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What changed in Ocugen, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ocugen, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+782 added−669 removedSource: 10-K (2025-03-05) vs 10-K (2024-04-16)

Top changes in Ocugen, Inc.'s 2024 10-K

782 paragraphs added · 669 removed · 527 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

194 edited+103 added−50 removed255 unchanged
Biggest changeWe expect that additional federal, state, and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
Biggest changeWe expect that additional federal, state, and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures. 30 Table of Contents The Foreign Corrupt Practices Act The Foreign Corrupt Practices Act ("FCPA") prohibits any United States individual or business from paying, offering, or authorizing payment or offering anything of value, directly or indirectly, to any foreign official, political party, or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.
Our first product candidate based on this platform technology, NeoCart, is an autologous cartilage tissue–engineered implant designed for use in repair of articular cartilage injuries in the knee. In contrast to approved cell-matrix based product, NeoCart showed rapid healing and durable benefit in clinical studies.
Our first product candidate based on this platform technology, NeoCart, is an autologous cartilage tissue–engineered implant designed for use in repair of articular cartilage injuries in the knee. In contrast to the approved cell-matrix based product, NeoCart showed rapid healing and durable benefit in clinical studies.
CanSinoBIO is responsible for the CMC development and manufacture of clinical supplies of such product candidates and is responsible for the costs associated with such activities.
CanSinoBIO is responsible for the CMC development and manufacture of clinical supplies of such product candidates and is responsible for the costs associated with such activities.
The civil FCA provides for treble damages and a civil penalty for each false claim, such as an invoice or pharmacy claim for reimbursement, which can aggregate into millions of dollars, and potential exclusion from federal health care programs. The civil monetary penalties statute is another potential statute under which biotechnological companies may be subject to enforcement.
The civil FCA provides for treble damages and a civil penalty for each false claim, such as an invoice or pharmacy claim for reimbursement, which can aggregate into millions of dollars, and potential exclusion from federal health care programs. The civil monetary penalties statute is another statute under which biotechnological companies may be subject to enforcement.
Under the MDRP, a manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds made available to states for its drugs under Medicaid and Medicare Part B.
Under the MDRP, a manufacturer is required to pay a rebate to each state Medicaid program for its covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds made available to states for its covered outpatient drugs under Medicaid and Medicare Part B.
CORPORATE INFORMATION We were originally incorporated as a Massachusetts corporation in 2000 under the name Histogenics Corporation ("Histogenics") and underwent a corporate reorganization in 2006, pursuant to which we were reincorporated as a Delaware corporation. On September 27, 2019, we completed a reverse merger (the "Merger") with Ocugen OpCo, Inc.
CORPORATE INFORMATION We were originally incorporated as a Massachusetts corporation in 2000 under the name Histogenics and underwent a corporate reorganization in 2006, pursuant to which we were reincorporated as a Delaware corporation. On September 27, 2019, we completed a reverse merger (the "Merger") with Ocugen OpCo, Inc.
For products approved under a BLA (including biosimilars) or an NDA, the Veterans Health Care Act ("VHCA") requires labelers, as a condition of payment by Medicaid, to calculate and report to the Veterans Administration ("VA") a different price called the Non-Federal AMP, which is used to determine the maximum price that can be charged to certain federal agencies, referred to as the Federal Ceiling Price ("FCP").
For products approved under a BLA (including biosimilars) or an NDA, the Veterans Health Care Act ("VHCA") requires labelers, as a condition of payment by Medicaid, to calculate and report to the Veterans Administration a different price called the Non-Federal AMP, which is used to determine the maximum price that can be charged to certain federal agencies, referred to as the Federal Ceiling Price ("FCP").
In addition, under the Pediatric Research Equity Act ("PREA"), a BLA or NDA or supplement to a BLA or NDA for a new active ingredient, indication, dosage form, dosage regimen, or route of administration, must contain data that is adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
In addition, under the Pediatric Research Equity Act ("PREA"), a BLA or NDA or supplement to a BLA or NDA for a new active ingredient, indication, dosage form, dosage regimen, or route of administration, must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Vaccines Exclusive License Agreement with Washington University In September 2022, we entered into the WU License Agreement with Washington University, pursuant to which we were granted an exclusive, sublicensable, royalty-bearing license to patent rights for an inhaled mucosal COVID-19 vaccine, as well as a license to certain tangible research property and technical information necessary to exploit the patent rights within the United States, Europe, and Japan.
Vaccines Exclusive License Agreement with Washington University In September 2022, we entered into the WU License Agreement with Washington University, pursuant to which we were granted an exclusive, sublicensable, royalty-bearing license to patent rights for a mucosal COVID-19 vaccine, as well as a license to certain tangible research property and technical information necessary to exploit the patent rights within the United States, Europe, and Japan.
In contrast, our Phase 3 clinical trial will use a co-primary efficacy endpoint defined as the mean change from baseline (as opposed to chondroplasty) to two years for the patients' Knee Injury and Osteoarthritis Outcome Score Pain and Function (Activities of Daily Living) subscale scales.
In contrast, our Phase 3 clinical trial will use a co-primary efficacy endpoint defined as the mean change from baseline (as opposed to chondroplasty) to two years for the patients' Knee Injury and Osteoarthritis ("OA") Outcome Score Pain and Function (Activities of Daily Living) subscale scales.
Overview of RP and LCA and Current Treatment Options IRDs are caused by genetic mutations that are passed down within families and lead to progressive disease, severe visual impairment, and blindness. They are a diverse disease class with large phenotypic and genetic heterogeneity. IRDs are a common cause of irreversible blindness due to retinal cell degeneration.
Overview of RP and Current Treatment Options IRDs are caused by genetic mutations that are passed down within families and lead to progressive disease, severe visual impairment, and blindness. They are a diverse disease class with large phenotypic and genetic heterogeneity. IRDs are a common cause of irreversible blindness due to retinal cell degeneration.
Additionally, before approving a marketing application, the FDA will inspect one or more clinical trial sites to assure compliance with GCPs. To assure current GMP and GCP compliance, an applicant will incur significant expenditure of time, money, and effort in the areas of training, recordkeeping, production, and quality control.
Additionally, before approving a marketing application, the FDA will inspect one or more clinical trial sites to assure compliance with GCP. To assure current GMP and GCP compliance, an applicant will incur significant expenditure of time, money, and effort in the areas of training, recordkeeping, production, and quality control.
For example, the genetic mutations of approximately 40% of RP patients remain unknown with few or no known therapeutic options available. Modifier gene therapy to ameliorate multiple forms of RP and LCA without requiring knowledge of the mutated gene, may provide a potentially robust and feasible treatment for RP and LCA.
For example, the genetic mutations of approximately 40% of RP patients remain unknown with few or no known therapeutic options available. Modifier gene therapy to ameliorate multiple forms of RP without requiring knowledge of the mutated gene, may provide a potentially robust and feasible treatment for RP.
("Purpose") relating to NeoCart, the WU License Agreement with Washington University with respect to inhaled mucosal COVID-19 vaccines in the Mucosal Vaccine Territory, and the license agreement with the University of Colorado ("CU") pursuant to which we acquired rights to the transferrin-tumstatin fusion protein technology used in our OCU200 product candidate.
("Purpose") relating to NeoCart, the WU License Agreement with Washington University with respect to mucosal COVID-19 vaccines in the Mucosal Vaccine Territory, and the license agreement with the University of Colorado ("CU") pursuant to which we acquired rights to the transferrin-tumstatin fusion protein technology used in our OCU200 product candidate.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with the FDA's Good Laboratory Practice ("GLP") regulations, applicable requirements for the human use of laboratory animals, such as the Animal Welfare Act ("AWA"), or other applicable regulations; • submission to the FDA of an IND application, which must become effective before human clinical trials may begin at U.S. clinical trial sites; • approval by an Institutional Review Board ("IRB") for each clinical site, or centrally, before a clinical trial may be initiated at that site; • adequate and well-controlled human clinical trials to establish the safety and efficacy, in the case of a drug product candidate, or safety, purity, and potency, in the case of a biological product candidate for its intended use, performed in accordance with Good Clinical Practices ("GCPs") and additional requirements for the protection of human research subjects and their health information; • development of manufacturing processes to ensure the product candidate's identity, strength, quality, purity, and potency in compliance with current GMP; • submission to the FDA of a New Drug Application ("NDA"), in the case of a drug product candidate, or a BLA, in the case of a biological product candidate, including results of preclinical testing, detailed information about the CMC, and proposed labeling and packaging for the product candidate; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the products are produced to assess compliance with current GMP, and to assure that the facilities, methods, and controls are adequate to preserve the therapeutics' identity, strength, quality, purity, and potency as well as satisfactory completion of an FDA inspection of selected clinical sites, selected clinical investigators to determine GCP compliance, and payment of user fees; and • FDA review and approval of the NDA, or licensure of a BLA to permit commercial marketing for particular indications for use, including agreement on post-marketing commitments, if applicable.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies, and formulation studies in compliance with the FDA's Good Laboratory Practice ("GLP") regulations, applicable requirements for the human use of laboratory animals, such as the Animal Welfare Act ("AWA"), or other applicable regulations; • submission to the FDA of an IND application, which must become effective before human clinical trials may begin at United States clinical trial sites; • approval by an Institutional Review Board ("IRB") for each clinical site, or centrally, before a clinical trial may be initiated at that site; • adequate and well-controlled human clinical trials to establish the safety and efficacy, in the case of a drug product candidate, or safety, purity, and potency, in the case of a biological product candidate, for its intended use, performed in accordance with Good Clinical Practice ("GCP") and additional requirements for the protection of human research subjects and their health information; • development of manufacturing processes to ensure the product candidate's identity, strength, quality, purity, and potency in compliance with current GMP; • submission to the FDA of a New Drug Application ("NDA"), in the case of a drug product candidate, or a BLA, in the case of a biological product candidate, including results of preclinical testing, detailed information about the CMC, and proposed labeling and packaging for the product candidate; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the products are produced to assess compliance with current GMP, and to assure that the facilities, methods, and controls are adequate to preserve the therapeutics' identity, strength, quality, purity, and potency as well as satisfactory completion of an FDA inspection of selected clinical sites, selected clinical investigators to determine GCP compliance, and payment of user fees; and • FDA review and approval of the NDA, or licensure of a BLA, to permit commercial marketing for particular indications for use, including agreement on post-marketing commitments, if applicable.
Our issued or registered patents and pending patent applications include those licensed from SERI, Purpose Co, Washington University, and CU. Certain issued patents and pending patent applications cover multiple of our product candidates. Our intellectual property includes compositions of matter, methods of use, product candidates, and other proprietary technology.
Our issued or registered patents and pending patent applications include those licensed from SERI, Purpose, Washington University, and CU. Certain issued patents and pending patent applications cover multiple of our product candidates. Our intellectual property includes compositions of matter, methods of use, product candidates, and other proprietary technology.
Novel Inhaled Mucosal Vaccine Platform for the Prevention of COVID-19 and the Seasonal Flu We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a monovalent COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine.
Novel Inhaled Mucosal Vaccine Platform for the Prevention of COVID-19 and the Seasonal Flu We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine.
In addition, labelers of biotechnology and drug products (the entity owning the National Drug Code listed for a product) participating in Medicaid and Medicare are required to comply with mandatory price reporting, discounts, rebates, and other requirements.
In addition, labelers of marketed biotechnology and drug products (the entity owning the National Drug Code listed for a marketed product) participating in Medicaid and Medicare are required to comply with mandatory price reporting, discounts, rebates, and other requirements.
Item 1. Business. OVERVIEW We are a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe.
Item 1. Business. OVERVIEW We are a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies, biologics and vaccines that improve health and offer hope for patients across the globe.
Our inhaled mucosal vaccine platform is driven by our conviction to serve a public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates.
Our inhaled mucosal vaccine platform is driven by our conviction to serve a major public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates.
If possible, Phase 1 trials may also be used to gain an initial indication of product effectiveness. • Phase 2 — Controlled studies are conducted in larger but still limited subject populations with a specified disease or condition to evaluate preliminary efficacy, identify optimal dosages, dosage tolerance and schedule, possible adverse effects and safety risks, and expanded evidence of safety. • Phase 3 — These adequate and well-controlled clinical trials are undertaken in expanded subject populations (e.g., several hundred to several thousand patients), generally at geographically dispersed clinical trial sites, to generate enough data to provide statistically significant evidence of clinical efficacy and safety of the product candidate for approval, to establish the overall risk-benefit profile of the product candidate, and to provide adequate information for the labeling of the product candidate.
If possible, Phase 1 trials may also be used to gain an initial indication of product effectiveness. 20 Table of Contents • Phase 2 — Controlled studies are conducted in larger but still limited subject populations with a specified disease or condition to evaluate preliminary efficacy, identify optimal dosages, dosage tolerance and schedule, possible adverse effects and safety risks, and expanded evidence of safety. • Phase 3 — These adequate and well-controlled clinical trials are undertaken in expanded subject populations (e.g., several hundred to several thousand patients), generally at geographically dispersed clinical trial sites, to generate enough data to provide statistically significant evidence of clinical efficacy and safety of the product candidate for approval, to establish the overall risk-benefit profile of the product candidate, and to provide adequate information for the labeling of the product candidate.
CanSinoBIO has an exclusive license to develop, manufacture, and commercialize our modifier gene therapy platform in and for China, Hong Kong, Macau, and Taiwan (the "CanSinoBIO Territory"), and we maintain exclusive development, manufacturing, and commercialization rights with respect to our modifier gene therapy platform outside the CanSinoBIO Territory (the "Company Territory"). 14 Table of Contents We partner with CanSinoBIO for the process development, manufacturing, testing, and release of drug product candidates for use in IND-enabling studies and clinical trials.
CanSinoBIO has an exclusive license to develop, manufacture, and commercialize our modifier gene therapy platform in and for China, Hong Kong, Macau, and Taiwan (the "CanSinoBIO Territory"), and we maintain exclusive development, manufacturing, and commercialization rights with respect to our modifier gene therapy platform outside the CanSinoBIO Territory (the "Company Territory"). 15 Table of Contents We partner with CanSinoBIO for the process development, manufacturing, testing, and release of drug product candidates for use in IND-enabling studies and clinical trials.
Specifically, sponsors may apply for and receive ODD if a product candidate is intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 0.2 million individuals in the United States, or affecting more than 0.2 million individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the United States will be recovered from U.S. sales.
Specifically, sponsors may apply for and receive ODD if a product candidate is intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 0.2 million individuals in the United States, or affecting more than 0.2 million individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product available in the United States will be recovered from the United States sales.
The photoreceptor cells convert light into electrical signals, which are then sent to the brain where they are processed to create the images we see. Stargardt disease is usually caused by mutations in the ABCA4 gene and is inherited in an autosomal recessive manner. This gene affects how one's body uses vitamin A.
The photoreceptor cells convert light into electrical signals, which are then sent to the brain where they are processed to create the images we see. Stargardt disease is usually caused by mutations in the ABCA4 gene and is inherited in an autosomal recessive manner. This gene affects how a person's body uses vitamin A.
In January 2023, we amended the WU License Agreement to add the countries of South Korea, Australia, and China to the Mucosal Vaccine Territory, and in November 2023, we further amended the WU License Agreement to add Hong Kong to the Mucosal Vaccine Territory. 16 Table of Contents Pursuant to the WU License Agreement, we may make, have made, sell, offer for sale, use, market, promote, distribute, export, and import licensed products in the Mucosal Vaccine Territory.
In January 2023, we amended the WU License Agreement to add the countries of South Korea, Australia, and China to the Mucosal Vaccine Territory, and in November 2023, we further amended the WU License Agreement to add Hong Kong to the Mucosal Vaccine Territory. 17 Table of Contents Pursuant to the WU License Agreement, we may make, have made, sell, offer for sale, use, market, promote, distribute, export, and import licensed products in the Mucosal Vaccine Territory.
