue recognized from the up-front payment pursuant the strategic development and commercialization agreement with TOI and from a grant from the Choroideremia Research Foundation in 2024.
We record the refundable payment as a tax receivable and a reduction in expense in the period in which the research and development expenses are incurred. Contingent Consideration We initially value contingent consideration related to business combinations using a probability-weighted calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows.
Contingent Consideration We initially value contingent consideration related to business combinations using a probability-weighted calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows. Key assumptions used to estimate the fair value of contingent consideration include the probability of success, discount rate, and updated timing of payment.
Reimbursements from a collaboration partner are recorded as a reduction to research and development expense. Similarly, amounts that are owed to a collaboration partner are recognized as research and development expense. Business Combinations We applied the provisions of Accounting Standards Codification (ASC) Topic 805, Business Combinations, in the accounting for our acquisitions of Bayon and Panoptes.
Collaboration Agreements We entered into a research agreement that falls under the scope of ASC 808, Collaborative Arrangements. Reimbursements from a collaboration partner are recorded as a reduction to research and development expense. Similarly, amounts that are owed to a collaboration partner are recognized as research and development expense.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
Off-Balance Sheet Arrangements We had no material off-balance sheet arrangements at December 31, 2025. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable.
This change in estimate is reflected in our consolidated financial statements for the year ended December 31, 2024. Recent Accounting Pronouncements Refer to Note 1 . Business, Presentation and Recent Accounting Pronouncements, in the Notes to the audited consolidated financial statements of Part IV, Item 15.
We have reflected the effects of the Act in its income tax provision in accordance with ASC 740. 60 Table of Contents Recent Accounting Pronouncements Refer to Note 1 . Business, Presentation and Recent Accounting Pronouncements, in the Notes to the audited consolidated financial statements of Part IV, Item 15.
We considered the development progress and timelines for its programs and noted no qualitative factors that would indicate potential impairment of its indefinite-lived intangible assets. Accrued Research and Development Expenses As part of the process of preparing the consolidated financial statements, we are required to estimate and accrue research and development expenses.
There were no adverse changes in clinical progress, development timelines, probability of technical success, or projected cash flows for the KIO-104 program. Accrued Research and Development Expenses As part of the process of preparing the consolidated financial statements, we are required to estimate and accrue research and development expenses.
Research and Development Expenses by Program The following table summarizes our research and development expenses by program: Year Ended December 31, 2024 2023 Change Research and Development Expenses by Program KIO-101 $ 25,456 $ 797,876 $ (772,420) KIO-104 671,739 — 671,739 KIO-201 30,875 68,840 (37,965) KIO-301 3,836,105 1,990,202 1,845,903 Unallocated Research and Development Expenses Personnel 2,562,417 2,372,040 190,377 R&D Tax Expense (Credit) 17,894 (1,736,398) 1,754,292 Other Research 697,721 534,477 163,244 Total Research and Development Expenses $ 7,842,207 $ 4,027,037 $ 3,815,170 57 Table of Contents Liquidity and Capital Resources Since becoming a public company in 2015, we have financed our operations from several registered offerings and private placements of our securities, payments from license agreements, and U.S. and foreign government grants.
Research and Development Expenses by Program The following table summarizes our research and development expenses by program: 63 Table of Contents Year Ended December 31, 2025 2024 Change Research and Development Expenses by Program KIO-101 $ 17,541 $ 25,456 $ (7,915) KIO-104 718,552 671,739 46,813 KIO-201* — 30,875 (30,875) KIO-301 7,217,067 3,836,105 3,380,962 Unallocated Research and Development Expenses Personnel 2,612,374 2,562,417 49,957 R&D Tax Expense (Credit) (587,447) 17,894 (605,341) Other Research 802,310 697,721 104,589 Total Research and Development Expenses $ 10,780,397 $ 7,842,207 $ 2,938,190 *In July 2024, the Company decided to cease development of KIO-201.
Under this Internal Revenue Code section, substantial changes in our ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset our taxable income. Specifically, this limitation may arise in the event of a cumulative change in ownership of more than 50% within a three-year period.
Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, future utilization of our net operating loss and research and development credit carryforwards to offset future taxable income and tax respectively, may be subject to an annual limitation as a result of ownership changes that may have occurred or that could occur in the future.
Removed
We were formed as a Delaware corporation on December 28, 2004, under the name of EyeGate Pharmaceuticals, Inc., and changed our name to Kiora Pharmaceuticals, Inc. effective November 8, 2021. Our first product candidate is KIO-301 with an initial focus on patients with later stages of vision loss due to retinitis pigmentosa (RP, any and all sub-forms).
Added
In March 2025, we entered into a credit line with UBS (the “Credit Line”) providing for a $10.0 million revolving line of credit. The Credit Line bears interest at the 30-day Secured Overnight Financing Rate ("SOFR") average, plus 1.5%. The SOFR rate is variable.
Removed
The authoritative accounting guidance provides an optional qualitative assessment for any indicators that indefinite-lived intangible assets are impaired.
Added
The Credit Line is secured by a first priority lien and security interest in the Company’s marketable securities held in its managed investment accounts with UBS. During 2025, we received $2.8 million in proceeds from the line, and made payments of $2.8 million, resulting in no credit balance as of December 31, 2025.
Removed
If it is determined that it is more likely than not that the indefinite-lived intangible assets are impaired, the fair value of the indefinite-lived intangible assets is compared with the carrying amount and impairment is recorded for any excess of the carrying amount over the fair value of the indefinite-lived intangible assets.