During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with ODD exclusivity by means of greater effectiveness, greater safety, or providing a major contribution to patient care.
During the seven-year exclusivity period, the FDA may not approve any other applications to market the same drug for the same disease, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity by means of greater effectiveness, greater safety, or providing a major contribution to patient care.
Post-Approval Requirements Any products manufactured or distributed pursuant to FDA approvals are subject to extensive and continuing regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and reporting, including adverse 22 Table of Contents experience reporting, deviation reporting, shortage reporting, and periodic reporting, product sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety and effectiveness after commercialization.
Post-Approval Requirements Any products manufactured or distributed pursuant to FDA approvals are subject to extensive and continuing regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and reporting, including adverse experience reporting, deviation reporting, shortage reporting, and periodic reporting, product sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety and effectiveness after commercialization.
Regulation Outside of the United States In addition to regulations in the U.S., we may be subject to a variety of regulations in foreign jurisdictions that govern, among other things, clinical trials and any commercial sales and distribution of our product candidates, if approved, either directly or through our distribution partners.
Regulation Outside of the United States In addition to regulations in the United States, we may be subject to a variety of regulations in foreign jurisdictions that govern, among other things, clinical trials and any commercial sales and distribution of our product candidates, if approved, either directly or through our distribution partners.
We plan to compete in the segments of pharmaceutical, biotechnological, and other related markets with therapeutics, regenerative medicines, and vaccines that have an acceptable safety profile and target commercially attractive indications. 13 Table of Contents The development and commercialization of gene therapies is highly competitive.
We plan to compete in the segments of pharmaceutical, biotechnological, and other related markets with therapeutics, regenerative medicines, and vaccines that have an acceptable safety profile and target commercially attractive indications. 14 Table of Contents The development and commercialization of gene therapies is highly competitive.
We have a state-of-the-art R&D center to support innovation and development of our product pipeline through commercialization. Ocugen's recently renovated GMP facility is designed to support manufacturing of cell and gene therapy-based products for clinical development as well as commercial launch.
We have a state-of-the-art R&D center to support innovation and development of our product pipeline through commercialization. Our renovated GMP facility is designed to support manufacturing of cell and gene therapy-based products for clinical development as well as commercial launch.
The ACA is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.
The ACA is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms.
These values include: • Respect — Acknowledging individual talents and understanding success requires diversity. • Integrity — An unwavering commitment to do what is right. • Teamwork — Collaboratively arriving at solutions so our people, patients, and shareholders benefit. • Accountability — Taking ownership of key deliverables.
These values include: • Respect — Acknowledging individual talents and understanding success requires everyone. • Integrity — An unwavering commitment to do what is right. • Teamwork — Collaboratively arriving at solutions so our people, patients, and shareholders benefit. • Accountability — Taking ownership of key deliverables.
In the event that SERI decides to discontinue the prosecution or maintenance of the licensed patent rights, we have the right, but not the obligation, to file for, 15 Table of Contents or continue to prosecute, maintain, or enforce such licensed patent rights. We have assumed prosecution of certain licensed patent rights under the SERI Agreement.
In the event that SERI decides to discontinue the prosecution or maintenance of the licensed patent rights, we have the right, but not the obligation, to file for, 16 Table of Contents or continue to prosecute, maintain, or enforce such licensed patent rights. We have assumed prosecution of certain licensed patent rights under the SERI Agreement.
A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website, www.ocugen.com, under “Investors”. Any amendments to Code of Business Conduct and Ethics are also being posted on our website, www.ocugen.com, under “Investors”. 31 Table of Contents
A copy of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are posted on our website, www.ocugen.com, under “Investors”. Any amendments to Code of Business Conduct and Ethics are also being posted on our website, www.ocugen.com, under “Investors”. 34 Table of Contents
The bioadhesive is a natural, biocompatible material which acts as adhesives for biological tissue, thereby eliminating the need for complicated suturing ( Figure 10 ). 11 Table of Contents Figure 10: Mechanism of the regenerative medicine cell therapy technology, NeoCart. Figure 10 demonstrates the mechanism of our regenerative medicine cell therapy technology, NeoCart.
The bioadhesive is a natural, biocompatible material which acts as adhesives for biological tissue, thereby eliminating the need for complicated suturing ( Figure 10 ). 12 Table of Contents Figure 10: Mechanism of the regenerative medicine cell therapy technology, NeoCart. Figure 10 demonstrates the mechanism of our regenerative medicine cell therapy technology, NeoCart.
Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations Our business activities, including but not limited to, research, marketing, sales, promotion, distribution, medical education, and other activities following product approval will be subject to regulation by numerous federal and state regulatory and law enforcement authorities in the United States in addition to the FDA, including potentially the Department of Justice, the Department of Health and Human Services and its various divisions, including the Centers for Medicare and Medicaid Services ("CMS") and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense, and state and local governments.
Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations Our business activities, including but not limited to, research, marketing, sales, promotion, distribution, medical education, and other activities following product approval are subject to laws and regulations by numerous federal and state regulatory and law enforcement authorities in the United States in addition to the FDA, including potentially the Department of Justice, the Department of Health and Human Services and its various divisions, including the Centers for Medicare and Medicaid Services ("CMS") and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense, and state and local governments.
Ocugen's R&D, clinical, regulatory, quality and manufacturing teams consist of experienced, highly qualified researchers and industry professionals from top institutional and leading companies, which help drive pipeline development with greater efficiency. • Product Designations.
Our R&D, clinical, regulatory, quality and manufacturing teams consist of experienced, highly qualified researchers and industry professionals from top institutional and leading companies, which help drive pipeline development with greater efficiency. • Product Designations.
Some preclinical studies may continue even after the IND is in effect. 18 Table of Contents An IND application becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, notifies the applicant of safety concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold.
Some preclinical studies may continue even after the IND is in effect. An IND application becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, notifies the applicant of safety concerns or questions related to one or more proposed clinical trials and places the trial on a clinical hold.
Department of Health and Human Services that would require manufacturers to charge a negotiated "maximum fair price" for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and requires manufacturers to provide discounts on Part D drugs.
Department of Health and Human Services that would require manufacturers to charge a negotiated "maximum fair price" for certain units of certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers of certain drugs payable under Medicare Parts B and D to penalize price increases that outpace inflation, and a requirement that manufacturers provide certain discounts on Part D drugs.
The positive trial update demonstrated that OCU400 continued to be generally safe and well-tolerated in subjects across different mutations and dose levels. 89% of participants demonstrated preservation or improvement in the treated eye either on BCVA or LLVA or MLMT scores from baseline. 78% of participants demonstrated preservation or improvement in the treated eyes in MLMT scores from baseline. 80% of RHO mutation subjects experienced either preservation or improvement in MLMT scores from baseline.
The positive trial update demonstrated that OCU400 continued to be generally safe and well-tolerated in subjects across different mutations and dose levels. 89% of participants demonstrated preservation or improvement in the treated eye either on BCVA or LLVA or MLMT scores from baseline. 78% of participants demonstrated preservation or improvement in the treated eyes in MLMT 8 Table of Contents scores from baseline. 80% of RHO mutation subjects experienced either preservation or improvement in MLMT scores from baseline.
Louis ("Washington University"), pursuant to which we licensed the rights to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong (the "Mucosal Vaccine Territory"). In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property.
Louis ("Washington University"), pursuant to which we licensed the rights to develop, manufacture, and commercialize a mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong (the "Mucosal Vaccine Territory"). In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property.
Progress reports detailing the results of the clinical trials must also be submitted at least annually to the FDA and the IRB and more frequently if serious adverse events ("SAEs") or other significant safety information is found. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.
Progress reports detailing the results of the clinical trials must also be submitted at least annually to the FDA and the IRB and more frequently if SAEs or other significant safety information is found. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.
Third-party payors also control costs by requiring prior authorization or imposing other dispensing restrictions before covering certain products and by broadening therapeutic classes to increase competition. Third-party payors 26 Table of Contents are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
Third-party payors also control costs by requiring prior authorization or imposing other dispensing restrictions before covering certain products and by broadening therapeutic classes to increase competition. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, is obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect rebate liability for prior quarters.
A manufacturer that becomes aware that its Medicaid reporting for a prior quarter was incorrect, or has changed as a result of recalculation of the pricing data, may be obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect rebate liability for prior quarters.
In general, for purposes of NDA and BLA approval, human clinical trials are typically conducted in three sequential phases, which may overlap or be combined. • Phase 1 — Studies are initially conducted in a small group of healthy human volunteers or subjects (e.g., 10 to 20 subjects) with the target disease or condition to test the product candidate for safety, dosage tolerance, structure-activity relationships, mechanism of action, absorption, metabolism, distribution, and excretion.
In general, for purposes of NDA and BLA approval, human clinical trials are typically conducted in three sequential phases, which may overlap or be combined. • Phase 1 — Studies are initially conducted in a small group of healthy human volunteers or subjects (e.g., 10 to 20 subjects) to test the product candidate for safety, dosage tolerance, structure-activity relationships, mechanism of action, absorption, metabolism, distribution, and excretion.
Before approving a product candidate for which no active ingredient (including any ester or salt of an active ingredient) has previously been approved by the FDA, the FDA must either refer that product candidate to an external advisory committee or provide in an action letter a summary of the reasons why the FDA did not refer the product candidate to an advisory committee.
Before approving a product candidate for which no active ingredient (including any ester or salt of an active ingredient) has previously been approved by the FDA, the FDA must either refer that product candidate to an external advisory committee or provide in an action letter a summary of the reasons 21 Table of Contents why the FDA did not refer the product candidate to an advisory committee.
Like the Medicaid rebate amount, the FCP includes an inflation penalty. A Department of Defense statute and regulation requires labelers to provide this discount on therapeutics dispensed by retail pharmacies when paid by the TRICARE Program, the health care program for military personnel, retirees, and related beneficiaries.
Like the 26 Table of Contents Medicaid rebate amount, the FCP includes an inflation penalty. A Department of Defense statute and regulation requires labelers to provide this discount on therapeutics dispensed by retail pharmacies when paid by the TRICARE Program, the health care program for military personnel, retirees, and related beneficiaries.
Developing a custom gene therapy for each of the more than 125 mutated genes linked to RP and LCA would not only be expensive but also may not be possible due to size, class, or localization that will impact delivery of the gene. Not all genes and disease expressions are amenable to gene therapy.
Developing a custom gene therapy for each of the more than 100 mutated genes linked to RP would not only be expensive but also may not be possible due to size, class, or localization that will impact delivery of the gene. Not all genes and disease expressions are amenable to gene therapy.
In addition, newly discovered or developed safety or efficacy data may require changes to a product's approved labeling, including the addition of new warnings and contraindications. In addition, the distribution of prescription drug and biological products is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution of samples at the federal level.
In addition, newly discovered or developed safety or efficacy data may require changes to a product's approved labeling, including the addition of new warnings and contraindications. 24 Table of Contents In addition, the distribution of prescription drug and biological products is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution of samples at the federal level.
This study will be a randomized, controlled clinical trial designed to evaluate the efficacy and safety of NeoCart in comparison to the current standard of care, chondroplasty, in subjects with articular cartilage defects. We intend to initiate the Phase 3 trial in the second half of 2024, contingent on adequate availability of funding.
This study will be a randomized, controlled clinical trial designed to evaluate the efficacy and safety of NeoCart in comparison to the current standard of care, chondroplasty, in subjects with articular cartilage defects. We intend to initiate the Phase 3 trial contingent on adequate availability of funding.
Preclinical Studies and IND Submission The testing and approval process of product candidates requires substantial time, effort, and financial resources. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.
Preclinical Studies and IND Submission The testing and approval process of product candidates requires substantial time, effort, and financial resources. Satisfaction of FDA pre-market approval requirements typically takes many years, and the actual time required may vary substantially based 19 Table of Contents upon the type, complexity, and novelty of the product or disease.
We intend to explore strategic licensing, acquisition, and collaboration opportunities with qualified partners to maximize the potential benefit of our product candidates for patients globally and to expand our product candidate pipeline to support our future growth. 3 Table of Contents • Obtaining government funding to advance our vaccine programs towards commercialization.
We intend to explore strategic licensing, acquisition, and collaboration opportunities with qualified partners to maximize the potential benefit of our product candidates for patients globally and to expand our product candidate pipeline to support our future growth. • Obtaining government funding to advance our vaccine programs towards commercialization.
Prior to 2019, Phase 1 and Phase 2 clinical trials were conducted to demonstrate the safety and efficacy of NeoCart. These clinical trials reported a decrease in pain and improved function of the knee. Additionally, per the results of the Phase 2 clinical trial, more patients responded to NeoCart than microfracture surgery. No Serious Adverse Events ("SAEs") were reported.
Prior to 2019, Phase 1 and Phase 2 clinical trials were conducted to demonstrate the safety and efficacy of NeoCart. These clinical trials reported a decrease in pain and improved function of the knee. Additionally, per the results of the Phase 2 clinical trial, more patients responded to NeoCart than microfracture surgery. No SAEs were reported.
CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to 27 Table of Contents implement coverage restrictions for some products. Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products.
CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some products. Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products.
OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR") and wet AMD. Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis.
OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet age-related macular degeneration ("AMD"). Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities, including contract manufacturers and subcontractors, are in compliance with current GMP requirements and are adequate to assure consistent production of the product within required 20 Table of Contents specifications.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities, including contract manufacturers and subcontractors, are in compliance with current GMP requirements and are adequate to assure consistent production of the product within required specifications.
The U.S. government, state legislatures, and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription products. In recent years, Congress has considered reductions in Medicare reimbursement levels for products administered by physicians.
The United States government, state legislatures, and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic products for branded prescription products. In recent years, Congress has considered reductions in Medicare reimbursement levels for products administered by physicians.
("OpCo") in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of April 5, 2019, by and among 30 Table of Contents OpCo, Restore Merger Sub, Inc., our wholly owned subsidiary ("Merger Sub"), and us, as amended, pursuant to which Merger Sub merged with and into OpCo, with OpCo surviving as our wholly owned subsidiary.
("OpCo") in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of April 5, 2019, by and among OpCo, Restore Merger Sub, Inc., our wholly owned subsidiary ("Merger Sub"), and us, as amended, pursuant to which Merger Sub merged with and into OpCo, with OpCo surviving as our wholly owned subsidiary.
Prior to commencing the first clinical trial at a U.S. investigational site with a product candidate, an IND sponsor must submit the results of the preclinical tests and preclinical literature, together with manufacturing information, analytical data, any available clinical data or literature, and proposed clinical study protocols, among other things, to the FDA as part of an IND submission.
Prior to commencing the first clinical trial at a United States investigational site with a product candidate, an IND sponsor must submit the results of the preclinical tests and preclinical literature, together with manufacturing information, analytical data, any available clinical data or literature, and proposed clinical study protocols, among other things, to the FDA as part of an IND submission.
OCU400 has received ODD from the FDA for RP and LCA as well as been granted a RMAT designation from the FDA for the treatment of RP associated with NR2E3 and RHO mutations. OCU400 has also 4 Table of Contents received OMPD from the EC, based on the recommendation of the EMA, for RP and LCA.
OCU400 has received ODD from the FDA for RP and LCA as well as been granted a RMAT designation from the FDA for the treatment of RP associated with NR2E3 and RHO mutations. OCU400 has also received OMPD from the EC, based on the recommendation of the EMA, for RP and LCA.
Moreover, some nations may not accept clinical studies performed for U.S. approval to support approval in their countries or require that additional studies be performed on natives of their countries. In addition, in certain foreign markets, the pricing of drug products is subject to government control and reimbursement may in some cases be unavailable or insufficient.
Moreover, some nations may not accept clinical studies performed for the United States approval to support approval in their countries or require that additional studies be performed on natives of their countries. In addition, in certain foreign markets, the pricing of drug products is subject to government control and reimbursement may in some cases be unavailable or insufficient.
Further, the export of investigational products outside of the United States is subject to regulatory requirements of the receiving country, as well as U.S. export requirements under the FDCA.
Further, the export of investigational products outside of the United States is subject to regulatory requirements of the receiving country, as well as the United States export requirements under the FDCA.
Typically, two Phase 3 trials are required by the FDA for product approval. 19 Table of Contents Under some limited circumstances, however, the FDA may approve an NDA or BLA based upon a single Phase 3 clinical study. The FDA may also require, or companies may conduct, additional clinical trials for the same indication after a product is approved.
Typically, two Phase 3 trials are required by the FDA for product approval. Under some limited circumstances, however, the FDA may approve an NDA or BLA based upon a single Phase 3 clinical study. The FDA may also require, or companies may conduct, additional clinical trials for the same indication after a product is approved.
Moreover, the Drug Supply Chain Act ("DSCSA") imposes obligations on sponsors of drug and biological products related to product tracking and tracing.
Moreover, the Drug Supply Chain Security Act imposes obligations on sponsors of drug and biological products related to product tracking and tracing.
Our website and the information contained on, or that can be accessed through, our website shall not be deemed to be incorporated by reference in, and is not considered part of this Annual Report on Form 10-K.
Our website and the information contained on, or that can be accessed through, our website shall not be deemed to be incorporated by reference in, and is not considered part of this Annual Report.
Unlike other tissues in the body, cartilage in the joints has no innate ability to repair itself, making any injury permanent. If left untreated, even a small defect can expand in size and progress to debilitating Osteoarthritis ("OA"), ultimately requiring a joint replacement procedure. Over 528 million individuals worldwide are diagnosed with OA.
Unlike other tissues in the body, cartilage in the joints has no innate ability to repair itself, making any injury permanent. If left untreated, even a small defect can expand in size and progress to debilitating OA, ultimately requiring a joint 11 Table of Contents replacement procedure. Over 528 million individuals worldwide are diagnosed with OA.
Our business advisory board members have been selected based on their extensive professional backgrounds and proven track record of creating partnerships among the public and private sector.
Our business advisory board members have been selected based on their extensive professional backgrounds and proven track record of creating partnerships among the public and 4 Table of Contents private sector.
The federal Physician Payment Sunshine Act requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value to physicians and teaching hospitals and certain other HCPs (such as physicians assistants and nurse practitioners), and ownership and investment interests held by physicians and their immediate family members.
The federal Physician Payment Sunshine Act requires manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value to physicians and teaching hospitals and certain other HCPs (such as physicians assistants and nurse practitioners), and ownership and investment interests held by physicians and their immediate family members, with the reported information made public on a searchable website.
In addition to the FDCA and its implementing regulations, biological products are regulated under the Public Health Service Act ("PHSA") and its implementing regulations.
In addition, biological products are regulated under the Public Health Service Act ("PHSA") and its implementing regulations.
OCU400 has received ODD for RP and LCA, a RMAT designation to OCU400 for the treatment of RP associated with NR2E3 and rhodopsin (“RHO’) , and OMPD from the EC, based on the recommendation of the EMA, for RP and LCA.
OCU400 has received ODD for RP and LCA, a RMAT designation to OCU400 for the treatment of RP associated with NR2E3 and RHO , and OMPD from the EC, based on the recommendation of the EMA, for RP and LCA.
This period may also be reduced by any time that the applicant did not act with due diligence. Only one patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 21 Table of Contents days of approval. The U.S.
This period may also be reduced by any time that the applicant did not act with due diligence. Only one patent claiming each approved product is eligible for restoration and the patent holder must apply for restoration within 60 days of approval.
For more information about our partnership with CanSinoBIO, see "—License and Development Agreements—Co-Development and Commercialization Agreement with CanSinoBIO" and see Note 3 in our notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For more information about our partnership with CanSinoBIO, see "—License and Development Agreements—Co-Development and Commercialization Agreement with CanSinoBIO" and see Note 3 in our notes to the consolidated financial statements included elsewhere in this Annual Report.
Common symptoms of RP include difficulty seeing in poor lighting or in the dark, loss of central vision or side (peripheral) vision, and difficulty reading print and deciphering detailed images. RP is associated with over 100 mutated genes that affect 1.5 million individuals worldwide.
Common symptoms of RP include difficulty seeing in poor lighting or in the dark, loss of central vision or side (peripheral) vision, and difficulty reading print and deciphering detailed images. RP is associated with over 100 mutated genes that affect about 1.6 million to 2 million individuals worldwide.
Overview of Dry AMD and Stargardt Disease and Current Treatment Options Dry AMD is attributed to the thinning of the macula of the retina, which leads to impairment and loss of central vision.
Overview of dAMD and Stargardt Disease and Current Treatment Options dAMD is attributed to the thinning of the macula of the retina, which leads to impairment and loss of central vision.
NIAID, with funding from Project NextGen, will cover the full cost of the clinical trials, including operations and related analysis. Ocugen will be responsible for providing clinical trial materials and upon completion will have full right of reference to the findings, which Ocugen believes will provide clinical evidence to support the further development of the Company’s lead mucosal vaccine candidate.
NIAID, with funding from Project NextGen, will cover the full cost of the clinical trials, including operations and related analysis. We will be responsible for providing clinical trial materials and upon completion will have full right of reference to the findings, which we believe will provide clinical evidence to support the further development of our lead mucosal vaccine candidate.
It acts as a shock absorber throughout the body withstanding significant pressure and allowing for joints to glide smoothly with minimal friction. Cartilage 10 Table of Contents damage can be caused by acute trauma, such as a bad fall or a sports-related injury, or by repetitive trauma, such as general wear over time.
It acts as a shock absorber throughout the body withstanding significant pressure and allows for joints to glide smoothly with minimal friction. Cartilage damage can be caused by acute trauma, such as a bad fall or a sports-related injury, or by repetitive trauma, such as general wear over time.
OCU400 consists of a functional copy of the retina-specific NHR gene, NR2E3 , delivered to target cells in the retina using an AAV5 vector that has the potential to be used as a gene therapeutic not only for the treatment of retinal diseases associated with mutations in genes such as NR2E3 , RHO , 6 Table of Contents CEP290 , and PDE6ß , but also other gene mutations associated with IRDs, including RP and LCA.
OCU400 consists of a functional copy of the retina-specific NHR gene, NR2E3 , delivered to target cells in the retina using an AAV5 vector that has the potential to be used as a gene therapeutic not only for the treatment of retinal diseases associated with mutations in genes such as NR2E3 , RHO , and PDE6ß , but also other gene mutations associated with RP.
If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of the product to the FDA together with a release protocol showing the results of all of the manufacturer's tests performed on the lot.
If the product is subject to official release by the FDA, the manufacturer submits to FDA a release protocol showing the results of all of the manufacturer's tests performed on the lot, and if required, samples of each lot of the product.
Under the goals and policies agreed to by the FDA under PDUFA, the FDA aims to complete its initial review of a marketing application and respond to the applicant within 10 months from the filing date for a standard marketing application, and within six months from the filing date for a priority marketing application.
Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act ("PDUFA"), the FDA aims to complete its initial review of a marketing application and respond to the applicant within 10 months from the filing date for a standard marketing application, and within six months from the filing date for a priority marketing application.
We believe these broad ODD, RMAT, and OMPD designations demonstrate that OCU400 has the potential to be a broad-spectrum therapeutic to treat multiple IRDs. These ODD, RMAT, and OMPD designations represent gene-agnostic broad coverage for RP and LCA and are not mutation-specific designations. Figure 9: Mechanism of our modifier gene therapy.
We believe these broad ODD, RMAT, and OMPD designations demonstrate that OCU400 has the potential to be a broad-spectrum therapeutic to treat RP. These ODD, RMAT, and OMPD designations represent gene-agnostic broad coverage for RP and is not mutation-specific designations. Figure 9: Mechanism of our modifier gene therapy. Figure 9 demonstrates the mechanism of our modifier gene therapy.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf these third parties terminate their agreements with us or fail to maintain or enforce the underlying patents or licenses thereto, or we otherwise lose our rights to these patents, our competitive position and our market share in the markets for any of our approved products will be harmed. • Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. • The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses. • Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel. • If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline 33 Table of Contents Risks Related to Our Financial Position and Capital Requirements We have incurred significant losses and negative cash flows from operations since our inception.
Biggest changeIf these licensors terminate their agreements with us or fail to maintain or enforce the underlying patents or licenses thereto, or we otherwise lose our rights to these patents, our competitive position and our market share in the markets for any of our licensed and approved products will be harmed. • Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management. • The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur substantial losses. • Our future success depends on our ability to retain key executives and to attract, retain, and motivate qualified personnel. • We have restated our prior consolidated financial statements, which may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price. • If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline. • The use of new and evolving technologies, such as artificial intelligence, in our business may result in spending material resources and presents risks and challenges that can impact our business including by posing security and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability. 36 Table of Contents Risks Related to Our Financial Position and Capital Requirements We have incurred significant losses and negative cash flows from operations since our inception.
We have also received ODD for OCU410ST for the treatment of ABCA4 -associated retinopathies including Stargardt, RP19 and CORD3 diseases. We may also seek ODD or OMPD for our other product candidates, as appropriate.
We have also received ODD and OMPD for OCU410ST for the treatment of ABCA4 -associated retinopathies including Stargardt, RP19 and CORD3 diseases. We may also seek ODD or OMPD for our other product candidates, as appropriate.
As a biotechnology company, we are subject to many federal and state healthcare laws, such as the federal Anti-Kickback Statute, the federal civil and criminal FCA, the civil monetary penalties statute, the Medicaid Drug Rebate statute and other price reporting requirements, the VHCA, the HIPAA, the FCPA, the ACA, and similar state laws.
As a biotechnology company, we are subject to many federal and state healthcare laws, such as the federal Anti-Kickback Statute, the federal civil and criminal FCA, the civil monetary penalties statute, the Medicaid Drug Rebate statute and other price reporting requirements, the VHCA, HIPAA, the FCPA, the ACA, and similar state laws.
An adverse determination in any such submission, proceeding, or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
An adverse determination in any such submission, proceeding, or litigation could invalidate or reduce the scope of our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators, including the FDA and the NIH, or IRBs or IBCs may not authorize us or our investigators to commence or continue a clinical trial, conduct a clinical trial at a prospective trial site, or amend trial protocols, or regulators, IRBs, or IBCs may require that we modify or amend our clinical trial protocols; • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our CDMOs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials, or be lost to follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or we may be required to engage in additional clinical trial site monitoring; • us, the regulators, IRBs, or IBCs may require the suspension or termination of clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics (alone or in combination with other products) of the product candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic or therapeutic candidate; • changes in marketing approval policies or regulations, or changes in or the enactment of additional statutes or regulations, during the development period rendering our data insufficient to obtain marketing approval and requiring us to conduct additional studies; • the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a marketing application; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; • patients that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the study, increase the needed enrollment size for the study, or extend the study’s duration; • the FDA or comparable foreign regulatory authorities may disagree with our study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials or find that a product candidate’s benefits do not outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; • the FDA or comparable foreign regulatory authorities may disagree with our intended indications; • the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or our contract manufacturer’s manufacturing facility for clinical and future commercial supplies; • the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a marketing application, or other comparable submissions in foreign jurisdictions, or to obtain regulatory approval in the United States or elsewhere; 41 Table of Contents • the FDA or comparable foreign regulatory authorities may take longer than we anticipate to make a decision on our product candidates; and • we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including: • regulators, including the FDA and the NIH, or IRBs or IBCs may not authorize us or our investigators to commence or continue a clinical trial, conduct a clinical trial at a prospective trial site, or amend trial protocols, or regulators, IRBs, or IBCs may require that we modify or amend our clinical trial protocols; 44 Table of Contents • we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our CDMOs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or participants may drop out of these clinical trials, or be lost to follow-up at a higher rate than we anticipate; • our third-party contractors may fail to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or we may be required to engage in additional clinical trial site monitoring; • us, the regulators, IRBs, or IBCs may require the suspension or termination of clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side effects, or other unexpected characteristics (alone or in combination with other products) of the product candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic or therapeutic candidate; • changes in marketing approval policies or regulations, or changes in or the enactment of additional statutes or regulations, during the development period rendering our data insufficient to obtain marketing approval and requiring us to conduct additional studies; • the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a marketing application; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; • we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; • patients that enroll in our studies may misrepresent their eligibility or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the study, increase the needed enrollment size for the study, or extend the study’s duration; • the FDA or comparable foreign regulatory authorities may disagree with our study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials or find that a product candidate’s benefits do not outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; • the FDA or comparable foreign regulatory authorities may disagree with our intended indications; • the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or our contract manufacturer’s manufacturing facility for clinical and future commercial supplies; • the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a marketing application, or other comparable submissions in foreign jurisdictions, or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may take longer than we anticipate to make a decision on our product candidates; and • we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development.
The success of our product candidates and our ability to generate revenues from our product candidates, if approved, will depend on many factors including our ability to: • complete and obtain favorable results from our clinical trials and preclinical studies with respect to our product candidates; • apply for and receive marketing approval from the applicable regulatory authorities; • receive regulatory approval for claims that are necessary or desirable for successful marketing; 38 Table of Contents • receive approval for our manufacturing processes and facilities from the applicable regulatory authorities; • recruit and enroll qualified patients for clinical trials with respect to our product candidates in a timely manner; • expand and maintain a workforce of experienced scientists and others with experience in relevant technologies to continue to develop our product candidates; • hire, train, and deploy marketing and sales representatives or contract with a third-party for marketing and sales representatives to commercialize product candidates in the United States and key foreign markets; • launch and create market demand for our product candidates, if approved, through marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; • achieve market acceptance of our product candidates by patients, the medical community, and third-party payors; • effectively compete with other therapies and establish a market share; • maintain a continued acceptable safety and efficacy profile of our product candidates, if approved, following commercial launch; • achieve appropriate reimbursement, pricing, and payment coverage for our product candidates, if approved; • manufacture product candidates in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; • establish and maintain agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; • pursue partnerships with, or offer licenses to, qualified third parties to promote and sell product candidates, if approved, in domestic and key foreign markets where we receive marketing approval; • develop our product candidates for additional indications or for use in broader patient populations; • maintain patent and trade secret protection and regulatory exclusivity for our product candidates; and • qualify for, identify, register, maintain, enforce, and defend intellectual property rights and claims covering our products and intellectual property portfolio; and not infringe on others’ intellectual property rights.
The success of our product candidates and our ability to generate revenues from our product candidates, if approved, will depend on many factors including our ability to: • complete and obtain favorable results from our clinical trials and preclinical studies with respect to our product candidates; • apply for and receive marketing approval from the applicable regulatory authorities; • receive regulatory approval for claims that are necessary or desirable for successful marketing; • receive approval for our manufacturing processes and facilities from the applicable regulatory authorities; • recruit and enroll qualified patients for clinical trials with respect to our product candidates in a timely manner; • expand and maintain a workforce of experienced scientists and others with experience in relevant technologies to continue to develop our product candidates; • hire, train, and deploy marketing and sales representatives or contract with a third-party for marketing and sales representatives to commercialize product candidates in the United States and key foreign markets; • launch and create market demand for our product candidates, if approved, through marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; • achieve market acceptance of our product candidates by patients, the medical community, and third-party payors; • effectively compete with other therapies and establish a market share; • maintain a continued acceptable safety and efficacy profile of our product candidates, if approved, following commercial launch; 42 Table of Contents • achieve appropriate reimbursement, pricing, and payment coverage for our product candidates, if approved; • manufacture product candidates in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; • establish and maintain agreements with wholesalers, distributors, and group purchasing organizations on commercially reasonable terms; • pursue partnerships with, or offer licenses to, qualified third parties to promote and sell product candidates, if approved, in domestic and key foreign markets where we receive marketing approval; • develop our product candidates for additional indications or for use in broader patient populations; • maintain patent and trade secret protection and regulatory exclusivity for our product candidates; and • qualify for, identify, register, maintain, enforce, and defend intellectual property rights and claims covering our products and intellectual property portfolio; and not infringe on others’ intellectual property rights.