Added
In May 2025, we entered into an exclusive option agreement (the "Option Agreement") with Senju Pharmaceutical Co., Ltd ("Senju"). Under the agreement, we granted Senju an exclusive option to obtain an exclusive license to the development and commercialization rights of KIO-301 for the treatment of ophthalmic diseases in certain key countries in Asia, including Japan and China.
Removed
The Company performed an annual evaluation of its indefinite-lived intangible assets for impairment as of August 31, 2024 with a quantitative analysis. The estimated fair value of the KIO-201 assets was less than their carrying value due to the strategic decision to cease all future development or partnership leading to commercialization. Accordingly, we recognized an impairment loss of $2.0 million.
Added
In exchange, we received a nonrefundable payment of $1.25 million. In the future, if the option is exercised and a license agreement is executed, we will be eligible to receive an additional $109.5 million plus tiered royalties of up to high teen percentages on net sales. From inception through December 31, 2025, our losses from operations have aggregated $154.2 million.
Removed
As of December 31, 2024, we also performed a qualitative update analysis for impairment and based on this analysis, the fair value of these products was greater than their carrying value resulting in no additional impairment.
Added
Research and Development Expenses We expense all research and development expenses as they are incurred.
Removed
The net operating loss and tax credit carryforwards are subject to review by the Internal Revenue Service in accordance with the provisions of Section 382 of the Internal Revenue Code.
Added
While our significant accounting policies are more fully described in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.
Removed
In 2024, we had a formal section 382 analysis performed. The analysis determined that ownership changes (under the definition of Section 382) occurred in multiple years. The base limitation calculated for these changes ranged from $170,643 to $494,650.
Added
Effective December 31, 2025, we elected to change the annual impairment testing date from August 31 to December 31. Under the applicable accounting guidance, an entity may first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired.
Removed
In addition to the annual NOL limitation, we had a Net Unrealized Built-In Loss (NUBIL) on the date of the ownership changes in multiple years. The total NUBIL was $17,519,701.
Added
If so, the asset's, fair value is compared with the carrying amount, and an 58 Table of Contents impairment charge is recognized for the amount by which the carrying amount exceeds fair value. In addition, SEC guidance recommends a reconciliation to market capitalization as a reasonableness check when estimated fair value exceeds a company's market capitalization.
Removed
As a result of the NUBIL, we adjusted our Federal NOL carryforwards for the 2018 through 2022 tax years down by a total of $9,126,676 in total with the filing of our 2023 tax return. Additionally, $3,146,111 of the NUBIL was recognized as an unfavorable book to tax adjustment during the 2023 tax year.
Added
We performed an annual quantitative impairment test of our indefinite-lived intangible assets as of August 31, 2025 and concluded that no impairment existed as of that date. Following our election to change the annual testing date, we updated the quantitative impairment analysis as of December 31, 2025.
Removed
The remaining NUBIL will be recognized in tax years 2024 and 2025. The NUBIL results in additional future tax deductions (“recognized built in losses” or “RBIL”), which would be treated as pre-change losses and subject to the 382 limitation if recognized during the 5-year statutory recognition period.
Added
During the period between testing dates, our market capitalization declined largely due to macroeconomic factors, despite clinical progress in both asset programs. Based on the market capitalization reconciliation described above, we concluded that a $4.6 million impairment charge related to KIO-104 was required as of December 31, 2025.
Removed
The total amount of RBILs limited by Section 382 is $17,519,701 and the annual allowance is $170,643 (relating to the 2018 change for RBILs incurred through the 2022 change) and $178,445 (for RBILS incurred after 2022) per year, therefore the availability of the RBILs will take many years, at which point we will be able to start using the NOLs that have not yet expired.
Added
We record the refundable payment as a tax receivable and a reduction in research and development expense in the period in which the research and development expenses are incurred.
Removed
Due to the annual limitations calculated during the analysis, it has been determined that all federal and state net operating losses that do not have an unlimited carryforward period will expire unused. Additionally, all federal and state R&D credits will also expire unused.
Added
This change in estimate is reflected in our consolidated financial statements for the year ended December 31, 2024. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA or the Act) was signed into law.
Removed
As a result, we are writing down our’ federal and state NOLs by 55 Table of Contents $46,054,630 and $54,655,301, respectively and our federal and state R&D credit carryforwards by $2,549,084 and $447,490, respectively. This is reflected in the 2024 tax provision.
Added
The Act reinstates and makes permanent 100% first-year bonus depreciation under Section 168(k) for qualified property acquired and placed in service after January 19, 2025. Additionally, the Act allows current expensing of domestic research and experimental expenditures (R&E) starting in 2025 and provides special retroactive relief for "small business taxpayers".
Removed
We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership.
Added
We deducted the unamortized R&E expenditures as of December 31, 2024 on its 2024 tax return, resulting in no change in our effective tax rate due to the full valuation allowance; however, the deduction did result in a reduction in our cash tax liability for 2024.
Removed
As a result, if we generate taxable income, our ability to use our pre-change net operating loss and tax credits carryforwards to reduce U.S. federal and state taxable income may be subject to limitations, which could result in increased future tax liability to us.
Added
We have foreign net operating loss carryforwards of $12.6 million as of December 31, 2025, which can be carried forward indefinitely, but their utilization will be limited to 75% of taxable income. We have no state NOL carryforwards.

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