The provisions in our charter documents include the following: • a classified Board of Directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our Board of Directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; 70 Table of Contents • the exclusive right of our Board of Directors, unless the Board of Directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the prohibition on removal of directors without cause due to the classified Board of Directors; • the ability of our Board of Directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our Board of Directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend, or repeal our amended and restated bylaws or repeal certain provisions of our amended and restated certificate of incorporation; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the chairman of the Board of Directors, the Chief Executive Officer, or the Board of Directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
The provisions in our charter documents include the following: • a classified Board of Directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our Board; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our Board, unless the Board grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our Board; • the prohibition on removal of directors without cause due to the classified Board; • the ability of our Board to authorize the issuance of shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror; • the ability of our Board of Directors to alter our amended and restated bylaws without obtaining stockholder approval; • the required approval of at least 66-2/3% of the shares entitled to vote to adopt, amend, or repeal our amended and restated bylaws or repeal certain provisions of our amended and restated certificate of incorporation; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the chairman of the Board of Directors, the Chief Executive Officer, or the Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from 75 Table of Contents conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.
Our operating results will suffer if we fail to compete effectively. • If third-party payors do not reimburse patients for our products candidates, if approved, or if reimbursement levels are set too low for us to sell our product candidates at a profit, our ability to successfully commercialize our product candidates, if approved, and our results of operations will be harmed. • We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements. • If we encounter difficulties in negotiating commercial manufacturing and supply agreements with third-party manufacturers and suppliers of our product candidates or any product components, our ability to commercialize our product candidates, if approved, would be impaired. 32 Table of Contents • If the manufacturers upon whom we rely fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues. • We may seek to collaborate with third parties for the development or commercialization of our product candidates.
Our operating results will suffer if we fail to compete effectively. • If third-party payors do not reimburse patients for our products candidates, if approved, or if reimbursement levels are set too low for us to sell our product candidates at a profit, our ability to successfully commercialize our product candidates, if approved, and our results of operations will be harmed. • We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials we may initiate, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements. • If we encounter difficulties in negotiating commercial manufacturing and supply agreements with third-party manufacturers and suppliers of our product candidates or any product components, our ability to commercialize our product candidates, if approved, would be impaired. 35 Table of Contents • If the manufacturers upon whom we rely on fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues. • We may seek to collaborate with third parties for the development or commercialization of our product candidates.
These identified errors resulted in a restatement of the following financial statements line items captions: Collaborative arrangement revenue, Research and development expenses, Other income (expense), net and Accrued expense and other current liabilities. Our management, after consultation with our independent registered accountants, concluded that our previously issued financial statements for the Restated Periods should no longer be relied upon.
These identified errors resulted in a restatement of the following financial statements line items captions: Collaborative arrangement revenue, Research and development expenses, Other income (expense), net and Accrued expense and other current liabilities. Our management, after consultation with our prior independent registered accountants, concluded that our Previously Issued Financial Statements for the Restated Periods should no longer be relied upon.
In addition, later discovery of previously unknown adverse events or that the product is less effective than previously thought or other problems with our products, manufacturers, or manufacturing processes, or failure to comply with regulatory requirements both before and after approval, may yield various results, including: • restrictions on manufacturing, distribution, or marketing of such products; • restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions; • modifications to promotional pieces; • issuance of corrective information; • requirements to conduct post-marketing studies or other clinical trials; • clinical holds or termination of clinical trials; • requirements to establish or modify a REMS, or a comparable foreign authority may require that we establish or modify a similar strategy; • liability for harm caused to patients or subjects; • reputational harm; • warning, untitled, Form 483s, or cyber letters; 48 Table of Contents • suspension of marketing or withdrawal or recall of the products from the market; • regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; • refusal to approve pending applications or supplements to approved applications that we submit; • fines, restitution, or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure or detention; • FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or • injunctions or the imposition of civil or criminal penalties, including imprisonment.
In addition, later discovery of previously unknown adverse events or that the product is less effective than previously thought or other problems with our products, manufacturers, or manufacturing processes, or failure to comply with regulatory requirements both before and after approval, may yield various results, including: • restrictions on manufacturing, distribution, or marketing of such products; • restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions; • modifications to promotional pieces; • issuance of corrective information; • requirements to conduct post-marketing studies or other clinical trials; • clinical holds or termination of clinical trials; • requirements to establish or modify a REMS, or a comparable foreign authority may require that we establish or modify a similar strategy; • liability for harm caused to patients or subjects; • reputational harm; • warning, untitled, Form 483s, or cyber letters; • suspension of marketing or withdrawal or recall of the products from the market; • regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; • refusal to approve pending applications or supplements to approved applications that we submit; • fines, restitution, or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure or detention; • FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or • injunctions or the imposition of civil or criminal penalties, including imprisonment.
Factors that may inhibit our efforts to commercialize our product candidates include: • the inability to recruit, train, manage, 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 product candidates; • our inability to effectively oversee a geographically dispersed sales and marketing team; • the costs associated with training sales and marketing personnel on legal and regulatory compliance matters and monitoring their actions; • an inability to secure adequate coverage and reimbursement by government and private health plans; • reduced realization on government sales from mandatory discounts, rebates and fees, and from price concessions to private health plans and pharmacy benefit managers necessitated by competition for access to managed formularies; • the clinical indications for which the products are approved and the claims that we may make for the products; • limitations or warnings, including distribution or use restrictions, contained in the products' approved labeling; • any distribution and use restrictions imposed by the FDA or other foreign regulatory agencies, including those that we may agree to as part of a mandatory REMS or voluntary risk management plan; • liability for sales or marketing personnel who fail to comply with the applicable legal and regulatory requirements; • 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 or engaging a contract sales organization.
Factors that may inhibit our efforts to commercialize our product candidates include: • the inability to recruit, train, manage, 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 product candidates; • our inability to effectively oversee a geographically dispersed sales and marketing team; • the costs associated with training sales and marketing personnel on legal and regulatory compliance matters and monitoring their actions; • an inability to secure adequate coverage and reimbursement by government and private health plans; 54 Table of Contents • reduced realization on government sales from mandatory discounts, rebates and fees, and from price concessions to private health plans and pharmacy benefit managers necessitated by competition for access to managed formularies; • the clinical indications for which the products are approved and the claims that we may make for the products; • limitations or warnings, including distribution or use restrictions, contained in the products' approved labeling; • any distribution and use restrictions imposed by the FDA or other foreign regulatory agencies, including those that we may agree to as part of a mandatory REMS or voluntary risk management plan; • liability for sales or marketing personnel who fail to comply with the applicable legal and regulatory requirements; • 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 or engaging a contract sales organization.
If we are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities.
Additionally, if we are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities.
Even if we are able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us and could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease commercializing the infringing technology or product.
Even if we are able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us and could require us to make substantial licensing and royalty payments. We could be forced, including by court order, to cease commercializing or practicing the infringing technology or product.
Pursuant to the WU Agreement, which relates to inhaled mucosal COVID-19 vaccines, Washington University maintains control of patent preparation, filing, prosecution, and maintenance, subject to our right to negotiate with WU after the first anniversary of the effective date of the WU Agreement to assume responsibility for and control of the prosecution and maintenance of the patent rights throughout the Mucosal Vaccine Territory in Washington University's name.
Pursuant to the WU Agreement, which relates to mucosal COVID-19 vaccines, Washington University maintains control of patent preparation, filing, prosecution, and maintenance, subject to our right to negotiate with WU after the first anniversary of the effective date of the WU Agreement to assume responsibility for and control of the prosecution and maintenance of the patent rights throughout the Mucosal Vaccine Territory in Washington University's name.
Additionally, our expenses will also increase if, and, as we: • initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future, particularly if there are any delays in enrollment of patients in or completing our clinical trials or the development of our product candidates; • seek marketing approvals for product candidates that successfully complete clinical development; • establish sales, marketing, and distribution capabilities for our product candidates for which we obtain a regulatory approval; • scale up our manufacturing processes and capabilities to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain a regulatory approval; 34 Table of Contents • expand our operational, financial, and management systems and increase personnel, including personnel to support our clinical development, manufacturing, and commercialization efforts, and our operations as a public company; • acquire other companies, products, product candidates, or technologies, or in-license the rights to other products, product candidates, or technologies; and • develop, maintain, expand, and protect our intellectual property portfolio.
Additionally, our expenses will also increase if, and, as we: • initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future, particularly if there are any delays in enrollment of patients in or completing our clinical trials or the development of our product candidates; • seek marketing approvals for product candidates that successfully complete clinical development; • establish sales, marketing, and distribution capabilities for our product candidates for which we obtain a regulatory approval; 37 Table of Contents • scale up our manufacturing processes and capabilities to support our clinical trials of our product candidates and commercialization of any of our product candidates for which we obtain a regulatory approval; • expand our operational, financial, and management systems and increase personnel, including personnel to support our clinical development, manufacturing, and commercialization efforts, and our operations as a public company; • acquire other companies, products, product candidates, or technologies, or in-license the rights to other products, product candidates, or technologies; and • develop, maintain, expand, and protect our intellectual property portfolio.
If we are found to infringe, misappropriate, or otherwise violate a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing its products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all.
If we are found to infringe or otherwise violate a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing its products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or at all.
Our commercial success depends upon our ability to develop, manufacture, market, and sell our product candidates and use our proprietary technologies without infringing, misappropriating, or otherwise violating the intellectual property and other proprietary rights of third parties. There is a considerable amount of intellectual property litigation in the biotechnology and pharmaceutical industries.
Our commercial success depends upon our ability to develop, manufacture, market, and sell our product candidates and use our proprietary technologies without infringing or otherwise violating the intellectual property and other proprietary rights of third parties. There is a considerable amount of intellectual property litigation in the biotechnology and pharmaceutical industries.
Our anticipated reliance on third parties for clinical trials will entail additional risks. Our third-party service providers may have relationships with other entities, some of which may be our competitors, for whom they may also be conducting clinical trials or other therapeutic development activities that could harm our competitive position.
Our reliance on third parties for clinical trials will entail additional risks. Our third-party service providers may have relationships with other entities, some of which may be our competitors, for whom they may also be conducting clinical trials or other therapeutic development activities that could harm our competitive position.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees, or as executive officers.
We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board, our board committees, or as executive officers.
We may not be successful in establishing or maintaining collaborative relationships, any of which could adversely affect our ability to develop and commercialize our product candidates. We are in an agreement with CanSinoBIO for the development and commercialization of our modifier gene therapy platform.
We may not be successful in establishing or maintaining collaborative relationships, any of which could adversely affect our ability to develop and commercialize our product candidates. We are party to an agreement with CanSinoBIO for the development and commercialization of our modifier gene therapy platform.
The determination to restate the financial statements for the Restated Periods was made by our Audit Committee of the Board of Directors upon management’s recommendation following the identification of errors related us not appropriately accounting for the estimated non-cash consideration and expense in one of our collaboration arrangements.
The determination to restate the financial statements for the Restated Periods was made by our Audit Committee of the Board upon management’s recommendation following the identification of errors related us not appropriately accounting for the estimated non-cash consideration and expense in one of our collaboration arrangements.
Changes in the economic, political, legal and social conditions and policies of the Chinese government or in relations between China and the United States may materially and adversely affect our business, financial condition, results of operations, access to capital, and the market price of our common stock.
Specifically, changes in the economic, political, legal and social conditions and policies of the Chinese government or in relations between China and the United States may materially and adversely affect our business, financial condition, results of operations, access to capital, and the market price of our common stock.
If patients are not adequately reimbursed for our product candidates, if approved, they may reduce or discontinue purchases of it, which would result in a significant shortfall in achieving revenue expectations and negatively impact our business, prospects, and financial condition.
If patients are not adequately reimbursed for our product candidates, if approved, they may reduce or discontinue purchases of our product candidates, which would result in a significant shortfall in achieving revenue expectations and negatively impact our business, prospects, and financial condition.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming, and unsuccessful. Competitors and other third parties may infringe, misappropriate, or otherwise violate our owned and licensed patents, trade secrets, or other intellectual property.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming, and unsuccessful. Competitors and other third parties may infringe, misappropriate, or otherwise violate our rights to owned and licensed patents, trade secrets, or other intellectual property.
The market price for our common stock may be influenced by those factors discussed in this "Risk Factors" section and many others, including: • our ability to enroll subjects in our ongoing and planned clinical trials; • the results of our clinical trials and preclinical studies, and the results of trials of our competitors or those of other companies in our market sector; • regulatory approval of our product candidates, or limitations to specific label indications or patient populations for use, or changes or delays in the regulatory review process; • the level of expenses related to any of our product candidates or clinical development programs; • regulatory developments in the United States and foreign countries; • reports of adverse events in any of our products, competing biologics, or gene therapy products; • changes in the structure of healthcare payment systems, especially in light of current reforms to the U.S. healthcare system; • the success or failure of our efforts to acquire, license, or develop additional product candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; • manufacturing, supply, or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators, or other strategic partners; 72 Table of Contents • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to ours; • market conditions in the biopharmaceutical sector and issuance of securities analysts' reports or recommendations; • trading volume of our common stock; • an inability to obtain additional funding; • sales of our stock by insiders and stockholders or the perception that such sales could occur; • our ability to effectively manage our growth; • ineffectiveness of our internal control over financial reporting; • additions or departures of key personnel, including major changes in our board or management; • intellectual property, product liability, or other litigation against us; and • general economic, industry, market conditions, and other events or factors, many of which are beyond our control.
The market price for our common stock may be influenced by those factors discussed in this "Risk Factors" section and many others, including: • our ability to enroll subjects in our ongoing and planned clinical trials; • the results of our clinical trials and preclinical studies, and the results of trials of our competitors or those of other companies in our market sector; • regulatory approval of our product candidates, or limitations to specific label indications or patient populations for use, or changes or delays in the regulatory review process; • the level of expenses related to any of our product candidates or clinical development programs; • regulatory developments in the United States and foreign countries; • reports of adverse events in any of our products, competing biologics, or gene therapy products; • changes in the structure of healthcare payment systems, especially in light of current reforms to the United States healthcare system; • the success or failure of our efforts to acquire, license, or develop additional product candidates; • innovations or new products developed by us or our competitors; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, or capital commitments; • manufacturing, supply, or distribution delays or shortages; • any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators, or other strategic partners; • achievement of expected product sales and profitability; • variations in our financial results or those of companies that are perceived to be similar to ours; • market conditions in the biopharmaceutical sector and issuance of securities analysts' reports or recommendations; • trading volume of our common stock; • an inability to obtain additional funding; • sales of our stock by insiders and stockholders or the perception that such sales could occur; • our ability to effectively manage our growth; • ineffectiveness of our internal control over financial reporting; • additions or departures of key personnel, including major changes in our board or management; • intellectual property, product liability, or other litigation against us; and • general economic, industry, market conditions, and other events or factors, many of which are beyond our control.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our Board of Directors.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the value of our shares to a potential acquiror or delay or prevent changes in control or changes in our management without the consent of our Board.
Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials, and our product candidates may not be successfully commercialized even if they receive regulatory approval. Our product candidates are in various stages of development ranging from preclinical development to pre-commercialization.
Further, our product candidates may not receive regulatory approval even if they are successful in clinical trials, and our product candidates may not be successfully commercialized even if they receive regulatory approval. Our product candidates are in various stages of development ranging from pre-clinical development to pre-commercialization.
Regardless of merit or eventual outcome, liability claims may result in: • loss of revenue from decreased demand for our products and/or product candidates; • impairment of our business reputation or financial stability; • costs of related litigation; • substantial monetary awards to patients or other claimants; • exhaustion of any available insurance and our capital resources; • diversion of management attention; • withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; • the inability to commercialize our product candidates; • significant negative media attention; • decrease in our stock price; • initiation of investigations and enforcement actions by regulators; or • product recalls, withdrawals, revocation of approvals, or labeling, marketing, or promotional restrictions.
Regardless of merit or eventual outcome, liability claims may result in: • loss of revenue from decreased demand for our products and/or product candidates; • impairment of our business reputation or financial stability; • costs of related litigation; • substantial monetary awards to patients or other claimants; • exhaustion of any available insurance and our capital resources; • diversion of management attention; • withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; • the inability to commercialize our product candidates; • significant negative media attention; 80 Table of Contents • decrease in our stock price; • initiation of investigations and enforcement actions by regulators; or • product recalls, withdrawals, revocation of approvals, or labeling, marketing, or promotional restrictions.
Our current and future collaborations may pose a number of additional risks, including the following: • collaborators may not pursue development of product candidates and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could fail to make timely regulatory submissions for a product candidate; • collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the preferred course of development, might cause delays or termination of the research, development, or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties or fail to maintain intellectual property rights which they license to us, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates. 59 Table of Contents Collaboration agreements may not lead to development or commercialization of our product candidates in the most efficient manner, or at all.
Our current and future collaborations may pose a number of additional risks, including the following: • collaborators may not pursue development of product candidates and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • collaborators could fail to make timely regulatory submissions for a product candidate; • collaborators may not comply with all applicable regulatory requirements or may fail to report safety data in accordance with all applicable regulatory requirements, which could subject them or us to regulatory enforcement actions; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidates or products, which may cause collaborators to cease to devote resources to the commercialization of our product candidates; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product candidate or product; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation, or the preferred course of development, might cause delays or termination of the research, development, or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time consuming and expensive; 64 Table of Contents • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation; • collaborators may infringe the intellectual property rights of third parties or fail to maintain intellectual property rights which they license to us, which may expose us to litigation and potential liability; and • collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.
A failure to comply with the applicable regulatory requirements may result in regulatory enforcement actions against our manufacturers or us, including fines and civil and criminal penalties, including imprisonment, suspension or restrictions of production, injunctions, delays, withdrawal or denial of product approval or supplements to approved products, clinical holds or termination of clinical studies, warning or untitled letters, Form 483s, regulatory authority communications warning the public about safety issues with the product, refusal to permit the import or export of the products, product seizure, detention, or recall, operating restrictions, suits under the civil FCA, corporate integrity agreements, or consent decrees.
A failure to comply with the applicable regulatory requirements may result in regulatory enforcement actions against our manufacturers or us, including fines and civil and criminal penalties, including imprisonment, suspension or restrictions of production, injunctions, delays, withdrawal or denial of product approval or supplements to approved products, clinical holds or termination 62 Table of Contents of clinical studies, warning or untitled letters, Form 483s, regulatory authority communications warning the public about safety issues with the product, refusal to permit the import or export of the products, product seizure, detention, or recall, operating restrictions, suits under the civil FCA, corporate integrity agreements, or consent decrees.
To date, our operations have been limited to organizing and staffing our company, acquiring rights to intellectual property, business planning, raising capital, and developing our product candidates. We have not yet demonstrated an ability to obtain marketing approvals (only EUA), manufacture a commercial-scale product, or conduct sales and marketing activities necessary for successful product commercialization.
To date, our operations have been limited to organizing and staffing our company, acquiring rights to intellectual property, business planning, raising capital, and developing our product candidates. We have not yet demonstrated an ability to obtain marketing approvals, manufacture a commercial-scale product, or conduct sales and marketing activities necessary for successful product commercialization.
While we are currently collaborating with NIAID for early clinical studies for the OCU500 program, there can also be no assurance that we will be able to obtain the required funding from government agencies for further development of OCU500 or for development of our vaccine candidates, OCU510 and OCU520.
While we are currently collaborating with NIAID for early clinical studies for the OCU500 program, there can also be no assurance that we will be able to obtain the required funding from government agencies or strategic partners for further development of OCU500 or for development of our vaccine candidates, OCU510 and OCU520.
For example, the Budget Control Act of 2011, among other things, includes aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which in connection with subsequent legislation are extended to 2032 unless additional Congressional action is taken.
For example, the Budget Control Act of 2011, among other things, included aggregate reductions to Medicare payments to healthcare providers of up to 2.0% per fiscal year, which in connection with subsequent legislation are extended to 2032 unless additional Congressional action is taken.
Moreover, even if we are able to receive and maintain ODDs or OMPDs, we may ultimately not receive any period of regulatory exclusivity if our product candidates are approved. For instance, we may not receive orphan product regulatory exclusivity if the indication for which we receive FDA or EMA regulatory approval is different than the ODD or OMPD.
Moreover, even if we are able to receive and maintain ODDs or OMPDs, we may ultimately not receive any period of regulatory exclusivity if our product candidates are approved. For instance, we may not receive orphan product regulatory exclusivity if the indication for which we receive FDA or EC regulatory approval is different than the ODD or OMPD.
The ACA is intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.
The ACA was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical and medical device manufacturers, and impose additional health policy reforms.
For example, unlike patent law in the United States, European patent law precludes the patentability of methods of treatment of the human body and imposes substantial restrictions on the scope of claims it will grant. In addition, unlike the U.S. the European Patent Office typically limits the claims to those commensurate in scope with specifically disclosed embodiments.
For example, unlike patent law in the United States, European patent law precludes the patentability of methods of treatment of the human body and imposes substantial restrictions on the scope of claims it will grant. In addition, unlike the United States the European Patent Office typically limits the claims to those commensurate in scope with specifically disclosed embodiments.
In addition, various laws, regulations, and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-U.S. nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products.
In addition, various laws, regulations, and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain non-United States nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products.
Companies that may compete with our NeoCart product candidate include Vericel Corporation's MACI, the only FDA-approved ACI product in the United States, and Aesculap Biologics, LLC's NOVOCART 3D, which is currently enrolling subjects in their Phase 3 clinical trial.
Products that may compete with our NeoCart product candidate include Vericel Corporation's MACI, the only FDA-approved ACI product in the United States, and Aesculap Biologics, LLC's NOVOCART 3D, which is currently enrolling subjects in their Phase 3 clinical trial.
Such litigation, including the litigation instituted against us in our current class action lawsuit, could cause us to incur substantial costs and divert management's attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations.
Such litigation, including the litigation instituted against us in our current class action lawsuits, could cause us to incur substantial costs and divert management's attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations.
If the FDA or comparable foreign regulatory authorities become aware of new safety information after the approval of any of our product candidates, they may, among other actions, withdraw approval, require labeling changes or establishment of a REMS or similar strategy, impose significant restrictions on a product’s indicated uses or marketing, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance.
If the FDA or comparable foreign regulatory authorities become aware of new safety information after the approval of any of our product candidates, they may, among other actions, withdraw approval, require labeling changes or establishment of a REMS or similar strategy, impose significant restrictions on a 51 Table of Contents product’s indicated uses or marketing, or impose ongoing requirements for potentially costly post-approval studies or post-market surveillance.
As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain.
As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are uncertain.
If we or our operations are found to be in violation of any federal or state healthcare law, or any other governmental laws or regulations that applies to us, we may be subject to penalties, including civil, criminal, and administrative penalties, damages, fines, imprisonment, disgorgement, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from participation in U.S. federal or state health care programs, corporate integrity agreements, and the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results.
If we or our operations are found to be in violation of any federal or state healthcare law, or any other governmental laws or regulations that applies to us, we may be subject to penalties, including civil, criminal, and administrative penalties, damages, fines, imprisonment, disgorgement, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from participation in the United States federal or state health care programs, corporate integrity agreements, and the curtailment or restructuring of our operations, any of which could materially adversely affect our ability to operate our business and our financial results.
Data breaches could subject us to individual or consumer class action litigation and governmental investigations and proceedings by federal, state, and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability.
Cybersecurity incidents or data breaches could subject us to individual or consumer class action litigation and governmental investigations and proceedings by federal, state, and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability.
In such instances, an appropriate replacement third-party relationship may not be readily available to us or on acceptable terms, which would cause additional delays and increased expense and may have a material adverse effect on our business. We may seek to collaborate with third parties for the development or commercialization of our product candidates.
In such instances, an appropriate replacement third-party relationship may not be readily available to us or on acceptable terms, which would cause additional delays and increased expense and may have a material adverse effect on our business. 63 Table of Contents We may seek to collaborate with third parties for the development or commercialization of our product candidates.
Although we try to ensure that our employees and contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer.
Although we try to ensure that our employees and contractors do not use the proprietary information or know-how of their prior employer(s) in their work for us, we may be subject to claims that these individuals or we have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer.
In the United States, the distribution of product samples to physicians must further comply with the requirements of the U.S. PDMA, and the promotion of biologic and pharmaceutical products are subject to additional FDA requirements and restrictions on promotional statements.
In the United States, the distribution of product samples to physicians must further comply with the requirements of the United States PDMA, and the promotion of biologic and pharmaceutical products are subject to additional FDA requirements and restrictions on promotional statements.
We rely on third-party contract manufacturers to manufacture some of our preclinical product candidate supplies and some of our clinical trial product supplies and, if approved, will rely on third-party contract manufacturers to manufacture some of our commercial product supplies, including all of our drug substance, vialing, labeling, and packaging.
We rely on third-party contract manufacturers to manufacture some of our pre-clinical product candidate supplies and some of our clinical trial product supplies and, if approved, will rely on third-party contract manufacturers to manufacture some of our commercial product supplies, including all of our drug substance, vialing, labeling, and packaging.
In the event that we are subject to or affected by privacy and data protection laws, including the CCPA, CPRA, or GDPR and other domestic or international privacy and data protection laws, we may expend significant resources to comply with such laws, and any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or affected by privacy and data protection laws, including the CCPA, CPRA, or GDPR and other domestic or 82 Table of Contents international privacy and data protection laws, we may expend significant resources to comply with such laws, and any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
We have based this estimate on assumptions that may prove to be wrong, and our operating and capital requirements may change as a result of many factors currently unknown to us. Conducting preclinical testing and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete.
We have based this estimate on assumptions that may prove to be wrong, and our operating and capital requirements may change as a result of many factors currently unknown to us. 38 Table of Contents Conducting preclinical testing and clinical trials is a time-consuming, expensive, and uncertain process that takes years to complete.
Our operating results will suffer if we fail to compete effectively. The biotechnology industry is characterized by rapidly advancing technologies as well as a strong emphasis on intellectual property leading to a highly competitive environment for the development and commercialization of therapeutic products, 51 Table of Contents regenerative medicines, and vaccines.
Our operating results will suffer if we fail to compete effectively. The biotechnology industry is characterized by rapidly advancing technologies as well as a strong emphasis on intellectual property leading to a highly competitive environment for the development and commercialization of therapeutic products, regenerative medicines, and vaccines.
We cannot predict when we will be able to generate the necessary data or results required to obtain regulatory approval of products with the market potential sufficient to enable us to achieve profitability, if ever. Accordingly, we may need 35 Table of Contents to obtain substantial additional funding in connection with our continuing operations.
We cannot predict when we will be able to generate the necessary data or results required to obtain regulatory approval of products with the market potential sufficient to enable us to achieve profitability, if ever. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations.
We will need to obtain FDA approval of any proposed product names, and any failure or delay associated with such approval may adversely affect our business. Any name we intend to use for our product candidates will require approval from the FDA regardless of whether we have secured a formal trademark registration from the USPTO.
We will need to obtain FDA approval of any proposed product names, and any failure or delay associated with such approval may adversely affect our business. 52 Table of Contents Any name we intend to use for our product candidates will require approval from the FDA regardless of whether we have secured a formal trademark registration from the USPTO.
The novelty of the technology and any negative publicity surrounding adverse events associated with gene therapy may also prevent the medical community, patients, and third-party payors from accepting gene therapy products in general, and our product candidates in particular, as medically useful, cost-effective, and safe.
The novelty of the technology and any negative publicity surrounding adverse events associated with gene therapy may also 57 Table of Contents prevent the medical community, patients, and third-party payors from accepting gene therapy products in general, and our product candidates in particular, as medically useful, cost-effective, and safe.
Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the 64 Table of Contents duration of the patent protection of our technology and product candidates.
Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and product candidates.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these 73 Table of Contents countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
In the event of contamination or injury resulting from our use of hazardous 74 Table of Contents materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities.
In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. Under certain environmental laws, we could be held responsible for costs relating to any contamination at our current or past facilities and at third-party facilities.
Our failure to meet the continued listing requirements of The Nasdaq Capital Market (“Nasdaq”) could result in a delisting of our common stock. We must continue to satisfy Nasdaq continued listing requirements, including, among other things, certain corporate governance requirements and a minimum closing bid price requirement of $1.00 per share.
Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock. We must continue to satisfy Nasdaq continued listing requirements, including, among other things, certain corporate governance requirements and a minimum closing bid price requirement of $1.00 per share.
We may also enter into additional licensing and funding arrangements with third parties that may impose diligence, development, and commercialization timelines and milestone payment, royalty, insurance, and other obligations on us.
We may also enter into additional licensing and funding arrangements with third parties that may impose diligence, development, and commercialization timelines and milestone payment, royalty, insurance, and other obligations.
The Nasdaq deficiency letter had no immediate effect on the listing of our common stock. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been given 180 calendar days, or until October 30, 2023, to regain compliance with the minimum closing bid price requirement by causing our stock to close above $1.00 for a minimum of 10 consecutive trading days.
The Nasdaq deficiency letter had no immediate effect on the listing of our common stock. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been given 180 calendar days, or until June 30, 2025, to regain compliance with the minimum closing bid price requirement by causing our stock to close above $1.00 for a minimum of 10 consecutive trading days.
The mutation associated with the RPE65 gene represents just one of more than 125 mutated genes linked to RP and LCA. The regenerative medicine sector is characterized by innovative science, rapidly advancing technologies, and a strong emphasis on proprietary products.
The mutation associated with the RPE65 gene represents just one of more than 125 mutated genes linked to RP and LCA. 56 Table of Contents The regenerative medicine sector is characterized by innovative science, rapidly advancing technologies, and a strong emphasis on proprietary products.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative 52 Table of Contents arrangements with large and established companies.
Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if 69 Table of Contents securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
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.
If we need to identify and retain alternative CDMOs for any reason during our product development programs, the technical skills required to manufacture our product candidates may be unique or proprietary to the original CDMO and we may have 55 Table of Contents difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.
If we need to identify and retain alternative CDMOs for any reason during our product development programs, the technical skills required to manufacture our product candidates may be unique or proprietary to the original CDMO and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills to a back-up or alternate supplier, or we may be unable to transfer such skills at all.
Moreover, patients in our clinical trials, especially patients in 45 Table of Contents our control groups, may be at risk for dropping out of our studies if they are not experiencing relief of their disease. A significant number of withdrawn patients would compromise the quality of a study's data.
Moreover, patients in our clinical trials, especially patients in our control groups, may be at risk for dropping out of our studies if they are not experiencing relief of their disease. A significant number of withdrawn patients would compromise the quality of a study's data.
If our licensors were to fail to maintain such licenses, we may need to obtain additional licenses with respect to the applicable product candidates. 67 Table of Contents Risks with respect to parties from whom we have obtained intellectual property rights may also arise out of circumstances beyond our control.
If our licensors were to fail to maintain such licenses, we may need to obtain additional licenses with respect to the applicable product candidates. Risks with respect to parties from whom we have obtained intellectual property rights may also arise out of circumstances beyond our control.
If we do not lawfully promote our approved products, if any, we may become 47 Table of Contents subject to such litigation and, if we do not successfully defend against such actions, those actions may have a material adverse effect on our business, financial condition, results of operations, and prospects.
If we do not lawfully promote our approved products, if any, we may become subject to such litigation and, if we do not successfully defend against such actions, those actions may have a material adverse effect on our business, financial condition, results of operations, and prospects.
In addition, our information technology systems may be at risk of being blocked from our world-wide operations. Ongoing human rights concerns in China may result in boycotts of our services or client requests not to use Chinese operations to support their projects.
In addition, our information technology systems may be at risk of being blocked from our world-wide operations. Ongoing human rights concerns in China may result in boycotts of our services or client requests not to use Chinese operations to support their projects. In addition, the U.S.
Any investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption laws or Trade Control laws by U.K., U.S., or other authorities could also have an adverse impact on our reputation, our business, results of operations, and financial condition.
Any investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption laws or Trade Control laws by U.K., the United States, or other authorities could also have an adverse impact on our reputation, our business, results of operations, and financial condition.
Moreover, because our product candidates must be manufactured under sterile conditions, the number of manufacturers who can meet this requirement are even more limited.
Moreover, because our product candidates must be manufactured under sterile conditions, the number of manufacturers who can meet this requirement is even more limited.
This could have a materially adverse effect on our competitive business position and our business prospects. Some intellectual property which we own or have licensed may have been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for U.S. industry.
This could have a materially adverse effect on our competitive business position and our business prospects. Some intellectual property which we own or have licensed may have been discovered through government funded programs and thus may be subject to federal regulations such as “march-in” rights, certain reporting requirements, and a preference for United States industry.
Our ability to successfully commercialize our product candidates, if approved, will depend in part on the extent to which coverage and adequate reimbursement for our product candidates will be available in a timely manner from third-party payors, including governmental healthcare programs such as Medicare and Medicaid, commercial health insurers, and managed care organizations.
Our ability to successfully commercialize our product candidates, if approved, will depend in part on the extent to which coverage and adequate reimbursement for our product candidates will be available in a timely manner from third-party payors, 58 Table of Contents including governmental healthcare programs such as Medicare and Medicaid, commercial health insurers, and managed care organizations.
If the manufacturers upon whom we rely fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology 56 Table of Contents manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues.
If the manufacturers upon whom we rely on fail to produce our product candidates or product components pursuant to the terms of contractual arrangements with us or fail to comply with stringent regulations applicable to biotechnology manufacturers, we may face delays in the development and commercialization of, or be unable to meet demand for, our product candidates, if approved, and may lose potential revenues.
Risks Related to the Commercialization of Our Product Candidates 49 Table of Contents We have no prior experience in the marketing, sale, and distribution of biotechnology products and there can be no assurance that our product candidates, if approved, will be successfully commercialized.
Risks Related to the Commercialization of Our Product Candidates We have no prior experience in the marketing, sale, and distribution of biotechnology products and there can be no assurance that our product candidates, if approved, will be successfully commercialized.
Failure to remedy any material weakness in our internal control over financial 76 Table of Contents reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
Our stockholders will not have the opportunity to influence our decisions on how to use our net proceeds from our Capital Raises. We have and may continue to invest the net proceeds from our Capital Raises in investment-grade, interest-bearing instruments and U.S. government agency securities and treasuries. These investments are not likely to yield a significant return.
Our stockholders will not have the opportunity to influence our decisions on how to use our net proceeds from our capital raises. We have and may continue to invest the net proceeds from our capital raises in investment-grade, interest-bearing instruments and the United States government agency securities and treasuries. These investments are not likely to yield a significant return.
In addition, while these clinical trials are subject to the applicable local laws (and therefore failure to comply with such laws could result in regulatory enforcement action), acceptance of the data by the FDA will be dependent upon its determination that the clinical trials were conducted consistent with all applicable U.S. laws and regulations.
In addition, while these clinical trials are subject to the applicable local laws (and therefore failure to comply with such laws could result in regulatory enforcement action), acceptance of the data by the FDA will be dependent upon its determination that the clinical trials were conducted consistent with all applicable United States laws and regulations.
These and other risks associated with international operations may materially adversely affect our ability to attain or maintain profitable operations. If we are unable to establish effective marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if approved, we may be unable to generate product revenues.
These and other risks associated with international operations may materially adversely affect our ability to attain or maintain profitable operations. 55 Table of Contents If we are unable to establish effective marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if approved, we may be unable to generate product revenues.
Under this agreement, CanSinoBIO is responsible for the CMC development and manufacture of clinical supplies for OCU400, OCU410 and OCU410ST. The agreement also provides commercialization rights to CanSinoBIO in Greater China. This agreement may be adversely affected if the U.S. government were to impose restrictions related to goods manufactured in or imported from China.
Under this agreement, CanSinoBIO is responsible for the CMC development and manufacture of clinical supplies for OCU400, OCU410 and OCU410ST. The agreement also provides commercialization rights to CanSinoBIO in Greater China. This agreement may be adversely affected if the United States government were to impose restrictions related to goods manufactured in or imported from China.
In order to satisfy our current and future debt service obligations, we will be required to raise funds from external sources. We may be unable to arrange for additional financing to pay the amounts due under our existing debt. Funds from external sources may not be available on acceptable terms, if at all.
In order to satisfy our current and future debt service obligations, we will be required to raise funds from external sources. We may be unable to arrange for additional financing to pay the amounts due under our existing debt. Funds from external sources 40 Table of Contents may not be available on acceptable terms, if at all.
The approval procedures vary 46 Table of Contents among countries and the time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval.
The approval procedures vary among countries and the time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn order to monitor and appropriately escalate cybersecurity risks, our Associate Vice President of IT & Facilities receives reports on a monthly basis, and more frequently as appropriate, from our third-party cybersecurity vendor.
Biggest changeIn order to monitor and appropriately escalate cybersecurity risks, our Associate Vice President of IT & Facilities receives reports on a monthly basis, and more frequently as appropriate, from our third-party cybersecurity vendor. 84 Table of Contents Our Board's role in risk oversight is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing our risk exposure and our Board actively overseeing the management of our risks both at the Board and Committee level.
Training topics include how to escalate suspicious activities including phishing, viruses, spams, insider threats, suspect human behaviors or safety issues. Our processes also include assessing cybersecurity risks associated with our use of third-party services providers in the normal course of business use.
Training topics include how to escalate suspicious activities including phishing, viruses, spams, insider threats, suspect human behaviors or safety issues. We also maintain cyber liability insurance. Our processes also include assessing cybersecurity risks associated with our use of third-party services providers in the normal course of business use.
The Company's Associate Vice President of IT & Facilities is responsible for overseeing the cybersecurity risk management program. He has over 20 years of IT management, cybersecurity, and information governance experience.
Cybersecurity Governance Cybersecurity is an important part of our risk management processes. Our Associate Vice President of IT & Facilities is responsible for overseeing the cybersecurity risk management program. He has over 20 years of IT management, cybersecurity, and information governance experience.
Risk factors” in this annual report on Form 10-K, including “Our internal computer systems or those of our development collaborators, third-party CDMOs, or other contractors or consultants may fail or suffer cybersecurity or other security breaches, which could result in a material disruption of our product development programs and cause our business and operations to suffer.
Risk factors” in this Annual Report, including “Our internal computer systems or those of our development collaborators, third-party CDMOs, or other contractors or consultants may fail or suffer cybersecurity incidents, data breaches, or other disruptions, which could result in a material disruption of our product development programs and cause our business and operations to suffer,” for additional discussion about cybersecurity-related risks.
The Company's Associate Vice President of IT & Facilities briefs the Audit Committee on the Company’s cybersecurity risk management program on an approximately quarterly basis, using risk assessment reports from our third-party cybersecurity vendor.
Our Associate Vice President of IT & Facilities briefs the Audit Committee on our cybersecurity risk management program on a quarterly basis, using risk assessment reports from our third-party cybersecurity vendor. The briefing includes discussion of management’s actions to identify and detect threats, as well as planned actions in the event of a response or recovery situation.
Removed
We face risks related to our collection and use of data, which could result in investigations, inquiries, litigation, fines, legislative and regulatory action, and negative press about our privacy and data protection practices”, for additional discussion about cybersecurity-related risks. Cybersecurity Governance Cybersecurity is an important part of our risk management processes.
Removed
Our Board of Directors' role in risk oversight is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing our risk exposure and our Board actively overseeing the management of our risks both at the Board and Committee level.
Removed
The briefing includes discussion of management’s actions to identify and detect threats, as well as planned actions in the event of a response or recovery situation. 79 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur corporate headquarters has initial terms of approximately seven years and include options to extend the leases for up to 10 years.
Biggest changeOur corporate headquarters has an initial term of approximately seven years and includes options to extend the leases for up to 10 years, which we have not elected to account for since it is not reasonably certain that we will exercise such option.
Item 2. Properties Our properties are located in Malvern, Pennsylvania, including our corporate headquarters, which consist of approximately 28,488 square feet of leased office space, and our current GMP facility, which consists of approximately 16,401 square feet. of laboratory and future manufacturing space.
Item 2. Properties Our properties are located in Malvern, Pennsylvania and other locations, including our corporate headquarters, which consist of approximately 28,488 square feet of leased office space, and our current GMP facility, which consists of approximately 16,401 square feet of laboratory and future manufacturing space.
Our current GMP facility has initial terms of seven years and includes an option to extend the lease for up to 5 years, which the Company has elected to account for since it is reasonably certain that the Company will exercise such option. Item 3. Legal Proceedings.
Our current GMP facility has an initial term of seven years and includes an option to extend the lease for up to five years, which we have elected to account for since it is reasonably certain that we will exercise such option.
Removed
For a discussion of legal proceedings, see Note 15 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. This discussion is incorporated herein by reference. Item 4. Mine Safety Disclosures. Not applicable. 80 Table of Contents PART II
Added
We lease two other general use facilities within the United States, which have initial terms of two to three years and contain no option to extend. We believe that our existing facilities are adequate to meet our current needs, and that suitable additional space will be available as and when needed.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 80 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 81 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 82 Item 7A . Quantitative and Qualitative Disclosures About Market Risk 92 Item 8. Financial Statements and Supplementary Data 92
Biggest changeItem 4. Mine Safety Disclosures 85 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 86 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 87 Item 7A . Quantitative and Qualitative Disclosures About Market Risk 97 Item 8. Financial Statements and Supplementary Data 97

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs a result, we anticipate that only the appreciation of the price of our common stock, if any, will provide a return to investors for at least the foreseeable future. Unregistered Sales of Equity Securities and Use of Proceeds None.
Biggest changeFurthermore, our ability to pay cash dividends is currently restricted by the terms of our Loan and Security Agreement with Avenue 1 and Avenue 2. As a result, we anticipate that only the appreciation of the price of our common stock, if any, will provide a return to investors for at least the foreseeable future.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Capital Market under the symbol "OCGN." Holders As of April 9, 2024, we had 257.3 million shares of common stock outstanding held by approximately 23 stockholders of record.
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq under the symbol "OCGN." Holders As of February 26, 2025, we had 292.0 million shares of common stock outstanding held by approximately 26 stockholders of record.
Issuer Purchases of Equity Securities During the quarter ended December 31, 2023, we did not repurchase any shares of our common stock. 81 Table of Contents
Unregistered Sales of Equity Securities and Use of Proceeds None. Issuer Purchases of Equity Securities During the quarter ended December 31, 2024, we did not repurchase any shares of our common stock.
Added
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. 86 Table of Contents

Item 7. Management's Discussion & Analysis

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

82 edited+41 added−27 removed30 unchanged
Biggest changeThe following table shows a summary of our cash flows for the year ended December 31, 2023 and the year ended December 31, 2022 (in thousands): Year ended December 31, (As Restated) 2023 2022 Net cash used in operating activities $ (62,054) $ (60,079) Net cash provided by (used in) investing activities 3,077 (16,967) Net cash provided by financing activities 20,881 59,475 Effect of changes in exchange rate on cash, cash equivalents, and restricted cash (5) 25 Net (decrease) in cash and cash equivalents $ (38,101) $ (17,546) Operating activities Cash used in operating activities was $62.1 million for the year ended December 31, 2023, and primarily consisted of a net loss of $63.1 million adjusted for non-cash items including stock-based compensation of $9.2 million, impairment of advance for COVAXIN supply of $4.1 million, depreciation and amortization of $0.7 million, non-cash lease expense of $0.5 million, other non-cash items of $0.4 million, and a change in net working capital of $13.1 million.
Biggest changeIn addition, as of December 31, 2024, we had accounts payable and accrued expenses and other current liabilities of $19.7 million, lease liability of $3.8 million, and indebtedness of $28.7 million. 92 Table of Contents The following table shows a summary of our cash flows for the year ended December 31, 2024 and the year ended December 31, 2023 (in thousands): Year ended December 31, 2024 2023 Net cash used in operating activities $ (42,142) $ (62,054) Net cash (used in) provided by investing activities (3,385) 3,077 Net cash provided by financing activities 64,858 20,881 Effect of changes in exchange rate on cash and restricted cash 28 (5) Net (decrease) in cash and restricted cash $ 19,359 $ (38,101) Operating activities Cash used in operating activities was $42.1 million for the year ended December 31, 2024, and primarily consisted of a net loss of $54.1 million adjusted for non-cash items including stock-based compensation of $7.4 million, depreciation and amortization of $2.0 million, non-cash lease expense of $0.9 million, non-cash expense from collaborative arrangements, net of $2.2 million, non-cash interest expense of $0.1 million, and a change in net working capital of $3.7 million.
Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, we may have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.
Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, we have based this estimate on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.
ASC 718 requires all stock-based payments, including grants of stock options and RSUs, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted.
ASC 718 requires all stock-based payments, including grants of stock options and RSUs, and PSUs, to be recognized in the consolidated statements of operations and comprehensive loss based on their grant date fair values. We use the Black-Scholes option-pricing model to determine the fair value of options granted.
Our inhaled mucosal vaccine platform is driven by our conviction to serve a public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates.
Our inhaled mucosal vaccine platform is driven by our conviction to serve a major public health concern, which requires the endorsement and support of government funding in order to develop and ultimately commercialize our vaccine candidates.
Funding requirements We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, prepare to manufacture our product candidates, prepare for the potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, explore strategic licensing, 88 Table of Contents acquisition, and collaboration opportunities to expand our product candidate pipeline to support our future growth; expand headcount to support our development, commercialization, and business efforts, and operate as a public company.
Funding requirements We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, prepare to manufacture our product candidates, prepare for the potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, explore strategic licensing, acquisition, and collaboration opportunities to expand our product candidate pipeline to support our future growth; expand headcount to support our development, commercialization, and business efforts, and operate as a public company.
Expense related to stock-based compensation awards subject to service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock-based awards generally vest over a one to three year requisite service period. Stock options have a contractual term of 10 years.
Expense related to stock-based compensation awards granted with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Stock-based awards generally vest over a one to three year requisite service period. Stock options have a contractual term of 10 years.
While our significant accounting policies are described in more detail in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies and estimates are those most critical to the preparation of our consolidated financial statements: Research and Development and Clinical Trial Accruals As part of the process of preparing the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we are required to estimate and record expenses, for which a large portion are research and development expenses.
While our significant accounting policies are described in more detail in the notes to the consolidated financial statements included elsewhere in this Annual Report, we believe that the following accounting policies and estimates are those most critical to the preparation of our consolidated financial statements: Research and Development and Clinical Trial Accruals As part of the process of preparing the consolidated financial statements included elsewhere in this Annual Report, we are required to estimate and record expenses, for which a large portion are research and development expenses.
You should read the "Risk Factors" and "Special Note Regarding Forward-Looking Statements" sections of this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
You should read the "Risk Factors" and "Special Note Regarding Forward-Looking Statements" sections of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
The allocation of the transaction price to the performance obligations in proportion to their standalone selling prices is determined at contract inception. If the consideration promised in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer.
The allocation of the transaction price to the performance obligations in proportion to their standalone selling prices is determined at contract inception. If the consideration promised in a contract includes a variable amount, we estimate the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer.
At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment.
At the end of each subsequent reporting period, we re-evaluate the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment.
As we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term, the expected term of employee options is determined using the "simplified" method, as prescribed in SEC's Staff Accounting Bulletin No. 107, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option.
As we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term, the expected term of employee stock options subject to service-based vesting conditions is determined using the "simplified" method, as prescribed in SEC's Staff Accounting Bulletin No. 107, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option.
Expense related to stock-based compensation awards are recorded to research and development expense or general and administrative expense based on the underlying function of the individual that was granted the stock-based compensation award. Shares issued upon stock option exercise and RSU vesting are newly issued common shares.
Expense related to stock-based compensation awards are recorded to research and development expense or general and administrative expense based on the 96 Table of Contents underlying function of the individual that was granted the stock-based compensation award. Shares issued upon stock option exercise, PSU and RSU vesting are newly issued common shares.
OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR") and wet AMD. Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis.
OCU200 possesses unique features which potentially enable it to treat vascular complications of DME, DR, and wet AMD. Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis.
The assumptions used in our Black-Scholes option-pricing model represent our best estimates and involve a number of variables, uncertainties, assumptions, and the application of our judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.
The assumptions used in our Black-Scholes option-pricing model and Monte Carlo simulation technique represent management's best estimates and involve a number of variables, uncertainties, assumptions, and the application of management's judgment, as they are inherently subjective. If any assumptions change, our stock-based compensation expense could be materially different in the future.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report.
See Note 3 in the notes to the consolidated financial statements included in elsewhere in this Annual Report on Form 10-K for information regarding our obligations under licensing and development agreements. Lease Obligations We have obligations under our operating leases, which include leased office, laboratory, and future manufacturing space, located in Malvern, Pennsylvania.
See Note 3 in the notes to the consolidated financial statements included in elsewhere in this Annual Report for information regarding our obligations under licensing and development agreements. Lease Obligations We have obligations under our operating leases, which include leased office, laboratory, and future manufacturing space, located in Malvern, Pennsylvania and other locations.
As of December 31, 2023, we had cash and cash equivalents of approximately $39.5 million. This amount will not meet our capital requirements over the next 12 months. We believe that our cash and cash equivalents will enable us to fund our operations into the fourth quarter of 2024.
As of December 31, 2024, we had cash of approximately $58.5 million. This amount will not meet our capital requirements over the next 12 months. We believe that our cash and cash equivalents will enable us to fund our operations into the first quarter of 2026.
The Company determines the amount of variable consideration by using the expected value method or the most likely amount method. The Company includes the unconstrained amount of estimated variable consideration in the transaction price. The amount included in the transaction price is the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur.
We determine the amount of variable consideration by using the expected value method or the most likely amount method. We include the unconstrained amount of estimated variable consideration in the transaction price. The amount included in the transaction price is the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur.
During the year ended December 31, 2023, we issued and sold 30.0 million shares of our common stock at a public offering price of $0.50 per share pursuant to a May 2023 public offering (the "May 2023 Public Offering"). We received net proceeds of $14.8 million after deducting equity issuance costs.
We received net proceeds of $34.7 million after deducting equity issuance costs. During the year ended December 31, 2023, we issued and sold 30.0 million shares of our common stock at a public offering price of $0.50 per share pursuant to an underwriting agreement (the "May 2023 Public Offering").
Indebtedness We have outstanding debt related to the funds borrowed from EB5 Life Sciences, L.P. ("EB-5 Life Sciences") pursuant to the U.S. government's Immigrant Investor Program, commonly known as the EB-5 program. Pursuant to the loan agreement entered into with EB-5 Life Sciences, we have borrowed $2.5 million to date.
Indebtedness We have outstanding debt related to the funds borrowed from EB5 Life Sciences pursuant to the United States government's Immigrant Investor Program, commonly known as the EB-5 program. Pursuant to the loan agreement entered into with EB-5 Life Sciences, we have borrowed $2.5 million to date.
We are continuing discussions with relevant government agencies regarding developmental funding for our OCU510 and OCU520 platforms. Modifier Gene Therapy Platform We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including inherited retinal diseases ("IRDs"), such as RP, LCA, Stargardt disease and multifactorial diseases such as dAMD and Geographic Atrophy ("GA").
We are continuing discussions with relevant government agencies as well as strategic partners regarding developmental funding for our OCU510 and OCU520 platforms. Modifier Gene Therapy Platform We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including IRDs, such as RP, Stargardt disease; and multifactorial diseases such as dAMD.
As a result of these factors, together with the anticipated continued spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements included in this Annual Report on Form 10-K are issued.
As a result of these factors, together with the anticipated continued spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
Collaborative Arrangements and Revenue Recognition The Company analyzes its collaborative arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards.
Collaborative Arrangements and Revenue Recognition We analyze our collaborative arrangements to assess whether they are within the scope of ASC 808, Collaborative Arrangements ("ASC 808") to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards.
Since our inception and through December 31, 2023, we have raised an aggregate of $301.0 million to fund our operations, of which $287.2 million is from gross proceeds from the sale of our common stock and warrants, $10.3 million is from the issuance of convertible notes, $3.3 million is from the issuance of debt, and $0.2 million is from grant proceeds.
Since our inception and through December 31, 2024, we have raised an aggregate of $368.9 million to fund our operations, of which $325.1 million is from gross proceeds from the sale of our common stock and warrants, $10.3 million is from the issuance of convertible notes, $33.3 million is from the issuance of debt, and $0.2 million is from grant proceeds.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends.
Estimating the fair value of stock options requires the input of subjective assumptions, including the expected term of the stock option, stock price volatility, the risk-free interest rate, and expected dividends. Estimating the fair value of PSUs requires the input of subjective assumptions, including stock price volatility, total shareholder return ("TSR") ranking, the risk-free rate, and expected dividends.
The increase was due to the amount of co-development services provided by us to the business partner in the collaboration agreement. Research and development expense Research and development expense decreased by $16.6 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The decrease was due to the amount of co-development services provided by us to the business partner in the collaboration agreement. Research and development expense Research and development expense decreased by $7.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
During the year ended December 31, 2023, we sold 4.5 million shares of our common stock under an At Market Issuance Sales Agreement ("the Sales Agreement") and received net proceeds of $5.6 million after deducting equity issuance costs of $0.2 million. The Sales Agreement was terminated in February 2023.
We received net proceeds of $14.8 million after deducting equity issuance costs. During the year ended December 31, 2023, we sold 4.5 million shares of our common stock under the At Market Issuance Sales Agreement ("the Sales Agreement") with certain agents and received net proceeds of $5.6 million after deducting equity issuance costs of $0.2 million.
Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $63.1 million and $86.8 million for the years ended December 31, 2023 and 2022, respectively.
The Sales Agreement was terminated in February 2023. Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $54.1 million and $63.1 million for the years ended December 31, 2024 and 2023, respectively.
The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied over time, with progress toward completion measured based on actual 90 Table of Contents costs incurred relative to total estimated costs to be incurred over the life of the contract.
We recognize as collaboration revenue the amount of the transaction price that is allocated to the respective performance obligation as each performance obligation is satisfied over time, with progress toward completion measured based on actual costs incurred relative to total estimated costs to be incurred over the life of the arrangement.
As of December 31, 2023, substantially all of our assets were located in the United States. Our headquarters are located in Malvern, Pennsylvania. Research and development expense Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation expense on assets used within our research and development activities.
Our headquarters are located in Malvern, Pennsylvania. Research and development expense Research and development costs are expensed as incurred. These costs consist of internal and external expenses, as well as depreciation expense on assets used within our research and development activities.
Our technology pipeline includes: • Modifier Gene Therapy Platform — Based on the use of nuclear hormone receptors ("NHRs"), we believe our modifier gene therapy platform has the potential to address many retinal diseases, including rare diseases such as retinitis pigmentosa ("RP") (OCU400) and Leber congenital amaurosis ("LCA") (OCU400), with a gene-agnostic approach.
Our technology pipeline includes: • Modifier Gene Therapy Platform — Based on the use of NHRs, we believe our modifier gene therapy platform has the potential to address many retinal diseases, including rare genetic diseases such as RP (OCU400), with a gene-agnostic approach.
See Note 9 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under the EB-5 loan agreement.
See Note 8 in the notes to the consolidated financial statements included elsewhere in this Annual Report for information regarding our obligations under the EB-5 loan agreement and the Loan and Security Agreement.
The fair value of the RSUs is determined by the market price of a share of our common stock on the grant date. We recognize forfeitures as they occur.
For RSUs, the fair value of the RSUs is determined by the market price of a share of our common stock on the grant date. For PSUs, we determine fair value by using a Monte Carlo simulation technique. We recognize forfeitures as they occur.
As of December 31, 2023, we had future minimum operating lease base rent payment obligations of $5.8 million, with $0.8 million payable within 12 months of December 31, 2023. See Note 7 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for information regarding our obligations under lease obligations.
As of December 31, 2024, we had future minimum operating lease base rent payment obligations of $5.2 million, with $0.9 million payable within 12 months of December 31, 2024. See Note 6 in the 93 Table of Contents notes to the consolidated financial statements included elsewhere in this Annual Report for information regarding our obligations under lease obligations.
Our modifier gene therapy platform is based on the use of NHRs, which have the potential to 82 Table of Contents restore homeostasis — the basic biological processes in the retina from disease state to normal state.
Our modifier gene therapy platform is based on the use of NHRs, which have the potential to achieve homeostasis — the basic biological processes in the retina to restore a healthy state from a diseased state.
We also believe our modifier gene therapy platform has the potential to address many retinal diseases, including a multifactorial dry age-related macular degeneration ("dAMD") using OCU410, which we believe has the potential to treat millions of patients, and Stargardt disease (OCU410ST), which is also a rare disease.
We also believe our modifier gene therapy platform has the potential to address multifactorial retinal diseases including dAMD, which affects millions of patients in the United States alone, using OCU410, and Stargardt disease, which is a rare genetic disease, using OCU410ST.
The increase in cash provided by investing activities was primarily driven by gross proceeds of $17.5 million from the maturities of marketable securities as well as a decrease in purchases of marketable securities of $9.3 million, classified as available-for-sale, during the year ended December 31, 2023.
Cash provided by investing activities was $3.1 million for the year ended December 31, 2023, and primarily consisted of gross proceeds of $17.5 million from the maturities of marketable securities, classified as available-for-sale, during the year ended December 31, 2023, which was partially offset by purchases of $3.9 million of marketable securities, classified as available-for-sale, during the year ended December 31, 2023 as well as purchases of $10.5 million of property and equipment during the year ended December 31, 2023.
We have not generated revenue from our product candidates to date, and have primarily funded our operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds.
Liquidity and Capital Resources As of December 31, 2024, we had $58.5 million in cash. We have not generated revenue from our product candidates to date, and have primarily funded our operations to date through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds.
Stock-based compensation We account for our stock-based compensation awards in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, Compensation—Stock Compensation ("ASC 718"). We have issued stock-based compensation awards including stock options and restricted stock units ("RSUs"), and we also account for certain issuances of preferred stock and warrants in accordance with ASC 718.
We have issued stock-based compensation awards including stock options and restricted stock units ("RSUs"), and market-condition based restricted stock units ("PSUs"), and we also account for certain issuances of preferred stock and warrants in accordance with ASC 718.
We are also developing OCU410 and OCU410ST, utilizing the nuclear receptor genes RAR-related orphan receptor A (" RORA " ) , for the treatment of dAMD and Stargardt disease, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection.
OCU410 and OCU410ST are being developed utilizing the nuclear receptor gene RORA , for the treatment of GA secondary to dAMD and Stargardt disease, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection.
Cash used in operating activities was $60.1 million for the year ended December 31, 2022, and primarily consisted of a net loss of $86.8 million adjusted for non-cash items including stock-based compensation of $10.5 million, non-cash lease expense of 87 Table of Contents $0.6 million, depreciation and amortization of $0.5 million, other non-cash items of $5.9 million, and a change in net working capital of $9.2 million.
Cash used in operating activities was $62.1 million for the year ended December 31, 2023, and primarily consisted of a net loss of $63.1 million adjusted for non-cash items including stock-based compensation of $9.2 million, impairment of advance for COVAXIN supply of $4.1 million, depreciation and amortization of $0.7 million, non-cash lease expense of $0.5 million, other non-cash items of $0.4 million, and a change in net working capital of $13.1 million.
Overview This Part II, Item 7 includes restated financial data. See "Explanatory Note." We are a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines that improve health and offer hope for patients across the globe.
Overview We are a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies, biologics and vaccines that improve health and offer hope for patients across the globe.
These strategies may include, but are not limited to: public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties.
We will continue to explore options to fund our operations through public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with 94 Table of Contents pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties.
The assumptions used in our Black-Scholes option-pricing model for stock options are as follows: Expected Term.
The assumptions used in our Black-Scholes option-pricing model for stock options and in our Monte Carlo simulation technique for PSUs are as follows, unless noted otherwise: Expected Term.
OCU400, our first product candidate in our modifier gene therapy platform, has received Orphan Drug Designation ("ODD") from the United States Food and Drug Administration ("FDA") for RP and LCA, a regenerative medicine advanced therapy ("RMAT") designation to OCU400 for the treatment of RP associated with NR2E3 and rhodopsin (" RHO") mutations from the FDA, and Orphan Medicinal Product Designation ("OMPD") from the European Commission ("EC"), based on the recommendation of the European Medicines Agency ("EMA"), for RP and LCA.
OCU400, our lead product candidate in our modifier gene therapy platform, has received ODD from the FDA for RP and LCA, a RMAT designation for the treatment of RP associated with NR2E3 and RHO mutations from the FDA, and OMPD from the EC, based on the recommendation of the EMA, for RP and LCA.
Louis ("Washington University"), pursuant to which we licensed the rights to develop, manufacture, and commercialize an inhaled mucosal COVID-19 vaccine for the prevention of COVID-19 in the United States, Europe, Japan, South Korea, Australia, China, and Hong Kong (the "Mucosal Vaccine Territory"). In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property.
Inhaled Mucosal Vaccine Platform We are party to the WU License Agreement with Washington University, pursuant to which we licensed the rights to develop, manufacture, and commercialize a mucosal COVID-19 vaccine for the prevention of COVID-19 in the Mucosal Vaccine Territory. In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property.
The Company identifies the goods or services promised within each collaborative arrangement and assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract.
For collaborative arrangements within the scope of ASC 808 we may analogize to ASC 606 for certain elements. 95 Table of Contents We identify the goods or services promised within each collaborative arrangement and assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract.
Current surgical and nonsurgical treatment options are limited in their efficacy and durability. In prior clinical studies, Phase 2 and Phase 3, NeoCart has shown potential to accelerate healing, reduce pain, and provide regenerative native-like cartilage strength with durable benefits post transplantation.
In prior clinical studies, Phase 2 and Phase 3, NeoCart has shown potential to accelerate healing, reduce pain, and provide regenerative native-like cartilage strength with durable benefits post transplantation. NeoCart was shown to be generally well-tolerated and demonstrated greater clinical efficacy than microfracture surgery at two years after treatment.
Substantially all of our net losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations. 84 Table of Contents Segment Information As of December 31, 2023, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance.
Segment Information As of December 31, 2024, we viewed our operations and managed our business as one operating segment consistent with how our chief operating decision-maker, our Chief Executive Officer, makes decisions regarding resource allocation and assessing performance. As of December 31, 2024, substantially all of our assets were located in the United States.
We continue to work with the FDA to address comments to lift the clinical hold. • Regenerative Medicine Cell Therapy Platform — Our Phase 3-ready regenerative medicine cell therapy platform technology, which includes NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults.
The first patient was dosed in the OCU200 Phase 1 clinical trial in January 2025, and currently we are actively recruiting patients. • Regenerative Medicine Cell Therapy Platform — Our Phase 3-ready regenerative cell therapy platform technology, which includes NeoCart (autologous chondrocyte-derived neocartilage), is being developed for the repair of knee cartilage injuries in adults.
OCU410 targets multiple pathways associated with AMD pathogenesis, in contrast to currently approved or under development products, and has potential to provide better safety and efficacy outcomes. OCU410ST has received ODD from the FDA for the treatment of ABCA4 -associated retinopathies, including Stargardt disease. Currently both OCU410 and OCU410ST programs are in Phase 1/2 clinical development, actively enrolling patients.
OCU410 targets multiple pathways associated with AMD pathogenesis, in contrast to products currently approved or under development that treat only one cause of GA, require multiple injections per year, and have safety considerations. OCU410ST has received ODD from the FDA for the treatment of ABCA4 -associated retinopathies, including Stargardt disease.
The following table summarizes our research and development expenses by product candidate for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, (As Restated) 2023 2022 Change OCU400 $ 7,318 $ 10,129 $ (2,811) OCU410 and OCU410ST 4,029 4,620 (591) NeoCart 1,336 472 864 COVAXIN 8,824 18,385 (9,561) Inhaled mucosal vaccine platform 629 1,015 (386) OCU200 713 4,900 (4,187) Unallocated costs: Research and development personnel costs 13,868 13,941 (73) Facilities and other support costs 1,507 1,265 242 Other 1,349 1,432 (83) Total research and development $ 39,573 $ 56,159 $ (16,586) Collaborative arrangement revenue Collaborative arrangement revenue increased by $3.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The following table summarizes our research and development expenses by product candidate for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Change OCU400 $ 6,846 $ 7,318 $ (472) OCU410 and OCU410ST 3,653 4,029 (376) NeoCart 489 1,336 (847) COVAXIN 25 8,824 (8,799) Inhaled mucosal vaccine platform 2,464 629 1,835 OCU200 379 713 (334) Unallocated costs: Research and development personnel costs 12,992 13,868 (876) Facilities and other support costs 2,984 1,507 1,477 Other 2,294 1,349 945 Total research and development $ 32,126 $ 39,573 $ (7,447) Collaborative arrangement revenue Collaborative arrangement revenue decreased by $2.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We anticipate that our general and administrative expenses will decrease in fiscal year 2024 as compared to fiscal year 2023 due to a lower headcount and a decrease in legal expenses. 85 Table of Contents Results of Operations The following table summarizes the results of our operations for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, (As Restated) 2023 2022 Change Collaborative arrangement revenue $ 6,036 $ 2,488 $ 3,548 Total Revenue 6,036 2,488 3,548 Operating expenses Research and development 39,573 56,159 (16,586) General and administrative 31,994 35,400 (3,406) Total operating expenses 71,567 91,559 (19,992) Loss from operations (65,531) (89,071) 23,540 Other income (expense), net 2,453 2,267 186 Net loss $ (63,078) $ (86,804) $ 23,726 We believe the following table provides more transparency as to the type of research and development expenses incurred.
We anticipate that our general and administrative expenses will increase in fiscal year 2025 as compared to fiscal year 2024 due to an increase in headcount. 90 Table of Contents Results of Operations The following table summarizes the results of our operations for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Change Collaborative arrangement revenue $ 4,055 $ 6,036 $ (1,981) Total Revenue 4,055 6,036 (1,981) Operating expenses Research and development 32,126 39,573 (7,447) General and administrative 26,686 31,994 (5,308) Total operating expenses 58,812 71,567 (12,755) Loss from operations (54,757) (65,531) 10,774 Other income (expense), net 703 2,453 (1,750) Net loss $ (54,054) $ (63,078) $ 9,024 We believe the following table provides more transparency as to the type of research and development expenses incurred.
We anticipate that our research and development expenses will be lower in fiscal year 2024 as compared to fiscal year 2023 due to a reduced headcount as well as internal cost saving initiatives.
We anticipate that our research and development expenses will be higher in fiscal year 2025 as compared to fiscal year 2024 due to an increase in clinical activities with respect to our product candidates as well as an increase in headcount.
Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete their performance obligations under the arrangements. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
Significant management judgment is required in determining the level of effort required under an arrangement and the period over which we our expected to complete their performance obligations under the arrangements and in determining the estimated market value of the co-development services included in the transaction price.
This assessment is performed throughout the life of the arrangements based on changes to the arrangements. For collaborative arrangements within the scope of ASC 808 the Company may analogize to ASC 606 for certain elements.
This assessment is performed throughout the life of the arrangements based on changes to the arrangements.
Additionally, we received concurrence from the FDA on the confirmatory Phase 3 trial design where chondroplasty will be used as a control group. We have completed renovating an existing facility into a current Good Manufacturing Practice ("GMP") facility in accordance with the FDA's regulations in support of NeoCart manufacturing for personalized Phase 3 trial material.
We have completed renovating an existing facility into a GMP facility in accordance with the FDA's regulations in support of NeoCart manufacturing for personalized Phase 3 trial material. We intend to initiate the Phase 3 trial contingent on adequate availability of funding.
Investing activities Cash provided by investing activities was $3.1 million for the year ended December 31, 2023 compared to cash used in investing activities of $17.0 million for the year ended December 31, 2022.
Financing activities Cash provided by financing activities was $64.9 million for the year ended December 31, 2024 compared to $20.9 million for the year ended December 31, 2023.
Currently both OCU410, for the treatment of geographic atrophy ("GA") patients, and OCU410ST, for the treatment of Stargardt patients, programs are in Phase 1/2 clinical development. • Novel Biologic Therapy for Retinal Diseases — OCU200 is a novel fusion protein consisting of two human proteins, tumstatin and transferrin.
Both OCU410 and OCU410ST studies have completed the low, medium, and high dose cohorts in the Phase 1 part of the Phase 1/2 trials to date, with OCU410 completing dosing in the Phase 2 part of the Phase 1/2 trials. • Novel Biologic Therapy for Retinal Diseases — OCU200 is a novel fusion protein consisting of two human proteins, tumstatin and transferrin.
Regenerative Medicine Cell Therapy Platform NeoCart is a Phase 3-ready, regenerative medicine cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process. NeoCart is a three-dimensional tissue-engineered disc of new cartilage that is manufactured by growing the patient's own chondrocytes, the cells responsible for maintaining cartilage health.
Patient follow-up will take place up to three months after the last injection. Regenerative Medicine Cell Therapy Platform NeoCart is a Phase 3-ready, regenerative cell therapy technology that combines breakthroughs in bioengineering and cell processing to enhance the autologous cartilage repair process.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC. 89 Table of Contents Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
In March 2024, we announced dosing was completed in the first cohort of Phase 1/2 study. Phase 1 is a multicenter, open-label, dose-ranging study. Phase 2 is a randomized expansion phase in which subjects will be randomized in a 1:1:1 ratio to either one of two OCU410 dose groups or to an untreated control group.
Phase 2 was a randomized expansion phase in which 51 subjects were randomized in a 1:1:1 ratio to either one of two OCU410 dose groups or to an untreated control group. 88 Table of Contents In October 2024, we announced that the DSMB had approved proceeding to Phase 2 using high and medium doses.
Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. Expected Dividends. The expected dividend yield is 0% because we have not historically paid, and do not expect for the foreseeable future to pay, a dividend on our common stock.
The expected dividend yield is 0% because we have not historically paid, and do not expect for the foreseeable future to pay, a dividend on our common stock. TSR ranking. The TSR, over a three-year period, is relative to the TSR, for that same period, as related to other companies within the Nasdaq Biotechnology Index.
Financial Operations Overview We have not generated revenue from our product candidates to date and have incurred net losses in each year since inception. We expect to continue to incur net losses until our product candidates, if approved, are successfully commercialized.
We are continuing discussions with relevant government agencies as well as strategic partners regarding developmental funding for our OCU510 and OCU520 platforms. Financial Operations Overview We have not generated revenue from our product candidates to date and have incurred net losses in each year since inception.
We received concurrence from the FDA on the confirmatory Phase 3 trial design and have completed renovating an existing facility into a current Good Manufacturing Practice ("GMP") facility to support clinical study and initial commercial launch. • Inhaled Mucosal Vaccine Platform — Our next-generation, inhaled mucosal vaccine platform includes OCU500, a COVID-19 vaccine; OCU510, a seasonal quadrivalent flu vaccine; and OCU520, a combination quadrivalent seasonal flu and COVID-19 vaccine.
We received concurrence from the FDA on the confirmatory Phase 3 trial design and have completed renovating an existing facility into a current GMP facility to support clinical study and initial commercial launch. This facility is needed to generate patient-specific NeoCart implant from chondrocytes derived from knee biopsy.
Unlike single-gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique approach and has demonstrated potential to address multiple retinal diseases caused by mutations in multiple genes in our Phase 1/2 clinical study.
Unlike single gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique, gene-agnostic approach designed to address not just the mutated gene but provide a molecular "reset" of health and survival of gene networks.
As of December 31, 2023, we had $8.6 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 1.5 years. 91 Table of Contents Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2 in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
This assumption is only used for the market-based PSUs. Stock-based compensation expense was $7.4 million and $9.2 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had $5.4 million of unrecognized stock-based compensation expense, which is expected to be recognized over a remaining weighted-average period of 1.6 years.
An additional three patients will be dosed with the medium dose in the second cohort and three patients with the high dose in the third cohort in the dose-escalation phase. Novel Biologic Therapy for Retinal Diseases We are developing OCU200, which is a novel fusion protein containing parts of human transferrin and tumstatin.
Novel Biologic Therapy for Retinal Diseases We are developing OCU200, which is a novel fusion protein containing parts of human transferrin and tumstatin. OCU200 is designed to treat DME, DR, and wet AMD. The first patient was dosed in the OCU200 Phase 1 clinical trial in January 2025, and we are actively recruiting patients for the Phase 1 clinical trial.
These broad ODD, RMAT, and OMPD designations further support broad-spectrum (gene agnostic) therapeutic potential of OCU400 to treat multiple IRDs such as RP and LCA associated with mutations in multiple genes. We completed enrolling, dosing, and recruiting RP and LCA patients in the Phase 1/2 trial for OCU400.
These broad ODD, RMAT, and OMPD designations further support the broad (gene-agnostic) therapeutic potential of OCU400 to treat RP associated with mutations in multiple genes. The OCU400 Phase 3 liMeliGhT clinical trial is currently underway, with enrollment on track to meet our target submission of a BLA and MAA in mid-2026.
Expected Volatility. The expected volatility is based on our historical volatilities and that of similar entities within our industry for periods commensurate with the assumed expected term. Risk-Free Interest Rate. The risk-free interest rate is based on the interest rate payable on U.S.
This expected term assumption is not an assumption used in our Monte Carlo simulation technique for PSUs. The expected term of the PSUs is equal to the performance period of the PSUs. Expected Volatility. The expected volatility is based on historical volatilities of Ocugen and similar entities within Ocugen's industry for periods commensurate with the assumed expected term.
Adjustments to original estimates will be required as work progresses and additional information becomes known, even though the scope of the work required under the contract may not change. Any adjustment as a result of a change in estimates is made when facts develop, events become known, or an adjustment is otherwise warranted.
We evaluate the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Adjustments to original estimates will be required as work progresses and additional information becomes known, even though the scope of the work required under the contract may not change.
To the extent a stock-based compensation award is subject to performance-based vesting conditions, the amount of expense recorded reflects an assessment of the probability of achieving the performance conditions. Expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur.
Expense for stock-based compensation awards with performance-based vesting conditions is only recognized when the performance-based vesting condition is deemed probable to occur. Expense for stock-based compensation awards with market-based and service-based vesting conditions is recognized ratably over the grantee's requisite service period. Compensation cost is not adjusted based on the actual achievement of the market-based performance goals.
In October 2023, OCU500 was selected by the NIAID Project NextGen for inclusion in clinical trials. OCU500 will be tested via two different mucosal routes, inhalation into the lungs and as a nasal spray. The clinical trials are expected to begin mid-2024. We are continuing discussions with relevant government agencies regarding developmental funding for our OCU510 and OCU520 platforms.
In October 2023, OCU500 was selected by the NIAID Project NextGen for inclusion in clinical trials. OCU500 will be tested via two different mucosal routes, inhalation and intranasal delivery. NIAID intends to initiate a Phase 1 clinical trial after IND clearance.
The increase was primarily due to $1.1 million in interest earned on our cash and cash equivalents balance which was offset by a decrease of $0.9 million related to a note receivable that was received during the year ended December 31, 2022. Liquidity and Capital Resources As of December 31, 2023, we had $39.5 million in cash and cash equivalents.
Other income (expense), net Other income (expense), net decreased by $1.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to $1.1 million in interest earned on our cash and restricted cash, which had a lower average balance compared to prior year.
NeoCart was shown to be generally well-tolerated and demonstrated greater clinical efficacy than microfracture surgery at two years after treatment. Based on this clinical benefit, the FDA granted a RMAT designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults.
Based on this clinical benefit, the FDA granted a RMAT designation to NeoCart for the repair of full-thickness lesions of knee cartilage injuries in adults. Additionally, we received concurrence from the FDA on the confirmatory Phase 3 trial design where chondroplasty will be used as a control group.
These decreases were partially offset by an increase of $0.9 million related to NeoCart, driven by CMC activities. General and administrative expense 86 Table of Contents General and administrative expense decreased by $3.4 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
General and administrative expense 91 Table of Contents General and administrative expense decreased by $5.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to $2.7 million in professional service fees and $2.4 million related to reduced headcount.
We received clearance from FDA to initiate a Phase 3 trial for OCU400 for the treatment of RP and intend to begin dosing patients in 2Q, 2024.
We also received approval from Health Canada to initiate a Phase 3 trial for OCU400 for the treatment of RP. The Health Canada trial will run in parallel with the United States FDA trial, expediting the ability to potentially provide a gene-agnostic treatment option to approximately 110,000 patients in the United States and Canada .
The decrease was primarily due to $9.6 million related to the termination of the COVAXIN program, $4.2 million relate d to OCU200, which is driven by a decrease in preclinical activities, $2.8 million related to OCU400, which is driven by a decrease in co-development services provided by our collaboration arrangements business partner.
The decrease was primarily due to $8.8 million related to the termination of the COVAXIN program . T his decrease was partially offset by an increase of $1.8 million relate d to OCU500, which is driven by an increase in preclinical activities and GMP manufacturing of Phase 1 clinical trial material.
During the year ended December 31, 2022, cash provided financing activities primarily consisted of gross proceeds of $50.0 million received from our underwritten offering that closed in February 2022.
During the year ended December 31, 2024, cash provided by financing activities primarily consisted of gross proceeds of $37.6 million received from the July 2024 Public Offering before deducting equity issuance costs of $2.9 million as well as gross proceeds of $30.0 million received from the debt financing transaction with Avenue before deducting equity issuance costs of $0.8 million.
This increase was partially offset by an increase of $6.0 million in purchases of property and equipment during the year ended December 31, 2023. Financing activities Cash provided by financing activities was $20.9 million for the year ended December 31, 2023 compared to $59.5 million for the year ended December 31, 2022.
Investing activities Cash used in investing activities was $3.4 million for the year ended December 31, 2024, and primarily consisted of payments related to purchases of property and equipment.

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